Paper: Sovereign Immunity in Repo and Derivative Documentation: When to Worry – What to Do

Christian A. Johnson
Widener University – Commonwealth Law School
May 26, 2021

Trading derivatives or repos with a party potentially entitled to sovereign immunity imposes a risk that the party will either be immune from lawsuit or immune from the enforcement of a judgment. As a matter of best practice, counterparties should perform due diligence to ensure that a party is not entitled to a defense of sovereign immunity and require a legal opinion to that effect from the party’s legal counsel. A counterparty should insist that the party represent in the ISDA or the GMRA that it is not entitled to any of the various sovereign immunities. It should then require the party to waive any sovereign immunity and agree that it will not raise the defense in court.

The full paper is available at

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