THE AUTHOR<\/strong>: Traditionally, one major roadblock stood between the victorious claimant and U.S. courts: the sovereign-immunity statute might allow enforcement, but the U.S. courtroom still required a showing of \u201cminimum contacts\u201d with the defendant if that defendant was foreign. In the case of a state-owned enterprise without meaningful U.S. ties, the plaintiff often hits a brick wall.<\/p>\n\n\n\n Enter the U.S. Supreme Court in CC\/Devas (Mauritius) Ltd. v. Antrix Corp<\/em><\/a>.<\/em> With this decision, the Court may have dramatically reduced one of the last remaining jurisdictional barriers to enforcing arbitral awards against state-owned entities in U.S. courts by eliminating the \u201cminimum contacts\u201d requirement. But can those seeking enforcement count<\/p>\n\n\n\n The dispute began when satellite-communications company Devas Multimedia Private Ltd (\u201cDevas (Mauritius) Ltd<\/strong>\u201d or \u201cDevas<\/strong>\u201d) and India\u2019s space-agency spin-off Antrix Corporation Ltd. (\u201cAntrix<\/strong>\u201d) entered into a contract to lease satellite spectrum and launch capacity. When the Indian government later determined it needed additional satellite capacity, Antrix terminated the contract under its force majeure clause, and Devas initiated arbitration under the ICC\/UNCITRAL framework.<\/p>\n\n\n\n After unanimously concluding that Antrix had breached the contract, the arbitral panel awarded Devas $562.5 million<\/a> in damages plus interest. Devas then petitioned the United States District Court for the Western District of Washington to confirm the award because assets of Antrix (or its parent, the Indian government) were traceable in the U.S. But success in U.S. enforcement requires navigating the Foreign Sovereign Immunities Act (\u201cFSIA<\/strong>\u201d) and U.S. personal-jurisdiction doctrine\u2014all while dealing with a corporate entity wholly owned by the Government of India<\/a>.<\/p>\n\n\n\n Under U.S. law, two elements matter when trying to enforce an award against a foreign state or state-owned enterprise:<\/p>\n\n\n\n Thus, many claimants found themselves in an awkward limbo\u2014award in hand, FSIA exception arguably triggered, but U.S. court turning them away because the defendant couldn\u2019t show those U.S. contacts.<\/p>\n\n\n\n In Devas<\/em>, the district court concluded that it had personal jurisdiction over Antrix, a state-owned company of the Indian government, because the requirements of the FSIA\u2019s long-arm provision were satisfied. Specifically, the court found that (1) an exception to sovereign immunity applied\u2014namely, the arbitration exception under 28 U.S.C. \u00a7 1605(a)(6), which permits actions to confirm arbitral awards against foreign states\u2014and (2) service of process had been properly effected. The court also reasoned that, since Antrix was an instrumentality of a foreign state, it was not a \u201cperson\u201d entitled to due process protections under the Fifth Amendment, and therefore a separate minimum-contacts analysis was unnecessary. Devas, <\/em>2020 WL 6286813, at *3<\/a>.<\/p>\n\n\n\n The Ninth Circuit subsequently reversed the district court\u2019s decision, and, following existing Ninth Circuit precedent, concluded that the FSIA requires a showing that a foreign state\u2019s instrumentality has the type of \u201cminimum contacts\u201d with the United States for purposes of personal jurisdiction, as set out in International Shoe v. Washington<\/em>.<\/p>\n\n\n\n The Devas case made it to the Supreme Court, which was presented with the question of whether the FSIA requires a showing of \u201cminimum contacts\u201d with the United States before a court can exercise personal jurisdiction over a foreign state defendant.<\/p>\n\n\n\n The Supreme Court was clarified crucial aspects of how FSIA\u2019s arbitration-award enforcement plays out and held that when a foreign state (or its entity) has waived its sovereign immunity through arbitration, and the arbitration exception applies, then service of process in accordance with \u00a71330(b) is sufficient to establish personal jurisdiction\u2014even without a separate showing of minimum contacts.<\/p>\n\n\n\n In other words, once the statutory waiver applies, the enforcement proceeding does not require the \u201cminimum contacts\u201d test traditionally required under due-process jurisprudence for domestic or corporate defendants.<\/p>\n\n\n\n The Court reasoned that the FSIA scheme reflects a conscious decision by Congress: the arbitration exception itself signals the foreign state\u2019s consent to suit in U.S. courts, and \u00a71330(b) authorizes jurisdiction upon service of process in such cases. Imposing a separate minimum-contacts requirement would eviscerate the legislative design.<\/p>\n\n\n\n Removing the minimum contacts barrier is central to the potential jurisdictional frontier change.<\/p>\n\n\n\n For claimants, this decision represents a smoother jurisdictional path (for now):<\/p>\n\n\n\n In sum, sovereigns and state-owned entities respondents should take note that the \u201cminimum contacts\u201d shield is gone \u2013 for now. The Supreme Court\u2019s decision removes the traditional jurisdictional defense that many state-owned entities relied on, meaning that sovereign respondents can no longer rely on a lack of U.S. presence alone as a barrier to enforcement.<\/p>\n\n\n\n But some questions remain open. Importantly, the Supreme Court left open whether the Fifth Amendment\u2019s Due Process Clause independently requires a showing of \u201cminimum contacts.\u201d If the Ninth Circuit (on remand) decides that Antrix preserved this argument, it could still find that jurisdiction is constitutionally deficient\u2014regardless of the FSIA\u2019s statutory framework.<\/p>\n\n\n\n Some circuits, like the D.C. Circuit, already hold that foreign agencies and instrumentalities are \u201cpersons\u201d entitled to due process protection unless the foreign state exercises \u201cplenary control\u201d over them. If the Ninth Circuit adopts a similar approach, certain state-owned entities (those with commercial autonomy) might regain constitutional protections\u2014even if the sovereign itself does not.<\/p>\n\n\n\n In the international arbitration world, the difference between an available enforcement path and an enforcement mirage often lies in jurisdiction. With Devas<\/em>, that path has been widened. By removing the \u201cminimum contacts\u201d hurdle under U.S. law when the FSIA arbitration exception applies, the Supreme Court has shifted the jurisdictional frontier for enforcement of awards against state-owned entities. With this decision, the Supreme Court clarified that, under the FSIA, personal jurisdiction over a foreign state, its agency, or its instrumentality is established when an exception to sovereign immunity applies and service of process is properly effected. The Supreme Court, however, left open the question of whether the Due Process Clause of the Fifth Amendment imposes an additional \u201cminimum contacts\u201d requirement\u2014an issue that will depend on whether foreign states and their instrumentalities are entitled to constitutional protections, and, if so, whether the procedural safeguards embodied in the FSIA itself suffice or whether the traditional International Shoe<\/em> framework continues to apply.<\/p>\n\n\n\n
Jessica Rado<\/strong>, Associate, Klafter Lesser<\/strong> | Alumni Advisor, Fordham Law School<\/strong><\/p>\n\n\n\n
\n\n\n\nIntroduction<\/strong><\/h2>\n\n\n\n
The Dispute at a Glance<\/strong><\/h2>\n\n\n\n
The Traditional Hurdle: Minimum Contacts + FSIA Enforcement<\/strong><\/h2>\n\n\n\n
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The Supreme Court\u2019s Shift<\/strong><\/h2>\n\n\n\n
Why It Matters: Implications and Open Questions<\/strong><\/h2>\n\n\n\n
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Conclusion<\/strong><\/h2>\n\n\n\n