Author: Andrea K. Bjorklund*
Published: April 2011
Description: “Successful” claimants in investment arbitrations increasingly find that they have earned a hollow victory if the losing state refuses to pay the arbitral award voluntarily. Immunity inhering in the state’s assets may prevent execution against them. This difficulty arises from the distinction between waivers of sovereign immunity with respect to jurisdiction and waivers of sovereign immunity with respect to execution. By entering into investment treaties states have waived their jurisdictional immunity, but the argument that a state’s waiver of jurisdictional immunity should encompass a waiver of immunity in sovereign assets themselves has so far been unsuccessful in the investment treaty context, and has met with only minimal success in cases involving state contracts. Investors are left to proceed against a state’s commercial assets, assuming they can locate them and defeat any arguments the state makes respecting their governmental function. These hurdles might prove too large for many investors to surmount. Thus, the international community has created an elaborate …
*Professor of Law & Martin Luther King, Jr. Scholar, University of California, Davis, School of Law. J.D. Yale Law School; M.A. New York University; B.A. University of Nebraska. I am grateful to Seán Duggan, Toni Henneke, Meg Kinnear, John Major & Tom Sikora, and to participants in the PCA/Houston International Arbitration Club/University of Texas Symposium: “Arbitration and National Courts: Conflict and Cooperation” (May 13-14, 2010), for helpful suggestions and comments. Any errors, of course, remain my own.