The appeals arose out of the attempted enforcement of an investment arbitration award in favour of the claimants against Romania in relation to investments made by the claimants in food production in Romania before the country acceded to the EU.

With effect from 1 April 1999, Romania adopted an investment incentive scheme for certain regions (“EGO 24”). On 30 June 1999, Romania incorporated EU State aid rules into domestic law, as a result of which EGO 24 was modified. During the early 2000s, the claimants invested in a large, highly integrated food production operation in the relevant region in reliance on EGO 24. In 2002, Romania and Sweden entered into a bilateral investment treaty providing reciprocal protection of investments and investor-State arbitration under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

The EU informed Romania that certain schemes, including EGO 24, were contrary to EU State aid rules. Romania repealed all but one of the incentives under EGO 24. The claimants then filed a request for ICSID arbitration under the BIT based on this repeal. In 2013, the tribunal issued the Award, deciding that Romania had breached the BIT and awarding compensation of approximately £70m plus interest.

Romania unsuccessfully applied to annul the Award. The Commission concluded that the payment of the Award by Romania constituted unlawful State aid. The claimants sought annulment of the Commission decision before the General Court of the EU. The General Court annulled the Commission decision and the Commission appealed. English proceedings were started in 2014 by the claimants applying for registration of the Award under the Arbitration (International Investment Disputes) Act 1966, which was granted.  Proceedings relating to stay of enforcement and security ultimately reached the Supreme Court, where Romania appealed an order for security and the claimants cross-appealed the grant of a stay.

The Supreme Court unanimously allowed the claimants’ cross-appeal and lifted the stay. It held that it was no longer necessary to consider Romania’s appeal in relation to security, so that order was discharged. Lord Lloyd Jones and Lord Sales gave the judgment, with which all members of the Court agreed.

The Court considers that the General Court judgment leaves in existence an extant Commission investigation into State aid. Without a final Commission decision closing the formal investigation procedure, the effects of the initiating decision subsist, imposing a duty of sincere co-operation on the English courts. But the duty of sincere co-operation does not require the imposition of a stay of enforcement of the Award: EU case law makes it clear that questions regarding prior treaties are not reserved to the EU courts.

The Court agrees with the majority in the Court of Appeal that English courts have the power to stay execution of an ICSID award in the limited circumstances they describe, but in the present circumstances the granting of a stay exceeds the proper limits of that power and is not consistent with the ICSID Convention.

For judgment, please download: [2020] UKSC 5
For Court’s press summary, please download: Court’s Press Summary
For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing please visit: Supreme Court website 7 October 2019 morning and afternoon session, 8 October morning and afternoon session, 9 October 2019 morning and afternoon session