The long-standing Congo case, drawn out through the Hong Kong courts for more than three years, has come to a close finally.

The case, involving a petition by an American company to seize over $800 million in investment by China Railway after the Democratic Republic of the Congo (DR Congo) offered mining rights to the State-run company in return for massive investments in infrastructure, became a landmark for how Hong Kong courts deal with cases involving sovereign immunity.

The four year battle centered on a petition to seize DR Congo assets, but brought to the fore the question of whether the Hong Kong court had jurisdiction over cases involving state sovereignty.

The case was referred for interpretation to the Standing Committee of the National People's Congress.

Referring to that interpretation, the Court of Final Appeal ruled on Thursday that the DR Congo, as a sovereign body, "enjoys state immunity and the courts of Hong Kong have no jurisdiction over that country". Thus, the African republic was exempted in Hong Kong from paying for the unpaid debt.

Among the four key controversial questions sought for interpretation, one lies in whether state immunity is within the realm of foreign affairs, which, according to the Basic Law, falls beyond the authority of the SAR. Another involved whether Hong Kong is "at liberty to depart from the rule or policy on state immunity".

By a three-to-two majority, the Court of Final Appeal had sought the interpretation of the Basic Law, for the first time by the judiciary, after ruling a provisional judgment on June 8.

FG Hemisphere Associate LLC, the plaintiff, sued DR Congo, as well as the China Railway Group Limited and its three subsidiaries, for a debt execution in Hong Kong in May 2008.

The Court of First Instance initially ruled in favor of DR Congo at the end of 2008. FG appealed later and successfully overturned the verdict in February 2010.

One year later, DR Congo appealed to the Court of Final Appeal and was provisionally granted "absolute immunity" in June.

The Department of Justice "welcomed the judgment" on Thursday, saying the case has made clear a very important doctrine and confirmation that Hong Kong should defer to the central government on questions of state immunity.

stushadow@chinadailyhk.com

China Daily

(HK Edition 09/09/2011 page1)