HONG KONG SAR, CHINA Trends and Developments Contributed by: Ralph Sellar, Jason Cheng, Shirley Choi and Grace Jia, Slaughter and May
state immunity. Under this doctrine, a foreign state generally enjoys immunity from all suits in the courts of Mainland China and Hong Kong, subject only to limited exceptions such as waiver. This is to be contrasted with the doctrine of restric- tive state immunity, under which foreign states do not enjoy immunity from suit where they are engaged in transactions of a purely commercial nature. The doc- trine of restrictive state immunity is adopted in several dispute resolution forums internationally.
The new FSIL implements the doctrine of restrictive state immunity. Under Article 7 of the FSIL, a foreign state does not enjoy immunity from the jurisdiction of the PRC courts in any proceedings arising out of a “commercial activity” between that foreign state and an entity of another state (including the PRC), where the activity takes place within the territory of the PRC, or otherwise has a direct effect within that territory. “Commercial activity” is defined to cover transactions of goods or services, investment, lending or any other act of a commercial nature, as opposed to the exer- cise of sovereign authority.
275 CHAMBERS.COM
Powered by FlippingBook