UK Supreme Court Confirms States cannot use Sovereign Immunity to Resist Registration of ICSID Arbitration Awards

The UK Supreme Court has dismissed appeals by Spain and Zimbabwe against a Court of Appeal decision, which held that states cannot resist the registration of ICSID Convention arbitration awards on sovereign immunity grounds. It considered that maintaining adjudicative immunity from the English courts' jurisdiction was inconsistent with the states' obligations under the ICSID Convention. This confirmation aligns the UK position with that in several other jurisdictions, including the US and Australia.

What you need to know

• In Spain v Infrastructure Services Luxembourg and another, and Zimbabwe (Appellant) v Border Timbers Ltd and another [2026] UKSC 9, the UK Supreme Court confirmed that state parties to the ICSID Convention cannot rely on sovereign immunity to resist registration and enforcement of ICSID arbitration awards rendered against them.
• While sovereign immunity applies as a matter of principle, an exception applies because Article 54 of the ICSID Convention amounts to a submission to the jurisdiction of the English courts and a waiver of immunity for the purposes of registration.
• The Supreme Court held that, while a waiver of sovereign immunity by international treaty requires a "clear and unequivocal expression" of the state’s consent to the exercise of jurisdiction by national courts, this does not require explicit words such as "waiver" or "consent" to be used. 
• Therefore, the test here was whether the obligations imposed by the ICSID Convention necessarily meant that a contracting state had submitted to the jurisdiction of other states' courts. The Supreme Court held that this was the case.
• However, the ICSID Convention expressly preserves immunity from execution, meaning that, while states cannot claim immunity from recognition and enforcement of ICSID awards, immunity from execution is unaffected and may still prevent investors from executing against state assets.

Background to the dispute

The detailed background to the dispute can be found in our previous article, discussing the Court of Appeal's decision. In summary, ICSID awards were rendered against each of Spain and Zimbabwe in arbitrations under the ICSID Convention. The successful investors, Infrastructure Services Luxembourg SARL and Border Timbers Limited, respectively, applied to the English courts for registration of their awards under the Arbitration (International Investment Disputes) Act 1966, which implemented the UK's obligations under the ICSID Convention into domestic law. 

Under s1(1) of the State Immunity Act 1978 (SIA), a state will have general immunity from the jurisdiction of the English courts, unless an exception stated in the SIA applies.

In separate decisions, two judges of the Commercial Court concluded that the ICSID awards should be registered, as Spain and Zimbabwe could not rely on immunity under the SIA. However, they arrived at these decisions for different reasons, creating some uncertainty. Read our earlier article on the novel approach to immunity adopted by Dias J in the Border Timbers v Zimbabwe case.

The Court of Appeal dismissed the states' appeals against those first instance decisions. It ruled that, while immunity was, in principle, engaged under s1(1) of the SIA, accession to the ICSID Convention amounted to a waiver of that immunity for the purposes of s2 of the SIA. 

Spain and Zimbabwe both appealed to the Supreme Court.

The Supreme Court's decision

The Supreme Court dismissed the appeals. In its judgment, the Court addressed two key issues:

1. The test for determining whether a state waived immunity by treaty: Following the decision of the Court of Appeal, it was agreed that immunity applied as a matter of principle. However, the appropriate test to decide whether a state had waived its immunity and submitted to jurisdiction by treaty, for the purposes of s2 of the SIA, was still in dispute. The Supreme Court ruled that the relevant treaty must be interpreted in accordance with the rules set out in Articles 31 and 32 of the Vienna Convention on the Law of Treaties. While any waiver must be clear and unequivocal, it need not use words such as "waiver" or "submission". The words used also convey an inherent meaning. Therefore, a court should consider whether a waiver of immunity is inherent in, and necessarily follows from, the words used in the treaty. Here, the test was whether, although the ICSID Convention does not expressly waive immunity, it necessarily followed from the words used that contracting states submitted to the English courts' jurisdiction.
2. Article 54 of the ICSID Convention amounts to a waiver of immunity from jurisdiction: Article 54(1) of the ICSID Convention obliges each contracting state to recognise as binding and enforce the pecuniary obligations imposed by an ICSID arbitration award as if it were a final judgment of that state's own courts. The Supreme Court held that, by acceding to the ICSID Convention, each contracting state agreed, not only to recognise and enforce the pecuniary obligations of ICSID awards, but also that awards to which that state is party will be recognised and enforced against it by the courts of other contracting states. It follows that the UK has agreed, and is obliged to, recognise and enforce ICSID awards, and that other contracting states, including Spain and Zimbabwe, agreed to the UK doing so. Preserving immunity from jurisdiction would be inconsistent with this agreement.

This followed from the ordinary meaning of the terms of the ICSID Convention. The context, object and purpose, and supplementary means of interpretation of the ICSID Convention also supported this conclusion, as did judgments from other jurisdictions, including Australia, New Zealand, Malaysia and the US, all of which interpreted Article 54(1) as a waiver of adjudicative immunity by each contracting state. 

The Supreme Court noted one decision, from the High Court of the British Virgin Islands, which held that Article 54 did not amount to a waiver of immunity. However, in the Supreme Court's view, that decision failed to take account of the fact that the state in that case (Pakistan) had, by ratifying the ICSID Convention, both agreed to comply with any ICSID arbitral award (Article 53) and consented to other contracting states enforcing the pecuniary obligations imposed (Article 54).

The Supreme Court emphasised that its decision did not impact immunity from execution, which is expressly preserved by Articles 54(3) and 55 of the ICSID Convention. However, immunity from execution only arises once the award has been recognised and can only be applied by the domestic UK courts if they first have jurisdiction. 

The Supreme Court held that, in light of its decision, it did not need to address a second issue: whether there was a valid arbitration agreement for the purposes of a separate exception to state immunity, found in s9 of the SIA. The Court of Appeal had not finally determined this issue either, but suggested that s9 requires the court to satisfy itself that the relevant state had agreed in writing to submit the dispute in question to arbitration. There was no legal basis for an English court to find itself bound by an ICSID tribunal's determination of its own jurisdiction. The Supreme Court expressly stated that it expressed no view on this.

Analysis and implications

While essentially confirming the earlier decision of the Court of Appeal, the Supreme Court's judgment will be welcomed by international investors for bringing final clarity to the position, as a matter of English law. The decision that states cannot rely on immunity under the SIA to resist recognition and enforcement of ICSID awards rendered against them provides investors (and, where applicable, those funding them) with greater commercial certainty.

However, the sharp distinction highlighted by the Court between registration and enforcement of ICSID awards, on the one hand, and execution against state assets, on the other, means that considerable uncertainty remains as to the extent to which investors will, in fact, be able to monetise ICSID awards.

The impact, if any, that this decision would have on immunity in relation to enforcement of non-ICSID awards under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) was open at the time of the Court of Appeal's decision. However, the English Commercial Court has since considered this issue in CC/Devas v India [2025] EWHC 964 (Comm), ruling that a state's ratification of the New York Convention is not, on its own, a waiver of sovereign immunity under the SIA. It follows that, at least for now, the sovereign immunity position as regards the enforcement of non-ICSID awards against states will have to be considered on a case-by-case basis. For further discussion of the CC/Devas case, read our previous article on that decision.

Other Authors: Alex Hiendl, Senior Expertise Lawyer; Jenny Zhang, Associate.