Introduction

Romania is currently being sanctioned by a court in Washington, D.C., for refusing to pay a $356 million award. At almost the same time, courts in Brussels and Luxembourg are telling Romania it is not allowed to pay that same award. It is the same award, same claimants, and two legal systems reaching opposite conclusions about whether money is owed.

The paradox is the clearest way to see a running pattern through several recent rulings on enforcement of awards. An award is not in practice, a single legal fact that either exists or doesn’t. To turn into money, it has to clear three separate hurdles. (1) a court somewhere has to be willing to hear the enforcement case in the first place, (2) the underlying consent to arbitrate has to be upheld, and (3) no competing legal order can be allowed to block the payment itself. Recent decisions show that an award can clear two hurdles cleanly and still fail at the third. That is the recent story: arbitration has not become unreliable, but its finality has always depended on more than the tribunal’s signature. This article argues that modern award enforcement is no longer governed by a single doctrine but has become a sequence of jurisdictional and systemic inquiries conducted independently by different legal orders.

Will A Court Even Hear The Case?

Start with the more settled question of whether a state can be sued in a foreign court to enforce an award or whether sovereign immunity blocks the door. Three closely timed decisions, the Singapore High Court in NextEra v. Spain (“NextEra”), the UK Supreme Court in the joined appeals of The Kingdom of Spain v. Infrastructure Services (“Infrastructure Services”)and Zimbabwe v. Border Timbers, and the High Court of Australia in CCDM Holdings LLC & Ors. v. The Republic of India (“CCDM”) answered that question by treaty rather than by policy, and the answers split cleanly.

For awards rendered under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”), in both NextEra and Infrastructure Services, courts held that the ICSID Convention effectively waives sovereign immunity. The ICSID Convention does not say so in so many words. Instead, the courts reasoned that Article 54(1), which obliges each contracting state to enforce awards against it “as if it were a final judgment” of its own court, read with Article 54, which preserves immunity only from execution against assets, implies a waiver of earlier jurisdictional kind of immunity. It is a self-contained enforcement mechanism under which a State, by becoming a party to the ICSID Convention, is deemed to have consented to adjudicative jurisdiction in enforcement proceedings before courts of other Contracting States.

The New York Convention (“NYC”) offers no equivalent mechanisms, which is why the High Court of Australia reached the opposite result in CCDM. The NYC is silent on immunity and instead defers enforcement procedure to the domestic law of the State wherever the award is being enforced. The domestic law in most countries includes the doctrine of immunity. There is no as if it were a final judgment” promise to imply a waiver. Recently, the English Court of Appeal in CC/Devas v. India confirmed that the “rule of procedure” under Article III of the NYC includes state immunity. Now, both England’s and Australia’s apex courts agree that mere ratification of the NYC doesn’t waive immunity. It clearly implies that treaty ratification alone doesn’t guarantee you can later sue to collect. Where a treaty doesn’t build in a waiver, a contract needs to.

When EU Law Blocks Payment Outright

Immunity, though, is not what stopped Romania from paying the Micula award. Romania never argued it was immune, as it had already lost the case and had no such argument left. Instead, the European Commission and the EU Courts intervened on an entirely different basis. The European Commission already found in decision 2015/1450 that payment of the award would itself constitute a new state aid. Building on that finding, the Court of Justice of the European Union (“CJEU”) and the General Court held that Article 108(3) of the Treaty on the Functioning of the European Union (“TFEU”) bars a Member State from implementing aid measures the European Commission has flagged for review, and it overrides whatever obligations Romania \might otherwise owe under the ICSID Convention.

CJEU in Commission v. United Kingdom ruled that the UK had breached EU law by letting its Apex Court enforce the award, violating both Article 108(3) of TFEU and the duty of sincere cooperation under Article 4(3) of the Treaty on European Union. The General Court went further on remand, holding that Romania’s obligation to pay could not be permitted within the EU legal order once the state-aid rules are engaged. The court also held that the ICSID Convention’s enforcement guarantee doesn’t create a right capable of overriding that constraint. The award has been declared void in some universal sense; it remains valid and collectable outside the EU. But inside the EU legal order, not a single court is now permitted to give it effect

This is a structurally different problem from immunity, as immunity says a particular court cannot hear the case, but the EU’s position says the obligation itself cannot lawfully be discharged within its own legal order regardless of which court hears it. That is a more far-reaching claim because a State cannot simply waive its way around it, as the obligation comes from membership of the EU and not from anything Romania consented to give up.

America’s Answer: Same Question, Different Verdict

Washington has treated the same dispute very differently. The Micula Sanctions are best understood not as a second merits ruling but as a compliance enforcement story. A D.C. Federal Court has escalated contempt fines against Romania under its inherent contempt power by holding that neither the Foreign Services Immunities Act (“FSIA”) nor its exception under 28 U.S.C. § 1605(a)(6) bar this kind of coercive sanction. Romania’s argument that partial payment in Romanian Lei satisfied the award was rejected as beside the point in a dollar-denominated judgment.

In NextEra, solar investors sought to enforce Energy Charter Treaty (“ECT”) awards in the U.S. courts. Spain argued that under the CJEU’s Achmea, EU law meant it never validly consented to arbitrate with EU investors. The D.C. Circuit rejected this because it treated the question as outside the FSIA’s exception, which grants jurisdiction over suits to enforce awards made pursuant to an arbitration agreement. The court held that consent disputes belong to the arbitrators under the treaty and EU law is not a part of the FSIA’s jurisdictional enquiry. The U.S. Solicitor General reinforced this in May 2026, urging the Supreme Court to deny Spain’s certiorari petition on the basis that Spain’s consent under the ECT was clear. The same jurisdictional question that blocks payment in Brussels is treated in Washington as simply irrelevant to the inquiry a U.S. court asks.

Why The Courts Disagree, & Why It Matters

The divergence is not really about mere disagreement on the facts but about which legal order each court considers itself obliged to defer to. The UK and Singapore read the ICSID Convention’s own text as displacing immunity. Australia applied its domestic immunity statute where the treaty text gives it no reason not to. The EU courts applied constitutional supremacy by treating their own treaty-based obligation as senior to a bilateral or multilateral consent to arbitrate. The U.S. courts applied the FSIA on its own terms and declined to treat the EU law as relevant to that statute at all. None of these courts is wrong on its own terms, as each answered a different question framed by different governing instruments.

For investors and drafters, it has become a transaction-stage risk rather than a curiosity. Recovering a judgment is increasingly a separate exercise from winning one. Now the major response is to negotiate express waivers where a treaty’s text leaves a gap and to choose a seat or enforcement jurisdiction with this fragmentation in mind. None of this means enforcement systems are broken. It means that they were never automatic.

Enforcement Is A Sequence, Not A Step

None of these developments created the enforcement state that courts have always stood between an award and a bank transfer. These recent rulings reveal how much that stage depends on which legal order gets to speak last. An award is no longer the end of a single legal process but the start of negotiation between several competing legal systems. Micula and other decisions are not separate stories but are two points in the same argument that finality was never a property of the award itself. It was always a question of how many legal orders had to agree before the money actually moved.