1. The United Kingdom Supreme Court has held that Contracting States to the ICSID Convention cannot claim sovereign immunity to resist enforcement of ICSID awards against them. The Supreme Court’s decision 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 provides welcome clarification for investors seeking to enforce ICSID awards in the United Kingdom.
I. SIGNATORIES TO THE ICSID CONVENTION HAVE WAIVED THEIR SOVEREIGN IMMUNITY IN THE UK COURTS
2. In two linked appeals from a 2024 Court of Appeal decision, Spain and Zimbabwe argued that they were entitled to immunity from enforcement in the United Kingdom because they had not submitted to the jurisdiction of the United Kingdom’s courts.
3. The starting position under Section 1(1) of the State Immunity Act 1978 is that a State is immune from the adjudicative jurisdiction of the courts of the United Kingdom unless it has specifically waived its immunity. Under Section 2(2) of the State Immunity Act 1978, a State may submit to the jurisdiction of the courts of the United Kingdom after a specific dispute arises or “by a prior written agreement.”
4. Under Article 54(1) of the ICSID Convention, the Contracting States agreed to “recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State […].” In other words, the Contracting States – including Spain and Zimbabwe – agreed to enforce ICSID awards in their national courts.
5. The question for the Supreme Court 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 United Kingdom’s courts and were therefore prevented from claiming sovereign immunity.
6. Spain and Zimbabwe’s principal argument was that Article 54(1) of the ICSID Convention did not amount to a submission to the courts of the United Kingdom because they had only agreed to enforce ICSID awards in their own territory. They relied on the dissenting judgment of Lord Goff in the landmark Pinochet case, who stated that any waiver of sovereign immunity must be clear and express, rather than implied. On this logic, Article 54(1) did not amount to a clear and express waiver: it could only be implied from the fact that Spain and Zimbabwe had agreed to enforce ICSID awards in their own territory.
7. The Supreme Court disagreed. While a waiver of sovereign immunity must be “clear and unequivocal,” Lord Goff had taken an “unnecessarily narrow view” of what may amount to an express waiver. A State may give a clear and unequivocal waiver “not only by the express words used but also by what is necessarily inherent in those words, and by what necessarily follows as a consequence of the use of those words.”
8. The Supreme Court then interpreted Article 54(1) of the ICSID Convention, applying international law principles of treaty interpretation. Reading the terms of Article 54(1) in their context and in light of the object and purpose of the ICSID Convention, the Supreme Court held that Article 54(1) amounted to a reciprocal commitment by Spain and Zimbabwe to not only enforce ICSID awards in their own courts, but waive their own immunity in respect of adverse ICSID awards. As a result, Spain and Zimbabwe had waived their immunity, and submitted to the jurisdiction of the United Kingdom’s courts, for the purposes of Section 2(2) of the State Immunity Act.
II. SUPREME COURT DECLINES TO RULE ON THE “ARBITRATION EXCEPTION” TO IMMUNITY
9. A second issue was also put before the Supreme Court: whether, by arbitrating disputes with foreign investors, Spain and Zimbabwe had also waived their immunity under Section 9(1) of the State Immunity Act (which provides that a State may waive its immunity from adjudication through a written arbitration agreement). In particular, Spain argued that the arbitration agreement between Spain and the relevant investor had been disapplied because it was contrary to EU law: there was, therefore, no valid arbitration agreement in place.
10. Given its conclusions on Section 2(2), the Supreme Court declined to answer this question. However, it is clear from the Supreme Court’s decision, and from various passages of the prior Court of Appeal decision, that this question remains up for debate.
