Introduction
The beginning of 2026 has been a busy and exciting period for our editorial team. Together with the European Federation for Investment Law and Arbitration (EFILA) and its young members’ branch, Young EFILA, we have worked on a rebranding and restructuring of the project. As you may have noticed from the change in the blog’s look, the project now operates under the name International Federation for Investment Law and Arbitration (IFILA), marking this new chapter and broader international outlook.
While this transition has been underway, we did not want to leave our readers without the Quarterly Review. This post provides a concise overview of the key developments in Investor-State Dispute Settlement (ISDS) and investment arbitration during the last quarter of 2025.
ECT Modernisation and Termination
Recent developments concerning the Energy Charter Treaty (ECT) highlight the accelerating fragmentation of the treaty’s modernisation and application under both climate policy pressures and geopolitical tensions.
In October 2025, the Romanian Government approved a draft law to denounce the ECT, despite the ongoing modernization efforts. In the accompanying press release, the Government stated that “the provisions of [the ECT] have become anachronistic and contradict the objectives of the European Green Deal and the Paris Agreement.” Romania thus becomes the tenth European Union (EU) Member State to formally denounce the ECT, alongside the EU itself. The draft law is currently awaiting adoption by the Romanian Parliament.
By moving to withdraw, Romania signals alignment with the EU’s climate agenda and with the majority of Member States that have concluded the treaty is outdated. This also changes the legal and investment landscape for the Romanian energy sector, as future projects will no longer benefit from ECT protections once withdrawal takes effect, even though existing investments may remain covered for years under the treaty’s “sunset clause.”
More broadly, each additional withdrawal weakens the treaty’s relevance and global influence. With the EU and many of its largest economies leaving, the ECT loses much of its economic weight and political legitimacy.
Separately, Switzerland notified the Energy Charter Secretariat of its intention to deny the advantages of Part III of the ECT to Russian and Belarusian investors, “for the sake of good order.” Part III contains the core investment protection standards granted to investors, including fair and equitable treatment (Article 10), protection against unlawful expropriation (Article 13), and free transfer of returns and capital (Article 14). By invoking its right to deny these advantages, Switzerland is effectively removing the legal basis on which Russian and Belarusian investors could rely on those protections under the treaty.
The notification must be understood in the broader geopolitical and legal context created by Russia’s invasion of Ukraine in 2022. Since the beginning of the war, many European states and institutions have adopted economic sanctions, trade restrictions, and financial measures targeting Russian and, to a lesser extent, Belarusian entities. These measures have extended beyond traditional sanctions into the legal architecture of international economic agreements, including investment treaties. The ECT, which provides strong protections to foreign energy investors, has therefore become a sensitive instrument in relations with sanctioned states because it could potentially allow investors from those countries to bring claims against governments that impose restrictive measures.
Against this backdrop, Switzerland’s action shows that, in practice, the treaty’s protections can be selectively restricted for political and security reasons, which weakens its role as a universal investment protection instrument. It also signals a growing willingness among European states to use treaty mechanisms to align investment law with foreign policy and sanctions regimes. It also illustrates how the ECT is being transformed not only by climate policy concerns and withdrawals within the EU, but also by the security consequences of the war in Ukraine, further eroding the treaty’s relevance and coherence as a multilateral energy investment framework.
Enforcement of intra-EU awards
The latest wave of cases regarding the enforcement of intra-EU investment awards presents the now well-known underlying phenomenon: investors attempting to monetize intra-EU ECT awards in jurisdictions that are not bound by EU law, while states invoke jurisdictional, procedural, or public-policy defenses to resist payment.
This reflects a deeper structural conflict between two legal orders. On one side is the EU’s effort to dismantle intra-EU investment arbitration. On the other side is the international arbitration system, supported by the ICSID Convention and enforcement mechanisms in third countries, which treats these awards as binding and enforceable regardless of EU-law objections.
In this context, in October 2025, the U.S. District Court for the District of Columbia ordered the enforcement of the 2018 intra-EU ECT award issued in Antin v. Spain, after ruling on the applicable post-judgment interest rate. This reconfirms that, at least at the lower-court level in the United States, intra-EU objections based on EU law do not automatically prevent enforcement of an ICSID award. Under the ICSID Convention, contracting states are required to recognize and enforce awards as if they were final judgments of their own courts, and U.S. courts have generally taken a treaty-based approach that focuses on the obligations under the Convention rather than on EU law arguments. This creates a practical path for investors to collect compensation outside the EU, even when enforcement is blocked within the Union.
In a separate decision, however, the U.S. District Court for the District of Columbia declined enforcement in Mercuria Energy Group v. Poland, on the basis that the award in question had been annulled by the Svea Court of Appeal in December 2024. The court’s reasoning reflects the strong weight accorded under U.S. law to annulment decisions made at the seat of arbitration, with the court declining to second-guess the Swedish court’s judgment. This position is consistent with the principle of international comity and illustrates the limited circumstances under which U.S. courts will disregard an annulment by the supervisory courts at the seat. The case therefore highlights the decisive impact that post-award annulment proceedings can have on enforcement prospects, even in jurisdictions typically regarded as enforcement-friendly.
In parallel, on October 6, 2025, the U.S. Supreme Court asked the U.S. Solicitor General to file briefs expressing the views of the United States on the pending request for certiorari in Kingdom of Spain, Petitioner v. Blasket Renewable Investments LLC, et al. (Case No. 24-1130). The U.S. Supreme Court seeks the U.S. Solicitor General’s (and therefore the U.S. Government’s) opinion in cases involving foreign relations, treaty obligations, or sensitive international legal issues. In this context, the U.S. Supreme Court is likely interested in how enforcement of intra-EU arbitration awards interacts with the United States’ obligations under the ICSID Convention, its relations with the European Union and its Member States, and the broader stability of the investment arbitration system.
The significance of this development lies in the possibility that the U.S. Supreme Court could soon clarify, at the highest judicial level, whether and how U.S. courts should enforce intra-EU investment arbitration awards. A ruling could either confirm the current enforcement-friendly approach of U.S. courts or introduce limits based on eurocentric jurisdictional or public-policy considerations.
In the United Kingdom, in November 2025, the High Court of England & Wales decided that the EUR 30 million ECT award issued in OperaFund Eco-Invest and Schwab Holding v. Spain cannot be assigned to a third party. The investors had purported to assign their rights under the award in January 2024 to Blasket Renewable Investments LLC, a U.S.-registered entity incorporated in the State of Delaware. In his judgment, Judge Pelling applied the rules of interpretation of international treaties set out in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (VCLT). He reasoned that no rule of customary international law spoke against or in favour of assignment specifically, but that Article 54(2) of the ICSID Convention did not allow for the assignment of awards.
This decision addresses a key tactic that investors have increasingly used in enforcing intra-EU ECT awards, namely the assignment of awards to third-party entities in more favourable jurisdictions. Because enforcement within the EU has become difficult, investors have sought to transfer their awards to entities outside the EU, often in the United States, in order to pursue enforcement in jurisdictions more receptive to such claims.
The English High Court’s refusal to allow the assignment in OperaFund v. Spain directly limits that strategy. By interpreting the ICSID Convention as not permitting assignment of awards, the court effectively treated the award as inseparable from the original investor. If other courts follow the reasoning of the English High Court, this could significantly reduce investors’ ability to restructure or monetize their awards after the fact, particularly in cases where enforcement within the EU is blocked.
Finally, in December 2025, the Federal Court of Australia ruled on the applicable interest rates for the enforcement of four ICSID awards arising out of Spain’s renewable energy framework. In its judgment, Judge J Steward adopted the post-judgment interest rates set out in the respective awards rather than the default rate under Australian court rules. Collectively, the awards in RREEF v. Spain, 9Ren v. Spain, Watkins Holdings and others v. Spain, and NextEra v. Spain amount to approximately EUR 500 million.
Other Relevant Proceedings and Awards
This past quarter has seen a number of notable developments in pending and recently concluded proceedings involving intra-EU investment disputes, particularly under the ICSID framework and the ECT. Quite predictably, tribunals have continued to confront jurisdictional objections grounded in EU law, questions regarding the EU Termination Agreement, and the compatibility of intra-EU arbitration with Member States’ obligations.
At the same time, enforcement efforts, annulment proceedings, and actions by the European Commission have underscored the broader political and legal tensions that continue to shape this area. The decisions and procedural steps outlined below illustrate the evolving approaches taken by tribunals and states as they navigate the still unsettled relationship between EU law and investor–state arbitration.
On 24 October 2024, the ICSID tribunal in VC Holding v. Italy rendered its award. While the award remains unpublished, it is reported elsewhere that a tribunal composed of Klaus Reichert SC (chair), Charles Poncet, and Brigitte Stern awarded the investors EUR 6.74 million in damages for breach of their legitimate expectations of fixed incentives for renewable energy production. The tribunal also rejected Italy’s intra-EU jurisdictional objection.
The annulment proceedings in Portigon v. Spain were discontinued on 26 November 2025. The proceedings concerned a June 2025 award related to Spain’s renewable energy framework. While the tribunal, composed of Felipe Bulnes Serrano (chair), Albert Jan van den Berg, and Giorgio Sacerdoti, found certain violations of ECT protections, it did not award any damages. Unlike most Spanish renewable energy proceedings, which were brought by energy companies themselves, Portigon v. Spain was initiated by one of the German financial institutions that had funded Spanish renewable energy projects. No annulment committee had been constituted on the date of discontinuance.
On 4 December 2025, The ICSID tribunal in Eurohold v. Romania dismissed Romania’s Rule 41 objection that the claim manifestly lacked legal merit due to the intra-EU nature of Eurohold’s claims. The tribunal, however, decided that the issues surrounding the EU Termination Agreement raised by Romania should be addressed in a separate preliminary phase of the proceedings. The tribunal ordered the bifurcation of the proceedings and dismissed Eurohold’s application to supplement its Request for Arbitration.
On 22 December 2025, the ICSID ad hoc committee in Mathias Kruck and others v. Spain dismissed Spain’s application to annul the 2023 award rendered by Dário Moura Vicente (chair), Katherine González Arrocha, and Carlos José Valderrama. The tribunal declined jurisdiction over one-third of the initial 116 claimants, upheld Spain’s tax carve-out exception, and rejected the state’s intra-EU objection. On the merits, the tribunal ruled that Spain had breached the ECT by violating the claimants’ legitimate expectations that the fundamental characteristics of the incentives framework for their photovoltaic power plants would remain unchanged. The tribunal awarded EUR 15 million in damages.
The European Commission launched infringement procedures against Hungary and Belgium over intra-EU investor–state arbitrations. The infringement procedures against Hungary concern the state-controlled company MOL Hungarian Oil, which has been involved in a long-running investment dispute with Croatia. For further analysis of the infringement procedures against Hungary, see Maria Paschou’s blog post titled The European Commission’s Legal Overreach: Infringement Proceedings Against Hungary and the Ignored International Law.
What is New @ IFILA
In 2026, the Quarterly Review will adopt a new format and be published every six months, allowing our editors more time to collect information and broaden its scope across the international landscape, in line with IFILA’s broader mandate and objectives. In the meantime, remember that you are always welcome to contribute to the Young IFILA Blog yourself by sending your submission to the new email address blog.youngifila@ifila.org.
*** This quarterly review was prepared by the Young IFILA Blog’s Editorial Board ***