Current SCOTUS Review: Is Spain Immune from a Foreign Arbitration Award’s U.S. Confirmation?
By Sasha Hill
The U.S. Supreme Court is considering hearing a case that examines the intersection between the Foreign Sovereign Immunities Act, or FSIA, and international arbitration treaties that could redefine the use of U.S. courts to confirm or deny arbitration awards made abroad.
In May 2025, Spain petitioned the nation’s top Court to hear its arbitration case, Kingdom of Spain v. Blasket Renewable Investments LLC, No. 24-1130 (Supreme Court docket available at https://bit.ly/47KcJ2S).
The issues are whether (1) FSIA, at 28 U.S.C. § 1605 (a)(6), allows U.S. courts to assert jurisdiction over a foreign sovereign without determining whether the sovereign consented to arbitrate differences between itself and the plaintiff; and (2) whether, in suits to confirm foreign arbitral awards, forum non conveniens dismissal is categorically unavailable, or unavailable in at least some suits, or whether availability depends on the facts of each case.
This dispute arose when multiple European Union-based energy companies arbitrated a dispute between themselves and the Kingdom of Spain, claiming they were owed Spanish energy subsidies. These companies cited their power to arbitrate the agreement from Article 26 of the Energy Charter Treaty (ECT), a multilateral treaty between the EU and non-EU countries, asserting that Spain had issued a valid offer to arbitrate—which they accepted—thus creating an arbitration agreement between them.
Through the subsequent arbitration, these companies obtained awards that they moved to enforce in the United States, when enforcement under the treaty was invalidated in Europe. The parties needed to address U.S. jurisdiction not solely under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, best known as the New York Convention, and the 1965 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, or ICSID Convention, but also the FSIA’s arbitration exception that allows a private party to enforce an arbitration agreement or award against a sovereign nation where the sovereign party consents to jurisdiction.
The ECT was the source of such consent for the District of Columbia U.S. Circuit Court of Appeals. Next Era Energy Global Holdings B.V. v. Kingdom of Spain, 112 F.4th 1088 (D.C. Cir. 2024) (available at https://bit.ly/4ojgW3u).
Spain, however, argues that it never agreed to arbitrate with the individual companies, and that it could never validly agree to arbitrate under EU law because the European Court of Justice has held that Article 26 is not a valid offer to arbitrate between an EU Member State and EU nationals—that is, the energy companies.
In the United States, one district court sided with Spain and found that “there was no valid offer to arbitrate” so a valid arbitration agreement could not exist. Another district court disagreed, treating the case as a merits issue, not a jurisdictional threshold issue.
The D.C. Court of Appeals treated Spain’s as a merits question for arbitrators in ruling that the issue went to the “scope” of the arbitration agreement—not its existence. Thus, the D.C. court deferred to the arbitration’s panel’s resolution and did not independently assess whether Spain had agreed to arbitrate, while also declining to consider Spain’s forum non conveniens defense—which allows a court to dismiss a case if another more convenient or appropriate court is better suited to hear it, even if the original court has jurisdiction.
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This brings us to present day, with the Kingdom of Spain petitioning for certiorari at the Supreme Court. The Court had distributed the case materials for its so-called long conference on Sept. 29, when it considers for review cases that have piled up during the Court’s summer recess.
But the Court deferred. On Oct. 6, the Court invited the U.S. Solicitor General to file a brief in the case on the United States’ view of the interaction of the treaties, FISA, and jurisdiction over foreign awards against sovereigns.
Spain’s petition for certiorari, available at the Court docket link above, argues that the Supreme Court should grant certiorari first because the Court should resolve a circuit split over the FSIA’s arbitration exception. Spain contends that the circuits are split over whether FISA Section 1605(a)(6) requires courts to find that the sovereign consented to arbitrate with the plaintiff.
The petition states that the Second and Fifth Circuits found that whether the sovereign consented to arbitrate with the plaintiff would be a threshold question but, instead, the D.C. Circuit treated this as a merits question.
Spain contends that the FSIA question is significant for both Spain and the United States because it is a recurring issue that implicates reciprocity concerns within foreign relations. The petition states, “If foreign courts followed the D.C. Circuit’s logic, . . . the United States might have to endure protracted summary-judgment proceedings even when it never consented to arbitrate with the plaintiff. This Court should grant review—or at least call for the views of the Solicitor General—in light of these sensitive diplomatic considerations.”
Next, Spain asserts that the D.C. decision was incorrectly decided because Spain never consented to an arbitration agreement with Basket and the other energy companies. “Section 1605(a)(6) does not permit courts to assert jurisdiction over a foreign sovereign unless the sovereign has consented to arbitrate ‘differences’ that arise ‘between’ itself and the plaintiff. That issue is thus a threshold jurisdictional question that courts must determine at the outset of a case.”
In other words, because the D.C. Circuit never considered whether an arbitration agreement existed, and simply considered the scope of the alleged arbitration agreement, Spain maintains that the decision is erroneous. Spain had asserted that “the Energy Charter Treaty contained no offer to arbitrate disputes with EU nationals”; the nation formally withdrew from the treaty in April.
Spain also argues that this case is an excellent vehicle for review because “[t]here are no preservation problems, alternative holdings, or factual disputes that would frustrate review” since the “FSIA question was fully briefed and squarely decided below.”
Furthermore, if the Court reverses the lower court’s decision, it would force the lower courts to treat Spain’s objection as a jurisdictional issue and consider whether the Energy Charter Treaty’s arbitration agreement demonstrates Spain’s consent to arbitrate with EU investors—which Spain already contends should have been a matter considered in the D.C. Circuit’s decision.
Finally, Spain argues that the circuits are split over the forum non conveniens question, with the Second and Ninth Circuits exercising their ordinary discretion to consider this defense in foreign-arbitral-award cases; the D.C. Circuit does not consider this defense in foreign-arbitral-award cases; and the Fourth Circuit makes the defense unavailable in at least some of these cases.
Additionally, Spain goes on to argue that the split is outcome-determinative—the D.C. Circuit’s view “categorically bars ‘forum non conveniens in proceedings to confirm a foreign arbitral award'” (citation omitted)--and that only the Supreme Court can resolve this issue, which the petition says is a two-decades old split.
Because the forum non conveniens question is a significant and important issue that occurs frequently in international arbitration, Spain asserts that this case is “an ideal vehicle” to resolve the issue. The cert petition argues that the D.C. Circuit’s decision on this matter was wrong because Supreme Court precedent states that forum non conveniens determinations should be flexible and fact-specific, yet the D.C. Circuit went against this precedent and created an absolute rule.
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Spain is joined by Poland, Romania, Bulgaria and the European Union, each of which in June filed amicus briefs asking the Supreme Court to take up Spain’s request to assess and decide on these issues. (The briefs are available at the Supreme Court link above.)
As fellow EU Member States, these countries also likely will face U.S. enforcement actions on intra-EU energy arbitration awards that the EU has declared invalid. They have also petitioned for the court to block U.S. enforcement of intra-EU investment awards that would be barred and considered invalid by EU law.
In August, Blasket Renewable Investments and Next Era Energy Global Holdings filed separate responses in opposition to Spain’s cert petition. Blasket argues that the petition should be denied because (1) Spain’s FSIA question does not warrant review because the FSIA exception does not apply, and Spain consented to the Energy Charter Treaty; (2) there is no circuit split because neither the Second nor Fifth Circuits address the “for the benefit” of a private party FISA standard applied by the D.C. Circuit, and (3) the decision analyzing the FISA arbitration exception by the D.C. Circuit is correct.
For these reasons, Blasket contends this case is a poor vehicle and does not merit the Court’s review, and urges it to wait for future cases that would provide a better opportunity to resolve the issues presented.
Next Era Energy Global Holding’s response also asserts that the petition should be denied because (1) the D.C. Circuit’s decision was correctly decided by its straightforward analysis; (2) there is no circuit split because the D.C. Court of Appeals decision does not conflict with any other appeals court decisions; and (3) Spain’s argument would require the United States to break its own treaty obligation under the ICSID Convention in order to help Spain break its own “treaty promises.”
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The author is the CPR Institute’s 2025-2026 academic year intern from the Howard University School of Law ADR Program, where she is a second-year student in Washington, D.C.
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