The standoff between the Spanish state and the funds that invested in renewables under the old feed-in tariff system has taken a new turn in the United States courts. The US justice system has once again rejected the government's arguments and paved the way for creditors in the so-called Antin case to begin tracing and seizing Spanish assets in the United States. The ruling, issued by the District Court for the District of Columbia, represents a significant setback for Madrid's strategy, which had relied on Brussels' position to halt the enforcement of the arbitration awards.
The ruling, signed by Judge Loren L. AliKhan, rejects Spain's request to suspend the execution of a judgment that awards investors $156,6 million (approximately €135,7 million) plus interest. The court considers that the European Commission's decision on state aid does not serve as a shield against creditors and, more worryingly for the government, suggests that its insistence that Brussels is preventing it from paying could be interpreted as an indication that Spain is unwilling or unable to meet its obligations.
The Antin case and the origin of the conflict
The controversy dates back to investments made by Infrastructure Services Luxembourg and EnergÃa Termosolar in Spanish solar projects, under the incentive framework approved by the government. Following regulatory changes implemented between 2012 and 2014, which retroactively reduced and eliminated subsidies for green energy, the investors resorted to international arbitration. An ICSID tribunal ruled in their favor in 2018, awarding them €101 million in compensation , an amount that, with interest and costs, has grown to over $156 million.
The European Commission, however, rejected Spain's disbursement of the money, considering it to constitute illegal state aid. This position was used by the Spanish government as its main argument before the US courts to avoid payment. The Spanish defense argued that both paying the judgment and providing a guarantee could violate EU law and expose the country to potential sanctions from Brussels. Judge AliKhan completely rejected this argument.
The "European shield" turns against Spain
The court ruling goes beyond simply rejecting Spain's arguments. The judge emphasizes that Spain has not demonstrated that providing a guarantee would actually trigger a sanctioning procedure by the European Commission . Furthermore, the ruling points out that the government has also failed to prove that it recently requested authorization from Brussels to pay the judgment or provide such a guarantee.
The most compelling argument, and the one causing the most concern in Moncloa (the Spanish Prime Minister's residence), links Spain's position to a possible unwillingness to pay. The insistence that European law prevents payment constitutes, according to the court, an indication that there is a reasonable probability that Spain cannot or will not comply with the judgment . This conclusion, far from protecting the State, strengthens the position of the creditors seeking free rein to seize assets.
The decision has immediate practical consequences. The plaintiffs will be able to register the judgment in any other judicial district in the United States , a key tool for expanding the search for Spanish assets beyond Washington. The investors' lawyers have specifically pointed to New York as a jurisdiction where assets subject to seizure might exist, some of which could be easily transferred.
Heritage research intensifies
The legal battle is not limited to debt recognition. Creditors have already sent information requests to The Clearing House Payments Company and the Federal Reserve Bank of New York to try to identify assets linked to the Spanish state. Spain tried to have these subpoenas annulled, but the court has also rejected its request, stating that the competent jurisdiction to decide on any potential challenge is the Southern District of New York.
This latest setback comes after a series of adverse rulings for Spain in US courts. At least two other courts have recently allowed creditors to proceed with actions aimed at locating and seizing state assets . The result is a veritable race among the various plaintiffs to secure priority over any assets that may be located in the United States.
A multi-million dollar cost overrun for the Treasury
The impact of this situation goes far beyond the outstanding compensation payments. A technical report prepared by the creditors estimates that the conflict has resulted in an additional cost of between 6.000 and 6.600 billion euros for the Spanish Treasury as a result of the increased cost of financing sovereign debt, linked to a greater perception of risk and legal uncertainty.
The study, which uses a difference-in-differences methodology comparing the evolution of Spain's financing costs with those of the rest of the eurozone, indicates that the problem no longer lies solely in the outstanding amount owed, but rather in the deterioration of the perceived risk associated with the country's debt . The recognized arbitration awards total €2.333 billion, but the increased cost of public financing would be three times greater than this figure.
The document also analyzes the possibility of a technical default scenario. Certain bonds issued by the Treasury incorporate cross-default clauses , meaning that the non-payment of binding obligations could allow some creditors to demand the early maturity of other issues or to impose more onerous financial conditions. Although this scenario would not be automatic or inevitable, the accumulation of unpaid arbitration awards and their enforcement in foreign courts increases this perceived risk.
The origin of this entire situation lies in the solar and wind energy subsidies offered by the Spanish government to incentivize investment in green energy. With the 2008 economic crisis and the resulting electricity tariff deficit, the government retroactively cut and eliminated these subsidies between 2012 and 2014 , leading to dozens of international arbitrations. Since then, 52 claims have been filed with the International Centre for Settlement of Investment Disputes (ICSID), many of which were brought by new players in the renewable energy sector . Twenty-nine of these cases resulted in awards against Spain, of which 28 remain unpaid.
Spain's refusal to pay these amounts, based on European Union criteria, has led the funds to seek collection in jurisdictions such as the United Kingdom, Belgium, Australia, and the United States, where courts are ruling in favor of the creditors. The decision by the District Court of Columbia not only allows for the seizure of assets but also leaves Spain with less room for maneuver in the appeals it still has pending in the country.
With this new ruling, Spain's problem is no longer solely the existence of an outstanding arbitration award. The US courts are now moving toward identifying and potentially seizing state assets , expressly rejecting the main argument Madrid had used to defend itself: that Brussels is preventing it from paying. The ball is now in the government's court, which will have to decide whether to maintain its strategy of resistance or seek a negotiated solution before the seizures take place.