LONDON — The governments of Spain and Zimbabwe on Monday urged the Supreme Court of the United Kingdom (UKSC) to overturn a decision that upheld the registration and enforcement of two major international arbitration awards, arguing that the previous rulings improperly stripped them of sovereign immunity.
Under challenge are awards issued under the ICSID Convention — one against Spain relating to a 2018 energy‑investment dispute, and another against Zimbabwe over claims tied to the land reform programme. Both States contend they never “expressly waived” their immunity when they acceded to ICSID, and therefore the awards should not have been enforced in UK courts under the State Immunity Act 1978 (SIA).
In October 2024, the Court of Appeal of England and Wales dismissed appeals by Spain and Zimbabwe, affirming that ICSID awards could be registered and enforced in the UK, despite claims of sovereign immunity. The Court held that accession to the ICSID Convention constitutes a binding waiver of immunity under Article 54 of the Convention — effectively permitting foreign state‑defendants to be treated “as if they were domestic judgments.”
The judges further determined that the Act giving effect to ICSID awards in UK law, the Arbitration (International Investment Disputes) Act 1966, overrides SIA’s general immunity protections when states agree to arbitration under the Convention.
States contest the waiver’s validity — and the UK Supreme Court could side with them
Spain and Zimbabwe now argue before the Supreme Court that the waiver implied by ICSID accession was never explicit or informed — and that the UK courts erred by treating their mere membership as consent to foreign enforcement. They claim the awards should be set aside to preserve the principle of sovereign immunity and avoid undermining state prerogatives.
If the Supreme Court rules in their favour, it would mark a landmark recalibration of how treaty‑based arbitration awards are enforced in the UK — potentially rolling back hundreds of millions of dollars in liabilities currently established against sovereign defendants.
A ruling in favour of Spain and Zimbabwe could dramatically increase the risk for investors seeking to enforce international arbitration awards against states in UK (and perhaps other) courts. It would signal that accession to ICSID alone may not suffice as a waiver of immunity — reviving sovereign immunity as a viable defence for defaulting States.
Conversely, if the Court rejects the appeal and upholds enforcement, it would reinforce the UK’s already strong reputation as a global hub for arbitration enforcement — and could encourage more investors to seek UK judgments to secure their claims, even where States resist payment.
This legal battle is widely seen as one of the most significant disputes in recent years over the boundaries between state sovereignty and international investment law — a tension that could reshape the landscape for foreign investors, sovereign debtors, and courts worldwide.
