Separate questions, separate standards: sovereign disputes in US courts after Devas, Blasket and YPF

Daniel D Birk and Olivia Radics
Eimer Stahl LLP
dbirk@eimerstahl.com
oradics@eimerstahl.com 
 

Three moments captured a noteworthy year in US sovereign-disputes litigation. In June 2025, a unanimous Supreme Court eliminated an entire category of defence, holding that foreign states cannot resist personal jurisdiction for want of ‘minimum contacts’ with the United States. In June 2026, the Court effectively ended Spain’s years-long campaign to stop US courts from enforcing intra-EU investment awards on the ground that EU law precluded any arbitration award from coming into effect. And in March 2026, the Second Circuit set aside the most far-reaching turnover order ever directed at a sovereign’s foreign-held assets, along with a US$16.1bn judgment and the enforcement campaign built around it. Though each case addressed distinct issues, together they reveal a unified approach to sovereign litigation and provide important lessons for cross-border practitioners.  

An extra-textual jurisdictional hurdle removed: Devas and Fuld

The Foreign Sovereign Immunities Act of 1976 (FSIA) provides the sole basis for jurisdiction over a foreign state in US courts. Under the FSIA, a US court has both personal and subject-matter jurisdiction over a foreign state once the plaintiff serves the state with process and establishes an exception to sovereign immunity.¹ For decades, the Ninth Circuit has required plaintiffs also to show that the sovereign had ‘minimum contacts’ with the United States, and on that basis it reversed confirmation of a US$562.5m ICC award (worth some US$1.3bn with interest) against Antrix, the commercial arm of India’s space agency. In CC/Devas (Mauritius) Ltd v Antrix Corp,² Justice Alito, writing for a unanimous Court, held that the statute means what it says: personal jurisdiction over a foreign state exists whenever an FSIA immunity exception applies and service has been properly made. Nothing more is required. 

The Court reserved the question whether the Fifth Amendment requires minimum contacts with the United States for a federal court to exercise jurisdiction over a foreign defendant (analogous to the Fourteenth Amendment’s condition of state-court personal jurisdiction on a defendant’s minimum contacts with the forum state), but two weeks later Fuld v Palestine Liberation Organization³ held that the Fifth Amendment does not impose the same standard as the Fourteenth (and may not impose any limits on the territorial jurisdiction of federal courts at all). Instead, assuming there are any limits, due process is met where a statute ‘ties federal jurisdiction to conduct closely related to the United States that implicates important foreign policy concerns.’ (There still remains the separate question whether foreign states and their instrumentalities are even ‘persons’ entitled to due process in the first place, which many courts and Justice Thomas, concurring in the judgment, have held or would hold are not.)

Separating arbitrability and jurisdiction: Blasket

Kingdom of Spain v Blasket Renewable Investments LLC disaggregated a different question from jurisdiction: whether a state has agreed to arbitrate at all. Spain faces roughly US$1.5bn in unpaid awards arising from its rollback of renewable-energy incentives, most rendered under the Energy Charter Treaty (ECT) in favour of EU investors. Following the Court of Justice of the EU’s Achmea and Komstroy judgments, Spain has argued everywhere that it was legally incapable under EU law of offering to arbitrate with intra-EU investors, so no arbitration agreement ever ‘existed’, and the FSIA’s arbitration exception to sovereign immunity cannot apply. In August 2024, the DC Circuit rejected that argument: Spain signed the ECT, which contains a standing offer to arbitrate, and signing the ECT was sufficient to establish an exception to immunity under the FSIA; whether that offer extends to intra-EU investors is a question of the agreement’s scope for the arbitrators, not a jurisdictional question for the courts.⁴ A wave of judgments followed, seven confirmations against Spain in as many weeks in August and September 2025, totalling more than €630m. (Meanwhile, a Swedish set-aside of a non-ICSID award was respected in Mercuria v Poland,⁵ a reminder that the arbitral seat still matters outside the ICSID system.) And new complaints are already seeking to enforce intra-EU treaty awards in US courts, most recently against Romania.

Spain sought certiorari, supported by the European Commission, Poland, Romania and Bulgaria as amici, and the Supreme Court called for the views of the United States. The Solicitor General’s May 2026 brief urged denial while arguing that the DC Circuit’s reasoning was wrong: in the government’s view, the existence of an arbitration agreement applicable to the parties is a jurisdictional fact that courts must decide de novo. Spain should nonetheless lose, the brief concluded, because the Vienna Convention on the Law of Treaties forbids a state from invoking its internal legal order to escape treaty obligations. On 29 June 2026, the Court denied the petition without comment.⁶

The denial leaves the DC Circuit’s framework standing and, as a practical matter, resolves the intra-EU question for now, since these cases are brought predominantly in the District of Columbia. But the Solicitor General’s position is noteworthy. Expect sovereigns in future FSIA cases to keep that position alive as fodder for a certiorari petition in a future case and to recast what were once ‘scope’ objections as challenges to the existence of an arbitration agreement purportedly subject to de novo judicial review.⁷ Meanwhile, Spain has made its first payment on one of these awards, even though the European Commission has declared that paying an intra-EU treaty award is unlawful State aid and has directed Spain to resist enforcement; the Commission has since opened a State aid investigation into that payment.

Separating jurisdiction from the merits: YPF

In Petersen v Argentine Republic (‘YPF’),⁸ minority shareholders in YPF, Argentina’s national oil company, won a US$16.1bn judgment, believed to be the largest ever entered against a foreign state, on the theory that Argentina’s 2012 renationalisation of YPF breached tender-offer provisions in the company’s bylaws. In 2018, the Second Circuit held that Argentina lacked sovereign immunity under the commercial-activity exception. But eight years later, the same court reversed the judgment on the merits of Argentine law. Corporate bylaws, the court held, are a ‘plurilateral organisational contract’ that creates no shareholder-versus-shareholder damages action under Argentine law; independently, Argentina’s General Expropriation Law channels expropriation grievances into its own compensation mechanism and bars private actions that would impede a declared expropriation. No party disputed that Argentina had flagrantly violated the bylaws. But the cause of action was not one Argentine law provides. In a footnote, the panel also vacated the district court’s extraordinary turnover order, which had directed Argentina to move its 51 per cent YPF stake from Argentina into a New York custody account. 

The lesson from YPF is an important one. The Second Circuit’s 2018 ruling that the plaintiff had cleared the FSIA immunity hurdle established only that a sovereign could be sued. It did not guarantee that the eventual judgment, even one a decade in the making, would survive review. YPF also teaches that claimants should consider first bringing their claims in treaty arbitration, instead of bringing contract claims in court, since a treaty claim is decided under international-law standards that do not depend on the host state’s domestic statutes.

What this means for cross-border practice

Read together, these decisions show that US appeals courts are taking, and enforcing, a disciplined, formalistic approach to sovereign disputes that disaggregates legal issues such as jurisdiction, arbitrability and the merits into separate inquiries subject to distinct standards of review. And that insight provides a practical lesson: a favourable answer at one stage of litigation may secure little at the next, and answering the jurisdictional and arbitrability questions is often only a threshold step on the way to a longer and more difficult contest. 

The next twelve months, which will include the Ninth Circuit’s remand in Devas, a possible YPF certiorari petition and the first post-Blasket enforcement actions against other EU states, will test how firmly the lines hold. Either way, practitioners should prepare from the beginning of a case to litigate each stage independently and to have a well-defined strategy for each stage.

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Notes

1  See 28 U.S.C. § 1330(a)–(b).
2  CC/Devas (Mauritius) Ltd v Antrix Corp Ltd, 605 US 223 (2025).
3  Fuld v Palestine Liberation Organization, 606 US ___ (2025) (Nos 24-20 & 24-151, decided 20 June 2025).
4  NextEra Energy Global Holdings BV v Kingdom of Spain, 112 F 4th 1088 (DC Cir 2024), cert denied sub nom Kingdom of Spain v Blasket Renewable Investments LLC, No 24-1130 (US, 29 June 2026). 
5  Mercuria Energy Group Ltd v Republic of Poland, No 1:23-cv-03572 (TNM), 2025 WL 2591788 (DDC, 8 September 2025) (appeal pending, DC Cir).
6  Kingdom of Spain v Blasket Renewable Investments LLC, No 24-1130 (US, 29 June 2026). 
7  For early analyses anticipating this dynamic, see Natalie Reid and Beatrice Walton, ‘The Solicitor General Opposes Cert in Spain v. Blasket but Opens the Door to Future FSIA Challenges to Award Enforcement’, Transnational Litigation Blog (3 June 2026); Akin Gump, ‘Enforcing Arbitral Awards Against Sovereigns: The US Remains the Forum of Choice—With Caveats’ (22 July 2026).
8  Petersen Energía Inversora SAU v Argentine Republic, Nos 23-7370, 23-7376 (2d Cir, 27 March 2026).