Yes, the United Kingdom has signed and ratified the ICSID Convention. The UK ratified the ICSID Convention on December 19, 1966 and has implemented the ICSID Convention through the Arbitration (International Investment Disputes) Act 1966.

The UK has made a number of notifications and designations either extending or excluding the application of the ICSID Convention to its overseas territories. Specifically:

1. Pursuant to the Notifications on Exclusion of Territories (Article 70) the UK has excluded the British Indian Ocean Territory, the Pitcairn Islands, the British Antarctic, the Sovereign Base Areas of Cyprus, and the New Hebrides; and
2. Pursuant to the Designations of Constituent Subdivisions or Agencies and Notifications Concerning the Approval by the Contracting State of Their Consent to ICSID Jurisdiction (Article 25(1) and (3)), the UK has extended the application of the ICSID Convention to the following overseas territories: Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Gibraltar, Montserrat, Anguilla, St Helena, St Helena Dependencies, Turks & Caicos Islands, Guernsey (Baliwick of), Jersey (Baliwick of), and the Isle of Man.

Article 54(2) of the ICSID Convention also requires Member States to designate the competent court or other authority in its State for the purposes of recognition or enforcement of an ICSID award. The UK has made a designation identifying the competent court in the following territories: England & Wales, Northern Ireland, Scotland, Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Gibraltar, Montserrat, Anguilla, St Helena, St Helena Dependencies, Turks & Caicos Islands, Guernsey (Baliwick of), Jersey (Baliwick of), the Islands of Alderney, the Island of Sark, and the Isle of Man.

Yes, the UK has signed and ratified the New York Convention. The United Kingdom ratified the New York Convention on 24 September 1975. It implemented the New York Convention by sections 100 to 104 of the Arbitration Act 1996.

The United Kingdom extended the territorial application of the New York Convention, for the case of awards made only in the territory of another contracting State, to the following territories: Gibraltar (24 September 1975), Isle of Man (22 February 1979), Bermuda (14 November 1979), Cayman Islands (26 November 1980), Guernsey (19 April 1985), Jersey (28 May 2002).

The UK government completed an update of the UK model bilateral investment treaty (“UK Model BIT”) in 2008. The UK Model BIT is available online. The UK Model BIT includes several key provisions that aim to protect investors’ rights, which include, inter alia:

• compensation in the event of nationalisation, expropriation and equivalent measures;
• the guarantee of treatment in line with that accorded by the host state to investors of its most favoured nation or to the host state’s own nationals;
• the guarantee of certain minimum standards, such as entitlement to fair and equitable treatment and full protection and security;
• the offer of protection against losses in the event of conflict; and
• the validity of the right to repatriate profits and other returns.

The UK has over 100 BITs, FTAs, and MITs currently in force. The specific provisions of individual treaties vary and should be considered carefully Broadly, however, all investor-state treaties to which the United Kingdom is a signatory provide investors with the above protections as established in the UK Model BIT.

UK investment treaties typically include very limited provisions which seek to exclude liability (either through carve-outs, non-precluded measures clauses or denial of benefits clauses). The UK Model BIT and UK – Colombia BIT include a carve-out from the national treatment and most favoured nation provisions for “measures which are necessary to protect national security, public security or public order”. The UK Model BIT also includes a limited carve-out for “safeguard measures” which are “strictly necessary” in response to certain “serious difficulties for the operation of monetary policy or exchange rate policy“.

The UK Model BIT does not include a denial of benefits clause, which would allow the UK to reserve the right to deny the benefits of the applicable treaty to companies if, inter alia, they are owned or controlled by non-protected investors and have no substantial business activities in the country of incorporation. This provision typically does not appear in the UK BITs currently in force, but there are limited exceptions. For example, the UK-Philippines BIT establishes that certain companies are denied benefits under the BIT  “on the grounds of the need to maintain public order, to protect essential security interests or to fulfil commitments relating to national peace and security”.

According to the UN Trade and & Development Investment Policy Hub, the UK has entered into 110 BITs of which: 85 are in force; 11 are signed but not in force; and 14 have been terminated.

The countries with which the UK currently has a signed and in-force BIT include: Albania, Antigua & Barbuda, Argentina, Armenia, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belize, Benin, Bosnia and Herzegovina, Bulgaria, Burundi, Cameroon, Chile, China, Colombia, Cote d’Ivoire, Croatia, Cuba, Czech Republic, Dominica, Egypt, El Salvador, Eswatini, Georgia, Ghana, Grenada, Guyana, Haiti, Honduras, Hong Kong Special Administrative Region of China, Indonesia, Jamaica, Jordan, Kazakhstan, Kenya, Kyrgyzstan, Lao People’s Democratic Republic, Lebanon, Lesotho, Lithuania, Malaysia, Mauritius, Mexico, Moldova, Mongolia, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Republic of Korea, Republic of the Congo, Russian Federation, Saint Lucia, Senegal, Serbia, Sierra Leone, Singapore, Slovenia, Sri Lanka, Thailand, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Uganda, Ukraine, United Arab Emirates, United Republic of Tanzania, Uruguay, Uzbekistan, Venezuela, Vietnam, and Yemen.

The UK has signed 11 BITs that are currently not in force with the following countries: Angola, Brazil, Costa Rica, Ethiopia, Gambia, Kuwait, Libya, Qatar, Vanuatu, Zambia, and Zimbabwe.

The UK has terminated (and has, to-date, not renegotiated) BITs with the following countries:

• Bolivia (terminated on 14 May 2013 with a 20 year sunset period);
• Ecuador (terminated on 18 May 2019 with 15 year sunset period);
• Estonia (terminated 8 November 2021, but 20-year sunset period);
• Hungary (terminated as at 11 August 2022, but 20-year sunset period);
• India (terminated as at 22 March 2017, but 15-year sunset period);
• Latvia (terminated as at 30 November 2021, but 20-year sunset period);
• Malta ( terminated as at 29 March 2021, but 20-year sunset period);
• Poland (terminated as at 22 November 2019, but 15-year sunset period);
• Romania (terminated as at 30 March 2021, but 20-year sunset period);
• Slovakia, terminated as at 1 July 2021, but 15-year sunset period);
• South Africa (terminated as at 31 August 2014, but 20-year sunset period);

It is important to note that British Overseas Territories (Overseas Territories) and Crown Dependencies (Guernsey, Jersey and the Isle of Man) do not have the authority to enter into international treaties, such as BITs, in their own right, and need to rely on the British government to extend investment treaties to them.¹ Currently, the protections available to British Overseas Territories and Crown Dependencies are the following:

• 37 UK BITs have been extended to the Crown Dependencies (Antigua & Barbuda, Bangladesh, Belize, Bolivia, Cameroon, Dominica, Grenada, Guyana, Honduras, Hungary, Indonesia, Jamaica, Jordan, Kazakhstan, the Republic of Korea, Latvia, Lesotho, Malaysia, Malta, Mauritius, Mongolia, Nepal, Pakistan, Panama, Papua New Guinea, Philippines, Romania, Senegal, Singapore, St Lucia, Swaziland, Thailand, Trinidad & Tobago, Tunisia, Turkmenistan, Uzbekistan and Yemen);
• 11 UK BITs have been extended to the Turks and Caicos Islands (Belize, Bolivia, Grenada, Guyana, Hungary, the Republic of Korea, Philippines, Singapore, St Lucia, Thailand and Tunisia);
• Three UK BITs have been extended to the Cayman Islands (Belize, Panama, St Lucia);
• Eight UK BITs have been extended to Gibraltar (Antigua & Barbuda, Dominica, Grenada, Guyana, Hungary, Mauritius, St Lucia and Tunisia);and
• Six UK BITs have been extended to Bermuda (Bolivia, Grenada, Guyana, Hungary, Indonesia and Tunisia).

Notably, some British Overseas Territories such as the BVI, Anguilla and Montserrat currently have no BITs extended to them. This means that a company registered in these overseas territories cannot rely on the terms of any UK BIT to bring an investment treaty claim against any state.

In addition to the BITs set out above, the UK has entered into 33 other treaties which include investment provisions, such as FTAs. Of these, 26 are in force; and 7 have been signed but are not in force:²

• Vietnam–UK FTA (1 January 2021);
• Ukraine–UK Political, Free Trade and Strategic Partnership Agreement (1 January 2021);
• Energy Charter Treaty (ECT, 16 April 1998, notification of withdrawal takes effect on 27 April 2025, with a 20-year sunset period);
• Singapore–UK FTA (11 February 2021);
• Turkey–UK FTA (20 April 2021);
• Australia–UK FTA (31 May 2023);
• Cameroon–UK Economic Partnership Agreement (19 July 2021);
• Canada–UK Trade Continuity Agreement (1 April 2021);
• CARIFORUM States-UK EPA (signed on 22 March 2019, not in force);
• Central America–UK Association Agreement (1 January 2021);
• Chile-UK Association Agreement (1 January 2021);
• Colombia-Ecuador-Peru Trade Agreement (31 December 2020);
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (30 December 2018);
• Côte d’Ivoire-UK Stepping Stone EPA (not in force);
• Egypt–UK Association Agreement (5 December 2020);
• Eastern and Southern Africa–UK EPA (1 January 2021);
• ESA–UK EPA (Mauritius, Seychelles, Zimbabwe) (1 January 2021);
• EU–UK Trade Cooperation Agreement (1 May 2021);
• Georgia–UK Partnership and Cooperation Agreement (1 January 2021);
• Ghana–UK Interim Trade Partnership Agreement (not in force);
• Iceland–Liechtenstein-Norway–UK FTA (1 September 2022);
• Israel–UK Trade and Partnership Agreement (1 January 2021);
• Japan–UK CEPA (1 January 2021);
• Jordan–UK Association Agreement (1 May 2021);
• Kenya–UK EPA (24 March 2021);
• Republic of Korea–UK FTA (1 January 2021);
• Lebanon–UK Association Agreement (not in force);
• Republic of Moldova-UK Partnership, Trade and Cooperation Agreement (1 January 2021);
• Morocco–UK Association Agreement (not in force);
• New Zealand–UK FTA (31 May 2023);
• North Macedonia–UK Partnership, Trade and Cooperation Agreement (not in force);
• Palestine-UK Interim Political, Trade, and Partnership Agreement (1 January 2021); and
• SACU and Mozambique–UK EPA (1 January 2021)

The specific provisions of each signed UK BIT vary considerably, and in many instances deviate from the UK Model BIT. Two key points to consider are whether there is a specific definition of  ”investor” under the amended BIT, and whether that investor’s interests in the host state qualify as an ”investment”. The UK Model BIT does not provide a definition of “investor” but most UK BITs adopt a broad definition of the term as a company incorporated or constituted under the law in force of a contracting party. Some BITs impose additional requirements for a qualifying investor, for example:

1. The UK – Russian Federation BIT requires that the investor must be “competent, in accordance with the laws of that Contracting Party [i.e., the home state] to make investments in the territory of the other Contracting Party“.
2. The UK – Colombia BIT requires a company to have “substantial business activities in the territory of the United Kingdom or any territory to which this Agreement is extended“.

The UK Model BIT defines “investment” broadly at article 1(a) as ”every kind of asset, owned or controlled directly or indirectly, and in particular, though not exclusively, includes: (i) movable and immovable property and any other property rights such as mortgages, liens or pledges; (ii) shares in and stock and debentures of a company and any other form of participation in a company; (iii) claims to money or to any performance under contract having a financial value; (iv) intellectual property rights, goodwill, technical processes and know-how; (v) business concessions conferred by law or under contract, including concessions to search for, cultivate, extract or exploit natural resources”.³

Some of the UK BITs impose additional restrictions on what qualifies as an investment, for example:

• The Colombia and Bulgaria BITs add a caveat that assets must be “economic assets” in order to qualify as investments;
• The Mexico BIT excludes certain types of asset from the definition of investment, for example debts, credit transactions and loans to a contracting party or a state enterprise;
• Article 3 of the Thailand BIT sets out that a competent authority of one of the parties must approve an investment in writing before it qualifies as an investment under the BIT: ‘‘(i) The benefits of this Agreement shall apply only in cases where the investment of capital by the nationals and companies of one Contracting Party in the territory of the other Contracting Party has been specifically approved in writing by the competent authority of the latter Contracting Party.’

Although the UK BITs generally do not provide a limitation period during which claims by an investor must be brought, there are two exceptions: the Mexico BIT (three years) and the Colombia BIT (five years).

a) Has your state exercised termination rights or indicated any intention to do so? If so, on what basis (e.g. impact of the Achmea decisions, political opposition to the Energy Charter Treaty, or other changes in policy)?

On 22 February 2024, following similar announcements by several EU member states, the UK announced its intention to withdraw from the Energy Charter Treaty (ECT). On 28 May 2024, the Depositary of the ECT confirmed receipt of the UK’s written notification of withdrawal, which will take effect on 27 April 2025.

The UK’s formal withdrawal followed an announcement by the UK Government in September 2023 that it would withdraw from the ECT if key modernisation proposals, largely focused on the transition away from fossil fuels, were not adopted. As subsequent discussions resulted in a stalemate, the UK Government withdrew from the ECT with the stated aim of supporting the UK’s transition to net zero and strengthening its energy security.

Separately, on December 16 2024, the European Commission referred the UK to the Court of Justice of the European Union (CJEU) for failing to terminate the BITs that it still has in force with Bulgaria, Czechia, Croatia, Lithuania, Poland and Slovenia.⁴ This referral follows the CJEU’s decision in Achmea, which ruled that intra-EU  investor-state arbitration under BITs is incompatible with EU law. All EU member states, including the UK (when it was still an EU member state), committed – in Declarations dated 15 and 16 January 2019 – to terminate the BITs concluded between them in a coordinated manner by means of a plurilateral treaty. Notwithstanding the UK’s exit from the EU, the European Commission considers these remaining UK BITs to be  intra-EU BITs as they were concluded while the UK was an EU Member State. The UK Government has not yet given any indication of how it intends to respond to the CJEU referral or, ultimately, whether it intends to keep these BITs in force.

Do any of the treaties reflect (i) changes in environmental and energy policies, (ii) the advent of emergent technology, (iii) the regulation of investment procured by corruption, and (iv) transparency of investor state proceedings (whether due to the operation of the Mauritius Convention or otherwise).

The UK Model BIT does not contain provisions addressing (i) changes in environmental and energy policies, (ii) the advent of emergent technology, (iii) the regulation of investment procured by corruption, and (iv) transparency of investor state proceedings. The same is generally true of most UK BITs.

However, the UK Government has stated that it is committed to negotiating new trade agreements that reflect the advent of emerging technology. For example, a digital trade agreement with Singapore was signed in February 2022 and entered into force on 14 June 2022, with the stated aim of opening new digital markets and facilitating cheaper trade through the adoption of digital trading systems.

Ongoing negotiations in relation to the UK –  Singapore BIT, which began in March 2023, are aimed at replacing the treaty with a more modern version and apparently focused on strengthening cooperation in science and technology innovation.⁵

The UK is a signatory to the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (Mauritius Convention). The Mauritius Convention which entered into force on 18 October 2017,  is aimed at ensuring that information on investor-state arbitrations arising under investment treaties is publicly available. Despite signing the Convention in [DATE], the UK has not yet ratified it.

b) Does your jurisdiction publish any official guidelines, notes verbales or diplomatic notes concerning the interpretation of treaty provisions and other issues arising under the treaties?

The UK has a repository of treaty preparatory materials which are held at the National Archives in Kew, London. The Archives hold a vast repository of materials which include parliamentary ratification records, diplomatic reports, cabinet papers and correspondence. The materials can be accessed on-site at the National Archives, or copies can be purchased online or by telephone.

The UK also provides a UK Treaties Online (UKTO) service, which contains a record of the UK’s treaty obligations under international law and is maintained by the Treaty Section of the Foreign, Commonwealth & Development Office. UKTO gives access to information on over 15,000 treaties to which the UK is or has been a party with links to texts of command papers published in the UK Treaty Series from 1892.⁶

In addition, the UK government provides a treaty enquiry service which provides advice on treaties that involve the UK, the Crown Dependencies and the UK Overseas Territories. The enquiry service is unable to provide advice on the proper interpretation of any treaty but can give advice on whether a particular treaty has entered into force, details of the signatories and contracting parties, and dates of signature, ratification, approval, acceptance, accession, succession and withdrawals and denunciations. Reservations, declarations or objections can usually also be identified, and where applicable, the relevant depositary for those instruments.

Footnote(s):

¹ Deepa Somasunderam, ‘Do companies registered in British Overseas Territories and Crown Dependencies have adequate investment protection?’ (The Law of Nations, 10 August 2018) <https://lawofnationsblog.com/2018/08/10/do-companies-registered-in-british-overseas-territories-and-crown-dependencies-have-adequate-investment-protection/> accessed 7 February 2025

² UNCTAD, ‘International Investment Agreements Navigator’ <https://investmentpolicy.unctad.org/international-investment-agreements/countries/221/united-kingdom> accessed 7 February 2025

³ UK Model BIT, 2008

⁴ European Commission, ‘The Commission decides to refer the UNITED KINGDOM to the Court of Justice of the European Union for failure to terminate its Bilateral Investment Treaties (BITs) with six EU Member States’ (Press release, 16 December 2024) <https://ec.europa.eu/commission/presscorner/detail/en/ip_24_6278> accessed 7 February 2025

⁵ Prime Minister’s Office, 10 Downing Street and the Rt Hon Rishi Sunak MP, ‘UK agrees new strategic partnership with Singapore’ (Press release, 9 September 2023) < https://www.gov.uk/government/news/uk-agrees-new-strategic-partnership-with-singapore#:~:text=Following%20the%20Strategic%20Partnership%2C%20the,jobs%20and%20growing%20our%20economies.> accessed 7 February 2025

⁶ FCDO, ‘UK Treaties Online’ < https://treaties.fcdo.gov.uk/responsive/app/consolidatedSearch/> accessed 7 February 2025

There is no national legislation that facilitates foreign investment in the UK. The laws of  England and Wales, Northern Ireland and Scotland generally do not distinguish between domestic and foreign investments. There are limited exceptions to this, however, in circumstances where foreign direct investment might create national security concerns, as set out in the National Security and Investment Act 2021.

English law and Scottish law protect against unlawful expropriation without compensation and provide for judicial review of government decisions.

a. Please list out any formal criteria imposed by such legislation / instrument (if any) concerning the admission and divestment of foreign investment;

Not applicable.

b. Please list out what substantive right(s) and protection(s) foreign investors enjoy under such legislation / instrument;

While there is no legislation / instrument facilitating direct foreign investment, foreign investors may be able to invoke substantive rights and protections under English law by way of a judicial review claim.

The English courts permit parties to challenge decisions of public bodies in reliance on certain grounds of judicial review, which are rooted in the common law, rather than codified in statute. A notable example of one such ground is Wednesbury unreasonableness. In broad terms, this permits a party to challenge a decision by a public body on the basis that the decision was so unreasonable that no reasonable public body would have made it. Other examples of judicial review grounds include procedural fairness and legitimate expectations.

c. Please list out what recourse (if any) a foreign investor has against the home state in respect of its rights under such legislation / instrument; and

As noted above, a foreign investor may have recourse against the UK state by way of a judicial review claim. 

d. Does this legislation regulate the use of third-party funding and other non-conventional means of financing.

Not applicable.

The UK has appeared as a respondent in one known investment treaty arbitration: Ashok Sancheti v. UK. The dispute concerned Mr Sancheti, an Indian national who had a solicitor’s practice in England.

An English entity, the Corporation of London, sought to increase the rents payable under a lease of property in the City of London held by Mr Sancheti. Mr Sancheti alleged that the Corporation of London had treated him unfairly, including by subjecting him to racial discrimination, and manipulating his rents. Mr Sancheti argued, in turn, that this treatment, and other “blatant discrimination by different organs and functions of the United Kingdom [including the Home Office, Law Society and English judiciary] in their dealing with [Mr Sancheti] in [his] capacity as an Inward Investor“,⁷ constituted a breach of the UK-India BIT dated 14 March 1994. That BIT has since been terminated by India, with effect from 22 March 2017.

Mr Sancheti gave notice of arbitration under the UNCITRAL rules to the UK Treasury Solicitor on 16 September 2006 and a tribunal was subsequently appointed.

In parallel to the arbitration, the Corporation of London commenced proceedings against Mr Sancheti in the English courts, challenging his refusal to pay the increased rents. Mr Sancheti applied to stay these proceedings pursuant to section 9 of the Arbitration Act 1996, in the light of the ongoing treaty arbitration. The English courts refused to grant a stay, both in the County Court and Court of Appeal, on the basis that the Corporation of London was not a party to the arbitration agreement.

The UK did not appear before the Court of Appeal, but a representative of the Treasury Secretary did write to the Court to raise certain jurisdictional points. The points were, as summarised by Lord Justice Lawrence Collins in the Court of Appeal, that:

“(1) it was not alleged in the notice of arbitration that the Corporation of London had engaged in the manipulation of rents, nor did Mr Sancheti allege any breach of contract; [and]

(2) irrespective of whether the United Kingdom was responsible for the acts and omissions of the Corporation as a matter of public international law, a tribunal under the BIT could not exercise jurisdiction in respect of contractual claims against the Corporation, and jurisdiction would only be asserted over claims for breach of treaty where the facts or contentions alleged by the claimant would (if ultimately proven true) be capable of constituting a violation of the treaty.“⁸

The treaty arbitration was ultimately terminated on 25 July 2009, with no public reason given for the termination of the proceedings. There is little public information available regarding the arbitration and therefore little to glean in relation to the UK practice when acting as respondent in treaty cases.

Footnote(s):

⁷ The Mayor and Commonality & Citizens of the City of London v Ashok Sancheti [2008] EWCA Civ 1283, [11].

⁸ The Mayor and Commonality & Citizens of the City of London v Ashok Sancheti [2008] EWCA Civ 1283, [22].

Yes, London is a popular choice for investment treaty arbitrations. This is due to various factors, including England’s pro-arbitration stance, ease of enforcement, the perceived neutrality of the English legal system, and the experience of its legal professionals. Further, under the LCIA Rules, in default of agreement by the parties, the seat of the arbitration is automatically London (except in special circumstances). Data from the LCIA indicates that London was the seat of 86% of LCIA arbitrations in 2023 and 88% in 2022.⁹

Footnote(s):

⁹ LCIA Annual Casework Report 2023, page 14

It is not possible to obtain an injunction against a state in the UK. The State Immunity Act 1978 (SIA) expressly stipulates that “relief shall not be given against a State by way of injunction or order for specific performance or for the recovery of land or other property.”¹⁰

The English Courts have recently confirmed  this in UK P&I Club & Anor v Republica Bolivariana de Venezuela [2023] EWCA Civ 1497 (relating to a London-seated arbitration). Attempts to argue that the unavailability of injunctive relief against states contravenes Article 6 of the European Convention on Human Rights were unsuccessful.¹¹

Footnote(s):

¹⁰ State Immunity Act 1978, s 13(2)(a)

¹¹ UK P&I Club & Anor v Republica Bolivariana de Venezuela [2023] EWCA Civ 1497,

The default procedure for the appointment of arbitrators is primarily set out in sections 16, 17 and 18 of the Arbitration Act 1996.

Sections 16, 17 and 18 are all “non-mandatory” provisions of the Arbitration Act 1996, so the parties may agree to exclude them.¹²

The starting point is that the parties are free to agree on a procedure for the appointment of arbitrators.¹³ If, or to the extent that, the parties do not do so, the default procedure applies.¹⁴

The procedure varies depending on the number of arbitrators on the tribunal, and whether there will be an umpire. Thus:

• If the tribunal is to consist of a sole arbitrator, the parties must jointly appoint the arbitrator not later than 28 days after service of a request in writing by either party to do so;¹⁵
• If the tribunal is to consist of two arbitrators, each party must appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so;¹⁶
• If the tribunal is to consist of three arbitrators:
  • each party must appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so; and
  • the two so appointed shall forthwith appoint a third arbitrator as the chairman of the tribunal;¹⁷
• If the tribunal is to consist of two arbitrators and an umpire:
  • each party shall appoint one arbitrator not later than 14 days after service of a request in writing by either party to do so; and
  • the two so appointed may appoint an umpire at any time after they themselves are appointed and shall do so before any substantive hearing or forthwith if they cannot agree on a matter relating to the arbitration.¹⁸

In any other case (in particular, if there are more than two parties), the procedure in section 18 of the Arbitration Act 1996 applies.¹⁹

If each of two parties to an arbitration agreement is to appoint an arbitrator, and Party A does but Party B fails or refuses to do so, Party A can give notice in writing to Party B that Party A proposes to appoint its arbitrator as the sole arbitrator,²⁰ and this will be the position unless Party B appoints its own arbitrator and notifies Party A that it has done so,²¹ or the court orders otherwise.²²

In terms of the Court’s practice of invoking such procedures, and in particular the mechanism for a party to apply to the court to exercise its powers to give directions as to the making of tribunal appointments or to make the appointments itself under section 18, the English Court clarified the applicable principles in Silver Dry Bulk Company Limited v Homer Hulbert Maritime Company Limited [2017] EWHC 44 (Comm). The decision states that the applying party must show a “good arguable case”  for the tribunal’s jurisdiction, with jurisdictional issues to be resolved by the tribunal under the kompetenz-kompetenz principle.

Footnote(s):

¹² Arbitration Act 1996, s.4(2), Sch 1

¹³ Arbitration Act 1996, s 16(1)

¹⁴ Arbitration Act 1996, s 16(2)

¹⁵ Arbitration Act 1996, s 16(3)

¹⁶ Arbitration Act 1996, s 16(4)

¹⁷ Arbitration Act 1996, s 16(5)

¹⁸ Arbitration Act 1996, s 16(6)

¹⁹ Arbitration Act 1996, s 16(7)

²⁰ Arbitration Act 1996, s 17(1)

²¹ Arbitration Act 1996, s 17(2)

²² Arbitration Act 1996, s 17(3)

England and Wales is an “arbitration-friendly” jurisdiction, which recognises the importance of the finality of an arbitral award. However, there are various grounds on which an English court may set aside an arbitral award (including a non-ICSID investment treaty arbitral award). The grounds, which are set out in sections 67, 68 and 69 of the Arbitration Act 1996, include:

1. a lack of substantive jurisdiction.²³.”Substantive jurisdiction” is defined under section 82 of the Arbitration Act as (1) whether there has been a valid arbitration agreement; (2) whether the tribunal is properly constituted, and (3) what matters have been submitted to arbitration in accordance with the arbitration agreement.²⁴
2. a serious irregularity affecting the tribunal, the proceedings or the award.²⁵ As defined in section 68 of the Arbitration Act, a “serious irregularity” can refer to one or more of the following circumstances:
   • a failure by the tribunal to comply with section 33 of the Arbitration Act 1996, which sets out the general duty of the tribunal;²⁶
   • the tribunal exceeding its powers (otherwise than by exceeding its substantive jurisdiction);
   • failure by the tribunal to conduct the proceedings in accordance with the procedure agreed by the parties;
   • failure by the tribunal to deal with all the issues that were put to it;
   • any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award exceeding its powers;
   • uncertainty or ambiguity as to the effect of the award;
   • the award being obtained by fraud or the award or the way in which it was procured being contrary to public policy;
   • failure to comply with the requirements as to the form of the award; or
   • any irregularity in the conduct of the proceedings or in the award which is admitted by the tribunal or by any arbitral or other institution or person vested by the parties with powers in relation to the proceedings or the award.
3. an appeal on a point of law.²⁷ Leave to appeal on a point of law will only be granted if, in accordance with S69 (3), the court is satisfied that:
   • the determination of the question will substantially affect the rights of one or more of the parties;
   • the question is one which the tribunal was asked to determine;
   • on the basis of the findings of fact in the award—
     • the decision of the tribunal on the question is obviously wrong, or
     • the question is one of general public importance and the decision of the tribunal is at least open to serious doubt, and
   • despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the court to determine the question.

The section 67 and 68 grounds for challenging an award apply on a mandatory basis, whereas section 69 is non-mandatory and parties therefore can and often (particularly through their choice of arbitral rules) do choose to opt out.²⁸

The English courts have through their case law developed a series of principles to guide the assessment in relation to each of sections 67, 68 and 69. However, the decisions of the court show that the approach is often highly context-specific and fact-sensitive.

In some recent, notable, examples, the English courts have shown a certain reluctance to annul or set aside non-ICSID investment awards. In Republic of Korea v Elliott Associates LP, a case relating to the Republic of Korea and USA FTA, Mr Justice Foxton in the Commercial Court refused a challenge to  the award on the basis of section 67 of the Arbitration Act 1996. He rejected the claimant’s argument that the tribunal had lacked substantive jurisdiction, and in doing so set out some important guidance on the concept of substantive jurisdiction.²⁹

In Czech Republic v Diag Human SE and Mr Stava, a case originally brought under the Czechia – Switzerland BIT, Mr Justice Foxton refused another challenge this time made under both sections 67 and 68 of the Arbitration Act 1996.³⁰ Both judgments add to the body of relevant principles, and illustrate the context-specific and fact-sensitive approach, referenced above.

A less recent, but nonetheless notable, example of a successful set aside challenge before the English courts is GPF GP Sarl v Poland [2018] EWHC 409 (Comm), in which Mr Justice Bryan delivered what is understood to be the first English court judgment setting aside an investment state arbitration award. The case, which had been brought by a Luxembourg company against the Republic of Poland, saw Mr Justice Bryan accept an argument that section 67 of the Arbitration Act 1996 entitled the claimant to challenge the tribunal’s award, because the tribunal had made too narrow a determination of its jurisdiction.

Footnote(s):

²³ Arbitration Act 1996, s 67

²⁴ Arbitration Act 1996, s 82

²⁵ Arbitration Act 1996, s 68

²⁶ Arbitration Act 1996, s 33

²⁷ Arbitration Act 1996, s 69

²⁸ Arbitration Act 1996, s 4(2), Sch 1

²⁹ Republic of Korea v Elliott Associates LP [2024] EWHC 2037 (Comm)

³⁰ Czech Republic v Diag Human SE [2024] EWHC 503 (Comm)

There are no grounds on which to challenge an ICSID award in the English courts. In accordance with Article 54(1) of the ICSID Convention, which the UK has signed and ratified, the English courts are bound to recognise and enforce an ICSID award as it were a final court judgment.

It is possible for English courts to stay execution of an ICSID award provided that the stay is temporary and consistent with the purposes of the ICSID Convention. The Convention itself provides for stays of enforcement in three scenarios: requests for interpretation; requests for revision; and requests for annulment. The English courts have clarified that its exercise of stays of enforcement must not extend to declining to enforce an award because of a substantive objection to it or staying enforcement of an award permanently or indefinitely.³¹

Footnote(s):

³¹ Micula and others v Romania [2020] UKSC 5 [82] – [84]

Foreign states that are the subject of adverse ICSID awards cannot rely on sovereign immunity to oppose the registration and enforcement of such awards in England and Wales. This is because they are taken to have waived immunity from suit by virtue of being a Contracting State to the ICSID Convention. This point has recently been confirmed by the Court of Appeal in Infrastructure Services Limited and another v Spain, and Border Timbers and another v Zimbabwe.

The Court confirmed that it considers Article 54 of the ICSID Convention to constitute “prior written agreement” for the purposes of Section 2(2) of the SIA – an exception to the general immunity from the jurisdiction of the UK’s courts that states would otherwise enjoy under Section 1(1) of the Act.³² However, it also clarified that, in this situation, immunity is respect of execution is still preserved by Art. 55 of the ICSID Convention, albeit Section 13(4) of the SIA provides that execution against commercial state assets is not precluded (see more at 15 below).³³ For more details on immunity against execution in England and Wales please refer to Question 15 below.

Note that this is a developing area of law in the jurisdiction and that the UK Supreme Court has recently granted permission to Spain and Zimbabwe to appeal the Court of Appeal’s decision.

Footnote(s):

³² Infrastructure Services Limited and another -v- Spain, and Border Timbers and another -v- Zimbabwe [2024] EWCA Civ 1257

³³ State Immunity Act 1978, s 13(4)

England and Wales is generally recognised as a pro-enforcement jurisdiction.

In Micula and others v Romania [2020] UKSC 5 (Micula), the UK Supreme Court accepted that, given Articles 54(1) and 55 of the ICSID Convention, it was “arguable” that there is scope for additional defences to enforcement, in “certain exceptional or extraordinary circumstances which are not defined”, where those grounds:

• are recognised in the law of the enforcing jurisdiction in respect of final judgments of the national courts; and
• do not directly overlap with the rights of recourse provided for under articles 50 to 52 of the ICSID Convention.

However, the Supreme Court did not speculate on what those “exceptional” circumstances might be, and there are no cases where recognition and enforcement have been successfully resisted under “exceptional or extraordinary circumstances” as contemplated in Micula.

The ability to resist recognition and enforcement of non ICSID arbitral awards varies according to the applicable enforcement regime, i.e. whether enforcement is sought under:

• the New York Convention and the corresponding Sections 100 to 103 of the Arbitration Act; or
• the catch-all provision for all domestic and foreign arbitral awards at Section 66 of the Arbitration Act.

It is more difficult to resist enforcement under the New York Convention route. The grounds for resisting enforcement are specified and limited. They include:

• incapacity – a party to the arbitration agreement was under some incapacity (section 103(2)(a));
• invalidity – there was no valid arbitration agreement (section 103(2)(b));
• lack of due process – a party was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present its case (section 103(2)(c));
• lack of jurisdiction – the award deals with disputes outside or beyond the scope of the submission to arbitration (section 103(2)(d));
• serious procedural irregularity – the composition of the tribunal or the arbitral procedure did not comply with the arbitration agreement or (failing such agreement) the law of the seat (section 103(2)(f));
• finality – the award is not yet binding or has been set aside or suspended at the seat (section 103(2)(f));
• arbitrability – the subject matter of the dispute is not capable of settlement by arbitration (section 103(3)); and
• public policy – it would be contrary to public policy to recognise or enforce the award (section 103(3)).
• Where enforcement is sought under Section 66 of the Arbitration Act, it is mandatory for a court to refuse enforcement where the defendant shows that the tribunal lacked substantive jurisdiction to make the award (Section 66(3)).

Enforcement under Section 66 may also be refused on the following discretionary grounds:

• public policy;
• non-arbitrability;
• invalidity; and
• estoppel.

In terms of the general principles applicable to the Court’s exercise of its discretion under Section 66, Mr Justice Foxton set out a number of relevant principles in Sodzawiczny v McNally [2021] EWHC 3384 (Comm):

• it is always open to a court to refuse a Section 66 enforcement application if:
  • the arbitrator’s relief is unclear or would make no sense if incorporated into a judgment;
  • a declaration contained in the award serves no useful purpose;
• where discretionary relief is prescriptive rather than declaratory, the arbitrator’s decision on issues relevant to granting it generally should not be re-argued at the Section 66 stage unless any independent interest of the court is engaged;
• the court will determine if a Section 66 order involving the award engages the court’s independent interests, such as compliance supervision difficulties or inappropriate use of coercive powers;
• post-award events, including the applicant’s conduct, may influence the court’s decision on a Section 66 enforcement; and
• the application will be refused if the dispute is non-arbitrable under English law.

The SIA, at Section 13(2), prima facie protects state assets from enforcement.

However, it is possible to enforce against state-owned assets or the assets of state in one of two scenarios:

1. the state has expressly agreed in writing to waive its immunity from execution or injunctive relief (SIA, section 13(3)); or
2. where enforcement proceedings (but not injunctive relief) are brought in respect of property belonging to the state and the relevant property is ‘in use or intended for use for commercial purposes’ (SIA, section 13(4)).

On the scope of the term ‘commercial purposes’, the Judicial Committee of the Privy Council has found that the state must have a proprietary interest in the assets in question; property belonging to a state-owned entity (even if subject to state control) will not constitute ‘property of a state’ for the purposes of the SIA.³⁴ The Supreme Court has also concluded that the commercial purposes exception does not consider the origin or source of the property.³⁵ Instead, the relevant test is the use to which the state’s property is put.³⁶

Examples of where assets have been found to be in use for commercial purposes include a case where the tribunal had ordered that funds that were to be used for the purchase of aircraft³⁷ or aircraft parts were to be used for an airline’s commercial operations.³⁸ In contrast, the scope of “commercial purposes” has not been found to extend to funds where they are intended to be distributed to a national development fund (even where those funds had been acquired through commercial transactions).³⁹

The property of a state’s central bank or other monetary authority will not be considered ‘in use or intended for use for commercial purposes.’ When such a bank or authority operates as a separate entity, it is immune from execution, injunctions, orders for specific performance, or recovery of land or other property, unless written consent is provided (SIA, section 14(4)).

Footnote(s):

³⁴ Botas Petroleum Pipeline Corporation v Tepe Insaat Sanayii AS (Jersey) [2018] UKPC 31 [21], [22] (Lord Mance)

³⁵ SerVaas Incorporated v Rafidain Bank and others [2012] UKSC 40

³⁶ LR Avionics Technologies Ltd v The Federal Republic of Nigeria and another [2016] EWHC 1761 (Comm)

³⁷ AIC Ltd v Federal Government of Nigeria [2022] UKSC 16

³⁸ Kuwait Airways Corporation v Iraqi Airways Company [1995] 1 W.L.R. 1147

³⁹ SerVaas Incorporated v Rafidain Bank and others [2012] UKSC 40

Following the UK’s withdrawal from the European Union in January 2020, it has actively pursued, and continues to pursue, trade deals with countries around the world. Many of these are rollover deals, intended to emulate the arrangements the UK had with those countries when it was still a member of the EU, but some are bespoke, such as new agreements with Japan and Australia.

Amongst the most significant developments in this regard is the UK’s accension on 15 December 2025 to the  Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP contains, in the words of the UK Government a, “modern and transparent” ISDS mechanism. It should, however, be noted that certain State Parties have reached side agreements with other State Parties to exclude the application of the ISDS provisions as between them. The UK has reached such agreements with Australia and New Zealand, meaning that UK investors will not have a right to bring claims under the CPTPP against Australia or New Zealand, and vice versa.

As the UK enters into future investment treaties, ISDS is likely to continue to be a feature, and government ministers have indicated as much. Such future investment treaties will likely include that currently being negotiated with Singapore (following the announcement of a new strategic partnership between the countries in 2023)⁴⁰ and India (with talks having been relaunched in November 2024).⁴¹

Footnote(s):

⁴⁰ Prime Minister’s Office, 10 Downing Street and the Rt Hon Rishi Sunak MP, ‘UK agrees new strategic partnership with Singapore’ (Press release, 9 September 2023) < https://www.gov.uk/government/news/uk-agrees-new-strategic-partnership-with-singapore#:~:text=Following%20the%20Strategic%20Partnership%2C%20the,jobs%20and%20growing%20our%20economies.> accessed 7 February 2025

⁴¹ Prime Minister’s Office, 10 Downing Street, Department for Business and Trade, The Rt Hon Jonathan Reynolds MP and The Rt Hon Sir Keir Starmer KCB KC MP,  (Press Release, 18 November 2024) <https://www.gov.uk/government/news/prime-minister-announces-relaunch-of-uk-india-free-trade-talks> accessed 7 February 2025

A significant development that will affect the use of ISDS in England and Wales is the UK’s withdrawal from the ECT following failure to reach agreement on its modernisation (as detailed at 4a above). The withdrawal was announced in February 2024 and will take effect on 27 April 2025.

As a result, investors in the energy sector will lose the ability to commence ISDS procedures against the UK for alleged breaches of the treaty. This is significant as the ECT is one of the most litigated of all investment protection agreements. This, and the inaction it is felt to have caused in state climate policy, is a large part of the reasoning for the UK’s and many other countries’ (and the EU’s) withdrawal from the ECT.

The sunset clause contained in Article 46 of the ECT should mean that the provisions of the treaty (including on ISDS) will continue to apply to existing investments for a period of 20 years from the date of withdrawal. Interestingly, however, some countries are exploring options and have already taken steps to mitigate against the effect of the sunset clause. By way of example,  in June 2024, the EU Member States signed a declaration and inter se agreement clarifying that the ECT’s investor–State arbitration provision does not apply, and never has applied, to intra-EU investment disputes.⁴² The International Institute for Sustainable Development has also developed a model inter se agreement for use by the EU and non-EU contracting parties which could potentially be used to neutralise the sunset clause (use of which would be permitted under Article 41 of the Vienna Convention on the Law of Treaties).⁴³

Footnote(s):

⁴² Kingdom of Belgium, ‘Energy Charter Treaty: Member States sign declaration and initial Inter Se agreement clarifying non-applicability of ECT arbitration provisions intra-EU’ (Press Release, 26 June 2034) <https://diplomatie.belgium.be/en/news/energy-charter-treaty-member-states-sign-declaration-and-initial-inter-se-agreement-clarifying-non-applicability-ect-arbitration-provisions-intra-eu> accessed 7 February 2025

⁴³ Investment Treaty News, ‘IISD developed a model inter se agreement to neutralize the ECT sunset clause’ (9 October 2024) <https://www.iisd.org/itn/en/2024/10/09/iisd-developed-a-model-inter-se-agreement-to-neutralize-the-ect-sunset-clause/> accessed 7 February 2025