Enforceability of Explicit Sovereign Immunity Waivers under the FSIA

Introduction

Williams v. Federal Government of Nigeria, decided on April 9, 2025 by the United States Court of Appeals for the Second Circuit, addresses the scope of sovereign immunity under the Foreign Sovereign Immunities Act (“FSIA”), 28 U.S.C. § 1602 et seq. Dr. Louis Emovbira Williams (“Williams”) obtained a default judgment in the United Kingdom against the Federal Government of Nigeria and subsequently filed suit in New York state court to enforce that judgment. The Federal Government of Nigeria and its Attorney General (collectively, “Nigeria” or “Appellants”) removed the case to federal court and moved to dismiss for lack of subject matter jurisdiction, invoking sovereign immunity. The district court denied immunity on the basis that Nigeria had explicitly waived it in the operative contract. Appellants appealed, and the Second Circuit affirmed.

Key issues:

Did the September 1993 “Fidelity Guarantee and Abiding Memorandum of Understanding of Assurance” (“Fidelity Guarantee”) constitute an explicit waiver of Nigeria’s sovereign immunity under FSIA § 1605(a)(1)?
Did the United Kingdom judgment preclude relitigation of the waiver issue in the U.S. under issue preclusion (collateral estoppel)?

Summary of the Judgment

The Second Circuit held that:

The Fidelity Guarantee’s plain language—authorizing Williams to choose “any other country” for enforcement and expressly waiving “acts of state, state privileges, … state immunities and the like”—constituted a clear, explicit waiver of Nigeria’s sovereign immunity within the meaning of FSIA § 1605(a)(1).
The district court properly considered contractual documents outside the pleadings to resolve the jurisdictional question, as permitted by Arch Trading Corp. v. Republic of Ecuador, 839 F.3d 193 (2d Cir. 2016).
The 2018 United Kingdom default judgment did not preclude the U.S. court’s waiver analysis because the UK proceeding addressed a different question—whether Nigeria had consented to U.K. jurisdiction as a “prior agreement”—whereas the U.S. court’s inquiry focused on waiver of sovereign immunity under the FSIA.

Consequently, the Second Circuit affirmed the district court’s order denying Nigeria’s motion to dismiss for want of subject matter jurisdiction.

Analysis

Precedents Cited

Foreign Sovereign Immunities Act, 28 U.S.C. § 1604–1607: Establishes that foreign states are presumptively immune from U.S. jurisdiction, subject to enumerated exceptions, including waiver of immunity (§ 1605(a)(1)).
Capital Ventures Int’l v. Republic of Argentina, 552 F.3d 289 (2d Cir. 2009):

Defined “explicit” waiver as “clear and unambiguous.”
Held that contractual language waiving immunity in “any court” suffices to meet the explicit waiver standard, even if the United States is not named.

Arch Trading Corp. v. Republic of Ecuador, 839 F.3d 193 (2d Cir. 2016):

Confirmed that courts considering a sovereign immunity defense may review materials beyond the complaint.

Pablo Star Ltd. v. Welsh Gov., 961 F.3d 555 (2d Cir. 2020):

Clarified appealability of FSIA immunity determinations under the collateral order doctrine.

Republic of Ecuador v. Chevron Corp., 638 F.3d 384 (2d Cir. 2011) & N.L.R.B. v. Thalbo Corp., 171 F.3d 102 (2d Cir. 1999):

Outlined the four elements of issue preclusion under federal law.

Legal Reasoning

1. Explicit Waiver under FSIA § 1605(a)(1)
The FSIA makes a foreign state immune unless an exception applies. Section 1605(a)(1) provides that immunity is waived “explicitly or by implication.” This Court requires an “explicit waiver” to be “clear and unambiguous.” Here, paragraph 21 of the Fidelity Guarantee grants Williams the right to choose “any other country” to enforce payment and expressly states that Nigeria “shall not … invoke any defences … state immunities … and the like” (App’x 214–15). Paragraphs 18 and 20 similarly strip objections to enforcement and the right to attach or execute on assets. Under Capital Ventures, such universal waiver language satisfies the explicit waiver standard, regardless of whether the contract names the United States specifically or mentions other jurisdictions.

2. Permissible Jurisdictional Inquiry
Nigeria argued that the district court overstepped by consulting the Fidelity Guarantee text outside the pleadings. The Court invoked Arch Trading to confirm that extrinsic contractual materials may be considered to resolve FSIA immunity issues without converting the motion into one for summary judgment.

3. Issue Preclusion and the UK Judgment
Nigeria contended that a 2018 UK default judgment holding that the Fidelity Guarantee was not a “prior agreement” submitting Nigeria to English jurisdiction should preclude relitigation. Under federal collateral estoppel, five elements must be satisfied: identity of issues, actually litigated, essential to the judgment, final and on the merits, and the party against whom preclusion is asserted was a party or in privity. The Second Circuit concluded the UK court decided a distinct issue (jurisdictional consent for English courts) rather than the FSIA waiver question posed in U.S. courts (“clear and unambiguous” waiver of immunity). Because the first element—identical issue—failed, preclusion did not apply.

Impact

This ruling establishes and reinforces important principles for litigants and foreign sovereigns:

Contract Drafting: Sovereigns and commercial counterparties must expressly limit waiver language if they do not intend to submit to U.S. jurisdiction. Language authorizing “any court” or “any country” enforcement will likely be interpreted as an explicit waiver under FSIA.
Enforcement of Foreign Judgments: U.S. courts will enforce foreign default and monetary judgments when based on contracts containing explicit waiver clauses, even if the foreign judgment-court reached a different conclusion on jurisdictional consent.
Jurisdictional Procedure: Parties may rely on extrinsic contractual and extrinsic evidence—beyond pleadings—to resolve FSIA immunity issues without formalized discovery or summary judgment.
Litigation Strategy: Sovereigns seeking to assert immunity must challenge the underlying contract language at the outset and cannot rely on foreign judgments on related but distinct questions to foreclose U.S. jurisdictional analysis.

Complex Concepts Simplified

Foreign Sovereign Immunities Act (FSIA): A federal law dictating when a foreign state can be sued in U.S. courts. It establishes a broad immunity but provides exceptions—for example, when a foreign state waives immunity in a contract.

Explicit Waiver: Under FSIA § 1605(a)(1), a foreign state can lose immunity if it “explicitly” says so. The phrase “clear and unambiguous” means that when reading the contract, a reasonable person would understand that the state has consented to suit.

Collateral Order Doctrine: An appellate rule allowing immediate appeal of certain interlocutory orders, such as denials of sovereign immunity, because immunity is an entitlement not to be haled into court.

Issue Preclusion (Collateral Estoppel): Once a court decides a specific legal or factual issue in a final way, the same parties cannot relitigate that identical issue in later suits. Here, the UK and U.S. courts addressed different legal questions, so preclusion did not apply.

Conclusion

Williams v. Federal Government of Nigeria clarifies that any contract clause waiving sovereign immunity in “any court” or “any country” will likely satisfy the FSIA’s strict “explicit waiver” requirement. The decision underscores the importance of precise drafting by sovereigns and the willingness of U.S. courts to consider extrinsic evidence in immunity disputes. It also demonstrates that foreign judgments on related but distinct issues do not bind U.S. courts under collateral estoppel. Ultimately, this ruling strengthens the enforceability of sovereign commitments in international financial and commercial agreements and provides clear guidance for future litigants on both sides of the “sovereign immunity” divide.