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Spain’s immunity challenge is back in an English court

Photo by Fancesco Zivoli, Spain
Photo by Fancesco Zivoli, Spain

The Kingdom of Spain is at the Court of Appeal as it seeks sovereign immunity over a long-running battle over violation to a provision of the Energy Charter Treaty (ECT).

Private equity firms Infrastructure Services Luxembourg (then known as Antin Infrastructure Services Luxembourg ) and Energia Termosolar (then known as Antin Energia Termosolar Netherlands) invested in certain solar power installations in Spain 13 years ago.

However, after this, Spain reduced and then removed the tariff advantages available for solar energy, in order to integrate tariffs and tax treatments within the European Union.

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The private equity firms considered that Spain had breached its obligations under the ECT and in November 2013 commenced an legal action through arbitration.

In 2018, a Tribunal awarded the firms €112m (£95m) plus interest, and Spain tried to have the award annulled but this attempt failed.

In 2021, the claimants made an ex parte application to the English court to register the award. However, Spain argued that the English court lacked jurisdiction and asked to set aside the order on the basis that it was entitled to State immunity.

However, last July, the English High Court rejected its State immunity argument to not recognise the arbitration award.

On Monday, the Court of Appeal will be hearing Spain’s appeal on that decision which is in front of Lord Justice Newey Lord Justice Phillips. The appeal is tied in with another case Border Timbers and others v Republic of Zimbabwe over a $124m (£98m) arbitration award.

Both cases, with Spain’s case up first, will be at court 17 of the Rolls Building until Thursday.