No immunity, no EU law defences: Federal Court of Australia enforces intra-EU ICSID awards

On 29 August 2025, the Federal Court of Australia (the Court) confirmed that four ICSID awards rendered under the Energy Charter Treaty (the ECT) against Spain are fully enforceable in Australia.

The decision in Blasket Renewable Investments LLC v Kingdom of Spain builds upon the High Court of Australia’s landmark ruling in April 2023 (2023 HCA decision), which held that Spain had waived its immunity from recognition and enforcement of ICSID awards by ratifying the ICSID Convention. It is yet another in a line of recent decisions from non-EU jurisdictions confirming the enforceability of intra-EU ICSID awards (see here for the August 2025 US Court of Appeals for the DC Circuit’s decisions). 

Background

The awards in issue in these proceedings arose out of Spain’s withdrawal of subsidies for renewable energy projects. Spain objected to four separate applications to enforce intra-EU ICSID awards brought by former investors in renewable energy projects in Spain or their assignees:

• RREEF Infrastructure (G.P.) Ltd & RREEF Pan European Infrastructure Two Lux Sàrl v Kingdom of Spain (brought by an assignee);
• 9REN Holding Sàrl v The Kingdom of Spain;
• Watkins Holding Sàrl and Watkins (Ned) BV v Kingdom of Spain (brought by an assignee); and
• NextEra Energy Global Holdings BV & Anor v The Kingdom of Spain.

In resisting enforcement, Spain raised several defences, including that: (i) it has not waived sovereign immunity by being party to the ICSID Convention; (ii) the awards are not “binding” due to the primacy of EU law over international law; (iii) the awards are not “binding” because EU Member States have modified the ICSID Convention so that it does not apply between them; and (iv) insofar as the ICSID awards had been assigned to different entities, those assignments were invalid and of no effect. 

None of Spain’s defences were successful.

Spain waived its sovereign immunity by acceding to the ICSID Convention

Spain argued that the precedent set by the 2023 HCA decision is wrong and that it had not waived its immunity from the enforcement of ICSID awards by acceding to the ICSID Convention. Moreover, Spain attempted to distinguish the 2023 HCA decision by arguing that it applies only to situations where the binding nature of the award is not contested.

The Court disagreed, finding that the 2023 HCA decision is binding and applies equally to cases where the binding force of the award is disputed. On that basis, the Court confirmed that by acceding to the ICSID Convention, Spain had “unmistakably” waived its sovereign immunity in respect of proceedings for the recognition and enforcement of ICSID awards.

ICSID as a “closed loop” system

The Court observed that the main theme underlying Spain’s arguments was that the awards are either invalid or not binding. However, the ICSID Convention contains its “own internal self-contained system of remedies”. It was undisputed that the awards in the enforcement proceedings were authentic, duly-certified ICSID awards. It was also undisputed that the awards were not subject to any stay of enforcement, and that any other remedies under Articles 50-52 of the ICSID Convention were exhausted. There was also no contention that the awards or their certification was obtained by fraud. Consequently, the awards were “binding” for the purposes of the ICSID Convention, and other Member States – including Australia – are obliged to enforce the pecuniary obligations contained therein.

On that basis, the Court held that there was no room for Spain to argue in the enforcement proceedings that the awards were not binding on it. This was a question reserved solely for the ICSID system – not for national courts of ICSID Contracting States. Having reached this conclusion, the Court found that it was unnecessary to examine Spain’s arguments concerning the binding nature of the awards. Nevertheless, the Court proceeded to dismiss these arguments as well.

EU law has no primacy under international law

Spain argued that it is not bound by the awards in question under public international law due to their conflict with its obligations as an EU Member State. In particular, it invoked the Court of Justice of the European Union (CJEU)’s decisions in Achmea and Komstroy, as well as the incompatibility of the awards with EU state aid rules. According to Spain, any conflict should be resolved by applying the principle of primacy of EU law.

The Court acknowledged that there may well be a conflict between EU law and Spain’s obligations under the ICSID Convention. However, it found that the principle of primacy of EU law applies only within the EU legal order. In no way does it affect the existence of Spain’s obligations under public international law and under the ICSID Convention specifically. Thus, the relevant awards are enforceable – and Australia has an obligation under the ICSID Convention to enforce them.

The ICSID Convention was not modified as between EU Member States

In the alternative, Spain argued that the Treaty of Lisbon had modified the ICSID obligations of Spain and other EU Member States under Articles 41 and 30 of the Vienna Convention on the Law of Treaties (VCLT).

The Court rejected this argument, holding that:

• Article 41 VCLT (inter se modification) does not apply for several reasons, including that enforcement obligations are owed to all Contracting States of the ICSID Convention (i.e., they are erga omnes partes obligations). Even assuming that EU Member States intended to modify the ICSID Convention among themselves – which the Court did not accept – such a modification among EU-Contracting States cannot legally abrogate the rights of other Contracting States of the ICSID Convention (like Australia).
• Article 30 VCLT (application of successive treaties) similarly does not apply. The EU foundational treaties cannot modify the obligations as between EU Member States and non‑EU States (like Australia). Moreover, the Treaty of Lisbon is not a later treaty than the ICSID Convention when it comes to the relevant EU Member States.

As a result, the Court rejected all of Spain’s arguments regarding the binding nature of the award.

ICSID awards are assignable

Spain also challenged the transfer of rights in two awards (RREEF and Watkins), arguing that ICSID awards cannot be assigned. 

The Court found that the question of whether ICSID awards constitute property capable of assignment is a matter governed by international law. It further found that there is no rule of customary international law or of the ICSID Convention that would prohibit assignment. Rather, allowing assignment by award creditors would better serve the object and purpose of the ICSID Convention, as it further mitigates sovereign risk. Alternatively, even if this issue were to be approached from the perspective of domestic law (in this case, Australian law), the Court found that the rights of enforcement which pertain to an arbitral award are choses of action capable of being assigned.

Key takeaways

The Court’s judgment helps confirm:

• the intended advantages of the ICSID Convention – national courts cannot second guess ICSID awards due to jurisdictional or other criticisms raised by award debtors; any such issues are left solely for the ICSID system to remedy;
• EU law constraints on the enforcement of ICSID awards (if valid) remain internal to EU law, and are irrelevant to the enforcement of ICSID awards outside of the EU; and
• assignment mechanisms function effectively, meaning that parties can strategically transfer enforcement rights to monetise their awards.

While Spain is likely to appeal the judgment, the Court’s judgment helps confirm that ICSID’s recognition and enforcement regime continues to function effectively in non-EU jurisdictions.