Sovereign Immunity - Chapter 3 - Enforcement of Arbitral Awards Against Sovereigns
R. Doak Bishop is a Partner in the Houston office of King & Spalding LLP. Mr. Bishop has over 27 years experience focusing on international arbitration and litigation of oil and gas, energy, construction, and environmental disputes. He has developed a global reputation for his experience in international arbitration, serving both as an arbitrator and counsel in large business disputes.
Mr. Bishop presently serves as Vice Chairman of the Institute of Transnational Arbitration and as a member of the U.S. delegation to the NAFTA Advisory Committee on Private Commercial Disputes. He has previously served as Chairman of the Litigation Section of the State Bar of Texas (1998) and Co-Chair of the American Bar Association International Litigation Committee (1998-1999). His experience in litigation and arbitration includes international litigation and arbitration, oil & gas and energy disputes, construction disputes, environmental disputes, and high technology disputes.
Mr. Bishop received his B.A. degree with high honors and departmental distinction from Southern Methodist University in 1973, and his J.D. degree with honors from The University of Texas in 1976 where he served as Research Editor of the Texas Law Review.
Originally from Enforcement of Arbitral Awards Against Sovereigns
The King can do no wrong. —William Blackstone, COMMENTARIES ON THE LAWS OF ENGLAND (1769)
Sovereign immunity is, in essence, the principle that the sovereign (i.e., the government) cannot be sued without its consent. Although rooted in English common law, the doctrine also derives from the practical consequence that the sovereign makes the laws, and so can restrict any legal right against it under the very laws that it makes. In federal states, like the United States, the concept extends to political subdivisions and involves the immunity of both the federal sovereign and its political subdivisions from the jurisdiction of both the federal courts and the courts of its constituent subdivisions. For purposes of this chapter, however, the principal focus will be on “foreign” sovereign immunity—i.e., the immunity of sovereign nation-states in the courts of other sovereign nation-states. This is an extension of the common law doctrine to the international plane, which emerged largely as a result of international comity.
Structurally, the chapter will first analyze the evolution of the doctrine from its “absolutist” origins to the significantly more “restrictive” version in place in most states today. This evolution has made it substantially easier for a creditor holding an arbitration award against a sovereign to be able to maintain jurisdiction over that sovereign in a foreign court. Importantly, however, the chapter next demonstrates that creditors should be aware of the significant distinction between immunity from jurisdiction and immunity from execution. The latter protects many (perhaps even most) sovereign assets from being attached to collect an arbitration award, even when the relevant foreign court has otherwise obtained jurisdiction over the sovereign state. This portion of the chapter includes an overview of these concepts as applied in the most recent sovereign immunity precedents in several major jurisdictions in which enforcement of ICSID arbitration awards is likely to be sought, including the United States, the United Kingdom, France, and Germany.1 The chapter concludes with some final remarks.