Hong Kong: State Immunity in International Arbitration, Express In-Court Waiver, Jurisdiction and Execution Immunities, and Award Enforcement
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Dealings between private enterprises and governments, or state-owned bodies, are commonplace in the spheres of foreign investment and cross‑border contracting across numerous jurisdictions. Parties to cross‑border frameworks often opt to refer prospective disputes to international arbitration rather than litigate in court. The underlying logic is clear and compelling. First, arbitration removes the quarrel from the reach of the state party’s own courts and places it before an impartial, independent tribunal. Second, well‑known international treaties, including the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), have markedly eased the recognition and enforcement of arbitration clauses and awards. Notwithstanding these benefits, state immunity may present a significant barrier to effective dispute resolution in practice when engaging with states or state‑controlled entities. In essence, state immunity signifies that a sovereign cannot be forced to accept the jurisdiction of another country’s courts (immunity from jurisdiction). It may likewise shield particular assets of a state party, in whole or in part, from the enforcement machinery of a foreign state (immunity from execution). Private businesses should be particularly mindful and fully aware of...
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Web page updated on 21/05/2026
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