Arbitration Case Alert

Nexus to Switzerland required for enforcement of ICSID award against foreign state assets


Case Number: 5A_406/2022 (17 March 2023)

Nexus to Switzerland required for enforcement of ICSID award against foreign state assets

In a recently published German-language decision slated for official publication, the Swiss Supreme Court upheld the decision of a cantonal court which rejected a request to attach assets allegedly belonging to Spain and located in Switzerland in aid of enforcement of an ICSID award. The underlying ICSID award was one of many arbitral awards holding Spain liable under the Energy Charter Treaty for reforms to its subsidy scheme for renewable energy installations.

In its decision, the Swiss Supreme Court first clarified that a party seeking an attachment based on an ICSID arbitral award need not obtain a prior declaration of enforceability of the award by a Swiss cantonal court.

Second, the Swiss Supreme Court reaffirmed its case law with regard to the enforcement in Switzerland of awards against foreign state assets, according to which an attachment requires that:

  • The foreign state was acting in a private capacity ("iure gestionis") rather than in a sovereign capacity ("iure imperii") in the legal relationship underlying the attachment claim.
  • The legal relationship in question has a sufficient nexus with Switzerland.

The court concluded that these requirements also apply when enforcement against foreign state assets is sought on the basis of an ICSID arbitral award. In the present case, the investor was not able to demonstrate a sufficient nexus between the legal relationship and Switzerland.

This is the first time that the Swiss Supreme Court has confirmed that the requirement of a nexus with Switzerland, which stems from case law relating to the enforcement of awards under the New York Convention, applies when enforcement is sought against the assets of a foreign state based on an ICSID arbitral award. (Decision 5A_406/2022 (17 March 2023)).


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