THE AUTHORS:
Imogen Kenny-Bartlett, Registered Foreign Lawyer at Herbert Smith Freehills Kramer
Wajih Jaroudi, Associate at Herbert Smith Freehills Kramer
In the span of three months, the High Court of Australia (Australia’s apex court, the “HCA”) and the Court of Appeal of England & Wales (the intermediate appellate court, the “EWCA”) ruled on the same question arising from precisely the same set of facts: ‘did a State’s ratification of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) amount to a submission to the adjudicative jurisdiction of the court for the enforcement of arbitral awards in the relevant jurisdiction’?
The HCA’s decision of April 2026 and the EWCA’s decision in June 2026 were aligned in their conclusion that a State does not waive its immunity from proceedings for the recognition and enforcement of arbitral awards as a matter of Australian and English law (respectively) by ratifying the New York Convention. However, their routes to this conclusion differed.
This article sets out a comparative analysis of each of these Australian and English decisions, along with summarising the previous proceedings and identifying how these decisions may inform international practice in arbitration and award enforcement proceedings.
Background
Mauritian investors commenced arbitration proceedings against India under the now-terminated Mauritius-India Bilateral Investment Treaty of 1998 (the “BIT”) relating to India’s decision to annul a contract for the lease of a proportion of India’s S-Band spectrum on two Indian satellites.
The arbitral tribunal subsequently determined in two awards that India had breached the BIT and the investors were entitled to compensation which valued the investment at US$ 740 million. Those awards have given rise to a myriad of court proceedings globally as the investors have sought to enforce them and obtain payment in various jurisdictions, including in Australia and England.
Australian Proceedings
At first instance, the investors applied to enforce the awards in the Federal Court of Australia (a court of first instance). India cross-applied to set aside the investors’ application, arguing that India was immune from the jurisdiction of Australian courts under Section 9 of the Australian Foreign States Immunity Act (the “FSIA”). In response, the investors argued that by ratifying the New York Convention, India had waived its state immunity and submitted to the jurisdiction of Australian courts, pursuant to Section 10(2) of the FSIA. The Federal Court found for the investors and held that Article III of the New York Convention was a “clear and unmistakable” implication that ratification of the New York Convention involved a waiver of state immunity. Specifically, the Federal Court considered that an “obvious and necessary implication” from the terms of the New York Convention was that India consented to Australia recognising and enforcing arbitral awards even if India was a party to the award. Sovereign immunity would prevent Australia from doing so and would be inconsistent with the New York Convention.
India appealed the decision to the Full Court of the Federal Court of Australia (an intermediate appellate court). The Full Court found that India had not waived its immunity in respect of proceedings to enforce awards which arose from a non-commercial relationship. The Full Court relied on India’s reservation to its ratification of the New York Convention that it would “apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the Law of India” (“Commercial Reservation”). Of note, India argued, and the investors ultimately accepted, that the awards arose from a non-commercial relationship. The Full Court did consider that “[t]here is much to be said in support of a conclusion” that India’s ratification of the New York Convention amounted to a waiver of adjudicative immunity for awards which arose from a commercial relationship, but it did not need to decide the point.
English Proceedings
At first instance, following an ex parte application by the investors, the English High Court ordered leave to enforce the awards. India applied to set aside this order on the basis that: (i) it benefited from state immunity with respect to enforcement of the awards under section 1 of the English State Immunity Act (the “SIA”); and (ii) the exception to state immunity under section 9 of the SIA, where a State agrees to submit a dispute to arbitration, did not apply. It was ordered that the former argument would be decided as a preliminary issue.
Similar to the Australian proceedings, the investors argued that India’s ratification of the New York Convention amounted to a “prior written agreement” under section 2(2) of the SIA, therefore waiving its state immunity and submitting to the jurisdiction of the English courts. The High Court rejected the investors’ argument and held that India had not waived its adjudicative immunity in respect of enforcement of awards in England.
Consequent Status
Following these decisions, the Australian courts and the English courts had reached the same conclusion – India had not waived its state immunity and had not submitted to the jurisdiction of the respective courts. However, the reasoning of the courts had diverged. The investors then appealed each of these decisions to the HCA and the EWCA, respectively.
The HCA and EWCA Decisions
Each of the HCA and EWCA was asked to consider whether state immunity from adjudicative jurisdiction had been waived by India’s ratification of the New York Convention. The investors particularly relied on Article III of the New York Convention which provides that: “[e]ach Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon” (emphasis added).
The Relevant Test
Each of the HCA and the EWCA began by setting out the relevant test for a waiver of state immunity under the respective domestic law:
- The HCA explained that under section 10 of the FSIA, there was a strong presumption that state immunity was not waived, and that “any waiver of foreign State immunity in an international agreement must be clear and unmistakeable”.
- Under English law, the test for whether a State had waived its state immunity under section 2(2) of the SIA was “[i]f the express words used amount, on their proper construction, to an unequivocal agreement by the state to submit to the jurisdiction”.
Interpretation of Article III of the New York Convention
The HCA observed at the outset that there was no express reference to state immunity in the New York Convention, and limited reference in its travaux préparatoires. Relying on academic commentary and international law jurisprudence, the HCA interpreted “rules of procedure” in Article III to incorporate rules of state immunity. Consequently, the HCA found that Article III could not amount to a waiver of state immunity as a matter of Australian law where enforcement of an award was conditional on its rules of state immunity.
The EWCA, in line with the decisions of the UK Supreme Court in Benkharbouche v Embassy of the Republic of Sudan and the House of Lords in Jones v Ministry of the Interior for the Kingdom of Saudi Arabia, also found that “rules of procedure” did include state immunity. In particular, the EWCA relied on the definition of “rules of procedure” set out by Lord Sumption in Benkharbouche: “a rule, which, whether technically procedural or substantive in character, has the effect of barring a claim for reasons which do not go to its legal merits”. The EWCA concluded that India’s ratification of the New York Convention and its consent to Article III therefore did not amount to a submission to the jurisdiction of the English courts, and noted that this accorded with the HCA’s decision on this matter.
Analogy Between the New York Convention and the ICSID Convention
The investors argued before both the HCA and the EWCA that an analogy should be drawn between the New York Convention and the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (the “ICSID Convention”). Notably, both the HCA in Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l. [2023] HCA 11 and the UK Supreme Court (the UK’s apex court) in Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l. [2026] UKSC 9 had previously found that the ratification of the ICSID Convention was considered a waiver of state immunity in respect of proceedings for the enforcement of ICSID awards.
Both courts rejected such an analogy on the following bases:
- The ICSID Convention is particularly concerned with disputes where a State is a party, unlike the New York Convention, which covers both private party and State disputes.
- The ICSID Convention expressly addresses issues of state immunity, unlike the New York Convention, which is silent on the issue.
- Contrary to Article 54(1) of the ICSID Convention, Article III of the New York Convention requires the recognition and enforcement of awards “in accordance with the rules of procedure of the territory where the award is relied upon”.
Decisions in Other Jurisdictions
Lastly, both the Australian and English courts considered it important to consider the alignment of their decisions with those of other States party to the New York Convention.
Both courts referred to the judgment of the Quebec Court of Appeal (Canada’s intermediate court) on this issue in the Canadian enforcement proceedings of the Devas case. While the Canadian court had held that India did waive its adjudicative immunity, it did not reach this conclusion merely because India ratified the New York Convention, but due to the fact that India had additionally: (i) entered into the Mauritius-India BIT; and (ii) agreed to submit to, and participated in, the arbitration. These additional matters were not considered by either the HCA or EWCA, as they were not the subject of those proceedings.
- In the Australian proceedings, the investors did not rely on the agreement to arbitrate in the Mauritius-India BIT as an exception to adjudicative immunity pursuant to section 17 of the FSIA.
- The English proceedings thus far concerned only the preliminary issue – whether ratification of the New York Convention amounts to a “prior written agreement” under section 2(2) of the SIA – and have not yet considered whether the agreement to arbitrate in the Mauritius-India BIT triggered the exception to adjudicative immunity under section 9 of the SIA.
The HCA specifically noted the first instance decision in the English High Court – in addition to the Quebec Court of Appeal’s decision and decisions in a different case in the US courts – in support of the common understanding among the three jurisdictions that the mere ratification of the New York Convention is not a waiver of state immunity.
The EWCA’s reasoning was supported by similar decisions in the German and US courts, and commented on the Australian proceedings up to and including the HCA’s decision. The EWCA considered that the Federal Court’s and Full Court’s failure to consider the scope of “rules of procedure” in Article III of the New York Convention “seriously harms their value as persuasive authority”.
Comment
These decisions from England and Australia form part of an emerging international consensus across the multiple jurisdictions (including also Germany, the US and Canada), that States have not waived their state immunity simply by ratifying the New York Convention. The HCA decision is an authoritative statement of Australian law, while the EWCA decision constitutes binding appellate guidance on the position in English law, given that the case will not be appealed to the UK Supreme Court.
The significance of this consensus to international practice must be caveated by the fact that, the HCA and EWCA decisions are limited in their scope to the question of whether the ratification of the New York Convention on its own amounts to a waiver of adjudicative immunity. However, investors may still be able to rely on other domestic law exceptions to adjudicative immunity which were outside the scope of these two decisions. For example, both English and Australian domestic legislation include an exception to adjudicative immunity where the State agreed to submit the dispute to arbitration (section 9 of the SIA in England and section 17 of the FSIA in Australia). The investors having not succeeded on the preliminary issue, the English court will in due course consider whether the agreement to arbitrate in the Mauritius-India BIT triggers the exception to state immunity set out in section 9 of the SIA.
These decisions may provide a further reason why investors may refer their disputes with States to ICSID arbitration where possible, instead of progressing in other arbitration fora, given that the HCA and the UK Supreme Court have both ruled that ratification of the ICSID Convention amounts to a waiver of adjudicative immunity, in contrast to the New York Convention.
Lastly, while the Devas arbitration concerned a treaty-based claim, immunity as a procedural defence is highly relevant in contractual disputes. The confirmation in multiple jurisdictions that ratification of the New York Convention on its own will not constitute a waiver of adjudicative immunity serves as a reminder of the importance of negotiating express waivers in transaction documents with States and other entities which may benefit from immunity.
