US authorises new seizures against Spain worth another 41 million euros over renewable energy arbitration awards

A US federal court has given the green light to proceed with further enforcement actions and the seizure of Spanish assets by creditors of arbitration awards stemming from cuts to renewable energy subsidies.

The country is still suffering the consequences of a decision from 2010, when the government of then-PM José Luis Rodríguez Zapatero, at the height of the economic crisis, retroactively reduced the subsidies it had promised to companies that invested in renewable energy.

Many of these companies resorted to international arbitration and won. As a result, Spain owes hundreds of millions in arbitration awards, most of which remain unpaid.

One of these cases has just taken a step forward after a Washington court authorised new asset seizure measures against Spain in the so-called 'InfraRed' case, brought by British firm InfraRed Environmental Infrastructure.

The original debt was 28 million euros, but years of non-payment, accrued interest and legal costs have raised it to 47.6 million dollars (approximately 41 million euros).

The judge not only rejected Spain's attempt to halt the foreclosures, but also broadened the scope of the search. Creditors can now trace Spanish assets in any federal district in the country, not just Washington.

Spain's position also failed to convince the court. The government argued that European regulations prevent it from making these payments, but the judge pointed out that Spain had never formally requested permission from the European Commission to seek a solution, nor had it explored other avenues.