UK Supreme Court confirms states cannot rely on immunity to resist recognition and enforcement of ICSID awards

The UK Supreme Court has unanimously held that Spain and Zimbabwe cannot invoke state immunity to resist the recognition and enforcement of ICSID arbitral awards, confirming that their accession to the ICSID Convention constitutes a submission to the jurisdiction of the English courts.

In linked appeals, the Court held that by agreeing to Article 54(1) of the ICSID Convention, contracting states agree that all other contracting states are obliged to recognise and enforce ICSID awards against them. The Supreme Court found that this amounts to submission to the jurisdiction of the English courts for the purposes of section 2(2) of the State Immunity Act 1978, meaning the states cannot rely on adjudicative immunity to oppose the registration of ICSID awards against them.

The judgment is a significant development in investor-state dispute settlement (ISDS) and forms part of a growing body of decisions worldwide addressing the relationship between state immunity and the enforcement of ICSID awards, including cases in Australia, New Zealand, Malaysia, the United States and the British Virgin Islands. The ICSID Convention currently has 158 contracting states, making the decision an important clarification of its operation in the UK.

Border Timbers, the respondent in the appeal against Zimbabwe, was represented by 3VB’s Dominic Kennelly and Catherine Drummond, led by Christopher Harris KC at Gibson Dunn, instructed by Baker McKenzie.

Spain was represented 3VB’s Cameron Miles, led by Lucas Bastin KC of Essex Court Chambers, instructed by Curtis, Mallet-Prevost, Colt & Mosle.

The Supreme Court’s decision confirms that states party to the ICSID Convention cannot rely on state immunity to resist the registration of ICSID awards in the UK, reinforcing the Convention’s framework for the recognition and enforcement of investor-state arbitral awards.

Read the judgment in full here.