Enforcing ICSID Convention Arbitration Awards in England & Wales: An Overview

Introduction

The enforcement of arbitration awards rendered under the ICSID Convention in England and Wales is governed by a distinct legal framework, primarily under the <span class="news-text_italic-underline">Arbitration (International Investment Disputes) Act 1966 (1966 Act)</span> (the “<span class="news-text_medium">1996 Act</span>”). This framework differs from the enforcement of non-ICSID awards under mechanisms like the New York Convention. This article examines the procedures, legal principles and challenges involved in enforcing ICSID awards in England and Wales, with a focus on state immunity and execution against state assets.

ICSID Arbitration

Investment treaty arbitration, or investor-state dispute settlement (“<span class="news-text_medium">ISDS</span>”), involves disputes between investors and foreign states under investment treaties. ICSID arbitration, administered by the International Centre for Settlement of Investment Disputes, is a leading forum for such disputes. A key feature of ICSID arbitration is its independence from national courts, as awards are insulated from substantive judicial review at the recognition and enforcement stages.

Under Article 54(1) of the ICSID Convention, contracting states must recognise awards as binding and enforce the pecuniary obligations imposed by them as if they were final judgments of the courts in those states. The execution of awards against specific assets is governed by the domestic laws of the enforcing state.

Framework for Enforcement in England and Wales

<span class="news-text_medium">a. Competent Courts and Procedure</span>

Applications for the recognition and enforcement of ICSID awards in England and Wales are made to the High Court under the 1966 Act and CPR Part 62.21. The award creditor must submit evidence including the certified award, translations (if necessary) and details of any stays or pending ICSID proceedings. Once registered, the award has the same legal force as a judgment of the High Court.

<span class="news-text_medium">b. Key Principles</span>

English courts are limited to verifying the authenticity of an ICSID award during recognition and enforcement proceedings. They cannot examine the award’s merits, fairness or propriety of the ICSID tribunal’s process. Grounds for resisting recognition are exceptionally limited, as confirmed in recent cases such as <span class="news-text_italic-underline">Infrastructure Services Luxembourg v Kingdom of Spain [2023] EWHC 1226 (Comm)</span>.

State Immunity and Execution: Recognition and Enforcement

The UK's <span class="news-text_italic-underline">State Immunity Act 1978</span> (“<span class="news-text_medium">SIA 1978</span>”) applies to recognition and enforcement of ICSID awards. While state immunity is engaged, exceptions under Section 2 of SIA 1978 allow the registration of ICSID awards, as contracting states are deemed to have consented to the jurisdiction of enforcing courts under the ICSID Convention (<span class="news-text_italic-underline">Infrastructure Services Luxembourg v Kingdom of Spain [2024] EWCA Civ 1257</span>).

Execution Against State Assets

The execution of ICSID awards against state assets is subject to domestic laws. Under SIA 1978, immunity from execution applies unless:

1. the state has expressly waived immunity; or
2. the assets targeted are used for commercial purposes.

Practical examples of attachable assets include state-owned commercial premises or commodities. Freezing injunctions in aid of enforcement may require express waivers of immunity.

Grounds for Refusal or Stay of Enforcement: Refusal of Recognition

There are no explicit grounds for refusing recognition of ICSID awards under the 1966 Act. However, in <span class="news-text_italic-underline">Micula v Romania [2020] UKSC 5</span>, the UK Supreme Court suggested that “exceptional or extraordinary circumstances” might justify refusal, though no such case has yet been decided.

Under CPR 62.21(5), enforcement may be stayed if the ICSID Convention proceedings allow for it, such as when an application for interpretation, revision or annulment of the award is pending.

Practical Insights and Challenges

• The ICSID Convention protects awards from review at the enforcement stage, reducing potential delays and objections.
• While recognition is largely automatic, execution can be challenging, particularly when state assets are shielded by immunity.
• Applications to register ICSID awards are relatively straightforward, with no requirement to serve a claim form or hold an inter partes hearing.

Conclusion

The enforcement of ICSID Convention awards in England and Wales strikes a balance between international obligations under the ICSID Convention and domestic principles of state immunity. While recognition is generally straightforward, execution remains a complex process, especially against sovereign assets. Practitioners must navigate these nuances carefully to maximise the enforceability of ICSID awards.