Today the globalization of world economies has caused the expansion of litigation involving foreign governments and their instrumentalities on American soil. In the international community, foreign states and their instrumentalities are increasingly involved in international commercial arbitration and the resulting enforcement of foreign awards in the U.S. arising from myriad commercial transactions, including those related to privatization and investments in emerging markets. Foreign sovereigns and their instrumentalities are especially active in the sphere of global money markets, and thus try to attract foreign capital to their national economies.
This paper highlights significant recent appellate decisions addressing international commercial arbitration in the context of the enforcement of arbitral awards against an agency or instrumentality of a foreign state. These decisions will be of interest to those practitioners representing foreign states and to those representing parties with adverse interest whose position in arbitration and subsequent enforcement litigation in the Unites States will be affected by recent precedents.
Recent decisions rendered under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“The New York Convention”) and the Foreign Sovereign Immunities Act (“FSIA”) have farranging consequences for government agencies and instrumentalities intended to be protected under the FSIA.