Case note: The Federal Court of Australia Enforces (More) ICSID Awards against Spain
Hamish Cameron
Juris Doctor Candidate, Monash University
1. Introduction
On 29 August 2025, the Federal Court of Australia delivered judgment in Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028 (Blasket), enforcing a set of ICSID awards worth a combined €470 million (~AUD$840 million) against Spain and comprehensively rejecting Spain’s sovereign immunity arguments. The decision strongly reinforces Australia’s reputation as a creditor-friendly jurisdiction for high-value sovereign award enforcement, confirming that inconsistencies between the ICSID Convention and European Union (EU) law does not alter Australia’s (and possibly other non-EU jurisdictions’) obligation to enforce genuine, certified and authenticated ICSID awards.
2. Background
Procedural History & Underlying Dispute
Blasket is the latest in an ongoing series of enforcement actions by investors seeking to enforce ICSID awards against Spain globally. In this case, 9REN Holdings, NextEra Energy and Blasket Renewable Investments (as assignee of RREEF and Watkins Holdings) (together, the Investors) sought to enforce awards worth a combined €470 million. A similar decision was handed down by the High Court in 2023 in Kingdom of Spain v Infrastructure Services Luxembourg Sàrl (2023) 275 CLR 292 (HCA Case).
This line of cases relates to foreign investment incentives adopted by Spain in 1997 to encourage the development of renewable energy in Spain. From 2010 to 2014, Spain materially altered these arrangements to the detriment of the Investors. The Investors variously commenced ICSID proceedings between 2013 and 2015, alleging that the alterations to the incentive regime were in breach of Article 10 of The Energy Charter Treaty (1994) (ECT), which requires Spain to accord foreign investors fair and equitable treatment ([9]).
Ultimately, the ICSID tribunals concluded that they had jurisdiction and rendered awards in the investors’ favour. The Investors proceeded to seek enforcement of those awards in several jurisdictions, including Australia.
The HCA Case
In the HCA Case, different investors had obtained a €101 million (~AUD$180 million) award against Spain under the ECT on similar grounds to the present case. These investors also sought enforcement in the Federal Court of Australia. Spain resisted, claiming sovereign immunity under the Foreign States Immunities Act 1985 (Cth) (FSIA).
The High Court held that Spain’s entry into the ICSID Convention – specifically, articles 53 to 55 – constituted a waiver of foreign state immunity for the purpose of recognition and enforcement of the award, though not for execution, which remained subject to separate immunity considerations.
Spain submitted in Blasket that the High Court was wrong to reach this conclusion, which Stewart J acknowledged in the decision was “in order to preserve its ability to apply to the High Court to reopen and reconsider its conclusion” ([4]).
3. Spain’s primary arguments
(a) Non-waiver of sovereign immunity
Spain argued that any waiver of sovereign immunity (as in the HCA Case) did not extend to awards where Spain was “not bound to comply with such awards as a matter of public international law” ([14]). Spain contended that its waiver is “limited to proceedings to enforce awards that are valid and binding” ([178]), and that this carve-out applies wherever the binding nature of the award is in dispute ([177]).
Spain argued that the present awards were not binding for one of two reasons:
- Primacy of EU Law: The dispute resolution mechanisms under the ECT and ICSID Convention are inconsistent with the principles of EU law as contained in the foundational EU treaties (to which Spain and the investors’ States are parties) and emerging EU case law (see [192]-[198] for a discussion of the decisions in Slovak Republic v Achmea BV [2018] 4 WLR 87 (Achmea) and Republic of Moldova v Komstroy LLC [2021] 4 WLR 132 (Komstroy) – recent cases upon which Spain heavily relied). Spain argued that, under the principle of primacy, EU law prevails over conflicting international obligations.
- Treaty Modification: Spain’s agreement to the ICSID Convention has been modified by Spain’s agreement to the Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community (2007) (Treaty of Lisbon), such that the EU court system replaces ICSID arbitration for intra-EU investment disputes.
On either basis, Spain argued there was no “binding” award within the meaning of Article 53 of the ICSID Convention, and therefore the Federal Court lacked jurisdiction as Spain had not waived its sovereign immunity under the FSIA.
(b) No power to enforce the awards
Spain further argued that, even if it had waived sovereign immunity, the Federal Court lacked the power to enforce the awards. For the same reasons as above, Spain contended the awards were not binding and thus not capable of enforcement “as a matter of public international law” ([14]). As Stewart J observed at [15], the merits of this argument “dovetail with the [first] argument based on what is said to be the consequence of public international law that is relied on to refute the waiver of immunity.”
4. Judgment
Justice Stewart comprehensively rejected Spain’s arguments. The Court held that Spain’s accession to the ICSID Convention constituted a clear and unmistakeable waiver of sovereign immunity for the purposes of recognition and enforcement proceedings in Australia ([180]-[184]). This waiver is not limited to cases where the binding nature of the award is uncontested; the HCA Case’s decision applies “at large”, including where the binding status is disputed ([183]). To the argument as to the primacy of EU law, Stewart J held that even though there was inconsistency between EU law and the ICSID Convention and ECT, EU law should not prevail in non-EU jurisdictions, because (at [213]):
“Where an investor from an EU Member State seeks enforcement of an ICSID award in an Australian court in accordance with Australia’s obligations under the Convention as given the force of law in Australian domestic law, it is no answer for Spain to say that it has some or other defence available to it under EU law, for it is not Australia which is under any supervening requirement of essentially foreign domestic public law to not comply.”
Applying principles of treaty interpretation, Stewart J went on to reject Spain’s treaty modification arguments (see [271] and [286]). Accordingly, each of Spain’s primary arguments failed (noting that both turned on the now-failed argument that the awards are non-binding).
The Court emphasised that the ICSID Convention establishes a self-contained, “closed system” for the recognition and enforcement of awards. Once a certified ICSID award is presented, the enforcing court’s role is limited to authenticating and entering judgment. Defences available under the New York Convention or based on public policy are not available. The only permissible challenges are those provided for within the ICSID Convention itself (such as annulment, rectification, or revision), and all such remedies had been exhausted in this case (see [160]-[175]).
The Court also went on to reject Spain’s submission that the enforcement regime under the International Arbitration Act 1974 (Cth) (IAA) was unconstitutional under Ch III of the Constitution ([350]), and held that Spain’s EU law arguments did not apply to the RREEF award, as the claimant under that award was incorporated in Jersey, which is not an EU Member State ([337]). With this, the Court fully disposed of Spain’s arguments.
Finally, the Court held that the assignment by RREEF and Watkins Holdings to Blasket Renewable Investments of their rights and entitlements under their respective awards was valid and enforceable ([326]), and rejected an application by the European Commission to intervene in the case, finding that its submissions added nothing beyond what Spain had contributed ([364]).
5. Significance
Blasket is one of the most comprehensive Australian award enforcement judgments against a foreign State handed down to date. It is significant for four principal reasons:
- Firstly, Stewart J confirms that ratification of the ICSID Convention waived Spain’s jurisdictional immunity. This ruling confirms and reinforces the strength and enforceability of the ICSID regime in Australia.
- Second, the decision neutralises in Australia the EU law defences that Spain – and other EU respondents – have deployed worldwide since Achmea and Komstroy. It confirms that any incompatibility between the Convention and EU law is irrelevant outside of the EU. This may be persuasive in non-EU cases.
- Third, the judgment is the first in the Commonwealth to analyse in depth whether an ICSID award can be assigned, finding no prohibition in the Convention or customary international law. This decision facilitates a secondary market in treaty awards and offers distressed investors an exit route.
- Finally, the failure of Spain’s constitutional challenge cements the validity of the IAA mechanism that provides for certified ICSID awards to be given effect as though they were court judgments.
Together, these findings further strengthen Australia’s position as a creditor-friendly jurisdiction for high-value sovereign award enforcement.