Micula v Romania
The United Kingdom's obligations under the ICSID Convention to enforce an investment award took priority over its EU law duty of sincere cooperation, because they predated its EU membership.
Facts
The Micula brothers, Swedish investors, obtained an award under the ICSID Convention against Romania, for breach of a bilateral investment treaty by withdrawing tax incentives for investment in a disadvantaged region. The European Commission decided that payment of the award would constitute unlawful state aid, and ordered Romania not to pay. The investors sought to enforce the award in England, and the English courts stayed enforcement pending the outcome of proceedings in the EU courts, relying on the duty of sincere cooperation under EU law.
Legal principle
The Supreme Court lifted the stay. The court held that the United Kingdom's obligations under the ICSID Convention, which required it to recognise and enforce ICSID awards as if they were final judgments of its own courts, were obligations owed to non member states which predated its accession to the EU, so that under article 351 of the Treaty on the Functioning of the European Union they were not affected by EU law. The duty of sincere cooperation did not require the English courts to stay enforcement. The Court of Justice later held that the Supreme Court had breached EU law, but the decision was given after the end of the Brexit transition period.
Related cases on challenging and enforcing awards, and investment arbitration
- Federal Republic of Nigeria v Process & Industrial Developments Ltd [2023] EWHC 2638 (Comm)
- Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43, [2006] 1 AC 221
- Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724
- RBRG Trading (UK) Ltd v Sinocore International Co Ltd [2018] EWCA Civ 838
- Republic of Ecuador v Occidental Exploration and Production Co [2005] EWCA Civ 1116, [2006] QB 432
- Slovak Republic v Achmea BV Case C-284/16, EU:C:2018:158
- Westacre Investments Inc v Jugoimport-SDPR Holding Co Ltd [2000] QB 288
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