MJIEL Vol 9 Issue 1 2012 - Article 3

ABSTRACT: Two recent judgments, Intraline and FG Hemisphere, have raised concerns that whether Hong Kong can sustain its status as a hub of commercial dispute resolution. The combined effect of the two judgments may cause various Chinese State entities to enjoy Crown immunity in Hong Kong which can hardly be waived without such entities’ explicit concurrence. In view of this, this paper discusses what types of Chinese State entities can enjoy Crown immunity in Hong Kong, and whether Crown immunity can be effectively waived in Hong Kong-seated commercial litigation and arbitrations by a well-drafted waiver clause. This paper argues that (a) subject to exceptions, a Chinese ‘institutional organisation’ is likely to be granted with Crown immunity, which however is unlikely to be enjoyed by a State Owned Enterprise (‘SOE’); (b) a Hong Kong court has no jurisdiction to hear or execute a case against a Chinese State entity, unless the entity waives its immunity ‘in the face of the court’, whereas an arbitral tribunal can assume jurisdictions for hearing the case itself; and (c) future parties may sign an immunity waiver clause mirroring the relevant ICSID instruments, and this may invite the court to allow greater flexibility than the two judgments.

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