The case, heard in November 2016, is between the state of Romania – represented by Thrings solicitors – and Swedish investors of Romanian descent (Viorel and Ioan Micula) and their associated companies.
The European Commission (EC) was also represented in the proceedings and argued in support of Romania.
The investors had obtained an award of damages and interest (approximately £173m) at ICSID in Washington DC. They registered the award in the English High Court for the purpose of enforcing it in this country.
The award followed Romania’s withdrawal of an investment incentive programme in light of Romania’s accession to the EU and the introduction of EU state aid rules.
The EC had determined prior to the Commercial court hearing that under EU law concerning payment of state aid by any member state of the EU, such as Romania, any payment under the ICSID award would constitute unlawful state aid.
The EC’s final decision on this issue is being challenged by the Swedish investors and their associated companies in the General Court of the European Union. The hearing is due to take place within the next couple of years. In the meantime, the proceedings in this country have been stayed.
In the case in London, Romania argued that registration of the award in the London proceedings should be set aside and, alternatively, that enforcement of the award in this country should be stayed pending the outcome of the EU court case. Although Mr Justice Blair decided not to set aside registration, he granted Romania’s alternative application for a stay.
Romania was represented by Robert Sear and Michael Nathanson of Thrings LLP, who instructed Robert O’Donoghue and Emily MacKenzie, Counsel, of Brick Court Chambers.
The investors and their companies were represented by White and Case LLP and Shearman & Sterling LLP.
Robert Sear 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.”
