Case note: Special leave granted – High Court to hear appeal of Republic of India v CCDM Holdings, LLC [2025] FCAFC 2
William Hettrick ACIArb
Lawyer, Projects (Construction), Clayton Utz, Melbourne
Ryan Cable
Senior Associate, Dispute Resolution, Clayton Utz, Brisbane
Sean Kelly
Partner, Projects (Construction), Clayton Utz, Melbourne
1. Summary
On 12 June 2025, the High Court of Australia granted special leave to hear an appeal of the Full Federal Court of Australia’s decision in Republic of India v CCDM Holdings, LLC [2025] FCAFC 2 (Republic of India) (see CCDM Holdings, LLC & Ors v The Republic of India [2025] HCADisp 120 here). The Full Federal Court’s decision in Republic of India highlighted important considerations on what constitutes a ‘waiver’ of foreign state immunity when seeking to enforce arbitral awards in Australia against foreign states under the New York Convention.
The High Court’s upcoming decision will provide further clarity as to the judiciary’s reasoning on preservation (or otherwise) of a foreign state’s immunity in Australia from enforcement of arbitral awards following the High Court of Australia’s decision in Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l (2023) 275 CLR 292 (Kingdom of Spain), which considered similar issues arising in relation to an arbitral award under the ICSID Convention.
The key distinguishing feature between the decision in Republic of India and that in Kingdom of Spain is India’s reservation under the New York Convention and what is meant by ‘commercial’ disputes under Indian law. For this reason, the Full Federal Court’s decision was not a radical overturning of the High Court’s decision in Kingdom of Spain, but rather, is a reminder that the specifics of each treaty and convention is of critical importance in both public and private international law. How the High Court determines the issue will be closely followed across Australia and more widely.
2. Introduction
It is no secret that disputes practitioners need to stay more than just two steps ahead at any given moment. Part of that strategy impliedly involves looking ahead to the desired outcome, which is usually a sum of money, whether that be for a successful claimant seeking damages or a successful respondent seeking enforcement of an award of costs for successfully defending a claim.
As every litigator knows, there’s little sense in securing such an entitlement against someone with empty pockets. But international arbitration takes that premise one step further. One of its many benefits is the ability to seek enforcement of an award in any jurisdiction that has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), which presently stands at 172 jurisdictions (amounting to almost 90% of the world).
In that regard, it could be said that in international arbitration there’s little sense in securing an entitlement, against full pockets or otherwise, if you would be unable to enforce that entitlement in the jurisdiction where assets are held by the award debtor. Embarking on such an endeavour and securing a favourable outcome without having regard to the jurisdiction where a successful award would be sought to be enforced, and the prospects of doing so, can be futile. This is particularly relevant when your arbitration involves a foreign state, as the Full Federal Court has reminded us in Republic of India.
The Full Federal Court was required to determine whether India, in ratifying the New York Convention, had submitted to its jurisdiction under section 10(2) of the Foreign States Immunities Act 1985 (Cth) (Immunities Act), effectively waiving the immunity it would otherwise enjoy under section 9 of the Immunities Act.
3. Background facts
The original claimants (incorporated in Mauritius) commenced arbitral proceedings against India in July 2012 in the Permanent Court of Arbitration at The Hague, pursuant to article 8 of the bilateral investment treaty concluded on 4 September 1998 between India and Mauritius (BIT).
The claimants alleged breaches by India of the BIT in relation to what was claimed to be ‘qualifying investments’ under the BIT. The investments comprised shareholdings in an Indian company, and a derivative interest in an agreement that company had with a corporation wholly owned by the government of India for the lease of S-band electromagnetic spectrum on two Indian satellites. That agreement was annulled by the Indian government in February 2011 on public policy grounds (Annulment).
The Award on Jurisdiction and Merits was issued on 25 July 2016 and the Quantum Award, which was sought to be enforced in Australia (by entities to which the original claimants had assigned their rights and interests in the Quantum Award) and is the underlying subject of this appeal, was issued on 13 October 2020.
India ratified the New York Convention with effect from 11 October 1960 subject to the reservation, as expressly authorised under art I(3), that the New York Convention would apply to “differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the Law of India” (Reservation). Australia ratified the New York Convention with effect from 24 June 1975, without reservation (so too did the Kingdom of Spain, therein explaining the departure from the High Court of Australia decision in Kingdom of Spain).
4. First instance
At first instance, similar to the High Court’s decision in Kingdom of Spain, it was found that India had waived its foreign state immunity as a consequence of ratifying the New York Convention. The primary Judge considered this constituted a submission by agreement to the jurisdiction of the Federal Court under section 10(2) of the Immunities Act, by way of “clear and unmistakeable necessary implication” (as the text of the New York Convention does not include “waiver” or “foreign state immunity“).
The source of that implication appeared to be the text of articles III and IV of the New York Convention; that each contracting State shall recognise arbitral awards as binding and enforce them, and that the applicant seeking to obtain recognition and enforcement shall supply a copy of the award together with the agreement to arbitrate the underlying dispute (paraphrased). The primary Judge concluded, on that basis, that India being a party to the Quantum Award was an obvious and necessary implication that India, in acceding to the New York Convention, is requiring Australia to recognise and enforce that Award.
Notably, the first instance decision did not appear to deal directly with the effect of the Reservation, but rather whether the application of the New York Convention itself was limited to awards involving commercial or private disputes, as opposed to disputes concerning the conduct of a State acting in a governmental capacity, which India contended. The primary Judge found no support for that contention as the relevant language in the New York Convention was too broad and general.
5. Full Federal Court Appeal
On appeal, the Full Federal Court considered the key issue was the effect of India’s Reservation. The sole question on appeal was characterised as whether, by its ratification of the New York Convention, India had submitted to the jurisdiction in respect of an award that was not, as a result of the Reservation, within the scope of India’s obligations under the Convention.
The Court approached this question by first answering whether India had waived immunity in respect of the enforcement of an award generally falling within the scope of the New York Convention but excluded by its Reservation, and secondly, by answering whether the Quantum Award was outside the scope of the Reservation, having regard to what constitutes ‘commercial differences’ under Indian law.
There was some tension as to whether or not, in reconciling the intended reciprocity afforded under the New York Convention concerning rights and obligations between contracting states, India’s reservation had the effect of altering its obligations unilaterally. The Court relied primarily on arts 20(1) and 22 of the Vienna Convention on the Law of Treaties (Vienna Convention). As the Reservation was expressly authorised by the New York Convention under art I(3) and therefore did not require subsequent acceptance by other contracting states, the Court was satisfied that the effect of the Reservation was to modify the legal consequence of certain provisions of the New York Convention for India and other contracting states “between and amongst them” (i.e. on a reciprocal basis). The first question was therefore answered in the negative, finding that India had not waived immunity in respect of Awards falling outside the scope of the Reservation.
Despite the respondents not seeking to challenge or adduce evidence as to whether or not the Quantum Award fell within the scope of the Reservation, and notwithstanding the respondents had accepted that the BIT and the Annulment were not commercial transactions, the Court answered the second question. Applying the presumption in Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331, that foreign law is the same as Australian law, the Court turned to, and agreed with, the primary Judge’s consideration of the ‘commercial transactions’ exception in section 11 of the Immunities Act, that the BIT and the Annulment were not ‘like transactions’ under subsection 11(3).
The Court held that the relevant ‘differences’ between India and the claimants arose from the BIT and the Annulment, the former being in the realm of public international law (to give rights to private investors in India) and the latter being a decision made by the Indian executive government as a matter of public policy. On that basis, the Quantum Award did not fall within the scope of the Reservation.