Government can't prevent Habib from suing

The federal government has failed in its legal bid to stop former Guantanamo inmate Mamdouh Habib from taking legal action against the state.

Mr Habib claims Australian authorities were complicit and sometimes present during torture he allegedly endured while detained in Pakistan, Egypt, Afghanistan and Guantanamo Bay, the US army base in Cuba.

But the Commonwealth of Australia had asked the Federal Court to throw out the case, claiming it could not be heard here because of the "act of state doctrine".

The principle, acknowledged in previous court cases in Australia, states that a nation is sovereign and its domestic actions may not be questioned in the courts of other nations.

The Commonwealth, which denies the torture claims, said the doctrine meant one country will not sit in judgment on the lawfulness of the sovereign acts of another country on foreign territory.

But on Thursday, Chief Justice Michael Black and Justices Nye Perram and Jayne Jagot concluded the act of state doctrine did not apply to prevent judicial determination of Mr Habib's claim.

"Torture offends the ideal of a common humanity and the Parliament has declared it to be a crime wherever outside Australia it is committed," said Justice Black.

"The Crimes (Torture) Act reflects the status of the prohibition against torture as a peremptory norm of international law from which no derogation is permitted and the consensus of the international community that torture can never be justified by official acts or policy."

Mr Habib was captured in Pakistan in the immediate aftermath of the September 11, 2001 terrorist attacks in the United States.

He was transferred to Egypt and then the US military camp at Guantanamo Bay in Cuba. He was released after five years in custody, but was never charged with an offence. Mr Habib says he plans to sue the government.

"They have to be punished and everyone has to know what's going on," he told the Seven Network on Thursday.