In OperaFund Eco-Invest SICAV plc and another v Spain [2025] EWHC 2874 (Comm), the Commercial Court decided that an International Centre for Settlement of Investment Disputes (‘ICSID’) Convention arbitration award relating to investments in Spanish solar energy plants was not assignable. The decision reaches a different outcome to an Australian judgment deciding against Spain on the same point. Whilst the Commercial Court decision is on appeal, it remains to be seen whether it may affect the market for third-party funding of investment treaty disputes.
Facts
OperaFund Eco-Invest SICAV plc and Schwab Holding AG (the ‘Claimants’) invested in several Spanish solar energy plants between July 2008 and July 2009, allegedly relying on representations by Spain about minimum tariffs and other incentives for renewable projects (the ‘Incentives’). Between November 2010 and June 2014, Spain enacted legislation revoking the Incentives.
On 31 July 2015, the Claimants issued ICSID arbitration proceedings against Spain under Article 26 of the Energy Charter Treaty 1994 (the ‘ECT’), alleging that, by revoking the Incentives, Spain had breached the ECT and caused the Claimants to incur substantial losses. On 6 September 2019, the arbitral tribunal issued an award finding Spain liable and awarding the Claimants €29.3 million (the ‘Award’).
On 9 August 2021, the Claimants applied without notice to register the Award in England and Wales under the Arbitration (International Investment Disputes) Act 1966 (the ‘1966 Act’), and an order was made on 14 September 2021. Registration meant the Award could be enforced as if it were a High Court judgment.
Spain later applied (on 6 January 2023) to set aside the registration order, including on the basis of state immunity under the State Immunity Act 1978.
Before a decision on Spain’s application to set aside the registration order, the Claimants purported to assign their rights under the Award to Blasket Renewable Investments LLC (‘Blasket’) via an assignment agreement dated 31 January 2024 (the ‘Assignment Agreement’).
On 13 February 2024, most of Spain’s set-aside arguments were dismissed, except the state immunity point. The state immunity issue has since been decided against Spain by the Court of Appeal in the separate case of Infrastructure Services Luxembourg SARL and another v Kingdom of Spain [2024] EWCA Civ 1257 (‘ISL v Spain’). Spain obtained permission to appeal to the Supreme Court, and the set aside application will remain adjourned pending the Supreme Court judgment on ISL v Spain.
The present decision concerns an application by the Claimants and Blasket (the ‘Applicants’) pursuant to CPR 19.4(2)(a) to replace the Claimants with Blasket in the Claimants’ legal proceedings against Spain (the ‘Application’), on the basis that the Claimants have assigned their rights in the Award to Blasket under the Assignment Agreement. Spain opposed the Application.
Decision
The Commercial Court rejected the Application, finding that the Claimants’ rights under the Award were not assignable to Blasket.
The Applicants put their arguments on three alternative bases - each of which were rejected:
- Issue estoppel.
- Assignability.
- Registration of the Award creating new rights.
Issue Estoppel
The Applicants’ primary argument was that Spain was estopped from disputing the assignability of the Award on the basis that a decision had been rendered against Spain on the same point in Blasket Renewable Investments LLC v Spain [2025] FCA 1028 (‘Blasket v Spain’). In Blasket v Spain, the Federal Court of Australia (the ‘FCA’) held that rights under an ICSID award (like the Award) were assignable choses in action under Australian law, with nothing in the ICSID Convention or customary international law prohibiting their assignment.
The Commercial Court rejected the issue estoppel argument.
For estoppel to arise from a foreign judgment, that judgment must be recognised and enforceable in England and Wales. Pursuant to Section 31 of the Civil Jurisdiction and Judgments Act 1982 (the ‘1982 Act’), a foreign judgment against a state other than the United Kingdom is recognised and enforced in the United Kingdom if, and only if:
- “it would be so recognised and enforced if it had not been given against a state” (section 31(1)(a)); and
- the foreign “court would have had jurisdiction in the matter if it had applied rules corresponding to those applicable to such matters in the United Kingdom in accordance with sections 2 to 11 of the State Immunity Act 1978” (section 31(1)(b)).
The Commercial Court dealt swiftly with the second limb, finding that it applied to the Blasket v Spain judgment. However, in determining whether the first limb applied, the Commercial Court accepted Spain’s submission, and followed the Supreme Court decision in Rubin and another v Eurofinance SA and others [2012] UKSC 4, that a foreign judgment against a non-state defendant is not capable of being enforced in England and Wales unless “… the judgment debtors were present … in the foreign country when the proceedings were commenced, or if they submitted to its jurisdiction”. By only asserting its purported entitlement to state immunity, Spain only appeared in the Blasket v Spain proceedings to contest the jurisdiction of the FCA.
Therefore, pursuant to section 33 of the 1982 Act, Spain did not submit to the jurisdiction of the FCA.
Assignability
The Applicants also contended that Spain’s objection to the assignability of the Award ought to be rejected on its merits. In their submission, because neither the ICSID Convention nor the ECT contains any express prohibition on assignment, and there are no applicable principles of international law prohibiting assignment, then third parties may seek recognition and enforcement of ICSID awards.
The Commercial Court rejected the Applicants’ submission, holding that the lack of express provisions in the ICSID Convention or the ECT meant that whether the Award was capable of assignment was a matter of construction of the ICSID Convention (and to a lesser extent of the ECT).
The Applicants relied substantially on a wide interpretation of the word “party” in Article 54(2) of the ICSID Convention to argue that the Award was assignable. Article 54(2) provides, in relevant part:
“A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General.”
Contrary to the Applicants’ interpretation and relying on leading commentaries, the Commercial Court found that, in the context of the remaining provisions of the ICSID Convention and its purpose, the word “party” in Article 54(2) meant only a party to the original arbitration, meaning that an ICSID award cannot be assigned. It dealt swiftly with the ECT to reach the same conclusion.
The Commercial Court noted that, contrary to the Applicants’ submission, the consequences of his decision were not commercially absurd or unjust. Pending a decision on Spain’s set aside application, the Claimants remained entitled to enforce the Award against Spain and Blasket, pursuant to the Assignment Agreement, could control the process and receive any sums recovered by the Claimants.
Registration of the Award creating new rights
Finally, the Applicants contended that, if the Award itself was not assignable, then the rights arising from its registration under the 1966 Act were capable of assignment.
The Commercial Court also rejected this argument. It found that, because the 1966 Act was enacted exclusively to implement the United Kingdom’s obligations under the ICSID Convention, registration of an award under the 1966 Act could not create new substantive rights. Therefore, the fact that the Award was not assignable did not change with registration. Allowing non-assignable awards to become assignable on registration would give rise to an undesirable outcome whereby the assignability of an award would depend on the jurisdiction in which it might be registered.
Permission to appeal has been granted. The appeal is due to be heard by November 2026.
Comment
Subject to the outcome of any appeal, this decision means that ICSID awards (including those rendered under the ECT) are not assignable under English law.
It is noteworthy that the decision is not consistent with the FCA’s decision in Blasket v Spain and the decision in Blue Ridge Investments LLC v Republic of Argentina, No. 10 Civ. 153 (S.D.N.Y. Sept. 30, 2012). In these decisions, the FCA and the US District Court for the Southern District of New York decided that ICSID awards were assignable by applying domestic law. By contrast, the Commercial Court has reached the opposite conclusion.
As things stand, pending appeal, the position on the assignability of ICSID awards in England and Wales is therefore now different from the position in other jurisdictions. In practice, the effect of the decision is that ICSID awards enforced in England and Wales become a less liquid asset than commercial arbitration awards, which remain assignable assets.
As permission to appeal has been granted, the position is subject to change.
Although the Court’s reasoning was specifically directed at an ICSID award, and grounded in the language of the ICSID Convention, it remains unclear what impact (if any) the decision may have on the assignability of non‑ICSID investment treaty awards (i.e., awards rendered under other investment treaties).
It also remains to be seen whether this will affect the market for third-party funding of investment treaty disputes. It seems likely that funders will be able to structure transactions to acquire the benefits of sums due under an ICSID award. However, such arrangements are likely to be more complex and potentially less attractive, as a funder may have to rely on the original claimant to remain an active party in any enforcement proceedings. These complications become especially significant if the claimant is, or becomes, insolvent following the award. In such circumstances, the inability to assign the award directly may create additional procedural and practical hurdles for funders seeking to monetise or enforce the award.
Judge: Pelling HHJ
