English Commercial Court finds that ICSID and ECT awards are not assignable

In Operafund Eco-Invest Sicav Plc & another v The Kingdom of Spain, the Commercial Court confirmed that awards made pursuant to the ICSID Convention or the ECT are not assignable.

Background

This case arose in the context of an application for the enforcement of an investment treaty award rendered in an arbitration conducted under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) and the Energy Charter Treaty (the ECT).

On 31 July 2015, the claimants commenced an ICSID arbitration against Spain for damages under the ECT following Spain's revocation of certain tariffs and incentives with respect to renewable energy projects in the country. An arbitration award dated 6 September 2019 (the Award) was rendered in the claimants’ favour against Spain.

In the most recent proceedings, the claimants and Blasket Renewable Investments LLC (Blasket) made an application under rule 19.2(4) of the Civil Procedure Rules (CPR) for an order that Blasket be substituted for the claimants as Claimant in the proceedings (the Substitution Application). The Substitution Application was brought on the basis of an assignment agreement between the claimants and Blasket dated 31 January 2024 (the Assignment Agreement). Under the Assignment Agreement, the claimants purported to assign to Blasket “…all of the rights, interests and benefits of the Assignors under or in respect of the Award….”

Notably, a similar issue was considered by the Federal Court of Australia (FCA) in Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028 (the FCA Proceedings). In that case, the FCA had granted the claimants’ substitution application with respect to an ICSID award. That ruling remains subject to appeal.

The Parties’ Submissions

Spain objected to the Substitution Application on the grounds that the State had not given express permission for the assignment and, otherwise, the Award was not assignable under public international law and the terms of the relevant treaties (the Non-Assignability Argument). Spain contended as a result that the jurisdictional requirements for an order of substitution mandated under CPR r. 19.2(4)(a) were not satisfied.

Blasket and the claimants submitted that Spain was estopped from pursuing the Non-Assignability Argument following the issuance of the judgment in the FCA Proceedings (the Issue Estoppel Argument). Alternatively, Blasket and the claimants submitted that the Non-Assignability Argument should be rejected on the merits. It was alleged that following the registration of the Award under section 2 of the Arbitration (International Investment Disputes) Act 1966 (the 1966 Act), a new and freestanding group of rights arose which were assignable under English law, even if the Award itself was not assignable. The Claimants argued that those rights were “rights…in respect of the Award”.

The Commercial Court refused the Substitution Application.

The Court rejected the Issue Estoppel Argument. The Court held that an issue estoppel based on a foreign judgment will only arise under common law where the relevant judgment was (i) given by a court of a foreign country with jurisdiction and (ii) final and conclusive on the merits. Additionally, unless Spain had submitted to the jurisdiction of the Australian courts, issue estoppel could not apply. The Court found that the judgment in the FCA proceedings was not final and binding as a final order had not yet been made. Additionally, the Court found that Spain had not submitted to the jurisdiction of the Australian Courts. Rather, Spain only appeared in the FCA proceedings to contest the jurisdiction of the Australian courts.

Assignability of an Award under International Law

The Court commenced its analysis with the observation that the ICSID Convention does not expressly authorise or preclude the assignment of an award. It was necessary therefore to examine the true “meaning and effect” of the ICSID Convention and the ECT, alongside applicable customary international law principles.

The Court noted that there is no rule of customary international law which provides that awards are either assignable or not assignable. The Court resorted to determining this question as a matter of construction under the ICSID Convention and the ECT. This required an application of relevant principles from the Vienna Convention on the Law of Treaties.

The Court held that while Article 54(2) of the ICSID Convention refers to “[a] party seeking recognition or enforcement..”, only an existing party to an underlying arbitration can seek recognition or enforcement of an award. In support of that conclusion, the Court pointed to the interchangeable use of the terms “the parties” or “a party” in Chapter IV and Section 6 of the ICSID Convention. The Court also relied on academic commentaries, some of which have suggested that permitting investors to assign treaty rights could cause States to effectively “lose control over who could assert treaty breaches and bring arbitral proceedings against them”.