Sovereign Immunity from Execution of Foreign Arbitral Awards in the 21st Century
Lead Research Organisation:
University of Edinburgh
Department Name: College of Arts, Humanities & Social Sci
Abstract
Investor-State Arbitration (ISDS) alleviates investors' fear of being dragged into municipal court procedures. In a sense, it hedges the risk of engaging in transnational commerce, trade, and investment by facilitating for trust in transborder cooperation through reliable dispute settlement. Corollary, legal barriers break down and the global merchants operate worldwide.
Despite ISDS success, enforcing foreign arbitral awards is, nonetheless, the role of municipal courts. At this stage, states have invoked 'sovereign immunity' in order to shield assets. This practice distorts the 'level-playing-field' and disrupts the pursuit of an effective transnational dispute-settlement mechanism between investors and states.
The issues pertaining to sovereign immunity in international law are not new. Nonetheless, several aspects remain unresolved. It is problematic when states invoke 'sovereign immunity' in order to circumvent compliance with an arbitral award. Sovereign immunity thus turns into a 'shield' used in order to avoid having sovereign assets attached and executed against. As a result, sovereign immunity from execution is said to be 'the last fortress, the last bastion of state immunity'.
Nuanced procedural questions must be addressed and assessed accordingly; for example: Should courts refer to international customary law when considering sovereign immunity? Should customary international law fil interpretative gaps in enacted statutes? Should courts reconsider-as the French court-the fictional distinction between waiver from jurisdiction as opposed to execution? Should courts be more 'hospitable' to investors seeking to attach and execute assets by, for example, reducing the burden-of-proof or providing for general asset discovery? What constitutes a commercial asset (as opposed to assets used for sovereign purposes) and how should an awardee-creditor go about to attach such assets?
Moreover, the legal theory behind sovereignty and sovereign immunity (i.e. the justification) must be analyzed and questioned if necessary; for example: How much-and to what extent-must a court consider possible interference with internationally developed norms, such as respecting sovereignty, independence, and dignity of a sovereign state? Are these concepts protected under the umbrella of friendship and foreign affairs considerations, i.e. 'international comity'?
The dissertation will also focus on what possible other, 'non-legal', venues for redress that could assist the award-creditor (e.g. BIT-Risk Insurance, selling the award or seek Third-Party Funding for enforcement purposes)? Should the investor turn to her home state for assistance in the form of sanctions or diplomatic protection? What role could the World Bank play?
Finally, this dissertation will address the BREXIT implications. Will the United Kingdom turn its back entirely on the common Foreign Investment Policy of EU?
Methodology: The main method is a doctrinal methodology. However, because this dissertation will focus on seven jurisdictions' approaches and also 'pure' international law, a comparative legal methodology is necessary. To avoid a dissertation that is 'disconnected with reality', the comparative methodology will be intertwined with a "hermeneutical method" (i.e. not strictly functional nor structural); namely, analyzing what the law is (dogmatic-de lege lata) but also what the law "should/could" be (de lege ferenda). The methods put emphasis on judicial authority and legislation, but also 'teachings of the most highly qualified publicists'.
This dissertation will address a relative gap in the current practice and literature on 'sovereign immunity' under public international law.
Despite ISDS success, enforcing foreign arbitral awards is, nonetheless, the role of municipal courts. At this stage, states have invoked 'sovereign immunity' in order to shield assets. This practice distorts the 'level-playing-field' and disrupts the pursuit of an effective transnational dispute-settlement mechanism between investors and states.
The issues pertaining to sovereign immunity in international law are not new. Nonetheless, several aspects remain unresolved. It is problematic when states invoke 'sovereign immunity' in order to circumvent compliance with an arbitral award. Sovereign immunity thus turns into a 'shield' used in order to avoid having sovereign assets attached and executed against. As a result, sovereign immunity from execution is said to be 'the last fortress, the last bastion of state immunity'.
Nuanced procedural questions must be addressed and assessed accordingly; for example: Should courts refer to international customary law when considering sovereign immunity? Should customary international law fil interpretative gaps in enacted statutes? Should courts reconsider-as the French court-the fictional distinction between waiver from jurisdiction as opposed to execution? Should courts be more 'hospitable' to investors seeking to attach and execute assets by, for example, reducing the burden-of-proof or providing for general asset discovery? What constitutes a commercial asset (as opposed to assets used for sovereign purposes) and how should an awardee-creditor go about to attach such assets?
Moreover, the legal theory behind sovereignty and sovereign immunity (i.e. the justification) must be analyzed and questioned if necessary; for example: How much-and to what extent-must a court consider possible interference with internationally developed norms, such as respecting sovereignty, independence, and dignity of a sovereign state? Are these concepts protected under the umbrella of friendship and foreign affairs considerations, i.e. 'international comity'?
The dissertation will also focus on what possible other, 'non-legal', venues for redress that could assist the award-creditor (e.g. BIT-Risk Insurance, selling the award or seek Third-Party Funding for enforcement purposes)? Should the investor turn to her home state for assistance in the form of sanctions or diplomatic protection? What role could the World Bank play?
Finally, this dissertation will address the BREXIT implications. Will the United Kingdom turn its back entirely on the common Foreign Investment Policy of EU?
Methodology: The main method is a doctrinal methodology. However, because this dissertation will focus on seven jurisdictions' approaches and also 'pure' international law, a comparative legal methodology is necessary. To avoid a dissertation that is 'disconnected with reality', the comparative methodology will be intertwined with a "hermeneutical method" (i.e. not strictly functional nor structural); namely, analyzing what the law is (dogmatic-de lege lata) but also what the law "should/could" be (de lege ferenda). The methods put emphasis on judicial authority and legislation, but also 'teachings of the most highly qualified publicists'.
This dissertation will address a relative gap in the current practice and literature on 'sovereign immunity' under public international law.
Organisations
People |
ORCID iD |
| Ana Maria Daza Vargas (Primary Supervisor) | |
| Ylli Dautaj (Student) |