The Hong Kong Court of Final Appeal

The Hong Kong Court of Final Appeal on Wednesday issued a majority judgment, in which it decided to seek legal interpretation from the Standing Committee of the National People's Congress over a debt dispute between a U. S. investment fund and the Democratic Republic of Congo.

According to the majority judgment, the five judges of the Hong Kong Court of Final Appeal voted by a majority of 3 to 2.

In May 2008, FG Hemisphere Associates LLC, a New York-based investment fund that bought more than 100 million U.S. dollars in debt carried by the Congo government sued in Hong Kong, for the latter's failure to repay money owed for a 1980s-era project. The Congo government claimed immunity as a foreign state.

While a lower court of Hong Kong ruled in December 2008 that Hong Kong had no jurisdiction in the case, an appeals court overturned that decision in February 2010, ruling that in line with international law, the territory follows restrictive immunity, which does not cover the business affairs of sovereign nations.

The Congo government appealed to the Court of Final Appeal, and in June 2010 asked it to seek legal guidance from Beijing.

The Hong Kong Court of Final Appeal said the majority judgment recognizes that the meaning of the words "acts of state such as defense and foreign affairs" is unclear and that it is arguable whether, on its proper interpretation, state immunity comes within Article 19 of the Basic Law.

The plaintiff has also argued that while state immunity falls within Article 13 of the Basic Law, that Article has no bearing on the courts' powers, raising an issue as to the proper interpretation of Article 13, it said.

Under Hong Kong's Basic Law Article 158(3), the Court has a duty to seek an interpretation from the Standing Committee of the National People's Congress if, in adjudicating a case, it needs to decide a question which involves interpreting provisions of the Basic Law which concern affairs which are the responsibility of the Chinese Central People's Government or which concern the relationship between the Central Authorities and the Hong Kong Special Administrative Region.

It is the first time that the Hong Kong Court of Final Appeal seeks legal interpretation from the Standing Committee of the National People's Congress.