A federal judge on Tuesday upheld a €59.6 million ($69.6 million) arbitral award against Spain over revoked incentives for renewable energy projects, dismissing Madrid’s objections and reinforcing the authority of international arbitration rulings.
U.S. District Judge Carl J. Nichols ruled that the International Centre for Settlement of Investment Disputes (ICSID) tribunal had already determined its jurisdiction and that the award deserved “full faith and credit.” Spain’s reliance on a European Court of Justice ruling—invalidating arbitration clauses in the Energy Charter Treaty for disputes within the EU—was not enough to derail enforcement.
A Win for Arbitration Stability
Judge Nichols emphasized that international comity favored enforcement, noting that ICSID awards are the result of “several years of arbitration proceedings in an international forum with its own legal personality.” Allowing Spain to re-litigate arguments already rejected internationally, he wrote, would undermine “the central precept of comity” and the predictability it fosters.
The court also rejected Spain’s argument under the foreign sovereign compulsion doctrine, which generally shields foreign entities from violating their own domestic laws. Nichols cited other rulings finding that such comity principles “do not favor” blocking enforcement of ICSID awards.
