SPAIN Trends and Developments Contributed by: Pablo Silván and Fernando Manzanedo, Ramón y Cajal Abogados, S.L.P.
settlement (ISDS) mechanisms. The Spanish govern- ment has argued that domestic courts offer sufficient protection (although, investors who took legal action in national courts due to reforms to the remunera- tion regime for renewable energy generation between 2010 and 2014 saw their claims dismissed in their entirety in virtually all cases) and that arbitration has been misused to challenge legitimate policy shifts. Nonetheless, the exit does not affect pending cases or awards already rendered. Investors continue to pur- sue enforcement in jurisdictions outside Spain, often targeting commercial assets held abroad. Compliance and enforcement challenges Spain has faced criticism for its approach to awards compliance. A 2024 report cited by Kluwer Arbitra- tion Blog ranked Spain as the least compliant state in terms of timely payment of arbitral awards. Domestically, Spanish courts have taken a cautious stance. While they recognise ICSID awards as equiv- alent to final judgments, they remain protective of assets deemed essential to public service or diplo- matic functions. This has led to enforcement actions in multiple juris- dictions, including the UK, US, and Australia. Claim- ants have sought to attach Spanish assets abroad, ranging from bank accounts to real estate holdings. Courts have generally upheld enforcement efforts when assets are commercial in nature. Spain has consistently invoked sovereign immunity to shield state assets from enforcement. While this defence has found traction in domestic proceedings, foreign courts have been less receptive. The distinction between jurisdictional immunity and immunity from execution is critical. Consent to arbitra- tion typically waives the former, but the latter remains a contentious issue, especially when assets are held by state-owned enterprises or used for commercial purposes. In several high-profile cases, claimants have success- fully pierced the corporate veil, demonstrating that certain entities function as alter egos of the state. This
has enabled enforcement against assets that would otherwise be protected. Courts in Australia, the United States, and the United Kingdom have increasingly rejected Spain’s claims of sovereign immunity. The Federal Court of Aus- tralia (2025) ordered Spain to pay EUR469 million to RREEF, 9REN, Watkins, and NextEra. The court dis- missed Spain’s immunity defence and criticised its legal strategy as obstructive. Other courts, such as the High Court of England and Wales, have targeted commercial assets like Spain’s stake in Luton Airport (via Aena, the airport operator in which private invest- ment holds a 49% stake in the share capital) and air navigation revenues (via Enaire). These entities, while state-owned, operate commercially and are vulner- able to attachment. Spain’s policy of opposing the enforcement of awards rendered in investor–state arbitration proceedings under the ECT must be analysed in light of the Euro- pean Commission’s view that the incentive schemes approved by Spain at the time and subsequently amended constitute illegal state aid. With regard to this criterion, the recent European Commission Decision C(2025) 1781 final of 24 March 2025 states that the Antin award ( Antin Infrastructure Services v Spain, ICSID Case No ARB/13/31 ) and in any event its implementation, entails state aid within the mean- ing of Article 107 (1) of the Treaty on the Functioning of the European Union which is incompatible with the internal market because it is based on an interpreta- tion of the ECT in breach of the Union law. Therefore, Spain has ordered: • not to pay any of the aid and recover any pay- ment of it, including from any third party that has acquired or may acquire the award, or any right thereunder; and • to take all appropriate measures to prevent Antin and any third party that has acquired or may acquire the award, or any right thereunder, from seeking recognition, enforcement or execution of the award, whether in member states of the EU or in third countries.
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