The Supreme Court today handed down judgment in Kingdom of Spain v. Infrastructure Services Luxembourg S.À.R.L. and Republic of Zimbabwe v. Border Timbers Ltd [2026] UKSC 9.
The decision settles as a matter of UK law a point of controversy about sovereign immunity and ICSID awards which has been the subject of appellate decisions in the United States of America, Australia, Singapore and a number of other jurisdictions.
That issue is whether Article 54 of the ICSID Convention constitutes a waiver of sovereign immunity from adjudication in proceedings for the enforcement of ICSID arbitral awards. The Supreme Court (Lord Lloyd-Jones and Lady Simler writing for a unanimous bench) found that it does. The appellant states had therefore submitted to the jurisdiction of the English courts for the purposes of section 2(2) of the State Immunity Act 1978 in proceedings brought to register ICSID awards against them in the Commercial Court pursuant to the Arbitration (International Investment Disputes) Act 1966.
In reaching that conclusion, the Supreme Court has clarified the general test for a submission pursuant to section 2(2) by way of prior written agreement in the form of an international treaty. Such a submission “requires a clear and unequivocal expression of the state’s consent to the exercise of jurisdiction”, which may be “conveyed not only by the express words used but also by what is necessarily inherent in those words, and by what necessarily follows as a consequence of the use of those words”. The test is therefore “whether the words used necessarily lead to the conclusion that the state has submitted to the jurisdiction” (at [69]). In formulating that test, the Supreme Court characterised Lord Goff’s widely-cited speech in Pinochet (No. 3) [2000] 1 AC 147 as taking “an unnecessarily narrow view of what may constitute an express waiver of immunity” (at [49] ff).
Having decided that Spain and Zimbabwe had submitted pursuant to section 2(2) of the State Immunity Act, the Supreme Court declined to consider separate issues relating to the ‘arbitration exception’ in section 9 of that Act, including in particular whether parties to ICSID awards are precluded by way of issue estoppel from arguing that an ICSID tribunal lacked jurisdiction. In the judgment of the Court of Appeal under appeal, reported at [2025] KB 611, the Court of Appeal gave a strong obiter indication that a state would not be so precluded, and the issue will therefore remain open in cases where section 2(2) is not available — for example, in proceedings against the large number of Contracting Parties to the ICSID Convention which joined the treaty prior to the State Immunity Act coming into force.
Further, the Supreme Court did not address Spain’s case that there was no valid arbitration agreement between intra-EU parties by way of Article 26 of the Energy Charter Treaty; and non-immunity defences to enforcement reserved by Zimbabwe remain to be determined in the Commercial Court.
Find the link of the judgment here.
Lucas Bastin KC and Freddie Popplewell acted for the Kingdom of Spain (together with Cameron Miles of 3VB), instructed by Luciana Ricart and Will Hampson of Curtis, Mallet-Prevost, Colt & Mosle LLP.
Benedict Tompkins acted for the Republic of Zimbabwe, (together with Salim Moollan KC of Brick Court Chambers and Tom Foxton of One Essex Court), instructed by Philip Beswick, Christopher Walke and John Choi of Gresham Legal.
