Introduction
In a significant reversal of the primary judgment, the Full Court of the Federal Court of Australia has upheld India’s state immunity claim in Republic of India v CCDM Holdings, LLC [2025] FCAFC 2, reinforcing the weight of treaty reservations and sovereign immunity in award enforcement proceedings. This judgment marks a pivotal development in Australia’s treatment of investor-state arbitral awards against foreign sovereigns, especially where the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) is ratified subject to reservations.
The Court overturned the primary decision (see our earlier article) which had found that India waived its state immunity by ratifying the New York Convention. Instead, the Full Court held that India’s reservation under Article I(3) of the New York Convention limited its enforcement obligations to disputes deemed “commercial” under Indian law – a threshold not met in this instance. The decision provides important clarification on the intersection of treaty reservations, reciprocity, and Australia’s Foreign States Immunities Act 1985 (Cth) (FSI Act).
Case Background
The dispute arose from India’s 2011 annulment of a satellite services agreement (Devas-Antrix Agreement) between Devas Multimedia Private Limited and Antrix Corporation Limited, a government-owned company. The annulment gave rise to an arbitration claim under the 2000 India-Mauritius bilateral investment treaty (BIT). In 2020, the arbitral tribunal issued a quantum award in favour of investors.
The enforcement proceedings were brought in Australia by CCDM Holdings LLC and associated entities. In CCDM Holdings v Republic of India (No 3) [2023] FCA 1266 (being the first instance decision), the primary judge found that by ratifying the New York Convention, India had submitted to jurisdiction of the under s 10(2) of the FSI Act. India appealed, relying on its Article I(3) New York Convention reservation to argue the dispute was not commercial under Indian law, and therefore not enforceable.
The Appeal Decision
Treaty Reservations and Sovereign Immunity
The Full Court found that a waiver of immunity under s 10(2) of the FSI Act must be express and unmistakable, echoing the High Court’s approach in Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l [2023] HCA 11. The Court rejected the proposition that India’s ratification of the New York Convention constituted such a waiver.
Instead, the Court confirmed that India’s reservation – limiting its obligations to commercial disputes as defined by Indian law – was determinative. Under the Vienna Convention on the Law of Treaties, such a reservation modifies the treaty relationship reciprocally. Consequently, Australia was not bound to enforce an award falling outside India’s reservation.
This case was distinguished from Kingdom of Spain, which involved the ICSID Convention, a treaty with specific obligations under Article 53 to comply with awards and more narrowly confined immunity under Article 55. In contrast, the New York Convention is silent on sovereign immunity.
Was the Dispute “Commercial” Under Indian Law?
The Full Court noted that the applicants had failed to lead evidence on the meaning of “commercial” under Indian law. Applying the presumption in Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54 that foreign law aligns with Australian law, the Court found the annulment of the Devas-Antrix Agreement was a sovereign act, not a commercial transaction.
The primary judge’s conclusion that the annulment was not a commercial act under s 11 of the FSI Act was upheld. It involved a Cabinet-level decision taken for reasons of national security, falling outside the scope of commercial activity.
The applicants’ argument that the BIT itself constituted a commercial transaction was also rejected. The Court reiterated that a BIT is a public international law instrument, not a commercial contract.
Outcome
India’s appeal was allowed. The enforcement orders were set aside. The Court held that India had not submitted to the jurisdiction of the Federal Court under s 10(2) of the FSI Act, and it retained immunity because the dispute did not arise from a commercial legal relationship under Indian law.
Comparative Analysis: The English Approach
The decision brings Australia into alignment with recent UK jurisprudence. In CC/Devas et al. v Republic of India [2025] EWHC 964 (Comm), the English High Court held that India’s ratification of the New York Convention did not constitute a waiver of immunity under s 2(2) of the UK State Immunity Act 1978. The Court relied on Article III of the New York Convention, which mandates enforcement in accordance with local procedural rules – including those governing sovereign immunity.
Sir William Blair emphasised that waivers must be explicit. Unlike the ICSID Convention (see Infrastructure Services Luxembourg v Spain [2024] EWCA Civ 1257), the New York Convention lacks language sufficient to imply a waiver. Both courts underlined the necessity of assessing treaty-based waivers case-by-case.
Key Takeaways
- Treaty reservations matter. Under the Vienna Convention, a reservation modifies obligations reciprocally. States are not bound to enforce awards outside the scope of another state’s reservation.
- Waiver must be clear. Ratification alone is insufficient. Without unmistakable intent to waive immunity, courts will not infer consent. The Court expressly declined to find waiver in this case because the dispute fell outside India’s commercial reservation.
- Sovereign acts are not commercial. Government actions involving national policy or security are unlikely to be deemed “commercial” under the New York Convention or s 11 of the FSI Act.
- Distinguish treaty frameworks. The ICSID and New York Conventions operate under distinct principles. Immunity analysis depends on the specific obligations and reservations within each instrument. While waiver might be arguable for awards falling squarely within a commercial reservation, this was not decided here.
This decision reinforces the importance for award creditors of closely analysing the interplay between international treaty obligations, state reservations, and domestic immunity laws when pursuing enforcement against foreign states. Further, where possible, careful thought should be given to construing the underlying transaction or action as “commercial”, so as to potentially avoid immunity restrictions.
Further Information
For more information about enforcement, arbitration and commercial disputes in Australia, please contact the authors of this article:
