An Analysis Of The State Exemption In International Commercial Arbitration

State immunity has become a principle of international law accepted by manycountries as habit of practicing rules. It is combined with other problems in itsemergence, existence, development, and at the same time it also sublimates itself.With economy of China and world going into depth, more and more States havebecome more involved in international business transaction, and legal disputesbetween state and private subject become increasingly frequent. With the purpose forthe private subjects to weaken the superior status of states in the international civiland commercial trade and the purpose for states to encourage more and deepertransactions, the two sides often protect the transaction by entering into theinternational commercial contracts which including arbitration clause. The arbitrationaward made on the base of arbitration agreement concerning a state will inevitablyface a series of state immunity problems of international commercial arbitration in thecourse of jurisdiction and execution.There are two major theoretical systems of state immunity, namely absoluteimmunity and restrictive immunity. The agreement of arbitration is the exception ofstate immunity under the restrictive immunity doctrine. However, the recognition andenforcement of international commercial arbitral awards concerning states generallyneed to comply with the New York Convention and judgment of the state immunityrules, so some problems will have different answers in different countries, such aswhether the arbitration agreement can be viewed as giving up immunity ofjurisdiction and execution, how to claim state immunity in recognition and executionphase of the arbitral award, which kind of behavior or property can be claimed stateimmunity. Hence, the scope of state immunity in the process of recognition andenforcement of international commercial arbitral awards is the focus of this paper.This paper set about from the basic theory of state immunity. In the first chapter,the two branches of state immunity, absolute and restrictive immunity will beintroduced. Then, two important treaties, the European Convention on State immunity and the United Nations Convention on jurisdictional immunity, and significantlegislation and cases of state immunity will be introduced to outline the absoluteimmunity and restrictive immunity doctrines. The development and the theoreticaldebate of the restrictive immunity doctrine under the background of the currentinternational trend are discussed.The author looks into the problem of state immunity in international commercialarbitration in Chapter II. The author first introduces and analyzes the concept andcharacteristics of international commercial arbitration, the New York Convention, andthe advantages of recognition and execution of arbitration award. Then, combinedwith United Nations Convention, the requirements and forms of waiver are discussed.Then, the complex relation of the arbitration agreement, jurisdiction and stateimmunity is discussed. Finally, the author discuss the international commercialagreement’s effect and significance to state immunity in jurisdiction and execution,and draw the conclusion: the agreement of submitting disputes to arbitration could berecognized as an implied waiver by a state for immunity from jurisdiction and theeffectiveness could not be extended to the enforcement of an arbitral award.In Chapter III, the thesis focuses on the practice of state immunity in China.China has experienced many related practice. China adheres to the absolute immunitydoctrine and lack rules. These are too bad for China to handle cases involving foreigncountries or China, and to protect the private investors. China has signed the UnitedNations Convention but not yet approving. Though there are a lot of internal andexternal causes for China to stick to the absolute immunity, the China government andthe ministry of foreign affairs shall know that China should formulate law of stateimmunity as soon as possible under the restrictive immunity environment. China shallestablish the restrictive immunity doctrine with Chinese characteristics, so as toprotect the interests of China and private subjects that participate in internationalcommercial activities.It is difficult to formulate a law which can integrate with the United Nations onjurisdictional immunities, so before that, we can rely on international civil andcommercial arbitration to solve the problem. China should admit that arbitration clause means the waiver of jurisdiction immunity. The arbitration clause shall bemade in the contract and shall be regarded as abandoning state immunity concerningarbitration matters.