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Kingdom of Spain (Appellant) v Infrastructure Services Luxembourg S.À.R.L. and another (Respondents); Republic of Zimbabwe (Appellant) v Border Timbers Ltd and another (Respondents) [2026] UKSC 9, 4 March 2026
The UK Supreme Court ("UKSC") has clarified a significant point of law regarding the enforcement of ICSID awards in the UK in its recent decision in 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. The decision confirms that Contracting States to the ICSID Convention (which number over 150 States worldwide) cannot rely on sovereign immunity to resist the recognition and enforcement of ICSID awards in the UK. This is because, as the UKSC has affirmed, Contracting States' accession to the ICSID Convention constitutes an express waiver of their sovereign immunity with respect to the recognition and enforcement (but not, importantly, the execution) of ICSID awards under the UK State Immunity Act 1978 (the "SIA").
We previously reported on the 2024 decision of the Court of Appeal in the same case; our client update on that decision can be found here.
1. States' Accession to the ICSID Convention Constitutes an Express Waiver of Sovereign Immunity for ICSID Award Enforcement
The UKSC's decision arises out of two linked appeals regarding the recognition and enforcement of ICSID arbitration awards respectively rendered against Spain and Zimbabwe. Both States sought to resist enforcement of these awards in the UK by arguing that, as sovereign States, they enjoyed immunity from the courts' jurisdiction under section 1 of the SIA. Both the High Court and the Court of Appeal rejected this argument, albeit for divergent reasons. In its judgment of 4 March 2026, the UKSC has unanimously upheld the Court of Appeal's decision and confirmed that Spain and Zimbabwe cannot oppose the recognition and enforcement of the ICSID awards against them on the grounds of sovereign immunity.
One of the key issues in dispute was whether Article 54 of the ICSID Convention, which imposes a general obligation on Contracting States to recognise and enforce ICSID awards, constitutes a waiver of sovereign immunity with respect to proceedings for the recognition and enforcement of ICSID awards against those same Contracting States.1 The UKSC held that it does: by agreeing to be bound by the ICSID Convention, including Article 54, Spain and Zimbabwe had submitted to the jurisdiction of the UK courts with respect to the recognition and enforcement of ICSID awards against them. This brought Spain and Zimbabwe within the specific exception to the general principle of sovereign immunity contained in section 2 of the SIA.2
In reaching this decision, the UKSC confirmed that a waiver of sovereign immunity by treaty requires a "clear and unequivocal expression" of the State's consent to the courts' jurisdiction.3 The wording in Article 54(1) of the ICSID Convention, the UKSC held, is sufficiently clear: each Contracting State agrees not only that it will recognise and enforce ICSID awards, but that awards involving (and potentially adverse to) that State will be recognised and enforced in other Contracting States.4
Because it found that the exception to sovereign immunity under section 2 of the SIA applied, the UKSC did not address Spain's argument that it enjoyed sovereign immunity because there was no valid arbitration agreement between Spain and the relevant investors within the meaning of section 9 of the SIA (Spain had argued that the arbitration agreement contained in the Energy Charter Treaty was invalidated with respect to EU investors by the EU's prohibition on investor-State arbitration between EU Member States, i.e. the Achmea/Komstroy objection). The UKSC also left in place the Court of Appeal's previous order remitting consideration of certain allegedly "exceptional" non-sovereign immunity defences put forward by Zimbabwe to the Commercial Court, which remain to be determined.
2. Comment
The UKSC's decision provides welcome certainty that Article 54 of the ICSID Convention constitutes a waiver of sovereign immunity by Contracting States for the purposes of section 2 of the SIA. For investors seeking to enforce ICSID awards in the UK, this should mean that the award enforcement process is streamlined (and therefore more cost-effective), as States are barred from raising sovereign immunity arguments in such proceedings. For States, this means that objections concerning, for example, the validity of the underlying arbitration agreement (such as Spain had sought to argue in the present case) must be raised during the arbitration, or during any subsequent annulment challenge within the ICSID system, but cannot be raised as an independent basis for resisting ICSID award enforcement in the UK.
As noted by the UKSC, this outcome is consistent with the broader objective of the ICSID Convention to produce final and binding awards that are supported by a fully reciprocal enforcement regime.5 The intention of the ICSID Convention, as the UKSC confirmed, is that "once the authenticity of an award is established, a domestic court before which recognition is sought may not re-examine the award on its merits, or the fairness and propriety of the proceedings and may not refuse to enforce".6 In other words, the unconditional nature of States' enforcement obligations under Article 54 means that States must accept that the enforcement of ICSID awards against them will be similarly unconditional.
This approach, however, is notably distinct from that under the New York Convention, which expressly permits enforcing courts to re-examine the fairness and propriety of the proceedings, and to refuse to enforce awards where certain grounds are met.7 Thus, it remains to be seen whether the UK courts will take the same position where a State seeks to resist enforcement of a non-ICSID investor-State award (or indeed any international arbitral award rendered under the New York Convention) on the basis of sovereign immunity. The issue could become particularly pertinent if Spain, or another EU Member State, seeks to resist enforcement of a non-ICSID investor-State award in the UK on the basis of the Achmea/Komstroy objection. The UKSC has now confirmed that States cannot raise such an objection to the enforcement of ICSID awards, but it is unclear whether the same principle applies to non-ICSID investor-State awards.
Finally, it should be noted that the UKSC's decision, as the court took care to emphasise, concerns only sovereign immunity from recognition and enforcement proceedings, not sovereign immunity from execution (i.e., the enforcement of an award debt against specific State-owned assets).8 Thus, while the UKSC's decision may ease the way for investors seeking to have their ICSID awards recognised and enforced in the UK, this does not guarantee that they will ultimately be able to monetise their awards once recognised and enforced. The rules of sovereign immunity with respect to execution against State-owned property are complex, and investors would be well advised to carefully consider the availability of the respondent State's assets in the UK (or any other jurisdiction) before they seek recognition and enforcement of their awards.
Footnotes
1 Article 54(1) of the ICSID Convention states that "Each Contracting State shall 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. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state".
2 Section 2 of the State Immunity Act 1978 states in relevant part that "(1) A State is not immune as respects proceedings in respect of which it has submitted to the jurisdiction of the courts of the United Kingdom. (2) A State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement; but a provision in any agreement that it is to be governed by the law of the United Kingdom is not to be regarded as a submission".
3 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, at [69].
4 Ibid, at [82], [89].
5 Ibid, at [107].
6 Ibid, at [107].
7 See New York Convention, Article V.
8 Ibid, at [21].
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