On 19 February 2020, the UK Supreme Court (“Court”) unanimously ruled that the successful Swedish claimants in Micula v. Romania could enforce their ICSID arbitral award (“Award”) in the UK, lifting a stay on enforcement that had been granted by the High Court in 2017 and upheld by the Court of Appeal in 2018. Romania and the European Commission both intervened in the case.
The Court found, inter alia, that, while English courts retain the power to order a stay of enforcement of ICSID awards, that power only exists in the limited circumstances of where a stay is sought on procedural grounds. Because Romania had here sought a stay on substantive grounds, granting a stay would exceed the proper limits of the power of English courts.
The Court also considered whether the principle of “sincere cooperation” under EU law required the grant of a stay. In particular, the Court examined Article 351 of the Treaty on the Functioning of the European Union (“TFEU”), which states that the EU treaties do not affect the duty of Member States to perform their obligations to non-Member States under prior agreements. The Court found that Article 351 of the TFEU mandated against a stay of enforcement because: (i) the UK had assumed its obligations under the ICSID Convention before it became a Member State of the European Union; and (ii) those obligations were owed not merely to Sweden and Romania but to all parties to the ICSID Convention (including non-EU Member States). Article 351 of the TFEU therefore protected the pre-existing obligations of the UK under Article 54 of the ICSID Convention to recognise and enforce awards as if they were a final judgment of its own courts.
As a result, the Court lifted the stay of enforcement on the Award.
The UK Supreme Court’s judgment is here.
The ICSID proceedings are here.