Written by Samhith Malladi, Twin-qualified lawyer (India and England & Wales), and Senior Affiliate, Shardul Amarchand Mangaldas [Bombay office]; and Niyati Gandhi, Associate, Dispute Decision, Shardul Amarchand Mangaldas [Bombay office]
The Recalibration of Enforcement Doctrine
The worldwide marketing campaign to implement arbitral awards towards the Republic of India arising from its long-running dispute with Devas Multimedia has witnessed a major doctrinal shift within the remedy of sovereign immunity inside the enforcement of investor–state dispute settlement (ISDS) awards.
To recall, the dispute arises from a contract entered in 2005 between Devas Multimedia Personal Restricted (Devas) and the Indian state-owned Antrix Company (Antrix), which was the industrial arm of the Indian Area Analysis Organisation. Antrix had agreed to lease S-band spectrum to Devas to broadcast its multimedia providers in India. Antrix terminated this contract in 2011 citing nationwide safety issues. In a nutshell, the dispute spawned three concluded arbitrations – a industrial ICC arbitration between Devas and Antrix and two investor-state arbitrations between Devas’ shareholders and India below the India-Mauritius Bilateral Funding Treaty (BIT) 1998 and the India-Germany BIT 1995. In 2022, Devas’ Mauritian shareholders commenced one other investor-state arbitration towards India below the India-Mauritius BIT in relation to India’s efforts to thwart the award towards Antrix within the ICC arbitration, which at present stays pending earlier than the Everlasting Courtroom of Arbitration. An outline of the assorted proceedings arising from this dispute has been beforehand mentioned on this weblog right here.
Devas and its shareholders received beneficial awards in all three concluded arbitrations. Since then, Devas and its shareholders have commenced enforcement proceedings in a number of jurisdictions internationally. Latest judgments from courts in the UK and Australia – arising from the Mauritian shareholders’ makes an attempt to implement the beneficial ISDS award in varied jurisdictions – haven’t solely reaffirmed the centrality of sovereign immunity in enforcement proceedings however have additionally echoed the analytical method to assessing the enforceability of ISDS awards adopted by Indian courts. This put up situates the UK and Australian judgments inside the broader trajectory of Indian jurisprudence and considers the implications for the way forward for ISDS enforcement.
Early Presumption in Favour of Enforcement of Arbitral Awards
The early efforts by Devas’ traders to implement an ISDS award towards India had been profitable in overcoming India’s defence based mostly on sovereign immunity. In Deutsche Telekom v. India, German traders in Devas received a beneficial ISDS award in a Geneva-seated UNCITRAL arbitration towards India for compensation in 2020. Thereafter, other than efficiently resisting India’s efforts to put aside the award within the seat courts in Switzerland, the traders have been profitable in having the award recognised as enforceable within the US, Singapore and Germany below the New York Conference 1958 (NYC).
The observations of a US Courtroom in 2024 whereas implementing the award are illustrative of a presumption in favour of the enforcement of ISDS awards. The US Courtroom rejected India’s declare to sovereign immunity below the International Sovereign Immunities Act 1976 (FSIA) on the premise of the “arbitration exception” within the FSIA. The courtroom held that India couldn’t declare immunity on condition that it had agreed to arbitrate below the India-Germany BIT in accordance with the UNCITRAL Guidelines. Tellingly, the US Courtroom proclaimed “Sufficient is Sufficient!”. The method of the US courtroom, implementing the award below the New York Conference, is reflective of the restrictive idea of sovereign immunity, which limits a state’s immunity from lawsuits in overseas courts to acts of a personal nature, reminiscent of industrial actions, whereas preserving immunity for acts carried out in its sovereign capability. This idea acknowledges that states typically interact in industrial actions and ought to be held accountable like personal entities in these contexts.
On the time of those enforcement efforts, there was no dialogue of India’s industrial reservation to the NYC and whether or not the dispute earlier than an ISDS tribunal is taken into account “industrial” below Indian legislation. India’s reservation to the NYC states: “India will apply the Conference solely to variations arising out of authorized relationships, whether or not contractual or not, which might be thought of industrial below the nationwide legislation.” India isn’t the one state to have made such a reservation to NYC, and never the one State refused this defence. In Zhongshan Fucheng Industrial Funding Co. Ltd v Nigeria 112 F.4th 1054 (D.C. Cir. 2024), a Chinese language investor sought to implement an award towards Nigeria below the China-Nigeria BIT earlier than a US courtroom. The US has adopted a industrial reservation below the NYC. Nigeria sought to withstand enforcement of the award on the bottom that the dispute arose out of a relationship that was not industrial in nature. The courtroom disagreed and adopted a broad interpretation of the phrase “industrial”, observing that the BIT itself was signed to advertise commerce and the dispute didn’t must come up from a contract in an effort to be industrial.
Nevertheless, as mentioned beneath, in current enforcement makes an attempt towards India, India’s arguments on the query of whether or not ISDS awards had been “industrial” in nature and fell inside the scope of this reservation have been assessed in new mild. Courts in Australia and the UK have in current judgments accepted the renvoi to Indian legislation’s characterisation of enforceable “industrial” awards as not together with ISDS awards.
Australia: Treaty Reservations and Home Authorized Classification
As mentioned right here, the Full Federal Courtroom of Australia’s determination in Republic of India v. CCDM Holdings, LLC [2025] FCAFC 2 illustrates the rising judicial circumspection in enforcement proceedings towards sovereign states. The courtroom reversed the prior determination within the first occasion by the Federal Courtroom, the place the courtroom had enforced the award towards India. The courtroom of first occasion had concluded that India was not immune below the Australian International States Immunities Act 1985 (Australian FSIA) because it had waived its sovereign immunity by ratifying the NYC. The courtroom had not been satisfied of the affect of India’s industrial reservation to the NYC, noting that enforcement was sought in Australia and Australia had not made any such industrial reservation.
The Full Federal Courtroom disagreed with the reasoning of the courtroom of first occasion. Making use of the Vienna Conference on the Regulation of Treaties, 1969, the courtroom famous that the industrial reservation had modified the connection between India and different NYC contracting states as regards the duty to implement overseas awards in Article III of the NYC. On condition that it utilized, the courtroom concluded that the arbitral award associated to a dispute as to rights below public worldwide legislation – which was totally different from a “industrial” dispute. This was strengthened by the truth that the termination of the contract with Devas had arisen from “public coverage” issues, which had been once more not industrial in nature.
The Australian courtroom’s willingness to defer to India’s personal authorized characterisation of the transaction underscores the importance of home legislation within the enforcement calculus. The choice demonstrates that, even within the presence of an in any other case legitimate arbitral award, the classification of the underlying relationship and the scope of the respondent state’s reservations can decisively form the result of enforcement proceedings below the NYC.
United Kingdom: Consent to Arbitrate Is Not Consent to Implement
The English Industrial Courtroom’s determination in CC/Devas et al. v Republic of India [2025] EWHC 964 (Comm) continued the pattern of upholding sovereign immunity as a bar to enforcement of ISDS awards towards a rustic that has made a industrial reservation below the NYC. Devas argued that India’s ratification of the NYC constituted a waiver of sovereign immunity below the UK’s State Immunity Act 1978 (SIA). India took the place that there was no such waiver due to the restricted scope of the NYC and the industrial reservation that India made when ratifying the NYC.
The courtroom was not satisfied that India’s ratification of the NYC was ample proof of a “prior written settlement” below Part 2(2) of the SIA. The courtroom noticed that the drafters of the NYC had not supposed to preclude the power of states to say their sovereign immunity in enforcement proceedings. An important cog in his evaluation was that Article III of the NYC directs contracting states to recognise overseas arbitral awards as binding and “implement them in accordance in accordance with the principles of process of the territory the place the award is relied upon …”, which preserved states’ sovereign immunity “in its personal phrases”. He concluded that the ratification of the NYC was in and of itself inadequate to represent waiver in accordance with English legislation. Lastly, on India’s industrial reservation to the NYC, the courtroom accepted that whereas below English legislation the dispute might be termed “industrial”, it couldn’t be assumed that this was essentially the case below Indian legislation. The courtroom didn’t go a lot additional apart from noting that the claimants had not superior a case below Indian legislation on what constituted a “industrial” dispute. The courtroom merely concluded that “on enchantment, the Full Federal Courtroom of Australia has determined this subject in favour of India, which should carry appreciable weight on this jurisdiction” (para 98).
On the finish of the judgment, the courtroom clarified that its conclusion was “not supposed to contradict in any manner the enforcement pleasant facet of the NYC, which is its function, and the explanation for its success, and which has been persistently upheld within the English courts … It merely recognises that worldwide jurisprudence, which holds that ‘… state immunity occupies an vital place in worldwide legislation and worldwide relations’, additionally must be taken under consideration in deciding the slim, however vital, subject of whether or not a state has by treaty given its consent to waive that immunity” (para 108). The Courtroom’s closing comment means that whereas the enforcement of overseas arbitral awards continued to be the tenet of the NYC, it should co-exist with the home procedural legislation of the implementing state, notably on a difficulty as basic as sovereign immunity.
This judgment reinforces the precept that sovereign immunity isn’t a mere procedural hurdle however a basic organising precept of enforcement. The NYC, whereas facilitating recognition of arbitral awards, doesn’t itself override the statutory necessities for waiver of immunity below home legislation. The English courtroom’s insistence on express and unambiguous consent locations the burden squarely on traders to safe such waivers on the outset.
Comparative Evaluation: Convergence and Doctrinal Resonance
The current UK and Australian judgments characterize a deference to home legislation remedy of awards and the basic nature of sovereign immunity as a boundary as central pillars of judicial reasoning. The judgments have the potential to be the inflection factors in the direction of a world pattern through which the enforceability of investor–state awards is more and more contingent upon the exact contours of state consent, each on the treaty-drafting stage and in home statutory frameworks.
Historic Strategy of Indian Courts
The analytical method now being adopted within the UK and Australia appears to reflect the jurisprudence of Indian courts, which haven’t handled ISDS awards as enforceable below the New York Conference, and thus the Indian Arbitration and Conciliation Act, 1996.
Part 44 of the Indian Arbitration and Conciliation Act, 1996 is a singular statutory expression of India’s emphasis on sovereign selection when implementing arbitral awards. Part 44 enforces solely these awards which might be thought of as “industrial below the legislation in pressure in India”, rendered pursuant to the NYC and are made in a territory notified by the Central Authorities. Indian courts have scrutinized when a world arbitration award could be thought of “industrial” in nature. In Union of India v. Khaitan Holdings (Mauritius) Restricted & Ors. [CS (OS) 46/2019 I.As. 1235/2019 & 1238/2019 dated January 29, 2019] (Khaitan Holdings), India requested the Delhi Excessive Courtroom to subject an anti-arbitration injunction towards a BIT arbitration commenced towards India by Khaitan Holdings below the India-Mauritius BIT 1998. The courtroom noticed that the Arbitration and Conciliation Act (Half II of which includes the New York Conference and the Mannequin Regulation) didn’t apply to BIT arbitrations, which had been totally different in nature from “industrial” arbitrations given in addition they concerned questions of public worldwide legislation. The Delhi Excessive Courtroom’s determination in Khaitan Holdings echoed its earlier determination alongside comparable traces in Union of India v. Vodafone Group Plc [AIR Online 2018 Del 1656].
To be clear, neither the US nor the Australian courts have thought of or relied on these choices.
India’s Latest Treaty Apply
Recognising the constraints of the prevailing enforcement paradigm, India has begun to deal with these issues proactively in its treaty apply. The India–UAE Bilateral Funding Treaty (2023) consists of an categorical waiver of immunity from each jurisdiction and execution in respect of disputes submitted to arbitration below the treaty. In a chapter aptly titled “Finality and enforcement of awards”, the India-UAE BIT’s Article 28.4 states that: “Every Get together shall present for the enforcement of an award in its Territory in accordance with its Regulation. For the avoidance of doubt, this Article 28.4 shall not forestall the enforcement of an award in accordance with [the] New York Conference.” Following Article 27.5 of the India’s Mannequin BIT (2016), Article 28.5 clarifies that: “A declare that’s submitted to arbitration … shall be thought of to come up out of a industrial relationship or transaction for functions of Article I of the New York Conference.” Related language impressed by the Mannequin BIT has been integrated into Article 29.5 of the lately ratified India-Uzbekistan BIT 2024.
As such, if an ISDS dispute had been to come up from an funding made pursuant to those BITs, India has dedicated to not resist an eventual award’s enforcement because it has executed within the varied Devas award enforcement actions around the globe. This growth marks a major departure from India’s historic method and indicators an rising consensus that enforcement issues should be resolved on the outset, somewhat than left to the uncertainties of enforcement litigation.
Conclusion: Sovereignty because the Organising Precept of Enforcement
The Devas enforcement saga has introduced into sharp reduction the centrality of sovereign immunity within the enforcement of investor–state arbitral awards. The doctrinal evolution witnessed within the UK and Australia isn’t a departure from established ideas however a reaffirmation of the analytical method lengthy adopted by Indian courts. As the worldwide authorized group grapples with the challenges of ISDS enforcement, the longer term effectiveness of arbitral awards will rely much less on the reasoning of arbitral tribunals and extra on the readability with which states outline—and restrict—their consent to enforcement, each in home legislation and in treaty apply. It will likely be vital to observe this pattern intently as courts interpret the interaction between sovereignty and the enforcement of worldwide arbitral awards.
