High Court stays £173m international settlement award
JPEG - 112.4 kb
Viorel and Ioan Micula had obtained a damages award and interest totalling £173m

Law Gazette | 2 February 2017

High Court stays £173m international settlement award

By Max Walters

The High Court has handed down a judgment which, for the first time, stays enforcement of an international dispute resolution award despite its registration in England and Wales.

The case, Micula & Ors v Romania & Anor [2017] EWHC 31 (Comm) (20 January 2017), heard in November last year, is between the state of Romania and two Swedish investors of Romanian descent and their respective companies.

Viorel and Ioan Micula had obtained a damages award and interest totalling £173m following a hearing at the International Centre for Settlement of Investment Disputes in Washington DC.

The award, which was registered in the High Court in England, followed Romania’s withdrawal of an investment incentive programme in light of the country’s accession to the EU and subsequent introduction of EU state aid rules.

The European Commission, which supported Romania, had determined prior to the Commercial Court hearing that under EU law concerning payment of state aid, any payment under the ICSID award would constitute unlawful state aid. The commission’s decision is being challenged by the investors in the EU’s General Court.

A hearing is due to take place within the next couple of years.

Romania argued that registration of the award in the London proceedings should be set aside or that enforcement of the award should be stayed pending the outcome of the EU court case.

In the ruling Mr Justice William Blair granted Romania’s application to stay enforcement of the judgment.

Romania was represented by West Country firm Thrings solicitors while the investors were represented by international firm Shearman & Sterling and City firm White & Case.

Robert Sear, partner at Thrings, said: ‘This is an important case as it is the first time that the enforcement of an ICSID award has been stayed in the UK on such terms.

‘The key issue in the matter was whether English law – in this case the law requiring the registration and enforcement in the English courts of an ICSID award – can only be implemented subject to EU law. The court considered that the decision did not create a conflict with the ICSID convention or the Arbitration Act 1966 as the award was to be equated with a domestic judgment on which a similar stay would have been granted.’

source: Law Gazette