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The UK Supreme Court has confirmed that States cannot rely on state immunity to resist registration of ICSID awards, as Article 54(1) of the ICSID Convention constitutes a submission to the court's jurisdiction
In its judgment dated 4 March 2026, the Supreme Court of the United Kingdom has held that foreign States cannot rely on state immunity under section 1(1) of the State Immunity Act 1978 (the SIA) to oppose the registration under the Arbitration (International Investment Disputes) Act 1996 of arbitration awards issued under the International Convention on the Settlement of Investment Disputes (ICSID Convention). This is because, properly interpreted under customary international law, article 54(1) of the ICSID Convention constitutes a submission to the court's jurisdiction by written agreement for the purposes of the exception to state immunity contained in section 2(2) of the SIA. This is a landmark decision which affirms the international consensus that national courts will give effect to ICSID awards in the manner required by the ICSID Convention and States party cannot claim immunity from adjudicative jurisdiction.
Background
As more fully summarised in our blog post on the Court of Appeal decision (see here), the case concerned two arbitration awards (Awards) issued under the ICSID Convention adverse to the Kingdom of Spain and the Republic of Zimbabwe (Appellants) respectively.
The Appellants sought to rely on the state immunity from adjudicative jurisdiction conferred under section 1(1) of the SIA to try to set aside registration of the Awards in the United Kingdom.
Infrastructure Services Luxembourg SARL and Border Timbers Ltd, the investors in each case (Investors), relied on section 2(2) of the SIA, which provides for an exception to state immunity where a State has submitted to the jurisdiction of the courts of the United Kingdom. The Investors argued that article 54(1) of the ICSID Convention, pursuant to which each contracting State is obliged to recognise as binding and enforce the pecuniary obligations of ICSID awards in their own territories, constituted a submission to the jurisdiction of the English courts for the purposes of section 2(2) of the SIA.
The Supreme Court proceedings
The following two issues came before the Supreme Court on appeal:
- Issue 1: By agreeing to be bound by article 54(1) of the ICSID Convention, did the Appellants 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 under section 1(1) of the SIA with respect to the proceedings?
- Issue 2: Did the Appellants agree to arbitrate with the Investors within the meaning of section 9(1) of the SIA such that they do not enjoy immunity from adjudicative jurisdiction under section 1(1) of the SIA with respect to the proceedings?
During the hearing, the Supreme Court decided that it was unnecessary to hear argument on Issue 2 or any other issues. Accordingly, its judgment only addresses Issue 1 and does not express any view on the correctness of the Court of Appeal's conclusions on Issue 2.
The Supreme Court broke down Issue 1 into two questions. First, what is the test for deciding whether there has been an agreement to submit to the jurisdiction under section 2(2) of the SIA, as a matter of UK law? Second, what is the correct interpretation of articles 53 to 55 of the ICSID Convention as a matter of customary international law, and does article 54(1) of the ICSID Convention satisfy the test in section 2(2) of the SIA?
The test in section 2(2) of the SIA
It was common ground between the parties that an agreement to waive state immunity must be express. However, the Appellants considered that express agreement ordinarily requires the words "waiver" or "submission" to appear, while the Investors disagreed, arguing that explicit use of such words was not required, but express waiver would include a necessary implication from the express words used. The Appellants primarily relied on Lord Goff's dissenting judgment in the case of R v Bow Street Magistrate, Ex Parte Pinochet (No 3) [2000] 1 AC 147, which concerned whether States party to the 1984 Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (the Convention against Torture) had agreed to exclude reliance on state immunity ratione materiae in relation to proceedings brought against officials in respect of acts contrary to the Convention. Lord Goff concluded that there was insufficient language in the Convention against Torture to amount to an express waiver of state immunity.
The Supreme Court agreed that a waiver of immunity must be clear and unequivocal but considered Lord Goff's characterisation of what may constitute an express waiver to be too narrow. Instead, noting that Lord Goff's was a dissenting judgment and citing from the judgments of the majority in Pinochet (No 3), it held that state immunity can be waived by a treaty if that treaty, as interpreted under public international law, contains a clear and unequivocal expression of the State's consent to jurisdiction. It formulated the test as "whether the words used necessarily lead to the conclusion that the state has submitted to the jurisdiction".
In particular, in Pinochet (No 3), the majority held that the express terms of the Convention against Torture must have conveyed an unequivocal agreement to exclude state immunity ratione materiae, since every case brought under that treaty would otherwise face a plea of immunity. An acceptance that there was no immunity was a necessary consequence of express provisions of the Convention against Torture requiring states to criminalise and establish jurisdiction over acts of official torture.
The Supreme Court also cited a number of other authorities, including NML Capital v Republic of Argentina [2011] 2 AC 495 and General Dynamics United Kingdom Ltd v State of Libya [2025] EWCA Civ 134, to conclude that section 2(2) of the SIA was satisfied if the express words of the agreement, on their proper construction, amounted to an unequivocal agreement to submit to the jurisdiction even if the words "submit" or "waiver" were not present.
The interpretation of articles 53 to 55 of the ICSID Convention
The Supreme Court then considered whether States are to be treated as having waived state immunity and submitted to the adjudicative jurisdiction of the UK courts in proceedings to recognise and enforce ICSID awards, by becoming party to the ICSID Convention (and in particular article 54). This depended on the proper interpretation of articles 53 to 55 of the ICSID Convention, interpreted in accordance with customary international law principles on treaty interpretation as codified in the Vienna Convention on the Law of Treaties (VCLT). Article 31 of the VCLT requires treaties to be interpreted in good faith in accordance with their ordinary meaning, in their context, and in light of the treaty's object and purpose. The Supreme Court held that it naturally followed from the words of article 54(1) that a State party to the ICSID Convention agrees, as a matter of mutual and reciprocal obligation to all other States party, that it will recognise and enforce ICSID awards, and that awards to which it is a party will be recognised and enforced in the courts of other States party. This is "fundamentally inconsistent" with state immunity from adjudicative jurisdiction. This conclusion is supported by article 55 of the ICSID Convention, which affirms state immunity from execution, but is silent on immunity from adjudicative jurisdiction.
This interpretation of article 54(1) is further confirmed by: (i) the context of article 54(1) as part of a self-contained scheme for producing binding awards; and (ii) the object and purpose of the ICSID Convention to "create a system for the international arbitration of investment disputes [...] that would produce binding awards supported by a fully reciprocal regime".
Given that the meaning of article 54(1) was clear and unambiguous, the Supreme Court did not need to have recourse to supplementary means of interpretation (e.g. the preparatory work of the ICSID Convention and judgments in other jurisdictions) under article 32 of the VCLT. Nonetheless, the Supreme Court was satisfied that the preparatory work of the treaty confirmed its construction of article 54(1). Additionally, foreign courts (including the Australian, New Zealand, Malaysian and US courts) have consistently interpreted article 54(1) as a waiver of adjudicative immunity.
Accordingly, the Supreme Court held that the Appellants had submitted to the jurisdiction of the UK courts for the purposes of section 2 SIA by virtue of article 54 of the ICSID Convention, and subsequently may not oppose the registration of ICSID awards against them on the grounds of state immunity.
Comment
The Supreme Court's decision provides a clear statement of UK law on state immunity in this important area. It reflects the broad international consensus among national courts that article 54(1) of the ICSID Convention amounts to a waiver of immunity by contracting States from each other's adjudicative jurisdiction. It will provide international investors with increased comfort in the practical protections afforded by international investment treaties.
The Supreme Court's decision is limited to state immunity from adjudicative jurisdiction, and notes separately that immunity from execution is preserved under article 55 of the ICSID Convention. However, as set out in section 13 of the SIA, in many cases, this immunity will not be insurmountable, e.g. where investors and other award creditors can execute an award against a State's commercial assets.
State immunity continues to be a live issue in the English courts, particularly in light of the upcoming Court of Appeal hearing in the case of Devas v India, which will consider the question of whether India's ratification of the New York Convention (1958) amounts to a "prior written agreement" submitting to the jurisdiction of the English courts for the purposes of section 2(2) SIA (see our blog post on the High Court decision here).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
