Author: Bharath Palle*
| Jurisdiction: | Topics: |
On 8 April 2026, the High Court of Australia in CCDM Holdings v. Republic of India, held that a State by ratifying the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (“New York Convention”) does not waive its sovereign immunity. The ratifying state continues to retain sovereign immunity in the courts of other State parties to the New York Convention during proceedings for recognizing and enforcing an arbitral award. I briefly discuss the decision below.
FACTUAL BACKGROUND
In 1998, India and Mauritius entered a Bilateral Investment Treaty (“BIT”), for protecting investments made by investors of either state. The BIT provided for arbitration of disputes with different regimes including the New York Convention, the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965) (“the ICSID Convention”), and a modified version of United Nations Commission on International Trade Law Arbitration Rules (1976) (“UNCITRAL”).
In 2005, Mauritian investors, including notably CC/Devas (Mauritius) Limited, through an Indian entity, entered a satellite leasing agreement with an Indian state-owned aerospace company called Antrix Co. Ltd. The purpose of the agreement was to offer broadband services throughout India. In 2011, Antrix annulled the contract because of a policy decision by the Government of India to pursue its “strategic requirements” and “national needs.”
The following year, the Devas investors commenced ad-hoc arbitration proceedings against India before the Permanent Court of Arbitration at the Hague. The investors claimed that India had expropriated their investments and breached the provisions of the BIT by denying them fair and equitable treatment. An arbitral tribunal in 2016 by a majority ruled in favor of the investors on merits, and in 2020 awarded them approx. $111M. This arbitral award was the subject of enforcement actions by Devas in the United States, the United Kingdom, Canada, Australia, and France.
PROCEDURAL BACKGROUND
In April 2021, the Devas investors applied to the Federal Court of Australia to recognize and enforce the arbitral award against India for $111M under the New York Convention.[1] Relying on section 9 of Australia’s Foreign States Immunities Act 1985 (Cth),[2] India claimed that it enjoyed sovereign immunity from the jurisdiction of Australian courts.
The primary judge of the Federal Court of Australia initially held that India had waived its sovereign immunity by ratifying the New York Convention. On appeal, the Full Court of the Federal Court assumed that ratifying the New York Convention would waive state immunity. Nevertheless, the Full Court reversed considering India’s reservation at the time of ratification that it would apply the provisions of the New York Convention only to differences arising out of legal relationships which are considered as “commercial” under Indian law. Because India’s reservation restricted how it would apply the New York Convention, this reciprocally restricted the extent to which other States could apply the same convention with respect to India.
The Full Court reasoned that India’s waiver of state immunity, consistent with its reservation, only applied to those awards that would be considered “commercial” under Indian law. For this reason, any waiver of sovereign immunity did not apply to arbitral awards that were not “commercial” in the relevant sense. Although there was no evidence led on whether the dispute between Devas and the Indian government involved a “commercial” dispute under Indian law, the Full Court held that the dispute was not “commercial” under Australian law, and reversed the judgment of the primary judge.
On appeal, however, the High Court considered a much narrower question: whether India, by ratifying the New York Convention, had waived its state immunity from jurisdiction of Australian courts that were enforcing a foreign arbitral award.[3]
THE HIGH COURT’S DECISION
The High Court began with acknowledged first principles concerning sovereign immunity. It is a rule of customary international law deriving from the principle of sovereign equality of States that “those who are independent and autonomous cannot, except by consent, exercise authority over, or establish an external source of authority over, others of independent and autonomous status.” States are presumed to have immunity unless a few well-established exceptions are shown. Because of the strength of the presumption that attaches to sovereign immunity, “any waiver of [such] immunity in an international agreement must be clear and unmistakable.” Reviewing the provisions of the New York Convention, the travaux préparatoires as well as the scholarly consensus, the High Court concluded however that this presumption of immunity was not overcome.
No express waiver and an ambiguous consideration in the travaux préparatoires: The Court concluded that the text of the New York Convention does not expressly refer to foreign State immunity. The Court found that the travaux préparatoires bear only a “limited and ambiguous consideration of foreign State immunity,” because the scholarly literature reviewing “the negotiating history of the Convention” indicated that “the delegates did not intend to preclude an immunity-based argument in enforcement actions against states.”
Article III preserves state immunity: Article III of the New York Convention “qualifie[d] the obligation of contracting States to enforce arbitral awards by reference to whatever rules of foreign State immunity [was] adopted by the territory where the award is relied on.” The High Court interpreted this provision to mean that the existing rules governing foreign State immunity were preserved.
A common understanding and state practice around the New York Convention: The High Court also considered the “common understanding” of authorities adopted in the United Kingdom and Canada, which had adopted the principle that a state through ratification of the New York Convention does not waive its sovereign immunity. Interestingly, the High Court did not consider the decision of the U.S. Court of Appeals for the D.C. Circuit in Ukraine v. Pro Tetneft, 18-7057, May 28, 2019, which adopted a directly contrary position, viz., that a State by signing the New York Convention waives its immunity from the enforcement of arbitral awards in other signatory states.[4]
No analogy with the ICSID Convention: A key judicial precedent that the Devas investors and the Federal Court relied on was the decision of the High Court of Australia in Kingdom of Spain v. Infrastructure Services Luxembourg S.A.R.L. & Anor (April 2023), which held that each contracting state to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965) (“the ICSID Convention”) waives its state immunity by agreeing to recognize and enforce ICSID awards on a mutual and reciprocal basis. The High Court explicitly held that “no analogy could be drawn” between the New York Convention and the ICSID Convention for several reasons.
- While the ICSID Convention is explicitly concerned with disputes involving the State as a party, the New York Convention has a broader scope to include disputes involving “persons whether physical or legal.”
- The ICSID Convention, unlike the New York Convention, also contains express references to State immunity preserving it in instances of execution.By contrast, Article III of the New York Convention preserves the rules governing foreign State immunity that are in effect.
The High Court ultimately found it unnecessary to determine the scope of the New York Convention because it had sufficient grounds to conclude that India had not waived its foreign State immunity by ratifying the New York Convention.
KEY TAKEAWAYS
The High Court’s decision does not consider whether India had waived its sovereign immunity by agreeing to arbitrate its dispute with the Devas investors. Here, the Canadian example is instructive. In connection with the Devas arbitral award, the Court of Appeal of Québec in December 2024 held that India was not immune from the jurisdiction of Québec courts in the enforcement proceedings. The Court held that there was a presumption of waiver both on the strength of the agreement to arbitrate as well as India’s ratification of the New York Convention. On 18 September 2025, the Supreme Court of Canada in Republic of India, et al. v. CCDM Holdings, LLC, et al. dismissed India’s leave to appeal against this decision.
There is also a growing split among different jurisdictions regarding the impact of the New York Convention on sovereign immunity. Apart from Canada, the U.S. Court of Appeals for the D.C. Circuit held that Ukraine had waived its sovereign immunity by signing the New York Convention. The U.S. Supreme Court in January 2020 denied Ukraine a cert petition against the DC Circuit’s decision.
It remains to be seen which approach will ultimately prevail amid these competing interpretations of the scope of the New York Convention.
[1] At some point, the Devas investors were substituted by their assignees. I will continue to refer to them as the “Devas investors” for the sake of convenience.
[2] Section 9 of that Act provides that “[e]xcept as provided by or under this Act, a foreign State is immune from the jurisdiction of the courts of Australia in a proceeding.”
[3] Although the investors provided documents that purported to show India’s agreement to arbitrate with their predecessors-in-interest—an agreement that would also have operated as a waiver of state immunity—India claimed that this document was vitiated by fraud. On appeal, the investors did not rely on the parties’ agreement to arbitrate for establishing a waiver of foreign State immunity.
[4] The High Court instead adopted the position urged by the United States of America in a 2024 amicus brief in NextEra Energy Global Holdings B.V. v. Kingdom of Spain, as an act of State practice.
*Dr. Bharath Palle practices as a commercial litigator at a law firm in New York City. He holds a doctorate in law from Harvard Law School, and has previously worked as a litigator in Chennai, India.