Supreme Court confirms the scope of state immunity in relation to the registration of ICSID arbitration awards

In a landmark ruling with significant implications for private international investors and foreign States, the UK Supreme Court has ruled that nation states party to the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”) cannot invoke state immunity to prevent the registration of ICSID arbitration awards in the English courts. The decision in Kingdom of Spain v Infrastructure Services Luxembourg S.A.R.L and Republic of Zimbabwe v Border Timbers Ltd [2026] UKSC 9 provides important clarity for investors and States in the context of ICSID investment treaty disputes, and reinforces the effectiveness of the ICSID framework in facilitating the resolution of private international investment disputes.

Background

The Kingdom of Spain and the Republic of Zimbabwe both received adverse arbitration awards under the ICSID Convention, arising from separate investment disputes. In Spain’s case, Infrastructure Services Luxembourg S.A.R.L and Energia Termosolar BV alleged that approximately €140 million in renewable energy investments had been adversely affected by changes to Spain's regulatory regime, in breach of the “fair and equitable treatment” standard under the 1994 Energy Charter Treaty, successfully obtaining an award of just over €100 million, plus interest and costs. 

Separately, Zimbabwe was faced with an award of approximately US$125 million plus interest and costs, following successful claims by Border Timbers Ltd and Hangani Development Co. (Private) Ltd of expropriation of investments in land without compensation.

Both awards were registered in the High Court of England and Wales pursuant to the Arbitration (International Investment Disputes) Act 1966, which has the effect of treating them as final judgments of that court. Spain and Zimbabwe applied to set aside the registration orders, arguing that they were entitled to immunity from the adjudicative jurisdiction of the English courts under section 1(1) of the State Immunity Act 1978 (the “SIA”). Both applications were dismissed at first instance. The appeals of Spain and Zimbabwe were heard together by the Court of Appeal, and they were dismissed, leading to the case being heard by the Supreme Court.

The issue

The central question was whether, by agreeing to be bound by article 54(1) of the ICSID Convention, Spain and Zimbabwe had submitted to the jurisdiction of the English courts by prior written agreement under section 2(2) of the SIA, thereby having waived their immunity from, and submitted to, the English’s adjudicative jurisdiction with respect to the proceedings. 

The Supreme Court unanimously dismissed both appeals, and held that by becoming parties to the ICSID Convention, Spain and Zimbabwe had waived their immunity from adjudicative jurisdiction in proceedings for the registration and enforcement of ICSID awards.

Waiver need not use explicit wording

The judgment devotes considerable attention to the question whether any waiver of immunity by treaty must be express or, alternatively, whether it may be implied.  The appropriate starting point for this analysis is section 2 of the SIA which provides an exception to immunity in the case of submission to the jurisdiction, but that provision does not use the terms express or implied submission or waiver. 

The Supreme Court rejected Spain and Zimbabwe’s argument that a waiver of immunity requires explicit use of terms such as “waiver” or “submission”, in order to be construed as such. 

The Supreme Court relied on the reasoning adopted by the Court of Appeal in General Dynamics United Kingdom Ltd v State of Libya [2025] EWCA Civ 134, where the Court of Appeal observed that “If the express words used amount, on their proper construction, to an unequivocal agreement by the state to submit to the jurisdiction, that is sufficient to satisfy section 2(2) of the SIA, even if the words ‘submit’ and ‘waiver’ are not used.”

What matters is that a waiver of immunity by treaty requires “a clear and unequivocal” expression of the state’s consent to the exercise of the court’s jurisdiction. Whether there has been such submission requires an exercise of treaty interpretation in accordance with principles under public international law; as contained in articles 31 and 32 of the Vienna Convention on the Law of Treaties.

Article 31 makes clear that the terms of a treaty are to be interpreted in good faith in accordance with their ordinary meaning, in their context, and with regard to the treaty’s object and purpose.  Article 32 allows for recourse to supplementary material, although for limited purposes only. Against that backdrop the Supreme Court turned to the interpretation of article 54(1) of the ICSID Convention.

Article 54(1) is a clear and unequivocal submission to the adjudicative jurisdiction of the English courts

Article 54(1) of the ICSID Convention requires each contracting state to recognise an ICSID award as binding and enforce its pecuniary obligations “as if it were a final judgment of a court in that State”. The court found this to mean that each contracting state had assumed the obligation to recognise and enforce ICSID awards and, further, agreed that all other contracting states had the right to exercise adjudicative jurisdiction over it to recognise and enforce awards, in accordance with their own domestic laws. 

The court also concluded that one contracting state cannot agree that another state “shall” recognise and enforce an award against it, whilst simultaneously claiming immunity which would prevent that outcome. The obligation to recognise and enforce an award – which has been consented to by contracting states to the ICSID Convention - is “therefore inconsistent with the maintenance of immunity.”

This conclusion did not require the Supreme Court to read in words or imply terms into article 54(1) of the ICSID Convention.  Rather, the submission to jurisdiction on a reciprocal basis was apparent from the ordinary meaning of the express and unequivocal terms of article 54(1).

Immunity from execution preserved

The court emphasised that immunity from execution remained expressly preserved by article 55 of the ICSID Convention. The absence of any corresponding preservation of adjudicative immunity accords with the obligations in article 54(1), which are “fundamentally inconsistent with the maintenance of such immunity”. The court’s rationale being that, had the ICSID Convention intended to preserve any other forms of state immunity, it would have done so.

ICSID Convention’s object and purpose supports the conclusion

The court noted that one of the primary purposes of the ICSID Convention was to encourage private investment in states by offering protection against sovereign risk. The object was to create a framework for international arbitration of investment disputes between states and foreign investors. 

The court observed that the interpretation of article 54(1) of the ICSID Convention, as discussed above, is entirely consistent with the object and purpose of the ICSID Convention which provides for mandatory recognition and enforcement of arbitral awards. If states could invoke immunity from adjudicative jurisdiction, this would “render valueless the protection which article 54(1) is intended to provide”.

International consensus

Courts in Australia, New Zealand, Malaysia and the United States have previously reached similar conclusions on the effect of article 54(1). There is therefore a broad international consensus that this provision constitutes a waiver of adjudicative immunity. 

Comment

This decision provides clarity as to the operation and effect of article 54(1) of the ICSID Convention. It confirms that a State cannot successfully rely on immunity to prevent the registration of an ICSID award.

Multinational businesses with investments in ICSID member states should note that:

• ICSID awards can be registered in England and treated as if they were final High Court judgments;
• States may still invoke immunity to protect specific assets from execution after registration; and
• The decision reinforces the value of investment treaty protections that provide access to ICSID arbitration.

The Supreme Court’s judgment sits in contrast to the Commercial Court’s judgment in CC/Devas (Mauritius) Ltd & Ors v The Republic of India [2025] EWHC 964.  In that case, the court held that India's ratification of the New York Convention 1958 was not, on its own and irrespective of whether India had agreed to arbitrate, a submission to the adjudicative jurisdiction of the English courts by "prior written agreement" for the purposes of section 2(2) of the SIA. 

Notably, the court in CC/Devas (Mauritius) Ltd had regard to the Court of Appeal’s remarks in Infrastructure Services Sarl where Phillips LJ considered whether, if state immunity is lost by virtue of article 54 in an ICSID Convention case, the same consequence should logically flow from the obligation in article III of the New York Convention. Phillips LJ observed that there is no requirement in the Vienna Convention in the Law of Treaties that, in interpreting one treaty (i.e. the ICSID Convention), regard must be had to the potential implications for a second treaty (i.e. the New York Convention) dealing with a different, although related, subject matter.

Further, Phillips LJ noted that the two provisions in each treaty are not worded identically, with article III of the New York Convention referring to the award being enforced 'in accordance with the rules of procedure of the territory where the award is relied upon'. As state immunity is regarded as a procedural bar as a matter of international law, it is arguable that article III preserves state immunity on its own terms.

The contrasting decisions illustrate that questions of state immunity in the enforcement of arbitral awards remain closely tied to the particular treaty framework engaged, and cannot be assumed to operate identically across the ICSID and New York Convention regimes.

For further information, please get in touch with the authors of this article or your usual CMS contact.

A copy of the judgment is available here:  The Kingdom of Spain (Appellant) v Infrastructure Services Luxembourg S.A.R.L. and another (Respondents); Republic of Zimbabwe (Appellant) v Border Timbers Ltd and another (Respondents)

This article was prepared with the assistance of Lily Clarke, trainee in CMS London