Eiser Infrastructure Ltd v Kingdom of Spain

The case of Eiser Infrastructure Ltd and others v Kingdom of Spain involved the applicants seeking recognition and enforcement of awards rendered by the International Centre for Settlement of Investment Disputes (ICSID) against Spain. The applicants, who had invested heavily in solar power projects in Spain, claimed that Spain's subsequent legislative changes that diminished the value of their investments constituted a breach of their fair and equitable treatment under the Energy Charter Treaty (ECT) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Investment Convention). The central legal issues revolved around the interaction between foreign state immunity, as provided by the Foreign States Immunities Act 1985 (Cth), and the obligations under the Investment Convention for the recognition and enforcement of ICSID awards.

The court had to determine whether the apparent inconsistency between Article 54 of the Investment Convention, which mandates the recognition and enforcement of ICSID awards, and section 9 of the Immunities Act, which provides immunity from jurisdiction, could be resolved. Additionally, the court considered whether Spain's participation in the ICSID arbitration constituted a submission to jurisdiction under section 10 of the Immunities Act. The court found that Spain's engagement in the ICSID proceedings, including its active participation and the execution of contracts governed by the Investment Convention, amounted to a submission to jurisdiction. Therefore, the court held that Spain could not rely on foreign state immunity to resist the enforcement of the ICSID awards.

The court's reasoning hinged on interpreting the Investment Convention and reconciling its provisions with the Immunities Act. It found that Article 54 of the Investment Convention, which requires recognition and enforcement of awards as if they were final judgments, did not derogate from the law in force in relation to immunity from execution as provided by Article 55. However, since Spain had submitted to the jurisdiction of the ICSID, it was precluded from asserting immunity in proceedings for the recognition and enforcement of the awards.

The final orders granted the applicants leave to enforce the ICSID awards against Spain, directing Spain to pay the awarded compensation and interest, along with the applicants' costs. Spain was also ordered to pay the amounts in different currencies as specified in the awards. Any party wishing to vary the costs order could apply to the court within 14 days of the making of these orders.