Courts Grapple with State Immunity as Spain Resists Enforcement of Arbitral Awards

7 September 2023
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Key Takeaways:
  • Investors with favourable arbitral awards against Spain arising out of its termination of renewables tariffs are embroiled in enforcement actions around the globe. Spain appears to be consistently resisting those actions on the basis that it is entitled to State immunity, stemming from its argument that it has not consented to arbitrate disputes with investors based in EU Member States.
  • Recent decisions from the English, Australian, and U.S. courts suggest that Spain’s immunity pleas are unlikely to succeed. International treaties, such as the ICSID Convention, contain provisions that the courts have held to amount to a waiver of the State’s immunity.
  • Most courts have accordingly, to date, held that the so-called intra-EU objection does not negate international law obligations to recognise and enforce arbitral awards binding on the State in which enforcement is sought.