BackgroundConcept of sovereign immunity
What is the general approach to the concept of sovereign immunity in your state?
The concept of sovereign immunity applied in the United States is that of restrictive immunity. The statute giving effect to this doctrine is the Foreign Sovereign Immunities Act 1976 (as codified in 28 USC sections 1330 and 1602 to 1611) (the Act). Section 1602 provides that:
the determination by United States courts of the claims of foreign states to immunity from the jurisdiction of such courts would serve the interests of justice and would protect the rights of both foreign states and litigants in United States courts. Under international law, states are not immune from the jurisdiction of foreign courts insofar as their commercial activities are concerned, and their commercial property may be levied upon for the satisfaction of judgments rendered against them in connection with their commercial activities. Claims of foreign states to immunity should henceforth be decided by courts of the United States and of the States in conformity with the principles set forth in this chapter.
The Act applies only to foreign states and, therefore, not to the federal government, or to state or tribal governments, whose immunity is determined based on the US Constitution and US common law.Legal basis
What is the legal basis for the doctrine of sovereign immunity in your state?
The law of sovereign immunity derives from international law, but the United States was the first state to codify that law with the enactment of the Act (see question 1). Section 1330 of the Act establishes that US federal courts have jurisdiction to adjudicate disputes against foreign states provided one of the exceptions described in the Act applies (see sections 1604, 1605 to 1607, 1609 to 1611).Multilateral treaties
Is your state a party to any multilateral treaties on sovereign immunity? Has the state made any reservations or declarations regarding the treaties?
The United States is not a party to any multilateral treaty on sovereign immunity.
Jurisdictional immunityDomestic law
Describe domestic law governing the scope of jurisdictional immunity.
Jurisdictional immunity covers the foreign state itself and its various organs, agencies and instrumentalities, and extends to all activities unless specifically excepted in the Act (see sections 1605 to 1607). Pursuant to section 1603, a ‘foreign state’ includes ‘a political subdivision of a foreign state or an agency or instrumentality of a foreign state’. An ‘agency or instrumentality of a foreign state’ is an entity:
State waiver of immunity or consent
(1) which is a separate legal person, corporate or otherwise, and
(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
(3) which is neither a citizen of a State of the United States . . . nor created under the laws of any third country’.
How can the state, or its various organs and instrumentalities, waive immunity or consent to the exercise of jurisdiction?
A foreign state may waive its immunity explicitly or implicitly (see section 1605(a)(1)). Waivers of immunity cannot be revoked unilaterally. An explicit waiver or consent may occur by treaty (as has been done with respect to commercial and other activities in a series of treaties of friendship, commerce and navigation) or in a contract between a foreign state and a private party. Implicit waiver of sovereign immunity from jurisdiction may be established where the foreign defendant has appeared in court (or has filed a responsive pleading in an action without raising the defence of immunity), has agreed to arbitrate in another country, or agreed that the law of particular country should govern a contract (see Report of the House Judiciary Committee, HR Rep No. 1487, 94th Congress, 2d Session (1976), at 18).
The Act also establishes the arbitration exception, which concerns actions to enforce arbitration agreements between private parties and foreign states or actions to confirm arbitration awards rendered pursuant to such agreements (see section 1605(a)(6)). In these cases, a foreign state is not immune from the jurisdiction of US courts.
In which types of transactions or proceedings do states not enjoy immunity from suit (even without the state’s consent or waiver)? How does the law of your country assess whether a transaction falls into one of these categories?
Apart from waiver and consent, foreign states do not enjoy sovereign immunity from the jurisdiction of US courts in the following areas:
- commercial activities (section 1605(a)(2));
- taking of property in violation of international law (ie, expropriation) (section 1605(a)(3));
- rights in property in the United States acquired by succession or gift or rights in immovable property situated in the United States (section 1605(a)(4));
- personal injury or death, or damage to or loss of property occurring in the United States (section 1605(a)(5));
- monetary damages concerning a terrorist act (section 1605A) or international terrorism (section 1605B);
- admiralty proceedings (specifically suits involving maritime liens) (section 1605(b)); and
- when the claim against a foreign state arises in the form of a counterclaim (section 1607).
All these are exceptions to jurisdictional immunity and do not in themselves overcome enforcement immunity.
The commercial activity exception is limited to those cases in which the action is based upon a commercial activity carried on by the foreign state, an act performed in connection with a commercial activity of the foreign state elsewhere, or an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States (section 1605(a)(2)). A ‘commercial activity’ is further defined as ‘either a regular course of commercial conduct or a particular commercial transaction or act’, whose commercial character ‘shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose’ (section 1603(d)). On the other hand, a ‘commercial activity carried on in the US by a foreign state’ means commercial activity carried on by a state and having substantial contact with the United States (section 1603(e)).
In Republic of Argentina v Weltover Inc, the Supreme Court held that the issuance of bonds by Argentina constituted a commercial activity under the Act because Argentina had acted ‘not as a regulator of a market, but in the manner of a private player within it’ (504 US 607 (1992), at 614). Argentina argued that the nature-purpose distinction is not appropriate because the ‘essence of an act is defined by its purpose’, but the Supreme Court pointed to the wording of section 1605(a)(2) and considered that such an argument was ‘squarely foreclosed by the language of the’ Act, as however ‘difficult it may be in some cases to separate “purpose” from “nature” . . . the statute unmistakably commands that to be done’ (504 US 607 (1992), at 617). In another leading case on the commercial activity exception, Texas Trading & Milling Corp v Federal Republic of Nigeria, the Court of Appeals for the Second Circuit held that Nigeria’s anticipatory breach of more than 100 contracts for the purchase of cement qualified as commercial (647 F2d 300 (2d Cir 1981) cert den). In another case, the Court of Appeals for the Seventh Circuit held that Greece had engaged in commercial activity and was thus amenable to suit where Greece had contracted with a healthcare provider for the provision of medical services to Greek nationals in the United States (see Rush-Presbyterian-St Luke’s Medical Center v Hellenic Republic, 877 F2d 574 (7th Cir 1989) cert den).
The expropriation exception (section 1605(a)(3)) actually creates two exceptions to the general rule of sovereign immunity. First, a state is not immune in any case ‘in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state’. Property is ‘taken in violation of international law’ through nationalisation or expropriation that does not serve a public purpose, is discriminatory in nature and is without payment of prompt, adequate and effective compensation (see, generally, Zappia Middle E Constr Co v Emirate of Abu Dhabi, 215 F3d 247 (2d Cir 2000)). Exhaustion of local remedies in the foreign jurisdiction is also not a statutory prerequisite to jurisdiction under the expropriation exception (see Cassirer v Kingdom of Spain, 616 F3d 1019 (9th Cir 2010) cert den; however, see also Restatement (Third) of Foreign Relations Law (1987), section 713, comment f: ‘Under international law, ordinarily a state is not required to consider a claim by another state for an injury to its national until that person has exhausted domestic remedies, unless such remedies are clearly sham or inadequate, or their application is unreasonably prolonged.’).
Second, a state is not immune when the taken property or any property exchanged for that property ‘is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States’. For example, in De Sanchez v Banco Central de Nicaragua, the court found that the defendant was engaged in commercial activity in the United States through the holding of funds in a US bank for the facilitation of currency exchanges (515 F Supp 900 (ED La 1981), at 911; and 770 F2d 1385 (5th Cir 1985)). Accordingly, in Dayton v Czechoslovak Socialist Republic, the Court of Appeals for the DC Circuit held that the nationalisation of textile plants without the payment of compensation did not fall within the expropriation exception because the plants were located in Czechoslovakia, no property exchanged for the plants was located in the United States and a Czechoslovakian trading company, which was sought to be held liable, did not own or operate the plants or property exchanged for them (Dayton v Czechoslovak Socialist Republic, 834 F2d 203 (DC Cir 1987) cert den).
Further, the Supreme Court recently opined that ‘whether the rights asserted are rights of a certain kind, namely, rights in “property taken in violation of international law”, is a jurisdictional matter that the court must typically decide at the outset of the case, or as close to the outset as is reasonably possible’ (see Bolivarian Republic of Venezuela v Helmerich & Payne Int’l Drilling Co, 137 US 1312 (2017), at 1319).
If one of the exceptions to sovereign immunity set out above applies, is there any related principle that could prevent a court having jurisdiction over the state?
In addition to sovereign immunity, the act of state doctrine could also prevent a court from exercising jurisdiction over the foreign state in question. As the legislative history explains, the Act ‘in no way affects existing law on the extent to which, if at all, the “act of state” doctrine may be applicable’ (see House Report, at 20; see also Dayton v Czechoslovak Socialist Republic, 672 F Supp 7 (DC Dist 1986), affd 834 F2d 203 (DC Cir 1987) cert den).Proceedings against a state enterprise
To what extent do proceedings against a state enterprise or similar entity affect the immunity enjoyed by the state? Is there precedent for piercing the corporate veil to subject the state itself to those proceedings?
As explained in question 4, section 1603 of the Act provides that a foreign state ‘includes a political subdivision of a foreign state or an agency or instrumentality of a foreign state’. A state enterprise may qualify as a foreign state provided the tripartite test in section 1603(b) is met, namely, that the enterprise is (i) a separate legal person, (ii) an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and (iii) neither a citizen of the United States nor created under the laws of any third country.
When a state enterprise qualifies as a foreign state, whether it will be amenable to suit depends on the applicability of the exceptions to sovereign immunity set out in sections 1605 to 1607 of the Act. For example, an airline that was wholly owned by the government of the Dominican Republic was considered an instrumentality of a foreign state notwithstanding the fact that it had several offices and bank accounts in the United States and paid city, state and federal taxes (see Arango v Guzman Travel Advisors, 761 F2d 1527 (11th Cir 1985)). Likewise, an airline that was 97 per cent owned by the Ecuadorian Air Force was held to be an instrumentality of a foreign state (see Keller v Transportes Aereos Militares Ecuadorianos, 601 F Supp 787 (DC Dist 1985)).
However, in Filler v Hanvit Bank, the Court of Appeals for the Second Circuit held that certain South Korean commercial banks did not enjoy sovereign immunity under the Act because the majority of the banks’ stock was owned by the Korean Deposit Insurance Corporation and was therefore not directly owned by South Korea (378 F3d 213 (2d Cir 2004) cert den). This follows the Supreme Court’s ruling in Dole Food Co v Patrickson, which settled the issue of ‘tiering’, finding that a foreign state must itself directly own a majority of the shares of an enterprise if that enterprise is to be deemed an instrumentality of the state under the Act. In that case, ownership of the defendant company was at various times separated from the state of Israel by one or more corporate layers (see 538 US 468 (2003); compare with In re Aircrash Disaster near Roselawn, 909 F Supp 1083 (ND Ill 1995), in which jurisdiction was upheld despite the fact that the aircraft manufacturer was indirectly owned by French and Italian governments through tiers of government-owned corporations, holding that the manufacturer was entitled to foreign state status despite ‘tiering’ of ownership through intermediaries, since two foreign governments owned a majority of each intermediate corporation).
However, even if the entity is not majority owned by a foreign state, it may still qualify as an ‘agency or instrumentality of a foreign state’ if it is an ‘organ’ of a foreign state (section 1603(b)(2)). The term ‘organ’ is not defined in the Act and the US Circuit Courts have adopted differing tests to determine whether an entity is an organ of a foreign state. For example, in USX Corp v Adriatic Ins Co, the Court of Appeals for the Third Circuit considered whether an insurance company was an organ of the Irish government and concluded that ‘for an entity to be an organ of a foreign state, it must engage in a public activity on behalf of foreign government’ (see 345 F3d 190 (3d Cir 2003) at 208, considering the findings of the Ninth and Fifth Circuits in EOTT Energy Operating Ltd P’Ship v Winterthur Swiss Ins Co, 257 F3d 992 (9th Cir 2001) at 997 and Kelly v Syria Shell Petroleum Dev BV, 213 F3d 841 (5th Cir 2000) at 846 and 847).
The Third Circuit also synopsised the various factors employed by the Courts of Appeals for the Ninth and Fifth Circuits, in particular:
- the circumstances surrounding the entity’s creation;
- the purpose of the entity’s activities;
- the degree of supervision by the government;
- the level of government financial support;
- the entity’s employment policies, particularly regarding whether the foreign entity requires the hiring of public employees and pays their salaries; and
- the entity’s obligations and privileges, and added an additional factor, namely the ownership structure of the entity.
All these factors are relevant, but none is determinative. What is critical is whether the entity in question performs a governmental function. Indeed, in Murphy v Korea Asset Management Corporation, the Court of Appeals for the Second Circuit held that a corporation organised under the laws of the Republic of Korea qualified as a foreign state because that corporation had a quintessentially ‘public’ mission to service and stabilise the Korean economy by disposing of non-performing loans and restructuring failing corporations (see Murphy v Korea Asset Mgmt Corp (2005, SD NY) 421 F Supp 2d 627, affd (2006, CA2 NY), cert den). Conversely, in Bd of Regents of Univ of Tex Sys v Nippon Tel & Tel Corp, the Court of Appeals for the Fifth Circuit held that a Japanese telecommunications company was not an organ of Japan because it was not created for a national purpose, was not actively supervised by the Japanese government, was not required to hire public employees, did not hold exclusive rights under Japan’s laws, and was not treated as a governmental organ under Japanese law (see 478 F3d 274 (5th Cir 2007), following the test developed in Kelly by the Court of Appeals for the Fifth Circuit).Standing
What is the nexus the plaintiff needs to have standing to bring a claim against a state?
The nexus that the plaintiff needs to have is determined by applicable law regarding personal and subject matter jurisdiction. However, the sole basis for obtaining jurisdiction over a foreign state is the Act (see Youming Jin v Ministry of State Sec, 557 F Supp 2d 131 (DC Dist 2008)). The Act provides for the exercise of personal jurisdiction under section 1330(b), but personal jurisdiction is satisfied if subject matter jurisdiction exists under the Act (ie, if one of the enumerated jurisdictional exceptions to immunity is satisfied) and service is perfected under section 1608 of the Act. Since the Supreme Court’s decision in Argentine Republic v Amerada Hess Shipping Corp, it is clear that the Alien Tort Claims Act (also known as the Alien Tort Statute), or federal statutes other than the Act, may not form the basis for a suit against a foreign state or instrumentality (see 488 US 428 (1989) at 443).
Further, once a court determines that personal jurisdiction exists over the defendant state, it must then consider whether the exercise of jurisdiction over the defendant is permissible under the due process clause of the Fifth Amendment. In fact, although section 1330(b) grants district courts personal jurisdiction over foreign states in cases where those states are not entitled to sovereign immunity as determined in sections 1605 to 1607 of the Act, when service has been made pursuant to section 1608, the reach of section 1330(b) does not extend beyond those limits set by the minimum contacts standard set out in International Shoe Co v Washington, 326 US 310 (1945) (see also Gilson v Republic of Ireland, 606 F Supp 38 (DC Dist 1984), affd 787 F2d 655 (DC Cir 1986); and Verlinden BV v Central Bank of Nigeria, 488 F Supp 1284 (SDNY 1980), affd 647 F2d 320 (2d Cir 1981)). For example, the Court of Appeals for the Fifth Circuit held that personal jurisdiction over the National Grains Production Company, Ltd (NGPC) of Nigeria was properly exercised by the district court, because NGPC had, among others, established a joint venture with a US corporation to establish rice farming operations in Nigeria and there was a transmission of funds to the United States (Hester International Corp v Federal Republic of Nigeria, 681 F Supp 371 (ND Miss 1988), affd 879 F2d 170 (5th Cir 1989)).Nexus of forum court
What is the nexus the forum court requires to exercise jurisdiction over a state if the property or conduct that forms the subject of the claim is outside the forum state’s territory?
The required nexus is determined by sections 1330 and 1604 and the exceptions to immunity set out in sections 1605 to 1607 of the Act. For example, a state is not immune from jurisdiction when rights in immovable property are at issue (section 1605(a)(4)), or when an act occurring outside the United States in connection with a commercial activity of the foreign state elsewhere causes a direct effect in the United States (section 1605(a)(2)).Interim or injunctive relief
When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what interim or injunctive relief is available?
Pursuant to section 1606 of the Act:
[a]s to any claim for relief with respect to which a foreign state is not entitled to immunity . . . the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances; but a foreign state except for an agency or instrumentality thereof shall not be liable for punitive damages.
in any case wherein death was caused, the law of the place where the action or omission occurred provides, or has been construed to provide, for damages only punitive in nature, the foreign state shall be liable for actual or compensatory damages measured by the pecuniary injuries resulting from such death which were incurred by the persons for whose benefit the action was brought.
When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what type of final relief is available?
In principle, the final relief available against a state will be damages. Specific performance will be subject to the conditions of section 1606 of the Act (see question 11).Service of process
Identify the court or other entity that must be served with process before any proceeding against a state may be issued.
Process is served on a state under section 1608 of the Act. Typically, proceedings will be issued before the federal district courts.
How is process served on a state?
Under section 1608 of the Act process is served on a foreign state:
(1) by delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the foreign state or political subdivision; or
(2) if no special arrangement exists, by delivery of a copy of the summons and complaint in accordance with an applicable international convention on service of judicial documents; or
(3) if service cannot be made under paragraphs (1) or (2), by sending a copy of the summons and complaint and a notice of suit, together with a translation of each into the official language of the foreign state, by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the head of the ministry of foreign affairs of the foreign state concerned, or
(4) if service cannot be made within 30 days under paragraph (3), by sending two copies of the summons and complaint and a notice of suit, together with a translation of each into the official language of the foreign state, by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the Secretary of State in Washington, District of Columbia, to the attention of the Director of Special Consular Services and the Secretary shall transmit one copy of the papers through diplomatic channels to the foreign state and shall send to the clerk of the court a certified copy of the diplomatic note indicating when the papers were transmitted.
Similarly, process is served on an agency or instrumentality of a foreign state:
(1) by delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the agency or instrumentality; or
(2) if no special arrangement exists, by delivery of a copy of the summons and complaint either to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process in the United States; or in accordance with an applicable international convention on service of judicial documents; or
(3) if service cannot be made under paragraphs (1) or (2), and if reasonably calculated to give actual notice, by delivery of a copy of the summons and complaint, together with a translation of each into the official language of the foreign state (A) as directed by an authority of the foreign state or political subdivision in response to a letter rogatory or request or (B) by any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the agency or instrumentality to be served, or (C) as directed by order of the court consistent with the law of the place where service is to be made.
Strict compliance with the procedures set out in section 1608 of the Act is necessary. For example, a plaintiff, who sent a complaint in English by registered mail, did not perfect service on the Mexican Consulate (see Gerritsen v Consulado Gen de Mexico (989 F2d 340 (9th Circ 1993) cert den).Judgment in absence of state participation
Under what conditions will a judgment be made against a state that does not participate in proceedings?
Under section 1608(e) of the Act, no judgment shall be made against a foreign entity unless there is satisfactory evidence of the right to relief. A copy of any default judgment must be sent to the foreign entity in the prescribed manner. Therefore, default judgment is proper, provided proper service of process is effectuated. In Reichler, Milton & Medel v Republic of Liberia, the District Court for the District of Columbia held that default judgment was proper against Liberia because Liberia was properly served and the claim was proven (see 484 F Supp 2d 1 (DC Dist 2007)). The courts have also held that default judgment is proper where provisions of the 1958 Convention on Recognition and Enforcement of Foreign Arbitral Awards and of the Act were satisfied (see Ipitrade International, SA v Federal Republic of Nigeria, 465 F Supp 824 (DC Dist 1978)).
Enforcement immunityDomestic law
Describe domestic law governing the scope of enforcement immunity.
The Act provides that ‘the property . . . of a foreign state shall be immune from attachment arrest and execution except as provided in sections 1610 and 1611’ (see section 1609). Sections 1610 and 1611 establish several exceptions to enforcement immunity. These exceptions are generally similar to those from jurisdictional immunity under sections 1605 to 1607.Application of civil procedure codes
When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?
Yes, to the extent enforcement immunity would not be applicable. Specifically, under the Act and the Federal Rules of Civil Procedure, state law governs the circumstances and manner of attachment and execution proceedings. When a foreign state is not protected by sovereign immunity, the foreign state shall be liable in the same manner and to same extent as a private individual under like circumstances (see section 1606). Therefore, in attachment and execution proceedings involving foreign states, the federal courts will generally apply Fed R Civ P 69(a), which mandates the application of local state procedures (see EM Ltd v Republic of Arg, 473 F3d 463 (2d Cir 2007) cert den). For example, in an action in which the judgment creditors had obtained default judgments awarding compensatory damages against Cuba, the award creditors sought turnover orders pursuant to Fed R Civ P 13 and 69 and NY CPLR section 5225(b) against garnishees that held funds belonging to entities that allegedly were agencies and instrumentalities of Cuba (see Weininger v Castro, 462 F Supp 2d 457 (SDNY 2006)).Consent for further enforcement proceedings
Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?
Prior submission to the jurisdiction of a court or tribunal does not necessarily establish waiver or consent to further enforcement proceedings against state assets. The Act provides, among others, that a foreign state shall not be immune from execution or attachment if the ‘foreign state has waived its immunity from attachment in aid of execution or from execution either explicitly or by implication’ (section 1610(a)(1)) or when ‘judgment is based on an order confirming an arbitral award rendered against the foreign state, provided that attachment in aid of execution, or execution, would not be inconsistent with any provision in the arbitral agreement’ (section 1610(a)(6)).Property or assets subject to enforcement or execution
Describe the property or assets that would typically be subject to enforcement or execution.
The property or assets that would be subject to enforcement, execution and attachment would be property used for a commercial activity in the United States.Assets covered by enforcement immunity
Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.
As explained above, only property used for a commercial activity in the United States would potentially be exempted from enforcement immunity. For example, in Aurelius Capital Partners, LP v Republic of Argentina, the Court of Appeals for the Second Circuit held that Argentinian social security funds were immune from attachment because those funds had not been used for any commercial activity whatsoever (584 F3d 120 (2d Cir 2009)). Conversely, in Birch Shipping Corp v Embassy of United Republic of Tanzania, the District Court for the District of Columbia held that a checking account used by the embassy of Tanzania was not immune from attachment (see 507 F Supp 311 (DC Dist 1980)).
Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.
Pursuant to section 1611(b)(1), the property of a foreign state shall be immune from attachment and from execution, if ‘the property is that of a foreign central bank or monetary authority held for its own account, unless such bank or authority, or its parent foreign government, has explicitly waived its immunity from attachment in aid of execution, or from execution, notwithstanding any withdrawal of the waiver which the bank, authority or government may purport to effect except in accordance with the terms of the waiver’. For example, the Court of Appeals for the Second Circuit held that funds deposited with Argentina’s central bank were immune from attachment and the ‘commercial activity’ exception to enforcement immunity, holding that section 1610(a)(2) did not apply because the central bank used those funds for central banking purposes and therefore held the funds ‘for its own account’ (see NML Capital, Ltd v Banco Cent De La Republica Arg, 652 F3d 172 (2d Cir 2011) cert den).Test for enforcement
Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.
No further test has been developed (but see question 9).Service of arbitration award or judgment
How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?
Service of process is effected as described in question 14.History of enforcement proceedings
Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?
Yes, there is a long and ever-increasing line of cases relating to proceedings against states or state entities in the United States. A significant number of these proceedings are for the enforcement and execution of both commercial and investor-state awards.Public databases
Are there any public databases through which assets held by states may be identified?
Yes, assets held by states may be identified by undertaking a variety of searches of public information, including, among others, searches on corporate registries or searches for real property through land registries (such as the office of the county tax assessor and the county recorder’s and registrar’s offices).Court competency
Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?
In principle, yes (see section 1606 and question 17), but discovery is subject to the limitations under section 1605(g)(1)(A):
the court . . . shall stay any request, demand, or order for discovery on the United States that . . . would significantly interfere with a criminal investigation or prosecution, or a national security operation, related to the incident that gave rise to the cause of action, until such time as the Attorney General advises the court that such request, demand, or order will no longer so interfere.
Immunity of international organisationsSpecific provisions
Does the state’s law make specific provision for immunity of international organisations?
The privileges and immunities of international organisations are governed by the International Organizations Immunities Act (28 USC sections 288 et seq).Domestic legal personality
Does the state consider international organisations headquartered or operating in its territory as enjoying domestic legal personality and could such organisations be subjected to proceedings before a court or arbitral tribunal?
Under section 288a(a), international organisations have the capacity to contract, acquire and dispose of real and personal property, and institute legal proceedings.Enforcement immunity
Would international organisations in the state enjoy enforcement immunity? Are there any cases where debtors sought to enforce against a state by attaching or executing assets held by international organisations?
International organisations enjoy enforcement immunity. Specifically, section 288a(b) provides that international organisations:
their property and their assets . . . shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments, except to the extent that such organizations may expressly waive their immunity for the purpose of any proceedings or by the terms of any contract.
Further, section 1611(a) of the Act provides that:
the property of those organizations . . . as . . . provided by the International Organizations Immunities Act shall not be subject to attachment or any other judicial process impeding the disbursement of funds to, or on the order of, a foreign state as the result of an action brought in the courts of the United States or of the States.
In OSS Nokalva, Inc v European Space Agency, the Court of Appeals for the Third Circuit held that the International Organizations Immunities Act does not confer absolute immunity on international organisations (‘as is enjoyed by foreign governments’) and since foreign states do not generally enjoy immunity from claims based on commercial activities, the Court found no reason ‘why a group of states acting through an international organization is entitled to broader immunity than its member states when acting alone’ (617 F3d 756 (3d Cir 2010) at 764).
In February 2019, the US Supreme Court affirmed that international organisations are not entitled to absolute immunity, but rather only to the immunity that foreign states enjoy today (Jam v International Finance Corp, 586 US __ (2019)). As the Supreme Court remarked, ‘same immunity’ means that the immunity that international organisations enjoy and the immunity that foreign states enjoy are ‘continuously equivalent’.
Updates & TrendsRecent developments
Are there any other current developments or emerging trends that should be noted?Key developments of the past year30 Are there any emerging trends or hot topics in your jurisdiction?
During the past few years, a host of developments affecting the law of sovereign immunity have taken place. First, in 2016, Congress, overriding a veto from President Obama, passed the Justice Against Sponsors of Terrorism Act (JASTA), which amended the Act to allow suits against foreign states for injuries, death or damages from an act of international terrorism (such as lawsuits against Saudi Arabia) to proceed in US courts. Second, in June 2014, the Supreme Court ruled in Republic of Argentina v NML Capital, Ltd that the Act does not provide a foreign state with immunity from post-judgment discovery in execution proceedings, and affirmed the decision of the Court of Appeals for the Second Circuit allowing access to third-party records about Argentina’s assets abroad (specifically, this allowed the district courts to compel banks to turn over information about Argentine assets or accounts) (134 S Ct 2250, 573 US __ 2014)). In September 2014, the District Court for the Southern District of New York held Argentina in civil contempt of court, after Argentina had repeatedly violated court orders designed to enforce prior judgments (see NML Capital, Ltd v The Republic of Argentina (SDNY 29 September 2014) Order at 3). Third, there is an ever-increasing number of cases that arise from the enforcement of both ICISD and non-ICSID investment treaty awards that have affirmed that the Act is the sole source of jurisdiction in actions against foreign states and will continue to enrich the case law on enforcement, attachment and execution over assets of foreign states (eg, Mobil Cerro Negro, Ltd v Bolivarian Republic of Venezuela, 87 F3d 573 (SDNY 2015) and (2d Cir 2017), Micula v Government of Romania (SDNY 2015)). Fourth, in February 2019, the US Supreme Court confirmed that international organisations are not entitled to absolute immunity, but rather only to the immunity that foreign governments receive today.