In a significant ruling dated 9 July 2025 (Proc. 108/24.7YRLSB.S1), the Portuguese Supreme Court (STJ) rejected Venezuela’s appeal against the recognition of an arbitral award rendered in France under the ICSID Additional Facility Rules, in favor of Canadian investor Gold Reserve Inc. The decision is of considerable relevance to the enforcement of investor-State awards in Europe and beyond.
The dispute arose from the termination of mining concessions granted to Gold Reserve in Venezuela. The arbitral tribunal had found that Venezuela violated its obligation to accord fair and equitable treatment under the 1996 Canada-Venezuela BIT, ordering the State to pay over USD 735 million. Gold Reserve sought recognition of the award in Portugal, where Venezuela raised the defense of jurisdictional immunity.
The STJ dismissed this argument on both doctrinal and treaty-based grounds.
First, the Court reaffirmed that State immunity from jurisdiction is not absolute, particularly in the context of commercial or investment-related activities. Drawing on customary international law and the United Nations Convention on Jurisdictional Immunities of States and Their Property (2004) (CNUIJ), the Court noted that States may waive their immunity expressly or implicitly. Even though the CNUIJ is not yet in force internationally, Portugal has ratified it and considers its core provisions as reflective of customary international law.
The Court concluded that Venezuela had tacitly and expressly waived immunity from recognition proceedings by (a) consenting to arbitration through the BIT and incorporating references to the New York Convention, thereby accepting the possibility of recognition and enforcement in jurisdictions other than the seat of arbitration; and (b) entering into a post-award settlement agreement in which it not only confirmed its liability but also renounced immunity before courts competent to enforce arbitral awards.
Second, the STJ made a clear distinction between immunity from jurisdiction and immunity from execution. It emphasized that the matter before it concerned only the recognition of the award in Portugal, not its enforcement. As such, arguments about the State’s immunity from execution were deemed premature and legally irrelevant to the recognition proceedings.
The Court also rejected Venezuela’s attempt to invoke public policy as a bar to recognition. The award was characterized as purely pecuniary and did not, in the Court’s view, contravene any fundamental principle of Portuguese constitutional or international public policy. The standard set by the Court was one of “manifest, intolerable, and evident” incompatibility with core legal values—far beyond general disagreement with the arbitral outcome.
This ruling reaffirms Portugal’s status as an arbitration-friendly jurisdiction and strengthens the enforceability of investor-State arbitral awards within the EU legal space. Most importantly, it underscores the principle that States cannot benefit from the privileges of international arbitration and later retreat behind immunity doctrines to avoid compliance with its outcomes.
As States continue to be parties to investment treaties and arbitral agreements, this decision signals that courts will hold them to the procedural and jurisdictional commitments they undertake—especially in legal systems aligned with the New York Convention and international norms on sovereign immunity.
This case provides an important reference point for arbitration practitioners navigating the tension between sovereign immunity and the recognition of investment arbitral awards within European legal systems.
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