THE AUTHOR:
Muhammad Faisal Hayat, Associate at RIAA Barker Gillette
Chris Lai closed his earlier piece for this publication 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.À.R.L and another; Republic of Zimbabwe v Border Timbers Ltd and another [2026] UKSC 9 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 (“ICSID”) 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.
What the Supreme Court Held
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 (“ICSID Convention”) 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 (“VCLT”), and considering the ICSID Convention’s object and purpose, that obligation is fundamentally inconsistent with a Contracting State maintaining adjudicative immunity in another Contracting State’s courts at the recognition stage. Agreement to Article 54(1) of ICSID Convention is therefore a “prior written agreement” submitting to the jurisdiction within section 2(2) of the State Immunity Act 1978 (“SIA”). The Court expressly preserved the carve-out in Article 55 ICSID Convention, which leaves immunity from execution against State assets unaffected (at [86]–[87]). The procedural history through Fraser J, Dias J and the Court of Appeal is set out in Lai’s 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) (“ECT”) raised in Spain’s appeal were not reached (at [20]).
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.
Two Regimes, One Award
The Convention’s 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 “sharp distinction” 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.
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’s written consent, and section 13(4) carves out property “for the time being in use or intended for use for commercial purposes”. 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.
The Court of Appeal had already endorsed the same distinction, citing the High Court of Australia’s reading that Article 55 “spells out” where the obligation to enforce stops short of an obligation to ensure execution ([2024] EWCA Civ 1257 at [74], quoting Kingdom of Spain v Infrastructure Services Luxembourg S.À.R.L. [2023] 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.
The Execution Doctrine: What Still Stands in the Creditor’s Way
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 [2025] EWCA Civ 134, which is the modern English authority on section 13(3) written consent to execution against State property. The exercise of working through General Dynamics served to underline that consent to adjudication and consent to execution are doctrinally distinct, and each must satisfy its own statutory threshold.
The architectural point that controls this terrain was put by Lord Diplock in Alcom Ltd v Republic of Colombia [1984] AC 580: the SIA is a comprehensive code, restating absolute immunity in section 1(1) and then subjecting it to “wide-ranging exceptions” in the sections that follow ([2024] EWCA Civ 1257 at [32]). That code separates adjudicative jurisdiction from enforcement jurisdiction. The exceptions to the one do not become exceptions to the other by implication. The Supreme Court’s holding that section 2(2) SIA is engaged tells an award creditor nothing about whether section 13(2) can be overcome against State assets in the jurisdiction.
Section 14(4) SIA is where the imbalance shows up most clearly. Central bank reserves, typically the largest identifiable pool of sovereign assets, are categorically deemed not in use for commercial purposes. Diplomatic and consular property is protected separately. The award creditor is left to attach a residual category of commercial property whose identification, valuation and pursuit have historically been the practical bottleneck in sovereign enforcement.
A Measured Assessment
The case for treating the judgment as a substantive win is not empty. Registration is the necessary first step, and a State that cannot resist it loses its adjudicative immunity defenses and exposes itself to interim relief and third-party debt orders that operate against a registered award as a domestic judgment, though in practice these tools face significant constraints at the execution stage against sovereign assets. The practical value of these tools depends heavily on the respondent State’s asset profile in the jurisdiction: where identifiable commercial assets exist, the threat of disclosure and attachment proceedings can shift settlement dynamics in the creditor’s favor before any contested execution is attempted. The signaling value – English law now sits alongside Australia, New Zealand, Malaysia, and the United States, the four comparator jurisdictions identified by the Court at [135] – is not nothing, and the settlement pressure on respondent States in long-running enforcement campaigns is real.
Against this stands the structural point. The historical bottleneck in sovereign enforcement has not been registration; it has been execution, and the assets typically held by respondent States in UK jurisdiction tend to sit on the opposite side of the section 13(4) and section 14(4) SIA lines. The international consensus alignment is welcome, but it operates at the entrance to a building whose interior rooms are still locked. The Supreme Court did not unlock them, and the doctrinal center of gravity in sovereign enforcement remains where it has been for decades. [2026] UKSC 9 is a meaningful procedural victory and a doctrinal alignment of real significance for many award creditors.
Beyond the Recognition Question
Zimbabwe’s reserved non-immunity defenses now return to the Commercial Court, the Supreme Court having confirmed that the Court of Appeal’s remittal order stands. Spain’s intra-EU objection under Article 26 of the ECT was not reached and remains live in any subsequent proceedings. The Court expressed that it heard no argument on section 9(1) SIA or on the additional grounds advanced by the Infrastructure respondents and that nothing in its decision should be read as expressing a view on the Court of Appeal’s conclusions on issue 2 (at [145]). The next phase of the litigation will shift the focus from recognition to execution. Now that registration of the award is settled, the central question becomes which sovereign assets can actually be reached, and at what cost? That is where the doctrinal pressure now sits, and where the next set of issues will be decided.
ABOUT THE AUTHOR
Muhammad Faisal Hayat is an Associate at RIAA Barker Gillette, Lahore. His practice spans corporate, commercial and regulatory matters, with a focus on international arbitration and the recognition and enforcement of foreign and ICSID awards. He has participated in and coached the Willem C. Vis Moot at Vienna and writes regularly on international arbitration.
*The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.
