State Immunity in Arbitration Enforcement: A Closer Look at Infrastructure Services v Spain and Devas v India

Recent UK court decisions in Infrastructure Services Luxembourg S.À.R.L. and Another v Kingdom of Spain [2024] EWCA Civ 1257 and Devas et al. v Republic of India [2025] EWHC 964 (Comm) have brought into sharp focus the complex interface between state immunity and the enforcement of international arbitration awards. While these cases appear to conflict at first glance, they, in fact, rest on fundamentally different legal frameworks: the ICSID Convention and the New York Convention.

What is state immunity in arbitration?

State immunity is a principle of international law that protects sovereign states from being sued in the courts of another state without their consent. In the context of arbitration, this immunity can pose significant challenges when investors seek to enforce arbitral awards against states.

Under English law, the State Immunity Act 1978 (SIA) governs this principle. While a state may waive immunity in commercial contexts or by agreement, courts require a clear and unequivocal waiver. Thus, whether a state can claim immunity from enforcement of an arbitral award depends on the nature of the arbitration agreement, the forum, and the applicable treaty framework (e.g., ICSID or New York Convention).

ICSID Convention

The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention), established under the auspices of the World Bank in 1965, is a self-contained system designed specifically for the resolution of investor-state disputes. Article 54 of the ICSID Convention obliges contracting states to enforce ICSID awards as if they were final judgments of their own courts.

The UK ratified the ICSID Convention in 1967 and incorporated its provisions through the Arbitration (International Investment Disputes) Act 1966.

New York Convention

The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards provides a framework for the enforcement of commercial arbitration awards across its signatory states. While highly effective in commercial contexts, its application in investment arbitration, especially concerning state immunity, is more nuanced. Unlike ICSID, it does not contain an equivalent to Article 54 that compels enforcement irrespective of state immunity claims.

Infrastructure Services Luxembourg v Kingdom of Spain [2024] EWCA Civ 1257

In this case, Infrastructure Services Luxembourg and Energia Termosolar B.V. secured a significant award (approximately €101 million) from an ICSID tribunal after Spain retroactively altered its renewable energy subsidy regime. The claimants sought to register the award in England for enforcement.

Spain resisted enforcement, asserting sovereign immunity under the State Immunity Act 1978 (SIA). However, the Court of Appeal ruled that Spain's ratification of the ICSID Convention, specifically the obligations under Article 54, constituted a "prior written agreement" to submit to the jurisdiction of UK courts under section 2(2) of the SIA. Accordingly, Spain was not immune from proceedings to enforce the award.

The ruling affirmed the special status of ICSID awards under English law and confirmed that registration under the Arbitration (International Investment Disputes) Act 1966 suffices for enforcement, bypassing usual immunity defences.

Devas et al. v Republic of India [2025] EWHC 964 (Comm)

In contrast, this case involved enforcement of two investment treaty awards totalling over €195 million obtained by Devas' investors under the India-Mauritius Bilateral Investment Treaty (BIT; 1998). These awards were not made under the ICSID system but through ad hoc arbitration conducted under UNCITRAL Rules and subject to the New York Convention.

When the investors sought to enforce the awards in England, India invoked state immunity. The claimants argued that India had waived immunity by ratifying the New York Convention. The High Court disagreed, ruling that the Convention did not constitute an express and unequivocal waiver of immunity as required under section 2(2) of the SIA.

The judgment emphasised the principle that state immunity must be clearly and specifically waived, and that general treaty ratification is insufficient in the context of enforcement actions.

So what?

At face value, these decisions may appear inconsistent: in one, a state is denied immunity; in the other, it is upheld. However, the diverging outcomes stem not from judicial contradiction but from the very different enforcement mechanisms embedded in the ICSID and New York Conventions.

ICSID awards benefit from a sui generis enforcement regime. Article 54 compels domestic courts of contracting states to treat ICSID awards as domestic court judgments. The Court of Appeal interpreted this as a waiver of immunity for enforcement purposes. Moreover, ICSID proceedings are grounded in explicit investor-state consent, often with state parties undertaking clear obligations to abide by awards.

By contrast, the New York Convention leaves enforcement to domestic procedural law and lacks the same mandatory enforcement clause. In Devas, the UK court rightly required clear evidence of waiver, which the New York Convention does not provide.

Here we are: though the outcomes in Infrastructure Services and Devas may seem contradictory, they are not. The cases engage with distinct treaty regimes that impose fundamentally different obligations on contracting states.

The divergence lies not in judicial inconsistency but in the structural features of two different international instruments. Understanding this distinction is key for investors, practitioners, and states as they navigate the complex field of international investment arbitration and sovereign immunity.

#internationalarbitration #arbitration #internationaldisputes #investmentarbitration #fromlawyerslife