Sometimes, winning an arbitral award is just half the battle. If the losing party refuses to pay voluntarily, it may be necessary to enforce the award in national courts. And if the losing party is a foreign State, questions of foreign sovereign immunity will inevitably arise.
Bilateral investment treaties often give foreign investors a choice of forum. When both the host State and the investor’s home State are parties to the ICSID Convention, foreign investors typically have the option to bring their claims under the ICSID Convention framework, which shields the arbitration and the award from most national court interventions. But foreign investors typically have a non-ICSID option as well, in which national courts play their usual roles under the New York and Panama Conventions, supporting the arbitration and reviewing the award.
Although there are important differences between ICSID and non-ICSID proceedings, the U.S. rules of foreign sovereign immunity are the same for both. In Mobil Cerro Negro, Ltd. v. Bolivarian Republic of Venezuela, the Second Circuit held that ICSID-award creditors could not use the summary procedures available for sister-state judgments to enforce ICSID awards.