Background
Operafund Eco-Invest SICAV PLC and Schwab Holding AG brought an Energy Charter Treaty arbitration against Spain concerning changes to its renewable-energy incentives. The investors obtained an ICSID award of €29.3 million in 2019 and later registered it in England under the Arbitration (International Investment Disputes) Act 1966. Spain sought to set aside the registration order, including on state-immunity grounds.
While those proceedings continued, the investors entered into a Swiss-law agreement purporting to assign all rights, interests and benefits under or concerning the award to Blasket Renewable Investments LLC. Blasket applied to be substituted for the investors in the English proceedings. The Commercial Court refused substitution, holding that no valid assignment had occurred, and Blasket appealed.
The Court’s Holding
The Court of Appeal unanimously dismissed the appeal. It held that the rights created by the ICSID Convention and embodied in an ICSID award are governed by international law. International law does not currently confer a general right to assign such an award, and the relevant treaty framework did not provide one. Article 54(2) of the ICSID Convention permits recognition or enforcement to be sought by a party to the arbitration, not a voluntary assignee such as Blasket.
The court also held that registration under section 2 of the 1966 Act did not create a separate English-law enforcement right capable of assignment independently of the award. Registration supplies the domestic machinery for executing the award; it does not create new substantive rights or permit a nonparty to do what the ICSID Convention does not authorize. Because Blasket had not acquired the investors’ interest, it could not be substituted in the proceedings.
Key Takeaways
- Under English law, an ICSID award against a contracting state cannot presently be transferred by voluntary assignment without a supporting right under international law.
- Article 54(2) limits the right to seek recognition or enforcement of an ICSID award to a party to the underlying arbitration.
- Registration under the 1966 Act is procedural and does not generate an independently assignable English-law right of enforcement.
Why It Matters
The decision restricts the developing market for purchasing ICSID awards, at least where recognition or enforcement is sought in England and Wales. A buyer cannot rely on a conventional assignment agreement or on registration of the award to replace the original award creditor.
The court acknowledged contrary first-instance decisions from other jurisdictions but found no settled international consensus supporting assignability. It left open distinct questions involving involuntary transfers, such as insolvency or corporate succession, and assignments made with the debtor state’s consent.