Australia confirms ratification of the New York Convention is not a waiver of immunity

What you need to know

• The High Court of Australia has unanimously decided that ratification of the New York Convention does not, on its own, amount to a waiver of foreign State immunity under the Foreign States Immunities Act.
• Australia is currently aligned with the United States, Canada and the United Kingdom on this issue.
• The decision provides a clear delineation between enforcement sought under the ICSID Convention and the New York Convention in Australia, where only ratification of the former will be treated as a waiver of immunity.
• The decision has implications for investors contracting with foreign States (or State-owned entities), particularly where the State is not a Contracting State to the ICSID Convention or where ICSID arbitration is not available to the investor.
• Investors engaged in transactions, or who have commenced non-ICSID arbitrations, with sovereign States should be aware that unless express waiver of immunity is agreed, States may resist enforcement of awards made against them on immunity grounds and are now more likely to succeed.

Introduction

In CCDM Holdings, LLC & Ors v The Republic of India [2026] HCA 9, the High Court has unanimously upheld India's claim to sovereign immunity under the Foreign States Immunities Act 1985 (Cth) (FSIA), finding that India did not waive immunity and submit to the jurisdiction of Australian courts in ratifying the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) during proceedings to enforce an arbitral award against it.

This is a landmark decision which now aligns the position in Australia with present authority in the United Kingdom,¹ the United States² and Canada³ on the issue of whether ratification of the New York Convention constitutes a waiver of sovereign immunity. (You can read about the recent United Kingdom decision here.)

Background of the dispute

The underlying dispute concerns an investment made by a group of Mauritian-domiciled companies in an Indian Government-owned corporation which was party to an agreement annulled by the Indian Government on public policy and national security grounds in 2011.

The investors commenced arbitral proceedings against India on the basis of a breach of the India-Mauritius bilateral investment treaty (BIT). Relevantly, Article 8 of the BIT otherwise provided for ICSID arbitration; however, India is not a Contracting State to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

In 2020, the tribunal found that India breached the BIT and issued a quantum award of US $111 million, which was sought to be enforced in Australia under section 8 of the International Arbitration Act 1974 (Cth) (i.e. under the New York Convention. India resisted enforcement, claiming immunity under section 9 of the FSIA.

The First Instance and Full Court decisions

At first instance,⁴ the primary judge (Jackman J) held that India had waived its foreign State immunity by ratifying the New York Convention. His Honour found a "clear" and "unmistakable" implication from the Convention — particularly Article III, read in the context of Articles I(1) and II(1) — that ratification by a State party involved waiver of foreign State immunity and submission to the jurisdiction of other State parties for the purposes of the Convention.

On appeal,⁵ the Full Court of the Federal Court considered that there was "much to be said" for the primary judge's reasoning but did not decide the waiver question definitively. Instead, the Full Court assumed, without deciding, that ratification constituted a waiver but held that the effect of India's reservation to its ratification — namely, that the Convention would apply only to "differences arising out of legal relationships … which are considered commercial under the Law of India" — reduced the scope of any waiver. It found the arbitral award was not with regard to differences arising from a commercial relationship, and accordingly held that India's immunity had not been waived in respect of the award.⁶

You can read more about the history of these proceedings in our earlier publication here.

Decision of the High Court

While the Appellants advanced five grounds of appeal,⁷ the Court decided the case on the principal, narrow issue of whether ratification of the New York Convention by India was a waiver of foreign State immunity. This was contrary to the assumption made by the Full Federal Court that India had waived its foreign State immunity by ratifying the New York Convention.

The High Court held that any waiver of foreign State immunity in an international agreement must be clear and unmistakeable, and must be derived from the express words of the agreement, including necessary implications from those words.⁸

The High Court observed that, unsurprisingly, the text of the New York Convention contains no express reference to foreign State immunity, and that, to the limited extent that consideration of foreign State immunity appeared in the travaux préparatoires (official records of negotiation of the Convention), there appeared to be an intention to "preserve foreign State immunity in the courts of other States".⁹

As to whether "[a]ny subsequent practice in the application of the treaty" could be said to have "establishe[d] the agreement of the parties regarding its interpretation" per Article 31(3)(b) of the Vienna Convention on the Law of Treaties, the Court held that "to the extent that any degree of common understanding can be discerned from the present authority… that understanding is that ratification of the New York Convention, by itself, is not a sufficient act of waiver of foreign State immunity." The Court had regard to recent decisions in the US, the UK (currently on appeal) and Canada.

In terms of the text of the Convention, the High Court's analysis focused principally on Article III, which provides that contracting States shall recognise arbitral awards as binding and enforce them "in accordance with the rules of procedure of the territory where the award is relied upon". The Court held that "rules of procedure" encapsulates the rules of foreign State immunity. Thus, Article III qualifies the obligation of contracting States to enforce arbitral awards by reference to whatever rules of foreign State immunity are adopted by the territory where the award is relied upon.

The High Court made clear that, contrary to the Appellants' submissions, no analogy could be drawn with the ICSID Convention and the High Court's earlier decision in Kingdom of Spain v Infrastructure Services Luxembourg Sàrl¹⁰ in which Spain was held to have waived immunity by entering into the ICSID Convention (which you can read more about here). This is because:

• Unlike the New York Convention, the ICSID Convention is expressly concerned with disputes to which a State is a party, and its travaux préparatoires involved detailed consideration of foreign State immunity.
• The ICSID Convention contains an express provision (Article 55) preserving State immunity only from execution — by contrast, Article III of the New York Convention supports the preservation of foreign State immunity from jurisdiction.
• The International Law Commission materials relied upon by the Appellants did not equate the two Conventions in any dispositive way.

Having decided that ratification of the New York Convention by India was not, in and of itself, a waiver of foreign State immunity, the High Court declined to determine India's contention that the New York Convention is limited in scope to awards involving commercial or private law disputes.

Significance for parties engaged in international arbitration

The key takeaway from the High Court's landmark ruling is that any waiver of foreign State immunity in an international agreement must be "clear and unmistakeable", and that such waiver "must be derived from the express words of the agreement" (including any necessary implications).¹¹ While a State may be held to have waived immunity by entering into the ICSID Convention, the same cannot be said for ratification of the New York Convention.

What this means in practical terms is that for parties holding ICSID awards, the Kingdom of Spain decision paves the way for enforcement against a State party to the ICSID Convention in Australia. However, for parties seeking to enforce non-ICSID awards — including investment treaty awards rendered under ad hoc or institutional arbitration rules — the enforcement path in Australia against an unwilling State is not available merely because that State is a party to the New York Convention.

The distinct treatment of sovereign immunity under each convention will now inform investment structuring decisions. Investors seeking certainty may gravitate towards the ICSID Convention, which offers clearer enforcement prospects, rather than the New York Convention, where enforcement outcomes are likely to be met with sovereign immunity arguments.

Parties contracting with sovereign States or State-owned entities should regard this decision as a timely reminder of the need to consider immunity from the outset. The dispute resolution mechanisms set out in applicable investment treaties merit careful scrutiny and are of critical importance.