Supreme Court confirms States cannot rely on immunity to resist registration of ICSID awards in England

In The Kingdom of Spain v Infrastructure Services Luxembourg S.À.R.L. and another; Republic of Zimbabwe v Border Timbers Ltd and another [2026] UKSC 9, the UK Supreme Court unanimously confirmed that Contracting States to the ICSID Convention cannot rely on State immunity to avoid the registration of ICSID awards in the United Kingdom.

Background

The appeals concerned ICSID awards issued in separate investor-State proceedings against Spain and Zimbabwe. In both cases, the award creditors obtained orders registering their respective awards in England under the Arbitration (International Investment Disputes) Act 1966.

Both States sought to set aside the recognition orders by invoking State immunity. Those applications were rejected by:

a. the High Court (regarding Spain’s application, [2023] EWHC 1226 (Comm); regarding Zimbabwe’s application, [2024] EWHC 58 (Comm)); and

b. the Court of Appeal, in a combined appeal ([2024] EWCA Civ 1257), which we discussed in detail in our previous blog, available here.

Both Spain and Zimbabwe (together, "the States") appealed the Court of Appeal’s decision to the UK Supreme Court.

The key issues raised in the appeals were:

1. By agreeing to be bound by article 54(1) of the 1965 ICSID Convention (the "Convention"), did the States submit to the jurisdiction of the English courts by agreement within the meaning of section 2(2) of the State Immunity Act 1978 ("SIA"), such that they could not claim immunity from adjudicative jurisdiction with respect to these proceedings under section 1(1) of the SIA? (the "First Issue"); and
2.  Did the States agree to arbitrate with the respondent investors within the meaning of section 9(1) of the SIA such that they could not claim immunity from adjudicative jurisdiction with respect to these proceedings under section 1(1) of the SIA? (the "Second Issue").

The Supreme Court’s decision

In a unanimous judgment, the Supreme Court dismissed the appeals.

With respect to the First Issue, the Supreme Court commenced its analysis by determining the correct test which should be applied under section 2 of the SIA for waiver of immunity. Section 2 of the SIA establishes an exception to State immunity where a State submits to the jurisdiction of the English courts. The Supreme Court found that a waiver of immunity by treaty requires evidence of “a clear and unequivocal expression of the state’s consent to the exercise of jurisdiction”. Such consent need not use explicit language such as 'waiver' or 'submission', and the relevant test to be applied in this context is whether the words used necessarily lead to the conclusion that the relevant State had submitted to the jurisdiction.

Applying that standard, the Supreme Court proceeded to consider whether and, if so, to what extent, the States could be treated as having waived State immunity and submitted to the adjudicative jurisdiction of the English courts by virtue of Article 54(1) of the Convention. Article 54(1) of the Convention provides that “[e]ach Contracting State shall” recognise an award as binding and enforce the award within its territories as if it were a final judgment of a court in that State.

The Supreme Court held that the ordinary meaning of Article 54(1) is that each contracting State mutually and reciprocally consents to awards to which it is a party being recognised and enforced in other contracting States. On that basis, the Supreme Court found that consenting to Article 54(1) establishes a waiver of reliance on State immunity. The Supreme Court emphasised that this understanding is further reinforced by the context, object, purpose and the travaux préparatoires of the Convention.

Notably, however, the Supreme Court raised an important caveat to its finding by highlighting the “sharp” textual distinction which the Convention draws between recognition and enforcement on the one hand, and execution on the other. In that regard, the Supreme Court held that Article 55 of the Convention expressly preserves State immunity from execution.

Nevertheless, the Supreme Court clarified that Article 55 of the Convention does not displace the binding obligation codified in Article 54(1) to recognise and enforce arbitral awards. Fundamentally, this is because once a binding award exists (recognised and to be enforced like a final judgment), adjudication has already occurred and therefore, the ability to rely on adjudicative immunity no longer applies. A contracting State cannot simultaneously agree that the UK "shall" recognise and enforce an ICSID award rendered against them, whilst also invoking immunity from recognition and enforcement that would preclude the UK from adhering to its own obligations under the Convention.

On that basis, the Supreme Court concluded that the States had clearly and unequivocally submitted to the adjudicative jurisdiction of the English courts by consenting to Article 54(1) of the Convention. Consequently, the States were barred from invoking State immunity to oppose the registration of the ICSID awards rendered against them.

The Supreme Court held that it was not necessary to decide Issue 2 in light of the conclusion reached on Issue 1.

Takeaways

This decision is of crucial importance to parties involved in ICSID proceedings who are seeking recognition and enforcement of arbitral awards in the UK. The decision confirms that once a State has consented to be bound by Article 54 of the Convention, that State cannot subsequently rely on sovereign immunity to oppose the registration of an ICSID award.

The decision also makes clear that State immunity is preserved in respect of execution. It follows that notwithstanding the registration of an ICSID award as a judgment, award creditors must still undergo the process of identifying State assets that are not immune from execution under domestic law. 

Notably, this decision positions the English courts in close alignment with the courts of other jurisdictions which have considered the same issue. Indeed, the courts of Australia, New Zealand, Malaysia, and the United States have all interpreted Article 54(1) as constituting a waiver of adjudicative immunity by each contracting State and a submission to jurisdiction (where domestically applicable).

Ultimately, this decision will provide assurance for investors seeking to enforce ICSID awards in the UK and re-affirms the English courts' pro-enforcement stance with respect to investor-State awards.