Overview

The highest appeal court in Hong Kong has ruled that absolute sovereign immunity applies in Hong Kong. The decision has implications for any party contracting with states or state entities where Hong Kong is the seat of arbitration, or enforcement of any judgment or award is likely to be sought in Hong Kong.

The judgment means that a foreign state and its property enjoy absolute immunity from both jurisdiction and execution in Hong Kong. The commercial activities exception that applied in Hong Kong before the handover in 1997 no longer applies.

This briefing looks at the legal ramifications for Hong Kong and foreign states with proceedings in Hong Kong.