Anisminic Ltd v Foreign Compensation Commission

A statutory finality or ouster clause ordinarily protects only a legally valid determination. It does not prevent a court from deciding whether a tribunal exceeded its statutory powers and produced a nullity. A tribunal may decide a remitted question wrongly. It exceeds its powers where a misconstruction causes it to ask a question the statute did not remit, consider an unauthorised matter or impose an additional condition.

Under article 4 of the Foreign Compensation (Egypt) (Determination and Registration of Claims) Order 1962, an original owner listed in Annex E had to satisfy only the prescribed property, identity and nationality conditions. The Commission acted outside its powers by treating the existence and nationality of an alleged successor in title as an additional condition.

Anisminic Ltd v Foreign Compensation Commission concerned a claim to participate in compensation paid to the United Kingdom under an agreement with the United Arab Republic. Anisminic's Egyptian mining undertaking had been sequestrated and sold. It later entered an agreement with an Egyptian organisation, T.E.D.O., for £500,000.

The Commission rejected Anisminic's principal claim under article 4 of the Foreign Compensation (Egypt) (Determination and Registration of Claims) Order 1962. It decided that T.E.D.O. had become a non-British successor in title. Browne J declared the provisional determination a nullity and held that the Commission was under a statutory duty to treat the claim as established. The Court of Appeal set that judgment aside.

The central issues were whether section 4(4) of the Foreign Compensation Act 1950 prevented judicial scrutiny and whether the Commission had exceeded its powers by considering the alleged successor in title.

1. Disposition. By a majority of three to two, the House allowed the appeal and restored Browne J's order. Lord Reid, Lord Pearce and Lord Wilberforce formed the majority. Lord Morris of Borth-y-Gest and Lord Pearson dissented.

2. The ouster clause. Lord Reid, Lord Pearce and Lord Wilberforce held that section 4(4) of the Foreign Compensation Act 1950, which prevented a determination from being called in question in a court, protected only a determination made within the Commission's statutory powers. A purported determination made outside those powers was a nullity and was not insulated from judicial examination. Lord Morris and Lord Pearson accepted that the provision did not exclude supervision where the Commission had acted without or in excess of jurisdiction.

3. Error within power and excess of power. Per Lord Reid, Lord Pearce and Lord Wilberforce, a tribunal may decide wrongly a question of law or fact entrusted to it without invalidating its decision. It exceeds its powers where it asks a question outside its remit, applies an unauthorised test, considers a matter which it has no right to consider, refuses a required consideration, breaches natural justice, acts in bad faith or makes a decision it has no power to make. The court must construe the legislation to identify the boundary between a protected error and a legally ineffective decision.

4. Construction of article 4. The majority held that article 4 imposed three relevant conditions on an applicant who was the original owner: the application had to concern property in Egypt referred to in Annex E; the applicant had to be the listed owner; and the applicant had to possess British nationality on the specified dates. The references to a “successor in title” did not require a surviving original owner to prove that no successor existed or that every alleged successor possessed British nationality. Lord Pearce and Lord Wilberforce also regarded article 10, which required account to be taken of compensation or recoupment already received, as the appropriate means of addressing the £500,000 payment.

5. Application. The Commission was satisfied of the three prescribed conditions. By treating T.E.D.O. as a successor in title and relying on its nationality to reject the claim, the Commission imposed an additional condition and decided a matter outside its remitted powers. Its provisional determination was therefore a nullity, and it was under a statutory duty to treat the claim as established.

6. Dissents. Lord Morris considered that construing the expressions in article 4 was central to the task Parliament had entrusted to the Commission. Any error was consequently within its jurisdiction and protected by section 4(4). Lord Pearson additionally construed “successor in title” as including an assignee of the beneficial interest in the compensation claim and considered the Commission's construction correct.

• House of Lords: Allowed the appeal by a majority of three to two and restored Browne J's order.
• Court of Appeal: On 5 April 1967, set aside Browne J's judgment.
• High Court: On 29 July 1966, Browne J declared the Commission's provisional determination a nullity and declared that it was under a statutory duty to treat Anisminic's principal claim as established.