UK Supreme Court decides whether an arbitral tribunal may award equitable compensation against a State

28 October 2026

The Supreme Court of the United Kingdom gave judgment on 28 October 2026 in The Kingdom of Spain and another v The London Steam-Ship Owners' Mutual Insurance Association Limited (No 2). The judgment carries the neutral citation [2026] UKSC 36, and the appeal was numbered UKSC/2025/0034. The appellant was the insurer, and the respondents were the Kingdom of Spain and the French State. Three questions of law were before the Court, all turning on section 13 of the State Immunity Act 1978, which limits the relief that may be granted against a State. The first was whether, absent agreement to the contrary, that section prevents an arbitral tribunal from granting an injunction against a State for breach of an equitable obligation to arbitrate. The second was whether it prevents a tribunal from awarding equitable damages for the same breach. The third was whether a tribunal may award equitable compensation against a State for that breach. The Court of Appeal had held that neither an injunction nor equitable damages could be awarded and had set aside the arbitrators' equitable compensation awards, and the insurer took all three points on to the Supreme Court.