Williams & Connolly’s Client the Kingdom of Spain Obtains Dismissal of Energy Charter Treaty Arbitration Enforcement Case

March 2023

On March 29, 2023, Judge Richard J. Leon of the U.S. District Court for the District of Columbia issued a decision in Blasket Renewable Investments LLC v. Kingdom of Spain, holding that Spain enjoys sovereign immunity and dismissing the plaintiff’s petition to confirm an arbitral award rendered pursuant to the Energy Charter Treaty.  The decision is significant for the Kingdom of Spain, which is facing claims from dozens of similarly-situated investors seeking billions of Euros in damages.  The case represents the first decision from a U.S. court to give effect to the seminal decisions of the Court of Justice of the European Union (“CJEU”) in Achmea and Komstroy.  There, the CJEU held that arbitration provisions contained in bilateral and multilateral investment treaties, like the Energy Charter Treaty, are incompatible with EU law and that Member States cannot make valid offers to arbitrate disputes with investors from other Member States.  Thus, as the District Court held, under Achmea and Komstroy there was no valid agreement between Spain and the Dutch investors in Blasket because “Spain lacked the legal capacity to extend an offer to arbitrate any dispute with the Companies” under EU law.  “Absent such an agreement, this Court cannot establish jurisdiction under any exception to the Foreign Sovereign Immunities Act.”

The team representing the Kingdom of Spain includes partner Jonathan Landy, associate Benjamin Graham, and co-counsel Csaba Rusznak of Sovereign Arbitration Advisors.

Read more about this outcome from Global Arbitration Review here.

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