Template:Contractual waiver of sovereign immunity: Difference between revisions
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The great question of whether one should specifically exclude [[sovereign immunity]] from a commercial contract. | The great question of whether one should specifically exclude [[sovereign immunity]] from a [[commercial contract]] governed by [[English law]]. | ||
'''Spoiler''': ''No''. | '''Spoiler''': ''No''. | ||
'''Twist''': Industry standard commercial | '''Twist''': Industry-standard [[commercial contract]]s<ref>E.g.,the {{isdama}} and the {{gmsla}}.</ref> ''do anyway''. This creates more problems than it solves. | ||
===General=== | ===General=== | ||
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]] [[Sovereign immunity|excludes any immunity of a state to a commercial contract]]. Now, to be sure, | 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]] [[Sovereign immunity|excludes any immunity of a state to a commercial contract]]. Now, to be sure, here arises a great opportunity for the [[chicken licken]]s in your [[litigation department]] to pipe up. “What if,” they will say, “the [[sovereign]] ''ignores'' the [[exclusive jurisdiction]] clause, and takes action against you 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? | 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? 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 any way? | ||
===[[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 [[agent]]s, when representing sovereigns, will protest ''they do not have their client’s authority to waive its sovereign privileges''. They will find themselves ''compelled'', by the terms of their agency, to insist the waiver is ''deleted''. | 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 [[Waiver|waive]] that immunity which, in a ghastly ironic turn, makes {{t|sovereign immunity}} ''more likely to apply''. For you may be sure [[agent]]s, when representing sovereigns, will protest ''they do not have their client’s authority to waive its sovereign privileges''. They will find themselves ''compelled'', by the terms of their agency, to insist the waiver is ''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”. Is this mere silence on the matter, or is it ''an explicit agreement to contract out of it''? | 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”. Is this mere silence on the matter, or is it ''an explicit agreement to contract out of it''? | ||
Had the {{isdama}} only had the sense to shut up about [[sovereign immunity]] in the first place, there would have been no problem: [[what the eye | Had the {{isdama}} only had the sense to shut up about [[sovereign immunity]] in the first place, there would have been no problem: [[what the eye don’t see the chef gets away with]]. | ||
This will still be the stance you find yourself having to adopt. “I am not agreeing that sovereign immunity ''applies'',” you will find yourself maintaining to the insistent gaze of your [[credit officer]]. “I am simply not saying that it ''doesn’t'' apply.” | This will still be the stance you find yourself having to adopt. “I am not agreeing that [[sovereign immunity]] ''applies'',” you will find yourself maintaining to the insistent gaze of your [[credit officer]]. “I am simply ''not'' saying that it ''doesn’t'' apply.” | ||
This falls short of what the Sovereign Immunity Act 1978 requires for sovereign immunity to kick in. Hold that confident smile until it hurts. | This falls short of what the [[Sovereign Immunity Act 1978]] requires for [[sovereign immunity]] to kick in. Hold that confident smile until it hurts. | ||
Latest revision as of 09:10, 28 August 2020
The great question of whether one should specifically exclude sovereign immunity from a commercial contract governed by English law.
Spoiler: No.
Twist: Industry-standard commercial contracts[1] do anyway. This creates more problems than it solves.
General
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 excludes any immunity of a state to a commercial contract. Now, to be sure, here arises a great opportunity for the chicken lickens in your litigation department to pipe up. “What if,” they will say, “the sovereign ignores the exclusive jurisdiction clause, and takes action against you 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? 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 any way?
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 agents, when representing sovereigns, will protest they do not have their client’s authority to waive its sovereign privileges. They will find themselves compelled, by the terms of their agency, to insist the waiver is 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”. Is this mere silence on the matter, or is it an explicit agreement to contract out of it?
Had the ISDA Master Agreement only had the sense to shut up about sovereign immunity in the first place, there would have been no problem: what the eye don’t see the chef gets away with.
This will still be the stance you find yourself having to adopt. “I am not agreeing that sovereign immunity applies,” you will find yourself maintaining to the insistent gaze of your credit officer. “I am simply not saying that it doesn’t apply.”
This falls short of what the Sovereign Immunity Act 1978 requires for sovereign immunity to kick in. Hold that confident smile until it hurts.
- ↑ E.g.,the ISDA Master Agreement and the 2010 GMSLA.
- ↑ SIT DOWN AT THE BACK with all your talk about counterclaims and enforcement of judgments.