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US District Court orders stay of enforcement of ICSID award of over USD 30 million against Kingdom of Spain

Photo by Kay Dittner / Unsplash

In the enforcement proceedings brought by RWE Renewables GMBH & RWE Renewables Iberia S.A.U. against the Kingdom of Spain before the United States District Court for the District of Columbia, the Court ordered that the proceedings be stayed until the ICSID ad hoc Committee has issued its decision on the annulment of the arbitral award or until a further order of the Court has been issued.

On 9 December 2021, the aforementioned companies (together, “the petitioners”), owners of the arbitration claimant companies - RWE Innogy GMBH and RWE Innogy Aersa S.A.U. - lodged a Petition before the US Court to enforce, pursuant to Article 54 of the ICSID Convention and 22 U.S.C. § 1650a.,  an over USD 30 million ICSID Arbitral Award against the Kingdom of Spain rendered on 18 December 2020, in RWE Innogy GMBH And RWE Innogy Aersa S.A.U. v. Kingdom Of Spain, ICSID Case No. ARB/14/34.

Subsequently, Spain moved to dismiss the case or, in the alternative, stay the proceedings. Petitioners opposed that Motion, and Spain replied. The European Commission then filed an amicus brief in support of Spain.

In line with the same strategy applied in the NextEra case when it sought an order from the District Court of Amsterdam requiring NextEra to withdraw the recognition and enforcement proceedings the latter had commenced in the United States District Court for the District of Columbia, and further to direct NextEra and its affiliates to refrain from attempting to compel the Kingdom of Spain to pay or otherwise enforce the award anywhere in the world until the European Commission has made a finding as to the award’s compatibility with the internal market, the Kingdom of Spain has filed a lawsuit in a German court seeking to enjoin enforcement of the RWE award in the District of Columbia. Just as NextEra did in that case, the petitioners filed a Motion for Preliminary Injunction and Temporary Restraining Order in the US District Court.

On 6 April 2023, the parties to the enforcement proceedings submitted a Joint Status Report and Proposed Order reporting to the District Court that the German Court of Appeals had issued an “interim order prohibiting Petitioners from initiating or continuing their motion until the German appellate court hears oral argument from the Parties on 2 May 2023”. Failure by the Petitioners to abide by this order will expose them to penalties of €250,000 and/or imprisonment of their executives for up to six months.

On 11 April 2023, the District Court rendered a Minute Order denying Petitioners’ Motion for Preliminary Injunction and Temporary Restraining Order without prejudice and made clear that Petitioners could resubmit their Motion if they wished the District Court to take up this issue again.

Finally, on 13 April 2023 the District Court denied Spain’s Motion to Dismiss but granted its Motion to Stay.

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