Enforcing arbitration awards against states

Step one: recognition of an ICSID award

Article 53 of the ICSID Convention says each party shall abide by and comply with the award, except where enforcement has been stayed under the Convention ¹. Article 54(1) requires each Contracting State to recognise an ICSID award as binding and enforce its money obligations within its territory as if it were a final judgment of its own courts ¹.

In the United States, 22 U.S.C. 1650a says an ICSID award creates a right arising under a treaty of the United States and is given the same full faith and credit as a final judgment of a state court. The Federal Arbitration Act does not apply to these awards ⁴.

Step one: recognition of other awards

Under Article III of the New York Convention, each Contracting State recognises arbitral awards as binding and enforces them under its own procedural rules ². Article V lets a court refuse recognition only on listed grounds ².

• Incapacity of a party or an invalid arbitration agreement ²
• No proper notice, or the party could not present its case ²
• The award goes beyond the scope of the submission to arbitration ²
• The tribunal or procedure did not follow the agreement or the law of the seat ²
• The award is not yet binding, or has been set aside or suspended at the seat ²
• The subject matter is not arbitrable, or enforcement would be contrary to public policy ²

Step two: immunity from execution

Recognition does not by itself allow seizure of state property. Article 55 of the ICSID Convention says nothing in Article 54 derogates from the law of any Contracting State on immunity from execution ¹.

In the United Kingdom, section 9 of the State Immunity Act 1978 says a state that has agreed in writing to arbitrate is not immune in UK court proceedings relating to the arbitration ⁵. Execution is treated separately. Section 13(2)(b) says state property is not subject to any process for the enforcement of a judgment or arbitration award ⁶. Section 13(3) allows relief with the state's written consent, and says a provision merely submitting to the jurisdiction of the courts is not consent ⁶. Section 13(4) allows process against property in use or intended for use for commercial purposes ⁶.

In the United States, 28 U.S.C. 1605(a)(6) removes immunity from jurisdiction in actions to enforce an agreement to arbitrate or to confirm an award, where listed conditions are met ⁷. Section 1610(a)(6) allows attachment or execution against property used for a commercial activity in the United States when the judgment is based on an order confirming an arbitral award ⁸. Section 1610(c) requires a court order finding that a reasonable period of time has passed after judgment and any required notice ⁸.

Stays during a challenge

An ICSID annulment committee may stay enforcement pending its decision ¹. To 31 December 2023, ICSID recorded 136 stay requests, of which 64 were granted and 35 were conditioned on security or a written undertaking ⁹. For non-ICSID awards, Article VI of the New York Convention lets a court asked to enforce an award adjourn its decision if a setting-aside application has been made, and order the other party to give suitable security ².