RREEF INFRASTRUCTURE (G.P.) LIMITED et al v. KINGDOM OF SPAIN
MEMORANDUM OPINION. Signed by Judge Carl J. Nichols on March 31, 2021. (lccjn1)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
RREEF INFRASTRUCTURE (G.P.)
LIMITED, et al.,
Civil Action No. 1:19-cv-03783 (CJN)
KINGDOM OF SPAIN,
Petitioners RREEF Infrastructure (G.P.) Limited and RREEF Pan-European
Infrastructure Two Lux S.A.R.L. (collectively “RREEF”) initiated this action to recognize and
enforce an arbitral award they won against Respondent, the Kingdom of Spain. See generally
Pet., ECF No. 1. Spain has moved to dismiss RREEF’s petition, or in the alternative, to stay
these proceedings until the resolution of Spain’s application to annul the award before the
International Centre for Settlement of Investment Disputes. See generally Resp’t Mot. to
Dismiss the Pet. or Stay the Proceeding, ECF No. 16. Consistent with how other courts in this
district have addressed motions to stay when an application to annul an arbitral award remains
pending before ICSID, the Court stays these proceedings until ICSID adjudicates Spain’s
RREEF Infrastructure and RREEF Pan-European are, respectively, Jersey- and
Luxembourg-based companies that specialize in infrastructure investments. RREEF
Infrastructure (G.P.) Limited v. Spain, ICSID Case No. ARB/13/30, Award, ¶ 4 (Dec. 11, 2019),
ECF No. 1-1 at 5. In 2005, Spain created a special incentive regime to encourage infrastructure
investment in the country’s renewable energy sector. See RREEF Infrastructure (G.P.) Limited
v. Spain, ICSID Case No. ARB/13/30, Decision on Responsibility, ¶ 91 (Nov. 30, 2018), ECF
No. 1-1 at 110. Relying on these inducements, RREEF invested around €300.8 million in wind
and solar power projects in Spain. Id. ¶¶ 159, 163, 174.
But Spain’s favorable incentive regime was short-lived. Beginning in 2012, only a few
years after RREEF made its investments, Spain adopted several new decrees retrenching on, and
eventually revoking, the incentives on which RREEF relied. Id. ¶¶ 127–44, 589, 600. These
changes cut RREEF’s returns on its investments. Award ¶¶ 56–57.
Two treaties govern RREEF’s investments in Spain: the Energy Charter Treaty and the
International Centre for Settlement of Investment Disputes Convention. The Energy Charter
Treaty is a multilateral investment treaty among 52 nations and regional organizations—
including Spain, the United Kingdom, and Luxembourg—to establish a legal framework for
promoting long-term cooperation in the energy field. Energy Charter Treaty, ECF No. 1-3, art.
2.1 The Treaty “obligates signatories to, inter alia, protect investments made in their domestic
territories by investors from foreign signatory states.” Masdar Solar & Wind Cooperatief U.A. v.
Kingdom of Spain, 397 F. Supp. 3d 34, 36 (D.D.C. 2019). As relevant here, Article 26 provides
that “[d]isputes between a Contracting Party and an Investor of another Contracting Party
relating to an Investment of the latter in the Area of the former” can be submitted to international
arbitration at the investor’s election. Energy Charter Treaty art. 26(1), (3)(a).
The ICSID Convention further protects investors like RREEF by facilitating enforcement
of arbitration awards arising from violations of the Energy Charter Treaty. The Convention is a
Upon ratifying the Treaty, the United Kingdom immediately extended it to the UK’s protectorate, Jersey, as
authorized by Article 40(2).
multilateral agreement signed by 163 states—including Spain, Luxembourg, the United
Kingdom, and the United States—that provides a framework for arbitrating investment disputes
“between Contracting States and nationals of other Contracting States.” ICSID Convention,
pmbl., ECF No. 1-2.2
In October 2013, RREEF submitted a request for arbitration with Spain under the ICSID
Convention. See Decision on Responsibility ¶ 14. RREEF alleged that Spain’s actions, which
diminished the returns on RREEF’s investments, breached Spain’s obligation under the Energy
Treaty Charter. See id. ¶ 11. The ICSID constituted an arbitral panel, which determined—over
Spain’s various arguments to the contrary—that it had jurisdiction over the matter. See RREEF
Infrastructure (G.P.) Limited v. Spain, ICSID Case No. ARB/13/30, Decision on Jurisdiction, ¶ 4
(June 6, 2016), ECF No. 1-1 at 42. In November 2018, the arbitral panel issued a decision on the
merits, concluding that by applying its legislative actions retroactively and by failing to ensure a
reasonable return on RREEF’s investments, Spain had breached its obligation to accord fair and
equitable treatment to RREEF’s investments, as required by Article 10(1) of the Treaty. See
Decision on Responsibility ¶¶ 474, 600. And, in December 2019, the panel issued an Award
directing Spain to pay RREEF €59.6 million in damages, plus 2.07% interest from June 30, 2014
until Spain satisfies the Award in full. Award ¶ 81(a)–(b).
Enforcement of ICSID awards in the United States is governed by 22 U.S.C. § 1650a,
which implements the treaty obligations of the United States, as a contracting party to the ICSID
Convention, to ensure that U.S. courts treat an ICSID award “as if it were a final judgment” of a
state court. ICSID Convention, art. 54(1). Section 1650a thus provides that “[t]he pecuniary
Under Article 70 of the ICSID Convention, the United Kingdom extended the Convention’s application to Jersey.
See ICSID, Contracting States and Measures Taken by Them for the Purpose of the Convention (Feb. 2019),
obligations imposed by [an ICSID] award shall be enforced and shall be given the same full faith
and credit as if the award were a final judgment of a court of general jurisdiction of one of the
several States.” 22 U.S.C. § 1650a(a). Federal district courts have “exclusive jurisdiction” over
actions to enforce an ICSID award. Id. § 1650a(b).
In December 2019, RREEF filed a petition to enforce the arbitral award in this Court.
See generally Pet. Spain in turn applied to ICSID for annulment of the award. Consistent with
its governing Convention, ICSID stayed enforcement of the award pending the annulment
tribunal’s decision. See ICSID Convention art. 52(5). Later that month, Spain moved to dismiss
RREEF’s petition for a lack of jurisdiction or to stay the proceedings until the ICSID tribunal
concludes its review of Spain’s annulment application. See Resp’t Mot. at 2–3. The European
Commission filed an amicus brief in support of Spain’s motion. See Amicus Brief by European
Commission, ECF No. 29.
Spain moves to dismiss on several grounds, including that the Court lacks subject-matter
jurisdiction under the Foreign Sovereign Immunities Act. See Resp’t Mot. at 1–2. In the
alternative, Spain moves for a stay until ICSID concludes its annulment proceedings. See id. at
30–32. “Rather than delve prematurely into EU case law, international treaties, and sovereign
constitutions,” the Court will stay the proceedings. Masdar, 397 F. Supp. 3d at 38.
Courts must address jurisdiction before turning to the merits. See Foster v. Chatman, 136
S. Ct. 1737, 1745 (2016). There are, however, “certain non-merits, non-jurisdictional issues
[that] may be addressed preliminarily, because ‘jurisdiction is vital only if the court proposes to
issue a judgment on the merits.’” Pub. Citizen v. U.S. Dist. Court for the Dist. of Columbia, 486
F.3d 1342, 1348 (D.C. Cir. 2007) (quoting Sinochem Int’l. Co. v. Malaysia Int’l Shipping Co.,
529 U.S. 422, 431 (2007)). One such threshold issue is a stay of a petition to recognize and
enforce an arbitral award. Both the Court of Appeals and courts in this district have concluded it
is appropriate to stay cases, like this one, seeking recognition or enforcement of an arbitral award
when proceedings to annul the underlying award are ongoing in a foreign jurisdiction. See, e.g.
Telcordia Techs., Inc. v. Telkom S.A. Ltd., 95 F. App’x 361, 362–63 (D.C. Cir. 2004); Masdar,
397 F. Supp. 3d at 38–39.
“[T]he power to stay proceedings is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself, for
counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936). When determining
whether to stay proceedings, a court must “‘weigh competing interests and maintain an even
balance’ between the court’s interests in judicial economy and any possible hardship to the
parties.” Belize Soc. Dev. Ltd. v. Gov’t of Belize, 668 F.3d 724,732–33 (D.C. Cir. 2012) (quoting
Landis, 299 U.S. at 254–55). The party seeking the stay bears the burden and “must make out a
clear case of hardship or inequity in being required to go forward, if there is even a fair
possibility that the stay for which he prays will work damage to some one else.’” Philipp v. Fed.
Republic of Ger., 253 F. Supp. 3d 84, 88 (D.D.C. 2017) (quoting Landis, 299 U.S. at 255).
Considerations of judicial economy favor a stay. Spain’s application to annul the arbitral
award presents many of the same arguments that it presses here. In general, “[l]itigating
essentially the same issues in two separate forums is not in the interest of judicial economy.”
Naegele v. Albers, 355 F. Supp. 2d 129, 141 (D.D.C. 2005) (quoting Nat’l Shopmen Pension
Fund v. Folger Adam Sec., Inc., 274 B.R. 1, 3 (D.D.C. 2002)). These negative effects on judicial
economy are even stronger when “it is clear that the outcome of [the other] proceedings . . . may
affect this Court’s determinations, at a minimum, by virtue of the[ir] persuasive value.” Hulley
Enters., Ltd. v. Russian Fed’n, 211 F. Supp. 3d 269, 284 (D.D.C. 2016). There can be no serious
dispute that the ICSID proceedings could significantly impact this litigation. After all, ICSID
might annul the award that RREEF seeks to confirm and enforce. If this Court were to affirm an
award that ICSID later annuls, “[m]ore expensive litigation involving more complex issues
would result.” In re Arbitration of Certain Controversies Between Getma Int’l & Republic of
Guinea, 142 F. Supp. 3d 110, 114 (D.D.C. 2015) (cleaned up).
The possible hardships to each party also favor Spain, which will be significantly
burdened by having to attack the validity of the award in two forums. And if the Court were to
confirm the award now, Spain could face the arduous task of trying to recover seized assets if its
annulment application before the ICSID proves successful. See Getma Int’l, 142 F. Supp. 3d at
118. To be sure, RREEF has a strong interest in quickly collecting its arbitral award, but that
interest is less acute both because ICSID has already stayed enforcement of the award and
because RREEF will be compensated for further delay by the interest that continues to accrue on
the award. In the Court’s view, the hardship to Spain absent a stay outweighs the hardship of a
stay to RREEF.
The Court therefore concludes that these proceedings should be stayed until the
annulment proceedings before the ICSID conclude. Other courts in this district have reached the
same conclusion when faced with similar circumstances. See, e.g., Infrastructure Servs.
Luxembourg S.a.r.l. v. Kingdom of Spain, Civ. No. 18-1753, ECF No. 36 (Aug. 28, 2019)
(staying the proceedings pending the ICSID’s annulment decision); Masdar, 397 F. Supp. 3d at
34 (same); Novenergia II—Energy & Environment (SCA) v. Kingdom of Spain, Civ. No. 181148, 2020 WL 417794 (D.D.C. 2020) (same).
Although a stay is warranted, “a court abuses its discretion in ordering a stay of indefinite
duration in the absence of a pressing need.” Belize Soc. Dev. Ltd., 668 F.3d at 732. The Court
will therefore require the parties to provide regular status updates regarding the status of the
ICSID annulment proceedings. The Court will promptly turn to the merits of the petition when
those proceedings conclude.
For these reasons, the Court grants Spain’s Motion in part and stays the proceedings until
ICSID rules on Spain’s application to annul the arbitral award. An order will issue along with this
DATE: March 31, 2021
CARL J. NICHOLS
United States District Judge
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