JURISDICTIONAL IMMUNITY OF STATES AND THEIR PROPERTY

November 16, 2000

Mr. Chairman,

This year, the working group of the 6th committee has made headway in its discussion of the topic of immunity of states and their property. The Chinese delegation would like to thank Mr. Gerhard Hafner, Chairman of the working group for his efforts in this respect.

Mr. Chairman,

The establishment of a universally applicable system of immunity of states and their property is a complicated issue in international law. Although the legislation and legal practice of some countries have laid some groundwork, it is necessary for countries to seek solution through cooperation and joint efforts. In the view of this delegation, the 1991 draft articles on this subject by the ILC can serve as a basis for the establishment of a universally acceptable immunity system, as they have taken into account the theories, legislations and judicial practice of various countries.

Mr. Chairman,

So far, three major problems surrounding this subject have remained unresolved. They are: the criteria used to determine whether the transaction is commercial, the relationship between a state and state enterprise vis-a-vis the system of immunity of states and their property, and the measures of constraint against state property.

On the question of criteria, my delegation believes that, in determining whether a transaction is commercial, one should, undoubtedly, first look at the nature of such a transaction. However, it's also necessary to look at the purpose of this transaction as complimentary criteria to judge whether the transaction is non-commercial. This is not for expanding the scope of immunity enjoyed by states, but rather, for avoiding and solving any legal conflict that may arise from different legal systems practiced by different states. The 1991 draft articles by the ILC can be viewed as a way to reconcile this legal conflict from the perspective of international law, in that they take into consideration various legal systems and practices. A balanced solution is the retention of the 1991 draft by the ILC, which will not compromise the jurisdiction of any state over a state's commercial act.

On the question of state and state enterprise vis-a-vis the system of immunity, the Chinese delegation is of the view that state enterprise is not something unique existing only in a certain country. In addition, asset composition of a state enterprise takes various forms. Take China for example, our state enterprise's asset composition includes asset owned by natural person and other judicial person not belonging to the state. Under Chinese law, our state enterprises have independent ownership of and the right to dispose of their own assets. Therefore, the state enterprises are independent of each other, so are state and state enterprises. Provision 3 of article 10 of the 1991 draft by the ILC merely reflects objectively such an independent relationship between state and state enterprise, it does not create any additional privileges for state or state enterprise. It is, therefore, proper to retain this provision.

On the question of measures of constraint against state property, the Chinese delegation believes that as measures of constraint against state property are different from those against ordinary property, they can be imposed only with the consent of the state whose property is the subject of such measures. If measures of constraint are taken against property which is in the territory of the state of the forum, and which is specifically in use or intended to use by the state for other than government non-commercial purpose, they should be confined to property that has a connection with the claim which is the object of the proceeding or with the agency or instrumentality against which the proceeding was directed. Moreover, the Chinese delegation will give favorable consideration to the proposal of giving a state a grace period of 2 to 3 months to implement the ruling, and we will put forward our views in future meetings of the working group.

Mr. Chairman, my delegation holds that the system of immunity of states and their property is an important issue that involves state sovereignty and inter-state relations. It is not a simple procedural issue. Only by employing the form of convention can it be possible for us to ensure that countries of the world will comply with this system of immunity. We hope that we will continue to discuss this subject and achieve concrete results.

Thank you Mr. Chairman.