Australia's Highest Court Finds That Ratification Of The New York Convention Does Not Constitute A Waiver Of Immunity

The High Court of Australia held that India had not waived sovereign immunity in respect of enforcement proceedings by ratifying the New York Convention

In CCDM Holdings LLC v The Republic of India[2026] HCA 9, the High Court determined that India's ratification of the New York Convention did not mean that India had waived immunity with respect to the enforcement of arbitral awards in foreign courts.

As a result, the High Court departed from both:

• The decision of the Full Court of the Federal Court in Republic of India v CCDM Holdings, LLC [2025] FCAFC 2 which had found that the Court did not have jurisdiction on an alternative basis, namely that India had not waived sovereign immunity in respect of awards rendered in investor-State arbitration proceedings, because India’s ratification of the New York Convention was subject to a commercial reservation (discussed in our previous post).
• The first instance decision of the Federal Court in CCDM Holdings, LLC v Republic of India (No 3) [2023] FCA 1266 which had held that the Court did have jurisdiction (discussed in our previous post). 

Background

India ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) subject to the reservation that it would “apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the Law of India”. 

In an award rendered in an arbitration under the India-Mauritius bilateral investment treaty, India was ordered to pay $US 740 million to the claimant investors. The investors subsequently commenced proceedings in Australia to enforce this award.

The question on appeal was whether India's ratification of the New York Convention amounted to a waiver of foreign State immunity under s 10(2) of the Foreign States Immunities Act 1985 (Cth) for the purposes of proceedings to enforce an arbitral award in the courts of Australia (which is also party to the New York Convention). 

Decision

The High Court held that India had not waived immunity with respect to the enforcement of arbitral awards in Australia. The Court relevantly found:

• There is a strong starting presumption that a foreign State has not waived immunity. Any waiver of foreign State immunity must be clear and unmistakeable.
• There was no basis for displacing this presumption. The text of the New York Convention contained no express reference to State immunity. There was limited and potentially conflicting consideration of State immunity in the travaux préparatoires to the New York Convention. Article III of the New York Convention, being the principal provision relied upon by CCDM as establishing a waiver of State immunity, implied the preservation of immunity. Article III refers to an obligation of contracting States to enforce arbitral awards "in accordance with the rules of procedure of the territory where the award is relied upon", and rules of procedure include rules on foreign State immunity.
• No analogy could be drawn to the High Court’s earlier finding in Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l. [2023] HCA 11 that ratification of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (ICSID Convention) waived sovereign immunity for enforcement of ICSID awards. The ICSID Convention expressly dealt with State immunity in Article 55 and, when read with Article 54, it was evident that a State’s ratification of the ICSID Convention waived sovereign immunity for the purposes of enforcement proceedings, although not for the purposes of execution proceedings

As the Court had found that there had been no waiver of sovereign immunity generally, there was no need to consider the effect of India’s adoption of the commercial reservation to the New York Convention.

Comment

As noted by the Court, the New York Convention, in contrast to the ICSID Convention, does not include any language concerning state immunity. How such immunity will be considered at the recognition and enforcement stage is a matter for the domestic law of the place where enforcement is sought. Many States include in their domestic legislation an exception from immunity for court proceedings which relate to international arbitration. 

However, this decision from the High Court is noteworthy as it indicates that ratification of the New York Convention alone will not constitute a waiver of foreign State immunity for the purpose of enforcing investor-state awards as a matter of Australian law. It remains to be seen as to whether this decision will be followed in other jurisdictions considering enforcement of investor-state awards against States under the New York Convention.

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