English Commercial Court finds that ICSID and ECT awards are not assignable 

In Operafund Eco-Invest Sicav Plc & another v The Kingdom of Spain, the Commercial Court confirmed that awards made pursuant to the ICSID Convention or the ECT are not assignable.

Background

This case arose in the context of an application for the enforcement of an investment treaty award rendered in an arbitration conducted under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) and the Energy Charter Treaty (the ECT).

On 31 July 2015, the claimants commenced an ICSID arbitration against Spain for damages under the ECT following Spain's revocation of certain tariffs and incentives with respect to renewable energy projects in the country. An arbitration award dated 6 September 2019 (the Award) was rendered in the claimants’ favour against Spain.

In the most recent proceedings, the claimants and Blasket Renewable Investments LLC (Blasket) made an application under rule 19.2(4) of the Civil Procedure Rules (CPR) for an order that Blasket be substituted for the claimants as Claimant in the proceedings (the Substitution Application). The Substitution Application was brought on the basis of an assignment agreement between the claimants and Blasket dated 31 January 2024 (the Assignment Agreement). Under the Assignment Agreement, the claimants purported to assign to Blasket “…all of the rights, interests and benefits of the Assignors under or in respect of the Award….”

Notably, a similar issue was considered by the Federal Court of Australia (FCA) in Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028 (the FCA Proceedings). In that case, the FCA had granted the claimants’ substitution application with respect to an ICSID award. That ruling remains subject to appeal.

The Parties’ Submissions

Spain objected to the Substitution Application on the grounds that the State had not given express permission for the assignment and, otherwise, the Award was not assignable under public international law and the terms of the relevant treaties (the Non-Assignability Argument). Spain contended as a result that the jurisdictional requirements for an order of substitution mandated under CPR r. 19.2(4)(a) were not satisfied.

Blasket and the claimants submitted that Spain was estopped from pursuing the Non-Assignability Argument following the issuance of the judgment in the FCA Proceedings (the Issue Estoppel Argument). Alternatively, Blasket and the claimants submitted that the Non-Assignability Argument should be rejected on the merits. It was alleged that following the registration of the Award under section 2 of the Arbitration (International Investment Disputes) Act 1966 (the 1966 Act), a new and freestanding group of rights arose which were assignable under English law, even if the Award itself was not assignable. The Claimants argued that those rights were “rights…in respect of the Award”. 

Decision

The Commercial Court refused the Substitution Application.

The Issue Estoppel Argument:

The Court rejected the Issue Estoppel Argument. The Court held that an issue estoppel based on a foreign judgment will only arise under common law where the relevant judgment was (i) given by a court of a foreign country with jurisdiction and (ii) final and conclusive on the merits. Additionally, unless Spain had submitted to the jurisdiction of the Australian courts, issue estoppel could not apply. The Court found that the judgment in the FCA proceedings was not final and binding as a final order had not yet been made. Additionally, the Court found that Spain had not submitted to the jurisdiction of the Australian Courts. Rather, Spain only appeared in the FCA proceedings to contest the jurisdiction of the Australian courts.

The Non-Assignability Argument

The Court accepted Spain’s Non-Assignability Argument.

Assignability of an Award under International Law

The Court commenced its analysis with the observation that the ICSID Convention does not expressly authorise or preclude the assignment of an award. It was necessary therefore to examine the true “meaning and effect” of the ICSID Convention and the ECT, alongside applicable customary international law principles.

The Court noted that there is no rule of customary international law which provides that awards are either assignable or not assignable. The Court resorted to determining this question as a matter of construction under the ICSID Convention and the ECT. This required an application of relevant principles from the Vienna Convention on the Law of Treaties.

The Court held that while Article 54(2) of the ICSID Convention refers to “[a] party seeking recognition or enforcement..”, only an existing party to an underlying arbitration can seek recognition or enforcement of an award. In support of that conclusion, the Court pointed to the interchangeable use of the terms “the parties” or “a party” in Chapter IV and Section 6 of the ICSID Convention. The Court also relied on academic commentaries, some of which have suggested that permitting investors to assign treaty rights could cause States to effectively “lose control over who could assert treaty breaches and bring arbitral proceedings against them”.

The Court also concluded that notwithstanding the subrogation provisions in the ECT, claims and awards concerning claims under the ECT are also not assignable as a matter of construction under the ECT.

Assignability of an Award under English Law

The Court also considered whether the claimants’ treaty rights were nevertheless assignable under English law. When considering that question, the Court determined that the claimants' registration of the Award under the 1966 Act did not give rise to new English law rights that were themselves capable of assignment. Rather, the Court posited that the 1966 Act is only concerned with providing a procedural mechanism to "give effect" to ICSID Convention awards in the United Kingdom.

In that regard, the Court reinforced that the overriding purpose of the 1966 Act is to implement the ICSID Convention. Thus, the 1966 Act should be interpreted in a manner consistent with the ICSID Convention. The Court added that permitting the registration of an award to create new substantive rights could result in the “…entirely undesirable possibility that the effect of registration might permit assignment in some jurisdictions but not others”.  The Court explained that such an outcome would run contrary to the overarching purpose of the ICSID Convention and the 1966 Act.

Takeaways

This case provides useful guidance for parties involved in investment arbitration proceedings seeking to assign their interests in awards rendered under the ICSID Convention or the ECT to third parties. This could arise, for instance, in the context of a purported assignment to a related group entity or to a third-party in order to monetise the award.

The Court held that the right to seek recognition and enforcement of an ICSID or ECT award is personal to the original investor. On its analysis of the underlying treaty framework, those rights cannot be passed to a third party, even where the underlying award has been assigned as a matter of private law. This significant decision confirms that the English Courts will not uphold the purported assignment of an ICSID or ECT award. The Court refused to do so on an interpretation of the ICSID Convention and the ECT.  Additionally, the decision confirms that the registration of an ICSID award in the United Kingdom does not create additional rights that can be assigned to a third party.  

The decision is of great significance for enforcement planning. It narrows the scope for secondary-market transactions in investment treaty awards and will influence how parties structure assignments, funding arrangements, and enforcement strategies in ongoing and future ICSID and ECT cases.

Operafund Eco-Invest Sicav Plc & another v The Kingdom of Spain [2025] EWHC 2874 (Comm)