The Australian High Court’s ruling dismissing the appeal brought by the Kingdom of Spain has sparked various interpretations and a great deal of speculation about the implications of this decision.
Some of these interpretations have been reported in the local (Spanish) media, with headlines claiming that there will be large-scale attachments of Spanish assets in Australia, or that this decision is a serious blow for the Kingdom of Spain, given the numerous similar proceedings still pending in various jurisdictions.
Others have suggested that this decision will provide significant encouragement to investors involved in this type of litigation, as the High Court has upheld the recognition and enforcement of the award, rejecting the Kingdom of Spain’s contention that nothing in the provisions of Arts. 53-55 could be construed as an express waiver by Spain of the general regime of immunity from jurisdiction of foreign States, set out in Part II of the Foreign States Immunities Act 1985 (the “FSIA”), in relation to Australian court processes concerning the recognition and enforcement of arbitral awards.
A further, perhaps somewhat more plausible, interpretation would be that the dismissal of the appeal, by holding that the Kingdom of Spain had indeed waived the general regime of sovereign immunity (Part II of the FSIA) by virtue of the exception set out in Article 10(1)(2) of the FSIA, but only in respect of its immunity from jurisdiction concerning the “recognition and enforcement” of the ICSID award at issue, and not as regards the immunity from jurisdiction to execute the award (Part IV of the FSIA), is in fact a Pyrrhic victory for the investors, as such a decision in no way ensures the recovery of what is due under the award.