International investors are seeking to seize Spanish assets in the US during the World Cup in an attempt to recoup more than €200mn linked to a dispute over Madrid’s decision to scrap renewable energy subsidies more than a decade ago.
The move marks the latest chapter in a battle between Spain and international investors in which the government of Prime Minister Pedro Sánchez — a forceful advocate of renewables — has ended up defending a previous administration’s decision to abolish financial aid for green energy schemes.
Blasket Renewable Investments, a US fund owed more than €600mn in awards and interest that arbitration tribunals have ordered Spain to pay, has secured legal rights in the US to pursue recovery of funds in 10 states where the Spanish team might play during the World Cup.
Blasket believes it can claim more than €200mn through US enforcement action. It has issued subpoenas to organisations including Fifa, the Royal Spanish Football Federation, the Hilton hotel in Chattanooga, Tennessee, where the Spanish team is staying, and Adidas, the official kit supplier to the team, seeking information on Spanish assets in the US linked to the World Cup that could be seized.
“We would be interested in any type of assets that Spain might bring into the United States,” said Matthew McGill from King & Spalding, Blasket’s US counsel. “If Spain were to have submitted a deposit for, say, hotel rooms for a group of Spanish dignitaries, we would seek to seize such an asset.”
Spain maintains the men’s national football team should not be affected by its dispute with Blasket because it is independent of the government.
Spain will play Cabo Verde and Saudi Arabia in Atlanta, Georgia, during the group stages of the tournament but could end up playing in many other states depending on how they progress in the competition.
A Spanish government official said the Royal Spanish Football Federation, or RFEF, was “a private entity independent of the state, and the operations of the Spanish national football team should be unaffected by any action by Blasket”.
The official added that Spain “would defend its interests” against any attempt to seize Spanish assets in the US.
The RFEF stressed the state had no role in funding or governing its work. “We have sent a cease-and-desist letter to the company, requesting that it stop this attempt to establish a link” between the RFEF and the state, said a federation spokesperson.
Fifa did not immediately respond to a request for comment.
The awards stem from Spain’s decision in 2013 to roll back a generous renewable energy subsidy regime that attracted billions of euros in foreign investment but became too expensive for the government during the Eurozone debt crisis.
The changes to the scheme under former prime minister Mariano Rajoy’s conservative administration triggered 50 claims at the World Bank’s International Centre for Settlement of Investment Disputes.
Spain has lost 27 cases and accumulated more than €1.7bn in liabilities plus interest to Blasket and other investors, which it refuses to pay.
The European Commission is backing Spain in its legal fight. Madrid and Brussels argue that paying the awards would amount to unlawful state aid because they arise from arbitration proceedings that are incompatible with EU law — a position that was endorsed by the European Court of Justice in 2018.
“Only the Commission can authorise the granting of state aid within the EU,” a Commission spokesperson said. “Arbitration tribunals are not competent to do so. If they award compensation, this compensation would constitute unlawful state aid.”
Investors dispute that interpretation, arguing Spain remains bound by its obligations under the Energy Charter Treaty, which allows foreign investors to bring claims against governments if policy changes harm their investments.
Although the EU and several member states have withdrawn from the treaty in recent years, investments can be protected for 20 years under a sunset clause.
International investors have obtained ECT awards against Spain in several countries outside of the EU, including the UK, Singapore and Australia, and more recently, the US. Enforcement action has led to the seizure of Spanish property in countries including the UK.
Faced with the prospect of asset seizure on US soil last year, the Commission allowed Spain to settle one case and pay €23.5mn to Japanese company JGC Holdings.
But EU officials maintain that settling such cases would encourage creditors to sell claims to non-EU vehicles such as Blasket to pursue enforcement outside the bloc.
Blasket’s dispute with the Spanish government has reached the US Supreme Court after Spain sought to block enforcement of awards on the grounds of sovereign immunity.
A decision on whether the court will hear the case is expected around June 25. The US Department of Justice has advised against taking it up, arguing Spain is unlikely to prevail given its international obligations.
Madrid hopes the court will take the case and that “it will be declared that US courts do not have jurisdiction and that the awards cannot be enforced,” a Spanish government official said.
McGill said investors would not back down. “Spain . . . but now also the European Commission is running out of room with this,” he argued, adding that Madrid would have to decide whether it wants to be in a “protracted impasse” with courts in countries including the US, UK and Australia.
Additional reporting by Samuel Agini in London
