English Court Confirms Ratification of New York Convention Does Not Waive State Immunity for Award Enforcement

In <span class="news-text_italic-underline">CC/Devas Ltd v Republic of India [2025] EWHC 964 (Comm)</span>, the English Commercial Court determined, as a preliminary issue, that a state’s ratification of the 1958 New York Convention (“<span class="news-text_medium">NYC</span>”) did not constitute a submission to the adjudicative jurisdiction of the English courts under section 2(2) of the State Immunity Act 1978 (“<span class="news-text_medium">SIA 1978</span>”), for the purpose of recognition and enforcement of arbitral awards against it under the Arbitration Act 1996 (“<span class="news-text_medium">AA 1996</span>”).

The NYC applies to the recognition and enforcement of arbitratal awards made in the territory of states other than those in which recognition and enforcement are sought. Article III provides:

<p class="news-text_emphasize">“Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.”</p>

The UK is a signatory and has enacted the NYC into domestic legislation by sections 100 to 104 of the AA 1996.

State immunity

State immunity is the protection given to a state from the jurisdiction of the courts of other states. The SIA 1978 provides for English law on state immunity. Section 1 of the SIA 1978 establishes the general principle that UK courts have no jurisdiction to adjudicate disputes against sovereign states. Sections 2 and 9 of the SIA 1978 provide for certain exceptions to this position:

<p class="news-text_emphasize">“2. Submission to jurisdiction</p>

<p class="news-text_emphasize">(1) A State is not immune as respects proceedings in respect of which it has submitted to the jurisdiction of the courts of the United Kingdom.</p>

<p class="news-text_emphasize">(2) A State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement …"</p>

<p class="news-text_emphasize">"9. Arbitrations</p>

<p class="news-text_emphasize">Where a State has agreed in writing to submit a dispute which has arisen, or may arise, to arbitration, the State is not immune as respects proceedings in the courts of the United Kingdom which relate to the arbitration.”</p>

<p class="news-text_emphasize">Section 13 of the SIA 1978 deals with submission to jurisdiction in relation to the enforcement (execution) of awards against states and raises different and discrete issues. </p>

Infrastructure Services Luxembourg Sarl v Spain

In <span class="news-text_italic-underline">Infrastructure Services Luxembourg Sarl v Spain [2024] EWCA Civ 1257</span> (“<span class="news-text_medium">Infrastructure Services</span>”), the English Court of Appeal dismissed appeals by Spain and Zimbabwe against orders refusing to set aside the registration of ICSID awards against them. The Court found that, although the states enjoyed general immunity from jurisdiction under section 1(1) of the SIA 1978, by reason of each state being a party to the ICSID Convention, they agreed to submit to the adjudicative jurisdiction of the English courts under section 2 of the SIA 1978. This was because article 54 of the ICSID Convention provides:

<p class="news-text_emphasize">"Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that."</p>

Facts

The underlying dispute arose out of the commercial contract between Devas Multimedia Private Limited (Devas) (an Indian registered joint venture company) and Antrix Corporation Limited (an Indian company wholly owned by the Government of India), for a lease of the S-band electromagnetic spectrum on two Indian satellites. In 2011, India annulled the contract. In 2012, the claimants (Mauritian entities and shareholders in Devas) commenced UNCITRAL arbitration proceedings against India under the Mauritius-India bilateral investment treaty (“<span class="news-text_medium">BIT</span>”).

In the arbitration proceedings, which were seated in The Hague, India unsuccessfully challenged the tribunal's jurisdiction because the conditions to India's offer to arbitrate in Article 8 of the BIT had not been satisfied. The tribunal awarded liability and quantum in the claimants' favour, on which EUR195 million was unpaid by India.

In June 2021, the claimants obtained permission to enforce the awards under section 101 of the AA 1996. India applied to set aside the order on grounds it was immune from the jurisdiction of the English court under section 1 of the SIA 1978. Section 9 of the SIA 1978 did not apply because India had not agreed to submit the underlying dispute to arbitration.

Issue for preliminary determination

By order for directions made on 23 October 2024, the court directed that there should be a preliminary determination of whether (as argued by the claimants), for the purposes of enforcement of the awards, India had submitted to the adjudicative jurisdiction of the English courts by prior written agreement within the meaning of section 2(2) of the SIA 1978, merely by its ratification of the NYC and (thereby) its consent under Article III of the NYC to the English court recognising and enforcing the awards.

Decision

Sir William Blair, sitting as judge of the High Court, held that ratification of the NYC by India did not, of itself, amount to consent to the jurisdiction of the English courts by way of a "prior written agreement" waiving the state's immunity under section 2(2) of the SIA 1978. The position differed from cases under the ICSID Convention. Here, there was no indication that those drafting the NYC intended to preclude immunity-based arguments in enforcement actions against states and legal commentary supported the view that state immunity arguments were not precluded.

Applying the test for waiver in English law, the ratification of Article III of the NYC was not, on its own, a waiver of state immunity. Furthermore, applying the established classification of state immunity, under both English law and international law, as a procedural rule going to the jurisdiction of a national court, the reference to "rules of procedure" in Article III of the NYC preserved state immunity.

A further practical consideration was that, under section 9 of the SIA 1978, where a state has agreed in writing to arbitration, it is not immune from proceedings relating to the arbitration. Whereas here, the state party disputed the arbitration agreement and therefore determination of that issue for state immunity purposes also had to be determinative for NYC purposes to avoid duplication. Sir William Blair made clear that his conclusion was not intended to contradict the NYC's enforcement-friendly aspect, which is both its purpose and the reason for its success.

Sir William Blair's findings included the following points:

• <span class="news-text_medium">Court of Appeal decision in Infrastructure Services:</span> The judge rejected the claimants' submission that the decision in Infrastructure Services was "highly persuasive of the proper interpretation of Article III of the NYC, given the close similarity of language with there being no material difference". On this point, Sir William Blair noted the observations made by Phillips LJ in Infrastructure Services as to why it was unclear that Article III of the NYC would have the same effect as Article 54 of the ICSID Convention. In particular, Phillips LJ had noted that the two provisions did not contain identical wording (the NYC referencing compliance with rules of procedure). In contrast, the ICSID Convention necessarily deals with awards to which a contracting state is a party; the same is not true for the NYC. The latter fact made it less obvious that Article III NYC contains an “unmistakable” agreement by states that awards made against them would be enforced.
• <span class="news-text_medium">No express waiver:</span> Sir William Blair also confirmed that a waiver of state immunity by treaty or convention must always be express and articulated in a clear and recognisable manner, as by an unequivocal agreement. As held in Infrastructure Services, if the express words used amount, on their proper construction, to an unequivocal agreement by the state to submit to the jurisdiction, that is sufficient to satisfy section 2(2) of the SIA 1978, even if the words "submit" and "waiver" are not used. It is a question of determining whether the necessary threshold of express agreement is crossed.
  Here, the evidence before the court indicated that those drafting the NYC did not intend to preclude an immunity-based argument in enforcement actions against states. Furthermore, the broader commercial context was that there are a vast number of commercial and financial transactions involving states and state-owned enterprises where waiver of state immunity is a matter of contract, not treaty.
  This is recognised in the SIA 1978 (for example, at section 3, which provides for the lifting of immunity in commercial transactions and the general availability for enforcement by execution against property used for commercial purposes at section 13(4)) and similar principles are widely accepted in international commerce generally. The balance between investors and states in investment disputes is a delicate and sometimes controversial one and nothing impels a conclusion that mere ratification of the NYC constitutes a waiver of immunity against a background where express waivers are a commercial commonplace and matter for negotiation.
• <span class="news-text_medium">Rules of procedure:</span> Rules on state immunity are concerned with determining whether the courts of one state may exercise jurisdiction in respect of another. Contrary to the claimants' submissions, the rules of procedure referred to in Article III are not limited to matters concerning the form and process for recognition and enforcement (which in this jurisdiction are specified in CPR Part 62) to the exclusion of rules on state immunity. On this point, after a detailed review of legal commentaries addressing the scope of the reference to “rules of procedure” and the relationship with state immunity, the judge concluded that, “overall”, the commentary recognised that state immunity continues to be applicable in the NYC scheme and is not waived by NYC ratification.
  Noting the claimants' argument that a broad interpretation of "rules of procedure" risked unlimited importation of procedural rules and possible subversion of the restricted defences available under Article V of the NYC, the judge observed that the legal commentary did not suggest any concerns on this point. In any event, state immunity was a fundamental principle of the international legal order. An outcome under the SIA 1978 by which ratification of the NYC does not, of itself, amount to consent under section 2(2), does not contradict the narrow interpretation of "rules of procedure" in Article III, which otherwise has the support of leading arbitration commentators.
• <span class="news-text_medium">India's submission that NYC applies only to private law disputes:</span> Although it was not necessary for the judge to determine the remaining issues between the parties, Sir William Blair's comments on those points included a response to India's submission that the NYC applied only to private law disputes and, consequently, would not apply to the enforcement of investor-state awards. On that point, the claimants produced research revealing 30 occasions when the NYC had been applied to investor-state arbitral awards, 20 of them involving bilateral investment treaties.
  The judge observed that, although the references to private law disputes in the history of the NYC indicated that the settlement of such disputes by arbitration was a matter of primary focus, this did not mean that the NYC was intended to be limited only to private law disputes. Even if that had been the original intention, the NYC had proved to be a runaway success in the scope of its application and there was authority supporting an evolutionary approach to its application by reference to the provisions of the Vienna Convention on the Law of Treaties.

This important case provides welcome confirmation of the position on state immunity arising on ratification of the NYC, following the Court of Appeal's decision in Infrastructure Services. As recognised by the judge, generally, that question does not arise in English law because a state's agreement to arbitrate will constitute waiver of immunity under section 9 of the SIA 1978. Here, the claimants appear to have been driven by a desire to "bypass" India's arguments on the lack of an arbitration agreement. The decision also contains an interesting discussion on the differing ways in which state immunity takes effect in other common law jurisdictions.