SUBMISSION TO JURISDICTION
177 As canvassed above (at [55]), a state is not immune from jurisdiction in a proceeding in which it has submitted to the jurisdiction of the court (Immunities Act, s 10(1)). Further, a state may submit to the jurisdiction at any time "by agreement or otherwise", which includes by treaty or other international agreement (Immunities Act, s 10(2) and the definition of "agreement" in s 3(1)). An agreement by a foreign state to waive its immunity under Pt II has effect to waive that immunity and the waiver may not be withdrawn except in accordance with the terms of the agreement (Immunities Act, s 10(5)).
178 The ECT, to which Spain is a signatory, in Art 26(2), gives an Investor party to a dispute with a Contracting Party three options for the resolution of disputes. The third option, in Art 26(2)(c) with reference to Art 26(3)(a) and Art 26(4), is by submitting the dispute to one or other of three modes of arbitration. In that regard, each Contracting Party gave "its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of [Art 26]" (Art 26(3)(a)). One of the modes of arbitration which is available, if the "Contracting Party of the Investor" (i.e. the investor's home state) and the Contracting Party to the dispute are both parties to the Investment Convention, is submission of the dispute to the Centre established pursuant to the Investment Convention (Art 26(4)(a)).
179 It was thus apparently the intention of the parties to the ECT to create rights in favour of private investors capable of enforcement in consensual arbitration against one or other state parties to the ECT. The election of the applicants to exercise the Investment Convention dispute resolution option given to them by the ECT must be considered as giving rise to an enforceable obligation on the part of Spain to arbitrate under the Investment Convention. See Republic of Ecuador v Occidental Exploration and Production Co [2005] EWCA Civ 1116; [2006] QB 432 at [32]. Thus, by being a Contracting Party to the ECT and a Contracting State to the Investment Convention, Spain submitted to the arbitrations under the Investment Convention which produced the awards they seek to enforce.
180 The question then is whether, by doing so, Spain also submitted to the jurisdiction of the designated courts (including this Court) for the purposes of enforcement (as opposed to execution) of those awards.
181 On the construction of the Investment Convention which I have arrived at, it must be that Spain has so submitted. In that regard, it has agreed to the terms of the Investment Convention which provide, amongst other things, that a Centre award is binding on the parties and is not subject to any appeal or any other remedy except those provided for in the Convention (Investment Convention, Art 53), that Contacting States (including Australia) are obliged to "recognise and enforce the pecuniary obligations imposed" by the award "as if it were a final judgment of a court in that state" (Art 54(1)), that in order for the applicants to seek recognition and enforcement of an award all that has to be done by them is to furnish to the competent court (which in Australia includes this Court) a copy of the award certified by the Secretary-General (Art 54(2)), and that foreign state immunity can be raised only at the stage of execution (Arts 54(3) and 55).
182 By agreeing to the designated courts of Contracting States having the power, and the obligation, to recognise and enforce arbitral awards against it, Spain inevitably consented to them doing so. It thereby waived any reliance on foreign state immunity from the jurisdiction of such courts in proceedings to recognise and enforce such awards.
183 Art 54 of the Investment Convention, which is at the heart of what I have found to be Spain's submission to the jurisdiction of designated courts for the purposes of recognition and enforcement of Centre arbitral awards, can be contrasted with Art 14 of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, opened for signature 10 December 1984, 1465 UNTS 85 (entered into force 26 June 1987) which was at the heart of the unsuccessful contention in Li v Zhou that China as a party to that Convention had submitted to the courts of Australia. Article 14(1) relevantly provides that "[e]ach State Party shall ensure in its legal system that the victim of an act of torture obtains redress and has an enforceable right to fair and adequate compensation, including the means for as full rehabilitation as possible". It says nothing equivalent to the provisions of Art 54 of the Investment Convention that the pecuniary obligations of arbitral awards must be enforced as if they were final judgments of a court. Li v Zhou is clearly distinguishable.
184 Spain draws attention to Art 26(8) of the ECT which provides that each Contracting Party must make provision for the effective enforcement of awards "in its Area". Area is defined under the ECT with respect to a state that is a Contracting Party to mean the territory under its sovereignty (Art 1(10)). From this, Spain argues that it did not submit to the enforcement of the awards in this case in other countries, including Australia, but only within its Area.
185 That submission might have had some validity if the ECT was simply an agreement between Spain and investors foreign to Spain. However, it is a treaty between Contracting Parties by which each state that is a Contracting Party promised to the others that it would "carry out without delay" any award and that it would make provision for the effective enforcement, in its area, of such an award. But in any event, the applicants need rely on the ECT only to the extent that it gave them the option to arbitrate under the auspices of the Centre under the Investment Convention. The applicants having accepted Spain's offer in Art 26(4) of the ECT in that regard, the arbitrations were conducted under the Investment Convention and it is to its terms that one must have regard for the purposes of recognition and enforcement.
186 Spain submits that s 17 of the Immunities Act deals exhaustively with the circumstances in which a foreign state would lose its immunity in proceedings for the recognition and enforcement of arbitral awards with the result that s 10 cannot be relied on in such proceedings. It submits that s 17 constitutes a comprehensive statement on the loss of state immunity in an arbitration and that the scope of s 10 (concerned with acts of waiver) cannot be expanded, as the applicants seek to do, by employing the general words of s 10 to further extend the arbitration exception in s 17.
187 There is nothing in the Immunities Act, or the ALRC Report, to support the proposition that there can be no overlap in the application of the exceptions to immunity set out in ss 10 to 22 of the Immunities Act. For example, there is no reason in principle why if the exception in s 11 in respect of commercial transactions applies, the exception in s 10 in respect of submission to jurisdiction should not also be able to apply, i.e. a state party to a commercial transaction can also submit to the jurisdiction of the Court such as to enliven the s 10 exception to immunity. Equally, "there is no reason to prevent, for example, a tort which fails to come within the tort exception to immunity [s 12] being brought under, say, the commercial transaction exception provided the facts permit" (ALRC Report [88]). The corollary is that if the tort exception does apply, the commercial transaction exception may also apply, depending on the facts.
188 The High Court in Firebird reasoned that the exceptions to immunity can overlap: [62] per French CJ and Kiefel J, [131] per Gageler J and [203]-[204] per Nettle and Gordon JJ.
189 The ALRC Report recognised that a foreign state arbitral award debtor in respect of an arbitration that does not meet the requirements of s 17 (which are identified at [57]-[58] above) may nevertheless not enjoy immunity in proceedings for the recognition and enforcement of an arbitration award if it has submitted to jurisdiction. That much is clear from the following discussion in the Report (at [107]) of the s 17 arbitration exception:
A foreign state is competent to waive its immunity, and (by agreement to accept service or otherwise) to submit to the jurisdiction of the courts of any country. In the absence of express submission the more defensible view is that the local courts should only be able to enforce an award against a foreign state if, had the underlying dispute being brought before those courts for resolution, the foreign state would not have been immune. This will allow the enforcement of awards arising out of commercial transactions, or of other transactions of the foreign state over which the courts would have had jurisdiction. Private parties seeking the enforceability of foreign awards in a wider category of cases are of course free to stipulate to that effect in the agreement to arbitrate. Foreign states cannot convincingly object, in view of the widespread acceptance of international commercial arbitration and of the New York Convention of 1958, if a foreign arbitral award is enforced in this way. The Commission believes that it is sufficient to assert a similar rule for local arbitrations, leaving any more general abrogation of immunity to be provided for by agreement of the parties.
(Emphasis added.)
190 This is exactly the point: on the proper construction of the Investment Convention (as I have found), Spain by becoming a Contracting State expressly submitted to the jurisdiction of the courts of other Contracting States in respect of the recognition and enforcement, but not execution, of any resulting award. If that is correct, then it satisfies the requirements of submission/waiver under s 10 of the Immunities Act and there is no basis to conclude that, notwithstanding such a submission, Spain nevertheless enjoys immunity because the particular arbitration in question does not meet the requirements of the exception in s 17.
191 Spain also submits that if a foreign state, absent any express submission to jurisdiction, was to be taken to have waived immunity from jurisdiction throughout the world in respect of enforcement proceedings for the purposes of s 10 of the Immunities Act simply by agreeing to arbitrate a dispute, s 17(2) would have no role to play.
192 This submission misses the point. It is not the case that "simply by agreeing to arbitrate the dispute" Spain has submitted to the jurisdiction of the Court under s 10 of the Immunities Act; that submission to jurisdiction arises from Spain's agreement to the Investment Convention the terms of which include mutual obligations to recognise and enforce Centre awards. That carries with it the inevitable consent to Centre awards being recognised and enforced in fulfilment of that obligation. Section 17(2) will continue to apply, and be required, in circumstances where the parties have submitted their dispute to arbitration without such submission amounting to a submission to the jurisdiction of the Court for the purposes of recognition and enforcement.
193 Insofar as foreign case law is concerned, several of the cases referred to above in the context of the distinction between enforcement and execution in the Investment Convention, namely SOABI (at [165] above), LETCO (at [167] above) and Blue Ridge Investments (at [169] above), also support the proposition that by becoming a signatory to the Investment Convention Spain submitted to the jurisdiction of the designated courts of Contracting States for the purposes of recognition and enforcement (but not execution) of any ensuing awards.
194 The applicants also refer to Government of the Republic of Zimbabwe v Fick [2012] ZASCA 122 as an example of a court finding that by becoming a signatory to a treaty that creates a dispute resolution tribunal, a Contracting State submitted to the jurisdiction of the courts of other Contracting States for the purposes of enforcing decisions of the tribunal and thereby waived foreign state immunity.
195 In that case, the South African Supreme Court of Appeal (SCA) held that by becoming a signatory to the Southern African Development Community (SADC) Treaty and a Protocol that established the SADC Tribunal, Zimbabwe "clearly both waived any immunity it might otherwise have been entitled to claim from the jurisdiction of the courts of member states and agreed that orders of the Tribunal would be enforceable in those courts" (at [44]). That arose from Art 32 of the Protocol which provided that the law and rules of civil procedure for the registration and enforcement of foreign judgments in force in the territory of the Member State in which the judgment is to be enforced shall govern enforcement and that decisions of the SADC Tribunal shall be binding upon the parties to the dispute in respect of that particular case and enforceable within the territory of the Member State concerned. The result and reasoning of the SCA was upheld by the Constitutional Court in Government of the Republic of Zimbabwe v Fick [2013] ZACC 22; 2013 (5) SA 325 at [33]-[35].
196 In detailed analysis of each of the foreign cases relied upon by the applicants, Spain ultimately submits that they "are of no real assistance" because Spain's plea of foreign state immunity arises in a very specific context; in accordance with the precise and unique terms of the Immunities Act Spain invokes sovereign immunity as a procedural bar to jurisdiction.
197 There are two things to be said in response to that submission. First, my analysis and conclusions have been reached independently of consideration of the foreign cases. Second, and in any event, that analysis and those conclusions, both with regard to the proper interpretation of Arts 53-55 of the Investment Convention concerning the distinction between recognition/enforcement and execution and with regard to Spain's submission to the jurisdiction of this Court in respect of the recognition and enforcement of the applicants' awards, are supported by the foreign cases. Relevantly, that analysis and those conclusions are not with regard to the construction of the Immunities Act - which is a domestic statute the interpretation of which, I accept, is not apt to be assisted by foreign case analysis.
198 It is of course correct that each state has its own law on foreign state immunity, and that considerable divergence exists. There is also no uniform international law on foreign state immunity: ALRC Report at [13], PT Garuda at [33]. The foreign cases cannot, therefore, assist in interpreting the Immunities Act, but that is not why I refer to them. They are cited on the question of the proper, international, construction of the Investment Convention. That, in turn, informs what it is that Contracting States agreed to, which is a necessary step in the analysis of whether such agreement amounts to submission to jurisdiction and waiver of foreign state immunity under s 10.
199 Finally, Spain argues that in considering whether it submitted to jurisdiction I must give primacy to the Spanish text of the Investment Convention because Spain, a Spanish-speaking country, can be taken to have principally referenced that text in signing the Investment Convention. On that basis, Spain submits, I should not regard Spain as having agreed to the distinction between recognition/enforcement and execution that is apparent in the English text.
200 Spain's submission cannot be accepted. In becoming a Contracting State to the Investment Convention, Spain agreed to the whole of the Convention including the testimonium which provides for all three texts to have equal authenticity. There is no basis upon which preference can be given to Spain's asserted subjective intention to give the Spanish text primacy when, objectively with reference to its terms, the Investment Convention was done in three authentic texts.
201 In view of my conclusion on submission, it is not necessary to deal with the two alternative bases on which the applicants seek to avoid the conflict between the immunity in s 9 of the Immunities Act and the Investment Convention as given the force of law by the Arbitration Act, namely the effect of s 34 of the Arbitration Act and implied repeal. I will therefore state my conclusions on them only briefly.