Legality of waiver of sovereign immunity clauses in international contracts

So much frenzy and hysteria has gripped the intellectual and political space of Nigeria, and possibly beyond, over the clause waiving Nigeria’s sovereign immunity in the 2018 rail construction contract executed between the Federal Government of Nigeria and the Export-Import Bank of China. This piece seeks to clarify the issues surrounding the controversy.

The concept or doctrine of sovereign immunity, according to the US Supreme Court in Nevada vs. Hall, 440 U.S. 410, 414 (1979), is an amalgam of two quite distinct concepts. The Court reasoned thus: The doctrine of sovereign immunity is an amalgam of two quite different concepts, one applicable to suits in the sovereign’s own courts and the other suits in the courts of another sovereign.

One of the earliest judicial pronouncements on the subject matter is the US decision of Cohens vs. Virginia, 19 U.S. (6 Wheat.) 264, 411-2 (1821), where it was pronounced thus: The universally received opinion is that no suit can be commenced or prosecuted against the United States; the Judiciary Act does not authorize such suits.