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Client Alert: D.C. Circuit Rulings Strengthen Enforcement of Investment Treaty Awards Against Foreign Sovereigns in U.S. Courts: Key Takeaways for Cross-Border Investors

The Bottom Line

U.S. courts are among the most reliable venues in the world for enforcing investment treaty awards against foreign governments. Recent D.C. Circuit decisions—NextEra Energy Global Holdings B.V. v. Kingdom of Spain (D.C. Cir. August 2024)[1] and Stabil LLC v. Russian Federation (D.C. Cir. February 2026) and Russian Federation v. Stabil LLC/JSC DTEK Krymenergo (February 2026) [2]—make clear that foreign sovereigns cannot easily use complex treaty or jurisdictional arguments to avoid U.S. court proceedings before investors receive a hearing on the merits. For EU investors holding Energy Charter Treaty (ECT) awards that cannot be enforced within the EU, the message is simple: what blocks enforcement in Europe does not necessarily block enforcement in the United States.
 
This alert outlines a practical protocol the D.C. Circuit's rulings suggest for investors pursuing post-judgment discovery against sovereign assets, and identifies the investors, developers and companies most likely to be affected by these decisions.
  

Background

Cross-border investors face a familiar challenge when a foreign government breaches its obligations: securing payment on a favorable arbitration award. While international arbitration under bilateral investment treaties (BITs), (ECT), investment contracts or ICSID provides a pathway to justice, enforcement against sovereign assets remains difficult.
 
Over the past two years, the U.S. Court of Appeals for the D.C. Circuit has issued two significant decisions that enhance predictability and accessibility for award holders. Together, these rulings position U.S. courts—especially the D.C. Circuit—as a viable and increasingly investor-friendly forum for enforcing investment treaty awards, even against aggressive sovereign defenses under the Foreign Sovereign Immunities Act (FSIA). The U.S. Supreme Court denied certiorari, making these the controlling decisions for foreign investors pursuing enforcement in the U.S.
 

The Cases

In Blasket/NextEra/9REN, Dutch and Luxembourgish energy companies invested hundreds of millions of euros in Spanish solar projects based on government-promised incentives and subsidies. Following the 2008 financial crisis, Spain revoked the subsidies and withdrew certain renewable energy incentives, prompting the investors to commence arbitration under Article 26 of the ECT. The investors obtained multi-million-euro awards. However, because the EU does not recognize the ECT’s arbitration provision for disputes between EU nationals and EU Member States, these awards are deemed invalid under EU law and cannot be enforced within the EU. The investors therefore sought enforcement in the United States under the ICSID Convention and the New York Convention. Spain responded by challenging jurisdiction under the FSIA and pursuing parallel litigation in Dutch and Luxembourgish courts seeking anti-suit injunctions to block enforcement worldwide.
 
In Stabil/DTEK, Ukrainian companies with electricity distribution networks and petrol stations in Crimea had assets seized after Russia’s 2014 invasion. They secured approximately $208 million and $34 million awards, respectively, under the Russia-Ukraine bilateral investment treaty. Russia contested U.S. jurisdiction, arguing the investments were in Ukrainian territory and invoking Fifth Amendment due process protections.
 
In both matters, the D.C. Circuit ruled in favor of the investors on key jurisdictional issues: the FSIA’s waiver and arbitration exceptions (to defeat immunity defenses), the foreign sovereign’s minimum contacts with the U.S. (to establish district court jurisdiction) and the commercial versus geopolitical characterization of the dispute (to determine whether the FSIA’s arbitration exception applies).
 

Key Holdings

HOLDING 1: Challenges to the Scope of an Arbitration Agreement Go to the Merits, Not Jurisdiction
Under the FSIA, petitioners need only show an arbitration agreement, an award and a treaty that potentially governs enforcement. Once established, U.S. courts have jurisdiction. Arguments that the treaty does not cover the specific investor or dispute—such as Spain’s EU-law objections or Russia’s territorial arguments regarding Crimea—are treated as merits defenses, not grounds for dismissal. The key distinction: challenges to the scope of an arbitration agreement (which investors does it cover?) go to the merits, while challenges to the existence or validity of the agreement itself could be jurisdictional. Spain argued that the ECT’s arbitration provision does not exist for EU investors because they are not covered under the treaty. The D.C. Circuit treated this as a scope dispute—a question of which investors are covered—not an existence challenge. This prevents foreign governments from weaponizing intricate legal theories to slam the courthouse door prematurely. The practical takeaway for EU investors: an Intra-EU challenge that succeeds within Europe does not necessarily succeed in the U.S.
 
The D.C. Circuit held that U.S. district courts have jurisdiction to enforce these awards under the FSIA’s arbitration exception. As a practical matter, sovereign challenges to arbitration provisions will likely be treated as scope questions—not jurisdictional bars—allowing foreign investors to reach the merits and collect on their awards in U.S. courts.
 
HOLDING 2: Personal Jurisdiction Over Foreign Sovereigns Follows Automatically
The D.C. Circuit rejected Russia’s argument that the Fifth Amendment’s Due Process Clause requires a “minimum contacts” analysis for foreign sovereigns. Foreign governments are not “persons” entitled to such protections. Proper service plus an applicable FSIA exception is sufficient for personal jurisdiction.
 
HOLDING 3: Geopolitical Context Does Not Strip Commercial Investments of Their Commercial Character
Russia’s attempt to characterize the Crimea disputes as purely geopolitical (thereby failing the New York Convention’s commercial requirement) was unsuccessful. The court viewed electricity networks and petrol stations as inherently commercial. Tribunals properly focused on commercial conduct under Russia’s de facto control without adjudicating sovereignty issues.
  

A Critical Limitation

Anti-Suit Injunctions Against Foreign Sovereigns Remain Virtually Unavailable 
 
In the Spain cases, the D.C. Circuit vacated a district court anti-suit injunction blocking Spain’s parallel foreign proceedings. Such injunctions raise significant comity concerns and are disfavored, especially against sovereigns. The court drew a critical distinction: while protecting a district court’s jurisdiction to enforce foreign arbitral awards can justify anti-suit injunctions against private parties, that justification is insufficient against sovereigns. As the court noted, an “anti-suit injunction against a foreign sovereign is virtually unprecedented.” Investors must therefore prepare multi-jurisdictional strategies and cannot rely on U.S. courts to halt sovereign litigation abroad.
 

Post-Judgment Discovery Against Sovereigns Must Follow a Priority Protocol[3]

In the Spain cases, investors sought post-judgment discovery to attach Spain’s assets in satisfaction of the judgment. They sought discovery from Spain and two Spanish entities, plus third-party subpoenas from two of Spain’s defense contractors. The court’s rulings suggest a priority protocol for investors pursuing post-judgment discovery against sovereigns:

1. Seek direct discovery from the sovereign party in the enforcement action.
2. Seek direct discovery from parties subject to the sovereign’s control.
3. Seek discovery from the sovereign regarding information related to third parties or nonparties, if you can demonstrate that information is shared with the sovereign.
4. If seeking discovery directly from a nonparty related to the sovereign, be prepared to demonstrate that the nonparty is an alter ego of the sovereign or that the sovereign has sufficient control over it.
5. Prioritize non-military assets to avoid FSIA attachment immunities for property “used in connection with a military activity” or “of a military character.”[4]
6. If other assets are insufficient to satisfy the judgment, consider re-seeking third-party subpoenas—the court left open whether such discovery might be granted if it is unlikely to prove invasive of sovereign dignity. 

Who Should Be Paying Attention

• Family offices and ultra-high-net-worth investors with exposure in politically sensitive regions (Eastern Europe, former Soviet states, Latin America, Middle East and Africa). 
• Renewable energy developers and infrastructure investors facing subsidy revocations or regulatory changes. 
• Companies with concession agreements, contracts or investments protected by bilateral or multilateral investment treaties. 
• Any party relying on protections against expropriation, unfair treatment or denial of justice.

 

Practical Takeaways

1. Map Treaty Protections Early: Review available BITs, the Energy Charter Treaty or ICSID coverage before a dispute arises. 
2.  Prioritize Asset Location: Choose enforcement forums based on where the sovereign holds attachable commercial assets. The strengthened U.S. jurisdictional framework is a powerful tool when assets are reachable here. 
3.  Anticipate Multi-Front Warfare: Expect parallel proceedings and aggressive defenses. Develop coordinated enforcement and asset-protection strategies from the outset. 
4.  Jurisdiction Is Only the First Step: These decisions open the courthouse door, but confirmation and execution still require careful navigation of the New York Convention, ICSID Convention and asset immunity issues.

 
For investors holding awards that face enforcement obstacles in other jurisdictions, the U.S. may offer a viable path forward. Whiteford’s international arbitration and cross-border disputes team regularly advises clients on treaty protections, enforcement strategy and asset recovery – from structuring investments to preserve treaty rights through FSIA litigation and multi-jurisdictional enforcement. If you have questions about enforcing an investment award or are considering investment in jurisdictions where sovereign risk is a factor, we welcome the opportunity to speak with you.