Washington Verdict: The European Commission and the Court of Justice of the European Union (CJEU) Cannot Stop or Invalidate the Payment of Compensation Awarded Under International ICSID Arbitral Awards

The highest court in the United States has sent an unequivocal message to Spain and, indirectly, to Brussels: a state cannot escape an international arbitral award by invoking the internal rules of the European Union. On 29 June 2026, the U.S. Supreme Court declined to rehear the case Spain v. Blasket Renewable Investments, leaving in place Madrid's obligation to compensate the investors it had harmed. The decision is final.

Context Several years ago, Spain abruptly cut subsidies that had been promised to investors (similarly to the Micula case), and the investors sought compensation and prevailed in ICSID arbitration under an international treaty that Spain had voluntarily joined. When Madrid refused to pay, the investors turned to U.S. courts to recover the money. Spain attempted a legal loophole, arguing that under EU law it should never have been allowed to consent to this type of arbitration, and therefore the awards were invalid. This argument was officially and actively supported by the European Commission, which backed Spain's position. The result? The argument was rejected by the U.S. Supreme Court itself, which brought the matter to a close. The central point of the Court's position is one of principle. Referring to Articles 27 and 46(1) of the Vienna Convention on the Law of Treaties, it held that a Member State of the European Union cannot invoke its own domestic law, including EU law, to evade obligations undertaken under an international treaty. Article 27 of the Vienna Convention is unequivocal: "A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty." Accordingly, under international law, EU law constitutes the internal law of the Member States. It cannot be used, after the fact, to reinterpret or deprive of effect the consent to arbitration that Spain, or any other state, unconditionally expressed when it ratified the international treaty. In other words, a state cannot commit itself under an international treaty and later invoke the rules of a regional legal order to invalidate its own commitment vis-à-vis parties outside that legal order.

The key point for everyone: an international award cannot be overturned "politically" The logic of a democratic and responsible legal system is simple and difficult to dispute: once a state signs an international treaty, it can no longer hide behind its own laws in order to avoid honoring its commitments. This rule derives from an international convention binding on states, and it expressly provides that a state may not invoke its internal law to justify failure to perform a treaty. In the eyes of international law, EU law is precisely the "internal law" of the Member States; it cannot be used to rewrite, years later, a commitment undertaken before the international community. This brings us to a crucial point that has received far too little public attention: awards rendered under the ICSID system, the World Bank's international arbitration mechanism, are final and fully enforceable. They cannot be annulled, amended, or blocked by the European Commission or by the CJEU. The only avenue for challenge exists within the ICSID system itself, before a special ad hoc committee, not in Brussels. In other words, a European administrative decision has no authority to set aside an international arbitral award recognized throughout the world. It is therefore no coincidence that the same "EU law" arguments have also failed before the courts of the United Kingdom, Australia, Singapore, and other jurisdictions, all of which have ordered the enforcement of ICSID awards.