No state immunity against registration of an ICSID award

05/11/24

The Court of Appeal (The Chancellor of the High Court, Lord Justice Newey and Lord Justice Phillips) has handed down judgment in the jointly-heard appeals in Infrastructure Services Luxembourg S.À.R.L. v. Kingdom of Spain and Border Timbers Limited v. Republic of Zimbabwe [2024] EWCA Civ 1257.

The appeals concerned whether foreign states are immune from the adjudicative jurisdiction of the courts to register ICSID awards against them under the Arbitration (International Investment Disputes) Act 1966 (the “1966 Act”). In the Commercial Court, this question had notably produced conflicting judgments: Mrs Justice Dias DBE in the Zimbabwe case and Mr Justice Fraser (as he then was) in the Spain case.

The respondents in the appeals were award creditors of ICSID awards, in each case worth over c.$100 million, who obtained ex parte orders from the High Court registering those awards under the 1966 Act. Zimbabwe and Spain applied to set aside those orders on the basis that, as sovereign states, they were immune from the Court’s adjudicative jurisdiction to register the awards. The Respondent award creditors had argued that Zimbabwe and Spain’s general immunity was displaced by two statutory exceptions under the SIA: submission to the jurisdiction under section 2 and the arbitration exception under section 9.

The Court of Appeal held that parties to the ICSID Convention have submitted to the jurisdiction (for the purposes of section 2 of the SIA) of all other Contracting States by virtue of Article 54 of the ICSID Convention and therefore may not oppose the registration of ICSID awards against them on the grounds of state immunity. The appeals were therefore dismissed.

The Court of Appeal also rejected a number of arguments relied on by the Respondents: that section 1(1) of the SIA did not apply to the registration of ICSID awards at all; that the Supreme Court’s previous decision in Micula v. Romania [2020] 1 WLR 1033 was binding authority disapplying the SIA in ICSID cases; that proceedings under the 1966 Act were outside the temporal scope of the SIA; and that States are precluded (in particular by estoppel) for the purposes of section 9 of the SIA from arguing that ICSID arbitral tribunals lacked jurisdiction.

Non-immunity defences to enforcement reserved by Zimbabwe have been remitted to the Commercial Court.

The judgment is here.