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ARTICLE · 07 AUGUST 2025

Sovereign Immunity In Subscription Credit Facilities: UK

Mayer Brown
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Government pension plans, state endowment funds, sovereign wealth funds and other arms of sovereign states are often investors in funds which borrow under subscription credit facilities.

United KingdomLitigation, Mediation & Arbitration
Doos Choi
Doos Choi
Simon Fisher
Simon Fisher
Sarah Garvey
Sarah Garvey
Dominic Griffiths
Dominic Griffiths
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Executive Summary

Government pension plans, state endowment funds, sovereign wealth funds and other arms of sovereign states are often investors in funds which borrow under subscription credit facilities. These state and quasi-state entities may seek to resist liability and the enforcement of any claims (including in respect of the capital call security granted in connection with subscription credit facilities) on the basis they enjoy sovereign immunity, claiming that they cannot, therefore, be pursued through the UK courts. Given the prevalence of English courts or Cayman courts (which, together with the British Virgin Islands (BVI) and other offshore jurisdictions, apply UK immunity legislation) as preferred dispute resolution jurisdiction in funds documentation, this is a critical risk factor. A successful claim to immunity would mean an inability to pursue a claim for debt or damages.

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