NEXTERA ENERGY GLOBAL HOLDINGS B.V. & Anor v KINGDOM OF SPAIN

3.—(1) A State is immune from the jurisdiction of the courts of Singapore except as provided in the following provisions of this Part.

(2) A court is to give effect to the immunity conferred by this section even though the State does not file and serve a notice of intention to contest or not contest in the proceedings in question.

4.—(1) A State is not immune as respects proceedings in respect of which it has submitted to the jurisdiction of the courts of Singapore.

(2) A State may submit after the dispute giving rise to the proceedings has arisen or by a prior written agreement; but a provision in any agreement that it is to be governed by the law of Singapore is not to be regarded as a submission.

(3) A State is deemed to have submitted —

(a) if it has instituted the proceedings; or

(b) subject to subsections (4) and (5), if it has intervened or taken any step in the proceedings.

(4) Subsection (3)(b) does not apply to intervention or any step taken for the purpose only of —

(a) claiming immunity; or

(b) asserting an interest in property in circumstances such that the State would have been entitled to immunity if the proceedings had been brought against it.

(5) Subsection (3)(b) does not apply to any step taken by the State in ignorance of facts entitling it to immunity if those facts could not reasonably have been ascertained and immunity is claimed as soon as reasonably practicable.

(6) A submission in respect of any proceedings extends to any appeal but not to any counterclaim unless it arises out of the same legal relationship or facts as the claim.

(7) The head of a State’s diplomatic mission in Singapore, or the person for the time being performing his or her functions, is deemed to have authority to submit on behalf of the State in respect of any proceedings; and any person who has entered into a contract on behalf of and with the authority of a State is deemed to have authority to submit on its behalf in respect of proceedings arising out of the contract.

11.—(1) Where a State has agreed in writing to submit a dispute which has arisen, or may arise, to arbitration, the State is not immune as respects proceedings in the courts in Singapore which relate to the arbitration.

(2) This section has effect subject to any contrary provision in the arbitration agreement and does not apply to any arbitration agreement between States.

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(1) The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.

(2) For the purposes of this Section, “award” shall include any decision interpreting, revising or annulling such award pursuant to Articles 50, 51 or 52.

(1) Each Contracting State shall recognise 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.

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.

4.—(1) Any person seeking recognition or enforcement of an award rendered pursuant to the Convention shall be entitled to have the award registered in the General Division of the High Court subject to proof of any matters that may be prescribed and to the other provisions of this Act.

(2) In addition to the pecuniary obligations imposed by the award, the award shall be registered for the reasonable costs of and incidental to registration.

(3) If at the date of the application for registration the pecuniary obligations imposed by the award have been partly satisfied, the award shall be registered only in respect of the balance, and accordingly if those obligations have been wholly satisfied, the award shall not be registered.

(a) proceedings may be taken on the award;

(b) the sum for which the award is registered shall carry interest; and

(c) the General Division of the High Court shall have the same control over the enforcement of the award,

as if the award had been such a judgment of the General Division of the High Court.

… given that Spain was the subject of a binding ICSID arbitral award, the effect of Spain's agreement to Arts 53-55 amounted to a waiver of foreign State immunity from the jurisdiction of the courts of Australia to recognise and enforce, but not to execute, the award.

A foreign State may submit to the jurisdiction at any time, whether by agreement or otherwise, but a foreign State shall not be taken to have so submitted by reason only that it is a party to an agreement the proper law of which is the law of Australia.

“As a general rule it is desirable that international treaties should be interpreted by the courts of all the states uniformly. So, if it could be said that a uniform interpretation of this phrase was to be found in the authorities, I would regard it as appropriate that we should follow it.”

The text of an international agreement or treaty is not interpreted according to particular domestic rules of interpretation, which might have slight variations from country to country. Rather, as is reflected by the approach taken in Australia, a treaty should have the same meaning for all of the States which are party to it. The general principles of treaty interpretation are contained in the Vienna Convention on the Law of Treaties (1969). Although the Vienna Convention on the Law of Treaties post-dates the ICSID Convention, it is widely accepted that, in the respects relevant to this appeal, the Vienna Convention was declaratory of customary international law.

… there is no real distinction between the United States provision permitting a waiver of immunity to be identified "either explicitly or by implication" and s 10(2) of the Foreign States Immunities Act permitting a waiver of immunity "by agreement". And, consistently with the caution that is required before drawing inferences of a waiver of immunity, United States courts have concluded, sometimes saying that they had little or no doubt, that entry into the ICSID Convention involves a waiver of immunity from jurisdiction.

122 It seems to us that the doctrinal basis for the Primacy Principle may be found in the rule that the Singapore courts are duty-bound to interpret our domestic legislation and hence, develop our common law, as far as permissible, in a way that advances Singapore’s international law obligations (see Yong Vui Kong v Public Prosecutor and another matter [2010] 3 SLR 489 at [59]), and in line with the observations we have made at [66] above citing Merck Sharp ([64] supra) at [37], that the common law should as far as possible be developed in a way that coheres with relevant legislation. In the present context, the New York Convention read with the Model Law and the IAA, which recognise the special role and function of the seat court, provide the basis for the Primacy Principle. It seems to us then that the starting position in Singapore should be that where transnational issue estoppel does not apply for some reason, or where a party wishes or chooses to invoke the Primacy Principle for any reason, including to avoid the time and expense that may sometimes be entailed in having to establish the technical requirements for invoking the doctrine of transnational issue estoppel, it may instead rely on a prior decision of the seat court, and an enforcement court in Singapore should accord primacy to that prior decision of the seat court by treating it as presumptively determinative of the matters dealt with in the judgment pertaining to the validity of the award. Being presumptively determinative, the onus then shifts to the party seeking to persuade the enforcement court to come to a different view to establish a sufficient basis for doing so.

123 This would not be an absolute principle and the court would need to resolve the further question of what weight should be placed on the seat court’s decision and what the limits of the principle are. It would not be absolute or completely preclusive doctrine precisely because of the instruments that underpin the Primacy Principle, namely, the Model Law, the IAA and the New York Convention. The effect of those instruments is that unlike the position with respect to special categories of awards, such as those issued under the auspices of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (18 March 1965) 575 UNTS 159 (entered into force 14 October 1966), and which exist within a self-contained system that is not subject to review by national courts, most arbitration awards are subject to the rules for enforcement and challenge in the courts of the country in which enforcement is sought (James Crawford, Brownlie’s Principles of Public International Law (Oxford University Press, 9th Ed, 2019) at pp 714–715). And in line with the principle of double-control, it is generally for each enforcing court to determine what weight and significance should be ascribed to challenges before the seat court (Astro ([3] supra) at [75]).

[68] ... It is a notable feature of the scheme of the ICSID Convention that once the authenticity of an award is established, a domestic court before which recognition is sought may not re-examine the award on its merits. Similarly, a domestic court may not refuse to enforce an authenticated ICSID award on grounds of national or international public policy. In this respect, the ICSID Convention differs significantly from the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. The position is stated in this way by Professor Schreuer in his commentary on article 54(1):

“The system of review under the Convention is self-contained and does not permit any external review. This principle also extends to the stage of recognition and enforcement of ICSID awards. A domestic court or authority before which recognition and enforcement is sought is restricted to ascertaining the award’s authenticity. It may not re-examine the ICSID tribunal’s jurisdiction. It may not re-examine the award on the merits. Nor may it examine the fairness and propriety of the proceedings before the ICSID tribunal. This is in contrast to non-ICSID awards, including Additional Facility awards, which may be reviewed under domestic law and applicable treaties. In particular, the New York Convention gives a detailed list of grounds on which recognition and enforcement may be refused ...”

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[69] Contracting states may not refuse recognition or enforcement of an award on grounds covered by the challenge provisions in the Convention itself (articles 50-52). Nor may they do so on grounds based on any general doctrine of ordre public, since in the drafting process the decision was taken not to follow the model of the New York Convention.

In the United States, the obligation to enforce ICSID awards is codified at 22 U.S.C. § 1650a, which provides that “pecuniary obligations imposed by [an ICSID] award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States.” “Confirmation is the process by which an arbitration award is converted to a legal judgment.”

Although Spain believes that the ICSID arbitrators lacked jurisdiction, it cannot succeed on the merits by “recycl[ing] a losing jurisdictional argument” that ICSID considered and rejected before. Tethyan, 590 F. Supp. 3d at 276. The terms of the ICSID Convention bar United States courts from examining “the ICSID tribunal’s jurisdiction to render the award.” Mobil Cerro Negro v. Bolivarian Republic of Venezuela, 863 F.3d 96, 102 (2d Cir. 2017).

(1) Disputes between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the latter in the Area of the former, which concern an alleged breach of an obligation of the former under Part III shall, if possible, be settled amicably.

(2) If such disputes can not be settled according to the provisions of paragraph (1) within a period of three months from the date on which either party to the dispute requested amicable settlement, the Investor party to the dispute may choose to submit it for resolution:

(a) to the courts or administrative tribunals of the Contracting Party party to the dispute;

(b) in accordance with any applicable, previously agreed dispute settlement procedure; or

(c) in accordance with the following paragraphs of this Article.

(3) (a) Subject only to subparagraphs (b) and (c), each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article.

(b) (i) The Contracting Parties listed in Annex ID do not give such unconditional consent where the Investor has previously submitted the dispute under subparagraph (2)(a) or (b).

(ii) For the sake of transparency, each Contracting Party that is listed in Annex ID shall provide a written statement of its policies, practices and conditions in this regard to the Secretariat no later than the date of the deposit of its instrument of ratification, acceptance or approval in accordance with Article 39 or the deposit of its instrument of accession in accordance with Article 41.

(c) A Contracting Party listed in Annex IA does not give such unconditional consent with respect to a dispute arising under the last sentence of Article 10(1).

(4) In the event that an Investor chooses to submit the dispute for resolution under subparagraph (2)(c), the Investor shall further provide its consent in writing for the dispute to be submitted to:

(a) (i) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington, 18 March 1965 (hereinafter referred to as the “ICSID Convention”), if the Contracting Party of the Investor and the Contracting Party party to the dispute are both parties to the ICSID Convention; or

(ii) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention referred to in subparagraph (a)(i), under the rules governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre (hereinafter referred to as the “Additional Facility Rules”), if the Contracting Party of the Investor or the Contracting Party party to the dispute, but not both, is a party to the ICSID Convention;

(b) a sole arbitrator or ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (hereinafter referred to as “UNCITRAL”); or

(c) an arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce.

(5) (a) The consent given in paragraph (3) together with the written consent of the Investor given pursuant to paragraph (4) shall be considered to satisfy the requirement for:

(i) written consent of the parties to a dispute for purposes of Chapter II of the ICSID Convention and for purposes of the Additional Facility Rules;

(ii) an “agreement in writing” for purposes of article II of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958 ( hereinafter referred to as the “New York Convention”); and

(iii) “the parties to a contract [to] have agreed in writing” for the purposes of article 1 of the UNCITRAL Arbitration Rules.

104. If I am right in reaching the above conclusion, it is unnecessary to consider whether the exception to general adjudicative state immunity in section 9 of the SIA is also engaged automatically in the case of ICSID awards, or specifically in the case of Spain and Zimbabwe.

105. In my judgment, however, it is difficult to interpret section 9 of the SIA other than as imposing a duty on the court to satisfy itself that the state in question has in fact agreed in writing to submit the dispute in question to arbitration. I do not see a legal basis, whether issue estoppel (as suggested by the Border claimants) or statutory interpretation (as suggested by the ISL claimants) which would justify the court in abrogating that duty and considering itself bound by the determination of the ICSID tribunal as to its own jurisdiction in that regard. Whereas the Convention, through article 54, supplies the prior written agreement to submit to the jurisdiction for the purposes of section 2(2), the Convention does not contain the relevant arbitration agreement and its processes cannot give rise to a valid arbitration agreement for the purposes of section 9 if none exists.

106. That leaves the question of the validity of the respective arbitration agreements, a particularly complex issue in the case of Spain and its challenge to the validity of article 26 of the ECT as a matter of international law, an issue I do not propose to embark upon in this judgment, since in the light of my conclusion in relation to section 2(2) it is unnecessary to decide whether the exception in section 9 applies and anything this Court said would be obiter. I did not understand the Border claimants to have put in issue Zimbabwe’s challenge to the validity of the reference under the relevant BIT by way of its Respondent’s Notice.

(8) The Court may, on its own accord or upon application, if it is in the interests of justice, revoke any judgment or order obtained or set aside anything which was done —

(a) without notice to, or in the absence of, the party affected

… Any contradictory obligations the State now faces, are a function of the State entering into the relevant treaties: the ECT and the EU Treaties. It is not contrary to Singapore’s public policy to uphold an award merely because the award debtor would then face contradictory obligations arising from commitments the debtor had entered into. It is not for the Singapore court to relieve the State of the consequences that may flow from the treaty obligations the State has entered into.