A US court has resolved three significant cases in Spain’s battle to avoid paying the damages it has been sentenced to in international arbitrations for cuts in renewable energy. The Appeals Court of the District of Columbia confirmed three final awards against Spain totaling $358 million (€324 million), corresponding to the cases of Nextera, 9REN, and AES (assumed by the Blasket fund). This paves the way for the companies to seek execution through the seizure of Spanish commercial assets in the United States. The judges rejected Spain’s claim of sovereign immunity but granted a minor victory in allowing it to continue litigating to avoid payment. The most important award upheld in the ruling is that of Nextera, in which Spain was ordered to pay €290.6 million for violating the Energy Charter Treaty with its cuts to promised renewable energy investments.Spain has been arguing that the Energy Charter Treaty does not allow EU companies to arbitrate against EU member states. However, the Appeals Court rejected this argument, stating that the treaty’s arbitration provision extends to EU nationals. Despite this, the judges only ruled on immunity and returned the case to continue litigation on execution, providing a potential escape route.It is a significant lifeline for Spain to hold onto, as confirmed by a dissenting opinion from Judge Florence Pan in the Appeals Court’s ruling. Spain’s strategy is to continue litigating relentlessly in response to unpaid damages. Companies with favorable awards have initiated an offensive to collect through the seizure of Spanish assets. Nextera obtained a preventive embargo on Aena’s usufruct right over Luton Airport in the UK, while Blasket secured an embargo on Eurocontrol’s transfers to Enaire in Belgium. The High Court of London also ordered the freeze of funds linked to the Cervantes Institute and the Spanish Vicente Cañada Blanch Institute in the UK. Blasket has threatened to initiate legal proceedings against Spain in England and Wales.
Spain has faced over 50 arbitration claims since 2011 for cuts in renewable energy subsidies, with 25 resolved in favor of investors (10 definitively) and 7 in favor of Spain. The State’s legal services have nullified three lost awards, and some claimants accepted the government’s offer in 2019 for higher returns until 2031. Of the initial €10.6 billion claims, the bill has been reduced to around €1.5 billion, with pending arbitration cases. Spain needs to continue litigating to avoid embargoes and payments to investors, as the issue of sovereign immunity is no longer a barrier in Australia and the US. Stay updated with Cinco Días through Facebook, Twitter, and LinkedIn for the latest economic and financial news. Subscribe to the Agenda de Cinco Días newsletter for exclusive economic information and relevant financial news.
