<center><span class="news-text_italic-underline">Date: 19 February 2025</span></center>
Summary
Libya appealed against a ruling that it had contractually consented to the enforcement of an arbitration award under the <span class="news-text_italic-underline">State Immunity Act 1978</span>, specifically under s.13(3). The case arose from a supply agreement governed by Swiss law, which included a provision requiring arbitration under the International Chamber of Commerce rules. The respondent obtained an arbitration award against Libya and sought to enforce it in the UK, applying for a charging order on a UK property owned by Libya. The core issue was whether Libya’s consent, expressed in the arbitration clause, extended to the enforcement of the award under s.13(3) of the Act. The judge ruled that Libya's use of the phrase "wholly enforceable" in the agreement sufficiently demonstrated its consent for the award to be enforced against its assets.
Held
Appeal dismissed.
- <span class="news-text_medium">Interpretation of s.13(3) of the Act:</span> The court found no need for additional requirements, such as "clear words", to determine if a state had waived its immunity. The court's role was to interpret whether the state had "expressed" consent through the words used in the agreement. The decision was consistent with the principle that the words of the agreement, once determined to express consent, fulfilled the requirements of s.13(3). <span class="news-text_italic-underline">Infrastructure Services Luxembourg Sarl v Spain [2024] EWCA Civ 1257</span> was applied.
- <span class="news-text_medium">Interpretation of Clause 32 of the Contract:</span> The judge correctly determined that Libya consented to the execution of the arbitration award. However, there were differing views on the reasoning:</br></br>
- <span class="news-text_medium">Per Phillips LJ:</span> The term "wholly enforceable" alone was insufficient to consent to the waiver of execution immunity. However, Libya had agreed to arbitration rules requiring it to "carry out any award without delay" which had been interpreted in other jurisdictions as a waiver of execution immunity. In that context, Libya’s agreement that the award would be "wholly enforceable" included waiving the necessary rights for enforcement.
- <span class="news-text_medium">Per Zacaroli LJ:</span> The failure to separately address recognition and enforcement of the award indicated Libya’s consent to the entire enforcement process, including recognition in any jurisdiction where enforcement was sought.
- <span class="news-text_medium">Per Lewison LJ:</span> A straightforward reading of Clause 32, indicating that the arbitration award would be final, binding and enforceable, showed that Libya had agreed to enforcement of the award. The judge reached the correct conclusion for the correct reasons.
Conclusion
The court upheld the decision that Libya had consented to the enforcement of the arbitration award under the <span class="news-text_italic-underline">State Immunity Act 1978</span>, specifically s.13(3). The use of the phrase "wholly enforceable" in the arbitration clause was interpreted as a clear expression of consent for the award to be executed against Libya's assets. The decision reflects the principle that, once a state has agreed to arbitration under specific terms, it can be deemed to have consented to the enforcement of any resulting award, including against its property. This case highlights the importance of clearly worded arbitration agreements and reinforces the broad interpretation of consent under the <span class="news-text_italic-underline">State Immunity Act</span>.
