No shield for sovereigns: UK Supreme Court rejects immunity arguments in enforcement of ICSID awards

In Kingdom of Spain v. Infrastructure Services Luxembourg S.À.R.L. and Republic of Zimbabwe v. Border Timbers Ltd [2026] UKSC 9, the Supreme Court held that by ratifying the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), contracting states have submitted to the jurisdiction of the courts of other contracting states for purposes of award registration. As a result, contracting states are not immune from litigation in the UK to recognise and enforce those awards.

The decision is a welcome development for ICSID award holders. It confirms the English legal position in clear terms and adds further support to the international consensus regarding the meaning and interpretation of the ICSID Convention.

Background

This was a joint appeal relating to both Spain and Zimbabwe. As we have covered previously, Spain's case arrived at the Supreme Court following defeats at both the High Court in May 2023 and the Court of Appeal in October 2024. Zimbabwe's parallel appeal arose from Border Timbers v. Zimbabwe, where it similarly failed to resist registration of an ICSID award on immunity grounds.

Both cases involved states resisting the registration of ICSID awards in the UK. The Spanish proceedings concerned awards rendered under the Energy Charter Treaty (ECT) in favour of investors who had challenged Spain's reforms to its renewable energy incentive regime. The Zimbabwean proceedings arose from an award concerning the expropriation of agricultural land, contrary to the Zimbabwe-Switzerland bilateral investment treaty.

Spain and Zimbabwe’s arguments

Both states advanced the same core argument: that foreign states enjoy immunity from the adjudicative jurisdiction of English courts under section 1 of the State Immunity Act 1978 (SIA), and that no exception to that immunity applied.
The relevant exceptions under the SIA provide that a state does not have adjudicative immunity if it has: (a) submitted to the jurisdiction of UK courts and thereby waived its immunity (section 2 SIA); or (b) agreed in writing to arbitration and the court proceedings relate to that arbitration (section 9 SIA).

The Supreme Court's ruling

The Supreme Court unanimously dismissed both appeals. The court held that Article 54(1) of the ICSID Convention, which requires contracting states to recognise ICSID awards as binding and enforce them as if they were final judgments of their own courts, constitutes "a clear and unequivocal submission to the adjudicative jurisdiction of the English courts for the purposes of recognising and enforcing the arbitral awards." In the words of Lord Lloyd-Jones and Lady Simler, Article 54(1) "could not be a clearer submission to the jurisdiction."

Several strands of reasoning underpinned the court's conclusion.

First, the court found that a state's agreement to Article 54(1) of the ICSID Convention was a sufficiently express and clear submission to displace the immunity otherwise afforded by section 1(1) of the SIA. The court rejected Spain's narrow interpretation of what constitutes an "express" waiver for the purposes of section 2 of the SIA, holding that an expression of consent "does not require explicit words such as waiver or submission." Meaning can be extracted not only from express words but also "by what is necessarily inherent in those words, and by what necessarily follows as a consequence of the use of those words."

Secondly, and related to the above, the court found that Spain and Zimbabwe could not "simultaneously agree that the United Kingdom 'shall' recognise and enforce an ICSID award rendered against them, whilst also claiming immunity from recognition and enforcement that would prevent the United Kingdom from complying with its own ICSID obligations".  

Thirdly, the court noted the distinction drawn in the ICSID Convention between recognition and enforcement on the one hand (Article 54) and execution on the other (Article 55). The court considered it significant that only immunity from execution is expressly preserved in Article 55, suggesting that the drafters did not intend adjudicative immunity to preclude recognition and enforcement proceedings.

Fourthly, the court observed that the ICSID Convention was designed to encourage investment by providing protection against sovereign risk. Accepting Spain's claim of adjudicative immunity would "render valueless the protection which article 54(1) is intended to provide."

Lastly, the court considered that international treaty texts should bear a uniform meaning across contracting states. It drew support for its interpretation from the "broad international consensus as to the meaning and effect of article 54(1)." The court considered that other courts in Australia, New Zealand, Malaysia, and the United States have all interpreted Article 54(1) as a waiver of adjudicative immunity.

As the court's decision on section 2 SIA disposed of the appeal, the court did not consider the arguments relating to section 9 SIA.

Comment

This landmark ruling confirms that states cannot invoke immunity to resist the registration of ICSID awards, even where, as in Spain's case, the underlying award arises from an intra-EU dispute under the ECT.

For investors, the decision provides welcome certainty: the path from ICSID award to enforceable judgment in the UK is now clear of adjudicative immunity objections. The court's emphasis on international consensus also signals a commitment to interpretive uniformity, reinforcing the reliability of the ICSID enforcement framework across jurisdictions. 

However, execution against state assets remains a separate hurdle, with immunity from execution expressly preserved under Article 55 of the ICSID Convention.