Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147

Anisminic Ltd v Foreign Compensation Commission is a landmark decision by the House of Lords that transformed the principles of administrative law in the United Kingdom. It redefined the scope of judicial review by abolishing the distinction between jurisdictional and non-jurisdictional errors of law, thereby ensuring that public bodies remain accountable for the legality of their decisions. The case also significantly limited the effectiveness of statutory ouster clauses, reinforcing the rule of law.

Background and Key Facts of Anisminic Ltd v Foreign Compensation Commission

Anisminic Ltd owned mining properties in the Sinai Peninsula, Egypt. During the Suez Crisis of 1956, these properties were seized and nationalised by the Egyptian government. Subsequently, in 1957, Anisminic sold the properties to The Economic Development Organisation (TEDO), a company owned by the Egyptian government.

The UK government, under the Foreign Compensation Act 1950, enacted Orders in Council in 1959 and 1962 to facilitate the distribution of compensation paid by foreign governments for the nationalization of British properties. This compensation was to be distributed by the Foreign Compensation Commission (FCC), a tribunal established under the Act.

Anisminic claimed compensation for the nationalised properties. The FCC, however, denied the claim, reasoning that TEDO, as the “successors in title” to Anisminic’s properties, did not meet the required British nationality under the provisions of the relevant Orders. Anisminic sought judicial review, asserting that the FCC had misinterpreted the term “successors in title,” thereby committing an error of law.

The tribunal relied on Section 4(4) of the Act, an ouster clause, which stated: “The determination by the commission of any application made to them under this Act shall not be called into question in any court of law.” This clause purportedly excluded judicial review of the FCC’s decisions.

Issues

The key issues raised in Anisminic Ltd v Foreign Compensation Commission were:

  • Error of Law: Did the FCC commit an error of law in interpreting the term “successors in title”?
  • Ouster Clause: Did Section 4(4) of the Foreign Compensation Act 1950 prevent the court from reviewing the tribunal’s decision?

Anisminic Ltd v Foreign Compensation Commission Judgement

The House of Lords, in a majority decision, allowed Anisminic’s appeal. The key findings were as follows:

  1. Error of Law and Ultra Vires:
    • The FCC’s misinterpretation of “successors in title” was an error of law.
    • Any error of law committed by a public body renders its decision ultra vires (beyond its powers) and null.
  2. Ouster Clause Interpretation:
    • The term “determination” in the ouster clause did not include decisions made outside the tribunal’s jurisdiction.
    • A decision made in error of law or in breach of the tribunal’s mandate is not a valid determination and therefore falls outside the protection of the ouster clause.

The House of Lords established that judicial review cannot be excluded by an ouster clause if the decision is tainted by an error of law that nullifies it.

Key Opinions

Lord Reid:

  • Distinguished between valid determinations and purported determinations.
  • Held that if a tribunal acts outside its jurisdiction or commits an error of law, its decision is not a determination under the statute.
  • Observed that Parliament would have used clearer language if it intended to shield even null decisions from review.

Lord Pearce:

  • Defined jurisdiction broadly, including adherence to natural justice and proper interpretation of the tribunal’s statutory mandate.
  • Asserted that tribunals must act within the powers conferred on them by Parliament and cannot expand their jurisdiction through erroneous interpretations.

Lord Wilberforce:

  • Supported the broad scope of judicial review, emphasizing that errors of law affecting a tribunal’s jurisdiction render its decisions void.
  • Highlighted that the term “jurisdiction” should not be narrowly construed to limit the courts’ oversight.

Conclusion

Anisminic v Foreign Compensation Commission is a seminal case that redefined the boundaries of judicial review in the UK. By abolishing the distinction between jurisdictional and non-jurisdictional errors of law, the House of Lords ensured that administrative bodies remain accountable for their decisions. The judgement also limited the scope of ouster clauses, reinforcing the courts’ role as guardians of the rule of law. This case remains a cornerstone of administrative law, emphasising the principles of legality, fairness, and accountability in public decision-making.

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