Under the broad concept of sovereign immunity, a State cannot be subjected to the jurisdiction of the courts and tribunals of another State without the express agreement of the former State. Sovereign immunity from execution, as an element of the overarching concept of sovereign immunity, precludes authorities of one State, from taking measures of constraint against the property of another State to satisfy the demands of creditors under court decisions, arbitral awards, and similar instruments.
II. History and development
The concept of immunity from execution developed alongside the overarching concept of sovereign immunity. Akin to sovereign immunity, the concept of immunity from execution can be derived from the principle of sovereign equality of States in international law, characterized by the latin maxim par in parem non habet imperium.1
Based on the principle of sovereign equality, a State could not be sued, and its assets could not be used for enforcement of judgments, absent its explicit consent. This status quo was, for the most part, prevalent until the second half of the XX century. The situation started to change gradually in the second half of the XX century. One of the most widely known expression of that change is the 1976 U.S. Foreign Sovereign Immunities Act. This act was one of the first statutes to codify the functional approach to sovereign immunities, distinguishing between situations when a state invoked this privilege for public and commercial purposes. Since then, the functional approach to sovereign immunities in general and immunities from execution, in particular, has been rapidly developing and is nowadays reflected in the domestic laws of most of the developed States.2
In the investor-State arbitration context, the question of immunity from execution normally arises, depending on domestic law, at the stage of recognition and enforcement of an arbitral award against the respondent-State, or at the stage when enforcement against specific property of that respondent-State is sought.
III. Distinction from other types of sovereign immunities
Unlike immunity from jurisdiction, which precludes courts of one State from assuming jurisdiction over claims brought against another State, immunity from execution protects the property of a State from being used to satisfy the debts of that State to third parties. The latter goes further than immunity from jurisdiction: even if a State could not enjoy immunity from jurisdiction.3
V. Sources of law governing sovereign immunity from execution and its scope
Customary international law.4 There are only a few international or regional treaties that address the issue of sovereign immunity from execution.5 The 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property, which has been established on the basis of the work of the International Law Commission6 and addresses some aspects of State immunity from execution (or from measures of constraint),7 is not yet in force ; however, the Convention reflects, at least in part, customary international law.8 The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards is silent on the issue of sovereign immunity from execution. Article 55 of the ICSID Convention specifically provides that the Convention does not derogate from the relevant domestic law concerning immunity from execution.9 Several States have adopted domestic legislation to give effect to immunity from execution.10 In other States, courts and tribunals have implemented the scope and limits of claims to sovereign immunity.11
Maritime International Nominees Establishment v. Republic of Guinea, ICSID Case No. ARB/84/4, Interim Order No. 1: Guinea’s Application for Stay of Enforcement of the Award, para. 24; Víctor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Decision on the Republic of Chile's Application for a Stay of Enforcement of the Award, 5 May 2010, para. 34.
UK State Immunity Act (1978); US Foreign Sovereign Immunities Act (1976); Article L 111-1 of the Code of Civil Enforcement Procedures of the French Republic; Federal Law of the Russian Federation “On Sovereign Immunities of Foreign States” N 297-FZ (2015); Canadian State Immunity Act (1982); Australian Foreign States Immunities Act (1985).
VI. Functional and absolute immunity from execution
In the past, vast majority of jurisdictions followed the concept of absolute immunity of sovereign property.13 At that time, all assets held by a foreign State were immune from actions aimed at executing court decisions, arbitral awards and similar instruments. Today, the concept of functional immunity prevails in customary international law14 and in most domestic laws.15 Under this approach, assets of a foreign State, which are not used for official State purposes (acta jure imperii) are not covered by immunity against execution or measures of constraint.
Vedier, P.H. and Voeten, E., How Does Customary International Law Change? The Case of State Immunity, International Studies Quarterly, Vol. 59, 2015, p. 209; Weidemaier, M.C. and Gulati, G.M., Differing Perceptions? Market Practice and the Evolution of Foreign Sovereign Immunity, Duke Law School Public Law & Legal Theory Series No. 2016-21, 2016, p. 1.
VII. Waiver of immunity from execution
Normally, a State can waive its immunity from execution by an international agreement, written contract, or by a declaration before the competent authority of another State handling the relevant proceeding.16 The terms of a waiver have to be clear and unequivocal.17 18 The interpretation of the terms of a waiver and its scope vary across jurisdictions.
Under Article 55 of the ICSID Convention, participation in an ICSID arbitration does not by itself constitute a waiver of immunity of execution.19
United Nations Convention on Jurisdictional Immunities of States and Their Property, General Assembly Resolution A/59/38, 2 December 2004, Article 19 (not in force); ILC, Draft Articles on Jurisdictional Immunities of States and Their Property, Yearbook of the International Law Commission, 1991, vol. II (Part Two), p. 13, Article 18 (with commentary); ILA Draft Convention (International Law Association, Montreal Draft Articles for a Convention on State Immunity 1982, 22 I.L.M. (1983) 287), Article VIII A; Canadian State Immunity Act R.S.C 1985 (CSIA), Article 12.
United Nations Convention on Jurisdictional Immunities of States and Their Property, General Assembly Resolution A/59/38, 2 December 2004, Article 19 (not in force); European Convention on State Immunity (1972), 1495 U.N.T.S. 181, Article 23; Cour de cassation, Civ. 1, 10 January 2018, Congo v. Commisimpex, no. 16-22.494; Cour de cassation, Civ. 1, 24 January 2018, Congo v. Commisimpex, no. 16-16.511.
Société NML Capital Ltd v. République Argentine, Cour de cassation, Civ. 1, 28 September 2011, no. 09-72.057; Société NML Capital Ltd. v. République Argentine, Cour de Cassation, Civ. 1, 28 March 2013, no. 10-25.938; Australian Foreign States Immunities Act (1985), Article 31; United States Court of Appeals, District of Columbia Circuit, Foremost-McKesson, Inc. v. Islamic Republic of Iran, 15 June 1999, 905 F.2d 438, 444 (D.C. Cir.1990); United States Court of Appeals for the Second Circuit, Transatlantic Shiffahrtskontor GmbH v. Shanghai Foreign Trade Corporation, 25 February 2000, 204 F.3d 384 (2d Cir. 2000); United States Court of Appeals for the Second Circuit, Cargill International S.A. v. M/T Pavel Dybenko, Her Engines, Tackle, Etc., in Rem Novorossiysk Shipping Co., 19 April 1993, 991 F.2d 1012 (2nd Circuit 1993); United States Court of Appeals, District of Columbia Circuit., Creighton Ltd. v. Government of State of Qatar, 2 July 1999, 181 F.3d 118 (D.C. Cir. 1999).
VIII. Issues related to the practical application of immunity from execution
Generally, exceptions from jurisdictional immunity, such as exception for commercial activities (acta jure gestionis), as well as waivers of jurisdictional immunity, do not automatically result in waiver of immunity from execution against specific property.20 That is because jurisdictional immunity that protects the State from lawsuits is distinct from sovereign immunity from execution protecting specific properties of that State from actions aimed at enforcing court decisions or arbitral awards.21 After a creditor succeeds with recognition and enforcement of an arbitral award, it must go through the hurdle of identifying specific State property that is free from immunity and can be used for the execution of the decision. In other words, the creditor would need to show that an exception from jurisdictional immunity applies to specific property or that the State validly waived its immunity in respect of that property in order to execute the award against that property.
Stoll, Peter-Tobias, State Immunity, in Wolfrum (ed.), The Max Planck Encyclopedia of Public International Law, Oxford University Press, 2012
Cosnard, Michel, La soumission des États aux tribunaux internes: Face à la théorie des immunités des États, Éditions A. Pedone, 1996
Fox, Hazel and Webb, Philippa, The Law of State Immunity, Oxford University Press, 3rd ed., 2013.
Yang, Xiaodong, State Immunity in International Law, Cambridge University Press, 2012.
Poulain, Bruno, L’arbitrage transnational et le droit français des immunités de l’Etat étranger, in Leben, Charles (dir.), Droit international des investissements et de l’arbitrage transnational, Pedone, 2015, pp. 967 et seq.
Malet-Deraedt, Fleur, The New French Legislation on State Immunities from Enforcement, ASA Bulletin 36:2, 2018, p. 332.