Anisminic Ltd v Foreign Compensation Commission

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid,Lord Morris of Borth-y-Gest,Lord Pearce,Lord Wilberforce,Lord Pearson
Judgment Date17 Dec 1968
Judgment citation (vLex)[1968] UKHL J1217-1

[1968] UKHL J1217-1

House of Lords

Lord Reid

Lord Morris of Borth-y-Gest

Lord Pearce

Lord Wilberforce

Lord Pearson

Anisminic Limited
and
Foreign Compensation Commission and Another

Upon Report from the Appellate Committee, to whom was referred the Cause Anisminic Limited against Foreign Compensation Commission and another, that the Committee had heard Counsel, as well on Wednesday the 2d, as on Thursday the 3d, Monday the 7th, Tuesday the 8th, Thursday the 10th, Monday the 14th, Tuesday the 15th, Wednesday the 16th, Thursday the 17th, Monday the 21st, Tuesday the 22d and Wednesday the 23d, days of October last, upon the Petition and Appeal of Anisminic Limited, of Lee House, London Wall, London, E.C.2, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 22d of March 1967, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of the Foreign Compensation Commission and Cecil Frank Cooper, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 22d day of March 1967, complained of in the said Appeal, be, and the same is hereby. Reversed, and that the Judgment of the Honourable Mr. Justice Browne, of the 29th day of July 1966, thereby Set Aside, be, and the same is hereby. Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.

Lord Reid

My Lords,

1

In 1956 the Appellants owned a mining property in Egypt which they claim was worth over £4,000,000. On the outbreak of hostilities in the autumn of that year it was occupied by Israeli forces and damaged to the extent of some £500,000. On 1st November 1956 property in Egypt belonging to British subjects was sequestrated by the Egyptian Government and on 29th April 1957, after the Israeli forces had withdrawn, the Egyptian Government authorised a sale of the Appellants' property and it was sold to an Egyptian organisation referred to in this case as T.E.D.O.

2

The Appellants' property had included a large quantity of manganese ore and steps were taken by them to dissuade their customers from buying ore from T.E.D.O. This seems to have embarrassed the Egyptian authorities, and on 23rd November 1957 an agreement was made between the Appellants, T.E.D.O. and the Sequestrator General whereby the Appellants purported to sell to T.E.D.O. for a price of £500,000 their whole business in Egypt, but this was not to include any claim which the Appellants might "be entitled to assert against any government authority other than the Egyptian government, as a result of loss suffered by, or of damage to or reduction in the value of" their business or assets during the events of October and November 1956.

3

Beyond the fact that the Appellants received the sum of £500,000 the effect of the agreement is not very clear; for their property had already been sold to T.E.D.O. by the Sequestrator. Before the agreement was made the Appellants had no legal right to sue in Egypt either for the return of their property or for compensation for its loss. But they had some hope or prospect of getting something after relations between the United Kingdom and the United Arab Republic returned to normal. This could have been a direct payment to them by the Egyptian Government: or, if the method was followed which the British Government had adopted in earlier cases, the Egyptian Government might pay a lump sum of compensation to the British Government to cover all claims by British subjects, and then it would be in the discretion of the British Government to determine how any such sum should be distributed among claimants. And similarly with regard to damage done by the Israeli forces there might have been some payment made by the Israeli Government. It is not disputed that by this agreement the Appellants gave up or assigned to T.E.D.O. any claim they might have to receive compensation directly from the Egyptian Government: but I think that they did not give up or assign any claim, hope or prospect they might have to receive something from the British or Israeli Governments.

4

The next material event was the making of a treaty between the Governments of the United Kingdom and the United Arab Republic on 28th February 1959. That treaty provided for the return to British subjects of their sequestrated property excepting properties sold between 30th October 1956 and 2nd August 1958: those excepted properties were listed in Annex E which included the property of "Sinai Mining (subject to a special arrangement)". Sinai Mining was the name of the Appellant company before its name was changed to Anisminic. It is not clear what was meant by "subject to a special arrangement". Under the treaty the United Arab Republic paid to the British Government the sum of £27,500,000 in full and final settlement of claims of a kind mentioned in Article IV. It is not disputed that at that stage the Appellants had no legal right to claim to participate in that sum. The disposal of that sum was in the discretion of the British Government. The most the Appellants had was a hope that they would receive some part of it.

5

This case arises out of the making of an Order in Council: �The Foreign Compensation (Egypt) (Determination and Registration of Claims) Order 1959, S.I. 1959 No. 625. That Order has now been superseded by a similar order, S.I. 1962 No. 2187 and I shall refer throughout to this later order. These orders were made under powers contained in the Foreign Compensation Act 1950. That Act set up the Respondent, the Foreign Compensation Commission, to deal with compensation payments made by the Governments of Yugoslavia and Czechoslovakia but it also provides for the Commission acting should there be future compensation agreements with foreign governments.

6

The Appellants duly submitted a claim under this Order to the Respondent Commission. They also submitted a separate claim in respect of damage done by the Israeli forces. These claims were opposed by the Legal Officer of the Commission and after sundry procedure including a long oral hearing the Commission on 8th May 1963 made a Provisional Determination that:

"� the above-named Applicants, Anisminic Limited, fail to establish a claim under the Egypt Order aforesaid in respect of the matters referred to in paragraph 2( a) of the Amended Answer

AND THAT the Application in respect of such claims be and is hereby dismissed

BUT THAT the claim in respect of damage referred to in paragraph 2( b) of the Amended Answer is fit for registration under Article 8 of the said Order in a sum to be hereafter determined."

7

The claim which was dismissed was the main claim with which this case is concerned, and the claim which was held fit for registration was a claim in respect of the damage done by the Israeli forces.

8

Browne J. on 29th July 1966 made a declaration that the Respondent's Provisional Determination was a nullity and that the Respondents are under a statutory duty to treat the Appellants' first claim as established. The Court of Appeal on 5th April 1967 set aside the judgment of Browne J. and the Appellants now seek to have his judgment restored.

9

The Respondent's first argument was that in any event such a declaration could not competently be made. I agree with your Lordships in rejecting that argument. If the Appellants succeed on the merits the declarations made by Browne J. should be restored.

10

The next argument was that, by reason of the provisions of section 4(4) of the 1950 Act, the Courts are precluded from considering whether the Respondent's determination was a nullity, and therefore it must be treated as valid whether or not enquiry would disclose that it was a nullity. Section 4(4) is in these terms:

"The determination by the Commission of any application made to them under this Act shall not be called in question in any court of law."

11

The Respondent maintains that these are plain words only capable of having one meaning. Here is a determination which is apparently valid: there is nothing on the face of the document to cast any doubt on its validity. If it is a nullity, that could only be established by raising some kind of proceedings in Court. But that would be calling the determination in question, and that is expressly prohibited by the Statute. The Appellants maintain that that is not the meaning of the words of this provision. They say that "determination" means a real determination and does not include an apparent or purported determination which in the eyes of the law has no existence because it is a nullity. Or, putting it in another way, if you seek to shew that a determination is a nullity you are not questioning the purported determination�you are maintaining that it does not exist as a determination. It is one thing to question a determination which does exist: it is quite another thing to say that there is nothing to be questioned.

12

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