European Disputes
Blog

Litigating against sovereign states can raise complex issues of sovereign immunity. A number of recent judgments of the English courts have touched on these issues, including In the Matter of the State Immunity Act 1978 and an Arbitration Between CC/Devas (Mauritius) Ltd. & Others v. Republic of India.¹ In that case, the Commercial Court held that the ratification of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the “NYC”) does not in and of itself, and absent a valid arbitration agreement, amount to consent by way of a ‘prior written agreement’ by the state, under section 2 of the State Immunity Act 1978, waiving state immunity from the jurisdiction of the English courts. In other words, sovereign states that are signatories of the NYC remain free, in principle, to invoke the doctrine of state immunity as a jurisdictional defence to sovereign litigation. However, Sir William Blair nevertheless made it clear that the ruling “does not in any way contradict the enforcement friendly aspect of the NYC, which is its purpose, and the reason for its success, and which has been consistently upheld in English law”.² But exactly how does one enforce against a sovereign state? And against which categories of state assets can one attach? In this article, we summarise the key features of the doctrine of sovereign immunity.

(Waiver of) state immunity

In the United Kingdom, section 1(1) of the State Immunity Act 1978 accords sovereign immunity to foreign sovereign states unless a statutory exception applies. As such, it is market practice in financial agreements involving a sovereign state to include a “waiver of sovereign immunity” clause, in which the state agrees not to claim the immunity it would otherwise be entitled to. In addition, in some cases, the ratification of a convention or treaty may constitute a waiver of sovereign immunity.³

Typically, such clauses will waive both ‘adjudication immunity’ and ‘enforcement immunity’. Adjudication immunity concerns whether a dispute involving a sovereign state can be determined by a court or tribunal, whereas enforcement immunity concerns whether a resulting judgment or award can be enforced against the state’s assets. Such clauses should be clearly and carefully drafted, include reference to interim measures, and be included across all related transaction documents.

However, even if the doctrine of sovereign immunity has been waived, there remain certain practical and legal enforcement considerations which make enforcement and recovery against a sovereign state challenging.

Enforcing against a sovereign state

The following issues should be considered to maximise the chances of recovering against assets of a sovereign states:

• Definition of “state assets”. “State assets” typically excludes property: (1) used by diplomatic or consular mission; (2) of a military nature or under control of the state military; and/or (3) located in the state and dedicated to public or governmental (as opposed to commercial) use. Central bank assets also typically fall outside the definition of “state assets” (in the United Kingdom, under section 14(4) of the Act).
• Definition of “state”. The “state” is typically defined as: (1) the sovereign or head of state; (2) the branches of government and other organs of the state; and/or (3) certain government departments. Although political subdivisions such as departments of state, administrative divisions and state corporations have restricted sovereign immunity (for example, public utilities and nationalised industries), enforcement against assets belonging to political subdivisions is unlikely unless the entity has no separate existence from the state (see Gecamines, below). Notwithstanding, a sovereign state’s shares in political subdivisions (such as state-owned enterprises) may be attachable.
• Separate legal personality. States will often hold valuable assets, indirectly, in complex corporate structures.  In English law, there is a presumption that separate legal entities are not liable for liabilities of a sovereign state (and vice versa).⁴ This presumption is only rebuttable if the sovereign state: (1) had constitutional and factual control over the relevant entity; (2) exercised sovereign authority over the relevant entity; and/or (3) could not properly be regarded for any significant purpose as distinct from the state-controlled entity (and vice versa).

In light of the considerations above, only certain asset classes are generally available for attachment in respect of enforcements against a sovereign state. These typically include:

• Bank accounts;⁵
• Ships, aircraft and cargo;⁶
• Receivables: payments due to the sovereign state by third parties (for example, swap counterparties, receivables under a loan, leasing or concession agreements and other commercial agreements entered into by the state);⁷and
• Real estate: state-owned real estate located outside the sovereign state may be subject to attachment if the property is located in England and Wales (other than diplomatic, consular or military buildings).⁸

Accordingly, determining at the outset which sovereign assets may be available for attachment, the value of those potential assets and how difficult they may be to attach will be crucial considerations for any litigation strategy against a sovereign state.

1. In the Matter of the State Immunity Act 1978 and an Arbitration Between CC/Devas (Mauritius) Ltd. & Others v. Republic of India [2025] EWHC 964, referred to hereafter as ‘Devas v India’. ↩︎
2. Ibid, at [85], [88] and [108]. ↩︎
3. Compare Devas v India with Infrastructure Services Luxembourg S.à r.l. v the Kingdom of Spain [2024] EWCA Civ 1257. In the latter, the Court of Appeal in London ruled that the language contained in Article 54 of the ICSID Convention was sufficiently clear to constitute a waiver of adjudication immunity, amounting to a submission to the jurisdiction of the English courts which prevented Spain from employing the doctrine of state immunity to object to the registration of an ICSID award. In Devas v India, Sir William Blair stated that any such waiver of state immunity must be “express, unequivocal and unmistakeable” at [82]. ↩︎
4. See La Generale des Carrieres SA des Mines v FG Hemisphere Associates LLC [2012] UKPC 27. ↩︎
5. In November 2024, a court in Luxembourg froze Uruguay’s Luxembourg bank accounts following a US asset manager enforcing a $61 billion ICSID award against Uruguay’s national airline. See Latin American Regional Aviation Holding S. de R.L. v. Oriental Republic of Uruguay (ICSID Case No. ARB/19/16). ↩︎
6. In August 2024, a court in France allowed a Chinese investor to seize planes owned by the Nigerian government, stationed in France, following the Chinese investor’s enforcement of a $81 million investment treaty award against Nigeria. Following Zhongshan Fucheng Industrial Investment Co Ltd v Federal Republic of Nigeria [2023] EWCA Civ 867, whereby the English court rejected Nigeria’s state immunity challenge to an enforcement order. ↩︎
7. In March 2025, a court in Switzerland seized a historic Italian building in Zurich following a German asset manager collecting on an Energy Charter Treaty ICSID award against Italy worth over €28 million. See ESPF Beteiligungs GmbH, ESPF Nr. 2 Austria Beteiligungs GmbH, and InfraClass Energie 5 GmbH & Co. KG v Italian Republic (ICSID Case No. ARB/16/5). ↩︎
8. In February 2025, an English court seized a London property linked to Libya’s former leader Muammar Gaddafi following a US defence contractor enforcing a £16 million ICC award against Libya. See General Dynamics United Kingdom Ltd v The State of Libya [2025] EWCA Civ 134. ↩︎