Anonymised and Structured Summary of the Opinion

Factual and Procedural Background

This opinion concerns an application to substitute Company A (the purported assignee) for the Plaintiffs in proceedings to register and enforce an international arbitration award ("the Award") made under the ICSID Convention arising from investor-state arbitration concerning measures taken by State A. The Plaintiffs originally obtained an ICSID award dated 6 September 2019 for damages in respect of alleged breaches of the Energy Charter Treaty (ECT). The Plaintiffs had the Award registered in England & Wales under the Arbitration (International Investment Disputes) Act 1966 ("the 1966 Act"). State A applied to set aside that registration on various grounds, including immunity under the State Immunity Act 1978.

On 31 January 2024 the Plaintiffs purported to assign "all of the rights, interests and benefits ... under or in respect of the Award" to Company A by an Assignment Agreement. The Plaintiffs and Company A seek an order under CPR r.19.2(4)(a) substituting Company A as Claimant (Plaintiff) on the basis of that assignment. State A opposes substitution on the primary ground that the Award is not assignable as a matter of international law (the "assignability issue"), and thus the jurisdictional precondition for substitution has not been satisfied.

A closely related issue was previously litigated in another jurisdiction (the Federal Court of Australia) in a case in which Company A had been substituted as claimant. That Australian judgment reached a different conclusion on assignability; the parties agree an appeal from that Australian decision may be pursued and that the time for appealing has not yet begun to run because a sealed order remains to be issued. Each side asked this court to resolve, finally and on the balance of probabilities, whether awards under the ICSID Convention (and in particular ECT-related awards) are assignable.

The hearing addressed (among other things) whether State A is estopped from relitigating the assignability point because of the Australian judgment and whether, even if assignability is barred under international law, the rights created by registration in England under the 1966 Act are assignable under English law. The court heard extensive written and oral argument supported by large bundles of documents and authorities.

Legal Issues Presented

1. Whether State A is precluded by issue estoppel (derived from the Australian Federal Court judgment) from contesting that the Award is assignable.
2. Whether an award rendered under the ICSID Convention (and, in the alternative, an award in respect of an ECT dispute) is capable of assignment as a matter of international law (including treaty interpretation of the ICSID Convention and the ECT and any relevant customary international law).
3. Whether, even if the Award itself is non-assignable under international law, the rights that arose on registration of the Award under the 1966 Act are assignable under English law such that substitution under CPR r.19.2(4)(a) can be permitted.

Arguments of the Parties

Plaintiffs' and Company A's Arguments

• The Australian Federal Court judgment in favour of Company A on assignability creates an issue estoppel that prevents State A from relitigating the assignability issue in these English proceedings.
• In any event, the ICSID Convention and the ECT contain no express prohibition on assignment; absent such a prohibition, awards (or at least recognition/enforcement rights under Article 54(2)) may be assigned and enforced by assignees.
• Alternatively, registration of the Award under section 1 and section 2(1) of the 1966 Act created new, English-law rights (enforcement rights analogous to a High Court judgment) that are assignable under English law even if the underlying Award were non-assignable under international law.

State A's Arguments

• Issue estoppel does not arise. The Australian judgment is not yet final and sealed; moreover, State A appeared in the Australian proceedings solely to contest jurisdiction and did not submit to that court's jurisdiction so the Australian judgment is not recognisable for the purpose of producing issue estoppel in England (Civil Jurisdiction and Judgments Act 1982, s.31 and s.33).
• On the merits, the ICSID Convention should be construed (by reference to the Vienna Convention rules on treaty interpretation) as precluding assignment of ICSID awards (and, with particular force, ECT-related awards), because provisions such as Article 53 and Article 54(2) use "the parties" and "a party" in context to mean the parties to the arbitration and there is no textual basis for permitting third-party enforcement without state consent.
• There is no clear and sufficiently widespread state practice or opinio juris that establishes a customary international law rule permitting assignment of ICSID awards; academic commentary and tribunal practice do not establish a binding customary rule to the contrary.
• Registration under the 1966 Act was intended to provide procedural enforcement mechanisms (treating registered awards as having force for execution under domestic law) and does not create new substantive assignable rights that override the Convention's limitations.

Table of Precedents Cited

Court's Reasoning and Analysis

The court proceeded in two main strands of analysis: (1) whether issue estoppel arising from the Australian judgment prevents State A from contesting assignability in England; and (2) the substantive question whether ICSID (and, where relevant, ECT) awards are assignable under international law (or whether registration creates assignable English-law rights).

Issue estoppel

• The court applied the established tests for issue estoppel based on a foreign judgment (as summarised by Males LJ in Hulley, following Good Challenger and Linhas): (i) the foreign judgment must be entitled to recognition according to domestic rules on recognition of foreign judgments; (ii) the parties in the two actions must be the same; and (iii) the issue decided must be the same.
• Two additional statutory requirements arise where the judgment is given against a State: s.31(1) of the Civil Jurisdiction and Judgments Act 1982 requires that (a) the judgment would be recognised if it had not been given against a State, and (b) the foreign court would have had jurisdiction if it had applied rules corresponding to those in the State Immunity Act 1978. The court concluded s.31(1)(b) is satisfied in the present English-law context given the binding Court of Appeal decision in ISL (unless and until overturned by the Supreme Court).
• As to s.31(1)(a), the court considered the common-law requirement identified in Rubin that foreign judgments entered in personam are enforceable in England only where the defendant was present in the foreign jurisdiction when proceedings began or submitted to its jurisdiction. Section 33 of the 1982 Act provides that an appearance solely to contest jurisdiction does not constitute submission.
• Applying the material in the Australian judgment, and having regard to how State A's appearance in those proceedings was recorded, the court concluded that State A appeared in Australia solely to contest jurisdiction (and was so regarded by all parties). Therefore State A did not submit to the Australian court's jurisdiction. Consequently s.33 prevents treating the Australian judgment as one enforceable here for the purpose of establishing issue estoppel. The court therefore concluded the Plaintiffs and Company A failed to establish issue estoppel.
• The court also noted a distinct finality problem: under Australian law the foreign judgment only becomes final and binding once a sealed order is issued; at the time of this hearing such an order had not been sealed. Even if that point alone were decisive, the court observed an adjournment to await sealing could have been ordered; however, because the court found non-submission to jurisdiction, estoppel failed in any event.

Substantive assignability under international law (ICSID/ECT)

• The court began with treaty interpretation under the Vienna Convention on the Law of Treaties (Articles 31 and 32), treating those rules as customary international law applicable to the construction of the ICSID Convention and the ECT.
• Textual and contextual interpretation of the ICSID Convention focused on Chapter IV (Arbitration), in particular Articles 53 and 54. Article 53(1) makes the award binding on "the parties" and Article 54(2) requires "a party seeking recognition or enforcement ... [to] furnish ... a copy of the award certified by the Secretary-General."
• The court concluded that, read in its textual and contextual setting, the terms "the parties" and "a party" in Chapter IV and Section 6 are used predominantly to mean the parties to the arbitration in which the award was rendered. The use of the shorter form "a party" at Article 54(2) does not, on context, demonstrate an intention to expand the class of persons who may seek recognition to persons other than the parties to the underlying arbitration.
• Consultation of authoritative commentaries on the ICSID Convention (for example Schreuer's commentary and a practical commentary) and scholarly writing (including the article by Hanno Wehland) supported the view that Article 54(2) was intended as an administrative mechanism for enforcement by parties to the arbitration and that the Convention does not endorse free assignment of awards to third parties who were not parties to the arbitration.
• The court rejected the plaintiffs' argument that silence in the Convention means assignment is permitted or should be left to municipal law of the enforcing state. The court considered this would produce inconsistent international outcomes depending on forum and would be contrary to the Convention's design. The court therefore held that the issue depends on construction of the Convention applying Vienna Convention rules rather than leaving the matter to municipal law.
• The court further concluded there is no sufficiently widespread, representative and consistent state practice or opinio juris to establish a customary international law rule either permitting or prohibiting assignment of ICSID awards. Authoritative scholarly materials and the limited array of first-instance decisions cited did not establish a binding customary rule.
• Applying those principles, the court concluded that, as a matter of construction of the ICSID Convention, awards rendered pursuant to it (and, more explicitly, awards concerning ECT disputes) are not assignable.

Effect of registration under the 1966 Act

• The court considered the 1966 Act which implemented Article 54 in the United Kingdom. Section 2(1) of the 1966 Act gives a registered award the same force and effect for the purposes of execution as if it were a High Court monetary judgment "as respects the pecuniary obligations which it imposes".
• Relying on the text of Article 54(1) and (3) and authorities such as Micula, the court held registration is a procedural device to facilitate enforcement (execution) and does not create new substantive rights or make assignable what the Convention makes non-assignable.
• The court therefore rejected the Plaintiffs' alternative submission that registration converts a previously non-assignable award into assignable English-law rights capable of supporting substitution under CPR r.19.2(4)(a).

Holding and Implications

The court reached three definitive conclusions:

• Core ruling: The Plaintiffs and Company A failed to establish that State A is estopped from asserting that the Award is non-assignable. In other words, the court concluded State A is not precluded by issue estoppel from raising the assignability objection in these proceedings.
• Core ruling: As a matter of treaty construction of the ICSID Convention, and, insofar as relevant, the ECT, awards made in ICSID Convention arbitrations (and, in particular, awards arising from ECT disputes) are not assignable. There is no established customary international law rule contrary to that conclusion.
• Core ruling: Registration of the Award under the Arbitration (International Investment Disputes) Act 1966 did not alter that position and did not create new substantive assignable rights; registration is a procedural device for enforcement and execution and cannot be used to convert a non-assignable Award into an assignable one.

Implications:

• The Plaintiffs and Company A cannot rely on the purported assignment to satisfy the Court's jurisdictional requirements for substitution under CPR r.19.2(4)(a) because the Award is not assignable under the relevant international instruments and registration did not change that substantive position.
• State A remains entitled to raise the assignability objection in these proceedings. The court did not create any new international-law precedent beyond its interpretation of the ICSID Convention as applied to the facts before it; the decision addresses the specific issues of estoppel, treaty construction, customary international law evidence and the effect of domestic registration legislation as they arose in this case.
• No broader change to municipal enforcement processes beyond the matters addressed in the judgment was determined; the court confined itself to the applicable interpretation of the ICSID Convention, the ECT and the 1966 Act in the context of the substitution application before it.

This summary has been prepared strictly on the basis of the content of the provided opinion. No information has been invented or inferred beyond what the opinion itself supplies.