State immunity and arbitration—general considerations
Produced in partnership with Herbert Smith Freehills
State immunity and arbitration—general considerations

The following Arbitration guidance note Produced in partnership with Herbert Smith Freehills provides comprehensive and up to date legal information covering:

  • State immunity and arbitration—general considerations
  • State immunity—general principles
  • Scope of state immunity
  • Which law of state immunity applies?
  • Immunity from jurisdiction
  • Immunity from enforcement and execution
  • Key considerations—transacting with foreign states
  • Key considerations—immunity from enforcement and execution

This Practice Note considers the role of state immunity in relation to arbitration proceedings in general terms. For more detailed information on state immunity and arbitration in the United Kingdom under the State Immunity Act 1978 (SIA 1978), see Practice Note: State immunity in proceedings relating to arbitration (England & Wales). In addition, for Practice Notes on state immunity in a number of jurisdictions around the world (including China, Russian and Singapore), see the ‘State immunity’ subtopic: State immunity and arbitration—overview.

In today’s global marketplace, commercial parties transact frequently with governments and government-owned or government-controlled entities when taking advantage of foreign investment opportunities or entering into cross-border contracts. As is the case with transactions between commercial parties, parties to such cross-border arrangements are opting more frequently to have potential disputes resolved by international arbitration rather than litigating through the courts. This is likely attributable to the benefits international arbitration offers over transnational litigation, including:

  1. neutrality—disputes are heard by an independent arbitral body appointed by the parties or the relevant arbitral institution. In this way, neither party receives a ‘home court advantage’

  2. ease of enforcement—multilateral international conventions such as the 1958 New York Convention on the Enforcement and Recognition of Foreign Arbitral Awards (New York Convention) and the International Centre for the Settlement of Investment Disputes Convention (ICSID Convention) require signatory jurisdictions to