(BRUSSELS) - An EU court ruled on Thursday against a Spanish law that Madrid has used to ward off foreign energy companies from making takeovers of Spanish groups.

The Spanish law was adopted at the end of 1999 when French energy group Electricite de France (EDF) attempted to get a foothold in the Spanish market by targeting Hidrocantabrico.

The law allows the Spanish government, within two months of the foreign acquisition, to either prohibit the exercise of voting rights or to make them subject to conditions.

The European Court of Justice (ECJ) ruled that the measure was "disproportionate" for Spain's declared aim of securing its energy supply.

The European Commission has long fought Spain over the law and brought the case before the Luxembourg-based ECJ in June 2006.

The European Union has frequently clashed with Madrid in recent years over Spanish restrictions on foreign ownership of Spanish energy companies, which Brussels sees as blatant and illegal protectionism.

The EU court ruling comes as EDF has again indicated interest in entering the Spanish market and in particular in Spanish group Iberdrola.

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