Basic Law still decides Hong Kong immunity, Congo debt hearing told

The Basic Law overrules any position Hong Kong may have had on state immunity before the handover, making the results of a landmark 1983 UK case void, the Court of Final Appeal heard.

Yesterday was the final scheduled day for the landmark hearing on Hong Kong's state immunity position, but, as the appellants were still making their responses when court was due to end, the case will continue today.

The case concerns FG Hemisphere Associates, a US-based vulture fund which buys cheap debt and sues the owing party to make a profit. Pitted against them are the Democratic Republic of Congo, which owes FG over US$100 million, and China Railway Group, which currently holds that sum. The secretary for justice has intervened in the case, in the public interest.

Arguments have centred on whether Hong Kong courts can define their own position of state immunity rights, or are obliged to follow the mainland. The central government - which is constitutionally responsible for Hong Kong's foreign affairs - practices 'absolute' immunity, where commercial deals cannot be taken to court.

David Pannick, QC for FG, had said Hong Kong should follow 'restrictive' immunity, under which commercial deals can be prosecuted. He cited a landmark 1983 House of Lords case which established the practice in English law.

But Barrie Barlow, SC for Congo, said yesterday that the case was 'unrelated to Hong Kong', 'does not address any aspect of Hong Kong law' and involved 'theoretical, alleged principles'.