The Standing Committee of the National People’s Congress has confirmed that the absolute immunity applies to foreign States in Hong Kong. The question was referred to it by the CFA in Hong Kong in a recent Congo Case which was considered in our update on 9 June 2011 - http://www.mayerbrown.com/publications/article.asp?id=11114&nid=6

As anticipated, the SCNPC has interpreted the Basic Law such that the issue of immunity of foreign States is a matter in which Hong Kong must adopt the same policy as the PRC. The CFA’s provisional conclusions in the Congo case are consistent with the position adopted by the Standing Committee of the National People’s Congress ("SCNPC"). Accordingly, foreign States enjoy absolute immunity from jurisdiction and execution in Hong Kong.

Since the doctrine of absolute immunity applies, the ability to sue a foreign State in Hong Kong may only occur where the State has waived its immunity. The majority of the CFA held that such waiver must be unequivocal and suggested that the State must elect to the Court to waive immunity. The Court concluded in the Congo Case that the submission of the DRC to international arbitration did not constitute such waiver to jurisdiction or execution in the Hong Kong courts.

The Congo case is significant because this was the first occasion in which the CFA has referred to the SCNPC a matter of interpretation of the Basic Law, but it does not open the floodgates for the interference of the SCNPC in Hong Kong’s judicial process. The issues arose as a result of the anomaly caused by the absence of any legislation regarding State immunity following the handover. The decision now gives certainty of Hong Kong’s position with regard to State immunity, an issue which had been unclear since 1997.