As part of Paris Arbitration Week 2026, we hosted a practical seminar exploring how commercial arbitration, investment treaty protections and insurance considerations intersect when disputes involve States or State‑owned entities (SOEs).
Our panel consisted of Partners Garbhan Shanks, Tatiana Menshenina, Thomas Karalis and Timi Balogun, and was moderated by Tania Tholot of The Brattle Group. Across five topics, the panel explored the issues at hand, from sanctions and anti‑suit injunctions to enforcement, non‑signatory claims and mediation clauses.
Investment Treaty Arbitration, Commercial Claims & Insurance – How They Interact
Tatiana and Garbhan highlighted the strategic tensions that arise when investors must choose between contract‑based arbitration and treaty‑based claims. Using a 500MW solar project case study, Tatiana showed how payment disputes, policy changes and stabilisation breaches can trigger parallel routes for redress, but require careful sequencing to avoid preclusion, double recovery and inconsistent findings.
Garbhan highlighted insurance’s often‑overlooked role in this ecosystem. Early structuring is critical, and choosing the right jurisdiction for the investment vehicle affects both treaty protections and the availability of political risk insurance (PRI). When a loss occurs, timing is equally as critical - insurance claims should usually be advanced before treaty proceedings otherwise key recovery opportunities may be put in jeopardy.
Key Takeaways
- Map contract and treaty protections early, including forks‑in‑the‑road and waiver risks.
- Decide the optimal sequence: commercial first, treaty first, or parallel—with a unified evidence plan.
- Bring insurers into strategic planning: PRI recoveries can shape, or even limit, subsequent treaty claims.
- Enforcement planning and confidentiality management must start from day one.
Sanctions, Impossibility & Anti‑Suit Injunctions
Tatiana examined two fast‑developing issues: the impact of sanctions on arbitral proceedings, and the rise of anti‑suit and anti‑enforcement injunctions in English courts.
In DRL v DRK (Singapore), sanctions left a claimant unable to pay deposits or security. The tribunal terminated the arbitration for “impossibility”—a decision the Singapore High Court upheld, confirming that termination under Article 32(2)(c) is mandatory once impossibility is established.
By contrast, English courts are actively protecting arbitration agreements from foreign court proceedings, especially in Russia‑related disputes. Recent cases (including the UniCredit trilogy and Barclays v VEB.RF) show courts readily granting mandatory anti‑suit (ASI) and anti‑enforcement (AEI) injunctions where an English‑law anchor exists.
Key Takeaways
- Sanctions can extinguish the right to arbitrate entirely
- English courts remain robust in enforcing arbitration agreements through ASIs and AEIs.
- Express drafting on the governing law of the arbitration agreement is essential for foreign‑seated cases.
Arbitration Claims Against Non‑Signatories
Thomas explored when non‑signatory States or SOEs can be bound by arbitration agreements. Approaches vary significantly by jurisdiction, for example, France remains expansive (group of companies doctrine), while England is restrictive.
Existing case studies, from Dallah to the long‑running Kabab‑Ji saga, show how the same issue can produce opposite results across jurisdictions. When State entities are involved, the focus shifts to whether the State assumed obligations, exercised control, or played a decisive role in performance.
Key Takeaways
- Consent is central, but doctrines like agency, assumption of obligations and estoppel can extend arbitration agreements to non‑signatories.
- Outcomes vary sharply across jurisdictions; enforcement risk is a real concern.
- When States are involved, wording such as “approved” vs “legally bound” can make or break jurisdiction.
Enforcement Against States and SOEs
Timi examined immunity and enforcement, one of the most challenging stages in State‑related arbitrations.
Most jurisdictions adopt a restrictive immunity doctrine: States are protected for sovereign acts, but commercial activity can be subject to adjudication and enforcement. Yet certain assets, particularly central bank assets, remain almost entirely immune. Sovereign wealth funds and SOEs sit somewhere in the middle, depending on their functions and degree of independence.
Recent cases, including Zhongshan v Nigeria, show courts increasingly willing to scrutinise whether assets labelled as “diplomatic” or “sovereign” genuinely serve sovereign functions.
Key Takeaways
- Distinguishing between State property and SOE property is critical.
- Commercial purpose defeats immunity; sovereign purpose preserves it.
- Enforcement planning should begin at the contract‑drafting stage, not after an award.
Mediation Clauses Before Arbitration
Garbhan and Timi closed the session with practical guidance on multi‑tier dispute resolution clauses—particularly relevant in State contracts.
Mediation or negotiation requirements can encourage early resolution and reduce costs, but only if drafted with precision. Vague “friendly discussions” have generated uncertainty and satellite litigation, whereas institutional mediation mechanisms (e.g., CEDR rules) offer clarity.
For States, mediation clauses can depoliticise early engagement and reduce pressure on officials to “own” the settlement of inherited disputes.
Key Takeaways
- Clarity is essential: specify rules, timelines and procedures for mediation.
- Non‑compliance issues tend to be treated as admissibility questions, not jurisdictional ones.
- Mediation can be especially valuable in State‑related disputes, promoting commercially sensible outcomes without political risk.
Conclusion
The session addressed the growing complexity of disputes involving States and SOEs. Across all topics, one theme consistently emerged: success depends on coordination, between treaty and commercial claims, between insurers and investors, between contractual drafting and enforcement realities, and between political and commercial considerations.
