Anisminic Ltd v Foreign Compensation Commission

Factual and Procedural Background

In 1956 the Appellant, Company A, owned a valuable mining enterprise in The State. During armed hostilities the site was occupied and later subjected to sequestration by The State’s government. In April 1957 an official custodian sold the enterprise to a government-controlled entity, Company B. To quell commercial disruption caused by the Appellant’s protests, all parties executed a second agreement in November 1957 under which the Appellant purported to sell “the whole business” to Company B for £500,000, while expressly reserving any claim the Appellant might have against governments other than The State.

On 28 February 1959 a treaty between The Government and The State created a £27.5 million compensation fund for British-owned property that had been sold under the sequestration regime. Pursuant to the Foreign Compensation Act 1950, an Order in Council empowered the Respondent, the Foreign Compensation Commission (“the Commission”), to determine claims upon that fund.

The Appellant’s primary claim—based on the loss of its mining assets—was rejected by the Commission in 1963 on the ground that, by virtue of the 1957 agreement, Company B had become the Appellant’s “successor in title” yet was not a British national, thereby failing the nationality test in Article 4(1)(b)(ii) of the operative Order in Council (S.I. 1962 No. 2187). A secondary claim for war-damage was admitted.

High Court: Judge [Last Name] declared the Commission’s primary determination a nullity and held that the claim must be treated as established.
Court of Appeal: Reversed, holding that section 4(4) of the 1950 Act (“shall not be called in question in any court of law”) ousted judicial review.
House of Lords: The Appellant appealed, seeking restoration of the first-instance declaration.

Legal Issues Presented

1. Does section 4(4) of the Foreign Compensation Act 1950 prevent any court from examining whether a Commission determination is a nullity?
2. On the true construction of Article 4(1)(b) of the 1962 Order, does “successor in title” include an assignee such as Company B, or is it confined to universal successors (e.g., heirs)?
3. If the Commission applied the wrong legal test, was its decision ultra vires and therefore void?

Arguments of the Parties

Appellant's Arguments

• Section 4(4) protects only determinations made within jurisdiction; a purported determination that is a nullity is open to review.
• “Successor in title” in Article 4(1)(b) addresses succession on death or corporate dissolution; it does not capture an inter vivos assignment to a foreign entity.
• Because the Commission imposed an unwarranted nationality requirement linked to Company B, it asked the wrong legal question and exceeded its powers.

Respondents' Arguments

• The statutory ouster clause is absolute; any challenge “calls in question” the determination and is therefore barred.
• On a natural reading of Article 4, Company B was a “successor in title,” hence the nationality condition failed and the dismissal was correct.
• Even if the Commission erred, the error was within jurisdiction and so immune from judicial scrutiny.

Table of Precedents Cited

Court's Reasoning and Analysis

(Majority – Lords Reid, Wilberforce and Pearce)

• Parliament may restrict appeals but cannot prevent courts from inquiring whether a body acted within the area of power that Parliament itself has marked out.
• Section 4(4) therefore shields only genuine determinations; a purported determination rendered outside the statutory limits is a nullity and may be ignored.
• The statutory scheme showed Parliament itself fixed certain mandatory criteria. Article 4(1)(b) obliges the Commission to admit a claim when the listed conditions are met; it confers no power to add further hurdles.
• Read in context, “successor in title” refers to universal successors (e.g., heirs) and not to an assignee of a mere hope or spes of compensation. Because the Appellant remained the original owner, no inquiry into successors was permissible.
• By investigating whether Company B was a successor and treating its foreign nationality as fatal, the Commission applied the wrong legal test and decided a question it had no authority to entertain. Its determination was therefore void.

(Dissent – Lords Morris and Pearson)

• The construction of “successor in title” and its application were questions remitted to the Commission; any misconstruction was an error within jurisdiction, insulated by section 4(4).
• The Commission acted squarely within its remit in examining the November 1957 agreement and concluding that the claim had passed to a non-British entity.

Holding and Implications

Holding: APPEAL ALLOWED; the declaration of Judge [Last Name] restored, the Commission’s provisional determination declared a nullity, and the Appellant’s primary claim ordered to be treated as established.

Implications: The decision establishes that statutory “ouster” clauses do not bar courts from reviewing whether a tribunal has acted outside the area of authority conferred upon it, and that any legal error bearing on the scope of that authority renders the tribunal’s decision void. The ruling is a cornerstone of modern UK administrative law, confirming that all public bodies remain subject to the supervisory jurisdiction of the courts.