Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

In Hong Kong, the doctrine of absolute sovereign immunity applies in respect of both jurisdictional immunity and enforcement immunity. In FG Hemisphere, the Court of Final Appeal found that China had consistently adhered to the doctrine that a state and its property enjoy absolute immunity from jurisdiction and from execution. The court held that this also applied in Hong Kong.

Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

Assuming sovereign immunity does not apply (for instance, because it has been waived), the full range of remedies available to any judgment creditor should be available against a state, although this has not been tested by the Hong Kong courts. In FG Hemisphere, the Court of Appeal appeared to accept that receivers could be appointed over state assets in Hong Kong. However, as discussed above, the Court of Final Appeal overturned this decision on the basis that absolute sovereign immunity applied.

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

Prior submission to jurisdiction does not constitute consent to further enforcement proceedings against the property of the state. Under common law, waiver must be established at two distinct stages: the state must have first waived its jurisdictional immunity from suit in the forum state, and also waived the immunity of its property from execution by the forum state’s processes. This position was endorsed by the Court of Final Appeal in FG Hemisphere.

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

As sovereign immunity from enforcement in Hong Kong is absolute, all state property is immune from enforcement (unless immunity has been waived).

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

See question 19.

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

In October 2005, China’s ‘Law on Judicial Immunity from Compulsory Measures Concerning the Property of Foreign Central Banks’ was added to Annex III of the Basic Law of Hong Kong. Annex III contains a list of Chinese legislation to be brought into force in Hong Kong through executive promulgation or legislative implementation.

Under this statute, property and bank accounts belonging to foreign central banks are immune from execution, unless the foreign central bank or state government waives such immunity in writing. Where waiver is given, the property or bank accounts sought to be executed against must have been designated for execution. Immunity granted under this statute is subject to the principle of reciprocity: immunity is only granted if the foreign state in question grants similar privileges to the China, Hong Kong and Macao central monetary authorities.

Legislation listed in Annex III of the Basic Law must first be brought into force through executive promulgation or legislative implemen­tation. Neither appears yet to have occurred in respect of this statute.

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

No further test has been developed.

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

Service of process is effected in the same way as described above. As required by Order 11, Rule 7 of the Rules of the High Court, leave to serve must first be obtained from the Hong Kong courts, following which a request has to be lodged with the Chief Secretary.

In Hong Kong, actions for enforcement of arbitral awards are viewed as actions involving jurisdictional immunity, not enforcement immunity. FG Hemisphere concerned proceedings to enforce a pair of arbitral awards against the Democratic Republic of the Congo in Hong Kong. The Court of Final Appeal found that the Democratic Republic of the Congo was immune from suit.

The Court held that the ‘suit’ in Hong Kong was the plaintiff’s application for leave to enforce the awards in Hong Kong under the Arbitration Ordinance (Cap 609). The Court observed that, even if recognition proceedings were successful, the applicant still had to seek to execute the award. At this stage the state would have a further right to object to execution against the targeted property on the grounds of state immunity.

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

There have not been many enforcement proceedings against states in Hong Kong.

Recent cases that have been brought have had to do with arbitral awards. FG Hemisphere, the leading recent case on sovereign immunity and proceedings against states, is a case concerning the enforcement of foreign arbitral awards.

Public databases

Are there any public databases through which assets held by states may be identified?

Yes, Hong Kong maintains public databases that can be used to identify assets held by states. Examples include land registries, business registries, trademark registries and vehicle registries. These public databases provide varying amounts of information on ownership of assets. For land searches, it is only possible to conduct searches by address and not by owner.

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

Hong Kong courts are generally competent to assist with identifying and enforcing against assets. Order 24 of the Rules of the High Court governs discovery of documents in Hong Kong proceedings, and Section 21M of the High Court Ordinance (Cap 4) allow for interim relief to be sought in Hong Kong in relation to foreign proceedings, provided that the foreign proceedings are capable of giving rise to a judgment enforceable in Hong Kong. (The relevant legal tests are set out in the Court of Final Appeal judgment in Compania Sud Americana de Vapores SA v Hin-Pro International Logistics Limited 19 HKCFAR 586.)

Norwich Pharmacal orders, Bankers Trust orders, orders for copies of bankers’ records pursuant to section 21 of the Evidence Ordinance (Cap 8), and other similar orders are available to assist with obtaining information on assets held by third parties, particularly banks.

However, it is unclear whether Hong Kong courts will take the same approach with respect to assets held by sovereign states, given that states are afforded absolute immunity in Hong Kong.