The world is in a period of acute geopolitical flux. Tariff wars, sanctions regimes, sovereign debt crises and armed conflict are reshaping the investment landscape at a pace that few could have anticipated. For all parties to sovereign and emerging market transactions — whether investors, states or state-related entities — the interaction between political risk and contractual stability has never been more consequential or more legally complex.
English law remains the governing law of choice for the vast majority of international finance and investment transactions precisely because of its predictability and the sophistication of the courts and arbitral institutions based in London. Disputes in this space arise from a wide range of circumstances — the imposition of capital controls, changes to concession terms, sanctions exposure, sovereign debt restructurings or the consequences of political upheaval — and they engage difficult questions of both English commercial law and public international law.
Our recent work has spanned some of the most significant matters in the market, acting on both sides of these disputes: from representing the Libyan Investment Authority in its multi-billion dollar claims against major international banks, to acting for Banco Comercial Portugues S.A in proceedings arising from Mozambique’s sovereign guarantees linked to the tuna bonds scandal. The fallout from Russia’s invasion of Ukraine has generated a further wave of disputes — freezing assets, severing contracts and testing the limits of jurisdiction clauses and sanctions frameworks — the consequences of which are still working through arbitral tribunals and national courts.
The legal toolkit in this space is more developed than it has ever been, but navigating it requires genuine expertise across English commercial litigation, international arbitration and public international law. The entry into force of the Arbitration Act 2025 is one notable development: its new default rule on the governing law of arbitration agreements carries a specific carve-out for investor-state arbitrations arising under treaties, preserving the primacy of international law principles where a state’s consent to arbitrate is itself in dispute.
Against this backdrop, it is important to understand and work through a number of practical considerations at the outset.
1. Know Where You Stand Before a Dispute Arises
Knowing your legal position before a dispute crystallises is essential — and in sovereign and emerging market transactions, that means more than just reviewing the contract.
In commercial disputes, it means understanding the governing law, the scope of any sovereign immunity from suit, whether a state or state entity has validly waived immunity, and the enforceability of jurisdiction clauses in the relevant forum.
In investment treaty disputes, it means mapping the treaty framework: which treaties are available, whether the investment structure attracts their protection, and what the state’s likely defences are. These questions are rarely straightforward and the answers can change — as the UK’s withdrawal from the Energy Charter Treaty has demonstrated.
Our team has advised across both dimensions, acting for investors and states in commercial litigation and treaty arbitration across Central Asia, the Middle East and Latin America.
2. The Dispute Starts at the Drafting Stage
Force majeure clauses, governing law and dispute resolution provisions can look like boilerplate until they are the only thing that matters. In sovereign and quasi-sovereign transactions, the contractual architecture determines the forum, the applicable law, and the strength of each party’s position if things go wrong. Getting those decisions right at the outset — and understanding how they interact — is far less costly than litigating around poorly drafted provisions later. Our experience across the Mozambique tuna bonds litigation and disputes involving state-owned entities in the CIS and MENA regions has repeatedly illustrated the point.
3. Build Your Enforcement Strategy Before You Start
Years of hard-fought litigation count for little if there are no identifiable assets against which to enforce at the end. Pre-commencement intelligence — understanding where assets are held, in what form, and whether sovereign immunity is likely to apply — should inform the decision to litigate at all, the choice of forum, and the interim measures sought along the way.
This is an area where Enyo’s in-house business intelligence capability sets us apart. Rather than instructing external investigators at the point an award is rendered, we integrate asset tracing and intelligence work into the litigation strategy from day one — identifying and monitoring assets, anticipating immunity arguments, and ensuring that the enforcement endgame is never lost sight of during the years it may take to get there. In complex sovereign disputes, that joined-up approach is not a luxury; it is often the difference between a judgment that can be enforced and one that cannot.
Enyo Law acts for investors, sovereign states and state-related entities across the full spectrum of international financial disputes. If you would like to discuss any of the issues raised in this article, please contact a member of our team.