Anisminic Ltd V Foreign Compensation Commission

In this case, the appellants were a British company which owned property in Egypt which had been sequestrated by the Egyptian government after the Suez crisis. A sum of money was subsequently made available by the Egyptian government for distribution by the British government at their discretion. Determination of claims to this money was referred by the statute to the Foreign Compensation Commission, any such determination being final and not capable of being called into question in any court of law.

The Commission heard the appellants’ case and held that they were not entitled to compensation, under the terms of the relevant order in council made under the Foreign Compensation Act, 1950. The order provided that a claim by an applicant was to be treated as having been established if the applicant was a person named in the treaty with the Egyptian government as owner of property, or was a successor in title of such a person, provided that the person so named and the successor in title were British nationals at specified dates.

The appellants here were persons named in the treaty but they had since (while reserving the benefit of any claim to compensation) transferred the property to a successor who was not a British subject. The commission dismissed the appellants’ claim for compensation holding that they were not entitled under the terms of the order in council. At the Trial Court Browne J, the trial judge, largely anticipated the view of the majority law lords.

He held that Anisminic, as original owners of a claim, should share in the fund, on the wording of the Order of Council, regardless of any assignment of the claim, that the expression “successor in title” could only apply when a claimant had died, that the commission had no right to inquire whether there had been any assignment, and had exceeded jurisdiction in considering it. Their decision against Anisminic’s claim was therefore void, and Anisminic were entitled to compensation from the fund.

At the Court of Appeal The court of appeal unanimously reversed Browne J. and found no excess of jurisdiction by the commission. All held that even if the commission were wrong in holding that Anisminic lost their claim by sale of rights to T. E. D. O. , still that was only error within their jurisdiction. And two of the court agreed with the commission’s view that T. E. D. O. were assignees and successor in title. At the House of Lords

In this important case, the House of Lords, after much judicial difference of opinion (two law Lords dissented), held by majority that the ouster clause as in section 4(4) of the Foreign Compensation Act did not preclude the court from inquiring whether or not the order of the tribunal was a nullity and further held the decision of the Foreign Compensation Commission, which had dismissed the claim of Anisminic Ltd to share in a compensation fund, to be a nullity, for excess of jurisdiction.

The fund had been set up to benefit those Britons who had suffered through the Suez incident in 1956 Dissenting Judgment Lord Pearson dissented as to assignment being nugatory and held that Anisminic had lost their rights by selling to T. E. D. O. He therefore held that the commission had not even erred; but strangely enough he conceded that if he had agreed with the majority lords that assignments should be ignored, he would have agreed that the commission had exceeded jurisdiction in dismissing Anisminic’s claim.

Lord Morris agreed with the commission that the claim had been lost by assignment, but he said that even if he had disagreed and thought their view wrong, the commission would still only err within jurisdiction, and their decision would be binding. The decision demonstrates the courts' reluctance to give effect to any legislative provision that attempts to exclude their jurisdiction in judicial review. Even when such an exclusion is relatively clearly worded, the courts will hold that it does not preclude them from scrutinising the decision on an error of law and quashing it when such an error occurs.

It also establishes that any error of law by a public body will result in its decision being ultra vires. The rules of Natural Justice stress the importance of procedural requirements in the process of adjudication involving the determination of questions affecting the rights and obligations of individuals. Justice demands that laws should not only be reasonable, fair and liberal in content, but should be interpreted, applied and enforced fairly and liberally.

The rule thrives basically on two vital maxims audi alterem patem, nemo judex in cause sua which respectively mean that the judge must hear from both parties before reaching his decision and, that no one shall be a judge in his own case. Generally, failure to observe the rules of natural justice leads to the voidness of the decision given. This was the decision in Anisminic ltd v Foreign Compensation Commission1 and also the decision in Ridge v Baldwin2 reaffirms this.

The rules of Natural Justice are implied instruction and the court according to the decision in Ridge v Baldwin3 are disposed to nullify the whole process for non-observance of the rule. In the Anisminic case,4 it was stated that lack of jurisdiction may arise in various ways, which include absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry, or the tribunal may depart to make an order which it has no jurisdiction to make…or may depart from the rules of natural justice.

The House of Lords held that: These words were not to be interpreted literally. If a determination were made by an improperly constituted commission or in bad faith or in breach of natural justice or (as in the instant case) in excess of jurisdiction because of an error of law induced by the commission asking themselves and answering the wrong question or applying a wrong legal test or proceeding on the basis of irrelevant considerations, then their determination was no determination at all; it was a nullity, and the exclusionary clause was therefore inapplicable.

The effect of this is that the rules of natural justice serve a vital role in determining issues of jurisdiction, Lord Reid though preferring to limit the meaning of jurisdiction to its narrower connotation; the power to entertain a matter, concedes that; There are many cases where although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such nature that its decision is a nullity. It may have given its decision in bad faith.

It may have made a decision which it had no power to make; it may have failed in the course of the inquiry to comply with the requirements of natural justice The consequence of the above listed circumstances is that the whole process becomes a nullity for acting in excess of jurisdiction. Thus where the rules of natural justice are not complied with, it is an instance of acting in excess of jurisdiction, as such it is not necessary that a body does not have jurisdiction ab initio, and more so, the fact that it has jurisdiction to entertain a certain matter does not make it absolute as it can still be denied jurisdiction.

It is therefore very clear from the foregoing that a tribunal exceeds its jurisdiction if it did not observe the rules of natural justice, despite the fact that the tribunal had jurisdiction to entertain the matter initially. Thus the rules of Natural Justice are related to jurisdiction and must be complied with in its totality. One of the most fundamental questions of law is whether a given court has jurisdiction to preside over a given case. A jurisdictional question may be broken down into three components: 1.

Whether there is jurisdiction over the person (in personam), 2. Whether there is jurisdiction over the subject matter, or res (in rem), and 3. Whether there is jurisdiction to render the particular judgment sought. The term jurisdiction is really synonymous with the word "power". Any court possesses jurisdiction over matters only to the extent granted to it by the Constitution, or legislation of the sovereignty on behalf of which it functions. The question of whether a given court has the power to determine a jurisdictional question is itself a jurisdictional question.

Such a legal question is referred to as "jurisdiction to determine jurisdiction. " The Supreme Court in Saluwa v Kabir5 defined jurisdiction to mean; ‘The authority which the court possesses to adjudicate matters litigated before it. It is the bases, foundation, or life-wire of access to court” A keen look at the definition, one will observe that the power to exercise jurisdiction is not confined to the law courts alone, tribunals and commissions can also exercise jurisdiction in appropriate times according to the statutes that established them.

A court or tribunal may not be competent to entertain a matter if it has no jurisdiction on such matters, it may in certain cases have jurisdiction but may act in excess of it, in those circumstances they are said to be ultra vires and will amount to a nullity. This is because jurisdiction is the blood, the livewire, bedrock and foundation of adjudication. Lack of jurisdiction may arise in various ways, there may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry or the tribunal may depart to make an order which it has no jurisdiction to make.

In Anisminic’s case,6 the Lords held that the Commission had misunderstood the meaning of “successor in title” and, in considering its nationality, had exceeded its jurisdiction by taking into account an irrelevant or extraneous consideration. Lord Reid, in a now famous and oft-cited passage, said in regard to “excess of jurisdiction”: It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision is a nullity.

But in such cases the word “jurisdiction” has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the inquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice.

It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.

Examples of Extended Jurisdictional Errors was emphasized by the court in Craig v The State of South Australia7 - An administrative tribunal may fall into error of law which causes it to: identify a wrong issue ask itself a wrong question ignore relevant material rely on irrelevant material, and at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion and the tribunal’s exercise or purported exercise of power is thereby affected, it exceeds its authority of powers.

Such an error of law is jurisdictional error which will invalidate its decision. Thus, judicial review entails the power of the court to in appropriate proceedings before it to declare a governmental measure either contrary or in accordance with the constitution or other governing law with the effect of rendering the measure invalid or void or vindicating its validity.

There are various grounds for judicial review and include that the agency acted without or in excess of jurisdiction i. e. ultra vires, procedural and substantive; violation or disregard of the laws of natural justice; the agency committed an error of law which Is quite apparent or glaring on the face or record of a given proceeding or that the action was based on fraud or collusion. 8 Thus, where a law confers jurisdiction on a body, the body is bound to confine itself within the ambit of that law and any act done in excess of such jurisdiction will amount to a nullity.

Non compliance with an empowering statute or entertaining matters outside the scope shall be regarded as acting in excess of jurisdiction and thus will be declared ultra vires by the court. In the Anisminic case, the contention of the appellant was that the commission was acting outside the law which set it up, when it ventured into the inquiry as to the meaning of “successor in title” which it had no jurisdiction to entertain.

The respondents contended that even if the commission misconstrued the provisions of the articles of Foreign Compensation Act or for some other reason the commission committed an error within jurisdiction and the determination that the clam had not been established was not a nullity. The argument was that where there is an error of law within jurisdiction, that it does not nullify the whole process and as such an ouster clause will subsist to preclude the court from exercising its power of review, but that the situation would be different if it acted in excess of authority.

Of course, if it were a “mere” error of law on the face of the record (and this certainly was “on the face”), the court would be powerless to review it, in view of the exclusion clause in the statute. 9 But this error was in the opinion of the House of Lords, one which went to jurisdiction – it was a decision outside the power of the commission to make, and therefore it was ultra vires and void. It was therefore not a “determination”, and it was open for the courts to say so.

An inferior tribunal cannot determine the extent of its own jurisdiction; as Lord Reid said If they (the commission) reach a wrong conclusion as to the width of their powers, the court must be able to correct that – not because the tribunal has made an error of law, but because as a result of making an error of law they have dealt with and based their decision on a matter with which, on a true construction of their powers, they had no right to deal.

The decision of the Court is that Courts cannot be excluded from reviewing a decision that was reached in an error of law and the consequence is that any error of law by a public body will result in its decision being ultra vires. As such it can be clearly seen that a body or commission must confine itself within the limits of the statute which confers jurisdiction upon it, else, the whole process will be a nullity. Furthermore, as I earlier mentioned, Lack of jurisdiction may arise in various ways.

There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make. Or in the intervening stage, while engaged on a proper inquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into something not directed by Parliament and fail to make the inquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity