Republic of Zimbabwe (Appellant) v Border Timbers Ltd and another (Respondents)

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Case summary

Case ID

UKSC/2024/0156

Parties

Appellant(s)

Republic of Zimbabwe

Respondent(s)

(1) Border Timbers Limited, (2) Hangani Development Co. (Private) Limited

Issue

(1) Did the Court of Appeal err in law by finding that Article 54(1) of the ICSID Convention, properly interpreted, constitutes a submission to the jurisdiction by prior agreement for the purposes of s2(2) State Immunity Act 1978 (“SIA”). (2) (For the First Appellant only): Did Fraser J err in law by finding that there was a valid arbitration agreement between Spain and the First Respondents for the purposes of s9(1) SIA, such that Spain was not immune from the adjudicative jurisdiction of the English courts pursuant to s1(1) SIA.

Facts

This case questions whether foreign states can rely on state immunity to set aside the registration of any ICSID arbitral award in the United Kingdom with which they do not consent to being enforced. Two appeals have been grouped together on the basis that the appeals raise the same issues. Both arise from challenges to investment arbitration awards brought against States (Spain and Zimbabwe) by international investors in those countries, who claim they have suffered losses caused by the States in breach of their international obligations. Two arbitral awards found in favour of the respective investors, awarding compensation totalling €101m against Spain, and US$124m against Zimbabwe. The First and Second Appellants subsequently applied to have their respective awards registered under the Arbitration (International Investment Disputes) Act 1966 (“1966 Act”), which gave effect to the United Kingdom’s obligations under the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”). These were duly registered. Once served, both Zimbabwe and Spain applied to have the registrations set aside by reason of State immunity. These applications were refused though for substantially different reasons. The appeals by both States were subsequently grouped together before the Court of Appeal, who subsequently dismissed their application, on the grounds that both States’ agreement to the ICSID Convention was also an agreement that any ICSID arbitral award could be enforceable in a signatory State. Both States now appeal this decision before the Supreme Court.