Foreign Sovereign Immunities Act – What’s Next?

Overview:

The Foreign Sovereign Immunities Act of 1976 (FSIA) establishes limitations on suits, in U.S. federal or state courts, against foreign sovereign nations and institutions thereof.  The United States was the first nation to codify the law of foreign sovereign immunity by statute.  Until 1976, the U.S. State Department decided whether foreign nations could obtain immunity from suits in U.S. courts. The State Department’s decisions sometimes appeared to be too political, so Congress passed the FSIA to transfer immunity decision-making to the judiciary.  The FSIA seeks to define and codify the restrictive theory of immunity and provide a comprehensive and uniform litigation procedure against foreign states and governmental agencies.

Disputes under the FSIA often arise in commercial suits.  Globalization has resulted in many national governments undertaking commercial activities.  State-controlled enterprises across the world are active in international energy, mining, aviation, shipping, and other sectors.  Foreign government sovereign wealth funds invest in foreign markets and property.  Where foreign governments are acting as private entities, the general assumption is that they should be treated as such during litigation.

Recently, for example, courts have applied the FSIA in litigation between hedge funds and the Republic of Argentina over Argentina’s refusal to pay bondholders on its defaulted sovereign debt.  One court has entered an injunction against Argentina requiring it to pay holders of its defaulted bonds at the same time it pays holders of its restructured debt.  Courts have also upheld wide-ranging asset discovery that judgment creditors have sought in an effort to uncover attachable property.        

The FSIA has also been applied in disputes beyond commerce. For example, Congress has repeatedly amended the statute to permit litigation against U.S. government-designated state sponsors of terrorism such as Iran.  Those amendments have led to clashes with the Executive Branch, as Congress’s desire to provide compensation has often conflicted with the Executive’s foreign policy goals.  They have also raised questions over the extent to which state-owned instrumentalities should be treated as distinct from the sovereigns that own them for purposes of immunity and attachment.

Finally, in the past several years, there has been an increase in employment-related claims brought against foreign sovereign employers by employees working in consulate offices, embassies, other sovereign-related agencies, or nationalized entities in the U.S.  In fact, a foreign sovereign with consulate offices in various states was recently named as a defendant in a California wage and hour class action.  In some instances, foreign sovereign employers may avoid the application of complicated U.S. employment laws, and in other situations, sovereign employers should consider taking measures to comply with certain U.S. laws to avoid claims from personnel working for them in the U.S.

The twists and turns in application of the FSIA expand and continue to broaden beyond mere commerce. It behooves those dealing with state controlled and sponsored entities to understand the Act, issues of scope and territoriality, immunity and its exceptions, and liability and enforcement procedures.

Our expert panel will provide you with a practical look at the FSIA and how it affects the execution of judgments against foreign governments and their instrumentalities. Experts on the FSIA will discuss who can be sued and in which courts, what constitutes a “foreign state,” the presumptions of immunity and their exceptions, and liabilities, damages, and enforcement proceedings under the Act.

Agenda:

Who Should Attend:

• Bankers
• Debt Investors
• Trade Specialists
• State and Federal Officials
• Foreign Government Contractors
• Exporters
• Importers
•  Lawyers and Legal Counsel
• Consultants
• Foreign Embassies and Consulate Offices