Infrastructure Services Luxembourg S.A.R.L and another v The Kingdom of Spain [2026] UKSC 9

Spain and Zimbabwe appealed against registration of ICSID arbitration awards in the UK, claiming state immunity. The Supreme Court held that by ratifying the ICSID Convention, particularly Article 54(1), contracting states waived their immunity from adjudicative jurisdiction for recognition and enforcement proceedings, while preserving immunity from execution only.

Facts

Two appeals were heard together concerning whether foreign sovereign states could rely on state immunity to set aside registration of ICSID arbitration awards in England. Infrastructure Services Luxembourg and Energia Termosolar obtained an award of €112 million against Spain arising from changes to Spain’s renewable energy regulatory regime, allegedly breaching the Energy Charter Treaty. Border Timbers obtained an award of US$124 million against Zimbabwe for expropriation of land investments. Both awards were registered in the High Court under the Arbitration (International Investment Disputes) Act 1966. Spain and Zimbabwe applied to set aside registration claiming immunity under section 1(1) of the State Immunity Act 1978.

Issues

Principal Issue

Whether by agreeing to be bound by Article 54(1) of the ICSID Convention, the appellant states submitted to the jurisdiction of English courts within the meaning of section 2(2) of the State Immunity Act 1978, thereby losing immunity from adjudicative jurisdiction.

Judgment

The Supreme Court unanimously dismissed both appeals. Lord Lloyd-Jones and Lady Simler (with whom Lord Briggs, Lord Sales and Lord Leggatt agreed) delivered the joint judgment.

The Test for Waiver Under Section 2 SIA 1978

The Court held that a waiver of immunity by treaty requires a clear and unequivocal expression of the state’s consent to the exercise of jurisdiction, interpreted according to public international law principles in Articles 31 and 32 of the Vienna Convention on the Law of Treaties. Such expression does not require explicit words such as ‘waiver’ or ‘submission’:

“We consider that a waiver of immunity by treaty requires a clear and unequivocal expression of the state’s consent to the exercise of jurisdiction… Such an expression of consent does not require explicit words such as waiver or submission. Meaning is 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.”

Interpretation of Article 54(1) ICSID Convention

The Court held that Article 54(1) constitutes a clear and unequivocal waiver of adjudicative immunity. Each contracting state agrees that all other contracting states will recognise and enforce ICSID awards as if they were final judgments of domestic courts. This reciprocal obligation is fundamentally inconsistent with maintaining adjudicative immunity:

“A contracting state (such as Spain or Zimbabwe) cannot simultaneously agree that the United Kingdom ‘shall’ recognise and enforce an ICSID award rendered against them, whilst also claiming immunity from recognition and enforcement that would prevent the United Kingdom from complying with its own ICSID obligations.”

The Court emphasised the distinction in Articles 54-55 between recognition/enforcement and execution, with only immunity from execution being expressly preserved in Article 55.

International Consensus

The Court noted broad international consensus supporting this interpretation, with courts in Australia, New Zealand, Malaysia and the United States reaching similar conclusions.

Implications

This judgment has significant implications for international investment law and state immunity. It confirms that ICSID contracting states cannot invoke sovereign immunity to resist recognition and enforcement proceedings for ICSID awards in other contracting states, though immunity from execution remains available. The decision reinforces the effectiveness of the ICSID Convention’s enforcement regime and provides important clarity on the interplay between treaty obligations and state immunity doctrine. The judgment also provides authoritative guidance on the standard for treaty-based waivers of immunity under UK law, rejecting an overly narrow approach requiring explicit waiver language.

Verdict: Appeals dismissed. Spain and Zimbabwe could not rely on state immunity to set aside registration of the ICSID awards. By ratifying the ICSID Convention, the appellant states submitted to the adjudicative jurisdiction of UK courts for recognition and enforcement proceedings under section 2(2) of the State Immunity Act 1978. Zimbabwe’s application was remitted to the Commercial Court for determination of reserved non-immunity defences.

Source: Infrastructure Services Luxembourg S.A.R.L and another v The Kingdom of Spain [2026] UKSC 9