A LONDON judge has handed Spain a major victory in its long and expensive fight with US vulture funds seeking to seize state assets over a string of renewable-energy compensation awards worth up to €1.7 billion.
The Commercial Court of London ruled that arbitration awards issued against Spain under the Energy Charter Treaty cannot be transferred or sold to third-party funds, blocking a tactic used by several US investors to pursue huge payouts.
The case centred on awards originally granted to OperaFund Eco-Invest and Schwab Holdings, two investment groups that sued Spain after the government slashed its generous renewable-energy subsidies more than a decade ago.
Those awards were later purchased by Blasket Renewables, a US-linked distressed-debt fund which attempted to enforce them in Britain.
Blasket took the case to London because the UK is one of the world’s main enforcement hubs for international arbitration, and because foreign governments hold assets in the country that can be targeted if a court authorises seizure.
Spain challenged the move, arguing that the awards could not legally be transferred to a third party and that Blasket therefore had no right to enforce them in the UK.
The court agreed, ruling that the rights created by the original arbitration decisions are personal to the original claimants and cannot be reassigned to investment funds seeking to profit from the claims.
The decision severely undermines a strategy used by so-called “vulture funds”, which buy arbitration awards at a discount and then chase sovereign governments through courts in London, Washington and other major jurisdictions.
Had the court sided with the US fund, Spain could have faced immediate attempts to seize assets in Britain, including bank accounts or property linked to the Spanish state.
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The ruling does not cancel the underlying awards but makes it far harder for funds to pursue aggressive enforcement actions in the UK, reducing the immediate risk of asset seizures and limiting Spain’s short-term exposure.
The decision may still be appealed, but it marks one of Spain’s most significant legal wins to date in the sprawling disputes arising from its overhaul of renewable-energy incentives.
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