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The FSIA’s Direct Effects Problem
Post authored by Lance Huckabee, JD candidate and Global Legal Scholar at the University of Pittsburgh School of Law
When a foreign sovereign breaches a commercial contract with a private entity, what recourse does the wronged party have? In the United States, the Foreign Sovereign Immunities Act (FSIA) governs such disputes, providing an exception for commercial activity that causes a “direct effect” in the U.S. Yet, the definition of “direct effect” has remained elusive, leading to decades of judicial inconsistency and a deepening circuit split.
At the heart of this legal uncertainty is the Supreme Court’s decision in Republic of Argentina v. Weltover (1992), which sought to clarify the issue but instead left room for widely divergent interpretations. Some circuits have adopted a flexible, causation-based approach, analyzing whether a foreign state’s breach had an immediate consequence in the U.S. Others, like the recent D.C. Circuit decision in Wye Oak Tech., Inc. v. Republic of Iraq, have imposed rigid bright-line rules—specifically requiring that the contract contemplate the U.S. as a place of performance. This formalistic approach creates a dangerous loophole, allowing foreign states to structure agreements in a way that insulates them from jurisdiction. As a result, a U.S. business may suffer substantial financial harm from a foreign sovereign’s breach but find itself without legal recourse simply because the contract was silent on where payments were to be made.
This restrictive interpretation undermines the FSIA’s core purpose: to hold foreign sovereigns accountable when their commercial activities impact U.S. businesses. By prioritizing contractual language over economic reality, decisions like Wye Oak erode the ability of American companies to seek redress, making sovereign breaches effectively consequence-free. A proper interpretation of the FSIA should align with Weltover’s focus on causation, ensuring that foreign states cannot exploit technicalities to evade liability. If left uncorrected, the current trend risks turning the FSIA into little more than a paper shield—one that protects sovereigns rather than those they harm.
The Wye Oak decision exacerbates both intra- and inter-circuit inconsistencies, further complicating the FSIA’s application and weakening the commercial activity exception in breach-of-contract cases. By imposing a rigid bright-line rule, it unduly narrows the scope of what qualifies as a “direct effect,” creating uncertainty for U.S. businesses engaged in international commerce. With Wye Oak’s attorneys petitioning for certiorari in January 2025, the case presents a critical opportunity for the Supreme Court to resolve the longstanding circuit split on the FSIA’s direct effects clause.
The Explosion of Private International Law in Asian Scholarship
The 21st century has witnessed a remarkable surge in academic scholarship on private international law in Asia. This is not to say that significant studies on the subject were absent before this period. However, in recent decades, Asian scholars have brought renewed vigour and depth to the field, establishing private international law as a critical area of legal inquiry on the continent.
A testament to this intellectual flourishing is Hart Publishing’s extensive series on private international law in Asia, featuring no fewer than 16 volumes with Professors Anselmo Reyes and Paul Beaumont as Series Editors. These works serve as a rich repository of comparative legal thought, offering valuable insights that extend far beyond Asia’s borders. Scholars and practitioners seeking inspiration from diverse jurisdictions will find these books to be an essential resource. Moreover, other publishers have also contributed to this growing body of literature, further amplifying Asia’s voice in the global discourse on private international law.
Having read and reviewed many of these works on the blog, I am continually struck by the depth of scholarship they offer. Each new book reveals fresh perspectives, reinforcing the notion that private international law is not merely a regional concern but a truly global conversation.
As someone deeply engaged with African private international law, I have found immense value in these Asian publications. The parallels between Asia and Africa—particularly in terms of legal pluralism and cultural diversity—make these studies both relevant and instructive. The cross-pollination of ideas between these regions has the potential to strengthen the development of private international law in both continents.
What is most striking about this surge in Asian scholarship is its outward-looking nature. No longer confined to internal discussions, private international law in Asia is now exporting ideas, influencing legal developments worldwide. This is a phenomenon that deserves both recognition and emulation. The rise of Asian scholarship in private international law is not just an academic trend—it is a pivotal force shaping the future of global legal thought.
The $24 Billion Judgment Against China in Missouri’s COVID Suit
This article was written by Prof. William S. Dodge (George Washington University Law School) and first published on Transnational Litigation Blog. The original version can be found at Transnational Litigation Blog. Reposted with permission.
On March 7, 2025, Judge Stephen N. Limbaugh, Jr. (Eastern District of Missouri) entered a default judgment for more than $24 billion against the People’s Republic of China and eight other Chinese defendants for hoarding personal protective equipment (PPE) during the early days of the COVID pandemic in violation of federal and state antitrust laws. The Eighth Circuit had previously held that the Foreign Sovereign Immunities Act (FSIA) barred most of Missouri’s claims but that the hoarding claim fell within the act’s commercial activity exception.
Missouri now has the judgment against China that it wanted. But Missouri may find that judgment hard to enforce. As discussed below, there appear to be significant procedural problems with the judgment that at least some defendants might raise. More broadly, the properties of foreign states and their agencies or instrumentalities are entitled to immunity from execution under the FSIA. Immunity from execution is broader than immunity from suit, and it is not clear that any of the defendants have property in the United States that can be used to satisfy the judgment. Read more
News
List of China’s Cases on Recognition of Foreign Judgments [2025 Update]
As the new year begins, it’s a good time for a fresh start. One timely occasion to do so is the release, on 31 December 2025, of the annual update of the List of China’s Cases on Recognition of Foreign Judgments (Case List), prepared since 2019 by China Justice Observer (CJO), founded by Guodong Du and Meng Yu (updates for the years 2020, 2022, 2023, and 2024 were also previously posted on this blog).
The Case List is compiled on the basis of a collection of “all Chinese court decisions involving the recognition and enforcement of foreign judgments (REFJ), as well as foreign decisions concerning the recognition and enforcement of Chinese judgments.” The stated intention behind this endeavor is to “build reasonable expectations on REFJ in China.”
The Case List constitutes a particularly valuable source of information on judicial practice relating to the recognition and enforcement of foreign judgments in China, both under international treaties concluded by China (for a full list, see here) and under domestic law, namely the Civil Procedure Law of the People’s Republic of China (2023 Amendment), Articles 298–303.
According to the 2025 update, a total of 120 cases involving China and 26 foreign States and regions, excluding foreign divorce judgments, have now been collected. This represents an increase of 11 cases compared to the previous update (109 cases in the 2024 update).
Key features of the 2025 update include the following:
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The List comprises 26 concise reports for each jurisdiction, together with a chart of bilateral judicial assistance treaties which China has concluded with 39 States, of which 35 bilateral treaties include judgment enforcement clauses.
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A total of eleven newly added cases involve one treaty jurisdiction – Uzbekistan (one case), and five non-treaty jurisdictions, namely, Australia (one case), New Zealand (four cases), Singapore (two cases), South Korea (two cases), and the United States (one case).
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Please note that Tian v Xu [2023] NZHC 3259 marks the first reported instance of a New Zealand court recognizing and enforcing a Chinese civil settlement statement (also known as a mediation judgment). By treating such instruments as equivalent to consent judgments, the New Zealand High Court has adopted a pro-enforcement approach consistent with precedents in Canada (Wei v Li 2019 BCCA 114) and Australia (Bank of China Limited v Chen [2022] NSWSC 749), providing a clear contrast to the earlier restrictive view expressed in Singapore (Shi Wen Yue v Shi Minjiu & Anor [2016] SGHC 137).
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Another noteworthy case is Sunvalley Solar Inc. v Baoding Tianwei Solarfilms Co. Ltd. (2019) Ji 01 Xie Wai Ren No. 3, where a Chinese court refused to enforce a U.S. default judgment rendered in breach of a valid arbitration agreement. By holding that a defendant’s absence does not constitute an implied waiver, the Chinese court shielded arbitration clauses from being bypassed via foreign default judgments.
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Other newly added cases, be it foreign judgments to be enforced in China or Chinese judgments to be enforced in foreign jurisdictions, provide a valuable comparative perspective on key issues in the eyes of courts from different jurisdictions, such as reciprocity ( e.g., the de jure reciprocity applied by a Beijing court in enforcing a South Korean IP judgment, the reciprocal consensus confirmed by a Shanghai court in enforcing a Singapore monetary judgment), natural justice (New Zealand), ascertainment and interpretation of foreign law (Singapore, Australia).
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Each case has been reviewed, and more details, such as the grounds, the case numbers, and causes of action, have been added.
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Case analyses have been aggregated under the country tags since 2022, so it is now easier to track down relevant cases, together with their information and analyses, in each country/region report. For example, under the tag ‘US-China Judgments Recognition and Enforcement’, one can find relevant case analyses involving mutual recognition and enforcement of judgments between the US and China.
For further details see here and here.
Happy New Year to all!
[Out Now] Bruijnen on Recognition of Kafala and Child Marriage in Family Law and Migration Law
Leontine Bruijnen (Maastricht University) has recently published a book titled Recognition of kafala and child marriage in family law and migration law (Wolters Kluwer, 2025) based on her dissertation written under the supervision of Prof. Dr. Thalia Kruger and Prof. Dr. Marta Pertegás. Read more
Out Now: Un Derecho Internacional Privado centrado en los derechos de las personas (Tirant lo Blanch 2025)
By Eduardo Álvarez-Armas, Assistant Professor of Law at the Universidad Pontificia Comillas (Spain) and Université Catholique de Louvain (Belgium)
Earlier this year, publishing house Tirant Lo Blanch released “Un Derecho Internacional Privado centrado en los derechos de las personas” (Private international law as focused on the rights of individuals), a volume that compiles the papers presented in the “VII Seminario AEPDIRI sobre temas de actualidad de Derecho Internacional Privado”, the 7th workshop on trending topics in private international law organized by the Spanish Association of International Law and International Relations Professors. These workshops on trending topics, initiated in 2015, have become one of the most significant academic activities of the Asociación Española de Profesores de Derecho Internacional y Relaciones Internacionales (AEPDIRI). They provide a yearly forum for collective reflection on the most dynamic and debated questions in each of the association’s academic branches (public international law, private international law and international relations), enhancing the exchange of research and practice ideas among academics, judges, and legal professionals, from Spain and beyond.
