Template:Contractual waiver of sovereign immunity: Difference between revisions
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There is great opportunity for the [[Chicken Licken]]s of your [[Litigation department]] to pipe up. ’What if, she might say, “the sovereign ''ignores'' the [[exclusive jurisdiction]] clause you have cleverly inserted, and takes action in its own court? What then, say ye?” | There is great opportunity for the [[Chicken Licken]]s of your [[Litigation department]] to pipe up. ’What if, she might say, “the sovereign ''ignores'' the [[exclusive jurisdiction]] clause you have cleverly inserted, and takes action in its own court? What then, say ye?” | ||
You got me. But hang on a minute: can you really launch an action in your own court and, by the same lights, claim immunity from suit? Is this not having your [[Brexit means Brexit|Brexit]] cake and eating it too?<ref>Apologies for gratuitous Brexit Reference. But Brexit means Brexit.</ref> And even if it isn’t<ref>SIT DOWN AT THE BACK with all your talk about counterclaims and enforcement of judgments.</ref>we are talking here about a sovereign who has, with the complicity of its own court system, ''already ignored one term of your [[contract]]'' ([[exclusive jurisdiction]]). Why would it respect the rest? | You got me. But hang on a minute: can you really launch an action in your own court and, by the same lights, claim immunity from suit? Is this not having your [[Brexit means Brexit|Brexit]] cake and eating it too?<ref>Apologies for gratuitous Brexit Reference. But [[Brexit means Brexit]].</ref> And even if it isn’t<ref>SIT DOWN AT THE BACK with all your talk about counterclaims and enforcement of judgments.</ref> we are talking here about a sovereign who has, with the complicity of its own court system, ''already ignored one term of your [[contract]]'' ([[exclusive jurisdiction]]). Why would it respect the rest? | ||
===[[Sovereign immunity]] and the [[Cassanova’s advice|Cassanova problem]]=== | ===[[Sovereign immunity]] and the [[Cassanova’s advice|Cassanova problem]]=== | ||
The fact that ([[Unless otherwise agreed|unless agreed otherwise]]) [[Sovereign Immunity Act 1978|Sovereign Immunity generally doesn’t ''apply'' to commercial contracts]] doesn’t stop [[Waiver of immunities - ISDA Provision|industry standard commercial contracts]] purporting nonetheless waive that immunity which, in a ghastly ironic turn, makes sovereign immunity ''more likely to apply''. For you may be sure punctilious [[agent]]s, when representing sovereigns, will protest ''they do not have their client’s authority to waive its sovereign privilege'' (the one which doesn’t actually exist). They will therefore be compelled by their own prudent regard for the boudaries of tgheir agency to insist the waiver to be ''deleted''. Now in the architecture of the {{isdama}} this involves writing in the {{isdaprov|Schedule}}, something like “Section {{isdaprov|13(d)}} shall not apply to Party A or Party B”. This is more than mere silence on the matter: it is ''an explicit agreement to contract out of it''. Had the {{isdama}} only had the sense to shut up in the first place, there would have been no problem, on a [[what the eye don't see the chef gets away with]] sort of basis. If I don’t mention sovereign immunity (because it doesn’t exist), a sovereign and its agent is less likely to get het up about it. <br> | The fact that ([[Unless otherwise agreed|unless agreed otherwise]]) [[Sovereign Immunity Act 1978|Sovereign Immunity generally doesn’t ''apply'' to commercial contracts]] doesn’t stop [[Waiver of immunities - ISDA Provision|industry standard commercial contracts]] purporting nonetheless waive that immunity which, in a ghastly ironic turn, makes sovereign immunity ''more likely to apply''. For you may be sure punctilious [[agent]]s, when representing sovereigns, will protest ''they do not have their client’s authority to waive its sovereign privilege'' (the one which doesn’t actually exist). They will therefore be compelled by their own prudent regard for the boudaries of tgheir agency to insist the waiver to be ''deleted''. Now in the architecture of the {{isdama}} this involves writing in the {{isdaprov|Schedule}}, something like “Section {{isdaprov|13(d)}} shall not apply to Party A or Party B”. This is more than mere silence on the matter: it is ''an explicit agreement to contract out of it''. Had the {{isdama}} only had the sense to shut up in the first place, there would have been no problem, on a [[what the eye don't see the chef gets away with]] sort of basis. If I don’t mention sovereign immunity (because it doesn’t exist), a sovereign and its agent is less likely to get het up about it. <br> | ||
Revision as of 10:13, 31 May 2019
The great question of whether one should specifically exclude sovereign immunity from a commercial contract.
Spoiler: No.
Twist: Industry standard commercial contracts like the ISDA Master Agreement do anyway. This creates more problems than it solves.
General
Specifically waiving sovereign immunity is a faintly stupid thing to do if your commercial contract happens to be governed by English law, since the Sovereign Immunity Act 1978 expressly excludes any immunity of a state to a commercial contract.
There is great opportunity for the Chicken Lickens of your Litigation department to pipe up. ’What if, she might say, “the sovereign ignores the exclusive jurisdiction clause you have cleverly inserted, and takes action in its own court? What then, say ye?”
You got me. But hang on a minute: can you really launch an action in your own court and, by the same lights, claim immunity from suit? Is this not having your Brexit cake and eating it too?[1] And even if it isn’t[2] we are talking here about a sovereign who has, with the complicity of its own court system, already ignored one term of your contract (exclusive jurisdiction). Why would it respect the rest?
Sovereign immunity and the Cassanova problem
The fact that (unless agreed otherwise) Sovereign Immunity generally doesn’t apply to commercial contracts doesn’t stop industry standard commercial contracts purporting nonetheless waive that immunity which, in a ghastly ironic turn, makes sovereign immunity more likely to apply. For you may be sure punctilious agents, when representing sovereigns, will protest they do not have their client’s authority to waive its sovereign privilege (the one which doesn’t actually exist). They will therefore be compelled by their own prudent regard for the boudaries of tgheir agency to insist the waiver to be deleted. Now in the architecture of the ISDA Master Agreement this involves writing in the Schedule, something like “Section 13(d) shall not apply to Party A or Party B”. This is more than mere silence on the matter: it is an explicit agreement to contract out of it. Had the ISDA Master Agreement only had the sense to shut up in the first place, there would have been no problem, on a what the eye don't see the chef gets away with sort of basis. If I don’t mention sovereign immunity (because it doesn’t exist), a sovereign and its agent is less likely to get het up about it.
- ↑ Apologies for gratuitous Brexit Reference. But Brexit means Brexit.
- ↑ SIT DOWN AT THE BACK with all your talk about counterclaims and enforcement of judgments.