Foreign Sovereign Immunities Act

Practical Law Glossary Item 2-502-5645 (Approx. 3 pages)

Glossary

Foreign Sovereign Immunities Act

Enacted in 1976, the Foreign Sovereign Immunities Act (FSIA) (28 U.S.C. §§ 1602 to 1611) codifies the doctrine of sovereign immunity and provides that a foreign state (including a political subdivision, agency, or instrumentality of the foreign state) is presumed immune from the jurisdiction of US courts and may not be forced to submit to the jurisdiction of those courts unless a specific exception applies (28 U.S.C. §§ 1605 to 1607).

The FSIA provides for several exceptions to sovereign immunity including:

An implicit or explicit waiver by the foreign state of its sovereign immunity.
Commercial activities (such as the lending and borrowing of money, the sale and purchase of goods, and the leasing of property exception).
When the foreign state initiates an action in the US to enforce an arbitration agreement or confirm an arbitral award, subject to certain limitations and conditions.

Cross-border agreements with a sovereign entity typically require the sovereign entity to:

Represent and warrant that neither it nor its properties have any sovereign immunity.
Waive any immunity it or any of its properties may have or acquire, including under the FSIA.

For examples of these provisions, see Practice Note, Loan Agreement: Cross-border Provisions: Absence of Immunities and Standard Clauses, Loan Agreement: Cross-border Provisions: Absence of immunities.

For more information on the FSIA:

Foreign Sovereign Immunities Act | Practical Law