Summary of Judgment

Factual and Procedural Background

The Claimants (Company A, Company B and Company C) are Mauritian investors who held shares in an Indian operating company (Company H). Company H contracted with Company G (an entity wholly owned by The State) under a commercial lease dated 28 January 2005 (the Contract). The State terminated and annulled the Contract in 2011. The Claimants commenced arbitration under a bilateral investment treaty between Mauritius and The State. A tribunal seated in The Hague issued two final arbitral awards (a jurisdiction and merits award dated 25 July 2016 and a quantum award dated 13 October 2020) (the Awards).

On 29 June 2021 a High Court judge (Judge Cockerill) granted, without notice, leave under the Arbitration Act 1996 to enforce the Awards in England and entered judgment in the terms of the Awards, subject to The State's right to apply to set aside the order. The State applied (5 May 2022) to resist enforcement, asserting sovereign immunity under the State Immunity Act 1978 (SIA) and arguing that the s.9 exception did not apply because it had not "agreed in writing to submit" the dispute to arbitration under the BIT. After joinder of assignees (Company D–Company F) the State amended to seek declaratory relief against them.

By application (24 January 2024) the assignees advanced the separate argument that The State's ratification of the New York Convention 1958, and in particular Article III, effected a prior written submission to the adjudicative jurisdiction of UK courts for enforcement purposes, engaging s.2(2) of the SIA. Judge Teare ordered that point be tried as a preliminary issue. In a reserved judgment (17 April 2025) Judge Blair answered that question negatively. The Claimants (including assignees) obtained permission to appeal. The State filed a Respondent's Notice advancing additional grounds, including reliance on reservations made on ratification.

Legal Issues Presented

1. Whether, by ratifying the New York Convention 1958 and accepting Article III, a Contracting State has, by prior written agreement within the meaning of s.2(2) of the State Immunity Act 1978, submitted to the adjudicative jurisdiction of the courts of the United Kingdom for proceedings to recognise and enforce foreign arbitral awards against that State.
2. Whether the phrase in Article III "in accordance with the rules of procedure of the territory where the award is relied upon" includes the rule of state (sovereign) immunity, and if so whether that preserves state immunity against recognition and enforcement proceedings despite the opening clause of Article III.

Arguments of the Parties

Appellants' Arguments

• The opening clause of Article III ("Each Contracting State shall recognize arbitral awards as binding and enforce them...") is, on its proper construction, an unequivocal reciprocal agreement that Contracting States submit to the adjudicative jurisdiction of other Contracting States for enforcement and thus waive immunity for that purpose.
• The reference to "rules of procedure" in Article III should be read narrowly to mean only procedural rules functionally necessary to effect recognition and enforcement (e.g. rules on presentation of documents and translation, CPR 62 procedures), and therefore does not preserve sovereign immunity.
• By analogy with the Supreme Court's reasoning on Article 54(1) of the ICSID Convention (Precedent: Infrastructure), the wording of Article III is materially similar and should likewise be interpreted as effecting a waiver.
• Evolutionary developments since 1958 (restrictive immunities, more awards involving states) support reading Article III as not preserving immunity.

Respondent's Arguments

• The State contended that Article III is explicitly qualified by the phrase "in accordance with the rules of procedure of the territory where the award is relied upon", and that rule of procedure includes state immunity; ratification alone does not waive immunity.
• The State relied on its reservation on ratification limiting application to commercial differences under its law and argued the claimants had not shown the dispute is commercial.
• In the alternative, The State sought to uphold the High Court decision and, by cross-appeal, to advance additional grounds for upholding immunity.

Table of Precedents Cited

Court's Reasoning and Analysis

The court framed the dispute as a pure question of treaty interpretation: whether Article III of the New York Convention, properly interpreted under Articles 31 and 32 of the Vienna Convention, effects a prior written submission by ratifying states to the adjudicative jurisdiction of other Contracting States for enforcement of awards against those states.

Key steps in the analysis:

• Adopted the test from Infrastructure/Supreme Court authority: waiver by treaty requires a clear and unequivocal expression of consent to the exercise of jurisdiction; interpretation follows Vienna Convention rules.
• Compared Article III of the New York Convention with Article 54(1) of the ICSID Convention, recognising material differences: Article III is qualified by "in accordance with the rules of procedure of the territory where the award is relied upon", whereas Article 54(1) contains no such qualification and operates within a self-contained ICSID scheme.
• Examined the meaning of "rules of procedure" and accepted as plain that state immunity is a rule of procedure in English and international law (citing domestic authorities and ICJ jurisprudence).
• Determined that the ordinary meaning of Article III, in context and in light of object and purpose, includes reference to domestic rules of procedure such as state immunity; consequently Article III preserves state immunity unless the state has otherwise agreed (e.g. by an arbitration agreement engaging the s.9 exception) or made an unequivocal waiver.
• Considered comparative and persuasive authorities (High Court of Australia, German court, US district court) and travaux préparatoires: the negotiating history supports that delegates did not intend to preclude immunity-based defences.
• Rejected the appellants' argument that "rules of procedure" should be read narrowly to exclude immunity or that the opening clause should be read as predominant and negate the qualification.

Holding and Implications

APPEAL DISMISSED

Holding: The Court of Appeal (Judge Phillips delivering the lead judgment, with Judges Newey and Lewison agreeing) held that Article III of the New York Convention, read in its context and applying the Vienna Convention rules of interpretation, does not effect a waiver of sovereign immunity by mere ratification. The phrase "in accordance with the rules of procedure of the territory where the award is relied upon" encompasses state immunity where that is a rule of procedure in the forum.

Implications: As a direct consequence, ratification of the New York Convention alone does not submit a Contracting State to the adjudicative jurisdiction of the courts of the United Kingdom for enforcement of arbitral awards against that State. Enforcement against a State will therefore depend on other bases (for example, the State having agreed in writing to arbitrate such that s.9 of the SIA applies, any applicable reservations, or other recognised bases for waiver). The opinion did not purport to resolve unrelated questions of immunity from execution or the s.9 exception beyond the scope of the preliminary issue decided.