CC/Devas v India: Sovereign immunity survives New York Convention

The Court of Appeal’s decision in CC/Devas (Mauritius) Ltd v India  is the first English appellate-level decision to address whether a State’s ratification of the New York Convention (the “Convention”) waives its adjudicative sovereign immunity in proceedings to enforce an arbitral award against it. The Court’s answer was clear: ratification alone does not amount to a waiver.

The judgment by Phillips LJ, with Lewison and Newey LJJ agreeing, distinguished the decision in Spain v Infrastructure Services Luxembourg SARL (“Infrastructure”),  where the UK Supreme Court held that the ICSID Convention (“ICSID”) does effect a waiver of adjudicative immunity (while finding that immunity from execution remains separately protected).

On 28 January 2005, Devas Multimedia Private Limited entered into a contract with Antrix Corporation Limited, an Indian government-owned company, to lease part of India’s S-Band satellite spectrum to develop a hybrid communications platform. In 2011, India ended the project, and Antrix terminated the contract. Mauritian investors then commenced UNCITRAL arbitration under the India–Mauritius bilateral investment treaty (the “BIT”). The tribunal issued awards on jurisdiction and merits and on quantum, the latter awarding sums in excess of EUR 195 million. The claimants, now award creditors, have pursued enforcement in multiple jurisdictions.

The question on appeal, brought by the award creditors after the lower court affirmed India’s sovereign immunity defence, was whether India’s ratification of the Convention, and in particular its consent to Article III’s requirement that contracting States recognise arbitral awards as binding and enforce them, amounted to a prior written submission to the jurisdiction of the English courts under section 2(2) of the State Immunity Act 1978 (the “SIA”), read with section 17(2), which treats a treaty as an agreement for these purposes. The High Court had answered that question in the negative.  The Court of Appeal affirmed that conclusion and dismissed the award creditors’ appeal.

That conclusion must be read against Infrastructure, where the Supreme Court held that ratification of ICSID, in particular due to the language in Article 54(1), waives adjudicative sovereign immunity. The State parties in that case argued that Article 54 should not be read as waiving immunity, relying in part on the similarity between its enforcement language and Article III of the Convention. The Supreme Court rejected that argument and held that adjudicative immunity was waived under ICSID.

In CC/Devas, the award creditors sought to deploy the same reasoning in reverse: if Article 54 of ICSID effected a waiver, they argued, Article III of the Convention did as well.  The Court of Appeal disagreed, emphasising Article III’s requirement that enforcement occur “in accordance with the rules of procedure” of the territory where enforcement is sought, language absent from ICSID, as well as relying on the materially different structure and purpose of the two treaties.

The Court first addressed the nature of state immunity. In English and international law, immunity is a procedural rule: it bars the national court from exercising jurisdiction, without affecting the parties’ substantive rights.  Because Article III makes recognition and enforcement subject to the procedural rules of the forum, in England those rules naturally include the SIA. Article III, the Court confirmed, therefore preserves the operation of domestic state-immunity rules rather than displacing them.

This is the central distinction between the two treaty regimes. Whereas ICSID contains no qualification to enforcement, the Convention expressly incorporates the forum State’s procedural rules. Unlike ICSID, therefore, the Convention does not, by itself, displace immunity under the SIA. A claimant must identify an independent basis for waiver before the English court’s adjudicative jurisdiction is engaged – in particular, an arbitration agreement satisfying the requirement in SIA section 9 that a State agree in writing to arbitrate a dispute. Article III’s pro-enforcement obligation operates only once that jurisdictional threshold has been crossed.

Logic and comparative authority further support the Court’s interpretation. If Article III were construed as a waiver of adjudicative immunity, the same logic could extend to immunity from execution, because both operate as procedural limits. That would produce a waiver materially wider than ICSID’s: Article 55 of ICSID expressly preserves immunity from execution, yet the New York Convention contains no express reference to State immunity at all. The judgment’s comparative discussion also supports the conclusion that ratification alone does not effect a waiver, drawing on decisions from Australia, Germany, and the United States.  Those authorities were treated as supporting the conclusion that Article III preserves, rather than waives, immunity.

The Court found the structural context to be equally important. ICSID is a closed, reciprocal regime for investment disputes between a contracting State and a national of another contracting State; it necessarily deals with awards to which a contracting State is a party.  The New York Convention serves a broader function: it facilitates recognition and enforcement of all foreign arbitral awards, regardless of the parties and regardless of whether a State is involved; in other words, it also covers commercial arbitrations between private parties. As Lewison LJ observed, Article III applies equally to awards involving non-party States, yet a treaty cannot deprive non-parties of immunity.  The Court considered that this difference rendered the inference of a general submission to adjudicative jurisdiction under Article III much less compelling.

The ICSID comparison also exposes the importance of what the treaty says – and does not say – about immunity. The Court noted at paragraph 28, citing paragraph 88 of Infrastructure, that Article 55 of ICSID expressly preserves only immunity from execution.  The absence of any preservation of adjudicative immunity in Articles 53-55 accords with Article 54(1)’s obligations being fundamentally inconsistent with maintaining that immunity: once an award must be recognised and enforced as a final judgment, the exercise of adjudicative jurisdiction is inherent in the process.

The Convention has no comparable provision addressing immunity. Instead, Article III makes enforcement subject to the forum’s procedural rules, which include state immunity. That difference again supports preservation of immunity under the Convention, not waiver.

The outcome is a clear but limited division between the two regimes. Under ICSID, ratification entails a submission to jurisdiction for recognition and enforcement proceedings (while Article 55 preserves immunity from execution). Under the Convention, ratification alone does not waive adjudicative immunity; the enforcement obligation remains subject to the forum State’s procedural rules, including its rules of State immunity. The Convention’s pro-enforcement policy therefore does not eliminate the threshold jurisdictional inquiry.

Thus, the SIA section 9 arbitration exception remains the primary route to jurisdiction in English enforcement proceedings against a State. Whether section 9 applies in this dispute remains unresolved, because India contests that the Devas dispute fell within its offer to arbitrate under the India–Mauritius BIT. Claimants should therefore distinguish carefully between (i) an arbitration agreement or treaty offer that constitutes a waiver under section 9, and (ii) ratification of the Convention alone, which does not.

For drafting purposes, agreements with sovereign counterparties should include an express waiver of immunity covering adjudicative jurisdiction in recognition and enforcement proceedings, while addressing immunity from execution separately and with appropriate specificity. In short, waiver should be express, not left to be inferred from the Convention alone.