Prudent to have a specific clause on waiver of sovereign immunity: Attorney General KK Venugopal

Speaking on the defence of sovereign immunity at the stage of enforcement of international arbitral awards, Attorney General KK Venugopal on Saturday said that to avoid any uncertainty, it was always prudent to have a specific clause on waiver of sovereign immunity in investment treaties or agreements..To avoid compensation claims in case an international arbitration dispute gets stuck in courts, he further suggested that such agreements must also clarify the scope of “State” as meaning only the Executive or Legislative wing of the Government. .Attorney General Venugopal was speaking at a webinar organized by UNCITRAL National Coordination Committee for India (UNCCI) and Mumbai Centre For International Arbitration (MCIA)..The theme of the session was “Breaching the Last Bastion: Sovereign Immunity and Enforcement of Arbitral Awards”..Apart from Venugopal, Nicholas Lingard, Partner and Head of Asia International Arbitration, Freshfields; Senior Advocate K V Vishwanathan; Smitha Menon, Partner, Wong Partnership and Nicholas Peacock, Partner, Herbert Smith Freehills spoke at the online event..At the very outset, Attorney General Venugopal clarified that he was only presenting his personal views on the issue and not the views of the Government of India..While acknowledging the existence of difference of opinion on the issue, Venugopal said that once a State entered into an agreement, it was bound by any award passed pursuant to it and thus, could not claim the defence of sovereign immunity..He, however, added that there were exceptions to this approach such as diplomatic functioning..During the session, Senior Advocate KV Vishwanathan emphasised on the importance of the principle of comity while dealing with the defence of sovereign immunity. ."Comity is the first basis on which sovereign immunity is tested.", he said. .He explained that India followed a restrictive approach as it has rejected the defence of sovereign immunity when the subject matter of the dispute is commercial and does not pertain to the sovereign functions of a State..Vishwanathan stated that the judges should be sensitive to "comity", theories of sovereign immunity and expectations and should not hesitate to grant the defence of sovereign immunity when it is against the core ethos of rule of law. .While Smitha Menon spoke at length on the approach adopted in Singapore, which was heavily based on the principles of comity, Nicholas Peacock explained the law in place in the United Kingdom. .Peacock explained that the defence of sovereign immunity was essentially a procedural issue and thus ought to be resolved as per the law of the forum. .Nicholas Lingard spoke on the relevance and applicability of the international customary law principle that equals do not have authority over another. .Advocate Promod Nair of Arista Chambers and Rohit Bhat of Freshfields, Singapore moderated the session.Neeti Sachdeva, the Secretary-General of MCIA, gave the closing remarks.