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 |
■ 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
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 |
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.
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
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
Solve IT
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
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
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)
Audio visual equipment services
IFS Audiovisual
Solve IT
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
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.
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
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)
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)
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)
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)).
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
[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
[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
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
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
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)).
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
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
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
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
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
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)
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
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