English High Court Rules Assignees Cannot Enforce ICSID Awards, Departing From Australian And US Decisions

In a significant development for award creditors and States, the English High Court recently held in Operafund Eco-Invest & anor v Kingdom of Spain that award assignees cannot seek recognition and enforcement of awards pursuant to the Convention on the Settlement of Investment Disputes (ICSID Convention).

The English court's decision expressly departs from a Federal Court of Australia judgment in August 2025 involving the same parties, as well as the prevailing position in the United States.

Award creditors and participants in the secondary award market will need to consider enforcement strategies and the structure of assignment agreements carefully, while States may have a further ground to resist enforcement, at least in England.

Background to enforcing investment treaty awards against Spain and assigning awards

Between 1990 and 2012, Spain sought to incentivise investments in the renewable energy sector through a favourable regulatory regime and subsidies. After the global financial crisis and a change of government, Spain curtailed the regime and revoked the subsidies. This prompted many investors to bring investment treaty claims seeking compensation for the harm inflicted on their investments. Numerous arbitral tribunals have since made awards finding that Spain's conduct breached its investment treaty obligations. It is estimated that Spain currently owes investors collectively at least USD 1.6 billion in damages under these awards.

As discussed in our earlier article, High Court rejects Spain's foreign state immunity claim and reinforces Australia's reputation as 'pro-arbitration', Spain has resisted enforcement proceedings in multiple jurisdictions, primarily relying on sovereign immunity exceptions and the Court of Justice of the European Union's rulings in Achmea and Komstroy. In those rulings, the CJEU held that investment treaty awards between EU member states are incompatible with the primacy of EU law (intra-EU objection).¹ Spain has fought enforcement proceedings on these grounds resolutely, appealing to the High Court of Australia and the United Kingdom Supreme Court, and petitioning the United States Supreme Court to hear a similar appeal.

As these proceedings illustrate, enforcing investment treaty awards against States and State entities raises particular challenges. This is in addition to the need to identify suitable assets to attach, fund enforcement proceedings, and manage delays in securing judgment.

In these circumstances, it is unsurprising that award creditors assign arbitral awards. Doing so allows creditors to monetise the award, transfer enforcement risks and focus on their core business. A number of funds now specialise in acquiring and enforcing awards.

One such fund, Blasket Renewable Investments LLC (Blasket), acquired rights to several awards against Spain. Blasket has filed enforcement proceedings in the Federal Court of Australia and the English High Court, among other jurisdictions. In both the Australian and English proceedings, a central issue was whether the ICSID Convention permitted Blasket, as an assignee, to seek recognition and enforcement of the award. Although the Federal Court and High Court reached divergent conclusions, both decisions turned on the meaning of 'party' in Art. 54(2) of the ICSID Convention.

Federal Court of Australia finds ICSID awards can be enforced by assignees

In Blasket Renewable Investments LLC v The Kingdom of Spain [2025] FCA 1028, the Federal Court found that whether the rights were assignable was a question of international, rather than domestic, law. This is because the rights that were the subject of the purported assignment were 'created on the international plane, out of the consent to arbitration' in the Energy Charter Treaty (ECT) and ICSID Convention.

The right to enforcement is one of the rights created under the ICSID Convention. In particular, Art. 54(1) and 54(2) require States to 'recognise' awards 'as binding and enforce the pecuniary obligations imposed by [an] award' and a 'party seeking recognition or enforcement' to provide a certified copy of the award. The Federal Court accepted (and agreed with a United States District Court in Blue Ridge) that 'party' for the purposes of Art. 54(2) was a party seeking recognition and enforcement, rather than (only) a party to the underlying award:

• there is 'nothing in the ICSID Convention suggesting any prohibition on assignment of rights under an award' and 'any attempts to read in an implied prohibition to Art 54 would be inconsistent with its ordinary meaning...';
  
• such an implied prohibition would be contrary to the 'object and purpose of the Convention,' which is to mitigate sovereign risk and provide legal security; and
  
• customary international law does not prohibit the assignment of rights under an award, including the right to enforcement.

Blasket was therefore validly assigned the right to enforce.

English High Court reaches contrary result

The English High Court agreed with the Federal Court that a rule of customary international law has not emerged regarding the assignability of awards. However, applying the Vienna Convention on the Law of Treaties 1969 (Vienna Convention), it concluded that the ICSID Convention itself prohibits enforcement by assignees:

• the authors of the ICSID Convention used the phrase 'a party' in Art. 54(2) and 'parties to the dispute' elsewhere in the Convention interchangeably;
  
• there was no reason why the Convention's drafters could not have specified that assignees could enforce awards, had that been their intention. In addition, nothing in the travaux préparatoires suggeststhat the drafters considered this issue. The 'restrictive approach' to interpretation required by the Vienna Convention therefore favoured confining Art. 54(2) to the parties to the underlying arbitration; and
  
• in response to Blasket's submission that this approach would lead to 'commercial absurdity or injustice,' the Court observed that Blasket could still control the enforcement process and receive any sums recovered by the original investor.

The Court also held that even if the ICSID Convention permitted the assignment of awards (contrary to the conclusions summarised above), the ECT would itself preclude assignment in this case.

Implications of the divergent outcomes

The divergent outcomes in Australia and the United States on the one hand, and England on the other, reinforce that award creditors and assignees need to evaluate enforcement strategies in respect of ICSID awards carefully. The position in both Australia and England may yet change, with appeals from both decisions expected to be heard this year. For now, at least, it is advisable to include a mechanism in assignment agreements for award creditors to conduct enforcement proceedings pursuant to the ICSID Convention.

As for Australia, its status as a pro-arbitration jurisdiction has been reaffirmed. Following the High Court of Australia's ruling in Infrastructure Services, the Federal Court's judgment in Blasket emphasises that ICSID awards will be recognised and enforced in Australia, the intra-EU objection is unlikely to preclude enforcement, and assignees can enforce awards against States under the ICSID Convention.

Footnote

¹ Slowakische Republik v Achmea BV (6 March 2018, C-2854/16); Republic of Moldova v Komstroy LLC, successor in law to the company Energoalians (2 September 2021, C-741/19).

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