The ruling aligns the U.K. with a broad international consensus and provides welcome certainty for investors seeking to enforce ICSID awards against foreign states.
In a decisive win for investors, the United Kingdom Supreme Court has held that sovereign states cannot resist recognition of International Centre for Settlement of Investment Disputes (ICSID) awards rendered against them on the grounds of state immunity. The ruling aligns the U.K. with a broad international consensus and provides welcome certainty for investors seeking to enforce ICSID awards against foreign states. See The Kingdom of Spain (Appellant) v Infrastructure Services Luxembourg S.À.R.L. and another (Respondents); Republic of Zimbabwe (Appellant) v Border Timbers Ltd and another (Respondents) [2026] UKSC 9. Judgment handed down March 4, 2026.
Background
In Infrastructure Services, an ICSID tribunal had awarded approximately €101 million to the claimants for Spain’s violations of the Energy Charter Treaty, stemming from regulatory changes Spain introduced to its renewable energy subsidy scheme.
In Border Timbers, the claimants obtained an ICSID award of approximately US$124 million for Zimbabwe’s expropriation of the claimants’ land in breach of a bilateral investment treaty between Switzerland and Zimbabwe.
Both awards were registered in the English High Court under the Arbitration (International Investment Disputes) Act 1966 (1966 Act), which gives effect to the U.K.’s obligations under the ICSID Convention.
Both Spain and Zimbabwe sought to set aside the registration orders, arguing that they enjoyed adjudicative immunity under Section 1(1) of the State Immunity Act 1978 (SIA).
The Decisions at First Instance
Both states’ applications were dismissed, but the two first instance—judges Fraser J (as he then was) in Infrastructure Services and Dias J in Border Timbers—reached that result for different reasons, creating a conflict of authority.
Fraser J held, primarily on the basis of the Supreme Court's decision in Micula & Ors v Romania, [2020] UKSC 5, that the ICSID Convention, as given effect by the 1966 Act, precluded Spain from raising any “defence” under the SIA to recognition of an ICSID award. In the alternative, he found that Article 54 of the ICSID Convention constituted a submission to the jurisdiction of the English courts for the purposes of Section 2 of the SIA, and that Spain could not dispute that it had agreed to arbitration within the exception to immunity contained in Section 9 of the SIA (commonly known as the “arbitration agreement exception”).
Dias J held that registration of an ICSID award was an essentially automatic ministerial act, not involving any adjudicative step on the part of the English courts, and therefore Section 1(1) of the SIA was not engaged at all. However, she also held, contrary to Fraser J, that Article 54 was not a sufficiently clear and unequivocal submission to the jurisdiction for the purposes of Section 2 of the SIA.
Both decisions were appealed and heard together by the Court of Appeal.
The Court of Appeal’s Decision
The Court of Appeal dismissed the appeals.
Critically, agreeing with Fraser J on the first of his alternative bases, the Court of Appeal held that Article 54 of the ICSID Convention—by which contracting states agree to recognize and enforce ICSID awards as if they were final judgments of their own courts—constitutes a prior written agreement to submit to the jurisdiction for the purposes of the exception to immunity found in Section 2(2) of the SIA. The Court of Appeal found that the language of Article 54 was clear and unambiguous, supported by the object and purpose of the UCSID Convention, and that express use of the words “submit” or “waiver” was not required by Section 2(2).
In doing so, the court rejected Dias J’s characterisation of registration as a purely ministerial act. It also held, disagreeing with Fraser J, that the Supreme Court's earlier decision in Micula v Romania was not binding authority for the proposition that state immunity does not apply to ICSID enforcement proceedings.
In the circumstances, the court found it unnecessary to determine whether Section 9 of the SIA (the arbitration agreement exception) was also engaged.
Spain and Zimbabwe appealed to the Supreme Court.
The Outcome in the Supreme Court
The Supreme Court has now unanimously dismissed the appeals.
The Court heard argument over two days on the first issue whether Article 54(1) of the ICSID Convention constitutes a submission to jurisdiction within the meaning of Section 2(2) of the SIA—and concluded that it was unnecessary to hear argument on the second issue (Section 9 of the SIA) or any other issues.
The Test for Waiver of Immunity
The Court held that a waiver of adjudicative immunity by treaty requires a “clear and unequivocal expression” of a state’s consent to the exercise of jurisdiction, but does not require explicit words such as “waiver” or “submission.” Meaning is conveyed not only by the express words used but also by what is necessarily inherent in and follows from those words. In reaching this conclusion, the Court rejected the narrower approach of Lord Goff's dissent in R v Bow Street Magistrate, Ex parte Pinochet (No 3) [2000] 1 AC 147, finding it unsupported by the authorities relied upon by Lord Goff and inconsistent with the Supreme Court’s own decision in NML Capital v Argentina [2011] 2 AC 495, in which a contractual clause was held to be “the clearest possible waiver of immunity” despite using neither the word “waiver” nor the word “submission.” The test is whether the words used necessarily lead to the conclusion that the state has submitted to the jurisdiction.
Interpretation of Article 54(1) of the ICSID Convention
Applying the Vienna Convention on the Law of Treaties, the Court found that Article 54(1) requires each contracting state to recognize and enforce ICSID awards as if they were final judgments of its own courts. This obligation is undertaken on a mutual, reciprocal basis: Each contracting state agrees not only that it will recognize and enforce awards, but also that awards rendered against it will be recognized and enforced in every other contracting state.
A state cannot simultaneously agree that another state “shall” recognize and enforce an ICSID award against it whilst claiming immunity that would prevent that other state from complying with its own convention obligations. This is fundamentally inconsistent with the preservation of adjudicative immunity. It is reinforced by the fact that Article 55 of the ICSID Convention expressly preserves only immunity from execution, meaning that adjudicative immunity is not preserved.
The Court therefore reached the conclusion that Article 54(1) of the ICSID Convention was a clear and unequivocal submission to the adjudicative jurisdiction of the English courts for the purposes of recognizing and enforcing the awards.
This conclusion was consistent with the object and purpose of the convention, which the Court held was to only preserve immunity in respect of execution, while making recognition and enforcement mandatory for all parties, investors and states alike. Lastly, the travaux préparatoires also confirmed this interpretation, and there was broad international consensus from the courts of Australia, New Zealand, Malaysia and the United States.
Key Takeaways
The judgment provides important practical guidance for both investors (and award creditors more generally) seeking to enforce ICSID awards and states that may face enforcement proceedings in the U.K.
Investors
The registration process under the 1966 Act will not be defeated by an immunity argument. This removes a significant procedural hurdle that had previously created uncertainty and aligns the U.K.’s position with the broad international consensus. Investors can therefore pursue a coordinated, multijurisdictional approach to enforcement with greater confidence.
However, registration does not guarantee payment or that it will be possible to execute an ICSID award. As both the Supreme Court and the Court of Appeal have emphasized, whilst adjudicative immunity in respect of recognition of an award is waived by Article 54(1), immunity from execution against state property is preserved by Article 55.
Investors may still face significant obstacles when seeking to satisfy an award against state assets, as states may invoke immunity from execution in respect of property used for sovereign (as opposed to commercial) purposes. It is therefore important that investors plan carefully and identify commercial assets early that may be available for execution.
States
Immunity from execution remains a meaningful safeguard. States should therefore ensure that their assets located abroad are properly categorized and, where appropriate, held through entities or in forms that enjoy immunity from execution. States should also carefully review any waiver of state immunity to ensure that they do not inadvertently waive immunity from execution.
Most importantly however, the decision does not “shut the door” on all challenges to registration. For example, Zimbabwe’s application to set aside was remitted to the Commercial Court to determine its nonimmunity defences, including arguments that the underlying award was a nullity. Similarly, following the recent decision of the Commercial Court in Operafund Eco-Invest Sicav Plc & another v The Kingdom of Spain [2025] EWHC 2874 (Comm,) there is uncertainty as to whether assignees of ICSID awards are able to bring enforcement proceedings in their own name. States may therefore still raise substantive challenges to recognition, provided that these do not depend on immunity.
Given the difficulty of resisting recognition of ICSID awards and the costs of prolonged enforcement battles, in some cases states may find that voluntary compliance with adverse awards—or negotiated settlements—represent a more cost-effective approach than protracted litigation across multiple jurisdictions.
About Duane Morris
Members of the Duane Morris team in London have extensive experience of acting for both investors and sovereign states on issues of state immunity and the recognition and enforcement of arbitral awards.
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