SPAIN Law and Practice Contributed by: Pablo Silván and Fernando Manzanedo, Ramón y Cajal Abogados, S.L.P.
Spain supports the EU’s push for a Multilateral Invest- ment Court, which would standardise global inves- tor–state dispute resolution. Spain’s withdrawal from the ECT signals a pivot toward EU-centric investment governance, emphasising sustainability and judicial reform. Spain will likely ratify upcoming EU agree- ments (eg, with Mercosur and Australia), expanding its trade and investment footprint. 2.4 Interpretive Aids Spain does not publish systematic commentaries on treaty provisions, official guidance documents for investors or arbitrators, or consolidated interpretive statements across its BIT network. This means inter- pretation often relies on tribunal jurisprudence, aca- demic analysis, and comparative treaty review. 2.5 Investment Laws Spain has a national investment law framework, though it is not a single codified statute and it is composed of several legal instruments that regulate foreign investment, the most recent and central being Royal Decree 571/2023, of 4 July, on Foreign Invest- ment. Spain aligns its national investment law with Regulation (EU) 2019/452, which sets a framework for screening foreign direct investment across the EU. Foreign investment is generally liberalised in Spain, meaning investors can operate freely unless specific restrictions apply. Royal Decree 571/2023 regulates the obligations to declare foreign investments in Spain for statistical pur- poses, which must be made after the closure of the transactions subject to declaration, and requires prior administrative authorisation for the closure – not the signing – of certain investment transactions in Spain, with both a general mechanism for investments in sensitive sectors such as critical infrastructure (ener- gy, transport, water, health and communications) or media and technology affecting public order or secu- rity, and one specifically relating to activities directly related to national defence. Disputes over authori- sation or compliance are handled through Spain’s administrative courts. Spanish law does not provide for ISDS mechanisms so that investors must rely on domestic legal remedies
unless protected by a treaty. Domestic law guaran- tees: • protection against expropriation; • principle of legality and publicity of norms; • non-retroactivity of punitive provisions that are unfavourable or restrictive of individual rights; • legal certainty; and • prohibition of arbitrariness by public authorities. Treaty protections often provide stronger guarantees. If foreign investors face discriminatory treatment or indirect expropriation, they may invoke treaty protec- tions even if domestic remedies are limited. 2.6 Arbitration Clauses in Investor–State Contracts Investor–state contracts are not typical or widespread in Spain in the way they might be in countries with less-developed legal systems or where foreign invest- ment is heavily negotiated on a case-by-case basis. Spain generally relies on transparent legal frameworks, EU regulations, and bilateral/multilateral treaties to govern foreign investment – not bespoke contracts between the state and individual investors. Works or service concession contracts that can chan- nel foreign investment are usually administrative con- tracts subject to public law and disputes must be resolved in the contentious-administrative courts. Some contracts entered into by public entities oper- ating under private law or by private entities belong- ing to the public sector may allow arbitration (this depends on the nature of the contract and the con- tracting authority). Arbitration submission clauses may specify commercial arbitration forums (eg, ICC) rather than investment arbitration (eg, ICSID) and may be subject to Spanish administrative law, which can limit the scope of arbitration if the contract involves sov- ereign functions.
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