I have a contract with NATO and a dispute has arisen: what happens next?

As in any legal relationship, we must uphold professional ethics and, in line with this firm’s usual practice, we should try to keep the dispute from escalating more than necessary and, where possible and in our client’s best interests, aim to reach a settlement.

However, there are many situations in which this is not feasible. In that event, and given that we are dealing with a contract with NATO, it must be anticipated from the outset that the leading scholarly opinion recognises an absolute immunity for international organizations. In practice, this means that they enjoy full immunity from the jurisdiction of domestic courts, commonly referred to as “jurisdictional immunity”.

This immunity is defined in Article 2 a) of Organic Law 16/2015 of 27 October on privileges and immunities […] as follows: “the prerogative of a State, organization or person not to be sued or tried before the courts of another State”.

Further on, Article 35.1 of that Law provides that international organizations shall enjoy jurisdictional and enforcement immunity in relation to all acts connected with the performance of their functions, unless the proceedings are of a private —or employment— nature and the organization fails to show that it has an alternative mechanism for resolving the dispute.

Therefore, where such a mechanism exists, immunity is presumed to be absolute. Some authors, however, argue that the mere existence of that mechanism is not enough, and that it must also be sufficiently appropriate to offer the parties a reasonable alternative to seeking relief before the ordinary courts[1].

The generally sensitive nature of these disputes means that they are not as accessible as other types of cases, but it appears that international arbitration is the most suitable avenue for resolving this kind of controversy.

Notwithstanding the above, close attention must be paid to the contracts concluded with these international organizations, as most of them provide for enhanced options to reach a solution even before turning to arbitral tribunals.

A separate and more detailed analysis is required when it comes to enforcing. However, in view of the imbalance between the private party and the international organization, some organizations have introduced a subsequent negotiation phase which allows for a sort of secondary or internal enforcement.

[1] ORTIZ, B. I. (2026). Dispute settlement between international organizations and private parties through international arbitration: Observations from the practice of the United Nations system. Nordic Journal of International Law, 95(3), p. 423.