On 20 April 2021, ACICA held an event titled From Madrid to Islamabad – Recent enforcement of ICSID awards in Australia. The moderator, Daisy Mallett from King & Wood Mallesons, was joined by expert speakers, Andrew Battisson from Norton Rose Fulbright, Professor Chester Brown from 7 Wentworth Selborne Chambers, Justice-Hogan-Doran SC, 7 Wentworth Selborne Chambers and Tamlyn Mills from Norton Rose Fulbright.
Background of Enforcing ICSID Award in Australia
The legal underpinning of International Centre for Settlement of Investment Disputes (ICSID) award is supplied by the 1965 Convention of other Settlement of Investment Disputes between States and Nations of Other States. This convention is also, otherwise, known as Washington Convention. Currently, there are 155 States who are parties to this treaty, and it covers a wide range of Australia’s trading partners. This convention intends to provide a mean for individuals to bring claims directly to a host state of their investment for violation of the protection set out in the treaty. Leading up to June 2020, 768 cases have been registered with ICSID tribunals.
In 1974, Australia passed the Trade Practices Act (Cth) to codify the Convention. It was not until 2017 that an enforcement decision was made. In 2017, Justice Gleeson granted an ex parte application for leave to recognise and enforce ICSID award against Democratic of Congo in the case of Lahoud. This case sets down a precedent in Australia for enforcing ICSID award. Australia has since attracted other parties to commence ICSID award matters in Australia. This is attributed to not only the precedent set in 2017, but also Australia has a relatively swift court process in comparison to other jurisdiction, enabling individuals to exert more pressure in claiming the award. For instance, unlike the US, it is not necessary for Australia to formally serve enforcement proceedings to the State as the matter is dealt with at the federal court, this saves the time spent on procedural matters.
This leads to the commencement of 6 other ICSI award matters in Australia between 2019 and 2020. 5 of which is against Spain.
Spain and ICSID Award Proceeding in Australia
The 5 claims that were brought into the Australian Court proceedings is related to the renewable energy investment scheme devised by the Spanish government back in mid-2000s. The Spanish government at the time encouraged the investment in renewable energy through subsidy program where it guaranteed minimum off—take prices to guarantee long-term energy supply. The Spanish Government, subsequently, withdrew from the program without compensating the investors. It is alleged that it is in breach of the protection of legitimate expectation within the fair and equitable standard supplied by the Energy Charter Treaty (ECT). Australia is an observer rather than a signatory. The ECT provides arbitration as one of the dispute resolution methods.
The issue to be decided in the Court is whether Spain has waived its immunity for the purposes of the Foreign State Immunities Act by reason of executing article 54 of the ICDS Convention by which recognising states were agreed that they would be bound to recognise and enforce an ICDS award that is brought before their Courts. This is differentiated from the Lahoud case heard before Justice Gleeson in 2017 as it was uncontested.
Author: Evangelina Cheung, ACICA Intern
