CL-2021-000481 - [2025] EWHC 2874 (Comm)

The final issue I have to determine is whether, notwithstanding the conclusions I have reached so far, the rights that accrued to the claimant from the commencement of these proceedings are assignable as a matter of English law.

The assignment agreement between the claimants and Blasket purported to assign to Blasket “… all of the rights, interests and benefits of the Assignors under or in respect of the Award (including the Decision on Rectification and the Annulment Decision) (including in each case, if any, the respective decision on arbitration costs and legal fees therein)…” The Claimants and Blasket submit that the rights that accrued to the claimant as a result of the commencement of these proceedings are “… rights… in respect of the Award…” and that whilst the assignability of the Award is governed by International law, the rights that accrued to the claimants following registration under s.2 of the 1966 Act are rights created by English law and their assignability if governed by English law. Spain argues that these submissions should be rejected because registration under the 1966 Act does not accord to the claimant rights that it did not otherwise have under the Award and that in consequence the rights arising as a result of registration are unassignable.

By Article 69 of the ICSID Convention, each Contracting State was required to take “… such legislative or other measures as may be necessary for making the provisions of this Convention effective in its territories.”. In the United Kingdom, that obligation was satisfied by the enactment of the 1966 Act, the long title of which describes the purpose of that Act as being “… to implement an international Convention on the settlement of investment disputes between States and nationals of other States.” S.1(1) of the 1966 Act permits registration of Awards rendered pursuant to the ICSID Convention and by s.2(1) of the 1966 Act:

“Subject to the provisions of this Act, an award registered under section 1 above shall, as respects the pecuniary obligations which it imposes, be of the same force and effect for the purposes of execution as if it had been a judgment of the High Court given when the award was rendered pursuant to the Convention and entered on the date of registration under this Act, and, so far as relates to such pecuniary obligations—

(a)

proceedings may be taken on the award,

(b)

the sum for which the award is registered shall carry interest,

(c)

the High Court shall have the same control over the execution of the award, as if the award had been such a judgment of the High Court.”

By s.3 of the 1966 Act, the Arbitration Act 1996 (“AA 96”) “… shall not apply to proceedings pursuant to the Convention…” other than sections 36 and 38 to 44 of AA 96 to the extent directed by order of the Lord Chancellor. It follows from this that in my judgment the reliance by the claimants and Blasket on s.58(1) of AA 96 is mistaken.

As is apparent from the provisions set out above, the 1966 Act was concerned exclusively with the provision of a procedural means by which effect was to be given to ICSID Convention awards in the United Kingdom. What that required was that the United Kingdom takes the necessary legislative steps to give effect to Chapter IV (Arbitration) Section 6 (Recognition And Enforcement Of The Award) of the ICSID Convention. The key provision that matters for present purposes is Article 54. Article 54(1) requires that each Contracting State “… shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State.” That provision contains nothing to suggest that recognition was required or permitted to have any impact on substantive rights and that the purpose of this provision was anything other than exclusively to facilitate enforcement of an ICSID Convention award in each Contracting State. That was put beyond doubt by Article 54(3), which provides that “(e)xecution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought.”

That is precisely what s.2(1) of the 1966 Act achieves because it limits the effect of registration under the Act to defining the force and effect of a registered award for the purpose of execution by analogy with a High Court monetary judgment – see Micula & Ors v Romania[2018] EWCA Civ 1801, [2019] Bus LR 1394 per Leggatt LJ (as he then was) at [259]. The obligation to “enforce” is expressed to apply only to the pecuniary obligations imposed by the award and to go no further than to oblige the contracting state to enforce those pecuniary obligations within its territories “… as if [the award] were a final judgment of a court in that state …” – see ISL per Philips LJ at [74]. As Leggatt LJ held in Micula & Ors v Romania (ibid) the effect of section 2(1) of the 1966 Act is not to make an ICSID award registered under section 1 of the 1966 Act equivalent for all purposes to a judgment of the High Court given in ordinary domestic proceedings. As Leggatt LJ held at [257], “… the purpose of the 1966 Act, … is to implement the ICSID Convention. To give effect to that purpose, section 2(1) of the 1966 Act must so far as possible be interpreted in a manner which is consistent with the ICSID Convention…” In those circumstances, registration does not render assignable what is not assignable under the ICSID Convention, merely because the benefit of a High Court judgment is capable of being assigned. Arden LJ (as she then was) agreed with Leggatt LJ - see [105] and at [116], where she held that “… Section 2(1)(c) [of the 1966 Act] is making it clear that the High Court controls its process applying its rules in the form in which they stood at the date of registration. It does not go further and make any change of substantive law…”.

The analysis by Leggatt and Arden LJJ remained intact following the appeal in that case to the Supreme Court because the Supreme Court did not overturn the analysis summarised above. It is right to note that the issue that arose in Micula & Ors v Romania (ibid) was different from that which arises in this case but the guiding principle remains the same.

In my judgment therefore registration does not create nor was it intended to create new substantive rights. If the Award is non-assignable, that cannot be changed by registration. As observed already, such an outcome would create an entirely random outcome in which assignability of an award (which I have concluded is not assignable as a matter of its governing law) might become assignable depending on which jurisdiction in the world it might be registered. Further it would give rise to the entirely undesirable possibility that the effect of registration might permit assignment in some jurisdictions but not others. That is not the effect of either the ICSID Convention or s.2(1) of the 1966 Act nor would such an outcome give effect to the purpose of either. In light of this conclusion it is not necessary for me to decide whether Spain’s alternative argument that as a matter of English law an ICSID Convention award is personal and so incapable of assignment under English law is correct or not.