Investment arbitration: ICSID and sovereign immunity

The Court of Appeal in Infrastructure Services Luxembourg Sarl and Another v The Kingdom of Spain; Border Timbers Ltd and Another v Republic of Zimbabwe [2024] EWCA Civ 1257; [2025] 1 Lloyd's Rep 66 heard a combined appeal against the decisions of Fraser J and Dias J respectively. The cases both raised the question of the relationship between the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 (ICSID) and sovereign immunity under the State Immunity Act 1978.

The first instance decisions took quite different views of that relationship, although each concluded that a contracting state could not rely upon sovereign immunity. The Court of Appeal was concerned only with immunity defences: the Zimbabwe case involved other defences and these were not up for determination in the present hearing.