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Foreign sovereign immunity answers a deceptively simple question: when can a foreign state be sued in U.S. courts? The doctrine determines whether investors, contractors, and award creditors can reach sovereigns and their state-owned entities. Just as importantly, it determines whether a judgment against them can actually be collected. Two unanimous U.S. Supreme Court decisions in 2025 reshaped the landscape. This explainer sets out the framework as it stands in August 2026.
Foreign Sovereign Immunity Under the FSIA
Since 1976, the Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602–1611, has been the sole basis for jurisdiction over foreign states in U.S. courts. The same framework governs their agencies and instrumentalities. The statute starts from a presumption of immunity: a foreign state is immune unless a specific statutory exception applies. If no exception fits, the case ends there — regardless of how serious the underlying claim may be.
The Exceptions That Matter Most in Commercial Disputes
- Commercial activity (§ 1605(a)(2)): claims based on a state’s commercial conduct with a U.S. nexus. What counts is the nature of the act — whether it is the type of transaction a private player could undertake — not its public purpose.
- Arbitration (§ 1605(a)(6)): actions to enforce arbitration agreements and to confirm arbitral awards governed by treaties such as the New York Convention. This is the workhorse exception for award creditors.
- Expropriation (§ 1605(a)(3)): claims involving rights in property taken in violation of international law, with a commercial connection to the United States.
- Waiver (§ 1605(a)(1)): explicit or implied waiver, commonly found in sovereign loan and contract documents.
The 2025 Supreme Court Decisions
CC/Devas v. Antrix: personal jurisdiction simplified
In CC/Devas (Mauritius) Ltd. v. Antrix Corp. (2025), an arbitration-enforcement case, the Court unanimously held that the FSIA itself imposes no minimum-contacts requirement. Instead, personal jurisdiction exists whenever an immunity exception applies and the claimant properly serves the state under the statute. The decision swept away decades of Ninth Circuit precedent that had made West Coast enforcement against sovereigns harder than elsewhere. However, it left any residual constitutional questions for another day.
Hungary v. Simon: the expropriation exception narrowed
In Republic of Hungary v. Simon (2025), the Court unanimously addressed liquidated property. In that situation, the claimant must trace the specific proceeds to commercial use connected with the United States. Alleging that proceeds were commingled with general government funds later used in U.S. commerce is not enough. After all, the statute treats money no differently from any other property. As a result, for most investment takings, treaty arbitration — not U.S. litigation — is the realistic remedy. We cover this in our explainer on indirect expropriation.
Winning Is Not Collecting: Immunity from Execution
Foreign sovereign immunity operates twice. Even after a judgment, sovereign property in the United States is presumptively immune from attachment and execution under § 1609. Execution generally requires property used for commercial activity in the United States. Somewhat broader rules apply to agencies and instrumentalities, while central bank assets and diplomatic property enjoy near-absolute protection. The Supreme Court has, however, permitted broad post-judgment discovery into a sovereign’s assets worldwide. A realistic collection strategy therefore begins with asset mapping and often runs through multiple jurisdictions — the same discipline that governs the enforcement of foreign arbitral awards generally.
What This Means for Claimants
Three practical rules follow for anyone confronting foreign sovereign immunity. First, structure the path to jurisdiction before the dispute: an arbitration clause converts a doubtful immunity fight into the FSIA’s most reliable exception. Second, distinguish the merits from collection. A state that cannot resist jurisdiction may still shelter its assets, so enforcement planning belongs at the start. Third, for expropriated investments, treaty coverage analysis is now more important than ever after Simon. Our Investment Protection practice performs that assessment before any claim is filed.
Transnational Matters PLLC represents claimants and respondents in disputes involving foreign sovereign immunity, state-owned entities, and award enforcement. This article is general information, not legal advice. Immunity outcomes turn on the specific exception, entity structure, and assets involved. Reviewed August 2026.
