Sovereign Immunity and Choice-of-Law Clauses

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On its face, a choice-of-law clause selecting the laws of the United States (or a state within the United States) may seem irrelevant to whether a foreign nation has waived its sovereign immunity in U.S. courts. Over the years, however, a number of U.S. courts have held that a choice-of-law clause may, in fact, function as an implied waiver of sovereign immunity. On June 3, 2026, the U.S. District Court for the District of Columbia (Judge Sparkle L. Sooknanon) reached precisely this conclusion in Koudoukara v. Embassy of Mali.

In this post, I use Koudoukara to flag a number of issues with the current jurisprudence. After summarizing the facts of that case, I argue first that choice-of-law clauses should never be read as implied waivers of sovereign immunity. I then argue that even if one accepts that a choice-of-law clause may operate as a waiver, the scope of the waiver should be limited by the language in the clause. Finally, I argue that courts should always consider whether the person who signed the contract containing the clause was vested with authority to waive sovereign immunity.

Koudoukara v. Embassy of Mali

Fanta Koudoukara was employed as a secretary by the Embassy of Mali (“Embassy”) in Washington, D.C., for eleven months. During that time, Koudoukara alleges the Malian Ambassador to the United States repeatedly propositioned her for sex. After Koudoukara declined these advances, and reported the Ambassador to the human resources department at the Embassy, she was fired.

In June 2024, Koudoukara sued the Embassy in federal court in the District of Columbia. She asserted claims for sex discrimination and retaliation in violation of Title VII and the DC Human Rights Act and for non-payment of wages in violation of the Fair Labor Standards Act. After the Embassy failed to appear, Koudoukara moved for a default judgment. Before granting the default judgment, the court considered whether the Embassy was vested with sovereign immunity. It concluded that it was not because the Embassy had waived its immunity via a choice-of-law clause in Koudoukara’s employment agreement stating that the agreement was to be governed by “U.S. labor law.”

There are three problems with this conclusion.

Problem #1: Choice-of-Law Clauses Do Not Waive Sovereign Immunity

In contrast to an arbitration clause or a forum selection clause that names a U.S. forum, a choice-of-law clause does not convey a willingness to engage in dispute resolution in the United States. It is perfectly possible for a foreign court or a foreign arbitral tribunal to apply U.S. law to resolve a dispute. So far as can be determined, no other nation has taken the position that a choice-of-law clause waives sovereign immunity. The United Nations Convention on Jurisdictional Immunities of States and Their Property (not in force) provides in Article 7.2 that: “Agreement by a State for the application of the laws of another State shall not be interpreted as consent to the exercise of jurisdiction by courts of that other state.”  The immunity statutes in the United Kingdom, Australia, Singapore, and other countries include similar language. Only U.S. courts interpret choice-of-law clauses as implied waivers of sovereign immunity.

Why have U.S. courts adopted this approach? The answer lies in the legislative history of the FSIA. The House Report prepared in connection with that Act contains the following sentence:

With respect to implicit waivers, the courts have found such waivers in cases where a foreign state has agreed to arbitration in another country or where a foreign state has agreed that the law of a particular country should govern a contract.

This scrap of legislative history is cited by virtually every U.S. court to have held that a U.S. choice-of-law clause operates as an implied waiver of immunity. It cannot, however, bear the weight that the courts have placed upon it. There is nothing in the text of the typical choice-of-law clause that references sovereign immunity. There is likewise nothing in the text of the FSIA directing courts to treat choice-of-law clauses as de facto waivers of sovereign immunity. A single sentence in the legislative history is not enough to override the intent of the parties as expressed in their agreement or the intent of Congress as expressed in the text of the FSIA.

This conclusion is buttressed by the fact that the history recounted in the legislative history appears to be wrong. Although the House Report states that the “courts have found . . . waivers” in prior cases where a foreign state “agreed that the law of a particular country should govern a contract,” scholars have been unable to find a single U.S. case decided prior to the enactment of the FSIA where a court announced such a holding. If there were, in fact, no prior decisions announcing this rule, the argument for treating choice-of-law clauses as sovereign immunity waivers collapses.

The DDC’s conclusion in Koudoukara that the Embassy waived its sovereign immunity when it signed an employment contract containing a choice-of-law clause choosing “U.S. labor law” is therefore based on a flawed premise. Choice-of-law clauses should not be construed as waivers of sovereign immunity. This is not, however, the only problem with the decision.

Problem #2: The Scope of the “Waiver”

Even if one accepts that a contract provision selecting the law of a U.S. state impliedly waives sovereign immunity, it is still necessary to interpret the clause to ascertain the precise scope of the waiver. It is essential to determine, in other words, whether the clause waives sovereign immunity for all claims or only for certain types of claims.

When interpreting the scope of explicit waivers of sovereign immunity, the courts have long held that they should be narrowly construed “in favor of the sovereign” and should not be “enlarged beyond what the language requires.” In a recent decision, the Third Circuit rejected a plaintiff’s argument that “any waiver [by the foreign sovereign] should effect a waiver of attachment immunity as to all a foreign state’s commercial property in the United States” (emphases in original). The court reasoned that such an approach would run contrary to precedent “recognizing that the scope of a waiver under the FSIA is delimited by evidence of the foreign state’s intent.”

These principles lead inexorably to the conclusion that the courts should interpret implied waivers in the form of choice-of-law clauses narrowly. The courts should, in other words, interpret the clause to waive immunity only for claims referenced in the language of the clause itself. This is, however, not what they do in practice. In case after case, the courts have interpreted ambiguous choice-of-law clauses to waive sovereign immunity for a wide range of claims even when there is nothing in the text of the clause suggesting that it was intended to sweep so broadly.

In Koudoukara, the choice-of-law clause stated that it would be governed by “U.S. labor law.” At most, this clause may be read to support a waiver of sovereign immunity for claims arising under the Fair Labor Standards Act. However, the court interpreted this clause, without any discussion, to waive immunity for all of the plaintiff’s claims, including those for sex discrimination and retaliation in violation of Title VII and the DC Human Rights Act (DCHRA). It is not at all clear (at least to me) that the language in the clause sweeps so broadly.

Problem #3: Authority to Waive Sovereign Immunity

The D.C. Circuit has also held that a waiver of sovereign immunity “is effective only if the actor who signed the agreement had the authority to waive immunity on behalf of the sovereign.” While there is disagreement among the federal courts of appeal as to whether the putative agent requires (1) actual authority, or (2) mere apparent authority, the D.C. Circuit has yet to take a position on this issue. That court has held, however, that the person signing the contract must be vested with authority to waive immunity.

This is not a power that is typically vested in low-level embassy officials. Indeed, it is not a power consistently vested in ambassadors. In Qatar National Bank v. Government of Eritrea, for example, the DDC Qatar National Bank (“QNB”) entered into a commercial loan agreement with Eritrea whereby the Bank agreed to lend $30 million to Eritrea. The agreement was signed by Ali Ibrahim Ahmad, Eritrea’s Ambassador to Qatar, on behalf of (1) the Ministry of Finance of the Government of Eritrea, and (2) the State of Eritrea, which served as a guarantor. Ahmad purported to sign the agreement pursuant to an “authorization signed by the President of the State of Eritrea on March 10th, 2009.” The agreement contained a forum selection clause choosing the courts in England. After Eritrea defaulted on the loan, QNB obtained a default judgment in an English court and sought to enforce it in the DDC. The DDC denied QNB’s motion because it had failed to show that Ahmad—the Eritrean ambassador to Qatar—had the requisite authority to waive sovereign immunity on behalf of Eritrea.

This case, and others like it, present the question of who signed the employment agreement on behalf of the Embassy of Mali in Koudoukara. The honest answer is that we don’t know. The DDC did not discuss the issue in its opinion. However, if the employment agreement was signed by an employee in the Mali Embassy—which seems probable—then it is far from clear that that person had authority to waive Mali’s sovereign immunity.

Conclusion

In Koudoukara v. Embassy of Mali, in summary, we have a case where (1) a choice-of-law clause was dubiously interpreted as a waiver of sovereign immunity, (2) that same choice-of-law clause was dubiously interpreted as waiving immunity with respect to claims not covered by the plain language of the clause, and (3) the court failed to address the question of whether the individual who signed the employment agreement on behalf of the embassy had the authority to waive Mali’s sovereign immunity. All of these are issues that the DDC would do well to examine more closely in future cases.