On December 1, 2015, the United States Supreme Court issued its decision in OBB Personenverkehr AG v. Sachs a case presenting important questions concerning the types of commercial activities that may strip foreign states and state-owned entities of sovereign immunity and subject them to the jurisdiction of U.S. courts.

The Supreme Court’s decision reversed an en banc decision of the U.S. Court of Appeals for the Ninth Circuit, which held that a foreign sovereign entity could be subject to the jurisdiction of the U.S. courts under the “commercial activity” exception to sovereign immunity set forth in the Foreign Sovereign Immunities Act (“FSIA”)2 by virtue of its agent’s commercial activity in the United States. The Supreme Court’s decision clarified the scope of the commercial activity exception, focusing specifically on the requirement that the plaintiff’s claim against the foreign state be “based upon” commercial activity carried on in the United States.