Jersey Judgment

FG Hemisphere v D.R. Congo [2011] JLR 486 (14 July 2011)

Administrative Law State Immunity Organ of State State Owned Companies Liability of State Entities

Citation: [2011] JLR 486
Status: Judgment
Jurisdiction: Jersey
Posture: Administrative Law / Judgment

More details

Posture: Administrative Law / Judgment

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Professional case brief

Research organized from the available case record

Source document

Holding and result

Government control requires more than mere ownership but less than total lack of independence; if the company has no strategic control, it is an organ of the state. The functions test is satisfied if the principal functions and activities are broadly governmental, regardless of commercial activities. The burden of proof lies on the party asserting governmental functions.

Court disposition

Judgment clarifies test for organ of state liability.

Material facts

Parties

FG Hemisphere

Applicant

Democratic Republic of Congo

Respondent

Procedural history

Posture

Administrative Law / Judgment

Questions and positions

Legal issues

Whether a company wholly owned by a state is an organ of the state and liable to the state's creditors.

Party arguments

Applicant: The company, though separate, is wholly owned and controlled by the state and exercises governmental functions, making it liable as an organ of the state.
Respondent: Mere ownership by the state does not make the company an organ of the state; it must have meaningful independent existence and not exercise governmental functions.

Court’s reasoning

Legal principles

01
[2011] JLR 486

A company separate from but wholly owned by a state is an organ of the state (and liable to state's creditors) if (a) its constitutional position or (b) it is under government control and exercises governmental functions.

Ratio, limits and disposition

Ratio decidendi

Government control requires more than mere ownership but less than total lack of independence; if the company has no strategic control, it is an organ of the state. The functions test is satisfied if the principal functions and activities are broadly governmental, regardless of commercial activities. The burden of proof lies on the party asserting governmental functions.

Obiter and limits

Engaging in trade or commerce is not determinative of governmental function.

Court disposition

Judgment clarifies test for organ of state liability.

Source and reliance status

Official court record

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Judgment text

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Court record

Judgment

[2011] JLR 486

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BAILII >> Databases >> Jersey Law Reports >> FG Hemisphere v D. R. Congo [2011] JLR 486 (14 July 2011) URL: https://www.bailii.org/je/cases/JLR/2011/JLR110486.html Cite as: [2011] JLR 486 [ New search ] [ Help ] FG Hemisphere v D. R. Congo 2011 JLR 486 (14 July 2011) Administrative Law-organ of state-test-company separate from but wholly owned by state is organ of state (and liable to state's creditors) if (a) constitutional position; or (b) under government control and exercises governmental functions-government control indicates more than mere ownership by state but less than company having no meaningful independent existence-satisfied if company has no strategic control, even if some day-to-day freedom-functions requirement satisfied if, in whole context, principal functions and activities broadly governmental-engaging in trade or commerce not determinative-burden of proof on party seeking to prove exercise of governmental functions The document you wish to view is available to registered users or can be purchased as a PDF. To purchase this document in PDF format or alternatively to Register to purchase membership go to the Jersey Law website via this link: 2011 JLR 486 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII URL: https://www.bailii.org/je/cases/JLR/2011/JLR110486.html

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[2011] JLR 486

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