USA—D.C. Circuit (Court of Appeal) rules on sovereign immunity and arbitrability concerning an ISDS award (Deutsche Telekom v India)
Arbitration analysis: After India terminated a satellite spectrum lease deal, Deutsche Telekom (DT) initiated arbitration under the Germany-India Bilateral Investment Treaty (BIT). Despite India’s contentions that the BIT’s arbitration clause did not extend to the parties’ dispute, the tribunal, along with courts in Switzerland, Germany and Singapore held in favor of DT. The US district court likewise confirmed the award, rejecting India’s claims on sovereign immunity and forum non conveniens, and India’s substantive defenses were forfeited or precluded. On appeal, the D.C. Circuit remanded the case, holding that the district court erred by refusing to consider India’s substantive defenses. The court determined that India’s claim to immunity under the Foreign Sovereign Immunities Act (FSIA) was ‘colorable’ and the legal boundary of challenges to the existence of an arbitration agreement and those concerning its scope were unclear, which is an issue currently pending before the US Supreme Court in a different petition for certiorari. Written by Gizem Alper, Independent International legal and ADR consultant.