Big US Decision Checks Spain's Solar Gambit

On February 15, the United States District Court for the District of Columbia dealt a stunning rebuke to the Kingdom of Spain in the ongoing saga surrounding Spain's refusal to pay its arbitration debts. In a well-reasoned, 30 page judgment, Judge Chutkan issued a broad injunction, enjoining the Kingdom of Spain from "seeking an interlocutory decree or any other relief in [the Netherlands] requiring [the award creditor] to suspend, hold in abeyance, or withdraw any proceedings before [the United States District Court], or that otherwise interferes with, obstructs, or delays resolution of [the award creditor's] Petition to Confirm the Award." The injunction went even further, enjoining the Kingdom of Spain "from pursuing any other foreign litigation that interferes with, obstructs, or delays resolution of [the award creditor's] Petition to Confirm the Award." This is what is called an anti-anti-suit injunction, as Spain had previously sought injunctive-style relief in various EU jurisdictions (i.e. anti suit injunctions) seeking to prevent award holders from prosecuting their enforcement action against it.

The judgment also denied the Kingdom of Spain's Motion to Dismiss [the award creditor's] Petition to Confirm its award.

The case, Nextera Energy Global Holdings BV et al. v The Kingdom of Spain, is one of the highest profile cases in a series of ECT arbitrations that have overwhelmingly held Spain to have breached its obligations to renewable energy investors under the Energy Charter Treaty. Instead of paying what it owes under those awards, Spain has taken a series of questionable steps to avoid payment, most recently seeking to enjoin award creditors from taking action to enforce their awards.

The February 15 decision is a welcome affirmation of the importance of a rules based international order and the primacy of international law. Spain should read the runes, pay what it owes, and re-establish the necessary conditions to attract renewable investors that are so badly needed at this time.