Sovereign Wealth Funds and State Immunity

How does the hybrid nature of SWFs affect the application of state immunity to these funds? May an SWF be sued in foreign courts for wrongful acts committed in the course of its investment activities? Can SWF investments be attached by a private creditor seeking to enforce an investment arbitration award against the fund’s state of nationality? This monograph addresses these questions from the perspective of the 2004 New York Convention and six selected jurisdictions (US, UK, France, Germany, Italy, China), with the broader aim of highlighting potential new standards for implementation of the state immunity rule to SWFs.

Table of Contents:
Acknowledgment Abbreviations International and Domestic Documents Table of Cases General Introduction  1 Problem Statement  2 Research Question  3 Selected Jurisdictions and Structure Part 1 swf s: History, Definitions and Core Elements  Introduction to Part 1 1 The Development of swf s as New State Investment Vehicles  1 The Emergence of swf s  1.1 Historical Antecedents: The India Companies and the Industrial Revolution (before 1953)  1.2 The Genesis of Commodity and Non-commodity swf s (between 1953 and the Mid-1990s)  1.3 The Expansion of swf s: The Asian Financial Crisis and the Rise of Crude Oil Price (between the Mid-1990s and 2005)  1.4 swf s Achieving International Prominence (after 2005)  2 The Quest for a Definition of swf s: the Main Scholarly Definitions  2.1 The First Definitions  2.2 swf s as Government-Managed Entities Seeking Higher Rates of Returns  2.3 Definitions Focusing on swf s’ Liability  2.4 Definitions Based on How swf s Are Managed  2.5 The Relevance of Funds’ Ownership and Purposes  3 Institutional Attempts to Define and Regulate swf s  3.1 imf Definitions  3.2 The ‘Santiago Principles’  3.3 Other Definitions Provided by International Organizations  4 Differences between swf s and Other Cognate Entities  4.1 swf s and State-Owned Enterprises  4.2 swf s and Public Pension Funds  4.3 swf s and International Reserves 2 swf s’ Core Elements  1 Legal Structure  2 Governance  3 Source of Assets  4 Purpose  4.1 Diplomatic and Political Tool  4.2 National Development Tool  4.3 Stabilisation and Diversification Tool  4.4 Intergenerational Savings Tool  5 Types of Investments  Provisional Conclusions Part 2 swf s and Adjudicative Immunity  Introduction to Part 2 3 The uncsi as an Attempt to Codify International Law on State Immunity  1 Relevance of the Convention for Development of a Customary Rule  2 Framing of swf s into the Notion of ‘State’  3 The Commercial Exception to Adjudicative Immunity  4 swf s with an Independent Legal Personality and Immunity of the Parent State 4 The Common Law Approach to Adjudicative Immunity: Two Archetypes of Statutory Norms  1 United States  1.1 Pool-of-Assets swf s  1.2 swf s Established with Independent Legal Personality  1.3 The Commercial Exception Under the fsia  2 United Kingdom  2.1 Qualification of a Pool-of-Assets swf as a ‘Department of Government’  2.2 The Commercial Exception Under the sia  2.3 swf s Established as Separate Entities 5 The Civil Law Approach to Adjudicative Immunity  1 France  2 Germany  3 Italy  4 China  4.1 Once Upon a Time: prc as the Last Bastion of Absolute Immunity  4.2 State Immunity and swf s before 2023  4.3 The Current Scenario  Provisional Conclusions Part 3 swf s and Immunity from Execution  Introduction to Part 3 6 The 2004 UN Convention  1 Beneficiaries of Immunity from Execution Under the uncsi  2 Differences between Pre- and Post-judgment Measures. The Commercial Exception  3 Piercing the Corporate Veil according to the uncsi 7 The US fsia and the UK sia  1 United States  1.1 Post-judgment Attachment: Pool-of-Assets swf s  1.2 Post-judgment Attachment: swf s Established as Separate Entities  1.3 Pre-judgment Attachment  2 United Kingdom  2.1 Post-judgment Execution. The Commercial Exception  2.2 Pre-judgment Attachment  2.3 swf s with Separate Legal Personality 8 European Civil Law Jurisdictions: France, Germany and Italy  1 France  1.1 From ‘Eurodif’ to the ‘Sapin 2’ Law  1.2 French Courts’ Decisions on swf s’ Property  2 Germany  3 Italy  3.1 Pre-judgment Measures  4 China  4.1 Pre-2023: China’s Traditional Approach towards Immunity from Execution  4.2 Post-2023: China’s Adherence to the Restrictive Doctrine of State Immunity  Provisional Conclusions Part 4 Immunity of swf s Managed by Central Banks  Introduction to Part 4 9 The Umbrella Protection of Central Banks to swf s  1 swf s in Systems Providing for Near-Absolute Protection to Central Bank Assets  1.1 The uncsi  1.2 United Kingdom  1.3 China  2 swf s and the ‘Purpose’ Test in Jurisdictions Granting a Milder Protection to Central Banks  2.1 United States  2.2 France  2.3 Germany  3 A Recent Trend to Be Monitored on Denying Immunity to swf s Managed by Central Banks: Stati v. Kazakhstan  Provisional Conclusions  Concluding Remarks: General Trends on swf s and State Immunity Bibliography Index