The next development came from the legislature. Since Lord Wilberforce’s
comments had still not been approved in the ratio of a case, the traditional
doctrine remained that none of the legislative, executive, judicial or
administrative acts of an unrecognized state would be accepted as valid by a
UK court. Thus, a company incorporated in an unrecognized state would
have no legal personality as far as the UK was concerned and could not sue
or be sued in the UK courts. But there was concern that such a position
would cause unwarranted hardship to individuals and damage commercial
confidence, so the legislature passed the Foreign Corporations Act 1991
(FCA), which gave companies incorporated under the laws of unrecognized territories legal personality within the UK legal system. It provided that the
consequences of UK non-recognition of the company’s territory of
incorporation would not apply to the corporation in question provided that the
territory concerned had a ‘settled legal system’. It is clear from the
parliamentary reports that this bill was passed in direct response to the
position taken by the courts following Lord Wilberforce.
Emin v Yeldag appears to be the only case (not governed by the FCA) where
this doctrine is upheld as the ratio of the case, and Lord Wilberforce’s ‘open
question’ is finally answered, in which Sumner J. reviewed all of the
authorities above and overturned two previous authorities in deciding to
recognize a divorce granted in northern Cyprus.