24.11.2025
Following the English Commercial Court’s decision in OperaFund Eco-Invest SICAV Plc & Schwab Holding AG v Kingdom of Spain [2025] EWHC 2874 (Comm), which marks a significant development in the ongoing global litigation concerning enforcement of ICSID awards against Spain, Trevor Mascarenhas and Yana Ahlden consider its significance and implications.
In rejecting the attempt to substitute Blasket Renewable Investments LLC for the original award creditors, the Court engaged deeply with public international law, treaty interpretation, and the interface between sovereign immunity and cross-border enforcement. The judgment sharpens the contours of what rights investors may—or may not—transfer under the ICSID Convention and the Energy Charter Treaty (ECT).
The judgement engages closely with public international law, treaty interpretation, and the limits of sovereign immunity, ultimately highlighting the complexity of enforcing ICSID awards across borders.
Background: From Renewable Energy Incentives to Multi-Forum Enforcement
OperaFund and Schwab had invested in Spanish renewable energy projects between 2008 and 2009, relying on regulatory incentives later withdrawn by Spain. The investors initiated ICSID arbitration under the ECT, resulting in a €29.3 million award in 2019
In 2021, the investors obtained registration of the award in England under the Arbitration (International Investment Disputes) Act 1966 (the “1966 Act”), conferring on the award the same enforceability as a domestic High Court judgment. While Spain sought to set aside registration—primarily relying on sovereign immunity arguments—OperaFund assigned “all rights, interests and benefits” in the award to Blasket in January 2024 and applied to substitute Blasket as claimant under CPR 19.2(4)(a). The court was directed to determine the substitution issue promptly to establish “who the parties are”.
Issue Estoppel: Could Spain Re-Argue Assignability?
Blasket’s primary argument was that Spain was estopped from disputing assignability because the Federal Court of Australia (FCA) had already ruled the award assignable in Blasket Renewable Investments LLC v Spain [2025] FCA 1028.
The Commercial Court rejected the estoppel argument for two principal reasons:
- Lack of finality. Under the “Good Challenger” and the “Sennar Test", a judgment can give rise to an issue estoppel only if it is conclusive. The FCA judgement had failed this test because no sealed final order had yet been issued in the proceedings, meaning the Australian judgment was not “final and conclusive on the merits” for estoppel purposes.
- Spain had not submitted to the Australian court’s jurisdiction. Under s.33 of the Civil Jurisdiction and Judgments Act 1982 (CJJA), a party does not submit to a foreign court’s jurisdiction merely by appearing to contest jurisdiction. The record showed Spain had appeared solely to assert state immunity and jurisdictional objections, precluding recognition of the FCA judgment under s.31(1)(a) CJJA.
- The court confirmed that issue estoppel may arise on points of law if the determination was “fundamental to the decisions”. Citing Skatteforvaltningen v MCML, the judge held: “issue estoppels can arise from determinations on points of law as well as points of fact”. However, since finality and jurisdiction failed, the estoppel argument collapsed.
Accordingly, Spain was free to argue the assignability issue anew.
The Core Legal Question: Are ICSID Convention Awards Assignable?
The Commercial Court accepted that the ICSID Convention contains no express rule on assignability. The question therefore turned on treaty interpretation under Articles 31–32 of the Vienna Convention on the Law of Treaties.
Article 54(2) allows “a party” to seek recognition or enforcement of an award. The Court held that:
- “A party” means a party to the original arbitration, not an assignee. Meaning that “this would exclude action by an interested third party.”
- Article 53 reinforces this reading by providing that awards bind “the parties” and must be complied with by “the parties”—a formulation consistently referring to participants in the arbitration itself.
- The requirement that the enforcing party present an ICSID-certified copy of the award further implied that the drafters did not contemplate third-party enforcement
The Court emphasized that allowing free assignability would introduce entities into the enforcement process that the Convention did not envisage.
Although the ECT likewise lacks a general clause on assignment, Article 15 expressly addresses subrogation in limited circumstances—where, for example, a state indemnifies an investor. According to the Court, the presence of such a tailored subrogation mechanism suggests that broader, free assignment was not intended. Otherwise, Article 15 would be superfluous.
Registration Under the 1966 Act Does Not Create Assignable Rights
OperaFund and Blasket argued in the alternative that, even if the award itself could not be assigned, registration under the 1966 Act created a new, assignable English judgment debt.
The Court rejected this, holding:
- The 1966 Act is purely procedural—it gives domestic effect to the UK’s treaty obligations but does not alter the underlying substantive rights of the award. Registration cannot “manufacture” assignability where the Convention does not permit it, echoing earlier reasoning in Micula v Romania.
Thus, no rights arose under English law that could support substitution of Blasket as claimant.
Commercial and Practical Implications
The judge rejected suggestions that this interpretation created commercial absurdity. OperaFund remained free to pursue enforcement, and Blasket (as assignee inter partes) could still control litigation strategy and receive proceeds under the assignment agreement. But Blasket could not become the formal enforcement party because public international law constraints overrode domestic procedural flexibility.
The ruling underscores that investors in ICSID awards must structure transfers with care: while economic rights may be transferred contractually, the ability to stand before national courts as enforcement claimants remains restricted. Ultimately highlighting how the court refused to prioritise commercial convenience over treaty structure.
Significance
The decision has international ramifications:
- It diverges sharply from Australian and US federal decisions that treat ICSID awards as assignable choses in action.
- It reinforces a more conservative, treaty-centred approach in the UK, especially important given multiple pending ICSID enforcement actions against Spain.
- The court recognised that allowing third-party enforcement of ICSID awards could undermine the treaty framework, which is built around state consent to arbitration with specifically defined investors.
- It signals a judicial emphasis on textual fidelity to the ICSID Convention at a time when intra-EU investment arbitration faces systemic challenges.
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