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
This Supreme Court decision concerned the application of state immunity in the context of the enforcement of ICSID arbitration awards in the UK. On appeal, the Supreme Court was asked to determine whether Spain and Zimbabwe could rely on their on their sovereign immunity under the State Immunity Act 1978 (“SIA”) to set aside the registration of two adverse ICSID awards in the High Court under the Arbitration (International Investment Disputes) Act 1966 (the “1966 Act”). The UK has given effect to its obligation to make the provisions of the ICSID Convention effective in its territories under the 1966 Act.
The case concerned two separate investment disputes. In the first dispute, Infrastructure Services Luxembourg S.À.R.L. and Energia Termosolar BV successfully obtained an ICSID award against Spain after changes to Spain’s renewable energy subsidy regime allegedly breached protections under the Energy Charter Treaty (“ECT”). In the second dispute, Border Timbers Ltd and Hangani Development Co. obtained an ICSID award against Zimbabwe following the expropriation of forestry investments protected under a bilateral investment treaty (“BIT”) with Switzerland. In both cases, the successful investors sought to register the award in England under the 1966 Act, which implements the ICSID Convention into domestic law. In response, Spain and Zimbabwe argued that they were entitled to immunity from the jurisdiction of the English courts under section 1 of the SIA as sovereign states.
Both the High Court and the Court of Appeal rejected Spain and Zimbabwe’s immunity arguments for different reasons. The two appeals were therefore brought before the Supreme Court.
The Legislative Framework
The facts
The UK signed the ICSID Convention on 26 May 1965, which entered into force in the UK on 18 January 1967. The ICSID Convention separately entered into force for Spain on 17 September 1994 and on 19 June 1994 for Zimbabwe.
Spain’s appeal
Spain ratified the ECT in 1997 and introduced Royal Decree 661/2007 to assure a reasonable return for renewable investments. The investors, Infrastructure Services Luxembourg S.À.R.L. and Energia Termosolar BV who were Luxembourg and Netherlands companies, claimed to have invested €139.5 million in Spanish solar energy projects relying on these incentives.
Subsequently, Spain substantially altered the regulatory regime governing renewable energy subsidies. Following these regulatory changes, the investors commenced ICSID arbitration under ECT article 26. Spain challenged jurisdiction on intra‑EU grounds under EU law and ECT interpretation.
In an award dated 15 June 2018, those objections were rejected by the arbitral tribunal, and the investors succeeded in their substantive claim. The tribunal found that by amending its regulatory regime, Spain had breached the fair and equitable treatment standard in article 10(1) of the ECT. Spain was ordered to pay €112 million in compensation, plus interest and costs, which was subsequently reduced by €11 million after rectification. Spain then sought annulment before an ICSID ad hoc committee, again arguing that the tribunal had exceeded its powers by accepting jurisdiction contrary to EU law. The committee rejected Spain’s application in July 2021, and any stay of enforcement was lifted.
Infrastructure Services Luxembourg S.À.R.L. and Energia Termosolar BV then applied without notice to register the award in the High Court under section 1 of the 1966 Act. The award was registered as though it were a High Court judgment. Spain applied to set aside that registration, arguing that section 1 of the SIA protected it from the adjudicative jurisdiction of the English courts.
Fraser J dismissed Spain’s application, concluding that Spain had submitted to jurisdiction by becoming party to both the ICSID Convention and the ECT. The Court of Appeal, hearing both cases together, affirmed that conclusion, holding that Article 54(1) constituted a prior written submission to jurisdiction for the purposes of section 2(2) of the State Immunity Act. Spain appealed to the Supreme Court.
Zimbabwe’s appeal
A 1996 Switzerland–Zimbabwe BIT provided for ICSID arbitration of unresolved investment disputes; Border Timbers Ltd alleged uncompensated expropriation and commenced ICSID proceedings, following which Zimbabwe disputed jurisdiction denying an agreement to arbitrate under the BIT’s definitions of “investments” and “investor”.
Pursuant to an award dated 28 July 2015, the arbitral tribunal dismissed Zimbabwe’s jurisdictional objections, and ordered Zimbabwe to pay Border Timbers Ltd US$124,041,223 together with interest and a further US$1 million in moral damages and costs. Zimbabwe applied to have the award annulled under article 52 of the ICSID Convention. On 21 November 2018, that application was dismissed by the ICSID annulment committee, with further costs ordered to be paid by Zimbabwe. Zimbabwe also sought a stay of enforcement, which was also refused.
On 15 September 2021, Border Timbers Ltd applied without notice to the High Court to register the award as a judgment under section 1 of the 1966 Act. Zimbabwe then applied to set aside on grounds of state immunity.
Dias J dismissed Zimbabwe’s application, finding that while Article 54(1) constituted a general waiver of immunity under public international law, such a general waiver did not meet the elevated threshold she applied to qualify as a submission to the jurisdiction for the purposes of section 2 of the SIA. Section 9 of the SIA required the English court to make its own determination of whether Zimbabwe had agreed to arbitration, and an arbitral tribunal’s own finding that it had jurisdiction could not preclude the English court from doing so. In any event, Dias J held that registration of an ICSID award was a purely administrative act and therefore not an exercise of adjudicative jurisdiction, which meant that the SIA did not apply at all to registration proceedings under the 1966 Act.
The Court of Appeal disagreed with Dias J’s administrative characterisation and held that registration did engage adjudicative jurisdiction, however, as stated above it upheld the registration because it found that Article 54 constituted a prior written agreement submitting contracting states to the jurisdiction of English courts.
The issues
Section 1(2) of the 1966 Act provides that a person seeking recognition or enforcement of an ICSID award “shall be entitled to have the award registered in the High Court subject to proof of the prescribed matters and to the other provisions of this Act”. Section 2 provides that a registered award has the same force as a High Court judgment for execution and related purposes.
Section 1 of the SIA confers state immunity subject to exceptions. Section 2(1) removes immunity where a state has submitted to the jurisdiction of the UK court, including by prior written agreement, and section 17(2) confirms “agreement” includes a treaty or convention.
The ICSID Convention requires written consent to arbitrate between a contracting state and a national of another; articles 53 to 55 render awards binding, oblige recognition and enforcement as if final judgments, and preserve only immunity from execution.
The main issues to be considered by the Supreme Court in respect of the two appeals were as follows:
- Issue 1: By agreeing to be bound by article 54(1) of the ICSID Convention, did the appellant states submit to the jurisdiction of the English courts by agreement within the meaning of section 2(2) of the SIA such that they do not enjoy immunity from adjudicative jurisdiction with respect to these proceedings under section 1(1) of the SIA?
- Issue 2: Did the appellant states agree to arbitrate with the respondent investors within the meaning of section 9(1) of the SIA such that they do not enjoy immunity from adjudicative jurisdiction with respect to these proceedings under section 1(1) of the SIA?
The decision
The Supreme Court unanimously dismissed the appeals of both Spain and Zimbabwe on the first ground and held that each state had submitted to the jurisdiction of the courts of the UK by virtue of Article 54(1) of the ICSID Convention. Consequently, the states could not rely upon adjudicative immunity under section 1 of the SIA to resist registration of the ICSID awards in England. The court also confined its judgment to the first issue identified on appeal. Having answered that question affirmatively, it found that it was unnecessary to determine the alternative argument.
In reaching its decision, the Supreme Court held that a treaty does not need to use explicit words such as “waiver“, “submission” or “immunity” to constitute a waiver of state immunity. Instead, the relevant question is whether the treaty, properly interpreted, clearly and necessarily demonstrates the state’s consent to the jurisdiction of another state’s courts.
In interpreting Articles 53 to 55 of the ICSID Convention, the Court held that Article 54 requires every contracting state to recognise and enforce ICSID awards as if they were final domestic judgments. This obligation necessarily involves submission to the jurisdiction of national courts for recognition and enforcement proceedings. Article 55 preserves immunity only from execution against state assets, not from the registration of awards. Accordingly, the awards against Spain and Zimbabwe were validly registered in England.
Analysis
This judgment constitutes significant authority on the relationship between state immunity and the enforcement of ICSID awards. Here, the Supreme Court adopted a practical approach, holding that states may waive immunity through treaty obligations even without express language referring to waiver. The court confirmed that treaty interpretation depends on the ordinary meaning and effect of the words used.
The decision is welcome confirmation that contracting states to the ICSID Convention cannot invoke state adjudicative immunity to avoid recognition of ICSID awards in the UK. However, the question of immunity from execution remains fully preserved and is a separate question. The judgment provides important certainty for investors and contracting states by confirming that the UK will honour its obligations under the ICSID Convention and facilitate the recognition of investment arbitration awards while preserving the statutory protections governing execution against sovereign property.