Gas magnate Dmytro Firtash was taken into custody over alleged links to organised crime in Spain, moments after a Vienna court ruled he could be extradited to the US on corruption charges.
Firtash, 51, made money through connections with Russian gas giant Gazprom, and was at one time linked to a former campaign aide of US President Donald Trump.
He is wanted in the US over charges that he and five others paid USD 18.5 million in bribes to officials in India to secure titanium mining licences in 2006.
Firtash was arrested in Vienna in March 2014, but released on a record Austrian bail of 125 million euros (USD 130 million).
He has denied all charges and maintained he was the victim of a smear campaign.
His legal team argued that he was caught up in a larger battle over the future of Ukraine, where the government has been engaged in bloody fighting with Russian-backed separatists in the east since 2014.
But when the warrant was issued, the tycoon was already under house arrest in Austria over the US allegations.
A lower court in Vienna sided with the tycoon in April 2015 and rejected the US request.
But the appeals court said yesterday the US had provided "sufficient" proof that Firtash "may have committed the crimes he is accused of".
The prosecutor's office refused to comment on the Spanish case or how Firtash's arrest would affect the extradition ruling.
Firtash owns Group DF, a business empire involved in energy, chemicals, media, banking and property in Ukraine and other countries including Germany, Italy and Austria.
He made his fortune importing gas to Ukraine from Russia and Central Asia via his group Rosukrenergo, since disbanded, in collaboration with Russian gas giant Gazprom.
Having backed the 2010 election campaign of Yanukovych, Firtash was able to expand his business interests, acquiring chemicals and fertiliser factories as well as TV channel Inter.
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