Who Has the Authority to Waive Sovereign Immunity Via Contract?
June 4, 2025
In a prior post, Ingrid Brunk and I wrote about the ways that foreign nations can waive their sovereign immunity via various types of contractual provisions. There are, however, additional requirements that must be satisfied for a contractual waiver of sovereign immunity to be valid. Among other things, a party seeking to enforce such a waiver must show that the person signing the contract on behalf of the foreign nation had actual or apparent authority to waive its sovereign immunity. If the signatory lacked such authority, then even an otherwise comprehensive contractual waiver of sovereign immunity will fail. The U.S. District Court for the District of Columbia (Judge Moxila A. Upadhyaya) grappled with precisely this issue in Qatar National Bank v. Government of Eritrea, a case decided on May 15, 2025.
Facts and Procedural History
In March 2009, 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 (“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 loan amount was later increased to $200 million.
After Eritrea failed to keep up with its loan payments, QNB filed a lawsuit in London in 2018. The suit was brought in England pursuant to the following provision in the loan agreement:
This Agreement shall be governed by and construed in accordance with the applicable laws, regulations and procedures of the United Kingdom and that the courts of the United Kingdom or any other courts chosen by the Bank shall have jurisdiction to consider any dispute which may arise out of or in connection with this Agreement and Borrower waives his right to object to the jurisdiction of such courts.
Eritrea did not enter an appearance and the English court granted a default judgment to QNB. Although the English court decision contained a long discussion about whether Eritrea had received proper service, the decision did not discuss whether Eritrea had waived its sovereign immunity.
In 2021, QNB sought to enforce the English judgment against Eritrea in the U.S. District Court for the District of Columbia pursuant to the Uniform Foreign-Country Money Judgments Recognition Act. Eritrea again failed to enter an appearance and Judge Upadhyaya had to decide whether to recognize and enforce the judgment.
Contractual Waivers of Sovereign Immunity
Although foreign sovereigns are immune from suit in U.S. court, they may waive this immunity via contract. These contractual waivers take different forms. The simplest version is an express waiver of sovereign immunity. Alternatively, the courts have held that a state may waive its immunity via a choice-of-law clause choosing the laws of a U.S. state or a forum selection clause choosing a court in the United States. In Qatar National Bank v. Government of Eritrea, the court concluded that there was no need to address whether the choice-of-law/forum selection clause in the loan agreement constituted a waiver of Eritrea’s sovereign immunity. Instead, the court denied QNB’s motion because it had failed to show that Ahmad had the requisite authority to waive sovereign immunity on behalf of Eritrea.
The D.C. Circuit has long 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. The district court did not address it, however, because it concluded that QNB had failed to come forward with evidence tending to show that Ahmad had been vested with any authority to act on behalf of Eritrea. In the court’s words:
First, it is unclear whether an ambassador has actual authority to waive immunity. Courts have traditionally assumed that an ambassador may present their country’s position on diplomatic issues. This Circuit has not addressed, however, whether an ambassador has the authority as a matter of law to enter into commercial contracts with third parties and waive sovereign immunity. The Bank has failed to address this issue.
Second, it is unclear whether Ahmad had actual or apparent authority to waive immunity in the loan agreement. The Bank has failed to present any evidence on Ahmad’s position. The Bank offers no explanation about the meaning of Ahmad’s “authorization” from the Eritrean President. Nor has the Bank made clear that the President had authority to waive Eritrea’s immunity. Regardless of whether actual or apparent authority is necessary, the Bank has fallen short of meeting its burden to show that Ahmad had any authority. In so doing, the Bank has failed to produce satisfactory evidence that the waiver exception applies.
The court invited QNB to introduce additional evidence on this point.
Conclusion
The problem with the court’s invitation to produce more evidence is that QNB has no easy way to determine—circa 2025—whether the Eritrean government took the necessary steps to confer actual authority upon Ahmad to sign the agreement in 2009. This information lies within the Eritrean government. Since Eritrea declined to enter an appearance in the enforcement action, there is no obvious path to obtaining this information via discovery. It will also be difficult to reconstruct the exact events leading to the signing of a contract so long ago in order to ascertain whether Ahmad was acting with actual or apparent authority. It would therefore seem that QNB has its work cut out for it as it goes about seeking to have the English judgment recognized and enforced.