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(Bloomberg) — Renewable energy investors are one step closer to seizing a property owned by the Spanish government in an affluent part of London, following a UK Supreme Court ruling, in order to enforce a €120 million ($139 million) arbitration award.
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The two firms — Infrastructure Services Luxembourg Sarl and Energia Termosolar BV — invested in a Spanish solar facility in 2008. They both claim that the country owes them millions after the government began removing subsidies for solar projects after 2011, as the country sought to shrink its budget deficit.
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The Supreme Court judges ruled on Wednesday that Spain couldn’t hide behind state immunity in order to prevent the enforcement of the award. Representatives of the Spanish government didn’t immediately respond to requests for comment.
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The investors in the Spanish lawsuit said that the Supreme Court’s decision “leaves Spain vulnerable to having its commercial assets seized in England if it continues to refuse to pay after today’s ruling.”
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Their lawyer, Richard Clarke, also said that this decision adds weight to the international consensus that arbitration awards must be complied with and enforced.
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A group of 26 renewable energy companies affected by Spain’s non-payment of arbitration awards said in 2024 that they are owed around €1.8 billion. Australia’s High Court in 2023 also dismissed Spain’s appeals, potentially paving the way for further seizures of Spain’s commercial assets.
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In a separate case that covers the same ground, the top court dismissed a case from Zimbabwe against Border Timbers Ltd and Hangani Development Co. Ltd after the African country was alleged to have expropriated their assets. An arbitration award in 2015 ordered Zimbabwe to pay $125m.
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The Supreme Court said that Spain and Zimbabwe are signatories to the 1965 Convention on the Settlement of Investment Disputes, so operate under the jurisdiction of UK courts. Therefore, they cannot oppose arbitration awards “on the grounds of state immunity,” the judges said in their ruling.
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The Spanish government made a payout to another renewable investment fund in June after the firm filed a suit in a US federal court.
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