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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
AAPrIL’s Feb 2026 Seminar: Pitel on ‘Reconsidering the “Proper Party” Basis for Jurisdiction’
On Thursday 12 February 2026, the Australasian Association of Private International Law (AAPrIL) is hosting its first seminar of 2026, as Professor Stephen Pitel presents free online and in-person (Qld, Australia) on the topic, ‘Reconsidering the “Proper Party” Basis for Jurisdiction’.
Abstract:
In several jurisdictions the fact that a defendant is a ‘proper party’ to a legal proceeding constitutes a sufficient basis for taking jurisdiction over that defendant. Advocates of the proper party basis rely on considerations of fairness and efficiency to support it. Do these considerations support the proper party basis, especially if it is given a wide scope? Recently Canadian courts have been reconsidering their approach to the proper party basis, as seen (somewhat opaquely) in Sinclair v Venezia Turismo, 2025 SCC 27. This presentation will explore that reconsideration and offer thoughts for changes in other jurisdictions including Australia and New Zealand.
Chair:
Mary Keyes is Professor of Law at Griffith University, and President of AAPrIL. She is a leading scholar on questions of international jurisdiction and international family law. Mary is co-author of Private International Law in Australia, and is a member of the Working Group on Jurisdiction at the Hague Conference on Private International Law.
Presenter:
Stephen Pitel Stephen G.A. Pitel is a Professor in the Faculty of Law at Western University. His research and teaching are focused on private international law, tort law, civil procedure and legal ethics. Stephen is the author of Conflict of Laws (3rd ed. 2025) and co-author of Private International Law in Common Law Canada: Cases, Text and Materials (5th ed. 2023) and Statutory Jurisdiction: An Analysis of the Court Jurisdiction and Proceedings Transfer Act (2012). His tort law scholarship includes co-authoring Fridman’s The Law of Torts in Canada (4th ed. 2020) and Cases and Materials on the Law of Torts (11th ed. 2023). In the field of legal ethics, Stephen is a contributor to Lawyers’ Ethics and Professional Regulation (4th ed. 2021). He is a former President of the Canadian Association for Legal Ethics.
Details:
Date and time: Thursday 12 February 2026, 5:00pm to 6:00pm (AEST)*
Date and time Thursday 12 February 2026, 5:00pm to 6:00pm (AEST)
in person: Griffith University, Southbank, Brisbane: Room 4.03 Building S07. The map is available here.
RSVP (essential): Please register via this link by COB Wednesday 11 February 2026, and advise whether you are attending in person or online. Please access the Teams link here. There is no cost.
* NZ. 8:00pm-9:pm; ACT, NSW, Tas and Vic. 6:00pm-7:00pm; SA, 5:30pm-6:30pm; Qld, PNG. 5:00pm-6:00pm; NT, 4:30pm-5:30pm; WA, 3:00pm-4:00pm
Open Online Conference: “Cross-Border Enforcement of Child Support: Pros and Cons of the Different National Systems” on January 28th, 2026 3-5:30pm CET
The Child Support Forum in cooperation with the International Union of Judicial Officers is pleased to invite every interested stakeholders of the cross border child support recovery to an open conference on January 28th, 2026 from 3 to 5:30 pm (CET).
According to Art. 41 of Regulation (EC) No. 4/2009 and Art. 32 of the 2007 Child Support Convention, the enforcement procedure shall be governed by the law of the state of enforcement. But in practice, the prospects of successfully initiating cross-border enforcement proceedings are not always easy to assess. In order to enforce successfully, it is necessary to know the specifics of the legal system of the state of enforcement (the Requested state).
Key questions in this context are:
- What does the process of enforcement of child support looks like in different states?
- Are maintenance claims given a degree of priority?
- How do Central Authorities facilitate the ongoing enforcement of maintenance decisions?
- What are the conditions for children to be exempted from costs?
The meeting aims to review the international legal framework and provide an overview of the various national enforcement systems. Finally, the advantages and disadvantages of the different systems from a legal policy perspective shall be discussed.
The participation is free of charge but registration is required.
To register, click here.
Online Book Launch – Legal Challenges of China’s One Belt One Road Initiative: Private International Law Considerations
Following the successful release of Legal Challenges of China’s One Belt One Road Initiative: Private International Law Considerations late last year, as previously announced on this blog, co-editors Dr Poomintr Sooksripaisarnkit (University of Tasmania) and Dr Sai Ramani Gariimella (South Asian University) are pleased to invite you to an upcoming online book launch.
This virtual event will feature insights from three distinguished contributors:
- Dr Jie (Jeanne) Huang (University of Sydney)
- Dr Nobumichi Teramura (Keio University Law School)
- Professor Beligh Elbalti (The University of Osaka)
Presentations will be followed by a moderated Q & A and discussion session.
This event is open to the public; please refer to the attached flyer to scan the QR Code for Zoom access.




