Sovereign, or state immunity is a fundamental rule of public international law, protecting States and their property from the adjudicative and enforcement jurisdiction of the courts of other States. It is generally accepted that a State's sovereignty will be infringed when it is made subject to the laws of a foreign court without its consent, and so a State can only be sued in a foreign court in limited circumstances.
In the UK, the applicable legislative framework is set out in the State Immunity Act 1978, which provides that a State will generally be immune from the jurisdiction of UK courts unless one of the exceptions apply. This article examines four recent cases where a party sought to enforce an arbitral award against a State, but an argument arose as to whether one of the following exceptions applied:
- Under section 2, a State will not be immune in respect of proceedings where it has submitted to the jurisdiction of UK courts. Section 2(2) provides that "a State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement; but a provision in any agreement that it is to be governed by the law of the UK is not to be regarded as a submission".
- Under section 9, where a State has agreed in writing to submit a dispute to arbitration "the State is not immune as respects proceedings in the courts of the United Kingdom which relate to the arbitration".
- Under section 13(2)(b), "the property of a State shall not be subject to any process for the enforcement of a judgment or arbitration award or, in an action in rem, for its arrest, detention or sale". However, section 13(3) provides that this does not prevent "the giving of any relief or the issue of any process with the written consent of the State concerned".
Submission to the jurisdiction
In Infrastructure Services Luxembourg S.A.R.L. & Anr v The Kingdom of Spain; Border Timbers & Anor v Zimbabwe (2024), two appeals heard together, the Court of Appeal considered whether Spain and Zimbabwe could rely on state immunity to set aside orders registering ICSID (International Convention on the Settlement of Investment Disputes) awards in England.
The claimant investors argued that, in ratifying the ICSID Convention (which provides, at Article 54, that contracting States shall recognise an ICSID award as binding and enforceable), both Spain and Zimbabwe had unequivocally agreed to submit to the enforcement jurisdiction of the English courts for the purposes of section 2(2) of the Act.
The Court of Appeal concluded that the ICSID Convention did indeed provide the requisite "written agreement" to submit to the jurisdiction for the purpose of section 2(2), although it did not go so far as to give rise in and of itself to a valid arbitration agreement under section 9.
The Supreme Court has given permission to appeal on this issue.
By comparison, in CC/Devas (Mauritius) Ltd & Ors v The Republic of India (2025), a recent judgment concerning the enforcement of an arbitral award against India, the Commercial Court ruled that the ratification of the New York Convention did not amount to a waiver of state immunity. Simply being a State party to the New York Convention did not constitute "prior written agreement" as required by section 2(2).
The Court distinguished the case from Infrastructure Services, emphasising that the wording of the New York Convention only requires contracting States to recognise arbitral awards as binding and to "enforce them in accordance with the rules of procedure of the territory where the award is relied upon". This wording on its face is less express, unequivocal and "unmistakeable" than the ICSID Convention. The Court also noted that the drafters of the ICSID Convention clearly had state immunity in mind when the treaty was being negotiated, given that it is in itself a mechanism to settle disputes between investors and States and State-owned entities. By comparison, the New York Convention applies more broadly to commercial arbitrations, regardless of whether a State is involved.
As the judge remarked, the question of whether a State has submitted to the jurisdiction of the English court by ratification of the New York Convention does not normally arise under English law because, where a State has agreed to submit a dispute to arbitration, the other party will usually be able to rely on the arbitration exception in section 9. However, in this case India disputed that there was a valid arbitration agreement in place. The reliance on section 2(2) was an attempt to circumvent determination of that issue.
The arbitration exception
Issues arising out of a dispute over whether an arbitration agreement was in place also arose in Hulley Enterprises Ltd & Ors v The Russian Federation (2025). In 2014, a Netherlands-seated tribunal famously ordered Russia to pay damages of over $50 billion plus interest to the former majority shareholders in the Yukos Oil Company. Russia sought to challenge the enforcement of the award in several jurisdictions, including England and the Netherlands. Although the English proceedings were stayed pending the outcome of the Dutch challenge proceedings, that stay was lifted to enable the English court to determine whether Russia could claim immunity pursuant to the Act.
The claimants relied on the arbitration exception set out in section 9. The key question for the English court was whether, in circumstances where the Dutch court had already found that an arbitration agreement did exist (such that section 9 would apply), this gave rise to an issue estoppel and could not be relitigated, or whether the nature of state immunity constituted a 'special circumstance' meaning that issue estoppel did not apply.
The Court of Appeal agreed that, where an issue of state immunity arises, the court is obliged to give effect to the provisions of the Act. However, that exercise involves applying substantive rules of English law, which includes issue estoppel. State immunity does not constitute a "special circumstance" such that issue estoppel should not apply. Accordingly, an issue estoppel had arisen from the Dutch court's determination that Russia had agreed to arbitrate, section 9 applied and Russia could not claim immunity.
Immunity from execution
Finally, while the previous decisions concerned the question of whether a sovereign State had submitted to the adjudicative jurisdiction of the English court, in General Dynamics United Kingdom Ltd v The State of Libya (2025) the Court of Appeal was asked to determine whether a sovereign State had submitted to the enforcement jurisdiction of the English court such that an award could be executed against it.
The claimant had obtained an award against Libya which it sought to enforce by way of a final charging order over property owned by Libya in the UK. The claimant contended that a clause in the parties' contract stating that "both parties agree that the decision of the arbitration panel shall be final, binding and wholly enforceable" constituted Libya's written waiver for the purposes of section 13(3) of the Act, as well as for the purposes of section 9 and the English court's adjudicative jurisdiction.
A majority of the Court of Appeal agreed that the clause, and in particular the words stating that any award was to be "wholly enforceable" constituted written consent, and Libya had therefore submitted to the enforcement jurisdiction of the English courts. Although Phillips LJ disagreed that these words on their own were sufficient to constitute written consent, he highlighted that the parties had also agreed under their contract that any dispute would be settled under the ICC Rules 1998, according to which parties undertake to "carry out any award without delay". This phrase has been interpreted as a waiver of immunity to the enforcement of arbitral awards in other jurisdictions and in that context he concluded that the agreement in this case that an award would be "wholly enforceable" could readily be seen to encompass any and all waivers necessary for the award to be executed as well as enforced.
Conclusion
While the principle of state immunity remains a cornerstone of public international law, these decisions demonstrate that States cannot always rely on it to avoid liability and that, in an appropriate circumstance, the English court will be prepared to conclude that a State has waived immunity or submitted to the jurisdiction.
Under the Act, it is clear that in entering into an arbitration agreement, a State party will waive its right to immunity, at least insofar as the adjudicative jurisdiction of the English court is concerned. Arguments as to whether the State is a party to the relevant arbitration agreement may make the issue more complex, but as Hulley demonstrates, where a foreign court has already determined the question, the English court will be ready to conclude that an issue estoppel has arisen such that it will not determine the issue afresh.
Meanwhile, in Infrastructure the English courts have shown that they may be willing to constitute accession to an international convention as a submission to the jurisdiction of the English court in certain circumstances, albeit the decision in CC/Devas indicates that they will not always do so. Finally, the decision in General Dynamics shows that the court may conclude that a State party has consented to the English court's enforcement jurisdiction, even if it has not used those words in its agreement.