Investor risks due to 'Sovereign Immunity' pleas in Court Rulings on Arbitral Award Enforcement of MENA-FI Investments can be mitigated via a harmonised international commercial arbiration law code

In investor-state foreign investment arbitrations the defence of ‘Sovereign Immunity’ may be raised as an obstacle to arbitral award enforcement. This defence is oft used without justification and is thus invalid, or more precisely, in bad faith. States entering into commercial contracts are acting as private actors and not as governments. Whilst a commercial contract signed by a state may implicate issues related to public policy, by and large, commercial contracts signed by states should be treated in the same manner as those entered into by private parties. Interpretations of the doctrine of ‘Sovereign Immunity’ of investor-state contracts between foreign investors and MENA governments necessitate that excessive and undue pleas of ‘Sovereign Immunity’ which undermine arbitral award enforcement be limited in scope exclusively to actus jure imperii or in situations that invoke serious public policy concerns. To do otherwise reduces credibility in the entire edifice of international commercial arbitration, which is intended to overcome unfavourable national laws catering solely to state interests. Given the necessity in commercial disputes of arbitration to foreign investors, as protection against national court biases, obstacles to arbitral award enforcement are a clear and present danger. The MENA context is beset by other factors that exacerbate the impact of sovereign immunity, such as political Islam, domestic interpretations of legal doctrines, public policy, political risk and court interpretations of sharia. Broad interpretations of state sovereignty may be upheld by certain interpretations of the sharia, which is the overarching regulatory framework of most MENA legal systems, even in cases of liberal jurisdictions.