Amicus Curiae Brief — Kingdom of Spain, Petitioner v. Blasket Renewable Investments LLC, et al.

Supreme Court briefJun 4, 2025

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No. 24-1130

In the Supreme Court of the United States

KINGDOM OF SPAIN, PETITIONER,

BLASKET RENEWABLE INVESTMENTS, LLC, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE EUROPEAN COMMISSION

ON BEHALF OF THE EUROPEAN UNION

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

SALLY L. PEI

Counsel of Record

R. STANTON JONES

ARNOLD & PORTER

KAYE SCHOLER LLP

601 Massachusetts Avenue, NW

Washington, DC 20001

(202) 942-5000

Sally.Pei@arnoldporter.com

TABLE OF CONTENTS

Page

Interest of amicus curiae ....................................................... 1

Introduction and summary of the argument ..................... 3

Argument ................................................................................. 5

I. This case implicates issues of extraordinary

importance to the European Union ............................. 5

A. The Court of Justice has confirmed that EU

Member States cannot and did not consent to

arbitrate investment disputes with EU

investors ..................................................................... 7

B. The D.C. Circuit’s decision encourages intraEU arbitration, notwithstanding its

incompatibility with the EU legal order ............. 13

II. The decision below invites a deluge of award

enforcement actions against EU Member

States in the D.C. Circuit ............................................ 18

III. Under the decision below, most modern

investment treaties on their own constitute a

basis for jurisdiction under the FSIA’s

arbitration exception .................................................... 20

Conclusion .............................................................................. 23

TABLE OF AUTHORITIES

Cases

Page(s)

BG Grp., PLC v. Republic of Argentina,

572 U.S. 25 (2014) ................................................................... 6, 12

Medellín v. Texas,

552 U.S. 491, 507 (2008) ..............................................................11

Stati v. Republic of Kazakhstan, No. 14-cv-1638,

2020 WL 13144317 (D.D.C. May 18, 2020) ..............................19

Tatneft v. Ukraine, No. 17-cv-582,

2021 WL 5353024 (D.D.C. Oct. 18, 2021).................................19

United States v. Palomar-Santiago,

593 U.S. 321 (2021) ......................................................................10

Statutes

26 U.S.C. § 1605(a)(6) .......................................................... 4, 12, 13

Rules

Fed. R. Civ. P. 69(a)(2)...................................................................19

Sup. Ct. R. 37.6 ..................................................................................1

Treaties and International Agreements

Agreement between the Belgium-Luxembourg Economic

Union and the Government of the People’s Republic of

China on the Reciprocal Promotion and Protection of

Investments, June 6, 2005..........................................................22

Agreement between the Government of the Republic of

Finland and the Government of the Socialist Republic of

Viet Nam on the Promotion and Protection of Investments,

Feb. 21, 2008.................................................................................22

Agreement between the Portuguese Republic and the United

Arab Emirates on the Reciprocal Promotion and Protection

of Investments, Nov. 19, 2011 ...................................................22

Charter of Fundamental Rights of the European Union,

Oct. 26, 2012, 2012 O.J. (C 326) 391 ............................................8

art. 47 ...............................................................................................9

iii

Treaties and International Agreements—Continued

Energy Charter Treaty,

adopted Dec. 17, 1994, 2080 U.N.T.S 95 (1995)

(entered into force Apr. 16, 1998) ...............................................2

art. 26 .................................................................. 6, 7, 10, 11, 15, 20

art. 47(3) ........................................................................................15

Treaty between the Government of the United States of

America and the Government of the Republic of Croatia

Concerning the Encouragement and Reciprocal Protection

of Investment, with Annex and Protocol, art. X,

July 13, 1996, S. Treaty Doc. 106-29 ........................................22

Treaty between the Government of the United States of

America and the Government of the State of Bahrain

Concerning the Encouragement and Reciprocal Protection

of Investment, art. 9,

Sep. 29, 1999, S. Treaty Doc. 106-25 ........................................22

Treaty between the United States of America and the

Republic of Ecuador Concerning the Encouragement and

Reciprocal Protection of Investment, with Protocol and a

Related Exchange of Letters, art. VI,

Aug. 27, 1993, S. Treaty Doc. 103-15........................................22

Treaty establishing the European Atomic Energy

Community, Oct. 26, 2012, 2012 O.J. (C 327) 1.........................8

Treaty on European Union,

Oct. 26, 2012, 2012 O.J. (C 326) 13 ......................................... 1, 8

art. 17(1) ..........................................................................................2

art. 19 ...............................................................................................9

Treaty on the Functioning of the European Union,

Oct. 26, 2012, 26 O.J. (C 326) 47 ..................................................8

art. 107...........................................................................................16

art. 108(3) ......................................................................................16

art. 267...................................................................................... 9, 10

art. 344...........................................................................................10

Vienna Convention on the Law of Treaties,

opened for signature May 23, 1969, 1155 U.N.T.S. 331

art. 31(3)(a) ...................................................................................11

European Union Authorities

Case C-6/64, Costa v. E.N.E.L.,

ECLI:EU:C:1964:66 (July 15, 1964) ..........................................8

Case C-109/20, Republiken Polen v. PL Holdings Sàrl,

ECLI:EU:C:2021:875 (Oct. 26, 2021) ......................................14

Case C-284/12, Deutsche Lufthansa AG v. Flughafen

Frankfurt-Hahn GmbH,

ECLI:EU:C:2013:755 (Nov. 21, 2013) .....................................16

Case C-284/16, Slovak Republic v. Achmea BV,

ECLI:EU:C:2018:158 (Mar. 6, 2018) .................................. 9, 10

Case C-333/19, DA v. Romatsa,

ECLI:EU:C:202:749 (Sep. 21, 2022) ........................................14

Case C-741/19, Republic of Moldova v. Komstroy LLC,

ECLI:EU:C:2021:655 (Sep. 2, 2021) ....................... 9, 10, 11, 14

Commission Decision of 24 March 2025 on the measure

State Aid SA.54155......................................................................17

Commission Notice on the recovery of unlawful and

incompatible State aid,

2019 O.J. C 247/1 (July 23, 2019) ..............................................17

Communication from the Commission to the European

Parliament and Council on Protection of intra-EU

investment, COM (2018) 547 final (July 19, 2018) .............. 8, 9

Council Regulation (EU) 2015/1589 of 13 July 2015 laying

down detailed rules for the application of Article 108 of the

Treaty on the Functioning of the European Union

(codification), art. 16, 2015 O.J. (L 248) ...................................17

Decision on State Aid, SA.40348 (Nov. 10, 2017) ......................16

Declaration on the legal consequences of the judgment of the

Court of Justice in Komstroy and common understanding on

the non-applicability of Article 26 of the Energy Charter

Treaty as a basis for intra-EU arbitration proceedings,

June 26, 2024, O.J. (L 2024/2121) ................................ 11, 15, 18

Opinion 2/13,

ECLI:EU:C:2014:2454 (Dec. 18, 2014)......................................9

Miscellaneous

Zachary Douglas,

The International Law of Investment Claims (2009) ............6

Christopher Dugan,

Investment Arbitration (2008)..................................................21

Investment Dispute Settlement Navigator,

Investment Policy Hub, UNCTAD ................................... 18, 20

Investor-state protection disputes involving EU Member

States: State of play, European Parliamentary Research

Service, Nov. 2022 .......................................................................18

Italian Republic v. CEF Energia, T 4236-19,

Svea Court of Appeal (May 27, 2024).......................................14

Kingdom of Spain v. Novenergia II - Energy & Environment

(SCA), SICAR, T 4658-18,

Svea Court of Appeal (Dec. 13, 2022).......................................14

Press Release, Council of the European Union,

Energy Charter Treaty: EU notifies its withdrawal (June

27, 2024).........................................................................................15

Republic of Poland v. Mercuria Energy Group, T 2613-23,

Svea Court of Appeal (Dec. 23, 2024).......................................14

Republic of Poland v. PL Holdings, T 1569-19,

Supreme Court, Sweden (Dec. 14, 2022) .................................14

Jeswald W. Salacuse,

The Law of Investment Treaties (2015) ............................... 5, 6

Christoph Schreuer, Investment Protection and

International Relations, in The Law of International

Relations 345 (A. Reinisch & U. Kriebaum eds., 2007) ..........5

Slot Group a.s. v. Republic of Poland, Cour d’appel

[Court of Appeal] Paris, 16e ch., Apr. 19, 2022, 49/2022.......14

Strabag SE v. Republic of Poland, Cour d’appel

[Court of Appeal] Paris, 16e ch., Apr. 19, 2022, 48/2022.......14

United States 2012 Model BIT.....................................................22

Kenneth J. Vandevelde,

Bilateral Investment Treaties (2010) ......................................21

In the Supreme Court of the United States

No. 24-1130

KINGDOM OF SPAIN, PETITIONER,

BLASKET RENEWABLE INVESTMENTS, LLC, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE EUROPEAN COMMISSION

ON BEHALF OF THE EUROPEAN UNION

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

INTEREST OF AMICUS CURIAE 1

Amicus curiae the European Commission is an institution of the European Union (the “EU” or “Union”), a

treaty-based international organization composed of 27

Member States. 2 The Commission is an independent

Pursuant to Rule 37.6 of the Rules of this Court, the undersigned

hereby states that no counsel for a party wrote this brief in whole

or in part, and no one other than amicus curiae or its counsel contributed money to fund the preparation or submission of this brief.

Counsel of record for the parties received timely notice of amicus

curiae’s intent to file this brief.

These Member States are Austria, Belgium, Bulgaria, Croatia,

Cyprus, the Czech Republic, Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.

(1)

institution and acts in the interests of the Union as a

whole, rather than individual Member States. Under Article 17(1) of the Treaty on European Union, Oct. 26, 2012,

2012 O.J. (C 326) 13, the Commission “shall ensure the

Union’s external representation”—i.e., it is responsible

for, inter alia, representing the Union in proceedings outside the EU. The Commission submits this amicus brief in

this function on behalf of the European Union.

The EU has a substantial interest in this case. Respondents seek to enforce arbitration awards that EU

companies obtained against Spain, an EU Member State,

under the Energy Charter Treaty, adopted Dec. 17, 1994,

2080 U.N.T.S 95 (1995) (entered into force Apr. 16, 1998)

(ECT). The Energy Charter Treaty is an investment protection agreement conceived and negotiated by the EU in

the early 1990s as part of the EU’s external energy policy.

The Court of Justice of the EU—the EU’s highest judicial body—has confirmed that arbitration under the Energy Charter Treaty between an EU Member State and

an investor of another EU Member State contravenes the

very structure of the EU legal order. EU Member States

have not, and never could have, consented to arbitrate disputes under the Energy Charter Treaty with EU investors. “Intra-EU” arbitral awards like those at issue here

are invalid and cannot be enforced anywhere in the EU.

Numerous investors have nevertheless sought to

evade EU law by pursuing enforcement of such awards

outside the EU. The D.C. Circuit has now permitted them

to do so in the United States, holding that—whether or

not the State actually agreed to arbitrate the underlying

disputes (Spain did not)—foreign sovereign immunity is

no bar to seeking enforcement of arbitral awards here.

The Commission seeks to emphasize the exceptional

importance to the EU of the questions that this case

implicates, and to highlight the consequences for the EU,

its Member States, and U.S. courts that will ensue from

the decision below, absent this Court’s intervention.

INTRODUCTION AND

SUMMARY OF THE ARGUMENT

This case is of immense consequence for the European Union. At issue is whether EU investors may seek

enforcement in the United States of arbitral awards that

EU investors obtained under the Energy Charter Treaty

against an EU Member State, even though the Member

State never offered to arbitrate the underlying disputes

with those investors. No court in the EU—not even the

courts of the investors’ home jurisdictions—would enforce such awards. But the decision below holds that EU

investors may come to the United States to pursue enforcement here instead.

The stakes for the EU could scarcely be higher. The

integrity of the EU legal system depends on EU Member

States’ trust in each others’ judiciaries to adjudicate

claims by EU nationals fairly and in accordance with EU

law. It also depends on Member States’ and EU nationals’

respect for the role of the Court of Justice as the final arbiter of EU law questions. Allowing Member States to resolve EU law disputes with EU investors before private

tribunals would undermine the basic structure of the EU.

That is why, as the Court of Justice has repeatedly made

clear, EU Member States simply cannot offer to arbitrate

disputes like the ones that gave rise to the awards at issue

in this case. Likewise, the EU and 26 of its Member States

have formally reaffirmed their understanding that the

Energy Charter Treaty cannot serve as the basis for intra-EU arbitration proceedings.

Yet the D.C. Circuit punted all these fundamental issues to the merits, on the theory that jurisdiction under

the Foreign Sovereign Immunities Act’s (FSIA) arbitration exception, 28 U.S.C. §1605(a)(6), does not require the

existence of an agreement to arbitrate disputes between

the parties. Instead, according to the D.C. Circuit, jurisdiction can arise from the Energy Charter Treaty itself.

That holding should not escape this Court’s review.

The D.C. Circuit’s decision rests on a misreading of the

arbitration exception and a misapprehension of the characteristics of modern investment treaties. But it will also

fuel decades of disruption for the EU. It incentivizes EU

investors to continue bringing intra-EU arbitration

claims under the Energy Charter Treaty. The very existence of such arbitrations is an affront to the EU legal order. They impose severe burdens on EU Member States.

And many of these arbitrations also create intractable legal and practical complications under the EU’s complex

regulatory framework governing State aid (i.e., public

subsidies), which the Commission is charged with administering.

The decision below has consequences for U.S. courts

as well. It entrenches the D.C. Circuit as a heavily favored

award enforcement forum, inviting a deluge of actions

against EU Member States brought by intra-EU award

holders hoping to collect on billions of dollars’ worth of

awards that the investors’ own home jurisdictions agree

are invalid and unenforceable.

In short, the D.C. Circuit’s decision will have immediate and lasting consequences for the EU, its Member

States, and U.S. courts. The Court should grant review.

ARGUMENT

This case implicates issues of extraordinary

importance to the European Union

The disputes that gave rise to this case are part of a

wave of what are known as intra-EU investment arbitrations: arbitrations brought by EU investors against EU

Member States under investment treaties. Intra-EU investment arbitration is fundamentally incompatible with

the structure of the EU legal order. Whether EU investors may pursue enforcement in the United States of investment awards that they have obtained against EU

Member States is thus a question of exceptional importance to the EU.

Investment treaties are international agreements between sovereign States. They may be bilateral agreements or multilateral treaties like the Energy Charter

Treaty. Each contracting State agrees to specific rules

governing investments made in its territory by nationals

of the other contracting States. Jeswald W. Salacuse, The

Law of Investment Treaties 141 (2015). To enable the

peaceful enforcement of these treaty obligations without

the need to resort to diplomatic protection, many investment treaties include an arbitration provision. Christoph

Schreuer, Investment Protection and International Relations, in The Law of International Relations 345, 346347 (A. Reinisch & U. Kriebaum eds., 2007).

The typical arbitration provision in an investment

treaty contains a unilateral standing offer by the contracting States to arbitrate a defined set of disputes with a defined set of investors from other contracting States. “Unlike the arbitration clauses used in contracts, these treaty

provisions could not be considered an arbitration agreement with the investor because the investor, while a national of a contracting state, was not party to a treaty.”

Salacuse 422-423. Instead, an agreement to arbitrate a

particular dispute is formed only if and when a qualifying

investor accepts the standing offer. Id. at 423; see BG

Grp., PLC v. Republic of Argentina, 572 U.S. 25, 50, 53

(2014) (Roberts, C.J., dissenting). See also, e.g., Zachary

Douglas, The International Law of Investment Claims 75

(2009). Thus, even in a multilateral treaty, the arbitration

provision governs bilateral relationships between two

particular contracting States: the home State of the investor, and the State against which the investor has initiated

arbitration.

The Energy Charter Treaty’s arbitration provision is

found in Article 26. The signatories offer to submit “[d]isputes between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the

latter in the Area of the former” to arbitration. ECT arts.

26(1), 26(2)(c), 26(3). In turn, an aggrieved investor may

accept that offer in writing, thereby forming an arbitration agreement. ECT arts. 26(4)-(5).

The D.C. Circuit recognized that, under its own precedent, the “existence of an arbitration agreement” is a jurisdictional fact that must be established as a threshold

question under the FSIA’s arbitration exception. Pet.

App. 17a-18a. Yet it held that whether “[Spain’s] standing

offer to arbitrate contained in [Article 26] extends to EU

nationals,” including the investors who obtained the

awards at issue here—and thus whether an arbitration

agreement between Spain and the investors could have

been formed—is a “merits question,” not a jurisdictional

one. Pet. App. 26a.

But whether the sovereign agreed to arbitrate the

dispute that led to the award at issue—thereby abrogating its presumptive immunity—is a fundamental question

that should be decided as a jurisdictional matter.

This case illustrates why. The Court of Justice has

made clear that, as a consequence of principles enshrined

in the EU’s foundational instruments, EU Member States

cannot agree to arbitrate investment disputes with EU investors, and did not agree to do so in the Energy Charter

Treaty. As such, Spain could never have agreed to arbitrate the disputes that gave rise to the awards that respondents seek to enforce here. Yet the D.C. Circuit sidestepped these weighty issues, asserting that the existence

of an agreement between Spain and the investors is a

“merits question.” Pet. App. 26a.

The result is that EU Member States can now be

haled into U.S. court to defend against enforcement of intra-EU awards here. That prospect will galvanize further

intra-EU investment disputes for years to come, not only

saddling EU Member States with protracted and costly

arbitration proceedings, but also sowing disruption within

the EU legal system. This Court’s intervention is needed

to ensure that questions of such fundamental importance

to the EU legal order are addressed at the threshold.

A. The Court of Justice has confirmed that EU

Member States cannot and did not consent to

arbitrate investment disputes with EU investors

1. Whether EU Member States’ standing offer to arbitrate in Article 26 of the Energy Charter Treaty extends to EU nationals (and thus, whether any intra-EU

agreement to arbitrate disputes under the Energy Charter Treaty can be formed) implicates bedrock precepts of

EU law. At its core, the question concerns whether an EU

investor that believes that an EU Member State has

treated its investment unfairly must seek recourse within

the EU legal system, or whether EU Member States can

agree to resolve such disputes before private arbitral tribunals instead. The Court of Justice has addressed this

question on several occasions, and has made clear that the

EU legal order’s basic structure precludes resolution of

intra-EU investment disputes outside the EU judicial

system.

The EU legal order is founded on the EU Treaties. 3

Under the EU Treaties, the EU Member States have

transferred legislative, regulatory, and enforcement powers to the EU and its institutions. As the Court of Justice

has put it, the EU Treaties have created “[their] own legal

system which, on the entry into force of the Treat[ies], became an integral part of the legal systems of the Member

States and which their courts are bound to apply.” Case

C-6/64, Costa v. E.N.E.L., ECLI:EU:C:1964:66, 593 (July

15, 1964). By acceding to the EU Treaties, “the Member

States have limited their sovereign rights, albeit within

limited fields, and have created a body of law which binds

both their nationals and themselves.” Ibid.

EU law protects EU investors and their cross-border

investments within the EU. See Communication from the

Commission to the European Parliament and Council on

Protection of intra-EU investment, at 1-2, COM (2018)

547 final (July 19, 2018), https://bit.ly/4kQSjZW. In particular, EU law safeguards the free movement of capital

and prohibits measures that unduly prevent or discourage

cross-border capital movement and payments. Id. at 1.

Protections include rights under the EU Treaties, the EU

Charter, general principles of EU law, and “extensive sector-specific legislation.” Id. at 3, 5-17. These rights are enforceable through EU administrative processes and

At present, the EU Treaties are the Treaty on the Functioning

of the European Union, Oct. 26, 2012, 26 O.J. (C 326) 47 (TFEU),

Treaty on European Union, Oct. 26, 2012, 2012 O.J. (C 326) 13

(TEU), and the Treaty establishing the European Atomic Energy

Community, Oct. 26, 2012, 2012 O.J. (C 327) 1.

judicial review in national and EU courts. The EU Treaties require, and the EU Charter guarantees, effective

remedies before national courts. TEU, art. 19; Charter of

Fundamental Rights of the European Union, Oct. 26,

2012, 2012 O.J. (C 326) 391, art. 47.

Against this backdrop, the Court of Justice has made

clear that intra-EU investment arbitration is and has always been incompatible with the very structure of the EU

legal order. See Case C-741/19, Republic of Moldova v.

Komstroy LLC, ECLI:EU:C:2021:655 ¶¶ 42-66 (Sep. 2,

2021); Case C-284/16, Slovak Republic v. Achmea BV,

ECLI:EU:C:2018:158, ¶¶ 31-60 (Mar. 6, 2018). Specifically, the EU Treaties establish a judicial system “to ensure consistency and uniformity in the interpretation of

EU law.” Komstroy, ¶ 45. Three features of that system

are key here.

First is the principle of “mutual trust,” which includes

Member States’ trust in each others’ legal systems. Opinion 2/13, ECLI:EU:C:2014:2454, ¶¶ 168, 191 (Dec. 18,

2014). The cohesion of the EU judicial system presupposes that Member States have faith in the fairness of

other Member States’ courts and their respect for EU law

and common EU values.

Second is the Court of Justice’s “exclusive jurisdiction to give the definitive interpretation of [EU] law.”

Komstroy, ¶ 45. Article 267 of the TFEU channels all EU

law questions to the Court of Justice: Member State

courts may (and, where they are courts of final instance,

must) refer any relevant question of EU law raised in proceedings before them to the Court of Justice. Id. ¶¶ 45-46;

TFEU art. 267.

Third is the designation of the EU legal system as the

forum for EU law disputes between Member States. Article 344 of the TFEU prohibits Member States from

creating dispute-settlement mechanisms other than those

set out in the EU Treaties on matters implicating EU law,

including by entering into other international agreements. TFEU art. 344. To do so would “affect the allocation of powers laid down by the [EU] Treaties and, hence,

the autonomy of the EU legal system, observance of

which is ensured by the Court [of Justice].” Komstroy,

¶ 42; Achmea, ¶¶ 17, 32.

As the Court of Justice has explained, interpreting

Article 26 of the Energy Charter Treaty as reflecting EU

Member States’ offer to engage in intra-EU arbitration

would undermine these pillars of the EU legal system.

Komstroy, ¶ 63. Arbitral tribunals convened under Article

26 are necessarily called upon to interpret and even apply

EU law, not least because the Energy Charter Treaty itself—as an agreement to which the EU and its Member

States are party—is part of EU law. See id., ¶¶ 23, 50. But

such tribunals are not courts or tribunals of a Member

State for purposes of Article 267 of the TFEU, and hence

are not subject to Court of Justice’s supervision. Id. ¶ 51;

see id. ¶¶ 48-59.

If Article 26 of the Energy Charter Treaty applied intra-EU, that would mean that Member States (in violation

of Article 344 of the TFEU) have allowed EU investors to

opt out of the EU judicial system and seek resolution of

EU law questions before arbitral tribunals. The implication would be that Member State courts do not offer adequate redress for EU investors—a notion squarely at

odds with the principle of mutual trust.

Thus, just as U.S. statutes susceptible to more than

one interpretation should be “construe[d] * * * to avoid

not only the conclusion that they are unconstitutional, but

also grave doubts upon that score,” United States v. Palomar-Santiago, 593 U.S. 321, 328-29 (2021), the Court of

Justice held that the Energy Charter Treaty’s standing

offer of arbitration must be interpreted as not extending

to intra-EU disputes, to avoid placing the Energy Charter

Treaty in conflict with the EU Treaties, Komstroy, ¶ 66.

On June 26, 2024, the EU and 26 Member States

signed a formal declaration, expressly reaffirming their

“common understanding” that “Article 26 [of the ECT]

cannot and never could serve as a legal basis for intra-EU

arbitration proceedings.” Declaration on the legal consequences of the judgment of the Court of Justice in Komstroy and common understanding on the non-applicability

of Article 26 of the Energy Charter Treaty as a basis for

intra-EU arbitration proceedings, June 26, 2024, O.J. (L

2024/2121), § 1 (2024 Declaration). This declaration reflects the “postratification understanding” of the relevant

signatory nations regarding the meaning of Article 26.

Medellín v. Texas, 552 U.S. 491, 507 (2008). Accord Vienna Convention on the Law of Treaties, art. 31(3)(a),

opened for signature May 23, 1969, 1155 U.N.T.S. 331 (in

interpreting a treaty, “[t]here shall be taken into account

* * * any subsequent agreement between the parties regarding the interpretation of the treaty or the application

of its provisions”). No non-EU signatory to the Energy

Charter Treaty has disputed this interpretation, which

concerns only the non-applicability of Article 26 as between EU Member States in their bilateral relations. See

p. 6, supra.

In short, it is crystal clear that the EU Treaties precluded the formation of any arbitration agreement under

Article 26 between Spain and the investors here. Spain did

not—and could not—offer to arbitrate the disputes that

led to the awards in these cases. No arbitration agreement

was ever formed.

2. The D.C. Circuit recognized that jurisdiction under

the FSIA’s arbitration exception requires “the existence

of an arbitration agreement.” Pet. App. 18a. Yet the court

sidestepped the structural EU law issues that question

implicates, including express pronouncements from the

EU’s highest court that leave no doubt that no arbitration

agreement existed.

The court did so on the theory that, rather than determine whether an arbitration agreement between Spain

and the investors here existed, the court could “look to the

investment treaty itself to identify the scope of the sovereign’s consent and the relevant agreement for purposes of

the FSIA’s arbitration exception.” Pet. App. 21a. The

court stated that it “need not and d[id] not resolve

whether Spain entered into separate arbitration agreements ‘with’ private parties because we conclude that it

entered into an arbitration agreement—the Energy

Charter Treaty itself—that is arguably ‘for the[ir] benefit.’” Pet. App. 22a. The court declined to address Spain’s

argument that it had not entered into the Energy Charter

Treaty for the benefit of EU investors, characterizing that

argument as one “regarding the scope of the Energy

Charter Treaty, not its existence.” Pet. App. 22a-23a.

The D.C. Circuit’s reasoning was misguided. “[A] sovereign’s consent to arbitration is important,” BG Grp., 572

U.S. at 43, and doubly so when that consent is the basis

for abrogating the sovereign’s presumptive immunity.

Thus, for jurisdiction to lie under the arbitration exception, the FSIA requires not only that a foreign sovereign

have signed an agreement “with or for the benefit of a private party,” but also that the agreement be “to submit to

arbitration all or any differences which have arisen or

which may arise between [the foreign sovereign and the

private party] * * * .” 28 U.S.C. §1605(a)(6). Moreover,

identifying a relevant agreement for the benefit of a

private party requires determining that the party invoking Section 1605(a)(6) is one for whose benefit the agreement was made. It cannot be enough, for purposes of asserting jurisdiction over a foreign sovereign, that the sovereign consented to arbitrate some disputes with some

other private parties. The court must satisfy itself that the

sovereign actually consented to arbitrate disputes with

the specific private party that is trying to sue it in U.S.

court.

And here, as explained above, there is no question

that, as a consequence of the EU Treaties, Spain could not

have entered into any such agreement. Even assuming

that, by signing the Energy Charter Treaty, Spain entered into an agreement for the benefit of some private

parties, it did not (and could not) enter into that agreement for the benefit of EU investors to arbitrate disputes

that arise between Spain and those investors.

But the decision below makes this all irrelevant. Under the D.C. Circuit’s rule, a private party can drag a foreign sovereign into court, forcing it to defend against enforcement of an arbitration award—even if it is clear, as it

is here, that the sovereign did not (and could not) agree to

arbitrate the specific dispute that gave rise to the award.

Whether the FSIA allows that outcome warrants this

Court’s review.

B. The D.C. Circuit’s decision encourages intra-EU

arbitration, notwithstanding its incompatibility

with the EU legal order

The decision below also carries significant consequences for the EU legal order.

1. The Court of Justice has expressly confirmed, in a

series of rulings binding on all EU Member States, that

the same fundamental EU law principles that foreclose intra-EU investment arbitration also require EU courts to

refuse to enforce intra-EU arbitral awards. See Case C109/20, Republiken Polen v. PL Holdings Sàrl,

ECLI:EU:C:2021:875, ¶ 52 (Oct. 26, 2021); Case C-333/19,

DA v. Romatsa, ECLI:EU:C:202:749 (Sep. 21, 2022). 4 In

other words, intra-EU investment awards are invalid and

categorically unenforceable within the EU. Courts in EU

Member States are consistently setting aside and declining to enforce intra-EU investment awards, including Energy Charter Treaty awards. 5

But as long as there remains a possibility of enforcing

intra-EU awards elsewhere, EU investors will likely continue to bring investment claims against EU Member

States, in the hope that they will be ultimately be able to

collect on any awards tribunals issue in their favor, even

if no EU court will enforce them. Indeed, despite the

Court of Justice’s unequivocal confirmation in Komstroy

that the Energy Charter Treaty’s arbitration provision

cannot apply intra-EU, EU investors have continued to

initiate new arbitrations against EU Member States under that provision. 6

A courtesy English translation of the Romatsa decision is available at page A91 of the addendum to the Commission’s amicus briefs

in the D.C. Circuit, filed on June 6, 2023.

See, e.g., Kingdom of Spain v. Novenergia II - Energy & Environment (SCA), SICAR, T 4658-18, Svea Court of Appeal (Dec. 13,

2022); Italian Republic v. CEF Energia, T 4236-19, Svea Court of

Appeal (May 27, 2024); Republic of Poland v. PL Holdings, T 156919, Supreme Court, Sweden (Dec. 14, 2022); Slot Group a.s. v. Republic of Poland, Cour d’appel [Court of Appeal] Paris, 16e ch., Apr.

19, 2022, 49/2022; Strabag SE v. Republic of Poland, Cour d’appel

[Court of Appeal] Paris, 16e ch., Apr. 19, 2022, 48/2022; Republic of

Poland v. Mercuria Energy Group, T 2613-23, Svea Court of Appeal

(Dec. 23, 2024).

See, e.g., WOC Photovoltaik Portfolio GmbH & Co. KG v. Kingdom of Spain, ICSID Case No. ARB/22/12 (German investor)

Even withdrawing from the Energy Charter

Treaty—though unnecessary, since Article 26 does not

apply intra-EU to begin with—would not solve the problem. The Energy Charter Treaty contains a sunset provision requiring contracting parties to comply with its

terms for 20 years after a withdrawal takes effect. ECT

art. 47(3). Numerous EU Member States (including Denmark, France, Germany, Ireland, Italy, Luxembourg, the

Netherlands, Poland, Portugal, Slovenia, and Spain), as

well as the EU itself, have already withdrawn from the

Energy Charter Treaty, primarily out of concern that its

protection of fossil-fuel investments is no longer compatible with the EU’s climate policy. See Press Release,

Council of the European Union, Energy Charter Treaty:

EU notifies its withdrawal (June 27, 2024),

https://bit.ly/4jkrTyr. Despite having specifically expressed their understanding that Article 26 does not authorize intra-EU investment arbitration, see 2024 Declaration, supra, even these EU Member States will remain

exposed to further intra-EU Energy Charter Treaty

claims for many years to come. This Court can help stem

the tide.

2. Beyond imposing substantial burdens and litigation costs on EU Member States, intra-EU arbitrations

are highly disruptive for the EU itself.

(registered Apr. 5, 2022); Vasilisa Ershova and Jegor Jeršov v. Republic of Bulgaria, ICSID Case No. ARB/22/29 (Lithuanian investors) (registered Nov. 11, 2022); ExxonMobil Petroleum & Chemical BV v. Kingdom of the Netherlands, ICSID Case No. ARB/24/44

(Belgian investor) (registered Oct. 21, 2024); Suomi Power Networks TopCo B.V. et al. v. Republic of Finland, ICSID Case No.

ARB/24/37 (Dutch and Swedish investors) (registered Aug. 23,

2024).

A significant proportion of intra-EU Energy Charter

Treaty cases (including the cases here) concern EU Member States’ incentive schemes for energy producers.

These cases implicate the complex EU law framework

that governs State aid, i.e., subsidies to private actors.

State aid control is critical to the proper functioning of the

EU internal market. It prevents the distortion of competition and ensures a level playing field for companies

across the EU.

The Commission is the EU’s State aid regulator. The

EU Treaties generally prohibit the provision of any State

aid. But a Member State that wishes to provide State aid

can notify the Commission of that intention, and the Commission can approve payment of aid on defined public policy grounds, and in compliance with the principles of necessity and proportionality. TFEU art. 107. Member

States must not implement potential aid measures unless

and until the Commission has provided authorization.

TFEU art. 108(3); Case C-284/12, Deutsche Lufthansa

Flughafen

Frankfurt-Hahn

GmbH,

ECLI:EU:C:2013:755, ¶¶ 34-42 (Nov. 21, 2013).

The Commission has determined that compensation

awarded by an arbitral tribunal in connection with a Member State subsidy scheme “would constitute in and of itself

State aid” that cannot be paid without the Commission’s

authorization. Decision on State Aid, SA.40348, ¶ 165

(Nov. 10, 2017), https://bit.ly/43pbUdO.

As a result, in a significant proportion of cases, Member States cannot pay intra-EU arbitral awards, whether

pursuant to the award or a judgment from an enforcement

court, unless and until the Commission has authorized

payment. The Commission must evaluate each potential

aid measure, including arbitral awards, separately. But

the Commission has recently declined to allow payment of

one arbitral award against Spain arising from Spain’s support scheme for renewable energy, finding that the award

in and of itself is State aid: it “contravenes provisions or

general principles of EU law” and therefore, as the Court

of Justice has held, “cannot be declared compatible with

the internal market.” Commission Decision of 24 March

2025 on the measure State Aid SA.54155, ¶¶ 254-264 &

p. 57, https://bit.ly/4mC9lfT.

If a Member State does make unauthorized payments, it will be in violation of EU law and subject to potential infringement proceedings brought by the Commission. Moreover, the Commission is required, in principle,

to order the Member State to recover (i.e., claw back) any

unauthorized payments made. Council Regulation (EU)

2015/1589 of 13 July 2015 laying down detailed rules for

the application of Article 108 of the Treaty on the Functioning of the European Union (codification), art. 16, 2015

O.J. (L 248). The recovery process entails close monitoring and coordination between the Commission and the

Member State. See Commission Notice on the recovery

of unlawful and incompatible State aid, 2019 O.J.

C 247/1, ¶ 65 (July 23, 2019). It may also lead to nationalcourt litigation, such as if the beneficiary refuses to repay

the aid or challenges the recovery decision, id. ¶¶ 141-142,

or if recovery requires resort to insolvency proceedings,

id. ¶¶ 127-135. Failure to recover funds would expose the

Member State to legal action by the Commission and possible penalties. Id. ¶¶ 148-158.

In short, attempts to satisfy or enforce intra-EU investment awards generate a morass of legal and practical

problems for EU Member States and the Commission.

Those problems are likely to persist as long as investors

continue to bring intra-EU claims under the Energy

Charter Treaty—and the D.C. Circuit’s decision only encourages them to do so.

II. The decision below invites a deluge of award

enforcement actions against EU Member States in the

D.C. Circuit

As a result of the decision below, courts in the D.C.

Circuit face a flood of intra-EU award enforcement actions.

Notwithstanding the impermissibility of intra-EU arbitration, investment tribunals have issued more than 30

intra-EU awards against EU Member States under the

Energy Charter Treaty. 7 The sums involved are staggering: the awards in this case alone total approximately 360

million euros. See Pet. App. 11a. As of 2022, intra-EU Energy Charter Treaty cases had resulted in awards or settlements worth a total of nearly $3 billion. See Investorstate protection disputes involving EU Member States:

State of play, European Parliamentary Research Service,

Nov. 2022, fig. 5, https://bit.ly/3T4Xvxj. That figure only

continues to increase.

By clearing the way for actions to enforce awards issued in arbitral proceedings that, as a matter of both EU

and international law (as the investors’ own home states

agree, see 2024 Declaration, supra), were invalid from the

start, the decision below signals that the courthouse doors

in the D.C. Circuit are open for EU investors to attempt

to enforce these awards here.

That will only cement the D.C. Circuit’s status as the

enforcement forum of choice for parties seeking to collect

on intra-EU awards. Even before the decision below, the

United States was an attractive forum for award

The UN Conference on Trade and Development (UNCTAD)

maintains information about known investor-State cases. See Investment Dispute Settlement Navigator, Investment Policy Hub,

UNCTAD,

https://investmentpolicy.unctad.org/investment-dispute-settlement.

enforcement actions. Reducing an arbitral award to a U.S.

judgment gives an award holder access to unusually powerful post-judgment discovery tools. See Fed. R. Civ. P.

69(a)(2). Lower courts have allowed litigants to obtain

worldwide post-judgment discovery into foreign sovereign’s assets. E.g., Tatneft v. Ukraine, No. 17-cv-582, 2021

WL 5353024 (D.D.C. Oct. 18, 2021); Stati v. Republic of

Kazakhstan, No. 14-cv-1638, 2020 WL 13144317 (D.D.C.

May 18, 2020).

Perhaps for this reason, most of the known intra-EU

Energy Charter Treaty awards against EU Member

States are already the subject of enforcement actions in

the D.C. Circuit. 8 At least twelve district judges in the

D.C. Circuit have one or more such cases pending before

them. While most of these actions were stayed pending

Those cases are InfraStructure Services Luxembourg SARL v.

Kingdom of Spain, No. 18-cv-1753 (D.D.C.); Novenergia II-Energy

& Environment (SCA) v. Kingdom of Spain, No. 18-cv-01148

(D.D.C.); RREEF Infrastructure (G.P.) Ltd. v. Kingdom of Spain,

No. 19-cv-03783 (D.D.C.); Watkins Holdings S.R.L. v. Kingdom of

Spain, No. 20-cv-01081 (D.D.C.); Infrared Environmental Infrastructure GP Ltd. v. Kingdom of Spain, No. 20-cv-00817 (D.D.C.);

Foresight Luxembourg Solar 1 S.A. R.L. v. Kingdom of Spain, No.

20-cv-00925 (D.D.C.); Cube Infrastructure Fund Sicav v. Kingdom

of Spain, No. 20-cv-01708 (D.D.C.); BayWa R.E. AG v. Kingdom of

Spain, No. 22-cv-02403 (D.D.C.); Hydro Energy 1, S.A.R.L. v. Kingdom of Spain, No. 21-cv-02463 (D.D.C.); RWE Renewables GMBH

v. Kingdom of Spain, No. 21-cv-03232 (D.D.C.); Swiss Renewable

Power Partners S.A.R.L. v. Kingdom of Spain, No. 23-cv-00512

(D.D.C.); Blasket Renewable Investments LLC v. Kingdom of

Spain, No. 25-cv-1756 (D.D.C.); CEF Energia B.V. v. Italian Republic, No. 19-cv-03443 (D.D.C.); Greentech Energy Sys. A/S v. Italian Republic, No. 19-cv-03444 (D.D.C.); MOL Hungarian Oil & Gas

PLC v. Republic of Croatia, No. 23-cv-000218 (D.D.C.); Mercuria

Energy Grp. Ltd. v. Republic of Poland, No. 23-cv-03572 (D.D.C.);

and ACF Renewable Energy Ltd. v. Republic of Bulgaria, No. 1:24cv-01715 (D.D.C.).

the D.C. Circuit’s decision in this case on Spain’s immunity under the FSIA, most are now proceeding individually

to the merits. And more than 30 intra-EU investment disputes are still in the arbitration phase. 9 Any awards rendered in EU investors’ favor in those cases, too, are highly

likely to make their way to the D.C. Circuit.

Absent this Court’s intervention, EU Member States

will be forced to defend against dozens of award enforcement actions, even though they agree—whether as respondents or the investors’ home countries—that the

Member State did not consent, and indeed could never

have consented, to the underlying arbitration, and that

the resulting awards are therefore invalid. This Court

should grant review to prevent that intolerable situation.

III. Under the decision below, most modern investment

treaties on their own constitute a basis for

jurisdiction under the FSIA’s arbitration exception

The D.C. Circuit’s reasoning that the Energy Charter Treaty itself represents a completed agreement sufficient to abrogate sovereign immunity has repercussions

far beyond this case, for the EU and its Member States as

well as other foreign sovereigns.

These cases can be identified through an advanced search in the

UNCTAD database, https://investmentpolicy.unctad.org/investment-dispute-settlement, using the following parameters: (1) Under

“Nationality of the Parties,” drag and drop “EU (European Union)”

from “Country Groupings” for both “Respondent’s Nationality” and

“Claimant’s Nationality”; (2) under “Applicable IIA,” select “The

Energy Charter Treaty” from the “selector of individual IIAs”

dropdown menu; and (3) under “Status/Outcome of original proceedings,” check the box for “pending.” To locate intra-EU cases

under bilateral investment treaties, use the same parameters, but

under “Applicable IIA,” check the box for “bilateral investment

treaties.”

The D.C. Circuit sought to minimize the breadth of

its holding by asserting that “not all investment treaties

‘supply the requisite state consent to arbitration,’” and

pointing to the 1979 Sweden-Malaysia bilateral investment treaty as a contrary example. Pet. App. 25a. But

even the source on which the court relied correctly notes

that investment treaties that contain a “mere agreement

to agree,” rather than completed consent to arbitration,

are today the exception, not the rule: “[i]n most modern

investment protection treaties, contracting states expressly consent to the mandatory submission of certain

investment disputes to arbitration * * * .” Christopher

Dugan, Investment Arbitration 236 (2008). See also Kenneth J. Vandevelde, Bilateral Investment Treaties 358359 (2010) (“A very few BITs provide that consent is subject to agreement between the investor and the host state,

without specifically requiring that consent be given.”).

That is, most investment treaties contain a provision

expressing the State’s consent to submit disputes to arbitration—a unilateral offer that a qualifying investor may

accept by submitting a claim to arbitration, in accordance

with any procedures the treaty sets forth. Vandevelde

358-359. EU Members States’ bilateral investment

treaties follow this longstanding practice. 10 So do those of

numerous other countries, including the United States. 11

Under the decision below, all such investment treaties (which number in the hundreds), in and of themselves,

now constitute valid “agreements to arbitrate” for purposes of the FSIA, even without a showing that the foreign state and the investor seeking to hale it into court

actually agreed to arbitrate the underlying dispute. There

is no reason to think that foreign sovereigns entering into

investment treaties understood that they were thereby

abrogating their immunity from suit in U.S. courts

brought by untold numbers of investors.

E.g., Agreement between the Portuguese Republic and the

United Arab Emirates on the Reciprocal Promotion and Protection

of Investments, art. 11, Nov. 19, 2011; Agreement between the Government of the Republic of Finland and the Government of the Socialist Republic of Viet Nam on the Promotion and Protection of Investments, art. 9, Feb. 21, 2008; Agreement between the BelgiumLuxembourg Economic Union and the Government of the People’s

Republic of China on the Reciprocal Promotion and Protection of

Investments, art. 8, June 6, 2005.

E.g., Treaty between the Government of the United States of

America and the Government of the Republic of Croatia Concerning

the Encouragement and Reciprocal Protection of Investment, with

Annex and Protocol, art. X, July 13, 1996, S. Treaty Doc. 106-29;

Treaty between the Government of the United States of America

and the Government of the State of Bahrain Concerning the Encouragement and Reciprocal Protection of Investment, art. 9, Sep.

29, 1999, S. Treaty Doc. 106-25; Treaty between the United States

of America and the Republic of Ecuador Concerning the Encouragement and Reciprocal Protection of Investment, with Protocol

and a Related Exchange of Letters, art. VI, Aug. 27, 1993, S. Treaty

Doc. 103-15. See also United States 2012 Model BIT, art. 25.

CONCLUSION

The petition should be granted.

Respectfully submitted.