Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147
The case of Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147 is a landmark decision for law students exploring judicial review and the scope of administrative authority. This case critically examines the limitations on the powers of administrative tribunals and the extent to which their decisions can be subjected to judicial review, challenging the traditional boundaries of legal oversight.
Facts
C applied for judicial review of D’s decision reject the claim involving distribution of compensation paid by the Egyptian government to the British government connected to British properties that were nationalised. C’s mining properties were one of the nationalised properties in Egypt which were sold to an Egyptian state-owned enterprise. D found that the term ‘successors in title’ required the title-holders of the properties to be British. C’s application for judicial review was based on the assertion that D’s decision involved an error of the law due to a misinterpretation of the legislation (the Foreign Compensation Act 1950)
Legal Issue
Did D make an error of the law during its interpretation of the Foreign Compensation Act 1950? Was the ouster clause effectively denying judicial review?
Held
The House of Lords allowed Anisminic’s appeal. The majority concluded that the Foreign Compensation Commission had misconstrued the scheme by treating the nationality of a successor in title as a barrier to the company’s claim. That legal error meant it had not made a valid determination of the kind entrusted to it. The provision preventing its determinations from being questioned in court did not protect this purported determination. Lord Reid explained that a body could begin with jurisdiction but invalidate its decision through errors such as misconstruing its powers or considering an impermissible matter. The result depended on the statutory scheme and the nature of the error, rather than an assertion that Parliament lacked power to restrict review.
⭐ Legal Principle
An ouster clause protecting a tribunal’s determinations may be construed as protecting valid determinations, not decisions rendered legally invalid by jurisdictional error. Anisminic’s misconstruction of the compensation conditions therefore remained reviewable despite the clause prohibiting challenges to determinations.
Significance
Anisminic is a foundation of modern judicial review because it narrowed the protection afforded by an ouster clause to an unlawful administrative determination. Its significance lies in interpretation of the statutory scheme and the legal error made within it. Later cases broadened the treatment of errors of law, while specific statutory exclusions still require close construction. The case should not be reduced to a claim that every ouster clause is ineffective or that courts may ignore clear legislation.
Common exam questions about this case
How did the ouster clause fail to protect the decision?
The majority treated the Commission’s legally defective determination as a nullity, outside the class of determinations protected by the clause. The decision had been based on a mistaken view of the compensation conditions. The court therefore construed the clause narrowly rather than purporting to repeal or invalidate Parliament’s legislation.
What was wrong with the Commission’s approach to successors in title?
The Commission treated the nationality of Anisminic’s successor as a disqualifying requirement in circumstances where the majority held that it was not relevant. That interpretation introduced an obstacle the applicable scheme did not impose. The error affected the legal question the Commission was authorised to determine.
Does Anisminic make every administrative mistake reviewable?
No. Its central concern was a legally invalid determination and the construction of an ouster clause. Whether another error is reviewable depends on the statutory setting and applicable public law principles. Factual disagreements, specialist evaluations and later expressly drafted exclusions cannot simply be treated as identical to the error in Anisminic.