White & Case Wins Important UK Supreme Court Judgment Lifting Stay of Enforcement of ICSID Award for Ioan Micula
3 min read
Global law firm White & Case LLP has secured a crucial victory at the UK's Supreme Court for Ioan Micula and the companies in which he has invested, enabling action to enforce the 2013 ICSID arbitral award of approximately €300 million, with interest.
"With the ongoing proceedings before the EU courts, the Micula saga is far from over," said White & Case local partner Kai Struckmann, who is part of the team representing Ioan Micula and his companies. "But this judgment is an important step, together with the judgment of September 2019 secured in the US District Court for the District of Columbia, in recovering the award rendered in favor of our client over six years ago."
The 2013 award resulted from a claim under the Sweden-Romania bilateral investment treaty (BIT) and arose out of the repeal by Romania of investment incentives that the Micula brothers had relied on when making substantial investments in western Romania in the early 2000s.
An ICSID tribunal rendered the award in favor of Mr. Micula, his brother and co-investor, and three companies they had invested in. However, their efforts to enforce the award were impeded by a 2015 European Commission decision holding that payment by Romania of the award was prohibited under EU State aid rules (the EC Decision). In June 2019, the Micula brothers prevailed in the European Union's General Court, which annulled the EC Decision in full, and clarified that the European Court of Justice's Achmea judgment, regarding the incompatibility of arbitration clauses in intra-EU BITs, does not apply in this pre-accession context. This judgment is currently under appeal at the Court of Justice of the European Union.
The UK Supreme Court's judgment, following a hearing before Lady Hale, Lord Reed, Lord Hodge, Lord Lloyd-Jones and Lord Sales on 18 June and 7, 8 and 9 October 2019, has lifted the stay on enforcement of the award previously granted to Romania by the High Court and upheld by the Court of Appeal. The Supreme Court held that the duty of sincere co-operation under EU law is not applicable in this case, where the UK has a prior obligation under the ICSID Convention to enforce the Award. Thus the Supreme Court overturned the orders of the High Court and Court of Appeal, which had ruled that enforcement should be stayed pending the outcome of proceedings before the EU courts concerning the validity of the EC Decision.
"The UK Supreme Court judgment confirms the special status of ICSID awards for the purpose of international enforcement, said White & Case arbitration partner David Goldberg, who led the Firm's representation of Ioan Micula and the three claimant companies before the Supreme Court.
White & Case partner Genevra Forwood, who is part of the team representing Ioan Micula and his companies, added: "The judgment is particularly significant for its confirmation that, as the claimants have consistently argued, the UK's obligations under the ICSID Convention to enforce ICSID awards take precedence over any obligation on the UK that arose out of the EU Treaties."
The White & Case team that led the Firm's representation of Ioan Micula and the three claimant companies before the English courts consisted of partner David Goldberg and associate Aqeel Kadri (both London). The White & Case team representing Ioan Micula and his companies before the EU Courts and coordinating the proceedings across multiple jurisdictions includes local partner Kai Struckmann, partner Genevra Forwood (both Brussels) and associate Aqeel Kadri (London), assisted by counsel Sir Nicholas Forwood QC (Brussels). Marie Demetriou QC and Hugo Leith, both from Brick Court Chambers, were instructed by White & Case for the English court proceedings.
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