Waiving Goodbye to Immunity: A Case Note on Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028

In a significant decision for international arbitration and sovereign risk, the Federal Court of Australia has confirmed that the Kingdom of Spain waived its foreign State immunity in proceedings seeking recognition and enforcement of arbitral awards rendered under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

On 29 August 2025, the Federal Court of Australian handed down judgment in Blasket Renewable Investments LLC v Kingdom of Spain [2025] FCA 1028. Justice Stewart held that Spain could not rely on foreign State immunity to resist enforcement of four ICSID awards in Australia, notwithstanding arguments based on European Union law, public international law and constitutional principles. 

The decision reinforces Australia’s position as a pro-enforcement jurisdiction for investment treaty awards and provides important clarity for investors, assignees and States alike. 

The Court’s reasoning also sits alongside the Federal Court’s earlier consideration of sovereign immunity in the context of non-ICSID awards under the New York Convention, including in CCDM Holdings, LLC v Republic of India, where the Court examined whether India’s status as a Convention State amounted to a waiver of immunity for enforcement proceedings in Australia (see our previous article Federal Court of Australia affirms jurisdiction to enforce arbitral awards against foreign States party to the New York Convention, 27 October 2023).

Background 

The Blasket proceedings concerned four applications to enforce arbitral awards issued by tribunals constituted under the ICSID Convention. The awards arose out of disputes between foreign investors and the Kingdom of Spain concerning reforms to Spain’s renewable energy regulatory regime. 

Between 2010 and 2014, Spain altered the "regimen economico primado" a framework of premium feed-in tariffs introduced in 2007 and 2008 designed to encourage investment in renewable energy for certain renewable energy producers. It was alleged by a number of foreign investors that this amounted to a breach of Spain’s obligations under the Energy Charter Treaty (1994), including the obligation to afford fair and equitable treatment. The ICSID tribunal upheld the investors claims and subsequently issued awards totalling approximately €500 million (approximately AU$900 million). 

The applications were brought in four proceedings, which were heard together: 

• Blasket Renewable Investments LLC v The Kingdom of Spain (RREEF proceeding)
• 9REN Holding Sàrl v The Kingdom of Spain (the 9REN proceeding), 
• Blasket Renewable Investments LLC v The Kingdom of Spain (the Watkins proceeding); and 
• NextEra Energy Global Holdings BV & Anor v The Kingdom of Spain (the NextEra proceeding).

In the Federal Court, Spain asserted that it was immune from the Federal Court's jurisdiction by virtue of s 9 of the Foreign States Immunities Act 1985 (Cth). 

Spain’s arguments

Spain advanced a multi-layered challenge to enforcement.

First, it submitted that the High Court’s decision in Kingdom of Spain v Infrastructure Services Luxembourg Sarl [2023] HCA 11; 275 CLR 292 was incorrectly decided. Relevantly, that judgment found that Spain's agreement to certain articles of the ICSID Convention did amount to a waiver of foreign State immunity in proceedings to recognise and enforce ICSID awards in Australia in that case. 

Secondly, Spain argued that, even if the High Court decision were correct, it did not apply where the binding status of an award was disputed. Spain contended that the awards were not binding at public international law because:

1. intra-EU investment arbitration under the Energy Charter Treaty is incompatible with EU law, following decisions such as Achmea and Komstroy;
2. compliance with the awards would constitute unlawful State aid under EU law; and
3. the developments in EU law had effectively displaced ICSID arbitration as the applicable dispute resolution mechanism for intra-EU disputes.

On that basis, Spain argued that Australia had no obligation under Article 54 of the ICSID Convention to enforce the awards, and that Spain had not waived its immunity.

Finally, Spain also advanced a constitutional argument, asserting that the provisions of the International Arbitration Act impermissibly required Australian courts to recognise awards without independently determining whether there was a valid arbitration agreement, incompatible with Chapter III of the Constitution.

Contrary to this, the applicants argued that the ICSID Convention is a "closed-loop system" and thus, given that there is no dispute as to whether the awards were genuine, certified and authenticated awards, the Court did not consider it necessary to consider Spain's argument that the awards are not binding.

The Court’s Decision 

Justice Stewart rejected Spain’s arguments and held that all four awards were capable of recognition and enforcement in Australia.

The Court accepted that the ICSID Convention establishes a "closed-loop system". Once an award has been duly rendered, certified and is no longer subject to annulment or stay under the Convention, national courts of Contracting States are not permitted to revisit its validity or binding effect.

As both Australia and Spain are Contracting States, Australia’s obligation under Article 54 of the ICSID Convention, to recognise the award as binding and enforce its pecuniary obligations as if it were a final judgment of an Australian court, was engaged.

The Court held that Spain’s accession to the ICSID Convention amounted to a waiver of foreign State immunity for the purposes of recognition and enforcement proceedings in Australia, consistently with the High Court’s decision in Spain v Infrastructure Services. Spain’s attempts to distinguish that decision, or to relitigate its correctness, were unsuccessful.

The Court also rejected Spain’s reliance on EU law. Whatever obligations Spain may owe within the EU legal order, those obligations do not qualify or diminish Australia’s rights and obligations under the ICSID Convention as a matter of public international law.

The constitutional challenge likewise failed. Justice Stewart held that, in enforcing the awards, the Federal Court was exercising judicial power in a manner consistent with Ch III of the Constitution.

Finally, the Court dismissed an application by the European Commission to intervene in the proceedings, ordering that it pay the applicants’ costs. 

Key Takeaways

This decision is a helpful crystallisation of how Australian courts treat foreign arbitral awards and has important implications for investors, assignees, States and counterparties exposed to sovereign risk: 

• Australia remains a strong pro-enforcement jurisdiction: The Federal Court has reaffirmed that ICSID arbitral awards can and will be recognised and enforced in Australia in accordance with the Convention and domestic implementing legislation.
• Foreign State immunity is not a shield against ICSID enforcement: Contracting States should expect to "waive goodbye" to foreign State immunity from jurisdiction in enforcement proceedings outside the EU, including in Australia. 
• EU law does not displace Australia’s international obligations: Arguments based on intra-EU law conflicts will not prevent enforcement of ICSID awards in Australian courts.
• Assignees can enforce ICSID awards: Where awards or enforcement rights have been validly assigned, assignees may seek enforcement in Australia, subject to ordinary principles of assignment.

For investors and financial institutions, the judgment reinforces the strategic value of Australia as an enforcement forum. For States, it underscores the legal consequences of participation in the ICSID system and the limits of relying on immunity or regional legal regimes to avoid enforcement abroad.