State Immunity at the High Court: An Upcoming Sequel

In 2011, state-owned Indian space entity, Antrix Corporation, terminated a lease with Devas Multimedia for satellite transponder capacity, citing ‘national needs’. The Government of India then expropriated investors’ assets in Devas, triggering an arbitration before an International Chamber of Commerce tribunal, which found that Antrix had wrongfully terminated the contract; two investor-initiated arbitrations and awards under the India-Mauritius Bilateral Investment Treaty; and setting aside/enforcement proceedings across six jurisdictions, with nine figure sums at stake.

The Australian leg of this saga began with CCDM Holdings LLC and associated entities filing for recognition and enforcement of the UNCITRAL quantum award. Predictably, India contested jurisdiction on grounds of state immunity – an argument that was rejected by Jackman J at first instance but then accepted by the Full Federal Court. In June 2025, the High Court granted special leave to appeal.

This case is a compelling sequel to the 2023 case of Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l., in which the High Court determined that Spain’s ratification of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) amounted to a waiver of its immunity in related enforcement proceedings. In the present case, the appellants contend that India’s ratification of the New York Convention has the same effect. Thus, the High Court is once again tasked with unravelling a deceptively complex question – what meaning should be placed on the ratification of a treaty? As in Kingdom of Spain, the case will be watched closely by English courts faced with parallel proceedings.

In anticipation of a High Court verdict, this article sketches out the key issues in dispute, offers some commentary, before noting a crucial and an internationally atypical choice made in the drafting of the Foreign State Immunities Act 1985 (Cth) (‘FSIA’).

Issues in Dispute

Pursuant to section 9 of the FSIA, foreign states are immune from the jurisdiction of Australian courts. This immunity can, however, be waived by submitting to those courts’ jurisdiction (s 10(2) FSIA). We know from Kingdom of Spain that waiver may be implied from the express words in a treaty, but such a waiver must be ‘unmistakeable’.

The appellants contend that India waived its immunity by signing the New York Convention – the widely ratified and highly successful treaty governing the recognition and enforcement of foreign arbitral awards.

India has offered several responses to this waiver argument, which can be sorted into three main claims. First, the New York Convention does not apply to awards based on the conduct of a state in its governmental – as opposed to commercial – capacity (jure imperii vs jure gestionis). Second, unlike the ICSID Convention at issue in Kingdom of Spain, signing the New York Convention cannot amount to a waiver of immunity because, inter alia, the latter does not explicitly reference immunity, qualifies the enforcement obligation with reference to local ‘rules of procedure’, and was, in any event, drafted well before the emergence of Investor-State Dispute Settlement of the sort at issue here.

Finally, the argument accepted by the Full Federal Court – and endorsed by the Commonwealth – is that even if waiver through ratification of the New York Convention is possible, any Indian waiver is limited by its reservation to the Convention. As is permitted under Article I(3), India only agreed to apply the Convention to disputes arising out of relationships considered commercial under Indian law, which may well exclude this matter. India and the Commonwealth argue that this reservation has reciprocal effect pursuant to the rule of customary international law later codified in Article 21 of the Vienna Convention on the Law of Treaties – i.e., Australia does not owe India an obligation to enforce non-commercial awards (per the Indian definition), and thus India has not waived immunity regarding such awards.

A Curious Reciprocity Debate

The dispute over the purportedly reciprocal effect of India’s reservation is complex. Both sides have made submissions spanning the text, context, object and purpose, travaux préparatoires, academic commentary and case law associated with Article I(3) of the New York Convention. These arguments are discussed at [33]-[59] of the appellants’ submissions, [48]-[70] of India’s submissions, and [31]-[42] of the Commonwealth’s submissions. Interestingly, this reciprocity debate is far more abstract than one may initially assume.

Consider the enforcement of a non-commercial award concerning a dispute between two private parties. Assume that it is otherwise enforceable under the New York Convention. If a party sought enforcement in Australia, it would succeed. This will not change if both parties are Indian, or if the arbitration was seated in India. Australia has not issued a commercial reservation, and thus Australian courts must disregard the award’s non-commercial nature. With the possible exception of this dispute over immunity, India’s reservation has absolutely no effect on the operation of the New York Convention in Australia.

Moreover, given that Australia’s obligations extend to recognition of awards coming from (or involving individuals from) states that are not party to the New York Convention, India’s ratification is just as irrelevant in practice as its reservation – Australia’s implementation of the Convention is wholly unaffected by India’s position.

These observations lead the appellants to argue that India’s commercial reservation is non-reciprocal, in a similar manner to human rights treaties (see generally 4.2.5 of this International Law Commission Guide). I find this argument plausible. So too, however, is the response from India and the Commonwealth. Namely, that while nothing changes in practice, India’s ratification of the Convention has one abstract legal consequence – it means that Australia owes its Convention obligations to India, and vice versa, where it otherwise would not. On this view, India’s reservation can operate reciprocally in narrowing those abstract obligations, even if it has no material effect on which awards may be enforced in Australia.

This reciprocity debate is likely to be the decisive issue in the High Court’s eventual judgment. But I am equally interested in a more fundamental tension in the appellants’ case. With India’s ratification having only abstract effect in Australia, I would argue that the appellants’ underlying analogy to Kingdom of Spain is more fraught than they, the Commonwealth, Jackman J at first instance, and even the Full Federal Court, have made it out to be.

An Uneasy Analogy

As a consequence of the reciprocity debate outlined above, much of the parties’ argumentation has focused on the nature of the promises made by Australia. Recall, however, that we are looking for an ‘unmistakable waiver’ of immunity by India. So, how can we characterise India’s decision to ratify the New York Convention?

The most favourable characterisation from the appellants’ perspective is that India has accepted the obligations assumed by Australia and all other signatories. While the Commonwealth has ultimately sided with India on the reciprocal effect of India’s reservation, it does endorse the appellants’ position on this preliminary issue at [21] of their submissions:

‘India cannot simultaneously agree that Australia “shall” (and so, implicitly, can) “recognize” and “enforce” the “arbitral awards” identified in Art I … whilst also claiming an immunity to which it would otherwise be entitled that would mean Australia cannot comply with that very obligation with respect to some of those arbitral awards.’

However, Australia’s obligation to enforce those awards exists regardless of India’s agreement to be bound by certain obligations within its own jurisdiction. In projecting the ‘before’ and ‘after’ of ratification, India could reasonably have assumed that the impact of its decision would be felt within its own borders. For completeness, India could also have foreseen its ratification impacting states that issued a so-called reciprocity reservation under Article I(3) (today, there are 87 such states). At the very least, however, India would have known that its ratification would not affect states that did not issue the reciprocity reservation.

There are two relevant questions:

• Has India promised that its courts will recognise and enforce (valid) arbitral awards?
• Has India waived its immunity from recognition and enforcement of arbitral awards in Australian courts?

Ratification answers ‘yes’ to the first question, but I am not sure that it unmistakably answers ‘yes’ to the second.

In Kingdom of Spain, this hurdle was met because by ratifying the ICSID Convention, Spain had taken a class of potential awards (those that it would agree to send to ICSID) and created an obligation upon Australia to recognise and enforce them, with state immunity protected only for the distinct purpose of execution. Spain had positively subjected itself to an Australian recognition and enforcement obligation that would not otherwise exist. In such circumstances, belated invocation of immunity seemed rather deceitful. India’s conduct is far less materially impactful in this case – Australia would be bound to enforce the appellants’ awards regardless – and thus a less intuitive waiver.

In sum, is treaty ratification relevant only if it creates an obligation that would not otherwise exist? Or is it so strong a symbolic endorsement of other signatories’ preexisting obligations that it unmistakably implies the waiver of any impediment to those preexisting obligations? A consensus appears to be forming around the latter position, but I remain sceptical that it is quite so clear.

The Elephant in the Room

In agreeing to enforce arbitral awards domestically, one might excuse India for not contemplating its immunity before Australian courts. However, in issuing a standing offer of arbitration to Mauritian investors – via the Mauritius-India BIT – it would have contemplated subsequent awards being enforced. So why is that not at issue?

Many jurisdictions accept that arbitration agreements trigger a standalone exception to state immunity for recognition and enforcement (see, eg, s 9 UK, §1605(a)(6) US, s 11 Singapore). Australia does not (see s 17 FSIA Act). This reflects a decision reached by the Australian Law Reform Commission (ALRC) in 1984 (see [105] et seq. of the ALRC Report). Offering a complete evaluation of the merit of the Australian approach is no small task, but one that could be timely following the High Court’s verdict in this case.