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ARTICLE · 11 JULY 2024

Managing Sovereign Immunity Risk On A Transaction – What Commercial Parties Need To Know

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State involvement in commercial transactions continues to increase and remains an area of distinct legal risk for commercial parties.

GlobalLitigation, Mediation & Arbitration
Sarah Garvey
Sarah Garvey
Alex Lakatos
Alex Lakatos
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State involvement in commercial transactions continues to increase and remains an area of distinct legal risk for commercial parties.

The nature of a state's role on any transaction may vary and its interest in any deal may be direct or indirect. For example:

  • a state may offer to guarantee a development project to reassure creditors;
  • a government may issue debt instruments to the market to raise funds;
  • a central bank may borrow funds to finance trade; or
  • a state may seek to invest surplus revenues for the benefit of future generations through funds, perhaps using separate offshore structures.

In each of these instances, the issue of sovereign immunity may arise.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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