Department of Law
Spring Term 2020
Master Programme in Investment Treaty Arbitration
Master’s Thesis
Recognition, Enforcement, and Execution of arbitral
awards under the ICSID convention
– the debate and problems in the differentiation between execution
and enforcement regarding questions of sovereign immunity
Table of Content
A. Introduction………1
B. Methodology and scope of analysis……….……..1
C. Sovereign immunity………...2
I. Problems past-present-future………..…...3
II. Sources of law……….…….4
III. Absolute and restrictive sovereign immunity……….4
IV. Application of restricted sovereign immunity………5
V. Waiver of immunity through the arbitration clause……….6
D. ICSID arbitration and enforcement………..………..6
I. Enforcement regime in the ICSID framework………..7
II. Terminology in the ICSID enforcement regime………..9
1. English ICSID version………11
2. French ICSID version……….13
3. Spanish ICSID version………14
4. German ICSID version………15
III. Results of the abstract studies………...17
E. Case Studies………..18
I. Historical background……….18
II. Case summaries……….19
1. Ascom Group & others v. Republic of Kazakhstan……….19
a. Factual background……….19
b. Procedural history……….………..19
c. Relevant approaches………....20
2. Eiser Infrastructure Ltd v Kingdom of Spain………...22
a. Factual background……….22
b. Procedural history……….………..22
c. Relevant approaches………...….23
3. Micula and others v Romania……….27
a. Factual background……….27
b. Procedural history……….……..…28
c. Relevant approaches………28
a. Benvenuti & Bonfant v People’s Republic of the Congo……….30
b. Société Ouest Africaine des Bétons Industriels v Senegal……...31
c. Liberian Eastern Timber Corporation v Liberia………...31
d. Blue Ridge Investments LLC v Argentina………...32
III. Results of the case studies……….32
F. Conclsions……….33
I. Results of the analysis………..33
Table of Abbreviations
ECT Energy Treaty Charter
ICJ International Court of Justice
ICSID International Centre for Settlement of Investment Disputes UNSCI United Nations Convention on Jurisdictional Immunities of
States and Their Property
VCLT Vienna Convention on the Law of Treaties
A. Introduction
This thesis analyses the conundrum at the intersection of (i) recognition, (ii) enforcement, and (iii) execution of investment treaty arbitral awards pursuant to the ICSID convention. Orienting between recognition, enforcement, and execution has recently stirred quite some debate. This culminates in the question of, on the one hand, whether it is necessary to differentiate between “enforcement” and “execution” in light of the plea of sovereign immunity, and how to do so, on the other hand. In this context, the concept of sovereign immunity in general and as a potential objection within the ICSID enforcement proceedings will be analysed in particular. This thesis does so by analysing scholarly work, the ICSID history and as a result of municipal case law vis-à-vis sovereign immunity and ICSID enforcement. A particular emphasis will be put on statutory interpretations, for example on ICSID enforcement regime and its terminology. In this light, a terminological analysis of language is instrumental given that the ICSID convention has three original languages.
B. Methodology and scope of analysis
patterns, tendencies, developments, and concepts found in both academic and practical spheres as well as the interdependence of these areas and give concluding statements in review of these results. The concluding remarks will include suggestions to solve the detected challenges both found in the debate and in this work.
C. Sovereign immunity
Concerning the doctrine of sovereign immunity and its relevance for the analysis, the discussion is to be presented in its historical development, its current status and its connections to the legal problems at hand. The doctrine of sovereign immunity has a high relevance for several contexts in public international law, with a wide range from human rights or diplomacy related issues1 as well as to investor state arbitration. Within the context of investor state arbitration, the double relevance regarding jurisdictional questions and enforcement proceedings2 presents enough ground for broad discussions, but for the sake of this work in a narrowed approach the impact within enforcement proceedings is to be analysed in detail. At the stage of enforcement proceedings against a state in investor state disputes, states may use the reference to sovereign immunity as a “defence” against the enforcement of an award.3 Within the chosen legal framework of ICSID for this analysis, Article 55 is referring to sovereign immunity as a limiting factor within the scope of dispute resolution.4 It is this very article that provides the bridge and connection between the concept of sovereign immunity and the ICSID enforcement proceedings, more precise the system and terminology used in these. The following question is therefore, how the principle of sovereign immunity manifests within the enforcement proceedings of the ICSID framework.
1 Mirjam Baldegger, Das Spannungsverhältnis zwischen Staatenimmunität, diplomatischer
Immunität und Menschenrechten, p. 7
2 Kaj Hobér, International commercial arbitration, p. 19
3 Anastasiia Filipiuk, Enforcement of ICSID Arbitration Awards and Sovereign Immunity, p. 16 4 Article 55
I. Problems past-presence-future
The doctrine of sovereign immunity is an old topic of public international law and was once summarized as “rex non potest peccare”, “the king can do no wrong”.5 Within the international perspective the topic of sovereign immunity has a pragmatic justification, namely, dignity comity or equality.6 This is said to present a vital precondition for a functional multilateral order with mutually respecting actors7. With the increasing importance of non-state actors involved in international relations also the relation of a sovereign and his immunity towards citizen non-state actors became a question of high relevance. Nowadays, non-states are acting more and more as commercial parties, adding complexity to the application of the doctrine.
As can be understood the doctrine has many areas of complication and controversy, in particular with respect to human rights violations, touching on the jurisdictional phase8 and with respect to execution per se. As one of the most traditional topics of both of private and public international law it is surprising that it presents still many problems which in turn remain unresolved in spite of the long lasting debate.9 With the increasing importance of international political, economic and legal relations the importance of reliable and transparent dispute resolution grows equally.10 Therefore, one of the many topics related to sovereign immunity is also investor state arbitration11 and this has sparked a discussion for decades. This debate essentially focusses on the enforceability element of arbitration and the obstacle that sovereign immunity presents vis-a-vis execution (and sometimes enforcement).
It has rightfully been criticised, that states may abuse the plea of sovereign immunity as a “shield” in order to avoid accountability, leaving the arbitration enforcement mechanism at times ineffective.12 Consent to arbitration constitutes a 5 George W. Pugh, Historical Approach to the Doctrine of Sovereign Immunity, p. 476; Eric T. Kohan, A Natural Progression of Restrictive Immunity, p. 1522
6 Jurisdictional Immunities of the State (Germany v. Italy: Greece intervening), Judgment, I.C.J. Reports 2012, p. 99
7 Eric T. Kohan, A Natural Progression of Restrictive Immunity, p. 1520 8 Ferdinand Mesch, Jurisdictional Immunities of Foreign States, p. 1225 9 Kaj Hobér, International commercial arbitration, p. 10
10 Tai-Heng Cheng, Ivo Entchev, State Incapacity and sovereign immunity in international
arbitration, p. 942
waiver of sovereign immunity from jurisdiction and there is no place for sovereign immunity as a defence in that regard.13 There is, however no implicit waiver of sovereign immunity from execution within the arbitration agreement, and therefore, other solutions, partly non-legal are sought; e.g. market based ones.14 The crux of the matter for this paper is whether the waiver extends to recognition and enforcement of ICSID awards.
II. Sources of law
As a topic of high relevance for investor state disputes as well as other public international law issues, the question of sovereign immunity has been subject of several international codification attempts throughout the years. However, as of now there is no coherent multilateral instrument that is legally binding to provide a unified law on sovereign immunity, and therefore it remains a source of dynamic development in public international law, predominantly driven by municipal case law.15 The European Convention on State Immunity from 1972 and the United Nations Convention on Jurisdictional Immunities of States and Their Property from 200416 are major attempts on the international level, on municipal levels many jurisdictions have taken deviating approaches and there is no uniform, binding law. Therefore, the sources of law are the 2004 UNSCI, municipal case law and scholarly work.17 Suggestions are being made however, that to unify the scope of sovereign immunity, the ICJ shall be the final arbiter.18
III. Absolute and restrictive sovereign immunity
The development of state immunity historically brought forth two distinct theories that can be distinguished from another, namely the theory of (a) absolute State immunity and the theory of (b) restrictive State immunity.19
The theory of absolute State immunity is built on the understanding, that a state cannot be brought to suit without its consent.20 In this doctrine there can be no 13 Ylli Dautaj, Sovereign Immunity From Execution, p.2
14 Ylli Dautaj, Sovereign Immunity From Execution, p. 2 15 Kaj Hobér, International commercial arbitration, p.11 16 Ylli Dautaj, Sovereign Immunity From Execution, p. 2 17 Kaj Hobér, International commercial arbitration, p. 12
18 Ylli Dautaj, ‘Sovereign Immunity from Execution of Foreign Arbitral Awards: Sweden’s Liberal
and Pragmatic Contribution’ (forthcoming), p. 26
distinction between commercial or sovereign activity since the state is to be viewed as a monolithic single object with potentially many manifestations in different legal forms.21 By illustration, the doctrine of absolute State immunity was predominant in the former soviet union and remains so to some extend in the people’s republic of china.22
The theory of restrictive state immunity on the other hand provides a distinction between actions acta jure gestionis (commercial acts) and acta jure imperii (sovereign acts) regarding the nature of state action and has developed as a balanced and pragmatic approach in order to allow international trade and investments for both state and non-state actors.23 Challenges, however can occur in the distinguishing of these two, in particular, the determination in dual-use cases.24 Many problems lay in the pragmatic details and actions, states might take to classify certain assets for execution and actions as “sovereign” in order to fall under the protection of sovereign immunity for jurisdiction.25 As of now, the theory of restrictive state immunity is, as a general approach, widely accepted,26 and will therefore be the basis on which this analysis is oriented.
IV. Application of restricted sovereign immunity
As mentioned above with respect to execution, the theory of restrictive state immunity is de facto based on a differentiation between protected and non-protected assets. Outstanding questions within this theory remain regarding the exact determination of the nature of a state’s action or asset as commercial or sovereign in various contexts. Moreover, the distinction has implications on their effects for the enforcement and execution of an ICSID award. To clarify, the scope of this work regarding different potential problems it is to be stated, that for the sake of this work the questions analysed will be “to what extend is an asset, that is protected by sovereign immunity, protected in what stage of the ICSID enforcement regime”.
21 Winston P. Nagan, The Emerging Restrictions on Sovereign Immunity, p. 407
22 but traditionally not in Hong Kong; Yilin Ding, Absolute, Restrictive, or Something More: Did
Beijing Choose the Right Type of Sovereign Immunity for Hong Kong?, p. 998; Rajesh Sharma, Enforcement of Arbitral Awards and Defence of Sovereignty, p. 256
23 Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law, p. 235 24 Kaj Hobér, International commercial arbitration, p. 11f
The analysis therefore does not cover the questions of “how to determine, whether or not an asset is protected by sovereign immunity”. However, to give a brief overview, it is to be said, that the test for immunity from jurisdiction and the test for immunity from execution need to be differentiated.27 The test to decide whether an asset is of commercial or sovereign nature is based on the purpose intended and practiced with the asset in question.28
V. Waiver of immunity through the arbitration clause
Sovereign immunity touches primarily two stages of investor state disputes, namely jurisdiction and enforcement (i.e. recognition, enforcement and execution). Generally speaking, an arbitration agreement is considered to be a waiver from jurisdiction but not execution.29 For this thesis, the question is whether the waiver extends to recognition and enforcement, but not execution. This thesis focusses solely on ICSID arbitration.30 This is to be brought in context with the requirements of creating final and binding results through arbitration.31
D. ICSID arbitration and enforcement
The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution and was established in 1966. It has the primary function of enabling reliable dispute resolution mechanisms to promote investments and attract investors.32 In terms of structure and organisation it is incorporated in the World Bank Group system.33 Its usage in Investor-State disputes is therefore not necessarily in congruence with every legal design intention it was created with in the first place. As a part of the multilateral order to enable and encourage cross border cooperation and investment, the object and purpose of ICSID is aimed towards a further multinational integration in both economic and legal fields, and with its reliable dispute resolution mechanism it provides a functional means to
27 Shannon Rose Selden & Vain Anderson, The King Can Do No Wrong: Sovereign Immunity and
Its Exceptions, p. 1
28 David Gaukrodger, Foreign State Immunity and Foreign Government Controlled Investors, p. 18
29 Anastasiia Filipiuk, Enforcement of ICSID Arbitration Awards and Sovereign Immunity, p. 16 30 Aliz Kaposznyak, Sovereign Immunity from Execution in Investment Treaty Arbitration, p.3 31 United Nations conference on Trade and Development, p. 2
32 Crina Baltag, The ICSID Convention: A Successful Story, p. 4
33 Matthew Slater, Inna Rozenberg and Richard Freeman, Jurisdictional And Forum Requirements
actually enable these goals.34 ICSID is based on a treaty between 153 member states. Therefore, its regulations and articles must be interpreted in accordance with the principles of treaty interpretation in international law.
The aim of this thesis is to contribute to the ongoing discussion in the aforementioned, narrow scope. In order to do so, the enforcement regime of ICSID is to be approached systematically to provide a sufficient legal ground for this. Also, the terminology within this system is to be interpreted in detail to be able to determine the exact effects of the problems coming with sovereign immunity objections within the enforcement proceedings.
I. Enforcement regime in the ICSID framework
The features of a final, binding and directly enforceable awards, is one of the most important aspect for investors when opting for ICSID arbitration. This provides the regime with actual functionality – i.e. the ends justify the means. The ICSID framework presents several unique features to effectuate these requirements effectively. Moreover, the overall enforcement proceedings in ICSID arbitration is different from other arbitral frameworks, since the ICSID convention provides for a detached system, that does not provide options for challenges or other judicial reviews of awards rendered under the ICSID system but instead has a system for annulment by a special annulment committee within the ICSID framework.35 The grounds for annulment are of a limited scope and to be decided upon by an ad hoc committee.36 These specifics of ICSID arbitration also reach out and influence the enforcement regime. Articles 53-55 of ICSID cover “Recognition and Enforcement” of awards and are, therefore, the parts of the convention that is of main interest for the purposes of this thesis. The terminology used will be analyzed in some detail, with a particular focus on “Recognition”, “Enforcement” and “Execution” including their overall relevance within the discussion on the necessity for final, binding and directly enforceable awards. However, before the in-depth meaning of these terms is explained in detail, the enforcement regime and the functional standing of the used terminology is to be looked at.
34 Michael Reisman, Repairing ICSID's Control System, p. 211 35 Antonio R. Parra, The Enforcement of ICSID Arbitral Award, p. 3f
Starting from ICSID article 54 it can be seen that there is a first distinction between “recognition” and “enforcement”.37 In the enforcement design structure of ICSID national courts are instructed to “recognize” ICSID awards as binding and “enforce” them with respect to pecuniary obligations.38 As mentioned, a further question analyzed in this work will cover the further interpretation of the “enforcement” part within this structure, but it is important to keep in mind this first distinction between “recognition” and “enforcement” in order to understand the different impacts of the doctrine of sovereign immunity towards this regulation system.
Sometimes states invoke sovereign immunity as a defense against the enforcement proceedings at the stage of “recognition” of an arbitral award. From a systematical perspective, recognition and enforcement of an arbitral award are to be categorized as a part of the jurisdictional question. 39 From a chronological perspective, after the aforementioned sovereign immunity objection against jurisdiction, the sovereign immunity objection against recognition within the enforcement proceedings is therefore the second time that a state may raise this doctrine in order to avoid being held accountable within the ICSID arbitration framework for dispute resolution. A third potential objection might be raised withing the “enforcement” after the recognition. Therefore, the next question at hand is the exact meaning and structure of the terminology regarding “enforcement” in ICSID.
37 Article 54
(1) Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State. A Contracting State with a federal constitution may enforce such an award in or through its federal courts and may provide that such courts shall treat the award as if it were a final judgment of the courts of a constituent state.
(2) A party seeking recognition or enforcement in the territories of a Contracting State shall furnish to a competent court or other authority which such State shall have designated for this purpose a copy of the award certified by the Secretary-General. Each Contracting State shall notify the Secretary-General of the designation of the competent court or other authority for this purpose and of any subsequent change in such designation.
(3) Execution of the award shall be governed by the laws concerning the execution of judgments in force in the State in whose territories such execution is sought
38 Edward Baldwin, Mark Kantor and Michael Nolan, Limits to Enforcement of ICSID Awards, p. 3f
II. Terminology in the ICSID enforcement regime
Within the shown enforcement regime of ICSID it is the particular usage of certain terms that is of the most interest for this work. The meaning and interpretation of the mentioned terms of “recognition”, “execution” and “enforcement” will be the primary concern for this analysis, since these terms determine the scope of the limitations found in Art. 55 ICSID regarding sovereign immunity. In order to provide for direct enforcement pursuant to the ICSID Convention the basic principle is one of automatic recognition of ICSID awards.40 The recognition of an award is the formally given confirmation that this award is authentic and that it has the legal consequences provided by the law.41 The recognition is designed to cloak the award as binding, whereas only the pecuniary obligations within the award are to be enforced.42 Therefore there is already a clear distinction between the terms of recognition and enforcement, as discussed more in detail below.
Since the regulation mentioned in Art. 55 ICSID refers to “execution”, it is of utmost importance to determine as precise as possible what exactly is meant with “execution” within the nuanced terminology of the ICSID framework vis-a-vis enforcement proceedings. The subject of interpretation is an international convention and therefore the Vienna Convention on the Law of Treaties, is to be used in order to interpret and in turn determine the exact scope of the terminology at hand. A crucial interpretative criteria that is to be taken into account is that there are different original language versions of the ICSID Convention articles and all of them must be interpreted in accordance with VCLT Convention. The relevant articles for this treaty interpretation are 31-33 VCLT.
From these articles a simple structured hierarchy of interpretation methods can be deduced to then be applied on the ICSID articles that are in the subject for this analysis. The structure presented in Article 31(1)43 constates as “general” rules the
40 Christoph H. Schreuer, The ICSID Convention, p. 1118 41 Christoph H. Schreuer, The ICSID Convention, p. 1128 42 Christoph H. Schreuer, The ICSID Convention, p. 1136
43 Article 31. GENERAL RULE OF INTERPRETATION
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
“ordinary meaning” i.e. the “wording of terms, (i) the context of the terms within the treaty and (ii) the object and purpose of the treaty (iii). All these rules have to be applied in “good faith”. Therefore, the interpretation in this thesis will be oriented along these criteria. Further details in the presented regulations of the Vienna Convention cover explanations about the determination of the “context” and in Article 3244, as a secondary approach, supplementary means of interpretation are mentioned.
It has to be taken into account however, that the ICSID convention is as mentioned not only formulated in English. The official languages for ICSID are English, Spanish, and French. Therefore, in order to determine the scope and meaning of the terms at hand, one has to consider the phrasing and structure in other languages as well. This finds its ground in Article 3345 of the Vienna Convention. In Article 33(i) that each authenticated language is of equal authority. Thus, this thesis must underscore the languages used in each authentic version. In order to further illustrate the terms, their meaning, usage and interpretation in an even broader
(a) Any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) Any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) Any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) Any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) Any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended.
44 Article 32. SUPPLEMENTARY MEANS OF INTERPRETATION
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) Leaves the meaning ambiguous or obscure; or
(b) Leads to a result which is manifestly absurd or unreasonable.
45 Article 33. INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR
MORE LANGUAGES
1. When a treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the treaty provides or the parties agree that, in case of divergence, a particular text shall prevail.
2. A version of the treaty in a language other than one of those in which the text was authenticated shall be considered an authentic text only if the treaty so provides or the parties so agree.
international context, the German ICSID version and application will be presented. This will merely be a comparative example used to illustrate the “true” meaning in the authentic versions.
1. English ICSID version
Within the English wording of the relevant ICSID Articles 53-55 the convention differentiates between “enforcement” and “execution”. The term of “enforcement” is used in the headline for Section 6 in the context of “Recognition and Enforcement of the Award”. This usage can be seen as “enforcement in the broader sense of the word” in other words “enforcement proceedings” following the recognition of the award, which itself might be even seen as a part within a broader scope of “enforcement procedure steps”. The term of “execution” is used in Art. 54 (3):
(3) Execution of the award shall be governed by the laws concerning the execution of
judgments in force in the State in whose territories such execution is sought.
And is also used in Art. 55:
Article 55
Nothing in Article 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from
execution.
The English ICSID wording therefore provides a distinct usage of the term “execution” within the relevant articles. The core question is now, if the usage of this term of “execution” is to be interpreted in another sense than the term of “enforcement”.
If this is the case, then Article 55 with its reference to protection from “execution”
through sovereign immunity only protects a state regarding “execution” but not regarding “enforcement”.
Following the systematic context, and in a broader sense connected to that the object and purpose as criteria to interpret the term, the ICSID preamble shows that effective mechanisms to provide enforcement are intended and the terminology at question is used within “IV. 6. Recognition and Enforcement of the Award“ of ICSID. Within that section it can be seen that in reference to awards in art. 53 (1) awards are to be “binding on the parties” and that they shall not be “subject to any appeal”. This regulation also follows the idea of presenting effective enforcement mechanisms. The same idea manifests in art. 54 (1) when it is stated, that each member state shall automatically recognize such an award rendered as binding and enforce the pecuniary obligations imposed just as if it were a final judgment of a national court in that respective State.46
The whole systematic context here shows that effective enforcement is the idea manifesting in different articles and provisions.
Therefore, in order to determine the meaning of “execution” in Art. 55 this interpretation shall follow the same idea. In order to provide for an effective enforcement mechanism, obstacles towards enforcement have to be as narrow as possible. Since the sovereign immunity objection mentioned in Art. 55 ICSID is such an obstacle, an interpretation that determines execution in a narrow and precise sense and not in a broad sense should be followed with the meaning of “enforcement as a whole” in order to provide as effective enforcement mechanisms as possible.
Concerning the historic approach of interpretation, it is to be stated that the drafting history of the convention according to Broches and Schreuer leaves some uncertainties, and since the drafting itself was the subject of time pressure and many challenges, no clearcut interpretation can be drawn from historic approaches.47 This however, does not contradict the results of looking in to the wording and the systematic context, it merely leads to the conclusion, that some means of interpretation are of greater importance than others for the questions analyzed in this work.
Another aspect that has to be taken into account is regarding the consequences of the different ways of interpretation. In other words, what follows if the terminology is to be interpreted synonymous and what follows if the terminology is to be interpreted in distinguishing. If there is no difference between “execution” and “enforcement”, that would mean that the scope of protection mentioned in Art. 55 ICSID covers the whole of enforcement proceedings. If, however, “execution” is a means of enforcement and therefore its last step, the scope of protection is limited to this very last aspect of enforcement. Therefore, the question is relevant in order to determine how broad or narrow the sovereign immunity defense can be brought forth by states. Since the aforementioned object and purpose of ICSID is to present effective mechanisms, an interpretation that would lead to a total inefficiency of enforcement proceedings due to immunity against them as a whole would not be in congruence with those goals. If, however the terms are interpreted as distinct form another, a more precise and accurate system is presented, that allows both an exact determination on the stage and scope of the sovereign immunity protection as well as an operational enforcement proceeding.
2. French ICSID version
French is also one of the official ICSID languages, and therefore the French version of the articles in Question are to be considered as well in order to determine the correct meaning of the terminology in question. Again, the mentioned standards for interpretation from the Vienna Convention are to be applied. The relevant provisions of ICISD are the same, namely Art. 54 (3) and Art. 55. Since the comparative analysis within this work is heavily based on the very wording and the structured presentation of the articles and sentences in question as a whole, they will be quoted here as a whole as well:
Article 54
(3) L’exécution est régie par la législation concernant l’exécution des jugements en vigueur dans l’Etat sur le territoire duquel on cherche à y procéder.
Article 55
Aucune des dispositions de l’article 54 ne peut être interprétée comme faisant exception au droit en vigueur dans un Etat contractant concernant l’immunité d’exécution dudit
As it can be seen, both provisions use the term of “exécution”. This term is also used in the headline of Section 6 “De la reconnaissance et de l’exécution de la
sentence”. Regarding the wording of the convention it can be therefore seen that
the French version of ICSID does not differentiate between the two terms. However, even if the wording itself may be synonymous, there can be different meanings to the same term within different contexts and therefore the same word might be interpreted with a different content in different circumstances. It lays in the very provision of Art. 31(1) Vienna Convention, that wording is just one tool among others to interpret the meaning of a treaty. Therefore the analysis has to take other criteria in to consideration as well, namely the aforementioned systematic context, the historical background, the implied consequences, and the usage of the terminology in other contexts, namely the French approach to enforcement and execution under other circumstances.
Regarding the consequences as well as the systematic context there is indeed no difference between the French and the English version, since it is only the wording that sets the two apart whereas the object and purpose, the meaning and the implied consequences of all language versions of ICSID remain identical. Since it was already stated, that the historical interpretation remains somewhat uncertain and at least within the interpretation of the French ICSID version as well the wording provides only a limited scope of determination, it can be stated therefore, that the
systematic and contextual approach is indeed the most important criteria of treaty
interpretation in this case.
3. Spanish ICSID version
The third official ICSID language is Spanish. Therefore, the Spanish terminology is to be considered as well, and will be taken into account within this work in the same manner as the French version. Regarding the wording of the relevant provisions, the Spanish ICSID version uses the following structure:
Artículo 54
(3) El laudo se ejecutará de acuerdo con las normas que,sobre ejecución de sentencias,estuvieren en vigor en los territorios en que dicha ejecución se pretenda.
Nada de lo dispuesto en el Artículo 54 se interpretará como derogatorio de las leyes vigentes en cualquier Estado Contratante relativas a la inmunidad en materia de
ejecución de dicho Estado o de otro Estado extranjero
The terminology used in the headline of Section 6 is “Reconocimiento y ejecución
del laudo”. It can be seen here that the Spanish wording just like the French wording
uses one and the same term in both instances. The Spanish “ejecución” is used as a translation for both “execution” and “enforcement” within the ICSID framework. It follows from this fact, that the analysis of the Spanish ICSID version comes to the same conclusion as the analysis of the French ICSID version.
4. German ICSID version
German is not one of the official ICSID languages and therefore the analysis is secondary and illustrate only. A comparative analysis helps depict the overall interpretation of ICSID practice. In other words, the German application helps validate or reject the interpretation in the different “authentic” ICSID documents. The German perspective will therefore be provided to round up the picture and further confirm or falsify the conclusions and patterns found so far. Regarding the wording of the relevant provisions, the German ICSID version uses the following:
Artikel 54
(3) Auf die Vollstreckung des Schiedsspruchs sind die Rechtsvorschriften für die Vollstreckung von Urteilen anzuwenden, die in dem Staat gelten, in dessen Hoheitsgebiet
die Vollstreckung begehrt wird.
Artikel 55
Artikel 54 darf nicht so ausgelegt werden, als schaffe er eine Ausnahme von dem in einem Vertragsstaat geltenden Recht über die Immunität dieses Staates oder eines fremden
Staates vor der Vollstreckung.
The terminology used in the headline of Section 6 is “Anerkennung und
Vollstreckung des Schiedsspruchs”. It can be seen here, that the German ICSID
The concept of sovereign immunity and its implications for enforcement proceedings in the context international law has been involved in several cases, and the German Supreme Court (Bundesverfassungsgericht). The case law firstly followed the aforementioned pattern in international law, to differentiate between immunity as an jurisdictional objection, and as an objection in the context of the enforcement proceedings.48 From a dogmatic perspective the figure used is here as well the theory of restrictive sovereign immunity, and a waiver of the state’s immunity regarding the dispute in question due to the states consent to the commercial activity with the private actor. 49 It was already stated, that for the scope
of this analysis, the particular terminology and usage of the ICSID enforcement regime is of primary importance. However, in order to draw comparisons and create a grander scaled perspective looking into other contexts might be of use to illustrate the legal and dogmatic principles at hand in order to answer these questions. Regarding the required differentiation between the commercial or sovereign nature of assets the same questions as being presented above have been covered in German court decisions about the defence of sovereign immunity against enforcement proceedings, for example regarding currency reserves at the federal bank or pieces of art in the property of a state.50 These decisions followed the mentioned principles of determination through national law and have been orientated at the purpose of usage of the assets in question. Issues within the enforcement proceedings of ICSID awards came up in German court decisions in cases involving Russia, using the framework of the ZPO, the German code of civil procedure.51
In a decision by the “Kammergericht”, the Oberlandesgericht, i.e. the highest state court, for the federal state of Berlin, the problem of sovereign immunity was central as a defence within enforcement proceedings outside of the ICSID framework. There, the “recognition” was objected with a reference to sovereign immunity.52 The relevance of that decision for this analysis lays in the fact, that it presents
48 BVerfG, 06.12.2006 – 2 BvM 9/03, BVerfGE 117, 141 49 KG Berlin, 045.06.2012 – 20 Sch 10/11, SchiedsVZ 2013, 112
50 KG Berlin, 05.03.2010 - 18 W 2/10, BeckRS 2010; also: BGH, 04.07.2013 – VII ZB 30/12, BeckRS 2013, 12429
another manifestation of the principle, that enforcement proceedings in general are multi staged and that sovereign immunity may be involved at several stages. This is a fruit of the same metaphorical tree found in the aforementioned differentiations and therefore the basis of the differentiation between enforcement and execution as well. In other words: it is in congruence with the approaches found in German cases towards the sovereign immunity objection within ICSID enforcement proceedings, that there is a need to differentiate between distinct steps within those enforcement proceedings.
Regarding the German wording of ICSID and the overall German practice regarding the matters at hand, it can be concluded, that a multi-staged approach towards enforcement proceedings is a well-accepted and practiced doctrine there as well and that the objection of sovereign immunity and its relevance for several aspects of this multi-stages proceeding is acknowledged and practiced too. It has been shown already, that the usage of the same wording within the ICSID paragraph does not necessarily have to mean, that there is no differentiation between the usage of the term in question in different contexts and in that regard for the German ICSID wording the same is true as for the French and the Spanish versions. It was also shown that the functional importance of the stage of “execution”, as it was shown within the English framework, manifests itself as well in the broader German perspective regarding the structure of enforcement proceedings. The systematic and contextual need for effective enforcement measures within ICSID remains here the predominant factor of considerations.
III. Results of the abstract studies
sophisticated approach to determine the exact impact of the concept of sovereign immunity for the enforcement proceedings in the ICSID framework.
In accordance with the interpretation standards of the VCLT as presented, it has been shown that the systematic and historic interpretation techniques as well as the considerations about further consequences not only allow but indeed encourage an interpretation that differentiates between the terms or ideas of “execution” and “enforcement” within the ICSIDs enforcement regime is terminology.
E. Case studies
The abovementioned legal problems do not exist in an academic vacuum, but are part of an ongoing complex practical issue with yet unresolved issues various this day.53 In order to illustrate the impact of the analyzed legal problems and approaches that exist in municipal courts an excerpt of the more recent and relevant cases will be presented. The historical and factual background of these cases is to be understood as well as the spheres of interest involved and the approaches and solutions found by the practitioners and argued by the parties are to be compared with the aforementioned approaches in academia. In this work the cases looked into in detail are selected due to their connection to the ICSID framework, their impact within the debates of public international law and their relevance for the concept of the sovereign immunity objection. The foreign case law involved in the analysis by that approach is a source of public international law pursuant to Art. 38 of the ICS statute and therefore of relevance for the results of this analysis.
I. Historical background
The case law presents several examples that touched upon the topic of this analysis. Multiple ICSID cases dealt with the issue of sovereign immunity at the stage of enforcement proceedings and the party’s as well as the decisionmakers have found different conclusions and approaches towards these questions. Within the broad scope of touched problems in these cases however, only the relevant approaches will be looked in to in depth.
II. Case summaries
In order to be able to understand the contexts, stages and consequences of the practical manifestation of the mentioned legal problems and doctrines it is important to consider the factual background and the procedural development of the cases presented as well as the legal reasonings and arguments brought forth. Therefore, the following structure will include brief references to the facts, the procedural history, and the reasoning and holding. That said the holding (i.e. legal construction) is the most important take-away.
1. Ascom Group & others v. Republic of Kazakhstan
On 24 January in 2018 the Stockholm district Court ruled a dismissal of plea of immunity by the Republic of Kazakhstan and the attachment of property belonging to the Republic of Kazakhstan located in Sweden in the context of the enforcement proceedings following an arbitral award.54
a. Factual background
In order to promote foreign investments for the extraction of natural resources, in particular oil and gas, the Republic of Kazakhstan ratified the Energy Charter Treaty (ECT). Through shares of Kazakh companies, foreign investors participated in the exploration and prospecting rights of oil and gas fields in Kazakhstan. After Kazakhstan terminated the agreements regarding the exploitation rights, the investors requested arbitration against Kazakhstan.55
b. Procedural history
In December 2013 the Stockholm Chamber of Commerce rendered an award with compensation damages amounting to USD 508,130,000 with interest from 30 April 2009 and Kazakhstan was also ordered by the award to pay the legal costs of the applicants. After that, enforcement proceedings have been initiated against Kazakhstan in several countries, including Sweden, the United Kingdom and the United States of America.
54 Ascom Group S.A., Anatolie Stati, Gabriel Stati and Terra Raf Trans Traiding Ltd. v. Republic
of Kazakhstan, SCC Case No. 116/2010
In March 2014 Kazakhstan challenged the award at the Svea Court of Appeal. With this challenge, the Republic of Kazakhstan intended to declare the award invalid and set it aside.
In December 2016 Kazakhstan’s appeal was dismissed by the Court, which was followed by an action for annulment of the judgment of the Court of Appeal brought forth by Kazakhstan at the Supreme Court in February 2017. In August 2017 the applicants requested an attachment of Kazakhstan’s property in the scope of the claims at the Stockholm District Court. This was granted by the Stockholm District Court in the first instance, the “execution” of the decision was to be postponed. Several decisions by the Enforcement Authority concerning attachments of these claims have then without success been appealed to Nacka District Court by Kazakhstan and the central bank of Kazakhstan. In October 2017 the Supreme Court dismissed the request of Kazakhstan for annulment of the judgement. In January 2018 the Stockholm District Court made the final decision, that is now subject to this analysis in the narrower sense.56
c. Relevant approaches
The first reference to the topic of “execution and enforcement” is found in the applicants approach towards the need for their request within the system of enforcement proceedings under Swedish law, namely the requirement to give the counterparty the opportunity to give their opinion.57 But it is in the statements of Kazakhstan, that the sovereign immunity issue is brought forth. With reference to the United Nations Convention on Jurisdictional Immunities of States and Their Property from 2004, the relevance of this topic for Sweden as the current place at hand, and references to declarations by the Supreme Court in Sweden about the current approach held towards sovereign immunity are presented.58 The argumentation of Kazakhstan in this case is based on claiming a sufficient scope of sovereign immunity protection against “enforcement measures” and Kazakhstan states, that the District Court would not be able to determine, whether or not certain property falls under this protection or not. In particular, Kazakhstan argues, that the
claimed protection of sovereign immunity covers the post-judgement measures in question.59
Looking back at the presented academic and legal discussion above it can be at this point already deduced, that the frame of the relevant argumentation for this analysis is within the enforcement and not the jurisdiction stage and that the approach of defence is the argument about sovereign immunity.
The applicants argue that, under the given circumstances, there is no sovereign immunity protection against the requested measures within the enforcement proceedings.60 Within this argumentation, it is important to precisely differentiate within the enforcement proceedings. The parties argue partly about the exact requirements for a valid attachment, in particular if there is a specified asset to be determined as a necessary precondition of an attachment.61
In its decision the Stockholm District Court concludes that there is a final and legal binding title ready for “execution”, namely the award.62 In an dissenting opinion, Judge Axel Taliercio further analysis is presented about the possibility of being obliged to pay compensation for damage suffered by the other party through the execution of an enforcement order that has been reversed.63
For the analysis of this work, the importance of this discussion is not so much based on the fact, that there are debates about the scope of party related interests involved in this case, but more in the fact, that the “execution” of an “enforcement order” is analysed about as its own problem.
The term of “execution” is here used in the sense of the final stage of the
enforcement proceedings, after the attachment.
It is of highest importance to underline this aspect, since it shows that there was an understanding of “enforcement proceedings” in the sense of “enforcement in the broader sense of the term” and “execution” in the sense of “enforcement in the narrower sense of the term”. In other words, “the last step of enforcement”.
This clarification is in congruence with the requirement for a precise differentiation between the two terms, as it was mentioned above in the comparative analysis of the ICSID articles.
2. Eiser Infrastructure Ltd v Kingdom of Spain
On 24th of February 2020 the Federal Court of Australia rejected Spain’s sovereign immunity defence against the enforcement of an ICSID awards.64 In its decision, the Federal Court rejected an argument brought forth by Spain regarding the ICSID Conventions wording and the question about the differentiation between “enforcement” and “execution” with regards to the question of sovereign immunity. This decision is therefore of highest relevance for the analysis in this work and has to be scrutinized in sufficient depth to understand its implications for the presented debate.
a. Factual Background
The claimants in this case have been investors, who filed claims under the ECT against Spain as a reaction to changes in the regime for subsidies regarding renewable energy generators.65 The dispute sparked out of a change in Spain’s position on subsidies and regulation concerning renewable energy. Several projects concerning renewable energy have been the target of investments before Spain made these changes. As a consequence, the shifting regulation decreased the value of several investments. Companies incorporated in the UK, the Netherlands and Luxembourg then accused Spain for a breach of the fair and equitable treatment regarding the investments.
b. Procedural History
After the investors successfully filed arbitration against Spain, Spain applied in July 2018 to the tribunal for rectification of the award, arguing the computation of the 64 Eiser Infrastructure Ltd v Kingdom of Spain, [2020] FCA 157
compensation was flawed.66 In January 2019 the tribunal issued the decision on rectification and made some changes towards the hight of compensations. In May 2019 Spain requested a stay of enforcement proceedings and applied for the annulment of the award.67 Following, in October 2019 the decision of the ad hoc committee led to the discontinuing of the provisional stay of the enforcement proceedings. Following this decision, still in October 2019 the applicants applied the Federal Court of Australia to enable further enforcement proceedings.68
c. Relevant approaches
In this case the parties as well as the Federal Court of Australia presented approaches of high value for the analysis in this work. Spain states, that due to its sovereign immunity, it is protected from the claims and enforcement measures presented.69 Spain argues, that on the basis of the Spanish and French versions of the Investment Convention there could be no distinction between on one hand the recognition and enforcement and on the other hand the execution of an award. Following on this statement, Spain concludes, that the sovereign immunity protection ruled in Art. 55 ICSID should be interpreted as covering the “enforcement” as a whole, including “execution”.70
Here it can be seen that the arguments presented by Spain fall exactly in line with the very problem discussed above regarding the different wordings of the ICSID section about sovereign immunity and enforcement proceedings. Spain takes the stance, that there shall be “no” such thing as a differentiation between the terms of “execution” and “enforcement” in this context.
If only the wording of the article in question would be the standard to use in order to interpret its meaning, this conclusion would indeed be accurate. It has been shown however, that in accordance with the Vienna Convention, the interpretation of Art 55 ICSID goes beyond the mere wording, in particular beyond the mere wording in the Spanish and English ICSID versions.
In order to analyse the questions brought forth by this statement of Spain, the immunity issue is then analysed with references to “relevant provisions of, and
principles applicable to, the Immunities Act and the Arbitration Act and Investment Convention” by the Federal Court of Australia.71 As a result of these comparisons, a distinction between the sovereign immunity from jurisdiction on one hand and the immunity of property from execution on the other hand within the system of the
Immunities Act is detected and presented. Regarding the term of “execution”, the
statement made here is the following: “their[the arbitrators] decisions can only
have that effect through the means of enforcement by judgment of a court and then execution” 72 Here a distinct mentioning of “execution” as the final stage of
enforcement proceedings is seen again and this interpretation is in congruence with
the results of the analysis of the ICSID articles presented above.
It is also important to notice, that execution is referred here to as a means of enforcement. This interpretation is in accordance with the results presented above and presents a congruent view towards the relationship between “execution” and “enforcement”.
In a reference to the ALRC Report is firstly stated in the decision, that “in the practice of governments there is a distinction between recognition and execution with regard to immunity.73 Again, the primary importance here lays in the fact, that the enforcement proceedings as a whole are interpreted as something different than “execution”, which is seen as their last stage. This reasoning gets even more specific, when in mentioning the Explanatory Memorandum to the Foreign State Immunites Bill 1985, it is state that the relevant regulations have to be understood to mean “enforcement by way of execution rather than enforcement by way of recognition and judgment.”74 “Execution” is in that context defined as “enforcement of judgements of the courts”.75
This again illustrates the relationship between “enforcement” and “execution”. The “execution” is a “way of enforcement”.
With these findings, the Federal Court of Australia confirms the hypothesis stated above about the dogmatic approach towards these terms within the ICSID articles about sovereign immunity. It is indeed within these interpretations of the ICSID Articles, that Spain’s argument refers to the French and Spanish language texts,76 who as it has been shown above, do not use a different wording within the differentiation between “execution” and “enforcement” in these articles. As a general template, the concepts of “recognition, enforcement and execution”77 are presented as three different ideas before the Federal Court of Australia tackles the issue of the wording within the ICSID articles.
The core idea of the role of “execution” as a mean of “enforcement” is stressed out again and with a mentioned dependence on the context78 the correct interpretation of the terms in other languages is seen as versatile enough to cover different meanings regarding the concept of “execution” and “enforcement” even when the wording is, like in the Spanish and English ICSID versions, not different.
Here, also another idea of immense value for this analysis is presented. Depending on the context a reference to “enforcement” can have a distinct meaning, that is may be different from the meaning in other contexts. This interpretation is congruent with the shown standards of interpretation due to the Vienna Convention and the results of the contextual, systematic, and historic interpretation above.
These two ideas are vital in order to explain the solution to seemingly contradictory situation, that in the French, Spanish and even German ICSID version the same wording is used for different concepts. It also provides an explanation to the fact, that in many works of scholars and practitioners of international arbitration, and international law in general for that matter, alike use(d) the terms of execution and enforcement synonymous. In other words: using the same or a synonymous
wording does not mean, that the concept “meant” by this phrase is to be the same without acknowledgement of the context in which it is used.
Regarding the wording in the English ICSID version the Federal Court of Australia consequently does not see any contradiction towards its results, since the wording itself already differentiates between the terms of “execution” and “enforcement” and therefore supports the found approach.79 An argument brought forth by Spain regarding the usage of “enforcement” and “execution” as being synonymously in private international law is answered by a statement that also in comparative international law a distinction between enforcement by way of recognition and judgment and enforcement by way of execution is known in the law concerning state immunity in other jurisdictions.80 From a dogmatic standpoint these arguments are touching on the question of the systematic and functional usage of the terminology beyond the mere wording and broadening the scope. The statement by the Federal Court of Australia here about the usage in comparative international law is again in congruence with the results found above.
Regarding the object and purpose of ICSID a reference to its preamble is made and indeed there is no more direct way to determine that question. A presented conclusion regarding this topic is, that effective enforcement mechanisms were intended with the goal to treat state parties and investors as equal as possible.81 With the topic of sovereign immunity as an obstacle towards effective enforcement proceedings only for the investors and therefore as an unequal starting ground however, this can only be a goal towards measures can be taken to at least get close to this ideal.
Further elaborations cover the preparatory materials published in 1970 and the debates and consultations in these. There, conflicting indications about the scope of preservation of the idea of sovereign immunity within Art. 55 are seen since the language is used loosely and at times synonymous.82
A conclusion, that can be drawn from this fact is, that perhaps the importance of the differentiation between the concepts of execution and enforcement with its consequences for the sovereign immunity discussion is more visible after decades of ICSID practice than it was within the debates before it was introduced.
In a brief reference to the Spanish and French wording of the relevant ICSID articles, it is stated that as a starting point, in accordance to Art. 33 (3) of the Vienna Convention, it has to be determined whether or not there is a different meaning within the Spanish, French and English versions of this ICSID regulations.83 The structural approach used by the Federal Court of Australia is therefore in accordance to the very dogmatic conclusion found in the abstract analysis above. In mentioning the Spanish and French terminology it is stated, that depending on context, “ejecución” and “l’exécution” are to be understood as either “enforcement” or “execution”.84 This is not only in accordance with the above found approaches towards the different usage of terminology but it also stresses out once more, that in the context of terminology can sometimes be of a higher importance than the wording. This fundamental idea is present throughout the decision and is in congruence with the approaches presented in other parts of this analysis.
3. Micula and v Romania
On the 19th February 2020 the UK Supreme Court lifted the approximately three years long stay of enforcement of an ICSID award against Romania. The court decided that the enforcement of an ICSID award was not precluded due to implications of European law.85
a. Factual background
Two former Romanian citizens that became Swedish nationals their companies had a legal dispute with the state of Romania in the context of tax regulations. Romania repealed several investment incentive schemes prior to entering the European
83 Eiser Infrastructure Ltd v Kingdom of Spain, p. 35 84 Eiser Infrastructure Ltd v Kingdom of Spain, p. 36
Union, with led to negative consequences for the worth and development of investments taken place in Romania.
b. Procedural history
In July 2005 the Investors initiated arbitration proceedings under ICSID against Romania. An award was rendered in December 2013, stating that Romania breached the obligation to fair and equitable treatment derived from the Romania-Sweden BIT of 2002. In April 2014 Romania requested the annulment of the Award and was rejected in February 2016. Within these proceedings the European Commission was participating as amicus curia and in March 2015 the European Commission decided, that Romania shall not be allowed to give any payment under the Award. This decision was annulled by the General Court of the European Union in November 2015. After the award was registered at the High Court of Justice, this Court granted Romania a stay of enforcement proceedings in 2017. That decision was without success appealed to the Court of Appeal by the claimants in 2018. Following this, the Claimants appealed successfully to the Supreme Court.86
c. Relevant approaches
The concept of sovereign immunity in the context of the enforcement proceedings within the ICSID framework is touched upon in this decision as well. As a starting point, again it is stated, that in lack of a coherent international understanding of the scope of sovereign immunity, the rules applied to determine the exact consequences of the protection found in the ICSID articles have to be taken out of the local legal system.87
Here it can be seen again, that the lack of a coherent international agreement about what exactly shall fall under the concept of “sovereign immunity” presents a persistent challenge that is “solved” by using a dynamic approach, allowing different scopes to be applied within the ICSID regulation as a mere “referral” to the standard to be applied, rather than presenting a standard on its own. This approach is visible as a pattern within the so far presented cases as well as within the relevant discussion in academia. In the current status quo in public international 86 Micula and others (Respondents/Cross-Appellants) v Romania, p. 2f
law this approach seems to be necessary, but it might as well highlight the importance to change that very status quo, in order to achieve actual transparency and predictable outcomes for investors as well as states and therefore strengthen the acceptance and credibility of the system as a whole.
Regarding the questions about terminology at hand, the court refers to “any action which might lead to the “execution” or “implementation” of the Award.”88 The formulation of “execution or implementation” is found various times within the decision89 and the connection between execution and the concept of sovereign immunity is brought forth within the application of Article 55 ICSID again. This is done as the role of ICSID as domestic law of the United Kingdom through the Arbitration Act of 1966 is introduced as a relevant standard for the decision.90
The party statements then bring in an approach of the highest relevance for this thesis. In distinguishing between the terms of execution and enforcement, the claimants submit that a stay of enforcement may only be granted in relation to Art. 50-52 ICSID.91
Here it can be seen once again that the differentiation between the concepts of “execution” and “enforcement” has an impact of practical importance within the scope of ICSID proceedings. This problem is of high relevance for the parties involved in determining the scope of measures to be taken. In quoting the aforementioned commentary of Professor Schreuer about the ICSID article, the Court claims here, that no clear distinction within the ICSID language between enforcement and execution has been made.92 However, it is also in context to the wording of ICSID Articles 54 and 55 stated in reference to Mr Broches, that it is necessary to leave sufficient freedom to the to interpret in good faith the principal concepts presented in ICSID”93 Therefore, just like how the question of sovereign immunity remains to some extend uncertain in its scope and its interpretation due
to the local legal framework, another ground for uncertainty lays in interpretation of the ICSID terminology itself.
4. Further cases
There are obviously other relevant cases. 94 In this thesis, the author has selected the most relevant given the problem formulation and also the more recent ones. Other interesting cases include, but are not limited to, the ones below.
a. Benvenuti & Bonfant v People’s Republic of the Congo
In this case, the applicants requested the recognition and enforcement of an ICSID award against the Peoples Republic of the Congo.95 They tried to secure the recognition of their award in French courts. It was within this proceeding, that the terminology of “execution” is touched upon. The Tribunal de Grande Instance allowed the requested recognition under the condition, that no “measure of execution” on assets of the Peoples Republic of the Congo in France are to be taken without authorization of the Court.96 Here it can be seen, that the distinction between recognition and other parts of enforcement proceedings is again a commonly used approach. The applicants appealed this very condition successfully at the Cour d’appel in arguing, that the Court here confused two different stages. A differentiation was made here between “obtaining an exequatur” and “actual execution”.97 In referencing to Art 54 ICSID it was stated, that granting recognition and enforcement does not constitute a measure of execution. It is instead a decision preceding possible measures of execution.98 This interpretation of the ICSID enforcement regime and its steps is in congruence with the frequently shown pattern of differentiating between different steps within the enforcement and the requirement to determine narrow and precise terms such as “execution” in order to be able for such precise determinations. With regard to the “second stage” of “execution” it was stated here that this is related of the topic of sovereign immunity
94 see also: Case Law Chronicle: Sovereign Immunity Is No Defense to the Recognition of ICSID
Award Against Venezuela; New York International Arbitration Centre
95 Benvenuti & Bonfant v People’s Republic of the Congo, Cour d’appel, Paris (26 June 1981) 65 ILR 88
