Court of Appeal Dismisses Appeal in Operafund v Kingdom of Spain

What was the dispute about?

In Operafund Eco-Invest SICAV plc and Others v The Kingdom of Spain [2026] EWCA Civ 1392, handed down on 2 November 2026, the Court of Appeal considered whether the successful investors in an arbitration could transfer the benefit of an award made under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965, commonly known as the ICSID Convention.

The underlying dispute concerned changes made by Spain to its renewable-energy tariff regime. From 1997, Spain had introduced legislation offering incentives for renewable-energy production, particularly solar power. The regime was substantially amended between November 2010 and June 2014, allegedly to the detriment of investors who had relied on those incentives.

Operafund Eco-Invest SICAV plc and Schwab Holding AG commenced arbitration against Spain under the Energy Charter Treaty on 31 July 2015. They chose the ICSID Convention procedure and obtained an award in their favour on 6 September 2019 for €29.3 million. The award was rectified and took its final form on 28 October 2019.

The investors subsequently applied in England and Wales to register the award under the Arbitration (International Investment Disputes) Act 1966. The registration order was made on 14 September 2021. Spain later applied to set that order aside, including on state-immunity grounds. Its separate challenge to the award under the ICSID Convention had been rejected by an ICSID ad hoc committee in March 2023.

How did the assignment to Blasket arise?

On 31 January 2024, the original investors entered into an agreement with Blasket Renewable Investments LLC, a Delaware company established to acquire and exploit investment treaty awards. The agreement, governed by Swiss law, purported to assign to Blasket all rights, interests and benefits of the investors under or in respect of the award.

Blasket then applied to be substituted for the investors in the ongoing English proceedings. The application relied on the Civil Procedure Rules, which permit substitution where an existing party’s interest or liability has passed to a new party. The central question was therefore whether the assignment had validly transferred the relevant rights.

1. 31 July 2015 The investors commence arbitration against Spain under the Energy Charter Treaty.
2. 6 September 2019 The tribunal issues an award of €29.3 million in favour of the investors.
3. 14 September 2021 The award is registered in England and Wales under the 1966 Act.
4. 31 January 2024 The investors enter into the assignment agreement with Blasket.
5. 25 July 2024 Blasket applies to be substituted for the investors in the English proceedings.
6. 10 November 2025 HHJ Pelling KC dismisses the substitution application in the Commercial Court.
7. 6–7 October 2026 The Court of Appeal hears Blasket’s appeal.
8. 2 November 2026 The Court of Appeal dismisses the appeal.

Why did the court find the award was not assignable?

Lord Justice Foxton, giving the leading judgment with which Lord Justices Males and Lewison agreed, examined whether customary international law recognised a general power for the beneficiary of a treaty right to assign that right without the consent of the state that owed the obligation.

The court considered the historical materials on the transfer of treaty rights, including the analysis of Lord McNair and the work of the International Law Commission. It concluded that the materials did not establish a general rule permitting unilateral assignment of rights under a treaty. The court distinguished the rules of domestic private law, under which certain debts and contractual rights may be assigned, from the international-law framework governing treaty obligations.

Blasket also relied on the principle associated with the SS Lotus case, arguing that conduct not prohibited by international law should be permitted. The court was not persuaded that the absence of a prohibition supplied the legal power needed to transfer a treaty right and alter the identity of the party entitled to enforce it against a state. The court considered that a liberty to act is not necessarily the same as a legal power to change the legal relationship between the original parties.

The court then considered the Energy Charter Treaty. It did not accept Spain’s argument that Article 15, which addresses subrogation where a contracting state has indemnified an investor, itself prohibited assignment. However, that conclusion did not assist Blasket because the more fundamental difficulty was the absence of an established general power under international law to assign the relevant treaty rights.

“The Judge was right on both grounds, and the appeal should be dismissed.”

Lord Justice Foxton, summarising the court’s conclusion at paragraph 3

What did Article 54(2) mean for enforcement?

Article 54(1) of the ICSID Convention requires each contracting state to recognise an ICSID award as binding and enforce the pecuniary obligations it imposes as if it were a final judgment of that state’s courts. Article 54(2) provides that “a party” seeking recognition or enforcement must furnish a certified copy of the award to the competent court or authority.

Blasket argued that the reference to “a party” should not be confined to a party to the original arbitration and should include an assignee that had acquired the award. The court rejected that interpretation. Reading Article 54(2) in the context of the Convention, it concluded that the provision referred to a party to the arbitration that resulted in the award.

The court acknowledged that first-instance decisions in the United States, Australia and the Netherlands had taken a different approach. It nevertheless considered that those decisions did not establish a sufficiently clear international consensus to displace its own interpretation of the Convention. The court also rejected the argument that it was enough for the original award creditor to initiate the recognition and enforcement process before the national court and then transfer the relevant position to an assignee.

The judgment therefore leaves the original award creditor as the party entitled to pursue recognition and enforcement under Article 54(2), rather than allowing an assignee to take that position simply by relying on a private assignment agreement.

Could the 1966 Act create a separate enforcement right?

Blasket’s second ground concerned section 2 of the Arbitration (International Investment Disputes) Act 1966. It argued that registration created an English-law right to enforce the award, and that this right could be assigned even if the award itself could not.

The Court of Appeal rejected that argument. It held that the 1966 Act implements the ICSID Convention by providing a domestic procedure for enforcement. It does not create new substantive rights independent of the award or permit the enforcement mechanism to be transferred separately from the underlying entitlement.

Lord Justice Foxton considered that allowing the enforcement right in one jurisdiction to be assigned independently could result in different parties holding enforcement rights in different countries, even though none was the person entitled to the award under the Convention. He described the proposed approach as an attempt to divide what was indivisible. Registration under the 1966 Act could not change the international-law position or create an assignable right where the Convention did not provide one.

What is the practical significance for award creditors?

The decision is significant for investors, litigation funders and companies operating in the secondary market for investment treaty awards. It confirms that a private agreement transferring the economic benefit of an ICSID award will not, without more, make the assignee the party entitled to seek recognition or enforcement under Article 54(2).

Lord Justice Males noted that it may be desirable as a matter of international law for ICSID awards against contracting states to be assignable, but agreed that this was not the current state of the law. He also reserved the question of whether an involuntary transfer, such as one arising on insolvency, death or corporate succession, might produce a different result. A further question—whether a state’s consent to an assignment could enable an assignee to enforce—was also left open.

Lord Justice Lewison agreed with the dismissal of the appeal, while describing Spain’s failure to comply with its treaty obligation to satisfy the award as regrettable. The Court of Appeal’s decision therefore resolves the issues raised by Blasket’s proposed substitution, but leaves those distinct questions for a future case in which they arise directly.