ICSID Award Research Articles

Infrastructure Services Luxembourg Sàrl and Energia Termosolar BV v Kingdom of Spain: Spain Fails to Secure Set Aside of Registration of Intra-EU ICSID Award in the English Commercial Court

<i>Infrastructure Services Luxembourg Sàrl and Energia Termosolar BV v Kingdom of Spain:</i> Spain Fails to Secure Set Aside of Registration of Intra-EU ICSID Award in the English Commercial Court

Article: Spain Fails to Set Aside Registration of intra-EU ECT ICSID Award in the English Commercial Court

In Infrastructure Services Luxembourg and another v. Kingdom of Spain [2023] EWHC 1226 (Comm), the English Commercial Court handed down a significant judgment in high profile proceedings seeking the enforcement of an ICSID award issued in a renewable energy sector dispute pursuant to the Energy Charter Treaty (ECT). The same parties have been engaged in multiple proceedings around the world, including in Australia, where the High Court recently rendered an important decision with regard to the waiver of a state’s enforcement immunity. The English Commercial Court provides a detailed assessment (and rejection) of Spain’s ‘intra-EU’ objection to the viability of investment treaty arbitration of its disputes with investors domiciled in EU Member States. The Infrastructure judgment has been heralded as a statement of the English courts’ readiness to straightforwardly enforce intra-EU awards in circumstances when enforcement through the courts of EU Member States may no longer be such an attractive prospect for intra- EU award creditors.

Enforcing an icsid Award Issued in an Intra-EU Investment Arbitration: An Italian Law Perspective

Abstract As a consequence of the cjeu’s decisions in Achmea, Komstroy, and pl Holdings, the enforcement of intra-EU investment awards has now become subject to serious challenges based on EU law. At the same time, the enforcement system under the icsid Convention is designed to prevent challenges at the enforcement stage. The article analyzes the potential clash between contrasting obligations under EU law and international law from the perspective of Italian law. To this end, it draws from the experience of other EU courts in the context of the Micula saga as well as from the only available example of enforcement of an icsid award in Italy. The article considers the various possible approaches to the intra-EU issue and then examines the compatibility of the icsid enforcement system with the Italian Constitution.

Eiser v Spain – Unprecedented Annulment of an ICSID Award for Improper Constitution of the Tribunal

Abstract The ad hoc Committee in Eiser Infrastructure Limited and Energía Solar Luxembourg SÀRL v Kingdom of Spain, annulled a unanimous ICSID award in its entirety, inter alia, on the ground that the tribunal was not properly constituted (Article 52(1)(a) of the ICSID Convention). The Committee found a ‘manifest appearance of bias’ with regard the claimant nominated arbitrator because the latter did not disclose his professional relationships with a Claimants’ expert, who testified before the Tribunal. The decision contains doctrinal findings which may reinforce and broaden arbitrators’ duty of disclosure. Nevertheless, the outcome of the decision – where proceedings, which began in 2013, at considerable expense to the parties, were annulled in full – seems unreasonable and inefficient. Moreover, some parts of the Committee‘s reasoning, as well as its decision to annul the award without giving the arbitrator an opportunity to refute the allegations raised against him, are questionable.

On Some Aspects Of Recognition And Enforcement Of Icsid Awards In The Republic Of Azerbaijan

The current paper analyzes recognition and enforcement procedure of ICSID Awards, namely matters of immunity from jurisdiction and immunity from recognition under legal framework established by the ICSID Convention. As such, Article 55 of the ICSID Convention regards national laws on state immunity which results in implications in enforcement of ICSID Awards. To be more precise, based on, inter alia, this provision the states have developed national rules governing application of state immunity which in absence of unified rules and practice may result in inability of winning investor to enforce the ICSID Award due to nature of property located in a state where investment is sought. Accordingly, there has been attempts to mitigate this risk by developing contractual tools for waiving sovereign immunity in case of enforcement of arbitrary award. With that said, the current paper highlights existing problems in enforcement of ICSID Awards deriving from doctrine of sovereign immunity and proceeds with analysis of the abovementioned tools as well as applicable national legislation of the Republic of Azerbaijan in order to identify provisions governing recognition and enforcement of ICSID Awards as well as those addressing the matter of sovereign immunity.

Analysis of The UK Supreme Court Decision in Micula and Others V Romania

On 19 February 2020 the UK Supreme Court in the case of Micula and others v Romania upheld 2013 ICSID tribunal award and lifted the stay on its enforcement. This case commentary provides a historical background of the 15-year long-running dispute between Romania State and Swedish Micula brothers, his co-investors and companies in order to understand the decision of UK Supreme Court. An attempt has been made to analyze the Sweden-Romania Bilateral Investment Treaty, 2013 the decision of ICSID tribunal, 2015 decision of EU Commission, 2019 judgment by the General Court of European Union (GCEU), 2019 decision of the US District Court. In this comment, the author also made an attempt to analyze the decision given in the Achmea v Slovakia case along with GCEU decision which creates a negative environment for the cross-border investors and has a wider ramification on Bilateral Investment Treaties (hereinafter BITs). This case comment also shows how the judgment of the UK Supreme Court welcomed by the EU-investors and creates a positive environment for them to invest in the European Union and creates an obligation for the English Court to recognize the ICSID Award. Further, the ruling had a wide implication in Investment treaty arbitration and recognition of ICSID ruling in other jurisdictions. Finally, the author concludes the judgment in a wider political context of Brexit, International Investment Arbitration, BITs and Achmea case.

Understanding ICSID Article 54

Abstract To the surprise of many, questions have recently arisen over the scope of inquiry, if any, that a national court may, consistent with Article 54 of the ICSID Convention, make in connection with the enforcement of an ICSID award. It has long been assumed in many, if not most, quarters that a national court is privileged to condition enforcement of an ICSID Convention award on a single simple requirement, viz. that the award be certified by the Secretary-General of ICSID. Until recently, doubts over whether that is so have been raised in a very small number of jurisdictions. But the Commission of the European Union has taken the view that an ICSID Convention award may be denied enforcement if it is contrary to a principle of “autonomy” of EU law and, based on its judgment in Achmea case in connection with non-ICSID awards, the European Court of Justice most likely takes the same view. This suggests that the European Union regards violation of EU public policy, more generally, as a defense to enforcement of an ICSID award. Based on text, object and purpose, legislative history, and predominant state practice, this position appears to run seriously afoul of the ICSID Convention. At the same time, some meaning must be given to the language in Article 54 according to which an ICSID award must be enforced by a national court “as if it were a final judgment of a court” of the enforcing State. The author finds that the understanding of Article 54 that best reflects all pertinent considerations is that it imposes on courts the modest requirement that they subject the enforcement of ICSID awards to no more restrictive or onerous procedures than they impose on the enforecement of national judgments.

Finality, Fairness, And Consistency

&#x0D; &#x0D; &#x0D; A unique feature of the ICSID framework is the built-in control mechanism that allows parties to seek annulment of an otherwise final award via Article 52 of the Convention. Unlike arbitration in other contexts, this mechanism is the exclusive means for review of an ICSID award. While scholars and practitioners regard this as one of the most innovative features of the ICSID regime, many of the grounds for annulment remain underdeveloped. In particular, annulment committees have applied the “serious departure from a fundamental rule of pro- cedure” ground inconsistently.&#x0D; Especially because challenges to arbitrators can occur dur- ing the appointment phase, during the arbitration itself, or during annulment proceedings, the proper standard for deter- mining bias remains convoluted. Accordingly, this Note exam- ines how different approaches to assessing arbitrator bias un- fold in annulment proceedings applying the “fundamental rule of procedure” ground. It argues that these differences have con- tributed to a greater number of unpredictable outcomes, under- mining a central purpose of ICSID. Two recent decisions—the Azurix and EDF annulments—highlight the divergent ap- proaches ad hoc committees have taken in addressing allegations of bias. This Note concludes by identifying the EDF approach as the most appropriate standard of review and dis- cusses possible routes for resolving differences in ICSID annul- ment decisions.&#x0D; &#x0D; &#x0D;

ICSID Award Annulled for Arbitrator’s Failure to Disclose Close Ties with Party Expert. Note on Eiser v. Kingdom of Spain

ICSID Award Annulled for Arbitrator’s Failure to Disclose Close Ties with Party Expert. Note on Eiser v. Kingdom of Spain

Taxation, State Aid Rules and Arbitral Courts:

In its long-awaited ruling on 18 June 2019, the General Court (GC) annulled the Commission's State aid Decision in the Micula case where the Commission considered that the damages payment by Romania of an ICSID award constituted State aid. In the GC's opinion, the payment of the adverse arbitration award by a Romania does not constitute illegal State aid. Unfortunately, the GC's reasoning is tied to the timing of the measure taken by Romania, which took place before Romania acceded to the EU, and the rest of the compelling substantive pleas were not assessed. Moreover, the GC did not rule on whether the compensation of the withdrawal of the tax incentives for the post-accession period constitutes State aid given that the Commission failed to distinguish between compensation for the period predating accession and post-accession. For this reason, this judgment does not put an end to the Micula saga as long as the Commission has lodged an appeal before the Court of Justice. Keywords: arbitral award, Bilateral Investment Treaty (BIT), repeal of tax incentives, damages compensation, enforcement

ICSID 중재판정의 집행(enforcement)에 관한 연구

ICSID 중재판정의 집행(enforcement)에 관한 연구

Presence of Third-Party Funding in the International Investment System Constitutes a Fundamental Change of Circumstances

The paper discusses whether the presence of Third-Party Funding (TPF) in ISDS constitutes a fundamental change of circumstances sufficient to successfully invoke the doctrine of rebus sic stantibus to justify a state’s refusal to enforce a TPF-funded arbitral award against it, by treating Articles 53 and 54 of the ICSID Convention as suspended for TPF-funded proceedings. An investor would typically seek the enforcement of an ICSID award in the domestic courts of the host state, which could be refused by the courts as against public policy if the state had legislated to ban TPF at least in an ISDS setting. However, this would trigger an objection by the enforcing party that such refusal constituted a violation of the state’s duty under the ICSID Treaty, specifically Articles 53 and 54. In response, the host state could (it is argued) invoke the principle of a fundamental change of circumstances to treat as suspended the ICSID Convention requirement of recognizing and enforcing the award. Afterwards, the investor’s home state could dispute the host state’s invocation of the doctrine in the ICJ to determine whether the change suffices to constitute a fundamental change of circumstances.

International Law and Corporate Participation in Times of Armed Conflict

This paper explores the overlapping conceptions of ‘international legal personhood’ in international criminal law (ICL) and international investment law (IIL) in light of the December 2016 ICSID Award of Urbaser v. Argentina. It is an effort to parse out and test potential standards for investor-to-state liability for corporate participation in mass atrocities and human rights violations, particularly in instances of armed conflict. In exploring the question of when a corporation can be held financially liable for human rights violations under international investment law, the paper suggests that Urbaser invites an application of ICL liability doctrines as ‘boundary crossing’ tools that arbitrators can use to further define the contours of international corporate subjectivity to international law.

Counterclaims Based on International Human Rights Obligations of Investors in International Investment Arbitration

The 2016 icsid award in Urbaser v. Argentina affirmed for the first time the possibility of a counterclaim in investment arbitration based on an international investor obligation under the human right to water. But to denounce a break-through and fundamental change in both international investment and human rights law would be premature. This article deconstructs the award’s reasoning and sheds light on its doctrinal fallacies, in particular the award’s unclear construction of the integration of a human rights obligation into investment arbitration and its misled argumentation on the existence of an international human rights obligation of private actors under the human right to water. Concluding that the award cannot be sustained under the current state of international law, the article then reflects on the potential of the award’s conception of human rights counterclaims for the future of international investment law and international human rights law.

Comments on the ICSID Award Ansung Housing v. People's Republic of China

Comments on the ICSID Award Ansung Housing v. People's Republic of China

An Assessment on the Enforcement of the ICSID Arbitral Award in China

This article examines the enforcement of the ICSID Awards in China. China is one of the most enthusiastic signatories of Bilateral Investment Treaty that grants mandatory jurisdiction to the ICSID investment arbitration system. It notes that China has failed to enact any specific legislation to comply with the ICSID Convention enforcement obligations, making its compliance with these obligations uncertain. It concludes that the only way that the China could claim to have fulfilled its treaty obligations is to declare that the ICSID Convention and related agreements have a direct effect on its domestic law. The status of treaties within China law, however, remains uncertain and unsettled. For this reason, it is likely that a judicial interpretation from the Supreme People’s Court is necessary to guarantee enforcement of such an award within China. Without such an interpretation, it is highly doubtful that a China court would enforce an ICSID award, despite the ICSID Convention plain requirement that it do so.

Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Final Award, 11 December 2013

The Micula brothers, Ioan and Viorel, together with three companies that they control, brought ICSID proceedings against Romania in July 2005. An ICSID Tribunal rendered its final decision on 11 December 2013, granting the claimants damages of RON 376,433,229 (equivalent to us$116 million) plus interest accruing until full satisfaction of the Award. The claimants have to date brought at least six sets of enforcement proceedings against Romania all over the world, none of which have yet reached fruitful final conclusion. The conflict between the EU legal order and the ICSID regime, as to the enforcement of awards, has manifested itself in the six different sets of enforcement proceedings. The aim of this case note is to provide an overview of the competition law dimension to the ICSID proceedings in the Micula case. The European Commission’s involvement in the Micula case, including its decision prohibiting Romania from fulfilling the ICSID award and the Commission’s intervention in the ICSID and subsequent enforcement proceedings is also examined. This case note concludes with the observation that The CJEU is due to issue a couple of decisions in the coming months, which could signpost the way for investors to enforce ICSID awards, when these involve the application of intra-EU BITs.

Enforcement of Intra-EU ICSID Awards

According to the European Commission, enforcement of the ICSID award in Micula constitutes illegal state aid under Article 107 TFEU. At the same time, Articles 53 and 54 ICSID Convention require unconditional enforcement of ICSID awards. So far, the relationship between the ICSID Convention and EU law is unresolved. This article presents different approaches to this relationship. It concludes that both EU law and the ICSID Convention are determining factors for the enforcement of intra-EU ICSID awards. As a result, the legal situation involves two competing legal orders each claiming superiority within their scope of application – an increasingly common situation in multilevel systems of governance. Discussing the various legal issues surrounding enforcement of intra-EU ICSID awards, the article proposes a solution to such problems along the lines of the ECtHR’s Bosphorus jurisprudence.

Enforcement against State Assets and Execution of ICSID Awards in Switzerland: How Swiss Courts Deal with Immunity Defences

Three recent decisions of the Swiss Federal Supreme Court provide welcome guidance on the enforcement of ICSID awards against State assets in Switzerland. In the first two decisions, the Swiss Federal Supreme Court reiterated the general principle that State assets entrusted to an International Organisation enjoy absolute immunity. The Court went on to find that while in the case at hand the Swiss Government could initiate arbitral proceedings against the International Organisation concerned if it considered a defence of immunity to constitute an abuse of law, the Court could not review a decision by the Swiss Government not to use its power to initiate such arbitral proceedings since this decision pertained to foreign affairs. In the third, most recent, decision, the Swiss Federal Supreme Court for the first time considered Swiss law on immunity in the context of the enforcement and execution of an ICSID award. It confirmed that ICSID awards are subject to general rules of immunity under Swiss law, and do not therefore enjoy more favourable treatment in this respect than domestic judgments against States.

Stay of Enforcement Decisions in ICSID Annulment Proceedings: Taking Stock

Article 52(5) of the ICSID Convention allows an applicant for annulment of an ICSID award to request that enforcement of the award be stayed while the annulment decision is pending. Although ICSID ad hoc committees have always granted such requests, they have disagreed as to whether a continued stay of enforcement should be conditional. One of the key concerns shared by these committees appears to be that continuation or termination of the stay should not undermine the annulment application's practical outcome.