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Inmunidad estatal, Derecho de la Unión Europea y ejecución de laudos CIADI sobre energías renovables contra España  (Sentencia Federal Court of Australia 29 de agosto de 2025: Blasket Renewable Investments v Kingdom of Spain [2025] FCA 1028)

 

La Sentencia del Tribunal Federal de Australia [2025] FCA 1028 – 29 de agosto de 2025 se enmarca en una serie de procedimientos iniciados en Australia para el reconocimiento y ejecución de laudos arbitrales dictados bajo el Convenio del CIADI (1965) en disputas entre inversores extranjeros y España, relativas a las reformas regulatorias sobre energías renovables adoptadas por este país entre 2010 y 2014. Los demandantes —inversores en proyectos solares y eólicos en España o cesionarios de sus derechos— solicitaron que los laudos se reconocieran en Australia conforme al art. 35(4) de la International Arbitration Act 1974 (IAA). España se opuso, alegando inmunidad soberana, invalidez de los laudos intra-UE a la luz del Derecho de la Unión Europea (casos Achmea y Komstroy), conflictos con normas de ayudas de Estado, así como objeciones a la cesión de los derechos de crédito a la sociedad Blasket Renewable Investments LLC.

Los antecedentes del litigio se remontan a una serie de procedimientos arbitrales iniciados por distintos inversores extranjeros frente a España en el marco del Convenio CIADI a raíz de las reformas regulatorias en el sector de las energías renovables. En el asunto RREEF v. Spain (ARB/13/30), fondos de inversión de Jersey y Luxemburgo obtuvieron en 2019 un laudo por 59,6 millones de euros más intereses debido a la reducción de la rentabilidad de parques eólicos y solares. En 9REN v. Spain (ARB/15/15), una sociedad luxemburguesa con inversiones fotovoltaicas recibió en 2019 un laudo que reconocía 41,7 millones de euros más intereses y costas. El caso Watkins v. Spain (ARB/15/44), relativo también a proyectos solares, concluyó con un laudo favorable a los inversores cuyos derechos fueron posteriormente cedidos a la sociedad Blasket Renewable Investments LLC. Finalmente, en NextEra v. Spain (ARB/14/11), la multinacional neerlandesa-estadounidense obtuvo un laudo en 2019 que condenó a España al pago de 290,6 millones de euros más intereses. Todos los intentos de anulación promovidos por España ante comités ad hoc del CIADI fracasaron entre 2019 y 2022, y al momento de las demandas en Australia no existía suspensión vigente.

Sobre esta base, el juez Stewart organizó el debate en torno a cuestiones jurídicas esenciales: la eventual inmunidad soberana de España y el alcance de la renuncia derivada de su adhesión al CIADI; el carácter cerrado del mecanismo de control de laudos previsto en el Convenio de Washington; la alegada nulidad de los laudos intraeuropeos conforme a la jurisprudencia Achmea y Komstroy del TJUE y a las normas sobre ayudas de Estado; la validez de las cesiones de créditos realizadas en favor de Blasket en los casos RREEF y Watkins; y la solicitud de intervención de la Comisión Europea en apoyo de las posiciones del Estado demandado.

España articuló sus defensas sobre cuatro ejes principales. En materia de inmunidad, sostuvo que el precedente de la High Court australiana de 2023 (Kingdom of Spain v. Infrastructure Services Luxembourg Sàrl) no era aplicable, pues en el presente supuesto los laudos carecían de carácter vinculante al haberse modificado inter se entre Estados miembros de la UE el art. 53 del CIADI. En relación con el derecho de la Unión Europea, alegó que los tratados y la jurisprudencia del TJUE prohíben someter disputas intraeuropeas a arbitraje internacional, sustituyendo dicho cauce por el judicial ordinario. En cuanto a las cesiones, cuestionó la eficacia de las realizadas a Blasket, invocando que el art. 35(4) de la International Arbitration Act no permite alterar la identidad del acreedor reconocido en un laudo. Finalmente, argumentó que el cumplimiento de las condenas económicas podría configurarse como ayudas de Estado contrarias a la normativa europea, lo que impediría su ejecución internacional.

La decisión de la Federal Court of Australia en Blasket Renewable Investments v. Spain ofrece una exposición sistemática de las cuestiones centrales que rodean la ejecución de laudos CIADI frente a un Estado miembro de la Unión Europea. El juez Stewart sostuvo que la inmunidad soberana no podía ser invocada por España, pues la adhesión al Convenio de Washington comporta una renuncia expresa y general a oponerse a la ejecución de laudos. Reafirmó asimismo que el CIADI constituye un mecanismo cerrado de control: las defensas de fondo ya habían sido examinadas en sede arbitral y en comités de anulación, y los jueces nacionales carecen de facultades para revisarlas, dado que los arts. 53 y 54 del Convenio consagran el carácter vinculante y ejecutable de los laudos. El tribunal también rechazó que la jurisprudencia Achmea y Komstroy pudiera afectar a la obligación de Australia de ejecutar los laudos, recordando que el derecho de la Unión Europea no forma parte de su ordenamiento salvo incorporación expresa. Del mismo modo, reconoció la validez de las cesiones de créditos en favor de Blasket, al no existir prohibición en el CIADI ni en el derecho internacional de transferir derechos derivados de laudos arbitrales. Finalmente, negó la intervención de la Comisión Europea, al carecer de un interés jurídico directo y por el riesgo de introducir complejidad procesal innecesaria. La sentencia consolida así la ejecutabilidad de los laudos CIADI en jurisdicciones extracomunitarias y reafirma la autonomía del sistema frente a las tensiones suscitadas en el marco europeo.

El tribunal concluyó:

  • España renunció a la inmunidad soberana en todos los procedimientos.
  • Los laudos CIADI son vinculantes y ejecutables en Australia.
  • Las cesiones a Blasket son válidas y le otorgan legitimación activa.
  • Las objeciones basadas en Derecho de la UE y ayudas de Estado no son relevantes para la jurisdicción australiana.
  • Las solicitudes de la Comisión Europea para intervenir deben ser desestimadas.

Los laudos deben reconocerse y ejecutarse en Australia como si fueran sentencias de la Federal Court, conforme al art. 35(4) IAA.

De acuerdo con la decisión:

“[…]

  1. Spain relies on s 9 of the Foreign States Immunities Act 1985 (Cth) to assert that it is immune from the Court’s jurisdiction in each of the proceedings. Its immunity case relies on arguments that are also relevant to the merits of the applications.
  2. Spain’s assertion of foreign State immunity must be understood against the backdrop of the unanimous judgment of the High Court of Australia in Kingdom of Spain v Infrastructure Services Luxembourg Sàrl [2023] HCA 11; 275 CLR 292 (Spain HCA) which held (at [8]) that Spain’s agreement to Arts 53-55 of the ICSID Convention amounted to a waiver of foreign State immunity from the jurisdiction of the courts of Australia in the proceeding to recognise and enforce the ICSID award in that case, but it did not amount to a waiver of immunity in respect of any processes to execute any resultant judgment. Spain formally makes the submission before me that the High Court was wrong in reaching that conclusion. It does so in order to preserve its ability to apply to the High Court to reopen and reconsider its conclusion with regard to the effect of agreeing to the ICSID Convention.
  3. Spain also advances arguments that were not advanced before or considered by the High Court and seeks to distinguish the present cases from the case decided by the High Court, including by making further arguments concerning the power of the Court to grant the relief sought that do not rely on foreign State immunity. In those circumstances, the outcome before me, regrettably, is not simply governed by the High Court decision.

6 The European Commission seeks leave to intervene in each proceeding pursuant to r 9.12 of the Federal Court Rules 2011 (Cth) (FCR). The applicants resist that intervention, although Spain supports it.

[…]

  1. Since about 1997, Spain has adopted various regulatory measures intended to encourage the development of renewable energy in Spain. In 2007 and 2008, Spain promulgated a scheme known as “regimen economico primado” or premium economic scheme that provided premium feed-in tariffs for certain renewable energy producers. From about 2010 to 2014, the premium tariffs were altered by Spain. The applicant investors (including the assignors to Blasket) in these proceedings asserted that the alteration amounted to a breach of Art 10 of The Energy Charter Treaty (1994) (ECT), which requires Spain to accord investments of investors of other States parties fair and equitable treatment.
  2. The applicant investors and assignors submitted the disputes between themselves and Spain to ICSID, as contemplated by Art 26 ECT, and ICSID established arbitral tribunals to determine each of the disputes. Spain participated in the tribunal proceedings, although it objected (and continues to object) to the jurisdiction of the ICSID tribunals. Ultimately the tribunals concluded that they had jurisdiction and rendered awards in the investors’ favour. The investors or, in some cases, their (purported) assignees, now apply to this Court to enforce the awards.
  3. The ultimate question for the Court is whether the ICSID awards must be, or ought to be, enforced in Australia and whether judgment should be entered in favour of each of the applicants against Spain thereby enforcing the pecuniary obligations imposed by the awards.
  4. Notwithstanding Australia’s apparent public international law obligation under Art 54 ICSID Convention as given force in domestic law under s 32 IAA, and the conclusion of the High Court in Spain HCA that by signing the ICSID Convention Spain waived its right to foreign State immunity in enforcement proceedings under the Convention, Spain asserts foreign State immunity and argues that the adjudicative jurisdiction of the Court is not engaged.
  5. It is important to identify some key particulars of that submission. The argument is made at two levels, in addition to the formal submission of the incorrectness of Spain HCA mentioned at [4] above.
  6. First, Spain says that its accession to the ICSID Convention did not amount to a waiver of foreign State immunity under the Immunities Act, where Spain is not bound to comply with such awards as a matter of public international law. This raises the question whether what was decided in Spain HCA was limited to situations in which the binding effect of an award is not in dispute or if the holding is “at large” such that I am compelled to reject this submission.
  7. Secondly, if it is held that Spain waived its immunity, Spain again submits that as a matter of public international law it is not bound to comply with the ICSID awards in the current proceedings. In the main, Spain says that the consequence of this is that there is no binding “award” which is capable of being enforced under the terms of s 35(4) IAA, and therefore no power of the Court to do so. While strictly speaking this is not an immunity argument, as Spain repeatedly acknowledges, its merits dovetail with the argument based on what is said to be the consequence of public international law that is relied on to refute the waiver of immunity.
  8. That is, Spain makes a number of contentions which are said to lead to the result that each of the applications for recognition and enforcement should be dismissed, either because the adjudicative jurisdiction of this Court is not engaged by reason of Spain having not waived its foreign State immunity in these proceedings, or because (for the same reasons) this Court does not have the power to enforce the awards in issue in these proceedings.
  9. It is, of course, common ground that if Spain’s assertion of foreign State immunity is good, then the awards cannot be recognised or enforced.
  10. As will be seen, an essential aspect of Spain’s case turns on Spain and the States of which the investors are nationals being, at material times, Member States of the European Union. The relevant Member States are the Grand Duchy of Luxembourg, the Kingdom of the Netherlands and the United Kingdom of Great Britain and Northern Ireland (before the UK left the EU on 31 January 2020). In respect of the UK, the relevant investor is a national of the Bailiwick of Jersey, a British Crown Dependency. There is an issue whether that status is sufficient to treat Jersey as an EU Member State for relevant purposes.

[…]

Immunity as a preliminary question

  1. Although these reasons for judgment determine issues of both immunity and power as argued by the parties, a procedural point arises as to whether it is appropriate to do so. A point initially arose as to whether by arguing both immunity and power Spain waived its immunity.
  2. Spain accepts that in the “usual case”, questions of foreign State immunity are determined as a preliminary matter: Zhang v Zemin [2010] NSWCA 255; 79 NSWLR 513 at [33] per Spigelman CJ, Allsop P and McClellan CJ at CL agreeing; JH Rayner (Mincing Lane) Ltd v Department of Trade and Industry [1989] Ch 72 at 194G per Kerr LJ. However, it submits that the usual approach should not be followed in the present case and that Spain should be permitted to advance its case with respect to the Court lacking power to enforce the arbitral awards simultaneously with its immunity case without that constituting a waiver of immunity. That is because the arguments that it advances in support of its assertion of immunity from adjudicative jurisdiction and those that it wishes to advance in support of its case that the Court has no power to make the orders sought are not severable and therefore not conveniently determined separately.
  3. Spain submits that it would be procedurally inefficient for the Court to determine the point underlying both the questions of jurisdiction and power, namely that the Court has no power to enforce awards that the award debtor is not bound to comply with as a matter of public international law, separately at the jurisdiction and then potentially later at the substantive stages of the process. The more efficient course, it submits, is to determine both the question of jurisdiction and the question of power at the same time following a single hearing.
  4. The applicants initially resisted that course, saying that if a State takes a step as a party claiming immunity other than for the purposes of asserting that immunity it loses its immunity. However, I understood the applicants ultimately to accept that because Spain’s contentions as to power, including its constitutional argument, are all directed to the maintenance of its immunity, it would not be irregular for the immunity and substantive points to be run together and that in adopting that approach Spain would not be regarded as having waived immunity (T336:3-4).

 

ICSID as a closed system

  1. The main theme underlining each of Spain’s arguments is the contention that the awards in these proceedings are invalid or not binding, for various reasons, with various consequences. As such, it is convenient to commence with the responsive contention by the applicants that there is no occasion to examine the validity of the awards with reference to Spain’s contentions, including about a conflict between its obligations under the EU treaties and its obligations under the ECT and the ICSID Convention, because those contentions were made by Spain before the ICSID arbitral panels where they were rejected. The result, submit the applicants, is that the awards that emerged from the ICSID system are presumptively valid and binding on Spain and must be enforced by Australia.
  2. It is common ground that there were, in fact, arbitral proceedings before ICSID tribunals or ad hoc committees (dealing with annulment applications) that delivered the awards that the applicants seek to enforce, and that those awards have been duly certified by the Secretary-General under Art 49(1). Copies certified by the Secretary-General have been tendered to the Court under Art 54(2).
  3. It is also common ground that none of the awards is subject to any stay or other remedy under Arts 50-52 ICSID Convention, such remedies having been exhausted. The authenticity of the awards is not challenged by Spain, and Spain makes no contention that the awards or the certification of them was obtained by fraud or that the awards and certification of them are anything other than bona fide. Spain’s contention is, in effect, that the tribunals and the ad hoc committees have made errors of law in accepting the validity of the references to them under Art 26 ECT.
  4. Article 53(1) ICSID Convention provides that the “award” shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in the Convention. The “award” that is referred to is necessarily the “award” referred to in Art 48. It is the decision of the tribunal decided by a majority of the votes of its members (Art 48(1)), which is in writing and signed (Art 48(2)), which deals with every question submitted to the tribunal and states reasons (Art 48(3)) and which is certified and dispatched to the parties by the Secretary-General (Art 49(1)). The Convention provides for the resolution of disputes as to the interpretation of an award (Art 50), for a party to apply for the revision of an award (Art 51) and for a party to apply to annul an award (Art 52). Article 53(2) extends the meaning of “award” in Section 6 of Ch IV to include “any decision interpreting, revising or annulling such award pursuant to Articles 50, 51 or 52”.
  5. Thus, the awards against Spain that are the subject of the proceedings are “binding” on Spain under Art 53(1) both as a “party” to the award and a Contracting State to the ICSID Convention: Spain HCA at [69] and [71]. Moreover, each Contracting State, including Australia, “shall recognise … and enforce the pecuniary obligations imposed by” the awards (Art 54(1)).

165 The result is, as I explained in Spain FCA:

[79] Sections 32-35 of the Arbitration Act give effect to what is referred to as the “closed” or “self-contained” system of remedies that parties can seek as set out in Arts 26, 27, 49(2) and 50-53 of the Investment Convention. These provisions cover the entitlement of parties subject to a Centre award to apply for the interpretation, revision or annulment of the award. Unlike under the 1958 New York Convention and the UNCITRAL Model Law, which are also given effect to by the Arbitration Act, the Investment Convention leaves no grounds for refusal of recognition and enforcement of a Centre award by national courts – not even on public policy grounds.

[80] As explained in the Explanatory Memorandum to the ICSID Implementation Bill 1990 (Cth) (at 7), a Centre award is not subject to any appeal or to any remedy apart from those provided for in the Investment Convention. This ensures that the objectives of the Investment Convention will not be able to be frustrated through ancillary litigation. Arbitration under the Investment Convention “is to the exclusion of any other remedy”.

  1. That the ICSID Convention contains its own internal self-contained system of remedies was confirmed on appeal in Kingdom of Spain v Infrastructure Services Luxembourg Sàrl [2021] FCAFC 3; 284 FCR 319 at [114] per Perram J, Allsop CJ and Moshinsky J agreeing (Spain FCAFC):

No doubt the issues which the Commission wishes to ventilate are relevant to the jurisdiction of the arbitral tribunal but its jurisdiction (or perhaps more precisely the absence of its jurisdiction) is not a matter which the Court can consider under s 35(4) of the International Arbitration Act. The sole issue for the competent court under Art 54(2) is whether the party seeking the recognition of the award has presented a certified copy of it. This Court has also had to consider the additional legal question of whether a plea of foreign state immunity may be maintained in such a proceeding. Neither of those issues is affected by the meaning of Art 26 of the ECT or whether Art 26 is lawful under EU law (Emphasis added.)

    1. That approach is further confirmed in the UK by Micula v Romania [2020] UKSC 5; [2020] 1 WLR 1033 at [68]-[69] per Lord Lloyd-Jones and Lord Sales JJSC, Lord Reed PSC, Lord Hodge DPSC and Lady Hale agreeing (Micula UKSC):

[68] … It is a notable feature of the scheme of the ICSID Convention that once the authenticity of an award is established, a domestic court before which recognition is sought may not re-examine the award on its merits. Similarly, a domestic court may not refuse to enforce an authenticated ICSID award on grounds of national or international public policy. In this respect, the ICSID Convention differs significantly from the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958. The position is stated in this way by Professor Schreuer in his commentary on article 54(1):

“The system of review under the Convention is self-contained and does not permit any external review. This principle also extends to the stage of recognition and enforcement of ICSID awards. A domestic court or authority before which recognition and enforcement is sought is restricted to ascertaining the award’s authenticity. It may not re-examine the ICSID tribunal’s jurisdiction. It may not re-examine the award on the merits. Nor may it examine the fairness and propriety of the proceedings before the ICSID tribunal. This is in contrast to non-ICSID awards, including Additional Facility awards, which may be reviewed under domestic law and applicable treaties. In particular, the New York Convention gives a detailed list of grounds on which recognition and enforcement may be refused …”

(…)

[69] Contracting states may not refuse recognition or enforcement of an award on grounds covered by the challenge provisions in the Convention itself (articles 50-52). Nor may they do so on grounds based on any general doctrine of ordre public, since in the drafting process the decision was taken not to follow the model of the New York Convention.

  1. See also to similar effect: in the UK, Infrastructure Services Luxembourg SARL v Kingdom of Spain [2023] EWHC 1226 (Comm); [2023] 2 Lloyd’s Rep 299 at [79] per Fraser J (Spain EWHC) (see also Infrastructure Services Luxembourg SARL v Kingdom of Spain [2024] EWCA Civ 1257; [2025] 2 WLR 621 at [80]-[82] per Phillips LJ, Sir Julian Flaux C and Newey LJ agreeing, dismissing the appeal) and in the US, Mobil Cerro Negro Ltd v Bolivarian Republic of Venezuela 863 F3d 96 (2d Cir 2017) at 102 per Carney J for the Court; Valores Mundiales SL v. Bolivarian Republic of Venezuela 87 F4th 510 (DC Cir 2023) at 515 per Edwards J for the Court; Micula v Romania 101 F4th 47 (DC Cir 2024) at 53 [6] per Rogers J for the Court.
  2. Those authorities are powerful in their own right, but are given further significance by the principle that a treaty should have the same meaning for all of the States which are party to it: Spain HCA at [38] citing Povey v Qantas Airways Ltd [2005] HCA 33; 223 CLR 189 at [25] and [32]; see more recently Carmichael Rail Network Pty Ltd v BBC Chartering Carriers GmbH & Co KG [2024] HCA 4; 417 ALR 173 at [29] and Evans v Air Canada [2025] HCA 22; 423 ALR 155 at [6].

170 There is no dispute between the parties that the general principles of treaty interpretation apply to the ICSID Convention, as captured by Arts 31 and 32 VCLT:

 Article 31. General rule of interpretation (…)

Article 32. Supplementary means of interpretation  (…)

  1. Looking at the ordinary meaning of the terms in light of their object and purpose, I therefore accept the following submissions by the applicants. First, there is nothing in the text of the ICSID Convention to suggest that for an ICSID award to be “binding” and subject to the obligations imposed on Contracting States by Arts 53 and 54, the tribunal’s determination of its jurisdiction must be proved to be correct. An ICSID award issued by a tribunal is binding and enforceable (subject to any stay on enforcement) unless and until it is annulled under Art 52. See “Article 53 – Binding Force” in Schill S W, Malintoppi L, Reinisch A, Schreuer C H, Sinclair A (eds), Schreuer’s Commentary on the ICSID Convention (3rd ed, Cambridge University Press, 2022) Vol II at 1452-1454 (Schreuer 3rd ed).
  2. Secondly, there is nothing in the text of the ICSID Convention that signifies any circumstances in which an “award” should somehow be treated as if it were not an “award”. Article 49(2) expressly contemplates that an award issued under Art 48 may contain “clerical, arithmetical or similar” errors leading to rectification of the award, upon which such decision becomes “part of the award”. That article also provides that the tribunal may “decide any question which it had omitted to decide”, such decision too becoming “part of the award”. There is no textual indication that the obligations in Arts 53 and 54 are conditional on the award rectification process being completed, or an omitted question being decided. The same is true in respect of interpretation, revision or annulment under Arts 50-52.
  3. The self-contained system of ICSID arbitration is reinforced by s 33 IAA which provides that an ICSID award is binding and is not subject to any appeal or to any other remedy, otherwise than in accordance with the ICSID Convention (per Art 53), and s 34 IAA which provides that the ICSID Convention prevails over other laws relating to the recognition and enforcement of arbitral awards. It expressly excludes Pts II and III of the IAA including the defences available under Art V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention) (ss 8(5)-(7A)) and Art 36 of the UNCITRAL Model Law on International Commercial Arbitration (given the force of law by s 16(1)).
  4. As such, I accept the applicants’ submission that it is not strictly necessary to further consider Spain’s contentions that the award is not binding within the four corners of the ICSID Convention due to apparent conflicts with EU law given that there is no dispute that they are genuine, certified and authenticated awards. Also, all rights of re-examination of the merits of the awards have been exhausted within the self-contained system of ICSID arbitration as affirmed by appellate courts around the world.
  5. Contrary to what has been argued by Spain then, the situation before the Court, insofar as the question of waiver is concerned, is not any different to that before the High Court in Spain HCA – the awards are binding under the ICSID Convention and by signing that Convention Spain waived its immunity in proceedings to enforce the awards. Spain’s various contentions must nevertheless be considered, and determinations made on them, against the possibility that my conclusions with respect to the ICSID system being a closed system and that that answers Spain’s case are wrong. Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028 43

Spain’s non-waiver of immunity contention

Spain’s submissions

  1. Spain advances a formal case asserting that Spain HCA was wrongly decided in holding that its accession to the ICSID Convention constituted conduct submitting to the jurisdiction of Australian courts for the purposes of the recognition and enforcement of ICSID awards. As Spain accepts, I am bound to reject that submission in view of the rules of precedent to which a first instance court must adhere.
  2. Spain also advances the submission that by acceding to the ICSID Convention it has not submitted to the jurisdiction of Australian courts for the purposes of the recognition and enforcement of ICSID awards in circumstances where Spain is not bound to comply with such awards as a matter of public international law. Spain also says that Spain HCA does not govern a situation such as the present where the question whether the relevant award is binding on the State is a matter in dispute.
  3. The contention that a State’s waiver of immunity in enforcement proceedings is limited to proceedings to enforce awards that are valid and binding was not advanced by Spain in the proceeding before the High Court in Spain HCA. The report of the argument notes (at 275 CLR 298) that Spain “does not say the European Court of Justice’s finding that there is no jurisdiction in the ICSID tribunal means that the award cannot be recognised” in Australia. Instead, Spain submitted that the Court should “take cognisance” of Komstroy and “the reasoning” in the sense of “almost just taking judicial notice of the outcome … as being an additional indicia of lack of clarity in relation to what is said to be the waiver of immunity”. It was explained by Spain’s counsel in the High Court that Komstroy cast doubt on the “proposition that by entering into the ECT Spain has agreed with all other domestic courts of States that are party to the ICSID Convention that decisions, whatever their basis, will not be the subject of an immunity claim for the purposes of recognition and enforcement”. As can be seen, the argument was not directed to the question of the Court’s power on the basis that the awards are not binding, rather being directed to immunity. That has left a gap for Spain to argue in the proceedings before me that the awards are not binding, that the Court therefore has no power to enforce them and that Spain has not waived its immunity in such proceedings.
  4. However, Spain acknowledges that the point made in Spain HCA “is not expressly stated to be limited to a case in which it is common ground that a binding ICSID arbitral award relevantly exists”, and that the decision could apply more broadly. That is, the High Court may be understood to have held that there is no relevant distinction between a case where an award is binding and a case where the binding status of an award is in contest (which is essentially the applicants’ argument). If this is so and there is adjudicative jurisdiction, whether an award is enforced would turn on the Court’s power to do so if the existence of a binding award is not established. Spain says that the appropriate course for this Court would be to assume the holding in Spain HCA operates “at large” and to reject the assertion of immunity on this ground, leaving it to the High Court to clarify the scope of its earlier reasoning.

Consideration

  1. As mentioned, in light of the evidently self-contained nature of the ICSID dispute resolution system and repeated judicial emphasis of that fact, the actual merits of Spain’s contention that the awards are invalid, or not “binding”, is not able to be sustained. The consequence is that the corollary submission that Spain has not waived immunity for the enforcement of such non-binding awards, and that the Court therefore has no jurisdiction in a proceeding to enforce them, does not strictly arise for determination. On the premise that the awards are binding on Spain, the proceedings are not outside the territory of what the parties accept was decided by the High Court. It follows that Spain’s contention of non-waiver of immunity to jurisdiction must be rejected.
  2. I will nevertheless consider that alternative contention, that the proceedings are not governed by the holding in Spain HCA, for completeness.
  3. The crux of how Spain seeks to distinguish the ruling in Spain HCA is the fact that there was no dispute in Spain HCA that the award before the Court was binding, whereas that is squarely in issue in the present proceedings (notwithstanding what I have concluded above). Hence, Spain’s contention could have particular significance for the question of waiver under s 10 Immunities Act. That is because, as explained above in relation to Spain HCA, waiver of immunity under s 10 requires a “high level of clarity and necessity”; it must be unmistakable. Spain’s contention that it did not waive immunity by entering into the ICSID Convention because of the principles of EU law expressed in Achmea and Komstroy was rejected by the High Court “because the relevant agreement arose from Spain’s entry into the ICSID Convention, which included its agreement as to the consequences of an award rendered pursuant to the ICSID Convention” (at [79]).
  4. The award creditors in Spain HCA were companies incorporated in Luxembourg and the Netherlands, both EU Member States. Hence, Achmea and Komstroy could have had an effect on the presumed-binding nature of awards rendered under the ICSID Convention in the same way that it is contended that they do in the present proceedings. As I have explained, Spain relied on the CJEU decisions to make that point to the High Court, albeit obliquely. The Court expressly rejected the argument (at [79]). I therefore consider that what was held in Spain HCA to be “at large”, and not limited to situations where the binding force of the awards is common ground. Therefore, I am bound to reject Spain’s contention that Spain HCA does not govern the present proceedings because it is disputed that the relevant awards are binding on Spain.
  5. It is nevertheless necessary to go on and consider the various bases on which Spain contends that the awards are not binding so that it can, at higher levels of the court hierarchy, advance the case that Spain HCA does not govern such a case.

[…]

The constitutional point

Introduction

  1. In the NextEra proceeding, Spain raises a constitutional issue as outlined above (at [78(4)] and [79]).
  2. The starting point is Spain’s submission, in essence, that it did not validly agree to the arbitrations because Art 26 ECT under which it purportedly agreed does not apply to intra-EU disputes. Put differently, it submits that Art 26 was not an offer by it to arbitrate under the ICSID system that was capable of acceptance and thereby create a binding agreement to arbitrate. It then advances the following propositions:

(1) The tribunal’s power to quell the dispute between the parties depends on their agreement, usually embodied in a contract; the award is not binding of its own force: TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; 251 CLR 533 at [29] per French CJ and Gageler J quoting Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645 at [31].

(2) A process, as contended for by the applicants, that disentitles the Court when called upon to exercise judicial power to inquire into whether there was an agreement between the parties such as to give the tribunal the requisite power, has the effect of vesting the judicial power of the Commonwealth in the tribunals and the annulment committees which is contrary to Ch III of the Constitution: Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; 183 CLR 245 at 269-270.

(3) The conclusiveness of an arbitral award does not offend those principles provided that there is an agreement between the parties for their dispute to be determined by arbitration and there is an ability to challenge the tribunal’s conclusion that there is such an agreement in a Ch III court: TCL at [17] per French CJ and Gageler J.

(4) In order to save Pt IV of the IAA from such constitutional invalidity, it should be interpreted so as to allow the Court under s 35(4), in particular with reference to the use of “may”, to inquire into whether there was agreement between the parties to submit their dispute to arbitration: s 15A of the Acts Interpretation Act 1901 (Cth).

 Consideration

  1. The starting point is that Spain is a Contracting State to the ICSID Convention, as is Australia. There is no dispute about that. Spain therefore agreed with, relevantly, Australia, that the closed loop ICSID system would apply in relation to it. It thus agreed not to litigate jurisdictional issues – such as whether it concluded an enforceable agreement to arbitrate – in an enforcing court in Australia as those issues are to be determined, by its agreement, in the closed loop system by a tribunal. Therefore, notwithstanding Spain’s contention that its agreements to arbitrate with the investors under Art 26 ECT are invalid as a consequence of EU law, for the purposes of proceedings in Australian courts it has waived its foreign State immunity in respect of proceedings for the enforcement of the awards.
  2. For that reason, the contention that by the ICSID system the question of whether Spain enjoys foreign State immunity, or whether it has waived it, is removed from the ambit of decision-making by the Court and left in the hands of the ICSID system is a false premise and must fail. It cannot be the case that the tribunal or the Secretary-General has any role with respect to determining if there has been waiver of immunity under Australian law. I reject Spain’s contention. This means the answer to question 2(a)(i) of Spain’s s 78B notice (extracted at [79] above) is “no”.
  3. The answer to question 1(a), ie whether “upon the party seeking to recognise or enforce an arbitral award furnishing a copy of it as certified by the Secretary-General” of ICSID the Court is required by Art 54 or s 35(4) to conclude that Spain has waived foreign State immunity, is “no”. That is because, as held in Spain HCA (as discussed earlier in these reasons), it is Spain’s entering into the ICSID Convention that requires the conclusion as to it having waived its immunity, not the presentation of the certified copy of the award. Spain has waived its immunity in a proceeding in which enforcement of an ICSID award is sought. In such a proceeding, an issue to be determined will be whether there is an ICSID award. That issue can be determined with reference to a certificate from the Secretary-General (Arts 49(1) and 54(2)), but the waiver of immunity comes before that.
  4. The answer to question 1(b) is “yes”. As already canvassed at length in these reasons, Australia as a Contracting State is obligated to give effect to Art 54(1) ICSID Convention, as incorporated into Australian law under s 32 IAA. Section 35(4) is the means by which the enforcement of an award occurs by order of the Federal Court.
  5. Turning to question 2, at its core, Spain argues that the jurisdiction conferred on this Court in an application for enforcement under s 35(4) and Art 54 is incompatible with Ch III of the Constitution, either because it impairs the institutional integrity of the Court or because it impermissibly vests the judicial power of the Commonwealth in arbitral tribunals. Those are the same arguments that were advanced and rejected in TCL albeit that that was in relation to the enforcement of an award under Art 35 Model Law and s 8 IAA with reference to the New York Convention. See TCL at [3] per French CJ and Gageler J and [56]-[57] per Hayne, Crennan, Kiefel and Bell JJ. Although the circumstances in which a court may refuse to enforce an ICSID award are far narrower than those under the New York Convention and the Model Law, there are nevertheless a multiplicity of such circumstances. The role of the Court in enforcing an ICSID award is not one of merely rubber-stamping the award in an administrative-type act. There are a number of matters that the Court may have to inquire into and determine depending on what issues are raised by the parties.
  6. In relation to the award, the following matters might require determination: Is the award on which the applicant claims really an ICSID award as referred to in Art 53(2)? Is the purported award genuine? Is there a certificate from the Secretary-General as referred to in Arts 49(1) and 54(2)? Is the purported certificate genuine? Has the award been annulled under Art 52? Is the award stayed under Arts 50(2), 51(4) or 52(5)?
  7. In relation to the parties, the following matters might require determination: Are the parties to the case the parties to the award? If the applicant is not a party to the award, does the applicant nevertheless have the right to enforce the award because it is the assignee of the rights to do so, or on some other basis? If by assignment, is the assignment valid and enforceable? If the applicant is a party to the award, does the applicant still have the right to enforce the award or has it transferred that right to another party, perhaps by assignment? If by assignment, is the assignment valid and enforceable?
  8. In relation to the relief, the following matters might require determination: Is the relief that is sought the right relief as available under s 35(4) and does it enforce “the pecuniary obligations imposed by that award” under Art 54(1)? Has the award already been paid, whether wholly or in part? What interest, if any, is to apply, both before judgment and thereafter? What costs orders should be made, both on the basis of any costs award by the tribunal and in the enforcement proceeding?
  9. In making those determinations and in enforcing the award, or refusing to enforce it, the court is exercising judicial power (TCL at [32] per French CJ and Gageler J and [104] per Hayne, Crennan, Kiefel and Bell JJ). In doing so, it quells a controversy between the parties and creates a new charter of rights and obligations expressed in the judgment of the court (TCL at [32]-[33] per French CJ and Gageler J). The existence of the multiplicity of circumstances in which a claim for enforcement of an award may fail, and the requirement that the enforcing court inquire into and make determinations in relation to those circumstances (ie “a determination of questions of legal right or legal obligation”: TCL at [33]), is an entirely appropriate and proper exercise of judicial power; the relative narrowness of those circumstances does not impair the integrity of the court as a Ch III court: TCL at [103]-[104].
  10. Insofar as Spain’s point about delegation of judicial power is concerned, as between Spain and Australia, Spain has agreed that the claims made by the investors, including any question of the validity of the agreement to arbitrate, be determined in the ICSID system. That consensual foundation to the determination of those claims does not result in an unconstitutional delegation of judicial power: TCL at [106], [108]. Brandy is entirely different because there the exercise of power was not by agreement but by the coercive force of the legislation with the result that it was an unconstitutional delegation of judicial power: TCL at [108].
  11. The result is that the answers to questions 2(a)(ii) and (b) are “no”.

 The European Commission’s applications to intervene

  1. As mentioned, the European Commission applied by interlocutory applications for leave to intervene in all the proceedings pursuant to r 9.12 FCR. It read two affidavits of Leo Flynn, Principal Legal Adviser to the Commission in Brussels, Belgium (at an address in the aptly named Rue de la Loi). The affidavits deal with EU rules in relation to State aid and the Commission’s role in relation to the possible contravention of those rules by Spain in the principal proceedings in the event that it pays the awards in these proceedings. By the parties’ consent, Mr Flynn’s affidavits were taken as read by Spain in the event that the Commission was denied leave to intervene. Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028 91
  2. The Commission also relies on brief written submissions on its intervention which, in two pages, contain the submissions that it makes in the proceedings in the event that leave to intervene is granted. Mr Nick Gallus, who appeared for the Commission on the intervention application, did not seek to make any oral submissions, either on the interlocutory applications or the substantive proceedings. Rather, he was available to answer any questions from the Court if there were any. There were not.
  3. The Commission seeks leave to make two submissions:

(1) That Spain’s submissions constitute an accurate description of EU law, such that EU law ensures that there was no agreement to arbitrate under the ECT, and any payment of the awards would be illegal State aid.

(2) That the ECT awards are already being investigated as illegal State aid, and any payment by Spain would subject it to significant ongoing fines until the payment was recovered.

  1. In addition to those two submissions, the Commission highlights relevant aspects of the CJEU’s decision in European Commission v UK, which concerned Micula UKSC (as discussed above).
  2. Under r 9.12(2) FCR, the Court may have regard to the following considerations in determining whether to grant leave to intervene:

(a) whether the intervener’s contribution will be useful and different from the contribution of the parties to the proceeding; and

(b) whether the intervention might unreasonably interfere with the ability of the parties to conduct the proceeding as the parties wish; and

(c) any other matter that the Court considers relevant.

  1. Regarding r 9.12(2)(a), the Commission submits that its proposed contribution will be useful and different from the contribution of the parties as its proposed submissions reflect the EU’s official position, with the Commission being the external representative of the EU which speaks on its behalf before international and non-EU domestic courts and tribunals. Additionally, it submits that it has additional authority specific to the question of State aid pursuant to Art 108(2) TFEU which grants the Commission exclusive authority to identify illegal State aid and determine its compatibility with EU law.

357 As to r 9.12(2)(b), the Commission submits that it will not unreasonably interfere with the proceedings as its submissions are short and are capable of being addressed by the parties without imposing a significant burden.

  1. The Commission raises two further matters supporting its application for leave to intervene. First, it argues that the EU has a substantial interest in the outcome of these proceedings, as they concern (according to the Commission) attempts by EU investors to enforce awards obtained against an EU Member State in contravention of EU law. Second, it notes that the Commission frequently intervenes in proceedings both within the EU and in other countries on matters of State aid, including in many similar arbitration-related proceedings against Spain before the US District Court for the District of Columbia.
  2. Spain, in support of the Commission’s applications for leave to intervene, states that as the “guardian” of the EU foundational treaties, the Commission is in a better position than Spain to make submissions as to the systemic consequences of the applicants’ contentions.
  3. The applicants oppose the Commission’s applications for leave to intervene.
  4. The Commission’s first proposed submission merely affirms that Spain’s submissions on EU law accord with what the Commission says is the content and effect of EU law. That does not add anything to the case or offer any assistance. In the main, I have not come to a different view on the state of EU law in these reasons; rather, the crux has been the effect of EU law on public international law binding Australia.
  5. As to the Commission’s second proposed submission about State aid, I accept the applicants’ submission that it concerns matters that do not arise at the stage of the proceedings in this Court. As Perram J noted in Spain FCAFC at [114], while the questions raised are no doubt interesting, as explained above, they are irrelevant on an application for recognition and enforcement of an arbitral award in circumstances where I have concluded, notwithstanding the identified consequences extant in and arising from EU public law, the Court is bound to give effect to the award in accordance with public international law and Australian domestic law. In any event, the Commission’s submission is no different from Spain’s.
  6. Finally, I have dealt with the Micula saga above, including the most recent decision of the CJEU. The Commission’s submission adds nothing beyond what Spain has contributed in that regard.
  7. In the circumstances, I would dismiss each of the Commission’s interlocutory applications to intervene with costs.

 Conclusion

  1. In the result, I find that Spain waived its foreign State immunity in all the proceedings for enforcement of the awards under s 10 Immunities Act. Also, Spain’s defences on the merits in all the proceedings fail. There should be judgments in favour of the applicants on each of the awards. As I understand the position (ie without deciding), assuming that no recoveries have otherwise been made, that means that the capital judgments in each proceeding will be:

(1) The RREEF proceedings: €59.6 million

(2) The 9REN proceeding: €41.76 million

(3) The Watkins proceeding: €77 million

(4) The NextEra proceeding: €290.6 million

  1. To those amounts there will need to be added pre-judgment interest and costs of the arbitral proceedings where those were ordered.
  2. As the applicants have been successful in these proceedings, they should have their costs.
  3. I will allow the parties to bring in agreed or competing orders to give effect to these reasons and to deal with any outstanding matters of quantification, interest and costs. If necessary, I will also allow for further submissions to be made on those issues. In the meanwhile, the proceedings should all be listed for case management on a mutually convenient date within a few weeks from the publication of these reasons”.

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