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Docteur Esra Yıldız Üstün

Assistant Professor and Doctor - Atatürk University

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Waiver of Immunity from Execution

I. Definition of sovereign immunity

1.

Sovereign immunity can be defined as a plea that can be claimed by one State against another State’s national court adjudication and enforcement jurisdiction, being invoked upon the basis that the given grievance would damage the State’s sovereignty.1 This doctrine originated within the formal independence and equality of States.2

A. Immunity from execution

2.

While state immunity is not in itself an obstacle to arbitration, difficulties inevitably arise when the terms of discussion encompass the question of whether immunity extends from the establishment of jurisdiction to execution.3

3.

Enforcement obstacles are most likely to arise when a winning party attempts to enforce its award against the host State. In addition, it is also likely to arise when a state entity in a third State that is member of the Convention on the settlement of investment disputes between states and nationals of other states or United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards attains the host State’s assets.4 The State may invoke immunity from execution to avoid having an award executed against its assets.5 This strategy is generally more effective if the losing party is the State itself – this is because sovereign immunity places state assets under state protection.6

B. Waiver of other types of immunities

4.

Most Bilateral Investment Treaties (BITs) include arbitration provisions, with a view to settling disputes that have arisen from the interpretation of the treaties. Signatory States hereby agree to waive their jurisdictional immunity by voluntarily signing such treaties.7 This development over time has served to reiterate the restricted immunity theory, which has been adopted in some national laws8 and international conventions.9 (See Immunity from Execution)

5.

Furthermore, pursuant to article 55 of the ICSID Convention,10 Even though the Convention imposes the obligation to recognize and enforce pecuniary obligations contained in ICSID awards,11 States’ immunity from execution remains unaffected.12 Accordingly, being a party to the ICSID Convention does not constitute a waiver from immunity an itself, it but may constitute a waiver under the State’s domestic legislation on sovereign immunity.13 However, this article only applies to immunity from execution, and not from jurisdiction.14

6.

A particularly remarkable example of implied waiver is the United Nations Convention on Jurisdictional Immunities of States and Their Property (UNCSI), which refers to instances in which States have implicitly waived their jurisdictional immunity by signing the treaties.15 This pattern has been cited in support of the claim that the convention’s member States have the right to enter a plea of jurisdictional immunity. However, this proposition may not extend to the execution immunity plea.16

II. State's consent to waive immunity from execution and forms of waiver

7.

States can waive their immunity from execution.17 Waivers are often presented as expressions of State’s consent in international legal instruments.18 As such, a State authority is required to correctly waive immunity.19 A waiver may be expressed in an international agreement, a written contract or an arbitration agreement, an ad hoc declaration before the court or by a written communication after a dispute between the parties has arisen.20 

8.

General waivers of immunity are quite rare in practice – this means that private parties may be in a better bargaining position when demanding a waiver of immunity from execution.21 However, it is not uncommon for economic development agreements to include a waiver of immunity clause.22 In one example, the Republic of Argentina had already waived its immunity from execution in favour of the foreign investor.23

III. Terms of a waiver

9.

Domestic laws usually provide that the terms of a waiver have to be made in writing.24 Domestic laws very rarely accept an implied waiver.25 Waivers are usually required to be clear and unequivocal26 or even express and specific.27 Some jurisdictions accept waiver to be either general or to have a limited extent.28

10.

Several international instruments require an ‘express’ waiver.29 This approach is generally followed by international jurisdictions30 and by national jurisdictions.31

11.

For certain types of assets, there may be no waiver32 or a special waiver may be required.33

IV. Example clause

12.

ICSID published a model clause of waiver of immunity from execution of the award.34

Bibliography

Akande, R.A., Enforcement and Practicability of Sovereign Immunity Doctrine in International Commercial Arbitration, Journal of Politics and Law, 2014, p. 1.

Al-Adba, N.M., The Limitation of State Sovereignty in Hosting Foreign Investments and The Role of Investor-State Arbitration to Rebalance The Investment Relationship, University of Manchester, 2014, p. 181.

Bello, T., Sovereign Immunity and Enforcement of Arbitral Awards; Breaking the Barrier, 2019.

Bjorklund, A.K., State Immunity and the Enforcement of Investor-State Arbitral Awards, in Binder, C., Kriebaum, U., Reinisch, A. and Wittich, S., (eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, 2008 p. 858.

Collier, J. and Lowe, V., The Settlement of Disputes in International Law; Institutions and Procedures, 1999, pp. 271-272.

Coop, G., Nistal, A. and Volterra, R. G., Sovereign Immunities And Investor-State Awards: Specificities Of Enforcing Awards Based On Investment Treaties in Fouret, J., (ed.) Enforcement Of Investment Treaty Arbitration Awards, 2015, pp. 67-83.

Delaume, G.R., Economic Development and Sovereign Immunity, American Journal of International Law, 1985, pp. 319-346.

Fouret, J. (ed.), Enforcement of Investment Treaty Arbitration Awards, 2015, pp. 99-113.

Fox, H. and Webb, P., The Law of State Immunity, 3rd ed., 2013. 

Lew, J.D.M., Mistelis, L.A. and Kröll, S.M., Comparative International Commercial Arbitration, 2003.

Matute, C., Forum Shopping in the Execution of ICSID Awards: Is it Time to Revive the UN Convention on State Immunity?, 2016. 

Ogutu, B., Is Sovereign Immunity the Achilles Heel in Enforcement of Investment Treaty Awards against States?, Uppsala University Department of Law, 2019.

Saleem, A.M., To What Extent Do States Have the Right to Use its Sovereign Immunity Defence against ICSID Awards?, University of Dundee - Centre for Energy, Petroleum and Mineral Law & Policy, 2013, p. 4.

Schreuer, C. H., Review: State Immunity: Some Recent Developments, Cambridge, 1991, pp. 213-221.

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