Since April 7, 2025, a high-profile case against the Federal Republic of Germany has been pending before the District Court in Washington, D.C. Two Strabag subsidiaries are seeking to enforce an arbitration award of more than €330 million, granted in 2024 by the World Bank’s International Centre for Settlement of Disputes (ICSID). The case stems from failed offshore wind power projects in the North Sea, whose economic viability was eliminated by changes to German grid connection regulations. Germany is attempting to prevent payment and has filed a motion in the U.S. to overturn the arbitration award. As a result, U.S. District Judge Loren L. Alikhan temporarily suspended the proceedings in early March 2026. (derstandard: 07.03.26)
The origin of the dispute lies in the North Sea
The conflict began more than twenty years ago. At that time, Strabag invested in offshore wind farms off the German coast through two companies. Shortly afterward, Germany changed the legal framework, significantly worsening the conditions for the projects.
The grid connection, in particular, became a problem. As a result, the projects in the North Sea were no longer profitable. Strabag abandoned the projects and subsequently attempted to recover the resulting damages through legal means.
Arbitration awarded Strabag damages
The two companies appealed to the ICSID (International Centre for Settlement of Investment Disputes). They based their claim on the Energy Charter Treaty, which is designed to protect investments in the energy sector. In 2024, the arbitration tribunal ruled in Strabag’s favor and awarded the company damages, including interest, of more than €330 million.
However, no payment has yet been made. Within the EU, the legal situation prevents the enforcement of such arbitration awards. The European Court of Justice considers the Energy Charter Treaty inapplicable to disputes between EU member states and EU investors.
Therefore, the case moved to the USA
It was precisely for this reason that Strabag turned to a US court. Outside the European Union, an ICSID arbitration award can still be recognized and enforced. The question in Washington is therefore whether Strabag can access German state assets held in the United States.
This is a sensitive issue for Germany because the case has now reached a new level. A European legal dispute has become an international enforcement conflict. This has further increased the pressure on the German government.
Germany Relies on Last Resort
Berlin is now attempting to overturn the arbitral award itself. According to the World Bank Arbitration Court’s database, Germany has initiated annulment proceedings. However, such proceedings are only successful if there are serious procedural errors or fundamental jurisdictional issues.
International law expert Gabriel M. Lentner commented: “In principle, such annulment proceedings can only address the most egregious procedural deficiencies.” The hurdles are high, and only a few applications are ultimately successful. Germany is therefore likely to primarily contest the arbitral tribunal’s jurisdiction.
Decision not expected before 2027
With the annulment application, Germany initially gained time. The US judge therefore temporarily suspended the proceedings in Washington. However, Strabag does not expect a decision on this application before 2027.
Thus, the case remains open for the foreseeable future. For Germany, this is merely a postponement, while the financial risk remains. If the application fails, enforcement proceedings in the US are likely to resume quickly.