New York Convention Article III Preserves State Immunity: “Rules of Procedure” Include Sovereign Immunity

1. Introduction

The appeal concerned a narrow but strategically important question in international arbitration enforcement against states: whether a foreign state, merely by ratifying the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”), thereby submits to the adjudicative jurisdiction of the UK courts—so as to lose immunity under section 2 of the State Immunity Act 1978 (“SIA”)—in proceedings to recognise and enforce arbitral awards.

The claimants sought to enforce two investment treaty arbitral awards (jurisdiction/merits and quantum) made under UNCITRAL Rules by a Permanent Court of Arbitration tribunal seated in The Hague. The respondent state asserted sovereign immunity under SIA section 1. While enforcement against states commonly proceeds via the arbitration exception in SIA section 9 (where there is an agreement in writing to arbitrate), the appellants advanced a distinct, freestanding route: that the state’s treaty obligation under Article III of the New York Convention itself constituted a prior written submission to UK jurisdiction within SIA section 2(2) (read with SIA section 17(2)).

The preliminary issue was whether, by ratifying the New York Convention and “thereby … its consent under article III”, the state had submitted for these enforcement proceedings. The High Court answered “no”; the Court of Appeal dismissed the appeal.

2. Summary of the Judgment

The Court of Appeal held that Article III of the New York Convention does not constitute a clear and unequivocal waiver of state immunity. The determinative point was the meaning of the phrase:

“Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon…”

Because state immunity is a “rule of procedure” under international law and English law, Article III preserves (rather than waives) immunity by making enforcement subject to domestic procedural rules, which include immunity. Therefore, ratification of the New York Convention is not, by itself, a “submission to jurisdiction” for SIA section 2(2).

Having disposed of the appeal on this basis, the Court did not need to determine additional grounds raised by the respondent (including the respondent’s reservation to the Convention and whether the dispute was “commercial” under the reserving state’s laws).

3. Analysis

3.1 Precedents Cited (and How They Drove the Result)

(a) Infrastructure Services Luxembourg SARL v The Kingdom of Spain (“Infrastructure”) [2024] EWCA Civ 1257, [2025] KB 611 and Infrastructure [2026] UKSC 9, [2026] 2 WLR 581

This litigation was argued in the shadow of Infrastructure, which had recently established that ratification of the ICSID Convention, and particularly Article 54(1), entails a waiver of adjudicative immunity for recognition/enforcement in the UK under SIA section 2(2). The Supreme Court clarified the domestic-law test for waiver by treaty: a waiver requires a clear and unequivocal expression of consent, and the question is whether the treaty words “necessarily lead to the conclusion” that the state has submitted to jurisdiction (applying Vienna Convention interpretation). [2026] UKSC 9 at [69]

The appellants’ core move was to “read across” from ICSID Article 54(1) (found to be a submission) to New York Convention Article III (both begin “Each Contracting State shall recognize … and enforce …”). The Court of Appeal rejected any mechanical read-across: Article III contains a qualifier absent from Article 54(1)—“in accordance with the rules of procedure”—and the ICSID system is a closed, expressly reciprocal regime with an explicit provision preserving only immunity from execution (Article 55), which supported the inference that adjudicative immunity was not preserved. By contrast, the New York Convention is silent on immunity and explicitly defers to domestic procedural law.

(b) Benkharbouche v Embassy of the Republic of Sudan [2017] UKSC 62, [2019] AC 777

The Court drew on Benkharbouche for the classification of state immunity as procedural in the relevant sense: it bars adjudication on the merits without extinguishing underlying rights. see especially [16] and [18] This mattered because if immunity is procedural, then Article III’s reference to “rules of procedure” naturally encompasses immunity rules.

(c) Jones v Ministry of Interior for the Kingdom of Saudi Arabia [2006] UKHL 26, [2007] 1 AC 270

Reinforced the same point in domestic terms: state immunity is “a procedural rule going to the jurisdiction”. This supplied a stable domestic-law anchor for the interpretation of “rules of procedure” as including immunity.

(d) Basfar v Wong [2022] UKSC 20, [2023] AC 33

The appellants invoked the “evolutionary” approach to long-lived treaties. The Court accepted the general principle but found it could not assist: there was no coherent way to say that “rules of procedure” once included immunity (in 1958) but later ceased to do so.

(e) Comparative / international materials and decisions

• CCDM Holdings LLC & Ors v The Republic of India [2026] HCA 9 (High Court of Australia): decided the same issue between the same parties after the English hearing. It held Article III preserves immunity; “rules of procedure” include foreign state immunity; this is inconsistent with waiver by mere ratification. The Court of Appeal treated this as “highly persuasive” in the interest of uniform treaty meaning.
• SchiedsVZ 2006 44 (German Federal Court of Justice): stated the New York Convention contains no waiver; immunity is part of domestic procedural law referred to by Article III.
• Global Voice Group SA v Republic of Guinea 2025 U.S. Dist LEXIS 28564 (D.D.C. 2025): “no arbitration agreement, no waiver”—used to support the common-sense proposition that states do not silently waive immunity where they did not agree to arbitrate.
• India v CCDM Holdings LLC 2024 QCCA 1620 (Quebec Court of Appeal): immunity not available, but the rationale turned on the investment treaty, arbitration clause, and participation in arbitration—not on New York Convention ratification alone.

3.2 Legal Reasoning

(a) The governing framework: SIA sections 1 and 2, and waiver by treaty

Under SIA section 1, a state is immune from the jurisdiction of UK courts unless an exception applies. Under SIA section 2(1)-(2), immunity is removed where the state has “submitted” to UK jurisdiction, including by “prior written agreement”; SIA section 17(2) confirms that “agreement” includes a “treaty, convention or other international agreement”.

Applying Infrastructure, the question became a matter of Vienna Convention treaty interpretation: does Article III, properly interpreted, necessarily entail consent to the UK court exercising jurisdiction against the state in enforcement proceedings?

(b) Article III’s structure: obligation plus a qualifying condition

The Court treated Article III as a two-part instruction: (1) a general obligation to recognise/enforce awards; but (2) recognition/enforcement must occur “in accordance with the rules of procedure” of the enforcing forum. The Court refused to privilege the first clause and read down the second; treaty interpretation is “holistic”.

(c) “Rules of procedure” includes state immunity (and that is decisive)

Two concessions effectively framed the outcome: (i) state immunity is a procedural bar in international law and English law; and (ii) Article III expressly incorporates domestic procedural rules. On the ordinary meaning, “rules of procedure” thus includes immunity rules. There being no express exclusion of immunity elsewhere in the Convention, Article III preserves the ability of states to invoke immunity where it exists domestically.

The Court also advanced a practical coherence point: if “rules of procedure” were read to exclude adjudicative immunity, it would be difficult to stop the same reasoning from excluding immunity from execution—potentially creating a sweeping implied waiver under SIA section 13(3)—despite the Convention never mentioning immunity. That would produce a waiver broader than ICSID’s carefully structured regime (which expressly preserves execution immunity).

(d) Treaty cannot strip non-parties of immunity

The Court endorsed the logic (drawn from academic commentary) that Article III applies to enforcement of awards generally, including potentially against states that are not parties to the Convention. Because a treaty cannot affect the rights of non-parties, it is implausible to interpret Article III as eliminating sovereign immunity. This supports the reading that immunity remains within “rules of procedure”.

(e) Travaux: confirmatory, not creative

The Court considered the travaux only to confirm the Article 31 meaning (since the text was not ambiguous). It cited:

• A 1955 UN report indicating the Convention should “respect the sovereign rights of States”; and
• A summary of negotiating history stating delegates did not intend to preclude immunity-based arguments in enforcement actions against states.

3.3 Impact

• No “Convention-only” route around immunity: Award creditors cannot rely on New York Convention ratification alone to establish submission to UK adjudicative jurisdiction under SIA section 2(2).
• Re-centres enforcement on the arbitration agreement (SIA section 9): In most cases involving state respondents, jurisdiction will depend on showing the state “agreed in writing to submit” the dispute to arbitration and that the dispute falls within that agreement. The Court’s reasoning aligns with the US formulation: “no arbitration agreement, no waiver”.
• Clear delineation from ICSID: The decision confirms that Infrastructure is not a universal template for all enforcement conventions. ICSID’s text and structure—particularly mutuality, the inevitability of state participation, and the explicit handling of execution immunity—are what drove waiver there.
• Promotes cross-jurisdictional uniformity: The Court expressly relied on convergent international approaches (notably Australia’s apex court and Germany’s federal court), strengthening predictability in treaty interpretation.
• Strategic ramifications for award assignment/enforcement planning: Where creditors seek to enforce via assignees or across multiple jurisdictions, this judgment reduces the utility of arguments that bypass the underlying arbitration agreement by invoking the Convention itself.

4. Complex Concepts Simplified

4.1 Adjudicative immunity vs immunity from execution

• Adjudicative immunity is immunity from being sued (or from the court exercising jurisdiction) in the first place.
• Immunity from execution is immunity from having state property seized to satisfy a judgment/award, even if the court had jurisdiction to recognise the award.

The Court’s reasoning emphasised that reading Article III as an implied waiver could unintentionally swallow both forms of immunity, which would be an implausibly sweeping result for a convention that does not mention immunity.

4.2 Why is state immunity called “procedural”?

“Procedural” here does not mean mere court paperwork or filing steps. It means a rule that makes the court stop without deciding the merits—like a jurisdictional bar. That is why “rules of procedure” can include immunity, limitation periods, and insolvency constraints.

4.3 Vienna Convention interpretation (Articles 31 and 32)

• Article 31: interpret in good faith by ordinary meaning, in context, in light of object and purpose (a holistic reading).
• Article 32: travaux are secondary—used mainly to confirm, unless the Article 31 meaning is ambiguous/absurd.

5. Conclusion

The Court of Appeal crystallised a clear rule for UK law: ratification of the New York Convention does not, without more, amount to submission to UK adjudicative jurisdiction under SIA section 2(2). The decisive textual feature is Article III’s requirement that enforcement occurs “in accordance with the rules of procedure” of the enforcing forum, and those procedural rules include state immunity.

The judgment also sets an important boundary around the reach of Infrastructure: while ICSID Article 54(1) necessarily entails waiver of adjudicative immunity, the New York Convention’s differently worded and differently purposed regime does not. For award creditors, the practical message is that enforcement against states in the UK will generally stand or fall on the usual foundations: a valid arbitration agreement (and scope), statutory gateways (notably SIA section 9), and the defences under the Arbitration Act 1996—rather than on New York Convention ratification alone.