Spain’s Green Promises Meet Sovereign Accountability -By Fransiscus Nanga Roka

Spain’s conflict with Blasket Renewable Investments highlights both of these pitfalls as well as the harm that each may cause to the transition toward renewable energy. A government cannot sell legal security in order to bring in new investment for renewable energy, strip away the agreed-upon system and then use its state sovereignty to remove any negative outcomes. Conversely, a creditor cannot use an arbitration award as a general authority over all government-owned properties.

The conflict arose as a result of Spain’s initial support for renewable energy through incentive programs, which was later reversed by changes in government policy regarding these programs. As a result, many investors sought to recover losses from Spain through the use of the Energy Charter Treaty (ECT). These investors ultimately became frustrated when they were unable to collect on their awards, resulting in several of them (such as Blasket) filing lawsuits in the U.S. District Court for the District of Columbia. In August 16, 2024, the D.C. Circuit ruled that the arbitration exception found in the Foreign Sovereign Immunities Act provided a basis for the District Court to hear the cases. The Supreme Court then decided not to review the D.C. Circuit’s decision in June 29, 2026.

The indictment against governments is clear; they want to make sure that people will believe what they say they will do when money is limited, but then they find out there are complications in the constitution when it comes time to pay. Government’s role as a regulator is still necessary. There should not be immunity for any type of energy subsidies from being revised by the democracy. However, just because a government can revise its policies does not mean that it automatically loses responsibility for what happens to those who have made investments which were protected.

Spain’s defense is an example of a genuine conflict of laws. In addition to challenging the validity of the arbitration agreement in accordance with the intra-EU arbitration doctrine of the European Union, Madrid was able to establish jurisdiction in the United States courts based upon the D.C. Circuit Court of Appeals’ finding that jurisdiction existed under American law. Although both sets of proceedings were combined for purposes of decision making by the court, there are significant legal differences among the enforcement regimes utilized in each set of proceedings. NextEra and 9REN invoked the ICSID Convention’s implementing legislation; Blasket invoked the New York Convention’s. If we consider all these as being essentially equivalent and interchangeable as “ICSID cases”, then we ignore the implications of these different enforcement regimes on the rights of parties to enforce their arbitral awards.

Nor did the Supreme Court grant creditors Spain’s treasury. The denial of certiorari allowed the lower court’s decision to remain in place; it did not provide a merit-based opinion affirming all of the creditor’s enforcement theories. More importantly, whether there is jurisdiction for an award confirmation action and whether there is authorization for the seizure of specific assets are two distinct issues. Under Section 1609 of the FSIA, the immunity of property remains intact unless otherwise provided for by law. Section 1610 provides that if a creditor seeks to execute on an award, they must demonstrate that there is an available exception to execution, such as demonstrating that the property was used commercially. Therefore, a victory in court does not eliminate the protections afforded under both sections of the FSIA.

The World Cup discovery process demonstrates the line. On June 2026, a U.S. Federal Court ruled that Blasket must take Spain’s football federation, national team and central bank out of the subpoena definition of “Spain” for purposes of collecting information regarding assets. Requesting information regarding an asset does not equate to demonstrating that the requested asset belongs to the debtor or may be attached. National associations cannot replace ownership.

The strategic response should be practical.

Spain should publish a list of all awards that are outstanding and their respective liabilities, as well as a schedule for resolving these issues, distinguishing between the items that can be enforced, and those that are truly unresolved. Payment schedules established through negotiation would help to minimize the amount of interest accruing on unpaid awards, as well as the cost of continuing to litigate these claims; however, they would also protect the ability to fund necessary expenditures.

The EU institutions and the EU member states need to establish a system to address conflicts arising from the obligation of the EU to enforce awards issued by international tribunals, and the obligation of the EU member states to comply with such awards. It would be an institutional failure to leave investors and taxpayers in a situation where they are subject to contradictory demands due to a lack of coordination among the EU institutions and the EU member states.

Creditors must reveal their chain of ownership and/or assignments. They need to prevent multiple recoveries from the same debt. They can only pursue legal attachments of assets owned by the debtor. The courts should also enforce both discovery proportionality and execution immunities with the same level of scrutiny.

Ultimately, governments developing incentives for renewable energy should make available fiscal stress testing results, transparent formula adjustments, and credible transition plans prior to seeking investments.

Beyond Spain, there are implications for the world. If we make promises that are not believable, it will be more expensive to finance the process of de-carbonization. If we randomly collect data, then we may lose the ability to protect people in accordance with our laws.

Sovereignty is a right to have law applied to its defense. However, sovereignty cannot be protected by granting it immunity to the consequences of committing itself to attract investment. Climate change requires that investments in climate solutions are made with the understanding that governments will honor their commitments regardless of how convenient those commitments may become. Creditors need to understand that their remedies are limited to what the law allows.

Fransiscus Nanga Roka

Faculty of Law Unviersity 17 August 1945 Surabaya and Managing Partner Law Firm Victorious Indonesia