ICC Arbitration Trends: Sovereign Immunity in Investment Treaty Disputes

The submission to arbitration waives immunity from jurisdiction. It does not, in most jurisdictions, waive immunity from execution. Claimants who treat the award as the end of the matter routinely discover that enforcement is a second, longer campaign.

Recent tribunal practice has drawn the distinction with increasing precision, and enforcement courts in New York, London, and Paris have followed suit in assessing whether the assets targeted are used for commercial purposes.

The result is a widening gap between the face value of awards against states and realised recovery. Claimants who plan for asset mapping at the pleading stage close that gap materially.

Structuring the claim to preserve enforcement optionality — treaty selection, seat, and the identity of the respondent entity — is a strategic decision, not an administrative one.