THE AUTHOR<\/strong>: Chris Lai closed his earlier piece for this publication<\/a> by noting that it remained to be seen whether the Court of Appeal’s decision would be appealed. It was, and the Supreme Court has now ruled. In The Kingdom of Spain v Infrastructure Services Luxembourg S.\u00c0.R.L and another; Republic of Zimbabwe v Border Timbers Ltd and another<\/em> [2026] UKSC 9<\/a> dated 4 March 2026, a unanimous panel comprising Lord Lloyd-Jones, Lord Briggs, Lord Sales, Lord Leggatt and Lady Simler dismissed both appeals. The holding aligns English law with the international consensus on the International Centre for Settlement of Investment Disputes (\u201cICSID<\/strong>\u201d) award recognition and removes a procedural defence that has long delayed enforcement against respondent States. It does not, however, change the calculus that matters most for an award creditor staring at a hostile sovereign balance sheet. The ruling is a threshold win for award creditors, but the harder battle, execution against sovereign assets, remains substantially unresolved.<\/p>\n\n\n\n The joint judgment was given by Lord Lloyd-Jones and Lady Simler, with whom Lord Briggs, Lord Sales and Lord Leggatt agreed. Article 54(1) of the Convention on the Settlement of Investment Disputes between States and Nationals of other States<\/a> (\u201cICSID Convention<\/strong>\u201d) requires each Contracting State to recognise an ICSID award as binding and to enforce its pecuniary obligations as if it were a final judgment of one of its own courts. Read in good faith under Article 31 of the Vienna Convention on the Law of Treaties<\/a> (\u201cVCLT<\/strong>\u201d), and considering the ICSID Convention\u2019s object and purpose, that obligation is fundamentally inconsistent with a Contracting State maintaining adjudicative immunity in another Contracting State\u2019s courts at the recognition stage. Agreement to Article 54(1) of ICSID Convention is therefore a \u201cprior written agreement\u201d submitting to the jurisdiction within section 2(2) of the State Immunity Act 1978<\/a> (\u201cSIA<\/strong>\u201d). The Court expressly preserved the carve-out in Article 55 ICSID Convention, which leaves immunity from execution against State assets unaffected (at [86]\u2013[87]). The procedural history through Fraser J, Dias J and the Court of Appeal is set out in Lai\u2019s earlier piece. The Court found it unnecessary to hear argument on the section 9(1) SIA arbitration exception, and the intra-EU validity issues under Article 26 of the Energy Charter Treaty (1994)<\/a> (\u201cECT<\/strong>\u201d) raised in Spain\u2019s appeal were not reached (at [20]).<\/p>\n\n\n\n The judgment reads at first as a decisive win for award creditors. Its practical reach turns on a distinction the Court was careful to preserve. Recognition and enforcement fall on one side of that line while Execution falls on the other.<\/p>\n\n\n\n The Convention\u2019s drafters did not treat recognition, enforcement and execution as a single process. Article 54(1) of the ICSID Convention imposes the binding obligation to recognise and enforce the award. Article 54(3) provides that execution is governed by the law of the State where execution is sought. Furthermore, Article 55 then preserves State immunity from execution. The Supreme Court was clear that this is not stylistic redundancy. The scheme draws a \u201csharp distinction\u201d between recognition and enforcement on the one hand and execution on the other, with immunity from execution being the only immunity expressly preserved (at [87]). Recognition under Article 54(1) is a judicial step that must precede any seizure or attachment; the execution sits behind a separate domestic-law gateway.<\/p>\n\n\n\n UK law mirrors this division. Sections 1 and 2 of the SIA deal with adjudicative immunity and submission. Section 13(2) is the execution-stage provision: the property of a State is not subject to any process for the enforcement of a judgment or arbitration award, nor to injunction or order for specific performance. Section 13(3) opens that bar only on the State\u2019s written consent, and section 13(4) carves out property \u201cfor the time being in use or intended for use for commercial purposes\u201d. Section 14(4) goes further: property of a State’s central bank or other monetary authority is categorically not to be regarded as in use for commercial purposes, an immunity that no commercial-purpose inquiry can dislodge.<\/p>\n\n\n\n The Court of Appeal had already endorsed the same distinction, citing the High Court of Australia\u2019s reading that Article 55 \u201cspells out\u201d where the obligation to enforce stops short of an obligation to ensure execution ([2024] EWCA Civ 1257<\/a> at [74], quoting Kingdom of Spain v Infrastructure Services Luxembourg S.\u00c0.R.L.<\/em> [2023]<\/a> HCA 11 at [44]). The reason the Court was careful to preserve this division is precisely that the doctrinal route by which it eliminated adjudicative immunity, necessary implication from the ordinary meaning of Article 54(1), would otherwise have threatened to swallow execution immunity too. Holding the line at Article 55 was essential to a defensible reading.<\/p>\n\n\n\n The Supreme Court settled the recognition stage. Execution is governed by a separate legal framework that the judgment leaves intact. The Supreme Court itself walked through it. In considering whether the kind of treaty consent it was finding under section 2(2) could be made to do equivalent work under section 13(3) SIA, the Court analyzed General Dynamics UK Ltd v State of Libya<\/em> [2025] EWCA Civ 134<\/a>, which is the modern English authority on section 13(3) written consent to execution against State property. The exercise of working through General Dynamics<\/em> served to underline that consent to adjudication and consent to execution are doctrinally distinct, and each must satisfy its own statutory threshold.<\/p>\n\n\n\n
Muhammad Faisal Hayat<\/strong>, Associate at RIAA Barker Gillette<\/strong><\/p>\n\n\n\n
\n\n\n\nWhat the Supreme Court Held<\/strong><\/strong><\/h2>\n\n\n\n
Two Regimes, One Award<\/strong><\/strong><\/h2>\n\n\n\n
The Execution Doctrine: What Still Stands in the Creditor\u2019s Way<\/strong><\/strong><\/h2>\n\n\n\n