Sovereign Immunity from Execution of Arbitral Awards : A Special Focus on Attaching and Executing Central Bank Assets and 2004 UNSCI

Sammanfattning: The past few decades have seen a veritable explosion of investment treaty and other arbitration claims brought against States. Many of these claims have been heard through ICSID arbitration. In comparison to other arbitration frameworks, the ICSID regime has its own self-contained rules for enforcement. Thus, given the significant increase in arbitration claims against States, on the one hand, and States’ not too seldom invoking of the defence of sovereign immunity, on the other hand, this treatise is timely in addressing various outstanding issues that award-creditors have and will continue to encounter when dealing with defaulting States.   The doctrine of sovereign immunity translates into the conventional wisdom that a State cannot be sued without its consent in foreign courts. This doctrine derives from the practical consequence that the sovereign makes the law, and consequently can break it too. This idea is an extension of primarily the common law doctrine to the international plane, which emerged largely as a result of international comity.[1] This concept is also based upon principles ‘equality’ in terms of ‘equal sovereign status’. Some authors even call it ‘independence’ and ‘dignity’ etc., In this respect, the ICJ has also held that it was equality, that is the basis, i.e. justification for the general rule of immunity.   The theory of immunity has gradually shifted from absolute to restrictive immunity, making it significantly easier for award-creditors to enforce an arbitral award. However, the barrier vis-à-vis immunity from execution makes the last link in ITA vulnerable. This evolution has made substantially an easier task for award-creditors in ITA and ISDS holding an arbitration award against a sovereign State. In view of this relatively at ease syndrome that award-creditors now possess, the immunity protections granted to State and its assets will be accessed albeit the proportionality test of acta jure imperii (i.e. sovereign or government purpose) & acta jure gestionis (i.e. commercial or mixed purpose) and the measurement standard applied to such tests is UNSCI 2004, which are now largely constituting States customary international law.   Ultimately, to the author’s opinion, the value of international arbitration (‘ITA and ISDS’) as a means and ends of solving disputes is dependent upon the extent to which arbitral awards are honoured and enforced. In this light, the author can vociferously say that sovereign immunity remains a significant impediment against award-creditors seeking to enforce arbitral awards against unwilling States. The barrier is not one that will fade away. Thus, outstanding award-creditors could be advised to exercise some pressure through alternate and viable forms of enforcement measures. Therefore, the States should not stand-alone to shield their commercial assets from enforcement, attachment and execution, especially for de minimis sovereign purposes.[2] [1] R Doak Bishop (ed), Enforcement of Arbitral Awards against Sovereigns (JurisNet, LLC Publ 2009). [2] Bishop (n 1).