UK Supreme Court Denies Spain's Immunity in Renewable Energy Dispute

The UK's Supreme Court ruled against Spain, denying its claim for sovereign immunity and allowing a multimillion-euro arbitration award to be registered. This decision involves disputes over renewable energy incentives and reflects limits on sovereign immunity amidst investment conflicts.

The United Kingdom's Supreme Court has made a landmark decision against Spain, stating that the country cannot claim immunity to prevent a multimillion-euro arbitration award related to cuts in renewable energy incentives from being registered. This ruling marks a significant limitation on states' ability to claim immunity in investment disputes.

Infrastructure Services Luxembourg and Energia Termosolar, investors in Spain's renewable energy sector, initiated arbitration under the Energy Charter Treaty after Spain withdrew subsidies. The International Centre for Settlement of Investment Disputes awarded them 101 million euros, with the amount increasing to 120 million euros with interest.

Despite Spain's appeal to overturn the registration based on sovereign immunity, both the High Court and Supreme Court rejected this claim, stating that Spain had consented to English jurisdiction under the ICSID Convention. This case forms part of over 20 arbitration awards against Spain, cumulatively worth about 1.6 billion euros.

(With inputs from agencies.)