Content area
Abstract
A more restrictive theory of sovereign immunity was codified in the US by the Foreign Sovereign Immunities Act of 1976 (FSIA) and in the UK by the State Immunity Act 1978. Nonetheless, many loan agreements will contain a contractual waiver that avoids the risk that a defense counsel may raise a threshold jurisdictional issue based on sovereign immunity. Many loan agreements also contain a representation by the sovereign borrower confirming that the loan is a private or commercial act of the borrower and not a public or governmental act. US legal opinions that address the enforceability of a contractual waiver of sovereign immunity are frequently qualified by saying that such waivers are subject to the limitations of the FSIA. The sovereign borrower should understand that the clause will attempt to seek both a waiver of jurisdictional immunities to which the sovereign itself may be entitled and a waiver of immunity to which the borrower's property may be entitled.