Enforcing Judgments and Awards Against Foreign States - Part 4 Chapter 4 - The Practice of International Litigation - 2nd Edition
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.
Litigation involving foreign states has become increasingly common, a trend that is likely to continue. In their commercial capacity, many foreign states are as significant as the largest multinational companies, in that, directly or through various agencies, instrumentalities and state-owned companies or other entities, they contract throughout the world for a wide variety of goods, services and capital. As a result, issues involving the recognition and enforcement of foreign-country judgments or the confirmation and enforcementof foreign arbitral awards rendered against a foreign state can be as important as issues underlying such enforcement against private business entities.
This chapter examines one of these issues: obtaining jurisdiction over a foreign state for the purpose of enforcing a court judgment or an arbitral award rendered outside of the United States.
In an earlier chapter, we examined generally the question of jurisdiction to enforce foreign-country money judgments. Obtaining jurisdiction to enforce, and enforcing, judgments or awards against foreign states presents a special case, however, because actions against foreign states are governed by the Foreign Sovereign Immunities Act (“FSIA”). Essentially a jurisdictional statute, the FSIA codifies the so-called “restrictive” principle of sovereign immunity under which the immunity of a foreign state is “restricted” to suits involving a foreign state’s public acts (jure imperii) and does not extend to suits based on its commercial or private acts (jure gestionis). Specifically, the FSIA (28 U.S.C. sections 1604-1607) provides that foreign states are immune from suit in federal courts unless the dispute falls within specified exceptions to immunity.
Exceptions to Immunity
Under the FSIA a court has personal jurisdiction over a foreign state if it has subject-matter jurisdiction over the claim, i.e., when one of certain exceptions to sovereign immunity applies (28 U.S.C. section 1330). With respect to the question of constitutional minimum contacts, Congress believed that “[t]he requirements of minimum jurisdictional contacts and adequate notice are embodied in the provision” because “each of the immunity provisions in the bill, sections 1605-1607, requires some connection between the lawsuit and the United States, or an express or implied waiver by the foreign state of its immunity from jurisdiction.”
Courts, however, have decided instead to keep distinct the issues of subject-matter jurisdiction under the FSIA and personal jurisdiction over the defendant. In Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981), cert.denied, 454 U.S. 1148 (1982), the Second Circuit held that:
[T]he [FSIA] cannot create personal jurisdiction where the Constitution forbids it. Accordingly, each finding of personal jurisdiction under the FSIA requires, in addition [to a finding of subject-matter jurisdiction and proper service of process], a due process scrutiny of the court’s power to exercise its authority over a particular defendant.