To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

International Arbitration (3rd edition)

Egypt Small Flag Egypt

State entities are not immune to enforcement in Egypt. A public official who intentionally refuses to implement a court order or judgment may face criminal prosecution.

France Small Flag France

French law recognizes state or sovereign immunity as a defence to enforcement, unless such immunity has been waived. The Court of Cassation has adopted different approaches to determining whether there has been waiver. In 2000, the Court of Cassation established that the state, by agreeing to an ICC arbitration, agrees to execute an award and that, consequently, such an agreement should be considered a waiver by the State of sovereign immunity (Court of Cassation, First Civil Chamber, 6 July 2000 (Bull. No. 207)). In 2013, the Court of Cassation held that the waiver can be recognized only if the waived assets were specifically and expressly presented in the contract (Court of Cassation, First Civil Chamber, 28 March 2013, Case 11-13.323). In 2015, the Court of Cassation changed its position and required that the waiver be express, without requiring other conditions (Court of Cassation, First Civil Chamber, 13 May 2015, Case 13-17.751).

Cyprus Small Flag Cyprus

The Court shall accept state immunity as a defense under certain circumstances which involve only public policy reasons and/or acts of state that are of no financial nature . (acta imperii)

Czech Republic Small Flag Czech Republic

See above - question No. 22.

Romania Small Flag Romania

As a general rule, a state or state entity may not raise a defence of state immunity at the enforcement stage, the latter being bound by the obligation to carry out the arbitral award.

Serbia Small Flag Serbia

Under Serbian enforcement law (which also applies to enforcement of arbitration awards), enforcement over property of a foreign state may only be performed with the written consent of a ministry competent for foreign affairs, or if the foreign state consents to enforcement over its property.

In all other cases, foreign states enjoy immunity from enforcement. As for enforcement over the property of the Republic of Serbia, such enforcement may be conducted, however, it is not possible to enforce claims over particular types of property – these include property such as real estate used by state authorities, property used for defense purposes, protected natural goods, cultural goods, etc.

China Small Flag China

Please refer to Question 22 above.

Denmark Small Flag Denmark

a. No Danish case law seems to exist regarding this issue. In legal theory it appears that the concept of relative immunity is applicable at the enforcement stage.

Poland Small Flag Poland

The immunity defence cannot be raised as a defence against recognition or enforcement but it may be successfully raised to exclude certain assets from enforcement. Immunity defence will not be upheld with respect to assets of the state or state entities that are used for commercial purposes.

Furthermore, Polish courts would allow execution, if immunity from execution was waived by the state, for instance, in an arbitration agreement.

Switzerland Small Flag Switzerland

No specific Swiss law has been adopted on the matter of sovereign immunity. Established case law in Switzerland, however, is based on the concept of limited immunity of states, according to which immunity from enforcement action is accorded for a state’s public acts (acta iure imperii), as opposed to a state’s private acts (acta iure gestionis), i.e. acts that concern an activity that a private party could have similarly engaged in. With regard to the latter, immunity may not apply.

In addition, assets dedicated to sovereign tasks are immune from enforcement unless the state or state entity in question has expressly waived such immunity.

Immunity may not apply if the counterparty can successfully demonstrate a sufficient nexus (e.g. Switzerland being the place of origin or place of performance of the obligation in question) between the state’s commercial (as opposed to public) act and Switzerland. The possibility of confiscation of a state’s assets acting under private law can therefore not be excluded provided that no treaty between the respective state and Switzerland determines the assets in question to be immune from enforcement.

UAE Small Flag UAE

Neither an Emirate of the UAE nor government bodies thereof have immunity. At the enforcement stage, barriers exist to the enforcement of awards against an Emirate or governmental body’s assets. For example, an award may not be satisfied by the seizure of public or private property owned by an Emirate or government body as set out in Article 247 of the UAE CPC.

United Kingdom Small Flag United Kingdom

Under s.9(1) of the 1978 Act, if a State has agreed in writing to submit a dispute to arbitration, it waives immunity from proceedings in the UK courts which relate to the arbitration, including enforcement proceedings. This does not apply to an arbitration agreement between States. (See Gold Reserve Inc. v The Bolivarian Republic of Venezuela [2016] EWHC 153).

Saudi Arabia Small Flag Saudi Arabia

As previously mentioned, the Saudi government and government bodies are prohibited from resorting to arbitration, and may only do so only after obtaining the approval of the Prime Minister.

Assuming an approval from the Prime Minister is granted and a government body enters into an arbitration proceeding, if an award is rendered against a government body, the typical enforcement courts will not have jurisdiction to enforce awards against such government body. Rather, the Royal Court will be the court with competent jurisdiction to enforce awards against government bodies.

United States Small Flag United States

Although under the Foreign Sovereign Immunities Act (“FSIA”), a foreign state waives its sovereign immunity from the jurisdiction of U.S. courts when it agrees to arbitrate disputes with a private party, this waiver of immunity does not extend to later enforcement proceedings. 28 USC § 1605(a)(6). Therefore, in order to execute an award against a sovereign state’s assets, the property at issue must fall within one of the exemptions to the general protection of sovereign states provided for in the FSIA. The first exemption authorizes execution against a foreign State’s property located in the U.S. if the property is used for “commercial activity” in the United States. 28 U.S.C. 1610(a). The second exemption designates certain types of property as “immune from execution,” including property of a foreign central bank or monetary authority held for its own account and property that is connected to the military. 28 U.S.C. 1611(b).

Austria Small Flag Austria

In general, the doctrine of restrictive immunity is recognised in Austria, according to which state immunity is applied only in relation to sovereign acts but not to activities of a commercial nature (acta iure gestionis). Moreover, if a state files an action for annulment or a motion under the Austrian Code of Civil Procedure Code, that action may be regarded as a waiver of immunity.

Nigeria Small Flag Nigeria

A state or state entity may successfully raise the defence of immunity at the enforcement stage only if the arbitral award was not published in a dispute emanating from commercial transactions. Nigerian courts recognize and enforce the doctrine of restricted immunity. See African Re-insurance Corporation v. AIM Consultants Ltd. (2004) 12 NWLR (Pt. 884) 223. Because arbitral awards that will be recognised and enforced must have been made in respect of disputes arising from commercial transactions, a state or state-entity may not be able to successfully raise the defence of immunity.

Portugal Small Flag Portugal

A state or state entity are entitled to raise a defence of state or sovereign immunity just according to the New York Conventions (or any other conventions in which Portugal is a member).

Russia Small Flag Russia

Under the 2015 Federal Law “On Jurisdictional Immunities of Foreign States and Property of Foreign States in the Russian Federation”, a state or state entity cannot rely on immunity at the enforcement state if it has expressly consented to enforcement, allocated or earmarked property for the satisfaction of the claim which is the object of proceedings, or the property has been established to be specifically in use or intended for use by the state for other than government non-commercial purposes (see also question 22 above). According to recent case law, however, the state’s consent to arbitration also implies its consent to enforcement.

Ireland Small Flag Ireland

The Arbitration Act, 2010 applies to arbitration agreements to which the Irish state is a party [ section 28 of the Arbitration Act, 2010].

Norway Small Flag Norway

As indicated in the answer to question 21 above, the Norwegian state and certain state-owned entities are generally reluctant to enter into arbitration agreements. However, if the state does enter into an arbitration agreement, the arbitration award will not be challenged at the enforcement stage based upon state or sovereign immunity.

Germany Small Flag Germany

If and where a state has agreed to arbitration, the defense of state or sovereign immunity can no longer be raised during the arbitration proceedings or the subsequent proceedings about the declaration of enforceability/recognition of an arbitration award.

However, the issue of state or sovereign immunity does come back into play in respect of the enforcement of an arbitral award. While the arbitration award against a state remains enforceable, such arbitration award cannot be enforced and executed into all state assets. Pursuant to a decision of the Federal Constitutional Court (Bundesverfassungsgericht) so-called sovereign and non-sovereign assets have to be distinguished. Sovereign assets, i.e. assets that fulfill a sovereign function are exempted from enforcement to measures. On the other hand, may be enforced and collected from non-sovereign assets.

Croatia Small Flag Croatia

The Croatian Enforcement Act provides that enforcement over the assets of a foreign state in Croatia can be conducted only provided that: a) the foreign country agrees to such an enforcement, or b) the Croatian Minister of Justice gives its consent to such an enforcement, after obtaining a prior opinion of the Minister of Foreign Affairs.

Updated: November 14, 2018