The Application Of Arbitration Provision Of US Foreign Sovereign Immunity Act

United States’ Foreign Sovereign immunity Act is the first domestic law on sovereign immunity in the world. The act lists the scope of circumstances in which state immunity can’t be quoted. In 1988 amendments of the act, the arbitration exception is ruled at large. However, in the judicial practice, courts confront with a great deal of controversy about the application of arbitration exception. To explain the issues in dispute, courts still have great discretion. This article analyzes the application of arbitration exception clauses in courts, defines the relationship between international commercial arbitration and state immunity, and provides advice for Chinese state immunity legislation.By reviewing the cases, the author finds the provisions of arbitration exception is specific, but the unanimous verdict still has not yet formed. The application of jurisdictional immunity is relatively clear; but the execution immunity remains vague. On the issue of jurisdictional immunity, because of the distinction of subject jurisdiction and personal jurisdiction, the jurisdiction issue is complicated. Generally, the subject matter jurisdiction is not in dispute. As long as the case meets the provision of act, subject matter jurisdiction is fulfilled. But there is some dispute about the personal jurisdiction. It’s thought that the foreign states needn’t meet the requirement of minimum contacts. The national public independent legal entities need to meet the minimum contacts. On the issue of immunity of execution, the state property used for business activity can be enforced. But the uncertainty and unavailability of the commercial property leads to private parties can’t claim their requests. Although many cases propose to reduce and even eliminate the immunity from jurisdiction of trends for the arbitration process, but such trends doesn’t reflect in seeking enforcement of an arbitration award against foreign countries. Development of restrictive immunity doctrine almost has no effect on the scope of immunity from execution. For the growing disputes, the immunity of execution is a more significant problem. Although legislative barriers cause the failure of enforcing an arbitration award, but immunity from jurisdiction and immunity from execution dualism does exist, most Western legal systems accept the dualism. The arbitration award holders should fully understand the risks and try to reduce or even avoid these risks.China adheres to the principle of absolute immunity for many years to protect the national interests. The principle of restrictive immunity is the mainstream model of the world. According to China’s current position in international economic exchanges, conditionally accepting the principle of restrictive immunity doesn’t damage national interests. China has signed the United Nations Convention on Jurisdictional Immunity and Their Property. Although the convention has not yet entered into force, China ought to perform the obligation of the convention. So China should accept the principle of restrictive immunity. In the relationship between international commercial arbitration and state immunity, the legislation should base on the convention, increase some contact factors, such as arbitration site and law application. In practice, China could identify cases relying on specific circumstances, and establish the reciprocity principle to protect the nation interests in abroad.