Micula & Ors v Romania & Anor [2017] EWHC 31 (Comm) (20 January 2017)

Micula & Ors v Romania & Anor [2017] EWHC 31 (Comm) (20 January 2017)

The High Court held that while the ICSID award is final and entitled to registration under the 1966 Act, enforcement of the award would directly conflict with the European Commission's binding Final Decision prohibiting payment as unlawful State aid. The court found that registration of the award itself does not breach EU law, but any enforcement action would create a real risk of conflict with EU obligations. Given ongoing annulment proceedings before the EU courts, the court stayed enforcement of the award pending the outcome of those proceedings, rather than setting aside the registration.

Citation
[2017] EWHC 31 (Comm)
Parties
Claimant/respondent: Viorel Micula; Claimant/respondent: Ioan Micula; Claimant/respondent: S. C. European Food S. A.; Claimant/respondent: S. C. Starmill S. R. L.; Claimant/respondent: S. C. Multipack S. R. L.; Defendant/applicant: Romania; Intervener: European Commission
Jurisdiction
England and Wales
Judgment Date
20 January 2017
Procedural Posture
Application to Set Aside or Stay Registration of ICSID Arbitration Award / High Court (commercial Court) Judgment on Application
Outcome
Stay of enforcement granted; registration order not set aside
Legal Topics
Enforcement of ICSID Awards, State Aid Prohibition Under EU Law, Res Judicata, Conflict Between International and EU Obligations, Preliminary Reference to CJEU
Arbitration International Investment Law European Union Law State Aid Enforcement of ICSID Awards State Aid Prohibition Under EU Law Res Judicata Conflict Between International and EU Obligations +1 more

Case Brief

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Parties

Viorel Micula

Claimant/respondent

Ioan Micula

Claimant/respondent

S. C. European Food S. A.

Claimant/respondent

S. C. Starmill S. R. L.

Claimant/respondent

S. C. Multipack S. R. L.

Claimant/respondent

Romania

Defendant/applicant

European Commission

Intervener

Procedural Posture

Application to Set Aside or Stay Registration of ICSID Arbitration Award / High Court (commercial Court) Judgment on Application

Legal Issues

  1. 1 Whether the High Court must set aside or stay registration of an ICSID award in light of a European Commission State aid decision
  2. 2 Whether enforcement of the award would breach EU State aid law
  3. 3 Whether the award is res judicata and the effect of EU law on finality

Ratio Decidendi

The High Court held that while the ICSID award is final and entitled to registration under the 1966 Act, enforcement of the award would directly conflict with the European Commission's binding Final Decision prohibiting payment as unlawful State aid. The court found that registration of the award itself does not breach EU law, but any enforcement action would create a real risk of conflict with EU obligations. Given ongoing annulment proceedings before the EU courts, the court stayed enforcement of the award pending the outcome of those proceedings, rather than setting aside the registration.

Court Disposition

Stay of enforcement granted; registration order not set aside

Orders

  • Enforcement of the ICSID award is stayed pending the outcome of annulment proceedings before the General Court of the European Union.
  • The registration of the award in the High Court remains in place; the application to set aside the registration order is refused.