State Immunity - Opt Out? CC/Devas v India
In its recent judgment in CC/Devas (Mauritius) Ltd v Republic of India,[1] the High Court of England and Wales has held that ratification by a State of the New York Convention does not in itself amount to a waiver of immunity by that State in arbitral enforcement proceedings under English (and by extension Cayman) statute, addressing a key question that had been raised – but left unanswered – by previous authorities. This decision is of interest in relation to arbitral enforcement against States in the Cayman Islands.
[1] [2025] EWHC 964 (Comm).
BACKGROUND
In 1998, the Governments of Mauritius and India entered into a bilateral investment treaty (BIT), which came into force in 2000. The BIT contained an arbitration clause providing for disputes between investors and the contracting States to be submitted (among other options) to an ad hoc arbitral tribunal in accordance with UNCITRAL rules.
The claimants were Mauritian investors (and their assignees) in the Devas project, a proposed development of hybrid communications platforms across India via the use of satellites operated by the Indian Government. The relevant project contract was entered into in 2005.
In 2011, the Indian Government decided to terminate the Devas project and annul the project contract, citing national security interests.
In 2012, the claimants commenced arbitral proceedings against the Indian Government under the BIT. In 2020, the arbitral tribunal awarded damages for the claimants (which by late 2024 had an outstanding value of over €195 million).
The claimants sought to enforce the arbitral award in the United Kingdom (among other jurisdictions), where they obtained an enforcement order in 2021.
In 2022, the Indian Government applied to have the order set aside, arguing it was immune from jurisdiction under the UK’s State Immunity Act 1978 (SIA).[1] India disputed it had agreed to submit the dispute with the claimants to arbitration (which would otherwise deprive it of immunity under s 9 SIA in arbitral enforcement proceedings).
In response, the claimants argued that by ratifying the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), and in particular Article III of that Convention, India had submitted to the jurisdiction of the English courts by prior written agreement under s 2(2) SIA separately from any individual arbitration agreement. Article III of the New York Convention requires that each Contracting State “[recognise] arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the reward is relied upon”.
In support of their case, the claimants relied on a previous decision of the English Court of Appeal,[2] which had ruled that ratification of a similar provision in Article 54(1) of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (the ICSID Convention) amounted to submission to jurisdiction by prior written agreement. The claimants argued that this previous decision (relating to the ICSID Convention) should apply by analogy to Article III of the New York Convention.
THE COURT’S DECISION
The English High Court (Sir William Blair) held that ratification of Article III of the New York Convention did not in and of itself amount to an agreement to waive State immunity for the purposes of SIA s 2(2).
The Court noted an important distinction between New York Convention Article III and ICSID Convention Article 54(1), in that Article III specifically provided for recognition and enforcement of awards in accordance with the enforcing forum’s “rules of procedure”. The Court noted that, in English law, State immunity is a rule of procedure that goes to the jurisdiction of the court, not a matter of substantive law. Recognition and enforcement under Article III was therefore subject to the UK’s rules of State immunity (largely set out in the SIA).
Therefore, the Court found that Article III of the New York Convention preserves State immunity, and the ratification of that provision in and of itself therefore was not an express waiver of immunity so as to constitute a “written agreement” to submit to the jurisdiction (for the purposes of s 2 SIA).
It should be noted that the Court in this decision did not address the question of whether there was an applicable written arbitration agreement (for the purposes of s 9 SIA), which remained to be separately determined at the date of the judgment.
KEY TAKEAWAYS
While this English High Court judgment considers a relatively narrow legal point, it will be of interest to any parties seeking to enforce arbitral awards against foreign States in the Cayman Islands. This is not least because the SIA applies to and is part of the law of the Cayman Islands, and because previous authorities had left open the question of whether ratification of Article III of the New York Convention amounted to an agreement to waive State immunity (as distinct from cases under the ICSID Convention).
This ruling highlights the importance of written arbitration agreements in arbitrations against foreign States.
Where enforcement of awards is sought under the New York Convention,[3] it is not unusual for foreign States to claim immunity by disputing the existence or applicability of a written agreement to arbitrate for the purposes of s 9 SIA. This decision closes the possibility (left unaddressed by previous judgments) of circumventing the issue by arguing that ratification of the New York Convention by a defendant State could itself amount to a submission to jurisdiction and waiver of immunity.
Non-State parties to arbitrations against foreign States would therefore be wise to:
- put the foreign State party to an express election or position as to the existence and/or applicability of the relevant written arbitration agreement; and
- comprehensively address any issues (whether raised or not) as to the existence and/or applicability of the arbitration agreement.
Taking such steps can better position parties enforcing arbitral awards in the Cayman Islands against State respondents by pre-emptively addressing any dispute in relation to the underlying arbitration agreement in an enforcement action.
[1] The SIA applies mutatis mutandis to the Cayman Islands by virtue of an Order in Council.
[2] Infrastructure Services Luxembourg SARL v Kingdom of Spain [2024] EWCA Civ 1257, [2025] 2 WLR 621.
[3] The Foreign Arbitral Awards Enforcement Act (1997 Revision) gives effect to the New York Convention in the Cayman Islands.
