The Court of Appeal has ruled that a third-party purchaser cannot automatically take over the enforcement of an investment treaty arbitration award through a voluntary assignment. The judgment addresses the interaction between international investment law, the Energy Charter Treaty and the enforcement framework established by the ICSID Convention.
What was the dispute about?
In Operafund Eco-Invest SICAV plc and others v The Kingdom of Spain [2026] EWCA Civ 1392, the Court of Appeal considered whether the benefit of an award made under the Convention on the Settlement of Investment Disputes between States and Nationals of other States 1965 (the ICSID Convention) could be transferred to a third-party company.
The underlying dispute arose from changes made by Spain to its renewable energy support arrangements. From 1997 onwards, Spain had introduced legislation offering incentives for renewable energy production, particularly solar energy. Subsequent legislative amendments between November 2010 and June 2014 altered the tariff regime, allegedly to the detriment of investors who had relied on the original incentives.
The investors commenced arbitration proceedings against Spain under the Energy Charter Treaty (ECT). They selected arbitration under the ICSID Convention and obtained an award in their favour on 6 September 2019 for approximately €29.3 million. The award was subsequently rectified and took its final form on 28 October 2019.
The central question before the Court of Appeal was whether the investors could transfer the benefit of that award to Blasket Renewable Investments LLC, and whether Blasket could then seek recognition and enforcement in England and Wales in its own name.
How did the assignment arise?
The investors applied in August 2021 under section 2(1) of the Arbitration (International Investment Disputes) Act 1966 to register the ICSID award in England and Wales. The registration order was granted by the High Court on 14 September 2021.
Spain subsequently applied to set aside the registration order, raising several challenges, including an argument based on state immunity. The investors’ award had also been the subject of annulment proceedings under Article 52 of the ICSID Convention, but an ICSID ad hoc committee rejected Spain’s annulment application on 2 March 2023.
On 31 January 2024, the investors entered into an agreement purporting to assign all their rights, interests and benefits under or in respect of the award to Blasket. The agreement was governed by Swiss law.
Blasket then applied to be substituted for the investors in the ongoing proceedings. It relied on the Civil Procedure Rules, particularly CPR 17.1(3) and CPR 19.2(4), which allow a party to be substituted where an existing party’s interest or liability has passed to another person.
The High Court refused the application. The judge concluded that the award and the relevant enforcement rights could not be assigned in the manner proposed. Blasket was granted permission to appeal, and the matter came before the Court of Appeal.
The appeal was heard on 6 and 7 October 2026 before Lord Justice Lewison, Lord Justice Males and Lord Justice Foxton. The approved judgment was handed down on 2 November 2026.
Why did the court reject the assignment?
The court considered whether the original award creditors had a legal right to assign the benefit of an ICSID award to a third party without the consent of the state against which the award had been made.
Blasket argued that the award represented an economic asset and that the investors’ rights should be capable of assignment. It relied on provisions of the Energy Charter Treaty, including the definition of investments in Article 1(6) and the protection of the disposal of investments under Article 10(1).
The court approached the question by considering the law governing the right being assigned. The parties agreed that the assignability of an ICSID award was governed by international law, unless the ICSID Convention itself referred the question to national law.
The court found that neither the ECT nor the ICSID Convention expressly grants investors a general power to assign the benefit of an award. It therefore considered whether such a power existed under customary international law. After examining the authorities and materials on treaty rights, the court concluded that customary international law did not establish a general right for the beneficiary of a treaty obligation to transfer that right unilaterally to a third party without the consent of the state responsible for the obligation.
The court recognised that different types of treaty rights may raise different considerations. A final monetary award is more readily identifiable than an unadjudicated claim or a promise about future state conduct. However, the court was not persuaded that this distinction established a general customary rule permitting the assignment of an ICSID award. The appeal therefore failed on the central question of assignability.
The court also considered Article 15 of the ECT, which addresses subrogation where a contracting state has indemnified an investor. It was not persuaded that Article 15 operated as an exclusion of every other possible assignment, or that it resolved the question in Blasket’s favour. The provision concerned a specific form of subrogation and did not supply the general assignment power that Blasket needed.
Who can enforce an ICSID award under Article 54?
Article 54(1) of the ICSID Convention requires each contracting state to recognise an award as binding and enforce its pecuniary obligations as if it were a final judgment of that state’s courts. Article 54(2) requires a party seeking recognition or enforcement to provide the competent court or authority with a certified copy of the award.
The Court of Appeal agreed with the first-instance judge that, in the circumstances of this case, “a party” in Article 54(2) means a party to the arbitration that resulted in the award. It does not include a third party that has voluntarily acquired the award rights by assignment while the original award creditor remains in existence.
The court considered the structure and purpose of the ICSID Convention, including the relationship between Articles 53 and 54. It concluded that the Convention distinguishes between the parties bound by the award and the obligations imposed on other contracting states to recognise and enforce it. The language did not support extending the right to seek recognition or enforcement to Blasket as a voluntary assignee.
Blasket also argued that it was sufficient that the original investors had begun the English registration process before the assignment. The court rejected that submission. A party continues to “seek” recognition and enforcement throughout the process, not merely when the initial application is issued. Blasket’s subsequent intervention was itself an attempt to pursue recognition and enforcement, so the fact that the investors had started the process earlier did not cure the problem.
“A party ‘seeking’ recognition and enforcement” does so throughout the process, until recognition and enforcement are achieved or the attempt ends.
— Court of Appeal’s analysis of Article 54(2)
The court left open questions that did not arise on the facts, including the position where rights pass involuntarily on bankruptcy or death, where a company undergoes corporate succession, or where the state has expressly consented to an assignment. Those situations were not decided by this judgment.
Why did the statutory enforcement argument fail?
Blasket’s second ground focused on section 2 of the 1966 Act. It argued that, even if the ICSID award itself could not be assigned, the right to enforce the registered award in England and Wales was a separate right created by statute and could be transferred independently.
The Court of Appeal rejected that argument. It held that the 1966 Act gives effect to the Convention’s recognition and enforcement framework; it does not create new substantive rights or a separate assignable asset detached from the award. Registration is a procedural mechanism for enforcement and does not alter who is entitled to the pecuniary obligations under the award.
The court was also concerned that accepting Blasket’s argument could fragment enforcement rights across different countries. The right to enforce an award in one jurisdiction might be held by a different person from the person entitled to the award itself, depending on the domestic legislation in each state. The court considered that result inconsistent with the structure and purpose of the Convention and the 1966 Act.
Accordingly, because the award had not been validly assigned, section 2 did not provide Blasket with an independent right to enforce it in England and Wales.
What does the judgment mean for award creditors?
The decision is significant for investors considering the sale or transfer of rights under investment treaty awards. It confirms that an assignment agreement governed by a national law will not, by itself, establish that the underlying international-law right is transferable. The law governing the award and the terms of the relevant treaty framework remain central.
For purchasers of ICSID awards, the judgment highlights the risk that acquiring the economic benefit of an award may not confer standing to seek recognition or enforcement under Article 54(2). The original award creditor’s involvement in commencing enforcement proceedings will not necessarily preserve the purchaser’s position after a voluntary assignment.
The ruling also draws a distinction between the ICSID Convention and other enforcement regimes. The court noted that the New York Convention has generally been understood to permit assignees to use its recognition and enforcement provisions, but considered the wording, structure and context of the ICSID Convention materially different.
Lord Justice Males and Lord Justice Lewison agreed that the appeal should be dismissed. Lord Justice Males noted that assignability might be desirable as a matter of international law, but considered that it was not the current state of the law. The court’s decision was unanimous.
Frequently asked questions
What did the Court of Appeal decide in [2026] EWCA Civ 1392?
The Court of Appeal dismissed Blasket’s appeal and upheld the decision refusing its substitution application. The purported assignment did not give Blasket the right to pursue enforcement of the ICSID award in its own name.
Can an ICSID award be assigned to a third party?
The court held that customary international law did not establish a general right to assign an ICSID award unilaterally without the consent of the state responsible for the award obligation. The decision concerns a voluntary assignment in circumstances where the original award creditors remained in existence.
Who can seek enforcement under Article 54(2) of the ICSID Convention?
In the circumstances considered, the court held that the phrase “a party seeking recognition or enforcement” refers to a party to the arbitration that produced the award, rather than a voluntary assignee.
Did starting enforcement proceedings before the assignment help Blasket?
No. The court held that a party continues to seek recognition and enforcement throughout the process. The original investors’ earlier application did not allow Blasket to take over and pursue enforcement after the assignment.
Does section 2 of the 1966 Act create a separate assignable right?
No. The court held that section 2 provides a route for registering and enforcing an ICSID award. It does not create a new substantive right that can be assigned independently of the award.
Did the court decide cases involving bankruptcy, death or state consent?
No. The court expressly left open questions involving involuntary transfers, corporate succession and assignments to which the state has consented. Those issues were not necessary to decide this appeal.