![]() Under the restrictive approach, a foreign state is only immune in relation to activities involving an exercise of sovereign power. Under the absolute approach a foreign state enjoys total immunity from being sued or having its assets seized by a foreign court, even in commercial matters. Most jurisdictions adopt either an “absolute” or a “restrictive” approach to state immunity. Parties need to be aware of the limitations of any waiver, and, critically, the approach to state immunity in all jurisdictions where any award or judgment would be enforced against state assets. ![]() However, this means that diligent commercial parties must approach all dealings with foreign states or state owned entities carefully considering who to contract with and how to incorporate comprehensive waivers of state immunity – both in respect of immunity from suit and immunity from execution – in all relevant jurisdictions. There are important reasons why national laws protect foreign sovereign interests, even if at the expense of private investors. It is to be distinguished from “crown immunity” which protects states from legal proceedings brought before their own courts. ![]() State immunity provides foreign states with protection against legal proceedings brought before the courts of other jurisdictions. The doctrine of state immunity can sometimes resemble the playground game of tag: the private investor chases after the state this way and that until, immediately before being caught, the state touches the wall, declaring that it is immune when “on base”. We compare the approaches to state immunity in England, Hong Kong, Singapore, Australia, the US and Canada. In an increasingly global market, commercial parties must be alive to jurisdictional nuances. State immunity is in itself a complex issue, but this is compounded by the fact that the approach to immunity is not common across all jurisdictions. Failure to properly address the issue can have serious consequences. Foreign state immunity is an important consideration for commercial parties dealing with foreign states or state owned entities.
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