Enforcing Arbitral Awards Against Sovereigns: The US Remains the Forum of Choice—With Caveats
Enforcing Arbitral Awards Against Sovereigns: The US Remains the Forum of Choice—With Caveats
Enforcing Arbitral Awards Against Sovereigns: The US Remains the Forum of Choice—With Caveats
On June 29, 2026, the U.S. Supreme Court denied certiorari in two enforcement proceedings under the Foreign Sovereign Immunities Act (FSIA), leaving intact D.C. Circuit rulings that rejected sovereign immunity defenses raised by Spain and Russia.1
Both states had argued that U.S. courts lacked jurisdiction under the FSIA’s arbitration exception because they had never consented to arbitrate the disputes underlying the awards—Spain under the Energy Charter Treaty (ECT), Russia under the 1998 Ukraine–Russia Bilateral Investment Treaty (BIT). The D.C. Circuit disagreed, and the Supreme Court denied review without comment.
The decisions confirm the U.S.—and the D.C. federal courts in particular—as a premier forum for enforcing arbitral awards against sovereign states. Obstacles remain, however. This alert maps what the cert denials settled, what they left open and the practical hurdles creditors will continue to face.
Background
In August 2024, the D.C. Circuit confirmed three ECT awards against Spain—held by NextEra, 9REN and Blasket—totaling approximately €360 million.2 Spain argued that European Union (EU) law barred it from arbitrating with EU investors under the ECT, and that no arbitration agreement therefore existed.3
Intra-EU ECT awards have become virtually unenforceable within the EU; the EU Court of Justice has held that intra-EU investment arbitration is incompatible with EU law.4 The European Commission (EC) has pressed that position directly: in March 2025, it ordered Spain not to pay a €101 million ECT award to Antin and to resist the award’s recognition worldwide. That backdrop is what pushed creditors to pursue Spain’s assets in the U.S. and other non-EU courts.5
Russia’s petition arose from two arbitral awards stemming from the 2014 annexation of Crimea—Stabil and DTEK Krymenergo.6 Russia argued that its standing offer to arbitrate under the 1998 Ukraine–Russia BIT did not extend to these investors, whose Crimean investments predated the annexation and lay outside Russian territory—and that no arbitration agreement therefore existed.7
The FSIA Framework
The FSIA governs enforcement actions against foreign sovereigns in U.S. courts. Foreign states are presumptively immune,8 but Section 1605(a)(6) strips immunity where at least one of four conditions is met: (i) U.S.-seated arbitration; (ii) the agreement or award is governed by a treaty calling for recognition and enforcement of arbitral awards; (iii) the underlying claim could have been brought in a U.S. court under another FSIA exception or (iv) the state has waived immunity.9
Where enforcement turns on a governing treaty (the second condition), the D.C. Circuit requires creditors to establish three elements: an agreement to arbitrate, an arbitral award and a treaty calling for recognition and enforcement, such as the New York Convention or the International Centre for Settlement of Investment Disputes (ICSID) Convention.10 Once established, the burden shifts to the sovereign to disprove an element.11 The U.S. government has questioned this burden-shifting framework and the Supreme Court has not endorsed it,12 but it remains the operative rule in the D.C. Circuit.
Existence v. Scope: The Distinction That Decided Both Cases
The outcome in both cases turned on how U.S. courts characterize a sovereign’s challenge to the FSIA’s arbitration exception—specifically, whether the challenge goes to the agreement’s existence or only to its scope. The distinction matters because it determines who resolves the objection.
- Existence challenges—assertions that no agreement was ever formed—are jurisdictional questions courts decide de novo. If no agreement exists, the FSIA exception does not apply and the sovereign is immune.
- Scope challenges—assertions that the state agreed to arbitrate, but not this particular dispute—are merit defenses on which courts defer to the tribunal.
Hulley v. Russia illustrates the stakes. The D.C. Circuit vacated confirmation of the roughly $50 billion Yukos award because the district court had deferred to the tribunal on whether Russia—which signed but never ratified the ECT—ever made a standing offer to arbitrate. Existence is a jurisdictional question the courts must decide independently.13
Both Spain and Russia sought de novo review by framing their objections as existence challenges. The D.C. Circuit rejected that framing in each case. Spain did not deny signing the ECT; it argued only that EU law placed intra-EU disputes outside the arbitration clause’s reach—a scope question. Russia cast its objection as a denial that any agreement existed, but the court found that Russia did not dispute the BIT’s standing offer; it contested only whether that offer reached these investors and this dispute. Because each objection presupposed an agreement and contested only its coverage, the question was for the tribunal, not the court. The Supreme Court declined to disturb those holdings.
From Jurisdiction to Execution
Confirming an award is only the first step. Creditors must then locate and seize state property in the U.S.—and at that stage, a separate execution-immunity regime applies.
Section 1610(a) sets the threshold: only foreign-state property in the U.S. that is used for commercial activity may be attached; a broad waiver of jurisdictional immunity does not suffice.14 Section 1611(b) carves out two categories that remain immune even where § 1610(a) would permit execution: central-bank property held for the bank’s own account (unless explicitly waived),15 and military-use property.16 Central-bank funds are also immune from prejudgment attachment, regardless of any waiver.17
U.S. Execution Advantages
U.S. courts permit broad post-judgment discovery into a sovereign debtor’s worldwide assets. Rule 69(a)(2) allows discovery in aid of execution from any person. In Argentina v. NML Capital, the Supreme Court held that the FSIA does not bar discovery of foreign-state assets held abroad.18 Creditors can therefore compel the state to disclose what it owns and where—often the decisive step in locating attachable property—even though attachment itself still requires a nexus to commercial activity in the U.S.
Under Bancec, a state-owned entity is presumed legally separate from the state, but that presumption may be overcome where the state controls the entity so extensively that a principal-agent relationship exists, or where recognizing separateness would work for fraud or injustice.19 Combined with broad discovery, this alter-ego doctrine can substantially widen the pool of assets a creditor can reach.
Open Issues
The cert denials addressed the jurisdictional questions presented, but three systemic issues remain open.
Deference. In its May 2026 amicus brief, the Solicitor General argued that the D.C. Circuit erred in treating consent as a scope question—but nonetheless recommended denying cert because independent review was unlikely to change the outcome in these particular cases.20
Forum non conveniens. Following TMR Energy, the D.C. Circuit holds the doctrine categorically unavailable in suits to confirm foreign arbitral awards.21 The Second Circuit and the Department of Justice (DOJ) have criticized that rule, and the question will recur.22
Existence/scope. Sovereigns will continue recasting scope objections as existence challenges. The D.C. Circuit’s treatment of Spain’s EU-law objection as a scope question sits uneasily with its contract-formation analysis in TIG v. Argentina, where it held that whether an agreement was “made by” a sovereign is for the court to decide—a foothold sovereigns will press in future cases.23
Bottom Line
For creditors, the immediate takeaway is forum selection: file in D.C., not New York. The D.C. Circuit’s framework is more favorable to enforcement than that of other circuits, and with the Supreme Court declining to intervene, that advantage holds for now. Winning on jurisdiction, however, does not solve collection. Asset-identification work should begin early—ideally in parallel with confirmation—and creditors pursuing EU member states should account for the structural obstacles to voluntary payment that Antin illustrates.
1 Kingdom of Spain v. Blasket Renewable Investments LLC, No. 24-1130, 2026 WL 1855038 (U.S. June 29, 2026) (denying certiorari); Russian Federation v. Stabil LLC, No. 25-1093 (U.S. June 29, 2026) (denying certiorari).
2 NextEra Energy Global Holdings B.V. v. Kingdom of Spain, 112 F.4th 1088, 1099–1106 (D.C. Cir. 2024) (confirming jurisdiction to enforce awards of €290 million, €41 million and €26.5 million rendered in favor of NextEra, 9REN and AES, whose award is now held by Blasket).
3 NextEra, 112 F.4th at 1096–98.
4 Slovak Republic v. Achmea BV, ECLI:EU:C:2018:158, ¶ 60 (Mar. 6, 2018); Republic of Moldova v. Komstroy LLC, ECLI:EU:C:2021:655, ¶ 66 (Sept. 2, 2021); see also Commission Decision (EU) 2025/1235 of 24 Mar. 2025 (Antin), arts. 1–3 (ordering Spain not to pay a €101 million ECT award and to prevent its recognition, enforcement or execution).
5 Other leading jurisdictions have also refused to let sovereign immunity or the intra-EU objection defeat enforcement. Australia and Singapore have each confirmed that ECT awards against Spain can be enforced, and the English courts have likewise rejected the intra-EU objection. DNZ v. DOA [2026] SGHC(I) 1, [36]–[37] (Sing. Int’l Comm. Ct.); Infrastructure Services Luxembourg S.à.r.l. v Kingdom of Spain [2023] EWHC 1226, [67], [88] (Comm); Kingdom of Spain v Infrastructure Services Luxembourg S.à.r.l. [2023] HCA 11, [82] (Austl.).
6 Stabil LLC v. Russian Federation, 167 F.4th 506 (D.C. Cir. 2026) (consolidated with JSC DTEK Krymenergo v. Russian Federation, No. 25-7064).
7 Stabil, 167 F.4th at 517.
8 28 U.S.C. § 1604.
9 28 U.S.C. § 1605(a)(6)(A)-(D); id. § 1605(a)(1).
10 Chevron Corp. v. Ecuador, 795 F.3d 200, 204 & n.2 (D.C. Cir. 2015); NextEra, 112 F.4th at 1100; LLC SPC Stileks v. Republic of Moldova, 985 F.3d 871, 877 (D.C. Cir. 2021).
11 Chevron, 795 F.3d at 205; NextEra, 112 F.4th at 1100; Hulley Enters. Ltd. v. Russian Fed’n, 149 F.4th 687-688 (D.C. Cir. 2025).
12 See NextEra, 112 F.4th at 1100; cf. Republic of Hungary v. Simon, 145 S. Ct. 480 (2025) (declining to resolve the question).
13 Hulley Enters., 149 F.4th at 685, 689.
14 28 U.S.C. § 1610(a)(6).
15 NML Capital Ltd. v. Banco Central de la República Argentina, 652 F.3d 172, 195–96 (2d Cir. 2011).
16 28 U.S.C. § 1611(b)(1)–(2). Property used for military purposes falls outside the commercial-activity requirement of Section 1610(a) altogether and is therefore also beyond reach. See All Am. Trading Corp. v. Cuartel General Fuerza Aerea Guardia Nacional de Nicaragua, 818 F. Supp. 1552 (S.D. Fla. 1993); Behring Int’l, Inc. v. Imperial Iranian Air Force, 475 F. Supp. 396 (D.N.J. 1979).
17 Weston Compagnie de Finance et d’Investissement, S.A. v. La República del Ecuador, 823 F. Supp. 1106, 1110-1111 (S.D.N.Y. 1993). See also Banque Compafina v. Banco de Guatemala, 583 F. Supp. 320 (S.D.N.Y. 1984).
18 Republic of Argentina v. NML Capital, Ltd., 573 U.S. 134, 144-145 (2014).
19 First Nat’l City Bank v. Banco Para el Comercio Exterior de Cuba (Bancec), 462 U.S. 611, 625-629 (1983).
20 Brief for the United States as Amicus Curiae at 12-13, 17, Kingdom of Spain v. Blasket Renewable Investments LLC, No. 24-1130 (U.S. May 2026) (arguing that the court the validity of an arbitration agreement is a jurisdictional question for the court to decide de novo, that the D.C. Circuit erred in treating Spain’s objection as one of scope, but that certiorari should nonetheless be denied because independent review would be unlikely to change the result).
21 NextEra Energy Global Holdings B.V. v. Kingdom of Spain, 112 F.4th 1088, 1105 (D.C. Cir. 2024). See also TMR Energy Ltd. v. State Prop. Fund of Ukraine, 411 F.3d 296, 303 (D.C. Cir. 2005); Deutsche Telekom, AG v. Republic of India, 155 F.4th 694, 700 (D.C. Cir. 2025).
22 Figueiredo Ferraz E Engenharia de Projeto Ltda. v. Republic of Peru, 665 F.3d 384, 390–92 (2d Cir. 2011) (permitting forum non conveniens dismissal); Brief for the United States as Amicus Curiae at 19–22, Kingdom of Spain v. Blasket Renewable Investments LLC, No. 24-1130 (U.S. May 2026) (criticizing the D.C. Circuit’s categorical rule).
23 TIG Insurance Co. v. Republic of Argentina, 110 F.4th 221, 231-235 (D.C. Cir. 2024).
