Second Circuit Rules That FSIA Provides Sole Basis for Jurisdiction Over Foreign Sovereigns in Actions to Enforce ICSID Awards

On July 11, 2017, the Second Circuit Court of Appeals issued Mobil Cerro Negro Ltd. v. Bolivarian Republic of Venezuela, holding that the Foreign Sovereign Immunities Act (the “FSIA”) is the sole basis for jurisdiction over a foreign state in U.S. court actions to enforce awards issued pursuant to the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”).

Agreeing with the views expressed by the United States, which submitted an amicus brief, the court also ruled that the federal statute implementing the ICSID Convention provides no exception to the FSIA’s service and venue requirements in ICSID award enforcement actions. Mobil Cerro Negro—the first federal appellate court decision to rule on these issues—is an important precedent reaffirming the primacy of the FSIA and its stated goals of promoting comity with foreign nations and ensuring that U.S. courts follow a consistent approach in actions against sovereigns.