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Lawyers, other representatives, expert(s), tribunal’s secretary

Final Award

FREQUENTLY USED ABBREVIATIONS

5 Member States Declaration Declaration of the Representatives of the Governments of the Member States, of 16 January 2019, on the enforcement of the Judgment of the Court of Justice in Achmea and on investment protection in the European Union signed by the Representatives of the Governments of Finland, Luxembourg, Malta, Slovenia and Sweden
22 Member States Declaration Declaration of the Representatives of Governments of the Member States, of 15 January 2019 on the legal consequences of the judgment of the Court of Justice in Achmea and on Investment Protection in the European Union signed by the Representatives of the Governments of, Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Netherlands, Austria, Poland, Portugal, Romania, Slovakia and United Kingdom of great Britain and Northern Ireland
1997 Electricity Law Law 54/1997 on the Electricity Sector (published on 28 November 1997)
2001 Renewable Energy Directive EU Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market
2008 Guidelines European Commission, Community Guidelines for State Aid for Environment Protection, Number 2008/C82/0171
2008 Presentation The 2008 InvestInSpain presentation entitled "Opportunities in Renewable Energy in Spain"
2009 Presentation The 2009 InvestInSpain presentation entitled "Legal Framework for Renewable Energies in Spain"
2009 Renewable Energy Directive EU Directive 2009/28/EC on the promotion and use of energy from renewable sources and amending and subsequently repealing Directive 2001/77 EC and 2003/30 EC
2010 Measures RD 1565/2010 and RDL 14/2010 collectively
2014 Guidelines European Commission, Community Guidelines for State Aid for Environment Protection, Number 2014/C200/0170
Antin Antin Infrastructure Services Luxembourg S.aà r.l. and Antin Energia Termosolar B. V. v. The Kingdom of Spain, ICSID Case No. AR/13/31
ASoC The Claimants' Amended Statement of Claim dated 6 February 2015
BayWa BayWa R.E. Renewable Energy GmbH and BayWa R.E. Asset Holding Gmbh v. Kingdom of Spain, ICSID Case No ARB/15/16, Decision on Jurisdiction, Liability and Directions on Quantum, 2 December 2019
BIT Bilateral Investment Treaty
Blusun Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italian Republic, ICSID Case No. ARB/14/3
BQR I Brattle's First Quantum Expert Report submitted along with the Quantum Memorial on 7 April 2017
BQR II Brattle's Quantum Rebuttal Report entitled "Rebuttal Report: Procedural Order No. 12" submitted on 9 November 2017
Brattle's Second Expert Report Second Expert Report of Carlos Lapuerta and José Antonio García of the Brattle Group submitted on 24 February 2015
Brattle's Third Expert Report Third Expert Report of Carlos Lapuerta and José Antonio García of the Brattle Group submitted on 17 October 2015 as corrected on 28 October 2015
Claimants The PV Investors
C-Costs Reply The Claimants' Reply cost submission dated 15 July 2016
C-Costs Submission The Claimants' Costs Submission dated 8 July 2016
Charanne Charanne B. V. & Construction Investments S.A. R.L. v. the Kingdom of Spain, SCC Arb. No. 062/2012, Award, 21 January 2016 and Partial Dissenting Opinion of Guido Santiago Tawil dated 21 January 2016
Chorzów Factory Case Concerning the Factory at Chorzów (Germany v. Poland), Claim for Indemnity, Merits, PCIJ Rep, Series A, No. 17, Judgment of 13 September 1928
CJEU Court of Justice of the European Union
CNE National Energy Commission (now known as the National Commission for Markets and Competition or "CNMC")
C-PHB1 The Claimants' post hearing brief on liability dated 20 May 2016
Commission European Commission
C-PHB2 The Claimants' reply post-hearing brief on liability dated 24 June 2016
CPI Spanish Consumer Price Index
CSP CSP Equity Investment s.a.r.l. (Luxembourg) v. Kingdom of Spain, SCC Arbitration 2013/094
CWS Claimants' Witness Statement
DCF Discounted Cash Flow
Disputed Measures The 2010 Measures and the New Measures collectively
Dissenting Opinion The Concurring and Dissenting Opinion of The Honorable Charles N. Brower to the Preliminary Award on Jurisdiction dated 10 October 2014
EC European Communities
EC Decision on State Aid European Commission's "Decision on the State Aid SA.40348 (20151NN) regarding Spain's Support for Electricity Generation from Renewable Energy Sources, Cogeneration and Waste" dated 10 November 2017
EC Treaty Treaty Establishing the European Community
ECJ European Court of Justice
ECT Energy Charter Treaty, Lisbon, 17 December 1994, 2080 UNTS 95 (also referred to as "Treaty")
Eiser Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36
EJM Expert Joint Model dated 5 October 2018 submitted pursuant to PO18
EOQR I Econ One Research's First Quantum Expert Report submitted along with the Quantum Counter Memorial on 14 September 2017
EOQR II Econ One Research's Second Quantum Expert Report submitted along with the Quantum Rejoinder on 22 December 2017
EU European Union
Exh. C- Claimants' Exhibit
Exh. CLA- Claimants' Legal Authority
Exh. R- Respondent's Exhibit
Exh. RLA- Respondent's Legal Authority
FET Fair and equitable treatment
FIT Feed-in-Tariff
FPS Full Protection and Security
Greentech Greentech Energy Systems A/S et al. v. Kingdom of Spain, SCC Arbitration V 2015/150
Greentech Documents Documents related to the Claimants' application for production of certain documents allegedly produced by Spain to the claimants in Greentech
Hearing on Liability Hearing on Liability held in The Hague on 14-21 March 2016
Hours cap Limit on the number of hours per year for which PV installations would receive the FIT established by RDL 14/2010
Hungary's Declaration Declaration of the Representative of the Government of Hungary, of 16 January 2019 on the legal consequences of the judgment of the Court of Justice in Achmea and on Investment Protection in the European Union
ICO Instituto de Crédito Oficial
IDAE Instituto para la Diversificación y Ahorro de la Energía
ILC International Law Commission
ILC Articles International Law Commission's Articles on the Responsibility of States for Internationally Wrongful Acts (ILC Articles), Annex to General Assembly Resolution 56/83 of 12 December 2001
Isolux Isolux Infrastructure Netherlands B.V. v. Spain, SCC Case V2013/153, Award, 17 July 2016
Joint Memorandum Joint Memorandum accompanying EJM dated 5 October 2018, submitted pursuant to PO18
Law 15/2012 Law 15/2012 of 27 December 2012, concerning Tax Measures to Ensure Energy Sustainability (published on 28 December 2012)
Law 24/2013 Law 24/2013 on the Electricity Sector of 27 December 2013
Masdar Masdar Solar & Wind Cooperatief U.A.v. Kingdom of Spain, ICSID Case No. ARB/14/1
MFN Most-favored-nation
MG&A Rebuttal Expert Report Rebuttal Expert Report of the Altran/MaC group submitted on 21 December 2015, as updated on 3 February 2016
MG&A Report Expert Report of Greatrex and Montojo Gonzalez in collaboration with Altran submitted along with the SoD
Ministry of Industry The Ministry of Industry, Energy and Tourism of Spain. Prior to December 2011 this entity was named the Ministry of Industry, Tourism and Commerce
MW Megawatt
New Measures RDL 2/2013, RDL 9/2013, Law 24/2013, RD 413/2014 and the Order on Parameters collectively
NextEra NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. the Kingdom of Spain, ICSID Case No. ARB/14/11, Decision on Jurisdiction, Liability and Quantum Principles, 12 March 2019
Novenergía Novenergia II - Energy & Environment (SCA) (Grand Duchy of Luxembourg), SICAR v. The Kingdom of Spain, SCC Arbitration (2015/063)
Order on Parameters Order IET/1045/2014 of 16 June 2014
PCA Permanent Court of Arbitration
PER 2005-2010 Plan for Promotion of Renewable Energies in Spain 20052010
PHB Post hearing brief
PHTC Pre-hearing telephone conference
PO1 Procedural Order No. 1 dated 31 July 2012
PO2 Procedural Order No. 2 dated 23 August 2012
PO3 Procedural Order No. 3 dated 16 November 2012
PO4 Procedural Order No. 4 dated 28 February 2013
PO5 Procedural Order No. 5 dated 14 March 2013
PO6 Procedural Order No. 6 dated 1 July 2013
PO7 Procedural Order No. 7 dated 10 January 2014
PO8 Procedural Order No. 8 dated 5 January 2015
PO9 Procedural Order No. 9 dated 30 July 2015
PO10 Procedural Order No.10 dated 25 January 2016
PO11 Procedural Order No.11 dated 23 March 2016
PO12 Procedural Order No.12 dated 29 September 2016
PO12 C-Costs Submission The Claimants' PO12 Costs Submission dated 14 June 2019
PO12 C-PHB1 The Claimants' First PO12 Post-Hearing Brief submitted on 16 March 2018
PO12 C-PHB2 The Claimants' Second PO12 Post-Hearing Brief submitted on 29 November 2018
PO12 C-Reply Costs Submission The Claimants' PO12 Reply Costs Submission dated 28 June 2019
PO12 Hearing Hearing on PO12 issues held in The Hague on 16-19 January 2018
PO12 phase The phase of the arbitration envisaged in PO12
PO12 R-Costs Submission The Respondents' PO12 Costs Submission dated 14 June 2019
PO12 R-PHB1 The Respondent's Quantum Post Hearing Brief submitted on 16 March 2018
PO12 R-PHB2 The Respondent's "Second Post Hearing Brief on Quantum" submitted on 12 February 2019
PO12 R-Reply Costs Submission The Respondent's PO12 Reply Costs Submission dated 28 June 2019
PO12-PHTC Pre-hearing telephone conference in the PO12 phase held on 8 January 2018
PO13 Procedural Order No.13 dated 29 May 2017
PO14 Procedural Order No.14 dated 31 July 2017
PO15 Procedural Order No.15 dated 20 October 2017
PO16 Procedural Order No.16 dated 11 January 2018
PO17 Procedural Order No.17 dated 25 January 2018
PO18 Procedural Order No.18 dated 18 July 2018
PO19 Procedural Order No.19 dated 15 October 2018
Preliminary Award on Jurisdiction Preliminary Award on Jurisdiction dated 13 October 2014
Procedural Rules The procedural rules of this Arbitration, executed on 20 July 2012 by the Tribunal, following consultation with the Parties
PILA Swiss Private International Law Act
PV Photovoltaic
Quantum Counter Memorial The Respondent's Quantum Counter Memorial submitted on 14 September 2017
Quantum Memorial The Claimants' PO12 Quantum Memorial submitted on 7 April 2017
Quantum Rejoinder The Respondent's Rejoinder on Quantum submitted on 22 December 2017
Quantum Reply The Claimants' Reply on Quantum submitted on 9 November 2017
RAIPRE Administrative Registry for Production Installations under the Special Regime / Registro Administrativo de Instalaciones de Producción en Régimen Especial
R-Costs Reply The Respondent's Reply cost submission dated 15 July 2016
R-Costs Submission The Respondent's Costs Submission dated 8 July 2016
RD Royal Decree
RD 1565/2010 Royal Decree 1565/2010 of 19 November 2010
RD 1578/2008 Royal Decree 1578/2008 of 26 September 2008
RD 18/2014 Royal Decree 18/2014 of 17 January 2014
RD 413/2014 Royal Decree 413/2014 of 6 June 2014
RD 436/2004 Royal Decree 436/2004 of 12 March 2004
RD 661/2007 Royal Decree 661/2007 of 25 May 2007
RDL Royal Decree Law
RDL 14/2010 Royal Decree Law 14/2010 of 23 December 2010
RDL 2/2013 Royal Decree-Law 2/2013 of 1 February 2013
RDL 6/2009 Royal Decree Law 6/2009 of 7 May 2009
RDL 9/2013 Royal Decree-Law 9/2013 of 12 July 2013
RE Renewable energy
RREEF RREEF Infrastructure (G.P.) Limited and RREEF PanEuropean Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB /13/30
Rejoinder The Respondent's Rejoinder dated 21 December 2015
Reply The Claimants' Reply dated 16 October 2015
Respondent The Kingdom of Spain (also referred to as Spain)
R-PHB1 The Respondent's post hearing brief on liability dated 20 May 2016 (corrected on 24 May 2016)
R-PHB2 The Respondent's reply post-hearing brief on liability dated 24 June 2016
SES Spanish electricity system
SoC The Claimants' Statement of Claim dated 28 September 2012
SoD The Respondent's Statement of Defence dated 22 May 2015, as amended on 16 June 2015
SPV Special Purpose Vehicle
Stadtwerke Stadtwerke Munchen GmbH, RWE Innogy GmbH and others v. Kingdom of Spain, ICSID Case No. ARB/15/1, Award, 2 December 2019
Sustainable Economy Law Sustainable Economy Act Law No. 2 of 4 March 2011
Terms of Appointment Terms of Appointment dated 4 July 2012
TFEU Treaty on the Functioning of the European Union
Treaty Energy Charter Treaty, Lisbon, 17 December 1994, 2080 UNTS 95 (also referred to as "ECT")
UNCITRAL United Nations Commission on International Trade Law
UNCITRAL Rules UNCITRAL Arbitration Rules (as revised in 2010)
UNTS United Nations Treaty Series
VCLT Vienna Convention on the Law of Treaties of 23 May 1969, 1155 UNTS 331

I. INTRODUCTION

1.
This is an ad hoc arbitration brought under the Energy Charter Treaty of 1994 ("ECT" or "Treaty")1 pursuant to the United Nations Commission on International Trade Law ("UNCITRAL") Arbitration Rules, as revised in 2010 (the "UNCITRAL Rules").

A. The Parties

2.
The Claimants are:

■ Mercurio Solar S.à r.l
■ Tyche Solar S.à r.l
■ Ampere Equity Fund B.V.
■ Element Power Holdings B.V.
■ MEIF Luxembourg Renewables S.à r.l
■ Impax Solar Investment S.à r.l
■ Impax New Energy Investors S.C.A.
■ WOC Photovoltaik Portfolio GmbH &Co. KG
■ NIBC European Infrastructure Fund I C.V.
■ Equitix Innova Infrastructure Investments Holding I B.V.(formerly, NEIF Infrastructure Investments Holding I B.V.)
■ Alesund, Christiansund S.à r.l. & Cie S.C.A. (formerly, Werec I & Christiansund S.à.r.l. S.C.A.)
■ Shulaya, Trier SG S.à r.l. & Cie S.C.A. (formerly, Werec II & Trier SG S.à.r.l. S.C.A.)
■ ASE C.V.
■ AES Solar Energy Cooperatief U.A.
■ Silver Ridge Power Holdings B.V. (formerly, AES Solar Energy Holdings B.V.)
■ Silver Ridge Power B.V.(formerly, AES Solar Energy B.V.)
■ Vela Energy Power España I B.V. (formerly, AES Solar España I B.V.)
■ Vela Energy Power España II B.V. (formerly, AES Solar España II B.V.)
■ Eoxis B.V.
■ Eoxis Holding S.A.
■ MPC Solarpark GmbH & Co. KG
■ Ceconat Energy GmbH
■ REI Renewable Energy International, S.à r.l.
■ Roland Schumann
■ InfraClass Energie 4 GmbH & Co. KG
■ ESPF Beteiligungs GmbH

3.

The Tribunal upheld jurisdiction over the foregoing 25 corporate entities and one natural person in its Preliminary Award on Jurisdiction, dated 13 October 2014 (the "Preliminary Award on Jurisdiction").2 The Claimants belong to the following groups of investors:

Investor Group Name of Claimants
HgCapital Tyche Solar S.à r.l. Mercurio Solar S.à r.l.
Ampere Ampere Equity Fund B.V.
Element Power Element Power Holdings B.V.
MEIF MEIF Luxembourg Renewables S.à r.l.
Impax Impax Solar Investment S.à r.l. Impax New Energy Investors S.C.A.
White Owl WOC Photovoltaik Portfolio GmbH & Co. KG
NIBC NIBC European Infrastructure Fund I C.V. Equitix Innova Infrastructure Investments Holding I B.V. (formerly, NEIF Infrastructure Investments Holding I B.V.)
Werec Werec I & Christiansund S.à.r.l. S.C.A., now called Alesund, Christiansund S.à r.l. & Cie S.C.A. Werec II & Trier SG S.à.r.l. S.C.A, now called Shulaya, Trier SG S.à r.l. & Cie S.C.A.
AES ASE C.V AES Solar Energy Cooperatief U.A. Silver Ridge Power Holdings B.V. (formerly, AES Solar Energy Holdings B.V.) Silver Ridge Power B.V. (formerly, AES Solar Energy B.V.)
  Vela Energy Power España I B.V. (formerly, AES Solar España I B.V.) Vela Energy Power España II B.V. (formerly, AES Solar España II B.V.)
Eoxis Eoxis B.V. Eoxis Holding S.A.
MPC Capital MPC Solarpark GmbH & Co. KG
Ceconat Ceconat Energy GmbH
Arisol R.E.I. Renewable Energy International S.à r.l. Roland Schumann
kgal InfraClass Energie 4 GmbH & Co. KG ESPF Beteiligungs GmbH
4.
The Claimants are described in greater detail in Appendix 2 to the Claimants’ Amended Statement of Claim dated 6 February 2015, as amended on Appendix 2 to the Claimants’ Reply on the merits dated 16 October 2015 and the Claimants’ letter to the Tribunal dated 3 February 2020, and are collectively referred to as the "PV Investors" or the "Claimants".
5.
The Respondent is the Kingdom of Spain (the "Respondent" or "Spain").

B. The Arbitral Tribunal

6.
The Tribunal is composed of The Honorable Charles N. Brower, appointed by the Claimants; of Judge Bernardo Sepulveda-Amor, appointed by the Respondent; and of Professor Gabrielle Kaufmann-Kohler, Presiding Arbitrator, appointed by agreement of the two co-arbitrators, with the consent of the Parties.3
7.
The Tribunal appointed Dr. Michele Potesta as Secretary of the Tribunal, with the consent of the Parties.4

II. PROCEDURAL HISTORY

a. Preliminary Award on Jurisdiction

8.
The procedural history of the first phase of the arbitration until 13 October 2014 is recounted at section II of the Preliminary Award on Jurisdiction.
9.
On 14 October 2014, the Tribunal dispatched to the Parties English and Spanish versions of the Preliminary Award on Jurisdiction and of the Concurring and Dissenting Opinion of The Honorable Charles N. Brower dated 10 October 2014 (the "Dissenting Opinion"). The Tribunal also invited the Parties to confer and submit their proposals for the procedural calendar for the next phase of the arbitration.
10.
On 24 October 2014, pursuant to paragraph 8.1 of the Procedural Rules dated 20 July 2012 (the "Procedural Rules"), the Parties provided the Tribunal with their positions on the publication of the Preliminary Award on Jurisdiction.

B. Amendments to the SoC, Procedural Calendar, Intervention by the European Commission, Publication of Awards and other related matters

11.
On 3 and 4 November 2014, the Claimants and the Respondent informed the Tribunal that they had been unable to agree on the procedural calendar. The main reason for disagreement related to the Claimants’ intention to amend their Statement of Claim of 28 September 2012 (the "SoC") "to address the new harmful measures implemented by Spain subsequent to the filing of the original Statement of Claim in September 2012",5 to which the Respondent "strongly object[ed]".6 The Parties also addressed this issue in their further submissions of 12 November, 19 November, 25 November, 28 November and 2 December 2014.7
12.
On 12 November 2014, the European Commission (the "Commission") filed an application for leave to intervene as a non-disputing party with the PCA. The Commission’s request for permission to intervene was "limited to the question of jurisdiction".8 The Commission "invite[d] the Tribunal to decline jurisdiction" because of the intra-EU nature of the dispute.9 The Commission maintained that the ECT did not create obligations among EU Member States inter se, "but only between the Union and its Member States, on the one hand, and each of the other contracting Parties, on the other hand [...]".10 If the Tribunal nevertheless decided to exercise jurisdiction, the Commission reserved its right to request leave to also intervene on issues of substance.11
13.
On 18 November 2014, the Tribunal invited the Parties’ comments on the Commission’s application and asked the Parties whether they had an objection to the Tribunal providing the Commission with a copy of the Preliminary Award on Jurisdiction.
14.
On 5 December 2014, the Parties submitted their comments. The Claimants argued that there was no basis for the Commission to intervene in the proceedings nor was "the intended scope of the intervention relevant to the dispute".12 The Claimants also did not object to the Tribunal providing the Preliminary Award on Jurisdiction to the Commission.13 The Respondent indicated that it had no objection to the Tribunal providing the Commission with a copy of the Preliminary Award on Jurisdiction (subject to certain confidentiality undertakings), or to the Commission intervening in the proceedings. However, the Respondent suggested that it may be appropriate to determine the question of the Commission’s intervention after the Tribunal’s determination regarding the amendment of the SoC.
15.
On 5 January 2015, the Tribunal issued Procedural Order No. 8 ("PO8"), in which the Claimants were granted leave to file an amended SoC. A procedural calendar for the next phase of the arbitration was circulated with PO8.
16.
By letter of 9 January 2015 to the Parties, the Tribunal ruled on the Commission’s application. It held that it had already affirmed its jurisdiction in the Preliminary Award on Jurisdiction.14 Under the Swiss lex arbitri, an award on jurisdiction did bind the Tribunal, which thus had no power to re-open a matter already decided. As the Commission’s application was limited to jurisdictional issues linked to the intra-EU nature of the dispute, the Tribunal could not accept the Commission's application.
17.
By the same letter, the Tribunal also drew the Parties’ attention to the latest developments concerning transparency in investment treaty arbitration and inquired whether the Parties would consent to the publication of the Preliminary Award on Jurisdiction and the Dissenting Opinion.15
18.
On 16 January 2015, the Claimants confirmed their consent to the publication of the Preliminary Award on Jurisdiction, as well as awards to be issued in these proceedings, subject to redactions to protect the confidentiality of commercially sensitive information. On the same day, the Respondent informed the Tribunal that it did not consent to the publication of the Preliminary Award on Jurisdiction, and on 28 January 2015, suggested that the Parties and the Tribunal hold a telephone conference on this issue.16
19.
In a second letter of the same day, Spain alleged that the Claimants had breached Article 8 of the Procedural Rules, in particular by disclosing the content of the Preliminary Award on Jurisdiction. According to the Respondent, on 24 December 2014, IAReporter had disclosed the outcome of the jurisdictional phase. It was the Respondent’s "foregone conclusion that the Claimants directly or indirectly disclosed either the Preliminary Award on Jurisdiction or the outcome resulting from such Preliminary Award to either Mr Peterson [of IAReporter] or some third party that is not a party to these confidential proceedings".17 The Respondent requested the Tribunal to enforce Article 8 of the Procedural Rules by ordering such sanctions as it deemed appropriate. On 28 January and 4 February 2015, pursuant to the Tribunal’s directions, the Claimants provided their comments, denying the Respondent’s allegations, and the Respondent provided its responses to the Claimants’ comments.
20.
On 6 February 2015, the Claimants filed their amended SoC (the "ASoC") along with supporting witness statements, exhibits, legal authorities and the Second Expert Report of the Brattle Group ("Brattle’s Second Expert Report").18
21.
On 13 February 2015, the Claimants submitted the Spanish language translation of the ASoC.
22.
Also on 13 February 2015, the President of the Tribunal made a disclosure, to which neither of the Parties objected.
23.
On 16 February 2015, the Tribunal informed the Parties that it was available for a telephone conference as proposed by the Respondent in relation to the publication of the Preliminary Award on Jurisdiction and asked them for their availability. On 6 March 2015, after further correspondence between the Parties, the Tribunal confirmed that the telephone conference would take place on 9 March 2015 at 16:00 (CET).
24.
Consequently, on 9 March 2015 at 16:00 (CET), the Parties and the Tribunal held a telephone conference to discuss the publication of the Preliminary Award on Jurisdiction.
25.
On 11 March 2015, the Respondent submitted additional comments on the matters discussed at the conference call. Amongst other things, the Respondent confirmed that: no matter what the outcome of the liability phase (i.e., whether [the Tribunal] finds Spain liable or not), and notwi[th]standing the fact that it is not what arises from the Procedural Rules, Spain would consent to the publication of the award on liability, even in the hypothetical case that such award could not be "the final" award. Furthermore, as anticipated during the procedural call Spain would also consent to the publication of the Preliminary Award on Jurisdiction at such point in time (i.e., when the Tribunal renders the award on liability)- which as it was explained during the procedural call, it was assumed the Tribunal would do in any event.19
26.
In letter of 26 March 2015, the Tribunal responded to the Commission’s application of 12 November 2014. It conveyed to the Commission that it had no power to reopen jurisdictional objections that it had already decided.20 The Tribunal observed, however, that the Commission had "reserved the right to request leave to intervene also on points of substance".21 The Tribunal informed the Commission, inter alia, that it would consider any such application and requested that the same be filed by 20 May 2015. Further, as neither Party had raised an objection, the Tribunal provided the Commission with a copy of the Preliminary Award on Jurisdiction and the Dissenting Opinion.22
27.
Also on 26 March 2015, the Tribunal sent a copy of the letter to the Commission just referred to and addressed the publication of the Preliminary Award on Jurisdiction.23 Having considered the Parties’ positions, it decided that the Preliminary Award on Jurisdiction would be published at the time of the issuance of the final award. Furthermore, it found that the Respondent had failed to establish the Claimants’ alleged breaches of the applicable confidentiality regime.24
28.
On 11 May 2015, following the Parties’ joint request for a revision of the procedural timetable, the Tribunal circulated a revised procedural calendar.
29.
On 20 May 2015, the Commission informed the Tribunal that it would not present an application to intervene on the merits because Spain had officially notified the Disputed Measures (in accordance with the requirements of EC law) as a result of which the Commission was now obliged to take a decision on Spain’s notification of the Disputed Measures.25 The Commission invited the Tribunal to suspend the arbitration until it had rendered its decision.26
30.
On 22 May 2015, the Respondent filed its Statement of Defence (the "SoD") with accompanying exhibits, legal authorities and an expert report of Greatrex and Montojo Gonzalez in collaboration with Altran (the "MG&A Report"). On the same day, the Respondent also filed the Spanish translation of its SoD.
31.
On 26 May 2015, the Tribunal provided a copy of the Commission’s letter of 20 May 2015 to the Parties, and informed them of its intent to ask the Commission to provide an estimate of the timeframe in which it planned to render its decision on the Kingdom of Spain’s notification of the Disputed Measures. Later that same day, the Tribunal responded to the Commission’s letter of 20 May 2015.
32.
On 11 June 2015, the Parties jointly requested an amendment to the dates for the document production phase specified in PO8 (as revised on 11 May 2015). The following day the Tribunal revised the time limits as requested by the Parties.
33.
On 16 June 2015, the Respondent filed a corrected version of the SoD and certain additional translations. By letter of the following day, the Tribunal accepted these changes subject to any objection by the Claimants. No objections were raised.27
34.
On 17 June 2015, each Party served its requests for the production of documents, in accordance with the procedural calendar annexed to PO8 (as amended on 12 June 2015).
35.
On 22 June 2015, the Tribunal received further correspondence from the Commission, advising about the timing of the decision on Spain’s notification of the Disputed Measures. Upon the Tribunal’s invitation, the Parties provided their comments on 5 July 2015.
36.
On 8 July 2015, the Tribunal amended the timetable to reflect the Parties’ agreement to extend the date for exchanging uncontested documents from 8 July to 17 July 2015.
37.
On the same day, the Parties submitted their responses and objections to the document requests.
38.
On 17 July 2015, having considered the Commission’s request to suspend the proceedings and the Parties’ comments thereto, the Tribunal informed the Parties of its decision to deny the Commission’s request and the related reasons. On 24 July 2015, the Tribunal communicated such decision to the Commission.
39.
On 20 July 2015, the Respondent asked the Tribunal and the Claimants whether they would agree to communicate the Preliminary Award on Jurisdiction and the Dissenting Opinion to the tribunal and the claimant in CSP Equity Investment s.a.r.l. (Luxembourg) v. Kingdom of Spain (SCC Arbitration 2013/094) ("CSP"). On 22 and 24 July 2015, the Tribunal and the Claimants confirmed that they had no objection to such request. On 25 July 2015, the Respondent conveyed that there was no information that needed to be redacted from the Preliminary Award on Jurisdiction, as confidentiality was covered by the rules applied in the SCC proceedings.
40.
On 22 and 23 July 2015, the Claimants and the Respondent submitted their Responses to the objections to the document requests.
41.
On 24 July 2015, the Tribunal forwarded to the Parties correspondence it had received from the Commission in which the Commission indicated that it would inform the Tribunal of its decision on Spain’s notification.
42.
On 27 July 2015, the Tribunal confirmed to the Parties its understanding that the Respondent would communicate the Preliminary Award on Jurisdiction and the Dissenting Opinion to the tribunal in CSP, being specified that both Parties had confirmed that no information needed to be redacted from the Award.
43.
On 31 July 2015, the Tribunal issued Procedural Order No. 9 ("PO9") ruling on the Parties’ document production requests.
44.
On 17 August 2015, the Respondent informed the Tribunal that it had been requested by the counsel for the claimants in RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain (ICSID Case No. ARB/13/30) ('RREEF"), to submit the Preliminary Award on Jurisdiction in that arbitration. It thus requested the Claimants’ and the Tribunal’s consent.
45.
Two days later, the Tribunal and the Claimants confirmed that they had no objection to such submission.
46.
On 17 October 2015, the Claimants filed their Reply (the "Reply") with accompanying exhibits, legal authorities, witness statements and the Third Expert Report of the Brattle Group ("Brattle’s Third Expert Report"). On 23 October 2015, the Claimants filed the Spanish translation of the Reply and on 28 October 2015, they filed a corrected version of the Brattle’s Third Expert Report.
47.
On 29 October 2015, the Respondent requested permission to communicate the Preliminary Award on Jurisdiction to the tribunal in Antin Infrastructure Services Luxembourg S.à r.l. and Antin Energia Termosolar B. V. v. The Kingdom of Spain (ICSID Case No. AR/13/31) ("Antin").
48.
On 3 November 2015, the Tribunal granted such permission and noted that the Claimants having consented to the publication of the Preliminary Award on Jurisdiction on 16 January and 19 August 2015, it was not necessary for Spain to seek any further consent from the Claimants with respect to the disclosure of the Preliminary Award on Jurisdiction to other arbitral tribunals or otherwise.
49.
On 11 December 2015, in light of certain new developments, the Claimants sought leave from the Tribunal, to submit a new witness statement from a Werec representative in respect of its claims. Following further correspondence of 11 December, 16 December and 23 December 2015 between the Parties and the Tribunal, the Tribunal granted the Claimants’ request on 29 December 2015. On 11 January 2016, the Claimants filed the witness statement of Jesús de Ramón-Laca Cotorruelo and on 29 January 2016, the Respondent provided its comments.
50.
On 21 December 2015, the Tribunal informed the Parties that the ICSID Secretariat had requested the communication of the Preliminary Award on Jurisdiction and the Dissenting Opinion to the ICSID tribunal in Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italian Republic (ICSID Case No. ARB/14/3) ("Blusun"). As the Respondent did not consent to the transmittal of the award to the tribunal in Blusun, on 14 January 2016, the Tribunal informed the ICSID Secretariat that it was not in a position to disclose the Preliminary Award on Jurisdiction to the tribunal in Blusun.
51.
On 21 December 2015, the Respondent filed its Rejoinder (the "Rejoinder") with accompanying exhibits, legal authorities, witness statements, and the Rebuttal Expert Report of the Altran/MaC group (the "MG&A Rebuttal Expert Report"). An updated version of the Rebuttal Expert Report of Altran/MaC group was filed on 3 February 2016.
52.
On 7 January 2016, the Claimants alleged that the witness statements of Messrs. Davey and Olivas la Llana (submitted with the Rejoinder) did not respond to or rebut evidence submitted with the Reply, and were thus inadmissible in light of the applicable rules and contravening the Claimants’ due process rights. The Claimants reserved the right to submit evidence in response to these witness statements.
53.

On 7 January 2016, the Claimants requested leave to file an extract from the Respondent’s pleadings in ICSID arbitration Masdar Solar & Wind Cooperatief U.A.v. Kingdom of Spain (ICSID Case No. ARB/14/1) ("Masdar"). The Respondent did not object. Thus, on 18 January 2016, the Tribunal confirmed that the document was part of the record as Exh. C-664.

54.
At this juncture, the Respondent sought to file a decision by the Spanish Constitutional Court. The Claimants did not object and, on 25 January 2016, that document was made part of the record as Exh. R-355.

C. Hearing on Liability and other related matters

55.
On 14 January 2016, the Parties provided the Tribunal with the names of the witnesses and experts they wished to cross-examine at the hearing.
56.
On 18 January 2016, the Tribunal circulated a draft Procedural Order No. 10 ("PO10") about the organization of the hearing.
57.
On the same day, the Parties provided the Tribunal with their list of attendees for the pre-hearing telephone conference (the "PHTC").
58.
On 20 January 2016, the President of the Tribunal informed the Parties that she would conduct the PHTC alone by delegation of her co-arbitrators.
59.
On 21 January 2016 at 6 p.m. (CET), the President of the Tribunal and the Parties held the PHTC to discuss the outstanding matters pertaining to the organization of the hearing. The PHTC was attended by the following persons:

Tribunal
Prof. Gabrielle Kaufmann-Kohler, Presiding Arbitrator
Dr. Michele Potesta, Secretary of the Tribunal

PCA
Ms. Hyun Jung Lee, Permanent Court of Arbitration

Claimants
Mr. Jeffrey Sullivan, Allen and Overy
Ms. Virginia Allan, Allen and Overy
Mr. David Ingle, Allen and Overy
Mr. Tomasz Hara, Allen and Overy
Mr. Pablo Torres, Allen and Overy

Respondent
Mr. Christian Leathley, Herbert Smith Freehills
Mr. Eduardo Soler Tappa, Herbert Smith Freehills
Ms. Florencia Villaggi, Herbert Smith Freehills
Mr. Jaime de San Roman, Herbert Smith Freehills
Ms. Pilar Colomés, Herbert Smith Freehills
Ms. Beverly Timmins, Herbert Smith Freehills
Ms. Melissa Sánchez, Herbert Smith Freehills

60.
During the PHTC, which was audio recorded, the President of the Tribunal and the Parties discussed the items set out in draft PO10, as well as other matters raised by the Parties during the call.
61.
On 25 January 2016, the Tribunal issued PO10.
62.
On 29 January 2016, the Respondent requested leave to introduce into the record (i) the award and dissenting opinion in Charanne B. V. & Construction Investments S.A. R.L. v. the Kingdom of Spain (SCC Case No. 062/2012) ("Charanne"), and (ii) five decisions by the Spanish Supreme Court. The Claimants did not object and, on 5 February 2016, the Tribunal granted the Respondent leave to file such documents, which the latter did on the same date, in Spanish (original), and 18 and 25 February 2016, in English (translations), as Exhs. RL-190, RL-191, and R-356 to R-360.
63.
On 3 February 2016, the Respondent sought the Claimants’ and the Tribunal’s consent for communicating the Preliminary Award on Jurisdiction and Dissenting Opinion to the tribunal in NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. the Kingdom of Spain (ICSID Case No. ARB/14/11), which consent was given on 4 February 2016.
64.
On 24 February 2016, pursuant to Procedural Rule 4.5, the Claimants requested leave to submit three additional categories of exhibits: (i) documents responding to Spain’s "late filed witness evidence";28 (ii) documents related to the due diligence of Impax; and (iii) documents which post-dated the Claimants’ last submission. On 1 March 2016, upon the Tribunal’s invitation, the Respondent objected to the submission of these new documents. On 7 March 2016, the Tribunal granted some of the Claimants’ requests and denied others. On 9 March 2016, in accordance with the Tribunal’s instructions, the Claimants provided the Tribunal with a consolidated index of the Claimants’ exhibits and submitted the new Exhs. C-665 to C-686.
65.
On 26 February 2016, pursuant to Procedural Rule 3.7, the Respondent sought leave to file two decisions of the Spanish Constitutional Court. Following the Claimants’ confirmation that they had no objection,29 on 7 March 2016, the Tribunal granted the Respondent leave to file the documents as Exhs. R-361 and R-362.
66.
Also during this period (i.e. between 23 February and 7 March 2016), the Parties and the Tribunal exchanged correspondence about the logistics of the hearing. The Parties made several joint proposals which the Tribunal approved.
67.
On 4 March 2016, the Tribunal invited the Parties to make the necessary adjustments to the hearing schedule and the Parties subsequently provided a jointly revised schedule on 9 March 2016.
68.
Also on 4 March 2016, the Respondent sought to submit documents as Exhs. R-363 to R-365. Such request was issued pursuant to leave granted by the Tribunal in its letter of 25 February 2016, which permitted the Respondent to introduce into the record any document received from the late production of documents by the Claimants on 17 February 2016.
69.
On 7 and 8 March 2016, the Parties provided their lists of attendees at the hearing. On 11 March 2016, the Parties submitted demonstrative exhibits.
70.
On 11 March 2016, the Tribunal issued further instructions in relation to the hearing. Also on 11 March 2016, the Claimants made a request with respect to (i) Exh. C-407 that had previously been filed erroneously and (ii) additional translations to be included in the Opus hearing bundle and considered part of the record (subject to the right of any party to dispute the accuracy of the translations). By email of the same date, the Respondent submitted comments.
71.
The following day the Tribunal ruled that the Opus hearing bundle was meant as hearing support reflecting documents (including translations) already on record. That said, as the addition of translations appeared to be intended to facilitate the efficient conduct of the examinations, the Tribunal permitted the filing of the additional translations, subject to compelling objections of the Respondent and it being understood that the Respondent could question the accuracy of the translations at the hearing as well as after the conclusion of the hearing. In addition, the Tribunal admitted the filing of the original version of Exh. C-407 in the record.
72.
On 14 and 15 March 2016, pursuant to section 11 of PO10, the Claimants and the Respondent filed the PowerPoint presentations for their opening statements.
73.
The hearing on liability (the "Hearing on Liability" or the Hearing) took place from 14 to 21 March 2016 at the Peace Palace in The Hague. The following persons attended the Hearing:

The Tribunal
Prof. Gabrielle Kaufmann-Kohler, Presiding Arbitrator The Hon. Charles N. Brower, Arbitrator
Judge Bernardo Sepúlveda-Amor, Arbitrator
Dr. Michele Potestà, Secretary to the Tribunal

Claimants
Ms. Judith Gill, 20 Essex Street Chambers
Mr. Antonio Vázquez-Guillén, Allen and Overy
Mr. Jeffrey Sullivan, Allen and Overy
Ms. Marie Stoyanov, Allen and Overy
Mr. Ignacio Madalena, Allen and Overy
Mr. David Ingle, Allen and Overy
Mr. Tomasz Hara, Allen and Overy
Mr. Pablo Torres, Allen and Overy
Ms. Stephanie Hawes, Allen and Overy
Mr. Thomas S. Murley, witness
Mr. David Tilstone, witness
Mr. Roger Scherer, witness
Mr. Darren Kyte, witness
Mr. Tobias Pehle, witness
Mr. Roland Schumann, witness
Mr. Joris van der Geest, witness
Mr. Juan Ramón Guzmán, witness
Mr. Javier Valladares, witness
Mr. Enrique Collado Arpia, witness
Mr. Raul Barrueco, witness
Mr. Pedro Manuel Diosdado, witness
Mr. Andreas Ochsenkühn, witness
Mr. Jesús de Ramón-Laca Cotorruelo, witness
Mr. Peter Rossbach, witness
Mr. Thomas Schreiber, witness
Mr. Alexandre Labouret, witness
Mr. Carlos Lapuerta, the Brattle Group, expert
Mr. José Antonio García, the Brattle Group, expert
Mr. Charles Chipchase, AES/SRP, representative
Mr. Rafael Cruz, Plenium Partners, representative
Mr. Tobias Matsubara, MPC Capital, representative
Mr. Peter O’Flaherty, NIBC, representative
Mr. Brian Potskowsky, AES/SRP, representative
Mr. Andrew Jessop, HG Capital, representative
Mr. Luigi Pettinicchio, HG Capital, representative
Mr. Luis Quiroga, HG Capital, representative
Mr. Dominic Wollweber, MEIF, representative
Mr. Allister Skykes, HG Capital, representative
Mr. Alexander Rietz, KGAL, representative
Ms. Rebeca Quiroga, Plenium Partners, representative

Respondent
Mr. Christian Leathley, Herbert Smith Freehills
Mr. Eduardo Soler-Tappa, Herbert Smith Freehills
Mr. Miguel Riaño, Herbert Smith Freehills
Ms. Florencia Villaggi, Herbert Smith Freehills
Mr. Jaime de San Román, Herbert Smith Freehills
Ms. Beverly Timmins, Herbert Smith Freehills
Ms. Pilar Colomés, Herbert Smith Freehills
Ms. Melissa Sánchez, Herbert Smith Freehills
Ms. Nicola Smith, Herbert Smith Freehills
Mr. Antolín Fernández, Abogacía del Estado
Ms. Amaia Rivas Kortazar, Abogacía del Estado
Ms. Raquel Vázquez
Ms. Iria Calviño
Mr. Antonio Sanchís
Mr. Alfonso Olivas, witness
Mr. Edward Davey, witness
Mr. Jesús Fernández Salguero, expert
Mr. Grant Greatrex, expert, MaC Group
Mr. David Pérez López, expert, Altran
Mr. Carlos Montojo González, expert, MaC Group

The PCA
Ms. Hyun Jung Lee, PCA Legal Counsel
Mr. Benjamin Craddock, PCA Case Manager

Opus 2 (transcription services)
Mr. Miles Annon
Mr. Chris Money
Ms. Georgina Ford
Ms. Emma Lovell
Mr. David Rex

Spanish language transcribers
Ms. Liliana Avalos Benetti
Ms. Lucia Horcajada Chapinal

Interpreters
Mr. Daniel Giglio (English/Spanish)
Ms. Silvia Colla (English/Spanish)
Ms. Silke Schoenbuchner (English/Spanish)
Ms. Edith Sternschuss-Kelly (English/German)
Mr. Sergio Corella Martinez (Spanish/German)
Ms. Astrid Fischer (Spanish/German)

Audio visual equipment services
IFS Audiovisual
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74.
On 19 March 2016, Spain asked to submit a new document. It did so on 1 April 2016, the Claimants having confirmed on 25 March 2016 that they did not object.
75.
Also on 20 March 2016, additional demonstrative exhibits were submitted by both Parties. On 21 March 2016, the Parties submitted their experts' PowerPoint presentations.
76.
During the hearing, the Tribunal heard opening submissions by counsel, asked questions to the Parties which counsel answered at the hearing and in their posthearing submissions, and heard evidence from the following witnesses and experts:

Mr. Thomas S. Murley, witness
Mr. Tobias Pehle, witness
Mr. Javier Valladares, witness
Mr. Andreas Ochsenkühn, witness
Mr. David Tilstone, witness
Mr. Roland Schumann, witness
Mr. Enrique Collado Arpia, witness
Mr. Jesús de Ramón-Laca Cotorruelo, witness
Mr. Joris van der Geest, witness
Mr. Roger Scherer, witness
Mr. Raul Barrueco, witness
Mr. Darren Kyte, witness
Mr. Juan Ramón Guzmán, witness
Mr. Pedro Manuel Diosdado, witness
Mr. Peter Rossbach, witness
Mr. Thomas Schreiber, witness
Mr. Alexandre Labouret, witness
Mr. Alfonso Olivas, witness
Mr. Edward Davey, witness
Mr. Carlos Lapuerta, the Brattle Group, expert
Mr. José Antonio García, the Brattle Group, expert
Mr. Jesús Fernández Salguero, expert
Mr. Grant Greatrex, expert, MaC Group
Mr. Carlos Montojo González, expert, MaC Group

77.
Following a consultation with the Parties at the end of the hearing, on 23 March 2016, the Tribunal issued Procedural Order No. 11 in relation to post-hearing matters ("PO11").
78.
On 22 April 2016, the Parties provided agreed corrections to the transcripts of the Hearing. On the same day, the Respondent objected to the inclusion of Exhs. C-378 and C-407, which the Claimants had uploaded to the Opus platform prior to the hearing, alleging that the Claimants had "abused their role while taking the lead in uploading documents to the Opus platform by including two entirely new documents onto the record and to make amendments to 72 documents".30 On 6 May 2016, the Claimants commented, stating, inter alia, that these matters were "routine misunderstandings that should have properly been dealt with in correspondence between the parties".31
79.
By letter of 13 May 2016, the Tribunal accepted that the Claimants had failed to submit the original English versions of the two documents by error, as was evident from the fact that in both cases two documents in Spanish were filed. Additionally, the Tribunal accepted the Claimants’ explanations that the track changes visible in the footer of Exh. C-378 (and other documents), which the Respondent had raised as an issue, were the effect of an automatic-update system. The Tribunal thus invited the Claimants to submit Exhs. C-378 and C-407 in their original language together with relevant translations. The Tribunal also invited the Parties to address the issue of the translations that had been added onto the Opus system before the Hearing, and the Respondent's related application for costs, in their upcoming cost submissions. On 16 May 2016, the Claimants submitted Exhs. C-378 and C-407 in English (original) and Spanish (translations).
80.
On 18 May 2016, in view of the Parties’ agreement, the Tribunal authorized the Claimants to file a Spanish Supreme Court judgment of 20 April 2016 as Exh. C-687. Additionally, the Tribunal provided that each Party would have an opportunity to respond to any comments made by the other Party in its reply post-hearing submission due on 17 June 2016. On 20 May 2016, the Claimants filed Exh. C-687.
81.
On 20 May 2016, the Claimants and the Respondent filed their first post-hearing briefs ("C-PHB1" and "R-PHB1") followed by Spanish translations on 31 May 2016.
82.
By email of 23 May 2016, the Respondent objected to the Claimants exceeding of the word limit set by the Tribunal for C-PHB1 and annex 1 and requested that it be allowed to add to its reply brief the number of words by which the Claimants had exceeded the limit, which the Tribunal allowed, the Claimants having no objection.
83.
On 30 May 2016, pursuant to the Tribunal’s directions of 18 May 2016, the Parties filed submissions on the Spanish Supreme Court decision of 20 April 2016. Also on 30 May 2016, the Respondent contended that the English translation of Exh. C-687 (see supra para. 80) was inaccurate. On 2 June 2016, the Tribunal invited the Parties to attempt to resolve divergences in relation to that translation and to revert if disagreements remained.
84.
On 15 June 2016, the Tribunal requested the Respondent to resubmit the Spanish translation of R-PHB1 ensuring that the paragraph numbers in the Spanish translation corresponded to those in the English version. The Respondent did so later that day.
85.
On 24 June 2016, the Parties filed their reply post-hearing briefs ("C-PHB2" and "R-PHB2"), translations into Spanish following on 1 July 2016.
86.
On 1 July 2016, the Claimants submitted their final consolidated indices of exhibits and of legal authorities.
87.
On 8 July 2016, the Parties filed their submissions on costs ("C-Costs Submission" and "R-Costs Submission") and the Respondent also its consolidated indices of exhibits and legal authorities. On 11 July 2016, the Claimants filed an updated submission on costs. Reply costs submissions were filed on 15 July 2016 ("C-Costs Reply" and "R-Costs Reply"), as were the Spanish translations of the initial submissions. Spanish translations of the reply submissions were filed on 22 July 2016.
88.
By email of 15 July 2016, the Respondent informed the Tribunal that a final award had been rendered in Isolux Infrastructure Netherlands B.V. v. Spain ("Isolux"), which was the first award on merits to address the 2013 Measures. The Respondent also attached press reports of 13 July and 15 July 2016 relating to that award. Following the Claimants’ objections, the Tribunal advised the Parties that it could not consider a decision merely on the basis of press reports. However, if one of the Parties were to request leave to submit the award into the record, the Tribunal would then give appropriate directions.
89.
By letter of 4 August 2016, the Respondent asked the Tribunal to formally request a copy of the Isolux award from the Isolux tribunal. On 18 August 2016, having reviewed the Parties' comments on the Respondent's request, the Tribunal directed the Respondent to use its best efforts to submit the Isolux award, adding that the Parties would have an opportunity to simultaneously comment on the award.

D. PO12 AND SUBSEQUENT DEVELOPMENTS

90.
On 29 September 2016, having deliberated on the Parties' case as it had developed through the written and oral submissions and the evidence gathered so far, the Tribunal unanimously issued Procedural Order No. 12 ("PO12").32
91.
On 13 October 2016, the Parties notified the Tribunal of the likelihood that they would require certain clarifications on the matters set out in PO12 and proposed an amendment to the next procedural steps in relation to such clarifications. On the same day, the Tribunal confirmed the Parties' proposal.
92.
On 15 November 2016, following further correspondence between the Parties and the Tribunal on 19 October, 24 October, 28 October and 1 November 2016, the Tribunal addressed the Parties' requests for clarification. In particular, with regard to the Claimants' requests for clarification, it (i) clarified that its invitation to the Claimants to present their quantum cases "as they deem appropriate" related only to their alternative claim and did not cover the so-called primary claim; (ii) confirmed that it did not expect to receive submissions on liability in the context of the phase outlined in PO12, and the Parties' further submissions should be "limited to the aspects of the quantum specified in PO12"; that said, liability could be addressed in connection with comments on the Isolux award if it was released; (iii) provided answers to questions set out in the Claimants' letter of 19 October 2016. In connection with the Respondent's requests for clarification, the Tribunal stated that the Parties should use a regulatory lifetime of a PV plant of 30 years and that the Respondent's understanding that written submissions be presented "in succession (i.e., the Claimants first present their written submission followed by that of the Respondent, etc.)" was correct and reflected the text of PO12.33
93.
On 13 December 2016, due to concerns of breach of confidentiality which the Claimants had raised and which the Parties had been unable to resolve, the Tribunal denied the Respondent's request to file the Isolux award, adding that it would reconsider its decision should circumstances change, for example if it were to receive confirmation that the claimant in Isolux had consented to the disclosure of the award.
94.
On 14 December 2016, the Parties submitted their joint procedural calendar for the phase of the arbitration envisaged in PO12 (referred to "PO12 phase"). On this basis, on 19 December 2016, the Tribunal circulated a draft procedural calendar for the Parties’ comments, to which the latter agreed on 11 January 2017.
95.
Following further correspondence of 19, 24 and 26 January 2017 and 1, 8 and 10 February 2017, it was agreed that a pre-hearing telephone conference (the "PO12 PHTC") would be held on 8 January and a hearing on 16 to 20 January 2018 (the "PO12 Hearing").
96.
On 10 February 2017, the Tribunal circulated the final version of the procedural calendar for the PO12 phase.
97.
In accordance with the procedural calendar, on 7 April 2017, the Claimants filed their "Quantum Submission" (the "Quantum Memorial") with accompanying exhibits, legal authorities and an expert report of the Brattle Group ("BQR I"), followed on 15 April 2017, by the translation of the Quantum Memorial.
98.
On 27 April 2017, pursuant to a request from the Respondent34 and having considered the Claimants’ comments, the Tribunal granted the Respondent an extension of five business days for its document requests and an extension of 4 calendar days for the Counter-Memorial. It also provided the Parties with an updated procedural calendar.
99.
On 5 May 2017 the Respondent served its requests for the production of documents. On 12 May 2017, the Claimants submitted their objections to the Respondent’s document production requests. On 19 May 2017, the Respondent provided its replies to the Claimants’ responses and objections. On 29 May 2017, the Tribunal issued Procedural Order No. 13 ("PO13") on these document requests.
100.
On 5 June 2017, the Claimants provided the Respondent with the documents responsive to the requests that the Tribunal had granted, subject to certain qualifications.
101.
On 5 and 18 July 2017, the Respondent objected to alleged deficiencies in the Claimants’ production and requested the Tribunal to grant it an extension to file the Counter-Memorial and vacate the hearing scheduled for January 2018. On 14 and 21 July 2017, the Claimants rejected the Respondent’s allegations and requests.
102.
On 26 July 2017 at 5 p.m. (CET), following a request from the Respondent, the Tribunal and the Parties held a hearing via conference call to discuss the issues raised in the Parties’ correspondence. In addition to the members of the Tribunal and the Secretary, Messrs. Sullivan, Ingle and Busby were present on behalf of the Claimants, and Messrs. Leathley, Soler Tappa, de San Roman and Ms. Timmins were present on behalf of the Respondent. At the telephone hearing, each Party first presented its views and then answered the Tribunal’s questions.
103.
On 31 July 2017, the Tribunal issued Procedural Order No. 14 ("PO14"), with a revised procedural calendar, which addressed the Respondent’s requests in relation to the document production phase and granted the Respondent an extension until 14 September 2017 to file its Counter-Memorial.
104.
On 7 August 2017, pursuant to the Tribunal’s directions in PO14, the Claimants submitted documents responsive to Spain’s requests and identified documents sought which allegedly did not exist or had not been located.
105.
Between 14 August 2017 and 20 October 2017, the Claimants provided the Tribunal and the Respondent with updates on the status of its production of responsive documents. On 31 October 2017, the Claimants confirmed that there were no document requests outstanding.
106.
On 14 September 2017, the Respondent filed its "Quantum Counter-Memorial" ("Quantum Counter-Memorial"), with accompanying exhibits, legal authorities and an expert report of Econ One Research ("EOQR I"), followed by translations on 21 September 2017.
107.
On 2 October 2017, the Claimants submitted their requests for the production of documents in accordance with the procedural calendar agreed between the Parties. On 9 October 2017, the Respondent submitted its objections. On 13 October 2017, the Claimants provided their replies. In a letter of 13 October 2017, the Claimants noted that Spain had retained a new expert (Econ One) for this phase of the arbitration instead of MG&A, whom it had used before. Inter alia, they reserved the right to also call MG&A for cross-examination at the PO12 Hearing. On 24 October 2017, the Tribunal wrote that it had taken note of the Parties’ positions and would take a decision if and when the Claimants decided to call MG&A.
108.
On 20 October 2017, the Tribunal issued Procedural Order No. 15 ("PO15") on the Claimants' requests for document production. It reserved its decision on request no. 7 until it received answers from the Parties to questions it had laid out in correspondence, and in Annex A to PO15. The Tribunal later denied request no. 7 on 1 November 2017, following consideration of the Parties' answers of 24 and 26 October 2017, as well as of the positions that they had advanced earlier.
109.
On 27 October 2017, the Respondent asked the Tribunal for a one-week extension to produce the documents ordered in PO15. On 31 October 2017, having considered the Claimants' objection to such request, the Tribunal granted an extension until 2 November 2017. The Tribunal further indicated that if, because of the delay, the Claimants had insufficient time to comment on the new documents in their Reply due on 9 November 2017, they would be permitted to file a short supplementary submission limited to addressing the documents produced late.
110.
Also on 31 October 2017, the Tribunal confirmed that the hearing would take place from 16 to 20 January 2018 at the Peace Palace in The Hague and requested that the Parties confirm their availability for the PO12 PHTC on 8 January 2018 at 5 p.m. (CET), which they did on 2 November 2017. On 2 November 2017, the Respondent also informed the Tribunal of the status of its document production and explained that it was still searching for documents, which it would produce if and when retrieved.
111.
On 9 November 2017, the Claimants filed their "Quantum Reply Submission" (the "Quantum Reply") with report from the Brattle Group ("BQR II"), followed by translations on 17 November 2017.
112.
On 27 November 2017, the Claimants complained that the Respondent had still not produced documents to any of the Claimants' requests. On 30 November 2017, the Tribunal invited the Respondent to provide an update on the document production process by 7 December 2017.
113.
On 30 November 2017, the Respondent objected to the Claimants' submission of three new expert reports (Exhs. C-702 to C-704), which, it said, did not rebut expert evidence presented in the Quantum Counter-Memorial. It thus requested that these expert reports be struck from the record or that it be permitted to submit rebuttal expert evidence. On 1 December 2017, further to the Tribunal's invitation, the Claimants provided their comments.
114.
Still on 30 November 2017, the Respondent informed the Tribunal and the Claimants that the Commission had issued its final decision on Spain’s notification of the Disputed Measures (see, supra, para. 29) and requested leave to submit that decision, in accordance with Articles 3.7 and 4.5 of the Procedural Rules. Upon the invitation of the Tribunal, the Claimants opposed Spain’s application on 4 December 2017. On 6 December 2017, the Tribunal granted the Respondent’s request to file the Commission’s decision into the record. On that same day, the Tribunal denied the Respondent’s request to strike Exhs. C-702 to C-704 from the record.
115.
On 7 December 2017, in accordance with the Tribunal’s directions of 30 November 2017, the Respondent provided its responses as to the status of its document production.
116.
On 14 December 2017, the Respondent submitted the Commission’s "Decision on the State Aid SA.40348 (20151NN) regarding Spain's Support for Electricity Generation from Renewable Energy Sources, Cogeneration and Waste", dated 10 November 2017 (the "EC Decision on State Aid") into the record as Exh. RL-201 and its comments on such document. On 22 December 2017, the Claimants provided their comments.
117.
On 22 December 2017, the Respondent filed its "Quantum Rejoinder" (the "Quantum Rejoinder") along with accompanying exhibits, legal authorities and a report by Econ One ("EOQR II"), followed by a translation on 2 January 2018.
118.
By letter of 4 January 2018, the Claimants complained that while documents pertaining to their production request No. 1 had been disclosed in another arbitration, the Respondent was presently "flouting its disclosure obligations" in the present proceedings. Hence, they asked the Tribunal to order Spain to explain why the documents had not been disclosed and order it to "immediately" produce any documents responsive to request No. 1.
119.
Upon the invitation of the Tribunal, on 8 January 2018 the Respondent submitted its comments. In a letter of 12 January 2018, the Tribunal denied the Claimants’ request. On 15 January 2018, on the eve of the PO12 Hearing, the Claimants asked the Tribunal to reconsider its decision. By email of the same date, the Tribunal noted that it would address this request on 16 January.

E. The PO12 Hearing

120.
On 5 January 2018, the Tribunal circulated a draft Procedural Order No. 16 ("PO16") on the organization of the PO12 Hearing for discussion at the upcoming PO12 PHTC.
121.
In response to the Tribunal’s invitation, by emails of 5 and 7 January 2018, the Parties provided their lists of attendees at the PO12 PHTC and submitted items to be added to the agenda, as well as draft hearing schedules.
122.
By letter of 6 January 2018, the Claimants contended that Spain had made submissions on several issues of liability in its Quantum Rejoinder outside of the scope of PO12, and requested the Tribunal to strike from the record sections 3.1 to 3.3 (and the new exhibits and legal authorities submitted in support of these sections) and direct Spain to submit a revised Quantum Rejoinder. Alternatively, the Claimants requested the opportunity to respond to the submissions on liability contained in these sections. By email of the same date, the Tribunal invited the Respondent to comment on these allegations during the PO12 PHTC scheduled on 8 January 2018.
123.
On 8 January 2018, the Hon. Charles N. Brower circulated the CV of his new law clerk, Dr. Devin Bray, and the confidentiality agreement that Dr. Bray had signed upon acceptance of his employment with Judge Brower, and invited the Parties to advise whether they had any objection to Dr. Bray’s attendance at the PO12 Hearing. On 9 and 10 January 2018, both Parties stated that they had no objection.
124.
On 8 January 2018 at 5 p.m. (CET), the PO12 PHTC took place as scheduled. The following persons attended:

Tribunal
Prof. Gabrielle Kaufmann-Kohler, Presiding Arbitrator
The Hon. Charles N. Brower, Arbitrator
Judge Bernardo Sepulveda-Amor, Arbitrator
Dr. Michele Potesta, Secretary of the Tribunal

PCA
Mr. Julian Bordaçahar, Permanent Court of Arbitration

Claimants
Mr. Jeffrey Sullivan, Gibson, Dunn & Crutcher
Ms. Marie Stoyanov, Allen and Overy
Mr. Antonio Vazquez-Guillen, Allen and Overy
Mr. David Ingle, Allen and Overy
Mr. Tomasz Hara, Allen and Overy

Respondent
Mr. Antolín Fernández, Abogacía del Estado
Mr. Diego Santacruz Descartin, Abogacía del Estado
Ms. Amaia Rivas Kortazar, Abogacía del Estado
Ms. Patricia Frohlingsdorf Nicolás, Abogacía del Estado
Mr. Roberto Fernández Castilla, Abogacía del Estado
Mr. Eduardo Soler Tappa, Herbert Smith Freehills
Mr. Christian Leathley, Herbert Smith Freehills
Ms. Florencia Villaggi, Herbert Smith Freehills
Mr. Jaime de San Román, Herbert Smith Freehills

125.
During the conference call, which was audio recorded, the Tribunal and the Parties discussed the items set out in the draft of PO16. On this basis, on 11 January 2018, the Tribunal issued PO16 on the organization of the PO12 Hearing, with the Spanish version following the next day. On 12 January 2018, the Parties also submitted their final list of attendees at the hearing.
126.
On 13 January 2018, pursuant to PO16, the Claimants requested leave to file additional documents into the record, to which, following invitation from the Tribunal, Spain objected on 15 January 2018. By email of the same date, the Tribunal issued its directions, granting certain of the Claimants’ requests and denying others. On 16 January 2018, in accordance with the Tribunal’s directions, the Claimants submitted the relevant legal authorities and an updated consolidated list of legal authorities.
127.
On 15 January 2018, in accordance with PO16, the Parties also filed their demonstrative exhibits and some corrected versions later that same day.
128.
The PO12 Hearing took place from 16 to 19 January 2018 at the Peace Palace in The Hague and was attended by the following persons:

The Tribunal
Prof. Gabrielle Kaufmann-Kohler, Presiding Arbitrator
The Hon. Charles N. Brower, Arbitrator
Judge Bernardo Sepúlveda-Amor, Arbitrator
Dr. Michele Potesta, Secretary to the Tribunal
Dr. A. Devin Bray, Law Clerk to the Hon. Charles N. Brower

The PCA
Mr. Julian Bordaçahar, PCA

The Claimants
Mr. Antonio Vázquez-Guillén, Allen and Overy
Mr. Jeffrey Sullivan, Allen and Overy
Ms. Marie Stoyanov, Allen and Overy
Mr. Ignacio Madalena, Allen and Overy
Mr. David Ingle, Allen and Overy
Mr. Tomasz Hara, Allen and Overy
Mr. Pablo Torres, Allen and Overy
Ms. Stephanie Hawes, Allen and Overy
Mr. Antonio Jiménez-Blanco, Allen and Overy
Ms. Carmen de la Hera, Allen and Overy
Mr. Carlos Lapuerta, expert, the Brattle Group
Mr. Richard Caldwell, expert, the Brattle Group
Mr. Jack Stirzaker, expert, the Brattle Group
Mr. Benjamin Lawrence, expert, the Brattle Group
Mr. Saurab Chhachhi, expert
Mr. Luis Quiroga, HG Capital, representative
Mr. Thomas Murley, HG Capital, representative
Mr. Marc Michael, AES, representative
Mr. Peter Rossbach, Impax, representative
Mr. Raúl Barrueco, DIF, representative
Mr. Tobias Matsubara, MPC Capital, representative Mr. Rafael Cruz, Plenium Partners, representative Ms. Rebeca Quiroga, Plenium Partners, representative

The Respondent
Mr. Antolín Fernández, Abogacía del Estado
Ms. Amaia Rivas Kortazar, Abogacía del Estado
Ms. Patricia Frohlingsdorf Nicolás, Abogacía del Estado
Mr. Roberto Fernández Castilla, Abogacía del Estado
Mr. Eduardo Soler-Tappa, Herbert Smith Freehills
Mr. Christian Leathley, Herbert Smith Freehills
Mr. Jaime de San Roman, Herbert Smith Freehills
Ms. Florencia Villaggi, Herbert Smith Freehills
Ms. Beverly Timmins, Herbert Smith Freehills
Ms. Melissa Sanchez, Herbert Smith Freehills
Mr. Wojtek Zaluska, Herbert Smith Freehills
Ms. Caroline Le Moullec, Herbert Smith Freehills
Mr. Daniel Flores, Econ One, expert
Mr. Jordan Heim, Econ One, expert Mr. José Díaz, Econ One, expert

DR-Esteno (Spanish language transcribers)
Mr. Leandro Lezzi
Ms. Marta Rinaldi

Opus 2 Court Reporters
Ms. Karen McKendry
Mr. Joshua Vince
Mr. Matt Alford

Interpreters
Mr. Juan Maria Burdiel Perez (English/Spanish)
Mr. Jesús Getan Bornn (English/Spanish)
Ms. Amalia Thaler de Klemm (English/Spanish)

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129.
On 16 January 2018, the Parties submitted the electronic versions of their opening presentations. Also on 16 January 2018, the Claimants submitted the demonstrative exhibits of the Brattle Group. On 17 January 2018, the Respondent submitted Econ One's demonstrative exhibits, and Econ One's hearing presentation.
130.
During the PO12 Hearing, the Tribunal heard opening arguments by counsel, asked questions to counsel and the experts and heard evidence from the following experts:

Mr. Carlos Lapuerta, expert, the Brattle Group
Mr. Richard Caldwell, expert, the Brattle Group
Mr. Jack Stirzaker, expert, the Brattle Group
Mr. Daniel Flores, expert, Econ One
Mr. Jordan Heim, expert, Econ One

131.
The Tribunal decided, in consultation with the Parties, to hold an expert conferencing on the last day of the hearing. During such examination, both Parties' experts stated that they would be prepared to assist the Tribunal if the latter needed help in matters of quantum.

F. PO17 AND OTHER RELATED MATTERS

132.
At the end of the PO12 Hearing, the Tribunal and the Parties discussed the further procedural steps. As a result, on 25 January 2018 (with the translation following on 30 January), the Tribunal issued Procedural Order No. 17 ("PO17"), which reads in relevant part as follows:

3. The Parties shall file a first round of simultaneous post-hearing briefs on 16 March 2018. In the first post-hearing brief, each Party shall comment on the evidence gathered in the course of the Hearing to the extent relevant. In addition, each Party shall present legal arguments as to the appropriate valuation date in this case.

4. Following receipt of the first round of post-hearing briefs, the Tribunal will circulate a draft procedural order setting out certain valuation parameters, inviting the Parties’ experts to produce a joint valuation model (the "Experts’ Joint Model" or "EJM") taking such parameters into account, and providing appropriate directions in connection with the EJM. Within 2 weeks from receipt of the draft order, the Parties and their experts may then comment and ask clarifications on the draft order, after which it will be issued in final form.

5. Within 2 months from the issuance of the order in final form, the experts will produce the EJM taking into account the parameters provided in the order. The time limit set out in this paragraph is tentative and may be modified if a Party so requests within 10 days after having received the order.

6. Thereafter, there shall be a second round of consecutive post-hearing briefs. The Claimants shall file their second post-hearing brief 8 weeks after the filing of the EJM. The Respondent will file its second post-hearing brief 8 weeks after receipt of the Claimants’ second post-hearing brief. In the second post-hearing brief, each Party may respond to the arguments made in the first round to the extent deemed necessary, comment on the EJM, and place the result of the EJM in its overall case. In addition, to the extent deemed necessary, each Party may address the EC Decision, the Eiser, Isolux, and Blusun awards, and authorities CL-237 to CL-240, filed by the Claimants on 16 January 2018.

7. The Parties shall confer and seek to agree on the word limits to apply to the two rounds of post-hearing briefs by 1 February 2018 and revert to the Tribunal with a proposal.

8. The Parties may also confer and seek to agree on rules on counsel’s involvement in the experts’ preparation of the EJM. If the Parties cannot agree on this issue, the Tribunal will address it in its forthcoming draft procedural order on the EJM.

9. No new documents may be submitted with the post-hearing briefs, except with leave of the Tribunal. Notwithstanding the foregoing, additional international decisions and awards, published after a Party’s last written submission, may be submitted as new legal authorities. In this respect, the Respondent shall notify the Claimants 2 weeks prior to the time limit for the filing of the Claimants’ second post-brief of any new legal authorities on which it intends to rely in its second post-hearing brief.

10. Following receipt of the second post-hearing briefs, upon request or on its own motion, the Tribunal may decide whether it is appropriate to hold a hearing for questions from the Tribunal and possibly oral arguments.

133.
On 1 February 2018, the Respondent sought a clarification from the Tribunal in relation to paragraph 9 of PO17 in respect of new relevant awards to be published after the deadline. On 7 February 2018, following an invitation from the Tribunal,35 the Claimants opposed Spain's proposal. On 13 February 2018, the Tribunal explained that it had included the rule contained in paragraph 9 of PO17 on the understanding that the Parties had agreed on it at the end of the PO12 Hearing. This not being the case and considering that paragraph 9 of PO17 presented certain shortcomings, the Tribunal provide a revised version of that paragraph.
134.
On 12 February 2018, the Respondent addressed the Tribunal's direction that any document under Spain's control responsive to Claimants' document request No. 1 should be produced in accordance with PO15, which had been restated on the last day of the PO12 Hearing. The Respondent confirmed that it had requested certain entities to again search their records for documents responsive to request No. 1. However, no such documents had been located. The Respondent further contended that the Claimants' allegation that certain documents had been produced in other proceedings should be rejected. In the alternative, the Respondent requested that the Tribunal order the Claimants to identify the counsel who had provided such information as well as the proceedings so that Spain could review those records. The following day, the Respondent submitted attachments to its letter. On 14 February 2018, the Tribunal invited the Claimants to address such letter and its enclosures in their second posthearing brief.
135.
On 16 February 2018, the Claimants submitted the Parties' agreed version of the English and Spanish transcripts of the PO12 Hearing. Owing to an error, the Respondent re-sent both transcripts on 19 February 2018, to which the Claimants agreed on 21 February 2018.
136.
On 9 March 2018, pursuant to paragraph 9 of PO17, the Claimants requested leave to file a press article from El Confidential dated 24 January 2018, which Spain opposed on 13 March 2018. On 14 March 2018, the Tribunal granted the Claimants' request and the Claimants filed the article as Exh. C-705 with their first post hearing brief (infra paragraph 137).
137.
On 16 March 2018, the Claimants filed their "First PO12 Post-Hearing Brief" (the "PO12 CPHB1"), followed by the Spanish translation on 25 March 2018. Also on 16 March 2018, the Respondent filed its "Quantum Post Hearing Brief" (the "PO12 RPHB1"), with a translation on 23 March 2018.
138.
On 13 April 2018, during the course of the preparation of the EJM, the Claimants requested that "EconOne be precluded from introducing an alternative But-For discount rate for the purposes of the Joint Model".36 The Respondent commented on 18 April 2018.

G. PO18 and the EJM, new Intervention by the European Commission, the Greentech Documents, the Achmea Judgment and other related matters

139.
On 30 April 2018, in accordance with paragraph 4 of PO17, the Tribunal circulated a draft Procedural Order No. 18 ("draft PO18") dealing with the presentation of an expert joint model (the "Expert Joint Model" or "EJM"). The Parties provided their comments on draft PO18 on 14 and 22 May 2018.
140.
On 16 May 2018, the Commission informed the Tribunal that "in case the Tribunal would deem it useful for its deliberations, the Commission would be available to update its written observations in the light of the recent judgment of the European Court of Justice in Case C-284/16 Achmea v. Slovak Republic, and in particular to set out its view on the consequences of that judgment for pending arbitration cases based on the Energy Charter Treaty".37 On 22 May 2018, the Tribunal forwarded the Commission’s correspondence to the Parties and invited the Parties’ comments, which were provided on 1 June 2018.
141.
On 6 June 2018, the Tribunal wrote to the Commission drawing the latter’s attention to the Tribunal’s letter of 26 March 2015,38 by which it had provided the Commission with the Preliminary Award on Jurisdiction. For the reasons stated in that letter, the Tribunal was unable to accept the Commission’s offer to update its written observations in relation to the intra-EU objection. The Tribunal advised the Commission, however, that it welcomed the Commission’s offer "to set out in detail the impact of [the decision it adopted on Spain’s notification in November 2017] on the case pending before [this] Tribunal"39 and invited the Commission to provide its comments limited to this issue by 19 June 2018. On the same day, the Tribunal informed the Parties of such letter.
142.
Still on 6 June 2018, further to the Parties’ comments on PO18 and a request from the Claimants, the Tribunal informed the Parties that, subject to their availability, it would hear the Parties orally by telephone conference on some of the points raised in their observations on 4 July 2018 at 14:00 (CET). On 7 June 2018, the Parties confirmed their availability.
143.
By letter of 14 June 2018, the Claimants requested the Tribunal to provide the Parties with a proposal for the procedure going forward40 and asked for indications of the timing of the award on liability and/or quantum and steps to avoid unnecessary delays.
144.
On 19 June 2018, the Commission provided its observations on the impact of the EC Decision on State Aid on the present case. The Tribunal forwarded the Commission’s correspondence to the Parties on the same day and invited their comments, which were provided on 5 July 2018.
145.
By letter of 25 June 2018, the Tribunal provided the Parties with the agenda for the conference call of 4 July. In its letter, the Tribunal also indicated that it would discuss the timing for the completion of the proceedings during the conference call, as requested by the Claimants on 14 June 2018. On 2 July 2018, after the Parties provided the lists of participants in the telephone conference on the following day, Spain protested against the attendance of the Brattle experts.
146.
On 3 July 2018, having considered the Claimants’ response, the Tribunal permitted the Brattle experts to attend the call, highlighting that as the call would be recorded, the Respondent would be able to provide the recording to its own experts if it so wished and if they could not participate. The following day, the Respondent confirmed that two of its own experts would attend the call.
147.
On 4 July 2018, in advance of the telephone conference, the Claimants provided the Tribunal with a zip file containing the Parties’ correspondence in relation to the EJM and certain other documents from the record to which the Claimants might refer during the course of the call.
148.
On 4 July 2018 at 2 p.m. (CET), the Parties and the Tribunal held the telephone conference to discuss draft PO18, with the following persons in attendance:

The Tribunal
Prof. Gabrielle Kaufmann-Kohler, Presiding Arbitrator
The Hon. Charles N. Brower, Arbitrator
Judge Bernardo Sepúlveda-Amor, Arbitrator
Dr. Michele Potestà, Secretary to the Tribunal

The PCA
Mr. Julian Bordaçahar, Permanent Court of Arbitration

Claimants
Ms. Marie Stoyanov, Allen and Overy
Mr. Antonio Vazquez-Guillén, Allen and Overy
Mr. David Ingle, Allen and Overy
Mr. Tomasz Hara, Allen and Overy
Ms. Carmen de la Hera, Allen and Overy
Mr. Jeffrey Sullivan, Gibson, Dunn & Crutcher
Mr. Carlos Lapuerta, expert, the Brattle Group
Mr. Richard Caldwell, expert, the Brattle Group
Mr. Jack Stirzaker, expert, the Brattle Group

Respondent
Mr. Diego Santacruz Descartin, Abogacía del Estado
Mr. Antolín Fernandez Antuña, Abogacía del Estado
Ms. Amaia Rivas Kortazar, Abogacía del Estado
Ms. María José Ruiz Sánchez, Abogacía del Estado
Mr. Eduardo Soler Tappa, Herbert Smith Freehills
Mr. Christian Leathley, Herbert Smith Freehills
Ms. Florencia Villaggi, Herbert Smith Freehills
Mr. Jaime de San Román, Herbert Smith Freehills
Mr. Daniel Flores, expert, Econ One
Mr. Jordan Heim, expert, Econ One

149.
During the conference call, the Tribunal heard the Parties' submissions on draft PO18 and proposed modifications thereto (submitted on 14 and 22 May 2018, supra paragraph 139). The recording of this conference call was sent to the Parties the following day.
150.
On 18 July 2018, the Tribunal unanimously issued PO18 in final form, the Spanish translation being circulated on 2 August 2018.41
151.
On 13 August 2018, the Respondent made a number of requests, among which an application that the Tribunal open a new procedural phase to consider Spain’s "new jurisdictional objection" based on "new facts". In this context, the Respondent asked to file the Achmea judgment along with an EC Communication and fact sheet published on 19 July 2018, which provided "guidance on the protection of cross-border EU investments, as well as on the implications of [Achmea], for the investor-State arbitration in the Energy Charter Treaty [...] in relation to cross border EU investments".42 The Respondent further requested that the Tribunal allow the Commission to present its comments on the impact of the EC Communication along with the Achmea judgment on the jurisdiction of the Tribunal in the present arbitration. On 31 August 2018, as directed by the Tribunal, the Claimants provided their comments on the Respondent’s requests. In accordance with the Tribunal’s further directions, the Respondent filed its reply comments on 6 September, to which the Claimants responded on 11 September 2018.
152.
On 7 September 2018, the Claimants (on behalf of Brattle) sought a clarification43 regarding one of the areas of disagreement between the experts regarding the EJM. Further correspondence on this issue was exchanged between the Tribunal and the Parties on 9 September, 11 September, 14 September, 18 September, 21 September, and 24 September 2018. By letter of 24 September 2018, the Tribunal issued certain clarifications in relation to the Claimants’ request.
153.
On 5 October 2018, after a short delay, the Brattle and Econ One experts filed the EJM accompanied by a Joint Memorandum to the EJM (the "Joint Memorandum").
154.
On 11 October 2018, following an inquiry from the Claimants, the Tribunal confirmed that the filing dates for the second post-hearing briefs were 26 November 2018 for the Claimants and 4 February 2019 for the Respondent. At this juncture, the Tribunal mentioned that it would shortly provide its decision on the Respondent’s request to open a new jurisdictional phase.
155.
On 15 October 2018, the Tribunal issued Procedural Order No. 19 ("PO19"), denying the Respondent’s request to open a new jurisdictional phase and other related requests, the Spanish translation following on 25 October 2018.
156.
Also on 15 October 2018, the Claimants filed an application for the production of certain documents allegedly produced by Spain to the claimants in Greentech Energy Systems A/S et al. v. Kingdom of Spain (SCC Arbitration V 2015/150) ("Greentech" and the "Greentech Documents") and certain legal authorities (Exhs. CL-243 to CL-249). The following day, the Tribunal invited the Respondent to comment on the Claimants’ application, which they did on 22 October 2018. On 29 October 2018, the Tribunal ordered the Respondent to file the Greentech Documents.44 The Tribunal also later determined that the legal authorities should not be admitted into the record.45
157.
On 31 October 2018, the Respondent asked the Tribunal to reconsider its order of 29 October 2018 regarding the Greentech Documents. Upon an invitation by the Tribunal, the Claimants submitted their comments later that same day. On 7 November 2018, the Tribunal denied the Respondent’s request.
158.
By correspondence of 12 November 2018, the Claimants informed the Tribunal that they had yet to receive the Greentech Documents. Two days later, the Respondent advised that a change to its counsel team was the cause of the delay. On 16 November 2018, the Claimants provided comments and requested leave to file a supplemental submission following receipt of the Greentech documents. On 21 November 2018, the Respondent filed the Greentech Documents.
159.
On 23 November 2018, the Brattle experts provided an agreed corrected version of the EJM. On 26 November 2018, the Tribunal conveyed its understanding that the updated EJM was submitted on behalf of both experts and that it should be advised, by 28 November 2018, if this was not the case. No such advice was provided.
160.
On 26 November 2018, the Claimants noted that their request for leave to file a supplemental submission following receipt of the Greentech Documents remained outstanding and asked for a two-day extension for their Second PO12 PHB (until 28 November 2018) in light of the time and manner in which they had received the Greentech Documents.
161.
On 27 November 2018, the Respondent informed the Tribunal that when the Greentech Documents had been filed, the metadata had been inadvertently erased. For this reason, the Respondent resubmitted the Greentech Documents including the metadata.
162.
On the same day, the Tribunal confirmed that the resubmitted Greentech Documents had been admitted into the record as Exhs. C-372 and C-373. The Tribunal also confirmed that the time limits for the second post-hearing briefs were extended until 29 November 2018 and 12 February 2019. The Tribunal further conveyed its understanding that there were no outstanding requests in connection with the Greentech Documents.
163.
Still on 27 November 2018, the Claimants informed the Tribunal that this understanding was not correct because (i) the documents attached to Spain's email of 27 November 2018 also had the metadata removed; and (ii) the Respondent had failed to provide the clarification requested by the Claimants in their email of 22 November 2018 regarding the origin of the Greentech Documents. On 29 November 2018, upon the Tribunal's invitation, the Respondent provided further comments on the Greentech Documents. On 10 December 2018, the Tribunal granted the Claimants leave to submit their observations to the Respondent's communication of 29 November 2018 and the Respondent an opportunity to reply in its PO12 Second PHB.
164.
On 29 November 2018, the Claimants filed their "Second PO12 Post-Hearing Brief" (the "PO12 C-PHB2") (the translation being provided on 6 December 2018) and relayed that in the process of preparing such brief, it had come to their attention that (i) the document presented as Exh. C-252 only comprised an annex to the National Action Plan on Renewable Energy in Spain (the PANER) 2011 - 2020 dated 30 June 2010, when it should include the full PANER; and (ii) Annex 3 to the Claimants' application for an order on document production dated 15 October 2018 had inadvertently been omitted from the winzip of documents accompanying that submission. They requested that these documents be included in the record, which Spain opposed on 6 December 2018.
165.
By letter of 10 December 2018, the Tribunal decided not to accept these documents, stating that the Claimants had not made out any "exceptional case"46 which would justify the introduction of Exh. C-252 and the Annex 3 mentioned above at such a late stage of the proceedings. In addition, the Tribunal also determined that new legal authorities CL-243 to CL-249 would not be admitted, noting in particular that these authorities all addressed the principle of adverse inferences which would only apply if the Claimants’ primary request for the disclosure of the Greentech Documents had been rejected, which was not the case.
166.
On 20 December 2018, the Claimants submitted their observations on the Greentech documents.
167.
On 12 February 2019, the Respondent filed its "Second Post Hearing Brief on Quantum" (the "PO12 R-PHB2"), followed by the translation on 19 February 2019. Also on 12 February 2019, the Respondent requested permission to file into the record the declaration by 22 Member States of the European Union "on the Legal Consequences of the Judgement of the Court of Justice in Achmea and on Investment Protection in the European Union". Pursuant to an invitation from the Tribunal, the Claimants submitted their comments on 18 February 2019.
168.
By letter of 21 February 2019, the Tribunal authorized the filing of all three declarations made by EU Member States and invited the Parties to provide their comments. On 25 February 2019, the Respondent filed such declarations under Exh. numbers RL-214 to RL-216, with an updated consolidated index of the Respondent’s legal authorities. The Parties submitted their respective observations on the declarations on 7 and 21 March 2019.
169.
On 26 April 2019, the Tribunal updated the Parties on the progress of its deliberations and further invited: (i) both Parties to make additional submissions on the Greentech Documents; (ii) both Parties to file their costs submissions pursuant to PO17; and (iii) the Respondent to file a submission on Interest.
170.
On 3 May 2019, the Respondent filed its submission on the Greentech Documents and on 10 May 2019, the Claimants filed their reply, both in accordance with the Tribunal’s instructions of 26 April 2019.
171.
On 17 May 2019, the Respondent filed its Submission on Interest.

H. Costs Submissions and Closure of the Proceedings

172.
On 14 June 2019, the Parties filed their Submissions on Costs (the "PO12 C-Costs Submission" and "PO12 R-Costs Submission"), with translations submitted on 24 and 26 June 2019.
173.
On 28 June 2019, the Claimants and the Respondent filed their Reply Submissions on costs ("PO12 C-Reply Costs Submission" and "PO12 R-Reply Costs Submission"), with translations submitted on 3 July 2019.
174.
On 4 September 2019, the Claimants requested that the Tribunal provide an update regarding the progress in preparing the award, which the Tribunal did on 6 September 2019. On 13 September 2019, the Claimants made further inquiries in this respect. On 18 September 2019, the Tribunal indicated that it would do the utmost to issue the award by 2019, reminding the Parties, however, that the award needed to be translated into Spanish before issuance. The Tribunal further indicated that it would write again towards the end of November with an issuance date.
175.
On 2 December 2019, after noting that it had all the necessary elements in terms of liability and, if applicable, quantum to render a Final Award, the Tribunal closed the proceedings and provided an updated on the date of issuance of the award.
176.
On 4 December 2019, the Respondent acknowledged the Tribunal's letter of 2 December 2019 and informed the Tribunal that on the same date Spain was notified of two new relevant decisions from ICSID tribunals which should necessarily inform the Tribunal's analysis.47 The Respondent noted that, being those awards public, it trusted that the Tribunal would take them into consideration.
177.
On 9 December 2019, the Tribunal acknowledged receipt of the Respondent’s communication of 4 December 2019 and took note of its content. Moreover, the Tribunal noted that in addition to the decision or awards that were on record and the additional two referred by the Respondent, it was aware of a number of other publicly available decisions or awards rendered in other arbitrations brought against the Kingdom of Spain and which concerned the measures in this case.48 The Tribunal invited the Parties to advise if there were other decision or awards rendered in arbitrations concerning the measures challenged in this arbitration. Finally, the Tribunal invited the Parties to inform whether they wished to file a short submission limited to said awards.
178.
By e-mails of 11 December 2019, both Parties agreed that filing additional submissions on these awards was not necessary.49 Moreover, they both noted that the award in the Infrared case50 had been issued. While the Claimants enclosed a copy of the award to their e-mail, the Respondent noted that despite the fact that the existence of the Infrared award was of public knowledge, the content of the award had not been made public until that date. On the same day, the Tribunal acknowledged receipt of both communications and took note of their content.
179.
On 27 January 2020, the Tribunal circulated a list containing the names of the Claimant entities and invited the Claimants to provide a clarification regarding the names of certain Claimant entities as well as make any other necessary corrections to the names appearing on the list. By letter of 3 February 2020, the Claimants provided the requested clarification and set out in Annex 1 to their letter the correct names of each Claimant entity.
180.
On 20 February 2020, the Tribunal informed the Parties that, having regard to Article 8.2 of the Procedural Rules and the Parties' related correspondence, after dispatch of the Award, it would give the Parties the opportunity to (i) request that redactions be made to the Final Award prior to its publication to the extent necessary to protect the confidentiality of sensitive information and to (ii) comment on the other Party's requests (if any). The Tribunal would then rule on any disagreement and instruct the PCA to publish the Final Award with the necessary redactions (if any) on its website. At the same time, it would also instruct the PCA to publish the Preliminary Award on Jurisdiction, in conformity with the Parties' agreement (see Claimants' letter of 16 February 2015, p. 1; Respondent's letter of 11 March 2015, p. 3). Hence, the Tribunal would stay in office in order to implement the afore-mentioned arrangements on publication.

III. OVERVIEW OF THE DISPUTE

181.
The present dispute concerns the Claimants’ investment in Spain’s renewable energy ("RE") sector, specifically in photovoltaic ("PV") installations representing an approximate aggregate 239,338 megawatts (MW) of electrical power-generating capacity. The dispute concerns the evolution of the legal framework applicable to the PV installations and the impact it had on the Claimants’ investment. Sections III.A and III.B summarize the evolution of the legal framework in the RE sector, which is necessary to put the Parties’ arguments (infra at Section V) into perspective. The purpose of the summary of the legal framework and of the Disputed Measures in sections III.A and III.B is to capture the general traits of the various legislative instruments which, unless otherwise mentioned, appear undisputed between the Parties.

A. The Investment Framework

1. The 1997 Electricity Law

182.
The main piece of legislation regulating power generation in Spain is Electricity Law No. 54/1997 published on 28 November 1997 (the "1997 Electricity Law"). The 1997 Electricity Law divides the generation of electricity into two regimes: the "Ordinary Regime" which concerns conventional generation facilities (i.e., non-renewable sources) and the "Special Regime" which concerns power generation from RE sources, including PV energy.51
183.
Among the key differences between the rights and obligations available to power generators under the two regimes is the manner in which they are remunerated. While Ordinary Regime generators receive the market price for their electricity, the remuneration for Special Regime generators is supplemented by a State subsidy or premium. Article 30.4 as in force at the time when the Claimants made their investments stipulates that such subsidy shall be determined by taking into account the following factors:52

the level of voltage at which energy is delivered to the grid, the effective contribution to environmental improvement, primary energy savings and energy efficiency, economically viable useful heat production and the investment costs incurred, in order to achieve reasonable rates of return with reference to the cost of money in the capital market. (Tribunal’s translation)

184.
The 1997 Electricity Law is implemented through "Royal Decrees" ("RD").53

2. RD 436/2004

185.
RD 436/2004 of 12 March 2004 ("RD 436/2004") was the first RD to establish an incentive system based on a "Feed-in-Tariff" ("FIT") for investors in PV technology, based on the criteria referred to in Article 30.4 of the 1997 Electricity Law.54
186.
In that regard, Article 22.1 of RD 436/2004 gave installation operators the option to either sell their electricity freely on the market or at a "single, flat rate":55

In order to sell their output or surpluses of electric power, the operators of installations within the scope of this Royal Decree must choose one of the following options:

a) Assignment of the electricity over to the electricity distribution company. In this case, the electricity sale price shall be expressed as a regulated tariff which shall be a single, flat rate for all scheduling periods and expressed in euro cents per kilowatt hour [i.e., a FIT].

b) Sale of the electricity freely on the market, through the system of offers and bids managed by the market operator [...]. (Tribunal’s translation)

187.
Whatever mechanism was chosen, RD 436/2004 purported to "guarantee to the owners of special regime installations a reasonable remuneration for their investment and to electricity consumers a reasonable allocation of the costs attributable to the electricity system".56
188.
The rate of the FIT was set out in Article 33 of RD 436/2004 and was linked to a PV installation's capacity. The FIT was calculated as a multiple of the consumer electricity tariff and was available at a certain multiple for the first 25 years of the installation's operational life and at a reduced multiple thereafter. Further, Article 40 established the framework for revision of tariffs, premiums and incentives for new installations. The Claimants' investments were not made pursuant to RD 436/2004.

3. RD 661/2007

189.
RD 661/2007, which replaced RD 436/2004, is the bedrock on which the Claimants anchor their claims. While the Parties' specific arguments are addressed when setting out their positions, the Tribunal reviews here certain key provisions of this RD.
190.
According to its Preamble, one of the reasons for issuing RD 661/2007 was the need to amend the remuneration scheme established by RD 436/2004 and separate the calculation of the FIT from the consumer electricity tariff used until then (see supra para. 188). At the same time and in the same vein as RD 436/2004, however, RD 661/2007 reiterated that "[t]he economic framework established in this royal decree develops the principles contained in Law 54/1997, [...] guaranteeing the owners of special regime facilities a reasonable return on their investments and electricity consumers a reasonable allocation of costs attributable to the electricity system".57
191.
Towards this end, Article 24 of RD 661/2007 stipulated that Special Regime installations could either opt to receive a single regulated tariff expressed in terms of Euro cents per kilowatt hour (i.e. the FIT) for the sale of their electricity or they could sell directly to the market and receive the market price.58 For PV installations that opted for the first recourse mentioned above, Article 36 stipulated the fixed tariff that would be payable as follows:
192.
In other words, depending on their installed capacity, PV installations were granted a FIT in Euro cents per kilowatt hour for the first 25 years of their operational life, and a lower amount thereafter. The FIT was adjustable annually for inflation based on the Spanish Consumer Price Index ("CPI").
193.
To be entitled to the FIT, a PV facility needed to register with the Registro Administrativo de Instalaciones de Producción en Régimen Especial ("RAIPRE") before a given time limit.59 Article 22 of RD 661/2007 provided that such time limit could be set at no less than one year after the PV sector reached 85% of its power target of 371 MW.
194.
Article 17 confirmed certain other rights of Special Regime installations, i.e. the right to sell all or part of the energy produced and priority of access to the transmission grid. Finally, Article 44 provided for the adjustment and review of tariffs. In that regard, Article 44.3 read as follows:60

In 2010, in view of the result of the follow-up reports on the extent to which the Renewable Energy Plan for 2005-2010 and the Energy Saving and Efficiency Plan for Spain (E4) have been achieved, as well as the new objectives included in the next Renewable Energy Plan for 2011-2020, tariffs, premiums, additional payments, and lower and upper thresholds set out in this royal decree will be reviewed, taking into account the costs associated with each of these technologies, the degree of participation of the special regime in meeting demand and its impact on the technical and economic management of the system, guaranteeing reasonable returns with reference to the cost of money on capital markets. Every four years thereafter a new adjustment will be carried out using the above criteria.

The adjustments to the regulated tariff and the lower and upper thresholds referred to in this section will not affect the facilities for which the start-up document was issued before January 1 of the second year after the year in which the adjustment was implemented. (Tribunal’s translation)

195.
The Claimants began investing in the Spanish PV sector under RD 661/2007 and, on their case, relying on the alleged "immutability" of the incentives contained in such decree.

4. Registration of the Claimants’ Facilities in the RAIPRE

196.
The 85% threshold set for the PV sector was achieved in and around August 2007. As a result, pursuant to Article 22 of RD 661/2007, Spain announced on 27 September 2007 that the time limit for RAIPRE registrations would expire on 29 September 2008.61 All of the Claimants’ PV installations were registered with RAIPRE within this deadline and accordingly fell within the purview of the benefits available under RD 661/2007.

5. RD 1578/2008

197.
RD 1578/2008 was enacted on 26 September 2008, days before the time limit for registration under RD 661/2007 expired.62 It set forth the economic regime applicable to PV installations that had registered after the closure of the RD 661/2007 registration window. For present purposes, it suffices to note that the regulated tariff granted to new installations under this RD was lower than the one granted under RD 661/2007 and that these tariffs did not apply to the Claimants’ installations.

B. The Disputed Measures

198.
Starting from 2010, Spain enacted a series of measures, which had the effect of adjusting and ultimately replacing the economic incentives granted under RD 661/2007.63 These measures (the "Disputed Measures") consisted of:

a. the "2010 Measures" comprising of RD 1565/2010 of 19 November 2010 ("RD 1565/2010") and RD Law 14/2010 of 23 December 2010 ("RDL 14/2010") (infra at (1)); and

b. the "New Measures" or the "New Regime" comprising of RD Law 2/2013 of 1 February 2013 ("RDL 2/2013"), RD Law 9/2013 of 12 July 2013 ("RDL 9/2013"), Law 24/2013 on the Electricity Sector of 27 December 2013 ("Law 24/2013"), RD 413/2014 of 6 June 2014 ("RD 413/2014") and Order IET/1045/2014 of 16 June 2014 (the "Order on Parameters") (infra at (2)).

1. The 2010 Measures

199.
In 2010, Spain approved RD 1565/2010 and RDL 14/2010. These are the first of the measures that the Claimants allege harmed their investment.
200.
RD 1565/2010 (as amended by Law 2/2011) extended the higher FIT provided under RD 661/2007 to 30 years and eliminated the lower FIT, with the consequence that installations would sell electricity at the market rate after year 30.64
201.
RDL 14/2010, for its part, established a limit on the number of hours per year for which PV installations would receive the FIT (the "hours cap").65 Once an installation reached this cap, it could continue to sell electricity but at market prices. The hours cap was applicable throughout the life of the installation.
202.
Finally, on 27 December 2012, Spain approved Law 15/2012, which imposed a tax of 7% "on the production of electricity and its incorporation into the electricity system".66

2. The New Measures

203.
In 2013, Spain enacted a series of measures that had the effect of withdrawing the regime put in place under RD 661/2007. These measures are set out below.

a. RDL 2/2013

204.
On 1 February 2013, Spain introduced RDL 2/2013, by which it removed certain components of the consumer price index ("CPI") used to adjust the FIT for inflation under RD 661/2007.67

b. RDL 9/2013

205.
On 12 July 2013, Spain enacted RDL 9/2013, which repealed all former regulations governing the PV sector, including RD 661/2007 and the 2010 Measures. In their stead, it introduced a "New Regime" for both existing and new installations.
206.
RDL 9/2013 enacted the following changes:

a. Article 30.4 of the 1997 Electricity Law was amended "in order to narrow the scope of action of the Government in the development of remuneration systems" for RE facilities.68 Pursuant to such amendment, the FIT was abolished. PV installations were now entitled to the market price supplemented by an additional amount (to which the Claimants refer as "Special Payment"). This "Special Payment" was to be "composed of an amount per unit of installed capacity", which "shall cover the investment costs [...] that cannot be recovered through the sale of energy, as well as an amount for the operation of the installation to cover, as the case may be, the difference between exploitation costs and the revenues obtained from the participation of such a standard installation in the market".69

b. These investment costs were calculated by reference to the costs of a hypothetical "Standard Installation", envisaged as an "efficient and well-managed" company having "the necessary means for the development of its field, whose costs are those of an efficient enterprise in that field and considering the corresponding revenue and a reasonable profit for the execution of its functions".70

c. The Government could revise the Special Payment every six years.71

d. Further, the Special Payment was capped at "the minimum level necessary to cover the costs [...] and [...] lead to a reasonable rate of return".72 Such "reasonable return" had to be calculated on the basis of the pre-tax "average returns in the secondary market of Spain’s ten-year bonds" "increased by 300 basis points".73

207.
The provisions of RDL 9/2013 were not implemented immediately and were subject to a transitory period of 11 months. During this transitory period, "in order to maintain both the flows of remuneration to the facilities, as well as the rest of the procedures, rights, and obligations", the provisions of RD 661/2007 with respect to remuneration continued to apply. However, once RDL 9/2013 was implemented, the revenues earned by PV installations during the transitory period were to be brought in line with the revenues that should have been earned under the New Regime.74

c. Electricity Sector Law 24/2013

208.
On 26 December 2013, the Spanish Parliament approved Law 24/2013, which consolidated the various legislative amendments that had taken place since the 1997 Electricity Law.75
209.
This Law removed the distinction between the Ordinary and Special Regime on the rationale that "the great penetration of production technologies starting from renewable energy sources [...] has caused its individual regulation [...] to lack any purpose". Rather, given the degree of technological development in the sector, it was "necessary for the regulations to consider these installations in a similar way to the rest of the technology integrated in the market".76 In other words, Law 24/2013 aimed to bring the two regimes at par, on the premise that RE no longer lacked the ability to compete in the market with more conventional sources.
210.
On this basis, the Law set up a remuneration structure along the same lines as that introduced by RDL 9/2013.77 In particular, the remuneration for the RE sector was to consist of the market price plus a supplementary amount (the Special Payment), calculated by reference to a Standard Installation and subject to revision every six years.78
211.
At the same time, Law 24/2013 maintained priority of access to the transmission grid for RE producers.79

d. RD 413/2014 and the Order on Parameters

212.
RD 413/2014 was approved on 6 June 2014 (published on 10 June 2014). Although this RD sought to implement and develop some aspects of the new remuneration regime established by RDL 9/2013 and Law 24/2013, it did not provide for the set of remuneration parameters necessary to calculate the costs of a Standard Installation.80 These were established by the Ministry of Industry, Energy and Tourism (the "Ministry of Industry") in the Order on Parameters, which, among other things, fixed the reasonable return for existing installations at 7,398%.81

C. The Primary and Alternative Claims

213.
In a nutshell, the Claimants contend that relying on the economic incentives contained in RD 661/2007 and particularly on the alleged stabilization guarantee in Article 44.3, they invested approximately EUR 2 billion in the Spanish PV sector. According to them, RD 661/2007 was specifically designed to attract investment and boost the RE sector. On the basis of RD 661/2007 and of various representations and public statements made by Spain, the Claimants had the reasonable and legitimate expectation that the incentives granted by RD 661/2007 would remain unchanged during the lifetime of their plants. However, once Spain had "charmed" the Claimants into making their investments, it set about enacting a series of measures that drastically scaled back and ultimately withdrew the incentives of RD 661/2007.
214.
The Claimants further allege that Spain’s conduct constitutes a breach of the latter’s obligations under Article 10 of the ECT. This is, in summary, the Claimants’ "primary claim".
215.
Spain’s primary defence is that the Claimants should have been aware that their incentives were subject to an overarching "principle of reasonable profitability". In other words, the Claimants were only entitled to a reasonable rate of return, "applicable at the time the Claimants made their investment", which "was around 7%".82 According to Spain, the New Measures were not drastically different from the RD 661/2007 regime, maintained all the key features of that regime, and guaranteed the same level of return. As such, its conduct is well within its right to regulate and does not constitute a violation of Article 10 of the ECT.
216.
In response to the Respondent’s argument that Spain "did not promise any regulated Tariff under RD 661/2007 [and] [...] the Spanish system only allowed investors to aspire to reasonable profitability as provided for in the [1997 Electricity Law]",83 in their Reply, the Claimants put forward their Alternative Claim.84 More specifically, while still maintaining their Primary Claim, the Claimants argued that "[i]n the event that the Tribunal were to agree that the Claimants’ legitimate expectations were limited by Spain’s concept of a 'reasonable return’ [...] Spain still faces international liability under the ECT",85 because it "significantly lower[ed] the 'reasonable return’".86 The Claimants contend that, even on the Alternative Claim, they suffered significant damages.87
217.
Spain disagrees. In response to the Alternative Claim, Spain contends that the Claimants continued to remain highly profitable and achieved the reasonable return that they could have expected at the time of their investment.

IV. REQUESTS FOR RELIEF

218.
Also in light of these developments, the Parties’ requests for relief have evolved in the course of the proceedings.

A. The Claimants' Request for Relief

219.
In their Reply, the Claimants sought the following relief:

[T]hat the Tribunal enter an Award in their favour and against the Respondent as follows:

(a) declaring that Spain has violated Article 10 of the ECT, as well as its obligations under international law;

(b) (i) requiring that Spain provides full restitution to the Claimants by reinstating the legal framework in place at the time the Claimants made their investments in its territory and compensating the Claimants for their losses suffered prior to such reinstatement; or (ii) directing Spain to pay full compensation to the Claimants for the losses they have suffered as a result of Spain's breaches of the ECT, including pre-award interest (in both cases, with compensation to be quantified in the next phase);

(c) directing Spain to pay all the costs incurred in connection with these arbitration proceedings, including the costs of the arbitrators and of any potential institutional costs, as well as the legal and other expenses incurred by the Claimants, including the fees of their legal counsel, experts and consultants and those of the Claimants' own employees on a full indemnity basis, plus interest thereon at a reasonable rate from the date on which such costs are incurred to the date of payment;

(d) directing Spain to pay post-award interest, compounded monthly, on the amounts awarded until full payment thereof (with the relevant interest rate to be set in the next phase); and

(e) such other relief as the arbitral tribunal may deem just and proper.88

220.
In their latest brief, the PO12 C-PHB2, the Claimants sought the following relief:

[T]hat the Tribunal enter an award in their favour and against the Kingdom of Spain as follows:

(a) DECLARING that the Kingdom of Spain has breached Article 10(1) of the ECT; and

(b) ORDERING the Kingdom of Spain to:

(i) pay the Claimants compensation for all losses suffered as a result of Spain's breaches of the ECT, in the amount specified for each of the Claimants in the present submission; and

(ii) pay the Claimants pre-award and post-award interest until full payment of the award is made; and

(iii) pay the costs of this arbitration, including the fees and expenses of the Tribunal, the fees and expenses of the PCA, the fees and expenses relating to the Claimants' legal representation, and the fees and expenses of any expert appointed by the Claimants, plus interest;

(c) AWARDING the tax gross-up claim pursuant to any of the options listed at paragraph 189 above;

(d) AWARDING such other relief as the Tribunal considers appropriate.89

B. The Respondent's Request for Relief

221.
In their R-PHB1, the Respondent sought the following relief:

Spain respectfully asks the Tribunal to:

a) Reject the claims made by Claimants with respect to the merits on the basis that Spain has not in any way breached the ECT; and

b) In addition, to reject the restitution and compensation claims made in paragraph 661 of Claimants' Reply;

c) That Claimants be ordered to pay all costs and expenses arising out of this arbitration, including the administrative expenses incurred by the PCA, the fees of the arbitrators and fees of the legal representatives of Spain, its experts and advisors including interest from the date on which the said costs were generated until the date of their effective payment; and

d) Reject any and all claims made by Claimants and referred to either in paragraph 505 of their Amended Statement of Case or 661 of their Reply, or subsequently during the course of these proceedings.90

222.
In their final brief, the PO12 R-PHB2, the Respondent requested the following relief:

On the basis of the foregoing, Spain respectfully requests the Tribunal to:

a) Reject any and all claims made by Claimants;

b) Consequently, dismiss all liability claims and terminate the proceedings;

c) Order Claimants to pay all costs and expenses arising out of this arbitration, including the administrative expenses incurred by the PCA, the fees of the arbitrators and fees of the legal representatives of Spain, its experts and advisors including interest from the date on which the said costs were generated until the date of their effective payment.91

223.
In the next sections, the Tribunal summarizes the Parties positions on the Primary Claim and the Alternative Claim (respectively sections V.A and V.B).

V. THE PARTIES' POSITIONS

224.
As a general matter, the Tribunal notes that the Parties’ positions traverse multiple rounds of submissions and have evolved significantly over the course of the proceedings. Moreover, the Parties do not always correlate their arguments and defences to those of the other side. In the circumstances, the Tribunal has organized the following sections in a manner that it considers to best reflect the Parties’ positions. Where appropriate, further details on the Parties’ positions are contained in the Tribunal’s analysis.
225.
Section V.A deals with the Parties’ positions on the Primary Claim, while section V.B addresses their positions on the Alternative Claim.

A. The Primary Claim

1. The Claimants' position

a. Overview

226.
The Claimants invoke "six independent breaches" of the Respondent’s obligations under Article 10 of the ECT:

a. Spain has failed to provide "fair and equitable treatment" ("FET"). The claim for breach of the FET provision rests on three distinct breaches, i.e. (i) breach of legitimate expectations; (ii) unreasonable, arbitrary and disproportionate measures; and (iii) lack of transparency (7(a), (c) and (d));

b. Spain has failed to "create stable, equitable, favourable and transparent conditions for Investors" (7(b));

c. Spain has impaired the Claimants’ investments through "unreasonable or discriminatory measures" (7(e));

d. Spain has failed to ensure that the Claimants’ investments were afforded "the most constant protection and security" (7(f)).

b. Investing in PV Power Generation

227.
The Claimants submit that PV technology has been an attractive, but costly, RE option for many years.92 In recent years, EU Member States have applied government-backed economic incentives, also known as "state support schemes", to promote the use of RE by reducing its costs, increasing the price at which it is sold or otherwise increasing the volume of energy sold.93 For the Claimants, given the start-up costs of producing PV power, there would be no investment in this sector without investment incentives.94
228.
The Claimants explain that States use a number of different support schemes to encourage investment in RE generation. One of the most important of such schemes is the FIT, which is essentially a fixed tariff set above normal market rates.95 FITs provide a guaranteed tariff over the long term permitting to recoup high upfront investments.96 While FIT systems are expected to be adapted as investment expenses go down, such adjustments can only concern new investments, which take advantage of the lower investment costs.97
229.
The Claimants further explain that the capital-intensive nature of PV plant development typically requires investors to raise substantial amounts of long-term debt, or project financing, to fund their investments. In project finance, the borrowers can rely on a steady stream of revenue which the asset will generate over a long period of time to service the debt. Such reliance is particularly important because of the non-recourse nature of project finance deals. The Claimants allege that most of the Claimants' installations used project finance in their development.98

c. Background of Spain's Electricity Sector

230.
The Claimants explain that the 1997 Electricity Law granted Special Regime generators priority access to the Spanish electricity transmission and distribution network. This meant that ordinary regime generators could not sell their electricity to the distribution grid until Special Regime generators had sold all their supply.99 The Claimants submit that for them such priority access to the grid was a key attraction of Spain's regulatory framework.100
231.
The Claimants further contend that Spain's active efforts to attract foreign investment in RE was the product of (i) binding EU obligations to meet RE consumption targets arising in particular from the UNCCC and the Kyoto Protocol, and (ii) the new Government's objective to present Spain as a global leader in green energy. They also stress that Spain does not dispute that its international commitments were a key driver behind its actions to promote and encourage investments in RE power generation installations, including PV plants.101
232.
In particular, among the EU instruments that the Claimants allege required Spain to reach certain RE targets, the Claimants discuss the 2001 EU Directive for the Promotion of the Use of Energy From Renewable Resources (the "2001 Renewable Energy Directive");102 various reports and communications from the European Commission;103 and the 2009 Directive on the promotion and use of energy from renewable sources, amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (the "2009 Renewable Energy Directive").104
233.
The Claimants contend that Spain’s EU-mandated duty to build RE capacity was taken up with enthusiasm by the Government of Prime Minister Zapatero that came to power in 2004.105 This was not only because the Government wanted to meet the EU obligation but because Spain viewed RE production as a means of transforming its economy, by reducing reliance on foreign energy supply, becoming a net exporter of energy, and creating jobs. Consequently, the new Government’s economic policy was focused on the construction of green infrastructure and the creation of green jobs.106 In furtherance of this policy, the Government set about providing investors with incentives for building RE capacity.
234.
Against that background, so the Claimants argue, on 12 March 2004, Spain enacted RD 436/2004.107 According to the Claimants, RD 436/2004 introduced for the first time an incentive system based on a lifetime FIT, replacing the previous scheme, which had provided that RE could be sold at market prices plus a premium.108 For the Claimants, Spain "introduced a stabilisation commitment aimed at creating the desired long term stability that was necessary to attract investment".109 This said, the Claimants specify that the RD 436/2004 FIT was originally subject to fluctuations linked to changes of consumer tariffs, which entailed a lack of predictability, resulting in turn in a lack of investment.110 This flaw was remedied in 2006, through the "freezing" of the consumer tariff pursuant to Royal Decree Law No. 7/2006.111 Yet, even these actions did not generate the expected level of investment.112 It therefore became necessary to consider enhancements in the incentives provided.
235.
According to the Claimants, the framework for these enhancements was laid in the Plan for Promotion of Renewable Energies in Spain 2005-2010 or "PER 2005-2010", prepared in 2005 by the Instituto para la Diversificación y Ahorro de la Energía ("IDAE"), an advisory governmental body that reports to the Ministry of Industry.113 The PER 2005-2010 provided recommendations to further increase investment in RE, and especially the PV sector, in light of the poor results achieved under RD 436/2004. After analysing the barriers to PV development, the PER 2005-2010 recommended that the Spanish electricity regulators maintain the regulated remuneration for PV installations; continue to grant such remuneration for the lifetime of a PV installation in order to attract project finance, and that Spain increase its PV installed capacity targets by an additional 363 MW (from the target of 135 MW set under RD 436/2004).114 The Claimants contend that the PER 2005-2010 demonstrates Spain’s awareness that development of the PV sector would require a long-term and stable cash flow through the FIT.
236.
According to the Claimants, the ensuing RD 661/2007 finds its roots in these recommendations.115

d. RD 661/2007 and the Claimants’ legitimate expectations as to its continued application

237.
The Claimants submit that, in enacting RD 661/2007, Spain was implementing the recommendations contained in the PER 2005-2010 and seeking to induce further investments into its RE sector, given that previous regimes had failed to attract sufficient investments.116 The enactment of RD 661/2007 marked a change from the incentives provided by RD 436/2004.117
238.
The Claimants allege that they made their investments in reliance on the incentives contained in RD 661/2007. In particular, they expected that they would be entitled to sell all the electricity produced by their PV plants at the FIT provided in RD 661/2007. Moreover, due to the express "stabilization commitment" contained in Article 4.3 of RD 661/2007, the Claimants further expected that any future changes to the FIT regime would only apply to new installations and not to those that already qualified under RD 661/2007.

i. RD 661/2007 conferred an economic right upon the Claimants

239.
The Claimants submit that RD 661/2007 granted qualifying PV installations an "immutable economic right" to, inter alia, a fixed premium indexed on inflation for all of the electricity generated by their PV facilities during the entire operational lifetime.118 They argue that, when commenting on the draft of RD 661/2007, the National Commission of Energy ("CNE") had stressed the importance of "regulatory stability to recover investments, maintaining regulated tariffs during the service life of existing facilities (with a transparent annual adjustment mechanism)".119
240.
Once a PV plant had registered with the RAIPRE through the relevant Autonomous Community where the PV plant was located within a one-year period (i.e. prior to 29 September 2008), it was entitled to receive all the economic incentives of RD 661/2007, including and especially the FIT.120 The Claimants submit that each of the Claimants’ individual plants received a government resolution confirming their specific entitlement to the RD 661/2007 FIT, which fact is not disputed by Spain.121
241.
The Claimants also contend that RD 661/2007 set no limit to the quantities of electricity entitled to the FIT. The FIT was owed for the operational life of the plant, i.e. 25-40 years.122 Specifically, each plant would receive the FIT at a particular rate depending on its capacity during its first 25 years of operation. Thereafter, the FIT would continue at a lower rate for the remaining life of the plant.123 The RD 661/2007 regime also implied that electricity distributors were required to buy all the electricity produced by PV installations at the FIT, the latter thus having priority over producers in the ordinary regime.124 More importantly, while the Claimants recognize that RD 661/2007 did not provide a perpetual tariff, they insist that any tariff adjustments would only apply to new investments.125
242.
The Claimants stress that none of them would have made the investments had they believed that the PV investment framework was subject to changes that could affect existing investments.126
243.
It is the Claimants’ submission that RD 661/2007 conferred upon duly-registered installations a guaranteed right comprising of "(i) the ability to sell all of an installation's electricity output; (ii) at a fixed FIT rate; (iii) billed and collected on a monthly basis; (iv) revised yearly for inflation; (v) for the lifetime of the installation; (vi) without any review or alteration to the FIT rate or term".127 This is demonstrated by the text of the decree;128 by the fact that it provided qualifying PV installations with a FIT for the lifetime of the installation;129 by the benefits it bestowed upon qualifying installations; and by the fact that the review process for the RD 661/2007 FITs would commence in 2010, without affecting installations already holding timely RAIPRE certificates.130 In addition, Article 44.1 of RD 661/2007 established a mechanism to update the FIT in order to account for inflation.131
244.
The Claimants have emphasized the relevance of two provisions in RD 661/2007, Article 22 (infra at ((a)) and Article 44.3 (infra at (b)). They have also asserted that RD 1578/2008, a regulation issued after RD 661/2007, strengthened their expectations and confirmed that Spain shared these expectations at the time (infra at (c)).

(a) The "tariff window" in Article 22

245.
The Claimants indicate that RD 661/2007 did not intend to apply the Article 36 FITs to all future facilities. Rather, in accordance with Article 22, as soon as 85% of the production target for any energy group or sub-group had been reached, the Secretary General for Energy was to set a period within which facilities had to obtain final RAIPRE registration in order to be entitled to the tariffs under RD 661/2007. This registration period could be no less than 12 months.132 The Secretary General for Energy issued the resolution on 29 September 2007, confirming that FITs under RD 661/2007 would apply as long as a facility was registered prior to 29 September 2008, i.e. the end of the tariff window.133
246.
For the Claimants, Article 22 would be devoid of meaning if Spain had remained free to change the FIT subsequently in respect of existing facilities. Similarly, it would serve no purpose for the Secretary General to set a final registration date under RD 661/2007.134

(b) Interpretation of Article 44.3

247.
The Claimants further invoke Article 44.3 of RD 661/2007 (reproduced supra at para. 194) in support of their argument that the FIT regime provided in RD 661/2007 was not subject to changes with respect to existing investments.
248.
Accordingly, so say the Claimants, a review of the FITs would be carried out in 2010, at the end of the planning period set out in the PER 2005-2010 when Spain anticipated that it would reach its capacity goals, and thereafter every four years. The success of RD 661/2007 in prompting investments in the PV sector resulted in that review taking place in 2008.135 However, Article 44.3 of RD 661/2007 made it clear that any revisions stemming from these reviews would not apply to existing installations.136
249.
The Claimants also observe that in 2010 the CNE itself understood this provision to "contain one of the criteria most relevant to the current regulation of the Special Regime in relation to legal certainty and stability of the economic regime".137 Furthermore, the CNE noted that economic incentives had to be set considering the costs of the technology installed.138 Consequently, it proposed a reduction in the tariff for new PV installations. However, according to the Claimants, Spain subsequently abandoned this review process by implementing the Disputed Measures.139
250.
The Claimants object to Spain's argument at the Hearing on Liability that "Spain would stand by 44.3 while the law in which it is encapsulated is in force, but Royal Decree 661 can be modified or repealed, at which point 44.3 would not apply".140 Such an approach would render Article 44.3 meaningless and essentially constitute an admission that Spain "fraudulently induced investment".141
251.
Furthermore, it would make no sense if Spain was permitted to make changes "through the backdoor" by claiming that the reviews fall outside of the scope of Article 44.3, as this would defeat the purpose of including Article 44.3 in the first place.142 In addition, the Claimants rebut Spain’s argument that "the registration for RD 661/2007 was closed and the two year window for registration under article 44.3, that was supposed to take place in 2010, never applied" by arguing that, whether the tariff window was closed in September 2008 or January 2012, Articles 44.3 and 22 still provided that any changes to the FIT would not apply to existing investments.143 In any event, contrary to Spain’s claim that the 2010 review did not take place, the CNE confirmed that the review did occur.144

(c) The relevance of RD 1578/2008

252.
In the Claimants’ view, RD 1578/2008 enacted in September 2008 further evidences that their expectations were legitimate and shared by Spain.145 Indeed, RD 1578/2008 applied only to installations registered after the window deadline of 29 September 2008.
253.
The Claimants also point to the Fifth Additional Provision in RD 1578/2008 which reads as follows:

Fifth Additional Provision. Modification of the remuneration for production activity using photovoltaic technology

In 2012, in light of the technological growth of the sector and the market and the operations of the payment regime, payment for the activity of electricity production using solar photovoltaic technology may be modified. (Claimants’ translation)146

254.
For the Claimants, this provision has the same "intent" as Article 44.3 of RD 661/2007 as was confirmed by a CNE report of 22 October 2009 in response to a question from a member of the public.147
255.
The Claimants explain that, since the FIT would automatically decrease at certain points for new investments only, it was not necessary to state in the Fifth Additional Provision that future changes would not apply to existing investments. Thus, like Article 44.3, that provision aimed at providing certainty to investors by informing them that a new payment system for PV may be set in 2012 affecting newly built plants registered after that date.148

ii. RD 661/2007 was designed to attract third party financing

256.
The Claimants further highlight that RD 661/2007 was designed to attract third party financing.149 They argue that this is obvious from the design of RD 661/2007, which provided that qualifying PV installations be paid on a monthly basis through invoices issued by the CNE, which were then paid by electricity distributors, thus allowing investors to manage their cash flow in a predictable way.150 The design of the FIT also matched the needs of project finance loans, which typically have a term of 18 to 25 years.151 Further, the PER 2005-2010 acknowledged that approximately 77% of RE investment would be financed by long-term loans from third party lenders.152 In sum, RD 661/2007 was "well suited to recovering invested capital, obtaining a return on invested capital, and attracting the necessary financing for major investment".153

iii. Spain actively encouraged foreign investment in the PV sector and made repeated representations on the economic regime of RD 661/2007

257.
In addition, the Claimants submit that Spain actively encouraged foreign investment into its PV sector through advertising materials, including English-language brochures and presentations, emphasizing the stability of its investment framework and the nature of the investment incentives that its regulations offered.154 The Claimants have in particular discussed the following documents (both pre-dating and post-dating the enactment of RD 661/2007):155

a. The 24 May 2005 brochure entitled "El Sol Puede Ser Suyo" ("The Sun Can Be Yours"), relating to RD 436/2004, explaining the advantages of investing in PV installations, including the expected profitability (which the Government estimated at that time at no less than 15%) as well as the investors' ultimate contribution to Spain's sustainable economy;156

b. The August 2005 English-language summary of the PER 2005-2010 outlining to foreign investors the steps needed for Spain to meet its RE consumption targets;157

c. The 14 February 2007 CNE Report No. 3/2007, issued three months before RD 661/2007 was approved, stressing the importance of the stability of the regulatory regime as a necessary tool to attract investors into the Spanish RE sector;158

d. The 25 May 2007 Ministry of Industry, Energy and Tourism press release, following the approval of RD 661/2007, indicating that through RD 661/2007 "the Government prioritize[d] profitability and stability" and that the regime represented an "increase in compensation" compared to RD 436/2007.159 The press release also represented that "[f]uture tariff revisions shall not be applied to already functioning facilities. This guarantees legal certainty for the electricity producer and stability for the sector, favoring development. The new legislation shall not be applied retroactively".160

e. The June 2007 update of "The Sun Can Be Yours" brochure, calculating sample return for various types of installations on the basis of certain assumptions, and quantifying those sample returns between 7.11% and 9.58%;161

f. The 25 October 2007 presentation given by the Deputy Director of the Special Regime at the CNE, Mr. Luis Jesús Sánchez de Tembleque, laying out the benefits of the Spanish RE framework and its investment incentives and noting the need for regulatory stability;162

g. The 29 October 2008 presentation by the Vice President of CNE, Mr. Fernando Marti Scharfausen, noting that the Spanish regulated tariff or market price plus premium applied for the "facility life-span" of the plants, and highlighting the absence of retroactivity in RD 661/2007;163

h. The November 2008 PowerPoint presentation titled "Opportunities in Renewable Energy in Spain" (the "2008 Presentation"), drafted by InvestInSpain, the State Company for the Promotion and Attraction of Foreign Investment, and carrying the seal of the Spanish Government on the first page, which discussed the benefits of RD 661/2007 and explained that its "[p]remium system [was] guaranteed";164

i. The November 2009 joint InvestInSpain - Ministry of Industry, Tourism and Commerce PowerPoint presentation titled "Legal Framework for Renewable Energies in Spain" (the "2009 Presentation"), praising the strengths and stability of the legal framework for RE in Spain, including reaffirming the importance of Article 44(3);165

j. The 22 October 2009 CNE response to a query from a PV producer regarding the application of the stabilization provision found in Article 44.3 of RD 661/2007, in light of the regulatory regime introduced by RD 1578/2008, where the CNE considered that although RD 1578/2008 envisaged a potential future modification to the remuneration for PV installations, those changes could not be made retroactively, all in line with the stabilization provisions of Article 44.3 of RD 661/2207;166

k. The February 2010 CNE presentation by Mr. Fernando Marti Scharfausen, confirming that RD 661/2007 provided a "warranty by law" to investors that no retroactive changes would be made.167

258.
These documents, so the Claimants argue, reflect Spain’s own understanding that the RD 661/2007 would apply to all qualifying installations during the entire life of the plants and that any changes, if ever made, would not affect existing installations.168 As such, these documents constituted further assurances contributing to the Claimants’ expectations that Spain’s regulatory framework for PV investment would not shift.169 The Claimants also emphasize that none of these documents, presentation or brochures contained any disclaimers.170
259.
Finally, the Claimants argue that, when effecting their investments in the PV sector, they also relied on Spain’s reputation as a safe place to invest, as Spain was a Western European country and EU Member State with a track record of protecting foreign investments.171

e. Registration of the Claimants’ PV facilities

260.
The Claimants contend that RD 661/2007 was so successful that in a short time the installed PV technology far exceeded the targets set by the PER 2005-2010 and the 371 MW target envisaged by RD 661/2007. They add that, as a direct result of RD 661/2007, Spain hit the 85% threshold in a matter of months, in August 2007. As a consequence, Spain announced on 27 September 2007 that the time limit for RD 661/2007 registrations would expire on 29 September 2008.172
261.
Finally, the Claimants agree with Spain that the announcement of 27 September 2007 set off a "race", motivating investors to invest in the PV Sector before the deadline. According to the Claimants, the obvious implications of such a "race" is that "everybody in the market, including all reasonable investors, understood that installations that met the deadline [...] would lock in the right to receive the RD 661/2007 FIT".173

f. The Disputed Measures

262.
The Claimants submit that Spain frustrated their legitimate expectations that the RD 661/2007 regime would remain stable by enacting a number of measures, which curtailed the incentives under RD 661/2007 and then withdrew them entirely.

i. The 2010 Measures

(a) RD 1565/2010

263.
The Claimants argue that RD 1565/2010174 eliminated the right of PV installations to receive the FIT for their entire life, limiting the FIT to the first 25 years of operation.175 This substantially reduced the revenues that investors could have realized as promised under RD 661/2007. Furthermore, RD 1565/2010 augured a new era of regulatory instability and was the first indication that Spain would ignore the key promises it had made to investors when promoting its FIT regime.176
264.
The Claimants reject Spain's formalistic argument that RD 1565/2010 does not contravene the literal wording of Article 44.3 of RD 661/2007 because the latter provision refers to "the reviews to this sub-section of regulated tariff" and not to a review of the duration during which the tariff would apply.177 Cutting the number of years during which a tariff applies has the same economic effect as cutting the tariff itself.178

(b) RDL 14/2010

265.
The Claimants contend that RDL 14/2010179 placed two separate caps on the number of hours during which PV installations could access the RD 661/2007 FIT.180
266.
First, RDL 14/2010 placed a transitory cap lasting from 1 January 2011 until the end of 2013.181 The Claimants allege that this was a drastic change, as under RD 661/2007, a PV installation was paid for its full electricity production during the entire calendar year.182 That transitory cap also failed to take account of regional differences, which resulted in a disproportionate impact on the more efficient PV plants located in sunnier regions.183 Once a PV installation reached its cap for the year, it was required to sell its additional production into the wholesale electricity pool at market rates, like conventional power generators in the ordinary regime (although still with priority of dispatch).184
267.
Second, upon its expiry in 2013, the transitory cap was replaced by a permanent one for the remainder of the FIT entitlement of PV installation (which was extended to 28 years under RDL 14/2014 and to 30 years by Law 2/2011).185
268.
The Claimants allege that, while the transitory cap of RDL 14/2010 applied, they experienced a dramatic reduction in the production of FIT eligible electricity. As a consequence, their cash flows dropped and the uncertainty facing the investments increased.186 They refute Spain's argument that, because the PER 2005-2010 contained estimates of the number of operating hours for PV installations (on the basis of which Spain determined the FIT), PV investors should have reasonably expected that there could be a reduction in the operating hours for which they would be entitled to the FIT.187 They submit that the RD 661/2007 FIT applied to every kilowatt hour of electricity and not only for the hours estimated in the PER 2005-2010 (on which the FIT was based).188
269.
It is the Claimants’ further submission that, through a series of regulations, including RDL 14/2010, Spain acknowledged the harm it had caused to PV investors and attempted to compensate for that harm, which however was ineffective.189 For the Claimants, these attempts at compensation showed the seriousness of the harmful measures that Spain had enacted in RDL 14/2010, as well as the unreasonableness of its seemingly improvised and arbitrary regulatory actions.190
270.
The Claimants point to RDL 14/2010 extending the right of access of the PV installations to the RD 661/2007 FIT from 25 to 28 years.191 The three-year extension was at the original, higher FIT rate, but still subject to the permanent caps.192 The Claimants’ position is that thereby Spain reinstated a small portion of what it had taken away by enacting RD 1565/2010.193
271.
Further, so the Claimants remark, the Sustainable Economy Law (i.e. Law 2/2011) further prolonged the entitlement to the FIT by two years to 30 in total at the higher FIT rate (although again subject to the permanent hour cap).194 This law also extended soft loans or liquidity lines of credit through the Instituto de Crédito Oficial ("ICO"), thus recognizing that the 2010 Measures had negatively impacted the financing obtained by PV investors.195

(c) Conclusion on the 2010 Measures

272.
The Claimants submit that the 2010 Measures had a direct impact on the cash flows of the plants and, therefore, on their ability to service the debt. Moreover, they caused a reduction in the value and potential resale value of the Claimants’ assets.

ii. Law 15/2012

273.
On 27 December 2012, Spain passed Law 15/2012, imposing a 7% levy on income obtained by generators, renewable or otherwise.196
274.
The Claimants maintain that although they "are not bringing any claims with respect to damages suffered as a result of the 7% levy", this measure is "part of the factual background of the dispute, providing additional details of the array of measures the PV Investors were subject to during recent years".197
275.
For the Claimants, this 7% levy amounts to a disguised tariff cut for RE installations and an additional limitation to the RD 661/2007 regime. As such, it cannot be regarded as bona fide taxation of general application.198 The fact that the levy is in reality a tariff cut presented in the form of a "tax" is confirmed by statements from the then Minister for Industry Jose Manuel Soria.199
276.
The Claimants contend further that the 7% levy had a disproportionate impact on RE compared to conventional generators. This is because the former operate in a regulated regime and cannot pass on the 7% levy to the consumers, whereas the latter can do so at least in part when selling electricity in the open market.200
277.
According to the Claimants, the damage caused by the 7% levy is now subsumed within the more substantial damage caused by the New Regime. The 7% levy may be considered neutral within the framework of the New Regime, but it is "not neutral to installations that qualified under the RD 661/2007 economic regime, where the 7% Levy was not in place".201
278.
Shortly after the enactment of Law 15/2012, Spain adopted additional measures which limited the Claimants’ right to deduct certain financial expenses from the application of corporate income tax.202

iii. The New Measures

(a) RDL 2/2013

279.
The Claimants submit that RDL 2/2013 enacted on 1 February 2013203 removed key components of the CPI used to adjust the FIT for inflation under RD 661/2007.204 The index replacing the CPI reduced the FIT for PV plants by about three percentage points.205
280.
For the Claimants, Spain’s argument that the new index is "well established in worldwide economic doctrine" is besides the point.206 What matters is that it is not the index that Spain committed to use under RD 661/2007.207 The Claimants argue that Spain changed the index to remove the price of oil from the underlying calculation, based on the belief that such price would continue to rise.208 Contrary to such belief, the price of oil fell, with the result that the new index was higher than the CPI.209 For the Claimants, this unexpected turn of events in no way justifies the measure, even if it may have benefitted the PV plants in certain periods.210 In any event, contrary to what Spain contends, the new index did not benefit the Claimants in 2015, as the indexation disappeared entirely with the enactment of the New Regime.211

(b) RDL 9/2013

281.
For the Claimants, RDL 9/2013, which was enacted on 12 July 2013212 and amended the 1997 Electricity Law, revoked RD 661/2007 in its entirety for RE installations.213 The Claimants assert that the New Regime so introduced applied not only to new installations, but also to existing ones.214
282.
The Claimants explain that, by contrast to the previous one, the New Regime is a rate-base system that applies a percentage return to the costs for specific standard projects, instead of measuring actual costs.215 In particular, according to the Claimants, RDL 9/2013 eliminated the FIT regime and, instead, introduced a system based on the Special Payment. Unlike the FIT, which is solely based on energy production, this system is only based in part on energy production, and is calculated by reference to the Government’s "standard installation", which bears no resemblance to the Claimants’ PV plants.216
283.
Further, the amount of the Special Payment "will not go beyond the minimum level necessary" to provide what the Government considers to be a "reasonable return".217 This concept, so the Claimants submit, no longer operates as a "floor" but rather as a cap to the Special Payment.218 The "reasonable return", measured by reference to the 10-year Spanish sovereign bonds plus a differential (300 base points in the case of existing facilities), is set at 7,398%.219 This return is calculated over the deemed regulatory life of the plant, i.e. 30 years, is computed pre-tax and takes account of the remuneration obtained under RD 661/2007.220
284.
The Claimants further explain that, under the New Regime, returns achieved under RD 661/2007 in excess of the reasonable return defined in RDL 9/2013 will be deducted from payments to be received in the future. In other words, this measure is fully retroactive as it claws back payments under the old regime.221 The Claimants note that Spain does not dispute that the New Regime "claws back" past revenues by offsetting future ones.222
285.
Moreover, the Claimants emphasize that the Special Payment is subject to governmental discretion and its parameters may be changed "every six years", which makes the operation of PV plants highly uncertain.223

(c) Law 24/2013

286.
On 26 December 2013, the Spanish Parliament approved Law 24/2013,224 which, so say the Claimants, introduced further harmful measures.225 In particular, such law removed the distinction between Ordinary and Special Regimes; it placed conventional and RE generators on an equal footing, depriving the latter of the unconditional priority access to the grid and dispatch.226 It also imposed on renewable installations the obligation to finance the accrued tariff deficit, i.e., the imbalance between revenues and costs in the electricity system.227
287.
The following months, the Claimants argue, were characterized by complete uncertainty as neither RDL 9/2013 nor Law 24/2013 defined the precise terms of the New Regime.228 The Claimants refer to this period from July 2013 to June 2014 as the "Transitory Period".

(d) RD 413/2014 and the Order on Parameters

288.
On 6 June 2014, the Government passed RD 413/2014229 and on 16 June 2014 the Order on Parameters,230 which specified the economic regime for the different RE installations, including PV plants.

(e) Content of the New Regime

289.
For the Claimants, the New Regime represents a complete overhaul of the FIT regime under RD 661/2007, as a result of which the Claimants’ installations were placed in a position much worse than under RD 661/2007. The New Regime undermines the very foundation on which the Claimants made their investments, namely a stable and predictable revenue stream at levels sufficient to service the debt, provide a return on investment, and justify the significant risks incurred.231
290.
The Special Payment is composed of a remuneration per MW of installed capacity and a remuneration per MWh of electricity produced, seeking to cover the operating costs that cannot be met by market prices.232 It is also subject to certain thresholds of operating hours.233
291.
Specifically, the Claimants submit that the New Regime negatively affects their investments in three main ways. First, Spain’s "repudiation" of the RD 661/2007 economic regime results in a significant reduction of cash flows, because the PV projects no longer enjoy the FIT234 and the Special Payment is only payable if the electricity system generates sufficient revenues.235 Second, the Claimants argue that the new terms deprive them of incentives to maximize day-to-day production throughout the year.236 Third, the PV projects face increased financial, operational and regulatory risks.237 The loss of the FIT has in particular affected the investors’ "ability to meet their debt obligations, which has manifested itself differently across the Claimants' projects".238
292.
Unlike what Spain argues, the Claimants deny that the New Regime provides them with a "reasonable return".239 First, the 7,398% return is pre-tax rate, i.e. equivalent to 5,179% after tax.240 Moreover, it operates as a cap on returns.241 Second, Spain contradicts itself when it argues, on the one hand, that producers may obtain higher returns if they beat the parameters of the standard installations, and, on the other hand, that such higher returns were objectionable under RD 661/2007.242 Third, the concept of reasonable return itself is subject to change in light of the broad discretion left to the Government.243 Finally, the Claimants challenge the transparency of the implementation of the New Regime. The Transitory Period left PV investors in the dark as to the precise level of remuneration for existing installations.244 In support, they point to a statement made by the European Commission in July 2015 noting the legal uncertainty created by the Transitory Period.245 In this context, the Claimants also observe that the Government ultimately used its own parameters to calculate the Special Payment, notwithstanding the fact that it had instructed two independent consultancy firms, Roland Berger and Boston Consulting Group, to assist in the determination of the Special Payment.246 The Claimants further complain that the PV industry was not consulted about the parameters of the New Regime.247
293.
On the basis of these facts, the Claimants allege breaches of Article 10 of the ECT and contend that Spain's defences are without merit.

g. Spain’s conduct breached the ECT

i. The Disputed Measures frustrated the Claimants’ legitimate expectations

(a) Scope and content of the obligation

294.
The Claimants submit that pursuant to Article 26(6) of the ECT, the treaty itself is the primary source of law applicable to the merits of the dispute and determines the standards of protection available to an investor against the actions of the host State and whether those obligations have been breached. Customary international law principles, although relevant, only apply where the ECT is silent and therefore are a secondary source of substantive law.248
295.
The ECT, being an international treaty, "must be interpreted in good faith in accordance with the ordinary meaning given to its terms in their context and in light of the ECT's object and purpose".249 The Claimants submit that investments in the energy sector involve high-value long-term commitments in projects that cannot easily adapt to the vagaries of legal and political changes. Consequently, the ECT’s fundamental objective is "to facilitate transactions and investments in the energy sector by reducing political and regulatory risks".250 According to the Claimants, the ECT seeks to accomplish this objective in two ways. First, by requiring Contracting States to maintain a stable, predictable and transparent legal and regulatory investment framework. Second, by offering more robust levels of protection than ordinary bilateral investment treaties,251 subject to very few exceptions with respect to a host State’s right to regulate.252
296.
For the Claimants, a central tenet of Spain’s obligation "to accord at all times to Investments of Investors of other Contracting Parties fair and equitable treatment" is to refrain from conduct that defeats the legitimate expectations on which an investor relied at the time of making its investment.253 In order to determine whether legitimate expectations have been created, the Claimants submit that regard must be had to the conduct of the host State, including (i) the legal order of the host State at the time when the investment was made (inter alia "legislation and treaties, and assurances contained in decrees, licences and similar executive assurances or undertakings");254 and (ii) "any undertakings or representations made explicitly or implicitly by the host State".255

(b) The Claimants’ legitimate expectations

297.
The Claimants submit that, when they invested in the Spanish PV sector, they had reasonable and legitimate expectations that the legal and business environment would remain stable and predictable. Specifically, they expected that their projects would be entitled to the economic incentives promised by RD 661/2007 for their entire operational lifetime and that any future revisions to these incentives would not affect their investments.256 This expectation was created by (i) the explicit guarantees and assurances made by Spain in the text of RD 661/2007 (on which see supra V.A.1.d) and (ii) the numerous public statements made by Spain and various entities, regarding the application of the regime. Moreover, these expectations were shared by other investors in the RE sector, as well as lenders, legal advisors and energy consultants.257
298.
The Claimants assert that Spain gave rise and reinforced the Claimants’ expectations by making repeated statements regarding the stability of the legal regime during the period in which the Claimants invested. That apart, various Government entities and officials - such as IDAE, CNE/CNMC and InvestInSpain - made numerous representations to the same effect both before and after the approval of RD 661/2007, which confirm the legitimacy of the Claimants’ expectations (set out in detail at Section V.A.1.d.iii above).258 According to the Claimants, these representations "estop Spain from now claiming that it reserved the right to dismantle the RD 661/2007 regime".259
299.
In particular, the Claimants contend that the statements made by various Governmental entities - specifically CNE, CNMC,260 IDAE and InvestInSpain - are attributable to Spain.261 In this respect, they argue that the relevant actions of CNE / CNMC, IDAE and InvestInSpain are attributable to Spain pursuant to Article 4 of the International Law Commission Draft Articles on State Responsibility ("ILC Articles"), as these entities qualify as organs of the State.262 In the alternative, the Claimants submit that CNE / CNMC's actions are attributable to Spain pursuant to Article 5 of the ILC Articles, because these entities were empowered to and did exercise governmental functions.263 In the further alternative, the Claimants argue that the acts of CNE, CNMC, IDAE and InvestInSpain are attributable to Spain under Article 8 of the ILC Articles, i.e. these entities acted in accordance with Spain's instructions or under its direction and control.264
300.
Finally, in the Claimants' view, a number of other actors shared their expectations on the application of RD 661/2007, which demonstrates the objective nature and reasonableness of their expectations. They refer to other investors,265 such as Iberdrola;266 legal advisors instructed by the Claimants;267 lenders involved in the financing of RE projects in Spain;268 and Grant Greatrex, one of Spain’s experts in this arbitration.269

(c) Spain’s breach of the Claimants’ legitimate expectations

301.
The Claimants submit that based on the expectation that their projects would be entitled to the economic incentives promised by RD 661/2007 for their operational lifetime and that any future revisions would not affect their investments, they invested close to EUR 2 billion in the Spanish PV sector. However, in disregard of these expectations, Spain enacted the measures that fundamentally altered, and subsequently withdrew, the legal and regulatory framework on which the Claimants had relied to make their investment. The Claimants’ arguments on the effects of the Disputed Measures are summarized in Section V.A.1.f above. According to the Claimants, this overhaul of the economic incentives regime, constitutes a clear violation of Spain’s FET obligation under the ECT.270

ii. Spain failed to create stable investment conditions

302.
As a separate breach,271 the Claimants assert that the first sentence of Article 10(1) of the ECT requires Spain to "create stable, equitable, favorable and transparent conditions" for investment, which is a heightened obligation, beyond the FET obligation found in other treaties.
303.
The Claimants clarify that whether the obligation is considered a sub-set of the FET standard or an independent obligation Spain must maintain stability such that future changes to the legal framework are (i) predictable; (ii) do not alter the fundamentals of the legal framework on the basis of which the investment was made; and (iii) do not fundamentally alter the economics of the investment absent the payment of compensation.272 Consequently, according to the Claimants, continuous changes in the legal framework applicable to an investment, which undermine the stability and predictability of the business and legal environment or keep the investor in the dark as to the framework that will eventually be applied, constitute a breach of this standard.273 The Claimants specify that in alleging a breach of this obligation, they do not posit that Article 10(1) is a stabilisation clause requiring States to freeze their legislation or curbing the State’s legitimate right to regulate.
304.
According to the Claimants, Spain has violated its obligation to provide stable investment conditions by unreasonably modifying the legal framework.274 In essence, Spain subjected the Claimants’ investments to a "rollercoaster ride" of constant and drastic changes in the regulatory framework ultimately dismantled the RD 661/2007 regime. In doing so, Spain reneged on the promises given under RD 661/2007 and consequently breached its obligation to provide stable investment conditions pursuant to Article 10(1).275

iii. The Disputed Measures are unreasonable, arbitrary and disproportionate

(a) The Disputed Measures are unreasonable

305.
The Claimants submit that a State’s conduct is reasonable, when it relates to a rational policy and, in implementing that policy, adopts acts that are appropriately tailored to the pursuit of that rational policy, with due regard for the consequences imposed on investors.276 In other words, the ends and the means to those ends must both be reasonable.
306.
The Claimants further submit that, in order to meet this threshold, Spain must first identify a rational policy goal that it sought to achieve by enacting the Disputed Measures and then show that the Disputed Measures were reasonably related to or appropriately tailored to addressing these policy goals, always keeping in mind the consequences for the Claimants. It is readily apparent, the Claimants say, that the Disputed Measures did not meet this threshold.277
307.
First, each of the Disputed Measures was unreasonable because they imposed retroactive incentive cuts for existing investments. According to the Claimants, given the nature of investments in PV installations (requiring large upfront capital expenses and relying on debt financing), a long term FIT was necessary to enable the Claimants to service their debt and receive a return on their investment, with the result that a significant cut in the FIT, wiping out the return and making it impossible to recoup initial expenses, was unreasonable.278
308.
Second, the Disputed Measures were not tailored to meet stated policy goals:

a. No specific explanation or rationale was provided for RD 1565/2010. To the extent the measure sought to address the "growth in recent years in the number of electric power installations within the Special Regime" and "additional technical requisites" needed to guarantee the operation of the electricity system and facilitate the growth of RE technologies, the Claimants consider that the decrease of the FIT effected by RD 1565/2010 was not the appropriate mechanism to achieve these goals.279

b. Similarly, the severe and permanent cut to the FIT introduced by RDL 14/2010 was inappropriate to address the stated policy behind the introduction of this measure i.e. to remedy, the tariff deficit. According to RDL 14/2010, the tariff deficit was caused by the fall in electricity demand, the fluctuation in fuel prices and "favourable weather". The Claimants contend that all three circumstances were temporary, were not caused by the Claimants' installations, and did not alter the costs of the installations. It was therefore unreasonable to subject the Claimants' investments to a cut in the FIT on this basis.280

c. Further, the cancellation of the mechanism whereby the FIT indexed for inflation on the basis of the CPI was also unreasonable. This is because the index used instead provided for a lower FIT only in order to reduce the income of the existing installations.281

d. Moreover, the rationale behind the New Regime was unreasonable. The alleged justification for the further cut to PV tariffs in 2013 was that "(1) 'the volume of rainfall and wind conditions have been much greater than historical averages'; and (2) there had been a 2.3% fall in electricity demand".282 The Claimants explain that PV installations were protected against a demand risk because they had priority access to the transmission grid. Accordingly, a reduction in demand (which is in any event, temporary) cannot justify the permanent abolition of a regulatory regime. That apart, say the Claimants, "it is absurd to change a long-term guaranteed FIT regime because the weather has changed", especially when an increase in rainfall would reduce the amount of PV energy produced.283 Additionally, the New Measures were not implemented with due regard to the impact on existing investors.284 Finally, assuming that the policy rationale behind the New Measures was justified, the CNE had recommended a suit of proposals to address the tariff deficit, which were reasonable and did not affect the FITs for existing installations. In other words, it was possible to adopt other remedies that were adequately shaped to achieve the policy rationale, with more limited impact for the Claimants. However, the Government largely ignored these proposals and implemented the New Measures instead, without taking into account the devastating consequences for existing PV installations.285

(b) The Disputed Measures are arbitrary

309.
The Claimants contend that the standard for determining if a measure is arbitrary is reasonableness. In other words, measures that are not based on reason will be deemed arbitrary. On this basis, the Claimants contend that the Disputed Measures are arbitrary for the same reasons that they are unreasonable.286 For the Claimants, Spain’s proposed threshold for arbitrariness is artificially high. Nevertheless, the Claimants view the Disputed Measures as arbitrary even when assessed against Spain’s standard.287
310.
Finally, the Disputed Measures are arbitrary for other reasons as well, in particular because:

a. They artificially cap the number of years for which the Claimants’ PV installations will receive benefits to 30 years, when in reality, the operation life of PV plants is longer.

b. The cap on the number of hours for which benefits are granted is arbitrary, as the same cap applies across Spain, without regard to the sunlight received in the different regions.

c. Spain has not explained how it arrived at a target rate of return of 7,398% pre-tax, which rate is, in any event, unreasonable.288

(c) The Disputed Measures are disproportionate

311.
A State breaches the FET standard if it adopts measures disproportionate to the aims pursued. This implies that measures must be (1) suitable; (2) necessary; and (3) proportionate to the aim pursued. The Claimants argue that the Disputed Measures satisfied none of these characteristics.289
312.
The Disputed Measures were not suitable because attacking the PV sector was not the solution to the tariff deficit problem, which existed before Spain induced the Claimants to invest and which was caused by the Spanish Government’s failure to set electricity prices at a level that was sufficient to cover the costs of the system. Further, as there is no evidence that the Claimants were earning exorbitant revenues, the suitability of the Disputed Measures cannot be defended on the ground that they sought to rebalance the costs and incomes of the electricity system.290
313.
The Disputed Measures were not necessary; other more reasonable and less harmful measures were available to address the tariff deficit.291
314.
The Disputed Measures were not proportionate either as they have drastically reduced the Claimants’ cash flows, brought their project companies to the verge of insolvency, and wiped out the returns that the Claimants ought to receive.292

iv. The Disputed Measures were not transparent

315.
Article 10(1) of the ECT requires a State to "encourage and create [...] transparent conditions for Investors of other Contracting Parties to make Investments in its Area". The Claimants submit that Spain's conduct in dismantling the RD 661/2007 regime lacked transparency because (i) the 11-month Transitory Period left PV producers in the dark as to what would happen next; (ii) the criteria underlying the New Regime and future revisions were not explained; (iii) Spain could change some parameters of the standard installation without its methodology being known; (iv) neither is a methodology for reviewing the Special Payment established; and (v) similarly, there is no transparent methodology for determining whether a plant has achieved reasonable profitability.293
316.
In response to Spain's contention that it acted transparently, the Claimants put forward the following:

a. Spain failed to consult the affected parties prior to enacting the Disputed Measures. The most significant measures, i.e. RDL 14/2010 and RDL 9/2013, were introduced without any dialogue with the PV sector. Spain's argument that these RDLs were designed for emergencies and do not allow for consultation, is an excuse.294

b. Spain's reliance on reports issued by CNE in 2012 and 2013 to argue that the introduction and implementation of the New Regime was transparent is misplaced. Spain ignored the recommendations in CNE's 2012 report. Consequently, the public consultation that was undertaken for this report was "at best pointless and at worst a sham".295 As regards the 2013 Reports, these were issued after the New Regime was introduced by RDL 9/2013 and could not have influenced that regulation. In any event, the consultation process for these reports "had not guaranteed the effective participation of affected parties".296

c. Similarly, the Memorandum issued by the Ministry concerning the June 2014 Ministerial Order rejected the "619 submissions from companies, industrial associations, and Autonomous Communities" merely on the basis that the Order complied with RDL 9/2013 and Law 24/2013 (both of which had been implemented without consultation).297

317.
In sum, the Claimants assert that Spain’s conduct was plainly not in conformity with the transparency requirements under the ECT.298

v. The Disputed Measures have impaired the Claimants’ investments

318.
Article 10(1) of the ECT provides that Spain "shall [not] in any way impair by unreasonable or discriminatory measures th[e] management, maintenance, use, enjoyment or disposal" of Claimants’ investments. Thus, to establish a breach of this obligation, it suffices to show that the measures in question were either unreasonable or discriminatory. The standard of reasonableness, according to the Claimants, is that the State’s conduct must bear a reasonable relationship to some rational policy.299 In other words, as with the FET standard of reasonableness discussed above, Spain must show that its measures were: (a) taken in pursuance of a rational policy goal; and (b) carefully tailored to achieve that goal.300
319.
In light of that standard, the Claimants reiterate the grounds on which they assert that the Disputed Measures were unreasonable. In sum, they contend that the remediation of the tariff deficit, cannot be a policy goal that justifies interference with the Claimants’ investment. They submit that the tariff deficit was caused by Spain’s persistent failure to set consumer prices at a level that was high enough to cover the actual costs of the Electricity System. As a consequence, enacting measures that are harmful to the PV sector to finance the result of several years of regulatory malfeasance is arbitrary and unreasonable.301

vi. The Disputed Measures violated the constant protection and security obligation

320.
Finally, the Claimants argue that Spain breached the obligation to provide their investments constant protection and security. In particular, they claim as follows:

This obligation requires Spain to provide legal security to Claimants' investments. It is breached where a change in the legal framework makes it impossible for an investor to preserve and continue its rights associated with the investment. The obligation has been breached here as the Disputed Measures have caused Claimants to lose their right to the FIT.302 (internal footnote omitted)

h. Spain's defences are without merit

321.
The Claimants contend that Spain’s defences are ill-founded and contradicted by the evidence.

i. Spain's first defence: the RD 661/2007 regime was not guaranteed

322.
According to the Claimants, Spain’s key defence is that they had no objectively reasonable expectation regarding the RD 661/2007 regime because they should have known that the incentives granted to them were subject to an overarching "principle of reasonable profitability" (or "reasonable return") found in the 1997 Electricity Law.303
323.
For the Claimants, Spain’s reliance on that principle is misplaced. The 1997 Electricity Law did not define reasonable return. It merely outlined the factors for determining the specific remuneration that would provide investors with a reasonable return. Such reasonable return had to be implemented through regulation. In RD 661/2007, Spain implemented the reasonable return principle by providing for specific remuneration in the form of a long-term FIT.304 In other words, RD 661/2007 represented what Spain considered a reasonable return in compliance with the principles of the 1997 Electricity Law at the time of the Claimants’ investment.305
324.
At the same time, the Claimants do not deny that Spain had the power to adjust the RD 661/2007 economic regime as costs of investment came down. According to the Claimants, this makes economic sense. However, as provided in Article 44.3 of RD 661/2007, any adjustments in remuneration could not affect existing installations.306
325.
Finally, the Claimants argue that most countries with FITs use concepts similar to reasonable return in order to calculate FITs. However, reasonable return is a concept aimed at the regulator, not at investors; it is the basis upon which the regulator calculates the tariff. Thus, under RD 661/2007, the regulator determined what the return necessary to induce investment.307 This being so, an efficient investor with operating costs below those assumed by the regulator would earn a higher return than the one used to set the FIT. In the Claimants' view, this is perfectly admissible and even expected.308

ii. Spain's second defence: Spain did not make a specific commitment

326.
Spain's second defence is that it made no commitment sufficiently specific to prevent it from enacting the Disputed Measures and that, absent such specific commitments, no legitimate expectations can arise. According to the Claimants, it is incorrect that legitimate expectations can only arise out of a specific commitment given by the host State to the investor, much less that such a commitment must be embodied in a contract containing a stabilization clause. While specific assurances may reinforce an investor's legitimate expectations, they are not indispensable. Guarantees included in general laws can give rise to legitimate expectations as well.309
327.
For the Claimants, "[i]t is obvious that RD 661/2007 contained a number of express commitments on which Spain intended investors to rely".310 First, Article 22 confirmed that installations that registered within the tariff window locked in the right to the tariff; second, Article 36 provided a specific tariff for 25 years and beyond; and third, Article 17 confirmed the right to obtain the FIT upon obtaining a RAIPRE certificate. These commitments created expectations, which were crystallised when the Claimants obtained RAIPRE certificates confirming their entitlement to the RD 661/2007 FIT. Spain reinforced such expectations by guaranteeing that changes to these incentives would not apply retroactively (under Article 44.3, which is an "express stabilisation commitment" according to the Claimants311) and by repeatedly confirming its intention as to the application of RD 661/2007.312 Alternatively, assuming that a specific commitment by the host State is required to generate legitimate expectations, the Claimants observe that the provisions referred to above did constitute specific promises and representations.
328.
Refuting Spain's argument that Article 44.3 of RD 661/2007 is not a stablisation clause and that, in any event, it was not breached, the Claimants make the following points:

a. Article 44.3 is evidently a stabilisation clause as its terms were specific enough: it expressly stated that revisions to the FIT would not affect installations that had qualified before the review. Moreover, this commitment was made specifically to those installations that had obtained their RAIPRE certificates within the term prescribed.313

b. Spain's argument that Article 44.3 has not been breached because the changes introduced did not constitute a "tariff review" but the introduction of a new remuneration format is flawed. Spain cannot get around the plain language of Article 44.3 by claiming that its actions are outside the purview of Article 44.3. This is precisely the sort of abusive and bad faith State conduct against which the FET standard protects investors.314

c. Spain's further argument that Article 44.3 has not been breached because RDL 14/2010 and RDL 9/2013 did not change the numeric amount of the tariff but only introduced an hours cap and a modification of the system of remuneration, is equally flawed. Both measures had an effect comparable in magnitude to the reduction in the original FIT.315

iii. Spain's third defence: the Claimants' returns were capped at 7%

329.
At the outset, the Claimants submit that this defence "is perhaps the most extravagant of all Spain's defences since it comes in two contradictory forms": on the one hand Spain asserts that the reasonable return was capped at 7% and, on the other, it argues that the reasonable return was dynamic. According to the Claimants, neither position is supported by the evidence.316
330.
The first piece of evidence on which Spain relies to support the existence of a 7% cap is the Memoria Económica. The Claimants submit that the Memoria Económica was not a public document. They cite the testimony of one of Spain's experts, Mr. Greatrex, who testified that he saw the Memoria for the first time in 2012.317 Moreover, for them, the statement made by Spain's other expert, Mr. Olivas, at the hearing that the Memoria Económica was distributed to the RE associations was new and unsubstantiated.318 When the Claimants requested the Memoria as part of the regulatory dossier of RD 661/2007 during the document disclosure phase, Spain agreed to produce it without suggesting that it was publicly available (contrary to what it did in respect of other documents).319
331.
The Claimants add that the Memoria does not state that changes to RD 661/2007 will be made. It merely provides that the tariff set out in RD 661/2007 aims at providing PV investors with an after tax return of "approximately 7%", without suggesting that this operates as a cap.320 On the contrary, the word "approximately" makes clear that the Memoria recognized that investors could earn in excess of 7%.321
332.
The second piece of evidence on which Spain relies is the PER 2005-2010. The Claimants point out that the reference to 7% in the PER 2005-2010 relates to all RE technologies and not just the PV sector. Moreover, the PER also refers to returns of "around 7%" after tax, which again speak against a cap. Additionally, the Claimants point out that the PER was not consistent with the Memoria. While the reference to 7% in the PER relates to all RE technologies, the Memoria provides different figures (ranging from 5% to 11%) for different types of RE technologies. In other words, so argue the Claimants, there was no clear or consistent indication that reasonable profitability meant 7% only.322
333.
Moreover, Spain's reliance on the testimony of its expert MG&A, is of no assistance as MG&A admitted during the hearing that there was no cap on returns under RD 661/2007.323
334.
In addition, the Claimants note that the reference to 7% in the Memoria and the 7,398% return supposedly offered by the new regime relate to two qualitatively different concepts. RD 661/2007 provided the remuneration based on production and incentivized installations to produce as much electricity as possible, while the new regime supposedly provides a 7,398% return irrespective of the production.324
335.
The "dynamic return" theory, so say the Claimants, also lacks a basis. The Claimants acknowledge that the reasonable return would have to change over time as the cost of investments went down. However, the Claimants submit that "Spain has failed to provide any evidence that the cost of money on capital markets had changed between 2007 (when RD 661/2007 was passed) and 2013 (when the New Regime repealed RD 661/2007) thus necessitating a change under the 'dynamic' return theory".325 In any event, even if such a change was necessary, Spain was estopped from altering the rate of return for existing investments.326

iv. Spain's fourth defence: the Claimants were receiving "luxury profits"

336.
The Claimants submit that Spain has presented no evidence to prove that the Claimants were receiving "exorbitant remuneration" or "luxury profits". They contend that the absence of evidence demonstrating that the Claimants were earning excessive returns is fatal to Spain's case, as without such evidence the reasonable return defence has no foundation.327

v. Spain's fifth defence: the Claimants did insufficient due diligence

337.
The Claimants contend that they carried out sufficient due diligence, which considered the relevant jurisprudence of the Spanish Supreme Court and confirmed their right to receive the FIT.
338.
For the Claimants, their due diligence was thorough and included requests for advice from numerous reputable law firms.328 None of these firms suggested that Spain could make retroactive adjustments to RD 661/2007.329 If Spain's argument were correct, the Tribunal would have to find that all of the law firms in Spain acted negligently by failing to inform investors and banks that RD 661/2007 could change retroactively.330

vi. Spain’s sixth defence: Supreme Court jurisprudence supports Spain’s case

339.
The Claimants disputes Spain’s reliance on a number of Supreme Court judgments, which allegedly hold that Article 44.3 of RD 661/2007 cannot be interpreted as a stabilization commitment. These Supreme Court decisions relate to a different economic regime and a different period. Hence, they are irrelevant to determine whether the Claimants had a reasonable and legitimate expectation that no retroactive changes would be made.
340.
First, the Claimants submit that the vast majority of the judgments invoked by Spain were issued after the Claimants made their investment and can thus not be taken into account to assess the Claimants’ legitimate expectations.331 Only four of the judgments were in existence when the Claimants made their investments.332 However, the dicta contained in these judgments cannot be deemed to override the contrary statements by Spain in respect of RD 661/2007, especially since these judgments do not deal with RD 661/2007.333
341.
The Claimants further remark that no decisions pre-dating the Claimants’ investments discuss Article 40.3 of RD 436/2004.334 In particular, the Supreme Court judgments of 2005 to 2007 refer to installations that did not have the benefit of the tariffs specified in RD 436/2004 and were not subject to the "stability commitment" at Article 40.3.335
342.
Second, the three Supreme Court judgments of December 2009 invoked by Spain, which address challenges arising from the replacement of RD 436/2004 by RD 661/2007,336 could not have informed the Claimants’ expectations at the time of the investments. Indeed, so the Claimants argue, their investments were finalized (or were in the process of completion) before these judgments were rendered in December 2009.337 In any event, they do not help Spain’s case, because RD 661/2007 was a vast improvement over its predecessor RD 436/2004. Therefore, the change from one regime to the other could not have indicated that the Government would implement retroactive tariff cuts such as the Disputed Measures.338
343.
By contrast, the Claimants rely on a Supreme Court decision of 20 April 2016, in which the Supreme Court held that, once a PV plant was registered, its owners had legitimate expectations to receive the FIT for which they were registered.339 The Claimants observe that the plaintiff in that case was an investor who had attempted to register an installation in the RD 1578/2008 pre-assignment register. RDL 1/2012 then came into force on 28 January 2012, implementing a moratorium that suspended the registration of all new RE installations in the Special Regime. This suspension prevented the plaintiff from registering its installation in the pre-assignment register of RD 1578/2008 and from receiving the RD 1578/2008 FIT.340 The Supreme Court upheld the claim considering that "the regulatory change that Royal Decree-Law 1/2012 entailed was surprising and that it broke the principle of legal certainty by suspending the payment pre-allocation procedures", and that RD 1578/2008 had "created some solid expectations for the owners of the installations that they would obtain registration in that Registry and the corresponding payment for their energy in the terms provided".341 In the Claimants’ view, this decision shows that the Supreme Court fully recognizes their expectations.342

vii. Spain's seventh defence: the Disputed Measures were justified

344.
In the Claimants’ submission, Spain has offered various "errant and inconsistent justifications for the Disputed Measures", none of which are defensible.343 In particular, the Claimants object to Spain’s arguments that the measures were necessary (a) to address the tariff deficit; (b) to protect consumers; and (c) to address EU state aid guidelines.344

(a) Tariff Deficit

345.
For the Claimants, the main reason for the implementation of the Disputed Measures was Spain's desire to tackle the tariff deficit. A number of contemporaneous documents, such as a 2012 CNE Report345 and the preamble to the laws and regulations introducing the Disputed Measures indeed refer to the need to remedy the tariff deficit.346 In the Claimants' view, Spain is reluctant to admit that the tariff deficit motivated the Disputed Measures, because Spain itself caused the deficit and it would thus acknowledge that it breached the ECT.
346.
The Claimants argue that the tariff deficit, like the over-capacity in the PV sector,347 are issues of Spain's own making, which existed long before Spain enacted RD 661/2007. The tariff deficit was the product of Spain's failures to follow its own laws; it was not a policy goal that justified interference with the Claimants' legitimate expectations.348
347.
Initially, so say the Claimants, the tariff deficit emerged out of a series of miscalculations about the costs and fluctuations in supply and demand.349 Subsequently, RDL 6/2009 set limits on the growth of the tariff deficit each year and required the Ministry to fix the network access tolls at appropriate rates. However, this was not done because the Government chose to keep artificially low electricity prices for electoral reasons.350 Similarly, the tariff deficit grew because the Government gave a high number of electricity consumers, essentially all Spanish households, the benefit of the so-called TUR (tarifa de último recurso, tariff of last recourse), i.e. a price designed to shield consumers from dramatic increases in the market price of electricity.351
348.
Furthermore, the Claimants argue that Spain ignored all of the CNE’s reasonable proposals to address the tariff deficit.352 They refer in particular to a CNE Report of March 2012, which identified measures to effect savings in the electricity system, without cutting the FIT and without imposing excessive costs on the consumers.353
349.
Finally, it is the Claimants’ position that there is no evidence of causation between the tariff deficit and the cost of the Special Regime (i.e. the PV premiums), contrary to what Spain argues.354
350.
The Claimants conclude by noting that the Spanish Supreme Court has issued several judgments and two sets of interim measures holding that Spain’s failure to comply with the requirements of RDL 6/2009 was a clear violation of Spanish law.355

(b) Protection of consumers

351.
The Claimants further submit that Spain's argument regarding the protection of consumers appears to have been raised solely for the purposes of this arbitration, as the only stated purpose of the measures was to address the tariff deficit.356 Indeed, Spain's policies show the opposite to a concern to protect consumers. In effect, Spain increased the VAT on electricity to 21% (when it was as low as 4% or even nil for other products and services at all). It also levies special tax on producers, all of which raises the price of electricity for consumers.357

(c) State aid rules

352.
The Claimants submit that the EC Decision on State Aid issued on 10 November 2017358 has no bearing on the present dispute.
353.
First, the Claimants argue, contrary to Spain, that there is no evidence to support the proposition that the New Measures were required to comply with applicable EU State aid rules.359 In that regard, they note that the EU guidelines being invoked post-date the Disputed Measures;360 Further, State aid was never mentioned as a purpose of the Disputed Measures.361 In any event, the Claimants contend that EU law did not require Spain to withdraw the economic regime, particularly not with respect to plants that operate under that regime.
354.
Second, the Claimants submit that, contrary to Spain's contentions, the EU Decision could not affect the Claimants' legitimate expectations about the Original Regime, as it did not address that regime at all.362 The Claimants note Spain's (and the EC's) argument that a beneficiary of unlawful aid cannot entertain legitimate expectations regarding such aid. In response, the Claimants contend that the non-notification of RD 661/2007 does not undermine their legitimate expectations, for the following reasons:

a. As a preliminary point, the Claimants' legitimate expectations have to be adjudged under the ECT and not under EU law;363

b. In any event, RD 661/2007 did not constitute State aid under EU law as FIT schemes financed by the end consumer, such as those under RD 661/2007, are not regarded as State aid;364

c. Spain itself did not consider the RD 661/2007 FIT to be State aid. Otherwise, it would have notified the EC. Moreover, there is no contemporaneous evidence showing that RD 661/2007 was viewed as unlawful State aid. In other words, Spain had no expectation that the Original Regime was State aid, much less that it was unlawful;365

d. Further, like Spain, the EC did not deem the RD 661/2007 FIT to constitute State aid. The Claimants point out that the EC monitored Spain’s RE support schemes at all times and was therefore on notice of the provisions of RD 661/2007. However, although it had suo motu powers to examine unlawful aid, the EC made no suggestions that the RD 661/2007 FIT was State aid at all, let alone that it was unlawful or incompatible;366

e. In conclusion the Claimants contend that upholding Spain’s argument would permit Spain to benefit from its own wrongdoing, which cannot excuse Spain from liability under international law. Even assuming that the RD 661/2007 FIT did constitute State aid, it would still be compatible with EU law. This is because the Decision makes no finding on the RD 661/2007 FIT, when it could have done so, which shows that the EC "was content that the RD 661/2007 FIT was compatible State aid".367

355.
Third, the Claimants stress that a "finding of compatibility with EU law [does not] ipso facto also amount to a finding of compatibility with the ECT", as the relevant standards under the two treaties are different.368
356.
Finally, the Claimants deny Spain’s contention that compensation awarded by the Tribunal on the basis that Spain modified the Original Regime, would constitute State aid. They submit that the Commission’s statement to this effect at paragraph 165 of the EU Decision is not binding on the Tribunal.369

viii. Spain’s eighth defence: the Claimants have suffered no loss

357.
The Claimants find this defence "absurd".370 They have substantiated their losses in their evidence,371 which losses caused the insolvency of many projects.372 In any event, the Claimants add, the PO12 phase, "definitively confirms" that each of the Claimants suffered substantial losses.373 Moreover, the CNMC itself confirmed that the New Regime reduced the remuneration and return of RE installations.374 In addition, Spain claims that the Measures were intended to cut the tariff deficit and address the over-remuneration of PV plants. The fact that the tariff deficit showed a surplus in 2014 as a result of the New Regime demonstrates that the Measures have caused the Claimants significant losses.375

i. The Disputed Measures have been criticized and challenged

358.
The Claimants also argue that the Disputed Measures were the object of strong domestic and international criticism, not only by PV industry associations and the banking sector, but also by Spain’s own organs and the European Commission.376 In particular, three of Spain’s Autonomous Communities brought legal challenges to RDL 14/2010 on constitutional grounds, arguing that such RDL frustrated the rights of Special Regime generators and violated norms of legal certainty and predictability. The Constitutional Court dismissed those challenges without examining the merits as in the meantime the New Measures had overtaken RDL 14/2010.377
359.
Furthermore, Spain’s Senate recognized the harm caused by the hour caps in RDL 14/2010 and passed amendments to repeal such caps. These amendments were, however, rejected by the Congress of Deputies.378
360.
Moreover, the 2010 Measures were criticized by the European Commission, which, so the Claimants assert, took issue with some retroactive and opaque changes to the regulatory regime made by some Member States.379 The Commission also started infringement proceedings against Spain for failing to communicate the type of measures that it intended to adopt in order to implement the European Directives and achieve the 20-20-20 target.380 Finally, certain Autonomous Communities brought constitutional challenges against the New Measures.381

j. The Tribunal has a duty to decide consistently

361.
Finally, the Claimants contend that the Tribunal should uphold the Primary Claim in line with its duty to ensure the "the harmonious development of international investment law".382 They submit that over 30 ECT claims have been filed against Spain as a result of its repeal of RD 661/2007 via the Disputed Measures. At the time of their last substantive pleading (i.e. PO12 C-PHB2), seven tribunals had issued final awards, five of which had "found that Spain had violated the investors' legitimate expectations and ordered damages".383 According to the Claimants, the two awards that did not find a breach of the ECT (Charanne and Isolux) were outliers that arose from facts peculiar to those specific cases.
362.
In the circumstances, as no "compelling contrary grounds" exist in the present case, the Claimants assert that the Tribunal "must follow the consistent line of cases" on issues of liability as well as damages, "find Spain liable for violating the ECT", and "award damages on the basis that the RD 661/2007 FITs would have continued, but for Spain's wrongful acts".384 Saying so, the Claimants request the Tribunal to uphold the Primary Claim. In the alternative, the Claimants advance their so-called Alternative Claim, which is addressed below (infra, at V.B.1).

2. The Respondent’s position

363.
Spain submits that the Claimants have failed to show a breach of Article 10(1) of the ECT.

a. The Claimants could not legitimately expect the stabilisation of RD 661/2007

i. The content of the legal standard and the scope of the Tribunal's enquiry

364.