Enunciating the Effect of the Doctrine of Sovereign Immunity of States on International Arbitration

Abstract

In the 21st Century States continue to be one of the main players in international business transactions. The onerous responsibility of states to provide goods and services to their citizens means that, they are by default involved in enormous commercial transactions and investment ventures. In several of these business transactions involving states for example; states and states, states and organizations, states and private individuals/companies, states overtime have adopted international arbitration as their preferred mode of dispute resolution. This is manifested especially in investment agreements and international commercial transactions involving states. However, under public international law (international personality of states) states enjoy sovereign immunity as international legal persons. Sovereign immunity is a legal doctrine by which the sovereign or the state cannot, commit a legal wrong and is immune from civil suit or criminal prosecution. This has raised the concern as to the extent to which a State involved in international arbitration can invoke the doctrine of sovereign immunity and its impact on international arbitration. Inquisitively this paper asks; Is the doctrine of sovereign immunity a threat to international arbitration? In answering these questions, this paper interrogates how various International Conventions that offer a legal framework for international arbitration have addressed these seminal issues. For example; The Convention on the Settlement of Investment Disputes between States and Nationals that was created to offer a mechanism for resolving investor state disputes.