Legal experts divided on state immunity issue

PUBLISHED : Friday, 10 June, 2011, 12:00am
UPDATED : Friday, 10 June, 2011, 12:00am


Should the Democratic Republic of Congo enjoy absolute state immunity? The question is bound to raise a new debate on the mainland, where the legal community is divided over whether Beijing should grant immunity when sovereign bodies engage in commercial acts, experts say.

The query, contained in this week's judgment of the so-called Congo case, has prompted Hong Kong's Court of Final Appeal to ask Beijing - for the first time - to interpret the Basic Law. It will now be up to the National People's Congress Standing Committee to explain the city's state immunity policy.

Since 1949, China has been one of the world's staunch defenders of absolute immunity, the doctrine that all acts carried out by the state are free from prosecution. It is a signatory of the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which acknowledges the doctrine of restrictive immunity, meaning that commercial deals are not immune from prosecution. But China has yet to ratify the convention.

With the growing importance of state-owned businesses and investments around the world, the question has become a growing topic of argument in China's legal circles.

'There was a bill in 1991 on the immunity of state property, which specified the application of immunity on economic acts, but the bill has not been passed by the National People's Congress,' said Ong Yew-kim, a law professor at Chinese University and a former mainland judge. 'It is a very complex issue and China has yet to find an internal solution. Some argue that economic acts should be covered by state immunity, while others argue that they should not.

'China holds firmly the absolute immunity principle on political affairs. But the present case involves a commercial transaction. It is also a new problem to face as to how state immunity should be applied in Hong Kong under 'one country, two systems'. I believe the mainland has yet to find an answer, and it is good for the NPC to give a decision.'

Kennedy Wong Ying-ho, a delegate to the Chinese People's Political Consultative Conference and a local solicitor, said there was a blank spot in mainland laws as to the extent that sovereign immunity is applicable. The authorities might consider legislation to deal with problems brought by the rise of 'vulture funds', which specialise in buying debts often issued by poor countries, he said.

But Professor Albert Chen Hung-yee, a Hong Kong member to the Basic Law Committee, said the lack of legislation on the mainland governing state immunity did not mean the National People's Congress Standing Committee lacked a basis to make a decision. 'The four questions asked by the Court of Final Appeal surrounded the interpretation of the wordings in articles 13 and 19 of the Basic Law. They are not about China's policy on state immunity itself,' Chen said.

After the NPCSC receives the Court of Final Appeal's request, it will issue documents to the Basic Law Committee and the Legal Affairs Committee for their discussion. It will give its interpretation of the Basic Law clauses in question after consulting the two committees.

The NPCSC will have its next bi-monthly meeting later this month, but the item is unlikely to be put on June's agenda given the tight schedule. This means the interpretation could be issued as soon as August.