Originally from Enforcement of Arbitral Awards Against Sovereigns

The King can do no wrong. —William Blackstone, COMMENTARIES ON THE LAWS OF ENGLAND (1769)

I. INTRODUCTION

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.