In a significant ruling on the intersection of international arbitration and sovereign immunity, the England and Wales Court of Appeal has held that India’s ratification of the 1958 New York Convention does not, by itself, amount to a waiver of state immunity in proceedings seeking enforcement of two bilateral investment treaty (BIT) arbitral awards in favour of Devas investors.
Dismissing the appeal, a Bench comprising Lord Justice Lewison, Lord Justice Newey and Lord Justice Phillips upheld the decision of Sir William Blair, who had ruled that Article III of the New York Convention does not constitute a prior written submission by a State to the jurisdiction of English courts under Section 2 of the UK State Immunity Act, 1978.
The Court held that Article III requires foreign arbitral awards to be recognised and enforced in accordance with the rules of procedure of the enforcing State, and that those procedural rules include the doctrine of state immunity. It rejected the investors’ contention that India’s ratification of the Convention amounted to an unequivocal waiver of sovereign immunity, distinguishing the New York Convention from the ICSID Convention, under which contracting States undertake a different enforcement regime. Consequently, the Court concluded that India’s accession to the New York Convention did not, by itself, permit English courts to assume jurisdiction over enforcement proceedings against the State.