Checklist on Sovereign Immunity

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What is Sovereign Immunity?
It is likely that the awarding authority in an infrastructure project will be a government authority and as such may benefit from sovereign immunity. This should be checked with local lawyers. In some cases when concession legislation is enacted, it specifically waives sovereign immunity for the state in relation to infrastructure projects – this is, however, by no means universal. A private operator will be anxious to ensure that any sovereign immunity is waived.
Click here to download word version of Checklist and Sample Wording for Sovereign Immunity
States generally benefit from two forms of immunity: jurisdiction and execution [1]. - A state's immunity to jurisdiction results from the belief that it would be inappropriate for one state's courts to call another state under its jurisdiction. Therefore, state entities are immune from the jurisdiction of the courts of another state. However, this immunity can generally be waived by the state entity. Reference to arbitration is in many legal systems sufficient to demonstrate a waiver of immunity to jurisdiction by the state. However, certain developing countries may be hesitant to submit themselves to international arbitration, believing that arbitration is dominated by Western principles and would not give a developing country a fair hearing. These same developing countries may feel more secure submitting to arbitration under the UNCITRAL rules, which are often considered more culturally neutral than those of the ICC or other Western tribunals [2]. - The state will also have immunity from execution, as it would be improper for the courts of one state to seize the property of another state. Immunity from execution may also generally be waived. Waiving immunity from execution may be difficult for a government to address. As a general proposition under most legal systems, certain assets belonging to the state should not be available for satisfaction of the execution of an arbitral award; for example, the country's foreign embassies, or consular possessions. Therefore, some method may have to be made available for the private party to seize certain state assets, possibly through careful definition of those possessions available for seizure. [1] Jeffrey Delmon, Project Finance, BOT Projects and Risk, 2005 [2] Craig, Park and Paulsson, International Chamber of Commerce Arbitration (3rd edition 2000).Two Types of Immunity
Sample Wording for Waiver Of Sovereign Immunity