Enforcing Arbitral Awards Against Sovereigns: The US Remains the Forum of Choice—With Caveats

On June 29, 2026, the U.S. Supreme Court declined without comment to review two high-stakes enforcement actions under the Foreign Sovereign Immunities Act, leaving intact D.C. Circuit victories for creditors seeking to enforce arbitral awards against Spain and Russia. In the Spain proceeding, the D.C. Circuit had confirmed three ECT-based awards totaling approximately €360 million in favor of NextEra Energy Global Holdings, 9REN, and Blasket Renewable Investments (which holds an AES award). In the Russia case, the court upheld enforcement jurisdiction over two awards—Stabil and DTEK Krymenergo—arising from investments affected by Russia's 2014 annexation of Crimea. Both sovereigns had argued that U.S. courts lacked jurisdiction because they had never consented to arbitrate the underlying disputes; Spain claimed EU law barred intra-EU investment arbitration under the ECT, while Russia contended its standing offer under the 1998 Ukraine–Russia bilateral investment treaty did not extend to the disputed investors or claims. The Supreme Court's denial of certiorari settles the immediate question but leaves critical doctrinal issues unresolved.

The framework governing these cases turns on the FSIA's arbitration exception, codified in Section 1605(a)(6), which strips sovereign immunity where four alternative conditions are met: U.S.-seated arbitration; a governing treaty requiring recognition and enforcement; a claim that could have been brought under another FSIA exception; or waiver. Under D.C. Circuit precedent, enforcement on treaty grounds requires creditors to establish three elements—an agreement to arbitrate, an arbitral award, and a treaty such as the New York Convention or ICSID Convention—after which the burden shifts to the sovereign to disprove any element. The Solicitor General challenged this burden-shifting framework in a May 2026 amicus brief but recommended against Supreme Court review because independent judicial examination would likely not alter the Spain and Russia outcomes. The Supreme Court's silence preserves the D.C. Circuit's approach for now, though the issue remains doctrinal quicksand.

The pivotal distinction in both cases concerned whether the sovereigns' objections challenged the *existence* of an arbitration agreement or merely its *scope*. Existence challenges—assertions that no agreement was formed—constitute jurisdictional questions that courts must decide de novo; if no agreement exists, the FSIA exception cannot apply and immunity stands. Scope challenges—claims that the state agreed to arbitrate but not this particular dispute—are merit defenses on which courts defer to the tribunal's interpretation. The D.C. Circuit rejected Spain's reframing of its EU-law objection as an existence challenge: Spain did not deny signing the ECT; it argued only that EU law restricted the arbitration clause's reach within the European Union—a coverage question for the tribunal. Similarly, Russia cast its objection as a denial that any agreement existed, but the court found Russia conceded the BIT's standing offer; it disputed only whether that offer covered these investors and this dispute. By characterizing both objections as scope questions, the court insulated the awards from de novo judicial scrutiny. The Supreme Court's denial leaves this distinction intact, though sovereigns will continue pressing the boundaries of what qualifies as an existence challenge.

The practical obstacles to collection, however, substantially temper the D.C. Circuit's enforcement advantage. Once an award is confirmed, creditors must locate and attach sovereign state property in the United States—a process governed by a separate execution-immunity regime under Section 1610. Only foreign-state property used for commercial activity may be attached; a broad waiver of jurisdictional immunity does not suffice. Moreover, Section 1611(b) carves out two categories of property that remain immune even where commercial activity would permit execution: central-bank assets held for the bank's own account (unless explicitly waived) and military-use property. Central-bank funds are also immune from prejudgment attachment regardless of any waiver. These statutory carve-outs mean that even victorious creditors cannot seize most sovereign assets.

U.S. courts do offer substantial execution advantages, however. Under Rule 69(a)(2), creditors can compel broad post-judgment discovery into a sovereign debtor's worldwide assets from any person, including the state itself. The Supreme Court held in *Argentina v. NML Capital* (2014) that the FSIA does not bar discovery of foreign-state assets held abroad—often the decisive step in identifying attachable property. Additionally, the *Bancec* doctrine permits creditors to pierce the legal separateness of state-owned entities where the state controls an entity so extensively that a principal-agent relationship exists or where recognizing separateness would work fraud or injustice. Combined with expansive discovery, this framework can substantially expand the asset pool available for execution. Creditors seeking to enforce against EU member states must additionally account for the structural barriers illustrated by the European Commission's March 2025 order directing Spain not to pay a €101 million ECT award to Antin and to resist its recognition worldwide; intra-EU investment arbitration has been held incompatible with EU law by the EU Court of Justice, making voluntary payment from EU member states virtually impossible and forcing creditors to pursue assets outside European jurisdiction.

Three significant legal questions remain open following the cert denials. First, the Solicitor General's criticism of the D.C. Circuit's burden-shifting framework suggests continued executive-branch pressure for de novo judicial review of consent questions, though the Supreme Court has not endorsed either approach. Second, the D.C. Circuit holds that forum non conveniens is categorically unavailable in arbitration-award confirmation suits following *TMR Energy*, but the Second Circuit and Department of Justice have challenged that rule, and the question will recur in future cases. Third, sovereigns will continue attempting to recast scope objections as existence challenges; the D.C. Circuit's treatment of Spain's EU-law objection sits uneasily with its contract-formation analysis in *TIG v. Argentina*, where it held that whether an agreement was "made by" a sovereign is a court question—a foothold sovereigns will exploit in future litigation. For creditors, the immediate strategic takeaway is forum selection: file in D.C., not New York, to benefit from the more creditor-friendly framework. However, securing jurisdiction is only the first step; asset-identification discovery must begin early, ideally in parallel with confirmation proceedings, and creditors pursuing awards against EU member states should assume that voluntary payment