Spain cannot claim immunity as a state in the UK dispute over renewable energy incentives
The United Kingdom's top court ruled that Spain cannot claim immunity in order to prevent a multimillion euro award being made?over the reduction of renewable energy incentives. This limits states' rights to claim immunity when they are involved in disputes with investors.
The Supreme Court stated, however, states can claim immunity with respect to the execution of a arbitration award against state property.
Infrastructure Services Luxembourg, Energia Termosolar and other companies that had invested in renewable energies in Spain brought Spain before the Energy Charter Treaty arbitration more than 10 year ago, for withdrawing subsidies to?renewable? energy.
The International Centre for Settlement of Investment Disputes of the World Bank (ICSID), awarded Infrastructure Services Luxembourg and Energia Termosolar a total of 101 million Euros. This award was later registered for enforcement by London's High Court.
In a recent ruling, the Supreme Court stated that the claimants had also "applied to register their award in Australia and in the United States".
Spain attempted to reverse the registration of the award, which is now worth approximately 120 million euros plus interest, on the basis that it had sovereign immunity. This argument was rejected both by the High Court and the appeal court in 2024. The European country brought its 'case' to the UK Supreme Court which ruled on Wednesday against Spain. It said that Spain had agreed to be under the?jurisdiction? of English courts by signing the ICSID Convention.
Spain's appeal concerned one of over 20 unpaid arbitral awards against Spain, which according to an International Law Compliance Institute report from September 2025 are worth around 1.6 billion euro.
The Spanish?energy and economic ministries didn't immediately respond to requests for comments.
The Supreme Court heard the appeal in December along with one brought by Zimbabwe, in a separate case worth up to $125,000,000 concerning the alleged expropriation land. Zimbabwe's appeal has also been dismissed.
(source: Reuters)
