The Supreme rejects suspending State loans of €3,000 million to Indra and Escribano

MadridThe Supreme Court has denied the precautionary measure requested by Santa Bárbara to suspend two loans for special armament modernization programs (PEM) of 3,000 million euros to the temporary union of companies (UTE) formed by Indra Sistemas and Escribano Mechanical & Engineering (EM&M), as reported by the high court this Monday.

In an order, the contentious chamber rejects Santa Bárbara's claim on the loans while the merits of the appeal filed by the armament company, a subsidiary of General Dynamics, are resolved. Among other arguments, the chamber bases the rejection of the precautionary measure on the fact that the damages alleged by Santa Bárbara "are nothing more than a mere allegation without supporting evidence, without it being proven that the execution of the royal decree and the loans being challenged could cause it imminent damages, and much less that they are difficult to repair".

The magistrates explain that it has not been proven that the continuity of the appellant company (Santa Bárbara), its current market position, or current jobs could be affected by the granting of these loans to competing companies. Likewise, they highlight that Santa Bárbara, in April 2000, was acquired by General Dynamics Corporation and became a subsidiary of the North American multinational, which is one of the world's leading companies in the defense sector. "It is difficult for its continuity as a company or current jobs to be considered compromised by not being a beneficiary of the questioned loans," the document adds.

Furthermore, Santa Bárbara is a contractor of other loans in Spain for the development of other different programs – Pizarro Vehicles Update Program (PIZARRO-ACT) – for an amount of 176 million euros granted by royal decree 914/2025, of October 14. On the contrary, the Supreme Court recalls that there is "a relevant public interest" in developing armament programs for the modernization of defense, as it constitutes a national and European Union strategy to reduce dependence on external supply of strategic supplies and the implementation of strategic industries that allow for autonomous defense capability and the strengthening of national industry.

Military planning

The provisional suspension of more than 3,000 million euros in public funding, corresponding to the PEMs, "would not produce a simple neutral postponement of the investment, but a substantial alteration of military, industrial and budgetary planning, with cumulative effects that are difficult to reverse". It would also directly and immediately compromise the modernization of critical military capabilities, compliance with international commitments made by Spain and the stability of a strategic industrial sector, the chamber adds.

Given this relevant public interest in the execution of the loans, "no irreparable harm is appreciated for the recurring company, since although the financing of competing companies generates the loss of the expectation of being the recipient of this financing, this private interest can neither prevail over the public interest described nor be superimposed on the private interest of the beneficiary companies, which is equally."