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Cube Infrastructure Fund Sicav v. Kingdom of Spain, No. 20-cv-1708 (EGS) (D.D.C. May 17, 2021) [click for opinion]

Cube Infrastructure Fund SICAV, Cube Infrastructure Managers S.A., Cube Energy S.C.A. (now Cube Energy S.a.r.l.) (“Cube”), Demeter Partners S.A., and Demeter 2 FPCI (“Demeter”) are European-based investment and private equity funds that invest in energy projects. Cube and Demeter invested in multiple hydro-power and photovoltaic (“PV”) facilities in Spain in 2008, 2011, and 2012, after Spain established a “special incentive regime” to encourage the development of renewable energy in that country.

In 2010, Spain began to rescind the benefits included in the special incentive regime and ultimately established a new regime in 2013. Cube and Demeter argued that the shift in regulatory regimes by Spain adversely affected the financial prospects of their facilities. Consequentially, they pursued claims against Spain through arbitration proceedings under the Energy Charter Treaty (the “ECT“), a multilateral agreement that establishes a legal framework to provide long-term cooperation in the energy field. Under Article 26 of the ECT, disputes between a contracting state and an investor of another contracting state may be submitted to a tribunal from the International Centre for Settlement of Investment Disputes (“ICSID”).

Spain objected to the tribunal’s jurisdiction, arguing that the ECT does not apply to investors from other EU member states, but is limited to investors from states outside of the EU. The tribunal rejected that argument, found Spain liable for breaching its obligations under the ECT, and ordered Spain to pay Cube and Demeter €33.7 million plus interest and costs. Spain subsequently petitioned ICSID for annulment of the arbitration award.

While annulment proceedings were pending before the ICSID Annulment Committee (the “Committee”), Cube and Demeter sought enforcement of the arbitral award in the District Court for the District of D.C. Spain responded by filing a motion to dismiss or alternatively to stay the case.

In determining whether to grant a stay of the proceedings, the court focused on the competing interests and potential hardships to each party, while also considering the court’s interest in judicial economy. The court noted that “interests of comity, judicial efficiency, and the convenience of the parties and the courts are especially strong ‘where a foreign parallel proceeding is ongoing.'”

The court explained that interests of efficiency favored a stay, where the award that Cube and Demeter sought to enforce could be annulled by the Committee. A stay also conserved the resources of the parties, where a decision on the merits by the court could be subject to appeal and its attendant costs. Interests of comity also weighed in favor of a stay, “given that resolving this case mandates addressing a conflict between decades-old treaties and newly minted EU case law.”

Furthermore, the court acknowledged that “the hardship to Spain in denying the stay also militates in favor of granting a stay in the case.” If the award were prematurely enforced, and the award annulled, it would result in litigation to recover any Spanish state assets that are seized. Conversely, the hardships to Cube and Demeter from the stay would be minimal, if any. Cube and Demeter’s award included interest and costs, and they would likely be compensated for the delay and accumulated interest if they were to prevail in the ongoing annulment proceedings.

Therefore, based on the possibility of contradictory decisions, considerations of comity, and the potential hardships to each party, the court granted Spain’s motion to stay and denied its motion to dismiss without prejudice.


Jacob M. Kaplan is a partner in Baker McKenzie, New York. He focuses on international litigation and arbitration, and has participated in several high-profile contract and financial services cases. Jacob serves as counsel in disputes concerning contract, energy, investment, construction, commodities, financial services, insurance, and intellectual property, among other matters. He has appeared in state and federal courts as well as a variety of institutional and ad hoc arbitral forums. Jacob can be reached at and + 1 212 891 3896.


Allen Al-Haj is a member of the Firm's North America Litigation and Government Enforcement Practice Group in Dallas and the Firm's North America Trade Secrets Practice Group. Before joining Baker McKenzie, Allen gained valuable insight into federal motion practice and procedure as a law clerk for the Honorable Jane J. Boyle of the US District Court for the Northern District of Texas. Allen's practice involves representing clients across many industries in an array of commercial litigation and employment-related disputes in state and federal courts across the country. His experience includes litigating cases involving federal and state trade secret, antitrust and unfair competition, and racketeer influenced and corrupt organizations (RICO) claims, as well as complex contract disputes, business torts, and consumer claims on an individual and class basis. Allen also has experience consolidating actions through federal and state multidistrict litigation (MDL) procedures aimed at streamlining discovery and pre-trial proceedings. His practice encompasses nearly all aspects of litigation, and he regularly advises clients in all litigation phases. Allen can be reached at and + 1 214 978 3020