On January 20, 2017, the U.K. High Court of Justice (HCJ) ruled in Micula v. Romania that the registration of an International Center for the Settlement of Investment Disputes (ICSID) tribunal award issued against Romania in 2013 should not be annulled, though its enforcement should be stayed pending a parallel proceeding. The original dispute arose when Swedish nationals with business interests in Romania filed suit against the Romanian government under the bilateral investment treaty (BIT) between Sweden and Romania that was signed in 2002 and entered into force in 2003. The claimants of the underlying dispute alleged that the Romanian government violated their obligation to fair and equitable treatment by withdrawing prematurely certain economic incentives for a “disfavored” region of Romania—incentives upon which the claimants relied when initially investing—as a part of Romania’s accession process to the European Union that came to fruition in 2007. The ICSID tribunal agreed, ruling that Romania failed to act transparently.
The claimants then sought to register the award in the U.K. under the Arbitration (International Investment Disputes) Act 1966 that implemented the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) in the U.K and entitles persons seeking to enforce an ICSID award to register it with the HCJ. Romania and the intervening European Commission (EC) argued that to enforce the award would conflict with EU law.
The HCJ ruled that there were no grounds for annulling the registration of the award, mirroring another proceeding on the matter. The payment of the award was stayed, however, pending the outcome of a parallel proceeding at the General Court of the European Union seeking to annul the EC’s decision that enforcing the award would amount to prohibited new state aid in violation of provisions of the Treaty on the Functioning of the European Union. The HCJ did so to comply with the “principle of sincere cooperation” enshrined in EU law that obligates the national courts of member states to not make rulings that would conflict with a decision by the EC. The HCJ also noted that staying the enforcement did not violate the U.K.’s obligations under the ICSID Convention because under that treaty, ICSID awards are equated with final domestic rulings—rulings that would also be stayed for the same reasons as the award.