In Operafund Eco-Invest SICAV Plc and Schwab Holding AG v Kingdom of Spain [2025] EWHC 2874 (Comm), the English Commercial Court held that awards rendered under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”) or the Energy Charter Treaty 1994 (“ECT”) are not assignable to third parties, and registration under the English Arbitration Act 1966 (“Arbitration Act”) does not create new, assignable substantive rights.
Background of the Dispute
In 2008-2009, the claimants invested in Spanish solar plants relying on Spain’s renewable incentives, which were later withdrawn, giving rise to an ICSID arbitration under the ECT.
In its final award dated 6 September 2019, the ICSID tribunal found Spain in breach of its obligations under Article 10(1) of the ECT to provide fair and equitable treatment and stable conditions to the claimants, and ordered Spain to pay USD 29.3 million in damages to the claimants.
On 9 August 2021, the claimants applied under Section 1(2) of the Arbitration Act to register the Award in England and Wales. The application was granted. Pursuant to Section 2(1) of the Arbitration Act, the award thereby acquired the same force and effect for enforcement as a High Court judgment.
In January 2024, the claimants attempted to assign all rights, interests, and benefits of the award to Blasket Renewable Investments LLC (“Blasket”) and applied to substitute Blasket as claimant in the English proceedings under Civil Procedure Rule 19.2. Spain opposed the substitution, arguing that ICSID awards are not assignable as a matter of international law.
Issues in Dispute
The Court had to determine:
1. Whether Spain was estopped from arguing non-assignability (due to a contrary ruling in Australian proceedings);
2. Whether ICSID awards are assignable as a matter of international law;
3. Whether registration in England creates assignable domestic rights, even if the award itself is not assignable.
No Issue Estoppel from the Australian Decision
The claimants argued that Spain was barred from re-litigating assignability because the issue had been determined against it in proceedings before the Federal Court of Australia (Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028).
The Court rejected that argument for two main reasons. First, the Australian judgment was not yet final. Second and more fundamentally, Spain had appeared in Australia solely to assert state immunity and had not submitted to jurisdiction, thus the Australian judgment did not meet the requirements under English law for recognition of a foreign judgment against a sovereign state.
Accordingly, Spain was not estopped from contesting assignability.
ICSID Awards Are Not Assignable
Article 54(2) of the ICSID Convention allows “a party” to seek recognition or enforcement of an award. The claimants argued that “a party” could include an assignee. The Court disagreed. Reading the Convention contextually, the Court found that it did not consider that “the phrase ‘a party’ in Article 54(2) of the ICSID Convention refers to anyone other than a party to the arbitration in issue and in consequence only a party to the underlying arbitration can seek recognition or enforcement of a ICSID Convention award” (Operafund, para. 51).
The Court also referred to Article 15 of the ECT (subrogation), which expressly provides for assignment to indemnifying states in defined circumstances. That express provision was seen as reinforcing the conclusion that general assignment was not intended (Operafund, paras. 52-53).
Spain also argued there was no rule of international law permitting assignment. The claimants argued the opposite. The Court held that there is no rule of customary international law establishing either proposition; as such, the issue depends on the construction of the ICSID Convention applying the principles of construction of the Vienna Convention on the Law of Treaties 1969 (Operafund, para. 71). The Court expressly declined to follow US and Australian first-instance decisions that had reached the opposite conclusion, considering them insufficiently grounded in the Vienna Convention principles (Operafund, para. 66).
Registration Does Not Create Assignable Domestic Rights
The claimants argued, in the alternative that, even if the award itself was not assignable, registration under the Arbitration Act created new English-law rights equivalent to a High Court judgment, which are assignable. The Court rejected this argument, however.
The Court held that registration does not create nor was it intended to create new substantive rights. If the award is non-assignable, that cannot be changed by registration. The Court also held that such an outcome would create an “entirely random outcome” in which assignability of an award might become assignable depending on which jurisdiction in the world it might be registered and give rise to the “entirely undesirable possibility” that the effect of registration might permit assignment in some jurisdictions but not others (Operafund, para. 78).
Impact of Judgment
While the judgment is subject to appeal, it signals that, at least in England, ICSID awards cannot be freely traded. This is a significant development for secondary market purchasers of investment arbitration awards, litigation funders, sovereign debt and award trading markets, as well as states facing enforcement proceedings.
Despite the UK’s well-known pro-arbitration reputation, the decision marks a step back, placing England out of step with other major jurisdictions, including the United States and Australia, on questions of assignment.
It remains to be seen whether the decision will be overturned on appeal. If it is not, it will present a material obstacle to enforcement strategies in England, particularly those involving third-party investors.
