Cross-Border Complexity: Negotiating International Arbitration Agreements with a State

Veronica Connolly, Senior Associate in the Dispute Resolution practice, joined Refiloe Motsei and Vee Mthembu on Jozi FM to discuss “Cross-Border Complexity: Negotiating International Arbitration Agreements with a State.”

27 Nov 2024 Podcast
Cross-Border Complexity: Negotiating International Arbitration Agreements with a State

Cross-Border Complexity: Negotiating International Arbitration Agreements with a State

Podcast

Cross-Border Complexity: Negotiating International Arbitration Agreements with a State

Podcast

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Veronica explained that state immunity is a principle of international law allowing states to assert immunity from legal proceedings as sovereign entities. This means arbitration tribunals or courts cannot hear claims against them, leaving private companies vulnerable. If a state breaches a contract, the company may find itself unable to enforce its rights.

While exceptions to state immunity exist, Veronica emphasised that they are not universally applicable and can vary by country. To mitigate this risk, she recommended that companies negotiate waivers of immunity directly with the state when drafting arbitration agreements.

Veronica outlined three key types of waivers:

  • Waiver of immunity from suit: Allows legal proceedings to be initiated and heard against the state.
  • Waiver of immunity from recognition and enforcement: Enables courts to issue orders for the enforcement of an arbitral award.
  • Waiver of immunity from execution: Permits the practical execution of an award, such as the seizure of assets or collection of sums owed.

Veronica stressed that negotiating these waivers during the arbitration agreement stage is crucial for private companies to safeguard their rights and reduce the risk of unenforceable awards.

Click here to listen to the interview. 

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