|2000 Renewable Energy Plan||Plan de Fomento de las Energías Renovables en España 2000-2010|
|2005 Supreme Court judgment||Judgment issued by the Spanish Supreme Court on 15 December 2005|
|2005-2010 Renewable Promotion Plan||Plan de Energías Renovables en España 20052010 approved by the Council of Ministers of Spain of 26 August 2005|
|2006 Supreme Court judgment||Judgment issued by the Spanish Supreme Court on 25 October 2006|
|2010 Regulatory Impact Report||Explanatory Report of draft Royal Decree 1614/2010|
|2016 Refinancing||Claimants refinancing of their loans in 2016|
|9REN v. Spain (Award)||Award rendered on 31 May 2019 in the case 9REN Holding S.à.r.l. v. Kingdom of Spain, ICSID Case No. ARB/15/15|
|Achmea||Judgment of Court of Justice of the European Union in the case Slowakische Republik (Slovak Republic) v. Achmea, BV, Case C 284/16, 6 March 2018|
|AEE||Spanish acronym for Spanish Wind Energy Association ("Asociación Empresarial Eólica")|
|AES Summit v. Hungary (Award)||Award rendered on 23 September 2010 in the case AES Summit Generation Limited and AES-Tisza Erömü Kft v. The Republic of Hungary, ICSID Case No. ARB/07/22|
|Antaris v. Czech Republic (Award)||Award rendered on 2 May 2018, in the case Antaris GMBH (Germany) and Dr. Michael Göde (Germany) v. The Czech Republic, PCA Case No. 2014-01|
|Antin v. Spain (Award)||Award rendered on 15 June 2018, in the case Antin Infrastructure Services Luxembourg S.à r.l. and Antin Energia Termosolar B.V. v Kingdom of Spain, ICSID Case No. ARB/13/31|
|APPA||Spanish acronym for Renewable Energies' Producers Association ("Asociación de Productores de Energías Renovables")|
|ASIF||Spanish acronym for the Association of Photovoltaic Producers ("Asociación de la Industria Fotovoltaica")|
|Babcock||Babcock & Brown GmbH|
|BayWa AH||BayWa r.e. Asset Holding GmbH|
|BayWa RE||BayWa r.e. Renewable Energy GmbH|
|BCG||Boston Consulting Group|
|Bemm Report||Due Diligence Report prepared by the Madrid law firm Bemm & Asociados concerning the projects in Spain, dated 1 September 2009|
|Blusun v. Italy (Award)||Award rendered on 27 December 2016, in the case Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italian Republic, ICSID Case ARB/14/3|
|Charanne v. Spain (Final Award)||Final Award rendered on 21 January 2016, in the case Charanne B.V. Construction Investments S.à r.l. v. Kingdom of Spain, SCC Arbitration, Arbitration No. 062/2012|
|CJEU||Court of Justice of the European Union|
|CL-#||Claimants' Legal Authority|
|Cl. Mem.||Claimants' Memorial on the Merits, dated 3 March 2016|
|Cl. Rej.||Claimants' Rejoinder on Jurisdiction, dated 24 May 2017|
|Cl. Reply||Claimants' Reply on the Merits and CounterMemorial on Jurisdiction, dated 6 February 2017|
|CNE||Spanish acronym for National Energy Commission ("Comisión Nacional de Energía")|
|CNE Report 3/2007||Report 3/2007 issued by the CNE regarding the Proposed Royal Decree [RD 661/2007] Regulating Electricity Generation in the Special Regime and Specific Technological Facilities Equivalent to the Ordinary Regime of 14 February 2007|
|CNMC||Spanish acronym for National Markets and Competition Commission ("Comisión Nacional de los Mercados y la Competencia")|
|Continental v. Argentina (Award)||Award rendered on 5 September 2008 in the case Continental Casualty Company v. Argentine Republic, ICSID Case No. ARB/03/9,|
|CPI||Consumer Price Index|
|CWS-ES||Claimants' Witness Statement by Mr. Errol Schulz, February 1, 2016|
|CWS-MT||Claimants' Witness Statement by Mr. Matthias Taft dated 24 February 2016|
|DCF||Discounted Cash Flow|
|EC's Decision on State Aid||Decision C(2017) 7384 of the European Commission dated 10 November 2017|
|EC's First Application||EC's Application for Leave to Intervene as a Non-Disputing Party dated 16 February 2016|
|EC's Second Application||EC's Second Application for Leave to Intervene as a Non-Disputing Party dated 17 January 2017|
|ECJ||European Court of Justice|
|Ecolgás||Elcogás S.A. v. Administración del Estado and Iberdrola S.A.  ECLI:EU:C:2014:2314, Case No. 275/13|
|Econ One First Report||Econ One Research Inc., Expert Report dated 15 June 2016|
|Econ One Second Report||Econ One Research Inc., Expert Report dated 7 April 2017|
|ECT||Energy Charter Treaty signed in December 1994 and in force since 16 April 1998|
|Eiser v. Spain (Award)||Award rendered on 4 May 2017 in the case Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36|
|Electrabel v. Hungary (Decision on Jurisdiction)||Decision on Jurisdiction, Applicable Law and Liability, issued on 30 November 2012, in the case Electrabel S.A. v. Republic of Hungary, ICSID Case No. ARB/07/19|
|Eureko v. Poland (Partial Award)||Partial Award rendered on 19 August 2005 in the case Eureko B.V. v. Republic of Poland, UNCITRAL, Partial Award|
|European Commission's State Aid Decision||Decision issued by the European Commission on the Spanish State Aid Framework for Renewable Resources dated 23 November 2017|
|FPS||Full Protection and Security|
|Greentech v. Spain (Final Award)||Award rendered on 14 November 2018, in the case (1) Foresight Luxembourg Solar 1 S.à r.l., (2) Foresight Luxembourg Solar 2 S.à r.l., (3) Greentech Energy Systems A/S, (4) GWM Renewable Energy I S.P.A., (5) GWM Renewable Energy II S.P.A. v. Kingdom of Spain, SCC Arbitration V (2015/150)|
|Hulley v. Russia (Final Award)||Final Award rendered on 18 July 2014, in the case Hulley Enterprises Limited (Cyprus) v. The Russian Federation, PCA Case No. AA 226|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|IDAE||Spanish acronym for Institute for Diversification and Saving of Energy ("Instituto para la Diversificación y ahorro de la Energía")|
|IRR||Internal Rate of Return|
|Isolux v. Spain (Award)||Award rendered on 17 July 2016, in the case Isolux Netherlands, BV v. Kingdom of Spain, SCC Case V2013/153|
|JSW Solar v. Czech Republic (Award)||Award rendered on 11 October 2017, in the case Mr. Jürgen Wirtgen, Mr. Stefan Wirtgen, Mrs. Gisela Wirtgen, JSW Solar (zwei) GmbH & Co. KG v. The Czech Republic, PCA Case No. 2014-03|
|KPMG First Damages Report||KPMG's Expert Report on Damages dated 3 March 2016|
|KPMG First Regulatory Report||KPMG's First Expert Witness Report dated 3 March 2016|
|KPMG Second Damages Report||KPMG's Complementary Expert Report on Damages dated 6 February 2017|
|KPMG Second Regulatory Report||KPMG's Second Expert Witness Report dated 6 February 2017|
|Law 15/2012||Law 15/2012 of 1 January 2013 introducing the TVPEE|
|Law 54/1997||Law 54/1997 on the Electricity Sector of 27 November 1997|
|LG&E v. Argentina (Decision on Liability)||Decision on Liability issued on 3 October 2006 in the case LG&E Energy Corp., LG&E Capital Corp. and LG&E International Inc. v. Argentine Republic, ICSID Case No. ARB/02/1|
|March 2007 Supreme Court judgment||Judgment issued by the Spanish Supreme Court on 20 March 2007, concerning an amendment to RD 436/2004 with regard to the methodology for updating premiums|
|Masdar v. Spain (Award)||Award rendered on 16 May 2018, in the case Masdar Solar & Wind Cooperatief UA v. Kingdom of Spain, ICSID Case No. ARB/14/1|
|May 2018 Hearing||Hearing held at the Peace Palace in The Hague from 22 to 23 May 2018|
|Ministry of Energy||Ministry of Industry, Energy and Tourism|
|Mohammad Al-Bahloul v. The Republic of Tajikistan (Award)||Partial Award on Jurisdiction and Liability rendered on 2 September 2009 in the case Mohammad Ammar Al-Bahloul v. The Republic of Tajikistan, SCC Case No V (064/2008)|
|Nations Energy v. Panama (Award)||Award rendered on 24 November 2010 om the case Nations Energy Inc v. Republic of Panama, ICSID Case No. ARB/06/19|
|NextEra v. Spain (Award)||Award rendered on 31 May 2019 in the case NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Kingdom of Spain, ICSID Case No. ARB/14/11|
|NextEra v. Spain (Decision on Jurisdiction)||Decision on Jurisdiction, Liability and Quantum Principles issued on 12 March 2019 in the case NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Kingdom of Spain, ICSID Case No. ARB/14/11|
|Noble Energy v. Ecuador (Decision on Jurisdiction)||Decision on Jurisdiction issued on 5 March 2008 in the case Noble Energy Inc. and Machala Power Cia. Ltda. v. Republic of Ecuador and Consejo Nacional de Electricidad, ICSID Case No. ARB/05/12|
|Noble Ventures v. Romania (Award)||Award rendered on 12 October 2005 in the case Noble Ventures, Inc. v. Romania, ICSID Case No. ARB/01/11|
|November 2017 Hearing||Hearing on Jurisdiction and the Merits held at the ICC hearing facilities in Paris from 6 to 10 November 2017|
|October 2007 Supreme Court judgment||Judgment issued by the Spanish Supreme Court on 9 October 2007|
|PDF Project Development||PDF Project Development Fund GmbH & Co KG|
|Plana de Jarreta||Plana de Jarreta Wind Farm ("Parque Eólico Plana de Jarreta")|
|PO2||Procedural Order No. 2 dated 23 May 2016|
|PO6||Procedural Order No. 6 dated 4 April 2017|
|PreussenElektra||Judgment of the European Court of Justice, PreussenElektra v. Schleswag, Case C-379/98, dated 13 March 2001|
|Project Companies||Parque Eólico La Carracha, S.L. and Parque Eólico Plana de Jarreta, S.L.|
|RAIPRE||Spanish acronym for the State Register of Production Facilities under the Special Regime ("Registro administrativo de instalaciones de producción en régimen especial")|
|RD 1565/2010||Royal Decree 1565/2010 of 23 November 2010|
|RD 1578/2008||Royal Decree 1578/2008 of 26 September 2008|
|RD 1614/2010||Royal Decree 1614/2010 of 7 December 2010|
|RD 2818/1998||Royal Decree 2818/1998 of 23 December 1998|
|RD 436/2004||Royal Decree 436/2004 of 12 March 2004|
|RD 661/2007||Royal Decree RD 661/2007 of 25 May 2007|
|RDL 1/2012||Royal Decree-Law 1/2012 of 27 January 2012|
|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 30 April 2009|
|RDL 7/2006||Royal Decree Law of 23 June 2006|
|RDL 9/2013||Royal Decree Law 9/2013 of 12 July 2013|
|REIO||Regional Economic Integration Organisations|
|Renerco||RENERCO Renewable Energy Concepts AG|
|Renewable Promotion Plans||2000 and 2005 Plans prepared by the Ministry of Energy and IDAE|
|Resp. C-Mem.||Respondent's Counter-Memorial on the Merits and Memorial on Jurisdiction, dated 15 June 2016|
|Resp. Rej.||Respondent's Rejoinder on the Merits and Reply on Jurisdiction, dated 7 April 2017|
|RfA||Request for Arbitration dated 16 April 2015|
|RL-#||Respondent's Legal Authority|
|Roland Berger's Report||Roland Berger's Report "Análisis de estándares de proyectos de producción de electricidad en régimen especial", dated 31 October 2014|
|RREEF v. Spain (Decision on Responsibility)||Decision on Responsibility and on the Principles of Quantum issued on 30 November 2018, in the case RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom Spain, ICSID Case No. ARB/13/30|
|RWS-JRA2||Respondent's Second Witness Statement by Mr. Juan Ramón Ayuso, dated 7 April 2017|
|Shell||Shell Overseas Holdings Limited|
|SPVs||Parque Eólico La Carracha, S.L. and Parque Eólico Plana de Jarreta, S.L.|
|Supplement for Reactive Energy||Bonus (or discount) introduced by RD 2818/1998 applied to revenue from the sale of energy for maintaining (or failing to maintain) certain power factors on an hourly basis, which are required for the proper functioning of the electricity system|
|TMR||Spanish acronym for the average or reference electricity tariff ("Tarifa eléctrica Media o de Referencia")|
|Tr-E Day [#] [Speaker(s)] [page:line]||English Transcript of the Hearing|
|TVPEE||A 7 % charge on the value of the electric power production, established by Act 15/2012|
|UP and C.D Holding v. Hungary (Award)||Award rendered on 9 October 2018, in the case UP and C.D Holding v. Hungary, ICSID Case No. ARB/13/35|
|Vattenfall AB v. Germany (Decision on Achmea)||Decision on the Achmea Issue issued on 31 August 2018, in the case Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12|
|VCLT||Vienna Convention on the Law of Treaties|
|Wind Farms or the Projects||Parque Eólico La Carracha and Parque Eólico Plana de Jarreta.|
|Yukos v. Russia (Final Award)||Final Award rendered on 18 July 2014, in the case Yukos Universal Limited (Isle of Man) v. The Russian Federation, UNCITRAL, PCA Case No. AA 227|
Following observations from both Parties, the Tribunal issued Procedural Order No. 2 ("PO2"), dated 23 May 2016. The Tribunal found the application premature as the Respondent had not raised any jurisdictional objections at that point, nor had it filed its Counter-Memorial. In the Tribunal's view:
Due to the absence so far of submissions by the Respondent on the very matter on which the Commission seeks to intervene, the Tribunal considers that it is not in a position to determine whether the Commission's intervention would assist the Tribunal in the terms of ICSID Arbitration Rule 37(2)(a). In the Tribunal's opinion, this criterion can only be sensibly assessed after the Respondent has had the opportunity to address the Tribunal's jurisdiction (i.e. after the Counter-Memorial, due on June 15, 2016).4
On 21 December 2016, the Tribunal issued Procedural Order No. 4 concerning the Respondent's 18 November application. It held that it is not for it to decide whether the Respondent should or should not submit a certain authority in support of its case; as a general rule, no prior leave of the Tribunal is required for submitting an authority with scheduled pleadings provided that the applicable rules of procedure are otherwise met. Nor is it for the Tribunal to enforce alleged confidentiality obligations involving a nonparty to the proceeding:
Without prejudice to the discretion of this Tribunal to decline ordering production of a confidential document or otherwise exclude from the file information that is to be kept confidential between the parties, it is generally for the person by whom such confidentiality is owed to seek any necessary consent to the release of protected information and for the person to whom such confidentiality is owed to ensure that such information is not improperly released and to seek appropriate remedies if need be.5
After receiving observations from the Parties, the Tribunal issued, on 4 April 2017, Procedural Order. No. 6, by which it rejected the EC's Second Application ("PO6"). The Tribunal was not convinced that a submission by the EC would add to the sum total of available information as to intra-EU jurisdiction under the ECT in the terms of Rule 37(2)(a), while it would most likely cause additional costs to the Parties. In the Tribunal's view:
[…] A non-disputing party permitted to file a submission under that Rule does not thereby become a party to the proceedings, and the Tribunal has no jurisdiction to award costs against it. No doubt permission to file might be made subject to a prior condition of the provision of security for costs, but the Tribunal understands that the Commission, faced with such a condition, has declined to file or to provide security.8
[…] The questions [on which the EC seeks to intervene] have been extensively discussed in a number of published awards, and have been well ventilated in the literature. The parties in the present case are fully capable of presenting the legal issues at stake.9
Judge James R. Crawford President
Dr. Horacio A. Grigera Naón Arbitrator
Ms. Loretta Malintoppi Arbitrator
ICSID Secretariat :
Mr. Francisco Grob Secretary of the Tribunal
For the Claimants :
Mr. Alberto Fortún Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Luis Pérez de Ayala Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Miguel Gómez Jene Cuatrecasas, Gonçalves Pereira, S.L.P.
Ms. Maribel Rodríguez Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Antonio Delgado Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. José Ángel Rueda Cuatrecasas, Gonçalves Pereira, S.L.P.
Ms. Mónica Lasquibar Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. José Ángel Sánchez Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Ignacio Frutos Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Kai Peters BayWa r.e. renewable energy GmbH
Mr. Tobias Steegmann BayWa r.e. Asset Holding GmbH
For the Respondent :
Ms. Amaia Rivas Kortazar State Attorney's Office
Mr. Antolín Fernández Antuña State Attorney's Office
Mr. Roberto Fernández Castilla State Attorney's Office
Ms. Patricia Froehlingsdorf Nicolás State Attorney's Office
Ms. María José Ruiz Sánchez State Attorney's Office
Ms. Carmen Roa Tortosa IDEA
On behalf of the Claimants :
Mr. Andreas Helber BayWa AG
Mr. Matthias Taft BayWa r.e. renewable energy GmbH
Mr. Errol Schulz NAB
Mr. José Alberto Ceña Lázaro Asociación Empresarial Eólica
Mr. Carlos Solé KPMG Asesores S.L.
Mr. Gregorio Mednik KPMG Asesores S.L.
Mr. Fernando Cuñado KPMG Asesores S.L.
Mr. Alberto Rabano KPMG Asesores S.L.
Mr. Alfonso Manzano KPMG Asesores S.L.
On behalf of the Respondent :
Mr. Juan Ramón Ayuso Ortíz
Mr. Daniel Lacalle
Mr. Daniel Flores Econ One
Mr. Andrés León Econ One
Mr. Juan Riveros Econ One
On 7 March 2018, the Tribunal wrote to the Parties as follows:
Since the hearing last year, a number of developments have occurred. On November 10, 2017, the European Commission issued its decision on State aid, which is now part of the record (RL-0117). In February 2018, the awards in JSW Solar vs. The Czech Republic (PCA Case No. 2014-03) and Novenergia II v. the Kingdom of Spain (SCC Case No. V 063/2015) became public. The Respondent has applied to introduce the first of these decisions and the Claimants the second. Moreover, [yesterday] the Court of Justice of the European Union (CJEU) issued its decision in the proceeding of Slowakische Republik (Slovak Republic) v. Achmea BV, Case C 284/16, which has been referred to in both parties' pleadings (e.g. Resp. Rej. Jur., paras 36-38; Cl. Rej. Jur., paras 38 and 51; exhibits CL-143 & CL-220).
Without prejudice to any final decision, the Tribunal considers appropriate to be informed of these developments, and have the Parties' views in relation thereto, while still in session. The Tribunal is therefore prepared to admit the aforementioned decisions not yet in the record.
Judge James R. Crawford President
Dr. Horacio A. Grigera Naón Arbitrator
Ms. Loretta Malintoppi Arbitrator
ICSID Secretariat :
Mr. Francisco Grob Secretary of the Tribunal
For the Claimants :
Mr. Alberto Fortún Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Iñigo Quintana Aguirre Cuatrecasas, Gonçalves Pereira, S.L.P.
Ms. Maribel Rodríguez Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. Miguel Gómez Jene Cuatrecasas, Gonçalves Pereira, S.L.P.
Mr. José Ángel Rueda Cuatrecasas, Gonçalves Pereira, S.L.P.
For the Respondent :
Ms. Amaia Rivas Kortazar State Attorney´s Office
Mr. Antolín Fernández Antuña State Attorney´s Office
Ms. Patricia Froehlingsdorf Nicolás State Attorney´s Office
Ms. María José Ruiz Sánchez State Attorney´s Office
The Claimants hold shares and participative loans in two companies incorporated in Spain, Parque Eólico La Carracha, S.L. and Parque Eólico Plana de Jarreta, S.L. (collectively the "SPVs"). These companies own and manage two wind farms with an installed capacity of about 49 MWs each, located in La Muela, province of Zaragoza, Spain: La Carracha and Plana de Jarreta (the "Wind Farms" or the "Projects").
As a result, Renerco acquired a 74% shareholding interest in each of the SPVs, which corresponds to the share capital investment currently owned by it in the Projects.28 The evolution of Renerco's investments is shown in the following table.
|Renerco / BayWa AH||2003-2008||2009||2010||2011||2012|
|Interest in the Projects||32.6%||32.6%||32.6%||72.6%||74%|
Source: Econ One Presentation, November 2017 Hearing, Slide 8
In 2013, Renerco changed its name to BayWa AH. The following table shows the interests of BayWa AH and BayWa RE, respectively, in the SPVs:
|Direct Interest in Renerco / BayWa AH||0%||87.8%||87.8%||87.8%||100%|
|Indirect Interest in the Projects||0%||28.7%||28.7%||63.4%||74%|
Source: Econ One Presentation, November 2017 Hearing, Slide 9
The Plan makes reference to a "[s]tandard project profitability: calculated on the basis of maintaining an Internal Rate of Return (IRR), measured in current pesetas and for each standard project, at a minimum of 7%, with own capital, before financing and after tax".60 Reference is also made to a projected annual increase of the electricity demand of around 2%, a lifetime of wind power facilities like the Claimants' Wind Farms of 20 years and an estimate of 2,400 of operating hours a year.61 The Plan explains the methodology used as follows:
Taking as a baseline the proposed energy targets, the financing requirements have been determined for each technology according to its profitability, defining a range of standard projects for the calculation model. These standard projects have been characterised by technical parameters relating to their size, equivalent operating hours, unit costs, periods of implementation, lifespan, operating and maintenance costs and sale prices per final unit of energy. Similarly, some financing assumptions have been applied, as well as a series of measures or financial aid.62
|28 July 2003 - Renerco is formed (BayWa not yet a shareholder)|
On 22 January 2004, the CNE issued a report on a draft that later became Royal Decree 436/2004. Among others, the report states:
Production facilities included under the special regime hold the right to receive a determined compensation for any energy sold, but logically only hold the acquired right to receive such compensation concerning the energy already sold, but not in regard to the energy that is projected to be sold in the future, which solely constitutes an expectation.63
In respect of project financing, the economic memorandum of RD 436/2004 prepared by the Ministry of Energy states that:
[…] in all cases, 100% of the financing is assumed to have been through equity capital. Leveraging and the percentage between equity capital and external funds are decisions specific to each project and each promoter. If made wisely, they should provide better ratios than those estimated here.64
In October 2005, a report by the Asociación de la Industria Fotovoltaica ("ASIF"), was published. Regarding the new regulation, the Report points out:
[…] [RD 436/2004] provides a reasonable return on investment for an average standard facility. This reasonable rate of return is considered [...] by the Plan for Renewable Energies, as […] an internal rate of return on the own equity invested of between 5 and 7%.83
On 15 December 2005, the Spanish Supreme Court issued a judgment concerning an appeal brought by an association of renewable energy producers against RD 436/2004 (the "2005 Supreme Court judgment"). Among other arguments, the association contended that RD 436/2004 did not provide for an updating mechanism in respect of one of the two pricing options (i.e. the Fixed Tariff), while it set out stricter technical requirements applicable to not only new installations but also existing installations. The Supreme Court dismissed the appeal on all counts. Drawing upon an earlier judgment from July 2005, the Court did not consider updates to be mandated by Law 54/1997, but rather a procedure devised by RD 2818/1998: "[g]iven the normative rank of this Royal Decree, nothing prevents another norm of the same hierarchical rank from modifying it."85 Regarding the additional requirements, the Supreme Court held:
There is no legal obstacle that exists to prevent the Government, in the exercise of its regulatory powers and of the broad entitlements it has in a strongly regulated issue, such as electricity, from modifying a specific system of remuneration, provided that it remains within the framework established in the [Law 54/1997]. And even though it might be necessary on the basis of the principle of legitimate expectations to include transitory provisions for the adaptation to the new system of existing companies, in no way this demand reaches the point of respecting the previous regime without the slightest change during a more or less prolonged period.86
The Preamble reads:
The regulation in force since 2003 setting out the methodology for the approval or modification of the average or reference electricity tariff identifies a maximum annual limit for any increase to such tariff and certain costs to be included in its calculation. The experience concerning its application, especially since 2005 [...], makes it necessary to authorize the Government to modify the costs to be considered, as well as to make the limits of tariff variation and the different tariff groups more flexible. And this with the urgency determined by the tariff revision scheduled for July 1, 2006, as the deadline.89
|30 June 2006, the Wind Projects are refinanced (BayWa not yet a shareholder)|
In response to this new regulation, the main associations of the renewables sector, led by APPA, the Asociación Empresarial Eólica (Spanish Wind Energy Association or "AEE") and ASIF, addressed a joint letter to the Minister of Energy dated 26 July 2006. The letter reads:
"[these] business associations can only state their rejection, their most profound discontent and their most serious concern about how and why the process is being carried out. […] RD-L 7/2006 substantially breaches the regulation of renewable energies established in the Energy Sector Act […]".90
In a note published shortly after, APPA criticized the new regulation:
Royal Decree-Act 7/2006 was approved last June, which contains a frontal assault on the national policy for the promotion of renewables: it eliminates the 80-90% bracket and the mechanisms of remuneration stability [of Royal Decree 436/2004], without also considering the established guarantees and time periods. The standard, which changes the game rules mid-game, introduces retroactivity and very seriously damages the legitimate expectations of investors. […] Royal Decree-Act 7/2006 has been published like in old times: at night and with aforethought: without prior consultations of the agents involved and, contrary to what has been repeatedly stated, the rules of the game have been changed in the middle of the match. Acquired rights have been modified retroactively.91
On 26 October 2006, the Minister of Energy appeared before the Senate. He stated in relation to renewable energy:
[…] It is important for all operators to receive this message and to be aware that our road map entails adapting to this framework as quickly as possible, which involves generating more market that we hope will be efficient, because it is not always so, and obviously, the tariffs are not going to pay for anyone's party. Tariffs by law can only take into account energy costs, and shareholder ventures are not energy costs.94
On 8 November 2006, the Secretary of Energy also appeared before the Parliament. He stated:
[...] The regulation of wind power in 2004 was rather unfortunate. In 2004, the current Royal Decree, 436, established premiums based on market price expectations. […] What has happened? That the price of market now is of 55 or of 60 and the wind power has a total remuneration of almost 100 Euros/MW-hour. This remuneration has an IRR of around 20 percent. I believe in renewable energies as much as anyone, but I also believe that we have to do things reasonably. Technologies, that is my opinion, whose investment is guaranteed through a premium […] they cannot have returns of 20 per cent; nobody has those. Some speculators do have them. We must be reasonable [...]95
The initial draft of what would become RD 661/2007 was released on 28 November 2006. It did not contain explicit language protecting existing plants from quadrennial revisions. Draft article 40.3 provided:
During 2010, in view of the results of the monitoring reports on the degree of compliance with the 2005-2010 Renewable Energies Plan (PER), and of the Energy Efficiency and Savings Strategy in Spain (E4), together with such new targets as may be included in the subsequent Renewable Energies Plan for the period 2011-2020, there will be a revision of the tariffs, premiums, supplements and lower and upper limits defined in this royal decree, application which shall start from January 2011, considering the costs associated with each of these technologies, the degree of participation of the Special Regime in covering the demand and its impact upon the technical and economic management of the system. Every four years, a new revision shall be performed.96
The final version added a paragraph stating:
The revisions of the regulated tariff and the upper and lower limits indicated in this section shall not affect facilities for which the commissioning certificate had been granted prior to January 1 of the second year following the year in which the revision had been performed.
On 19 January 2007, AEE published a note in which it criticized this draft:
[…] the proposal is puzzling as it even advocates amending [the predefined remuneration] for facilities already in operation and for investments in progress, while removing the right to receive the remuneration established, recognised by the current regulation, which would seriously affect the legal certainty and legitimate expectations that were generated based on the sustainability that this regulation guarantees.97
On 14 February 2007, the CNE issued a report on this draft ("CNE Report 3/2007"). It noted that economic incentives are an essential regulatory instrument to reach the renewable energy targets set by the Government. It also highlighted the importance of legal stability for investors and financers, and suggested that any future revisions to the incentive's regime should be predefined as in RD 436/2004 and must not affect existing facilities.98 It pointed out at the same time:
As stated by both scientific and jurisprudence doctrine [...] these principles [of legal certainty and legitimate expectation] do not prevent the dynamic innovation of the same, or new regulatory provisions from being applied in the future to situations that commenced prior to their entry into force, but which continue following the entry into force of the new rules.99
On 21 March 2007, the Ministry of Energy prepared a report on the proposed new regulation, which the Claimants contend is an internal document which was only released during document production.103 According to the Report:
The regulated tariff has been calculated to guarantee a return between 7% and 8%, depending on the technology. Premiums have been calculated according to the same criteria established in Royal Decree 436/2004, that is, the premium has been calculated as the difference between the regulated tariff and the average market price considered for these technologies. […]
With the remuneration provided, the return would be 7% for the regulated tariff option, and between 5% and 9% for the market sale option.104
The draft RD 661/2007 was criticized by APPA. In its comments (alegaciones) on the draft RD 661/2007 APPA contended that the new regulation "breach[ed] the principle[s] of legal certainty and legitimate expectations: changing the economic regime retroactively" in respect of installations which had entered into operation under RD 436/2004, in circumstances where, in their view, Article 40.3 only contemplated quadrennial revisions while ruling out any other adjustment to remunerations. It also complained about the Government's use of subsequent decrees to change remuneration's regimes through the back door, circumventing Article 40.3 of RD 436/2004. It further stated that, should the Government go ahead with the proposed regulation, it will…
no longer be credible: any rational investor, when planning facilities of this type, must bear in mind not only the costs and the foreseeable remuneration, but it also must consider the risk that such remuneration could be lowered [in the future].105
On 9 May 2007, AEE issued a press release criticizing the draft:
For AEE, today the important thing is to ensure the door is not left open to changes in remuneration parameters at the halfway point, as is the case with the current wording of the decree. The "stable" nature of the twenty-year period proposed by the new Royal Decree for the allocation of remuneration is fictional if the premium amendments are retroactive as is contradictorily regulated now.106
A transitory provision, which the Claimants contend (by reference to the witness statement of Mr. Ceña109) was agreed upon between AEE and the Government along with caps and floors, was included in RD 661/2007. This provision granted existing wind farms (i.e., those commissioned before 1 January 2008, like the Claimants' Wind Farms) the possibility to opt among three alternative remuneration schemes:
(i) Keep the Fixed Tariff of RD 436/2004 and continue to receive this form of remuneration during all the wind farm's remaining operational life;
(ii) Receive the feed-in remuneration values set in RD 661/2007;
(iii) Opt before 1 January 2009 for a transitional period of approximately 5 years (i.e., until 31 December 2012), during which wind farms would be remunerated under the previous Premium option available under RD 436/2004. Once this transitional period ended (i.e., from 1 January 2013), feed-in remuneration values and the option to choose between the Regulated Tariff and Premium options of RD 661/2007 would apply for existing wind farms, although without TMR revisions which, as the Respondent states, were eliminated permanently by RDL 7/2006.110
The same day, 25 May 2007, the Government issued a press release, which is one of the press releases relied on by Claimants to support its legitimate expectations and umbrella clause claims.119 The press release reads:
The Government assigns priority to profitability and stability in the new Royal Decree on renewable energy and cogeneration.
The purpose of this Royal Decree is to improve the remuneration of those less mature technologies, such as biomass and thermosolar, so as to be able to meet the objectives of the 2005-2010 Renewable Energies Plan […].
The new regulation guarantees a return of 7% for wind and hydraulic installations opting to cede their output to distributors, and between 5% and 9% if they participate in the electric energy generation market […].
[…] The government's commitment to these energy technologies has been the reason why in the new regulation stability in time is sought allowing business owners to plan in the medium and long term, as well as a sufficient and reasonable return which, like the stability, makes the investment and engagement in this activity attractive.
Any revisions of tariffs to be carried out in the future will not affect the facilities already in operation. This guarantee provides legal certainty for the producer, providing stability for the sector and promoting its development.120
In July 2007, Pöyry issued a report on the Spanish renewable energy market, focusing on wind energy. It noted that:
The Spanish Government has been historically concerned with the increases on the regulated tariff as they affect Spanish inflation and competitiveness. The average reference tariff (TMR – tarifa media de referencia) was one of the key components to a wind farm's remuneration, representing around 50% of the revenues for wind farms on the Market Option or almost all of its revenue on the Fixed Tariff Option under RD 436. Hence higher average tariffs were beneficial for wind generators.
However, owing to the tariff deficit, and windfall profits for wind farms during 2005 and 2006, the Spanish government has reviewed the legal framework for the Special Regime (co-gen and renewables).
Wind generators received (under RD 436) a payment linked to the TMR. However, this had an unfortunate side effect of a feedback (as outlined in Pöyry's wind reports from 2004). In essence, this meant higher system costs as a result of wind farms led to higher TMRs, which in turn raised remuneration to wind farms, leading to higher system costs and higher TMRs etc.
Given the likelihood of ongoing tariff deficits in the future the government decided to de-link remuneration from the TMR permanently. Since the introduction of RD 7/2006 on June 2006, wind generators have collected the 50% (40% as premium and 10% as incentive) of the January 2006 TMR, which is €76,588/MWh.
[…] As tends to be the case in Spain, the resulting legislation, RD 661/2007, is a negotiated compromise which is seen as positive by most of the industry, although key members of the major Spanish wind association (AEE) have not been too complimentary of the changes contained within it.123
Also in 2007, ASIF published an article in which it discussed RD 661/2007. After noting that the regulation seeks to provide a reasonable return to investors, the article states:
[...] but, what is a reasonable rate of return for an investment in renewable energy, specifically in photovoltaic energy? […] It is considered quite reasonable for an investment payback period to be around ten years, and an internal rate of return on a project (without financial leverage) around 7%, which is in line with other regulated investments. […]124
In the same year, AEE criticized RD 661/2007 in its industry yearbook:
From a regulatory perspective, the new R.D. 661/2007 strays from the path marked by the regulator and not only revises remuneration by reducing the premium, but also basically modifies the mechanisms involved in its allocation and repeals all aspects of the above-mentioned R.D. 436/2004, regulating on the very same issues just two years after its approval […]. On the other hand, the new decree removes the incentive to participate in the electricity market and annuls the non-retroactivity of this revision and of future revisions concerning premiums and remuneration supplements, thereby applying it universally to all installations regardless of when they are commissioned. The proposal also entails a high level of uncertainty with regard to the indices for the annual updating of all parameters. […] The measure clearly contradicts the allocation of these values over a 20-year period, rendering the concept of durability completely fictitious, insofar as subsequent changes to these values have also been planned that, as a result, would be applied retroactively.130
On 10 January 2008, AEE issued a press note assessing the impact of the RD 661/2007 in respect of wind facilities. It states:
the remuneration of wind energy fell in 2007 to the levels of 2003 and 2004. In the seven months during which the new RD 661/2007 has been in effect, the premium has been lower than that of RD 436/2004 by 5.07 E/MWh. All the wind farms have remained under RD 436/2004 with an average remuneration of €77.62/MWh throughout 2007, given that if they had changed to RD 661/2007, it would have been €74.11/MWh.135
On 26 September 2008, Royal Decree 1578/2008 ("RD 1578/2008") put in place a new remuneration regime applicable to PV installations that were not registered by the deadline provided by RD 661/2007. The new regime offered lower remunerations and created a pre-allocation remuneration register (Registro de Preasignacion de Retribución) which, among others, gave the Government the power to scale entry into operation of new installations. RDL 6/2009 (discussed below) did something similar with respect to other renewable energy technologies including wind power.136 The Preamble states:
The growth of installed capacity experienced by photovoltaic solar technology has been much greater than expected. [...] Just as insufficient compensation would make the investments nonviable, excessive compensation could have significant repercussions on the costs of the electric power system and create disincentives for investing in research and development [...]. Therefore, it is felt that it is necessary to rationalize compensation and, therefore, the royal decree that is approved should modify the economic regime downward, following the expected evolution of the technology, with a long-term perspective.137
On 16 October 2008, the Secretary of Energy appeared before the Senate and stated:
[…] The tariff deficit generated for the first time in the year 2000 is becoming increasingly large and, therefore, more unsustainable. Its elimination is one of the major challenges that we propose to resolve during the term. [...] We want to obtain investments that create wealth, not those that just absorb consumer resources. [...] we must be aware of the financial sustainability of the cost of energy […].138
On 29 October 2008, Mr. Fernando Martí Scharfhausen, Vice President of CNE, made a power point presentation entitled "The Legal and Regulatory Framework of Renewable Energies". Reference was made to:
b. Regulatory stability. Predictability and certainty of economic incentives over the lifetime of the facility (encourage investors and lower financial costs): non-retroactivity.139
During 2009, Spanish Government officials participated in events overseas where they highlighted Spain's regulatory framework for renewable energies. For instance, Mr. Sebastián stated at the International Renewable Energy Agency Conference in Bonn:
Spain has made a clear commitment to attain the maximum contribution of renewable energies to our energy system. As a result of this commitment, Spain is among the world leaders regarding installed capacity in technologies such as wind, photovoltaic, solar thermal, and biofuels. Renewable facilities amount to 34 GB out of a total 91 GB installed capacity, generating around 20% of our total output. Our wind sector is especially remarkable. Wind contribution to our power generation already exceeds 10%. […]
In our experience, one of the key factors to this success is the design of an adequate regulatory framework that grants the long-term stability required to undertake the necessary investments.140
Royal Decree Law 6/2009 of 30 April 2009 adopted new measures in the energy sector ("RDL 6/2009"). Its preamble reads:
The growing tariff deficit (that is, the difference between the amounts collected from the regulated tariffs established by the Administration and the rates paid by consumers for their regulated supply, and the access tariffs that are established by the deregulated market and the real costs associated to such tariffs) is provoking serious problems that, in the context of the current international financial crisis, is seriously affecting the system and not only putting the financial situation of the companies in the electric power sector at risk, but also the sustainability of the system itself. This imbalance is unsustainable [...]144
RDL 6/2009 was not welcomed by renewable energy producers. For example, the renewable energy association APPA commented that:
That is how Miguel Sebastián, who has never met with or considered the sector regarding the regulatory changes, confirmed his declared commitment to meeting the European objectives. Meanwhile, in Spain he had created another obstacle for Spanish renewables. Two days later, Royal Decree-Law 6/2009 was published in the BOE, passed by the Council of Ministers on 30 April, adopting diverse measures to reduce the tariff deficit and to increase the administrative obstacles for clean energy. The measures under the RDL […] will make the sector's development even more difficult, while, as in other sectors, it suffers from funding issues arising from the crisis.146
On 20 May 2009, APPA and Greenpeace submitted to the Ministry of Energy a proposal for a draft bill on a Renewable Energies Development Act.147 The draft proposed economic incentives to achieve "reasonable rates of return", which were in line with feedin regulations already in place. Calculations were based on estimated costs per type of facility and "an annual percentage rate equivalent to the previous year's average yield on 10-year Spanish government bonds, plus a spread of 300 basis points". Grandfathering provisions were included.
|3 November 2009 - BayWa RE purchases 87.8% of Renerco|
On 31 December 2009, MO ITC/3519/2009 was published. This order contained the updated feed-in values applicable to wind facilities pursuant to Article 44.1 of RD 661/2007. The Claimants state that these are the values that would have applied to their facilities as of 2013 (i.e. the end of the RD 661's transitory period), including the option to choose between the Regulated Tariff or the Premium, had Spain not abrogated the feedin regime in 2013:156
|First 20 years||7.7471||3.0988||8.9866||7.5405|
Source: MO ITC/3519/2009, Annex III, sub.b.2.1157
In February 2010, a study of the Supreme Court's case law was published on a renewable energy sector magazine. The study recounts that:
[..] retroactivity on premiums was indeed granted and explained by the Supreme Court [...]. As we have been saying, it is nothing new, and we will now look at why: Recently, the [...] ruling of 3 December 2009, [...] based on a ruling of 15 December 2005, stated literally that: 'the appellant commercial entities have no right to the remuneration regimen of the electricity sector remaining unchanged, [...] and 'does not guarantee the perpetuation of the existing situation'; which can be modified at the discretion of the institutions and public authorities to impose new regulations taking into account the needs of the general interest. [The appeal was overturned as] the return of the activity of generation from this technology was higher than that considered as sufficient and reasonable remuneration.158
In April 2010, APPA published another report on the Supreme Court's case law on renewables. The report states:
Supreme Court case-law is conclusive: it openly and emphatically justifies retroactivity of the rules that regulate or which could regulate the economic regime of the special regime, whilst respecting the principles established in Law [...]
[…] these 'reasonable rates of return' that the Supreme Court itself has fixed, based on IDAE indications, at Internal Rate of Return of 7 percent.
[it is worth] fleeing from any optimism [...] a certain modification to the premiums [...] beneath that 7 percent [...] could perfectly be validated by the court [...] maintaining that the 'reasonable nature' of the rates of return in the year 2006 or 2007 may have stood at the aforementioned 7 percent, but there is no reason why this figure should be matched at the time the modification is made.159
Also in April 2010, the Ministry of Energy released a set of files including one eight-page document titled "Elementos para un acuerdo sobre la política energética".160 Among other measures, this document proposed:
Adapting renewable energy remuneration mechanisms to advances in technology, ensuring facilities receive reasonable earnings in all cases and that complying with renewable share targets is compatible with sufficiency principles concerning costs and energy system efficiency. […] Deadline: Before July 1, 
On 2 July 2010, the Secretary of Energy sent a draft to Mr. José Donoso, AEE chairman, entitled "Agreement with the Wind Sector". It reported that the Ministry of Energy had "reached an agreement with the wind sector whereby it undertakes to promote the following actions":
1. Temporary and extraordinary 35% reduction of the reference premium currently in force for wind farms subjected to Royal Decree 661/2007, applicable from the entry into force of the new Royal Decree and until 12/31/2012, notwithstanding the annual updates of the reference premium in accordance with Royal Decree 661/2007. The rules established in First Transitional Provision remain unchanged until 12/31/2012 and thereafter shall be subject to the provisions of Royal Decree 661/2007, with annual updates.
2. Amendment of Art. 44.3 of Royal Decree 661/2007 stating that future revisions of the premiums should not affect existing facilities, in precisely the same manner as currently established for regulated tariffs and upper and lower limits, nor those facilities, upon approval of the review, that were already registered into the Pre-allocation Remuneration Register established by Royal DecreeLaw 6/2009, of April 30.
3. For those years in which the average production values of the industry as a whole exceed the provisions of PER2005-2010 (2,350 hrs), the hours of each plant exceeding 2,589 hrs (2,345 +10%) shall be remunerated at the pool price. […]162
The same day, 2 July 2010, a press release was issued whereby the Respondent announced the following:
July 2, 2010 The Ministry of Industry, Tourism and Commerce has closed agreements with wind and thermosolar energy industry representatives, the Spanish Wind Energy Association (AEE) and the Spanish Thermosolar Industry Association, Protermosolar, respectively, for the revision of the regulatory frameworks of electric power production from these technologies.
The agreements [with the CSP and wind sectors] include short-term measures that will reduce the impact of these technologies on the price of electricity, as well as long-term measures which will provide these technologies with stability and certainty for their future development.
The wind energy premiums established in RD 661/2007 will be reduced by 35% until January 1, 2013. […]
[...] the number of hours entitled to the remuneration above the market price is limited for wind and thermosolar plants, taking into account the different technologies and what was set out in the 20052010 Renewable Energies Plan for the calculation of the facilities' profitability.
This measure, which does not compromise the profitability of existing facilities will guarantee that renewable production above the one foreseen benefits consumers and does not compromise the economic sustainability of the system.
Also, this agreement strengthens the visibility and stability of the regulation of these technologies for the future, guaranteeing the current premiums and tariffs of RD 661/2007 for facilities in operation (and for those included in the pre-register) after 2013. […]
Industry will immediately begin the process which will allow the content of the agreement to be converted into a law.163
On 9 July 2010, AEE issued a bulletin reporting on the agreement reached with the Government.164 The bulletin noted:
The Spanish Association of Wind Power Businesses [...], in representation of the wind power sector, has finally reached an agreement with the Spanish Ministry of Industry, Commerce and Tourism (MICyT) under which there will be a temporary reduction in the remuneration for operating installations in exchange for greater regulatory stability.165
On 13 July 2010, a legal opinion about case law on renewables was published in a Spanish law review. The opinion stated:
As has been explained, we understand that a modification of the tariffs established in RD 1578/2008 (ACT 13234/2008) applicable to authorised facilities that are operational prior to such amendment, could be interpreted by the courts as "foreseeable" and in no case diminishing the principle of legitimate expectations.166
On 30 August 2010, AEE made formal observations (alegaciones) to this new draft. They stated:
The proposed modification of the remuneration regime of the reactive energy, if approved, would have a level of retroactivity such that, according to the Jurisprudence of the Constitutional Court, it may be considered of a "minimum degree" as it only has an impact on the economic effects that in a future would be produced although the basic situation or relation has arisen in accordance with the previous one.
It is true that the Supreme Court has declared, in relation to this type of retroactive modification, that it is not an "unchangeable right" that the economic regime remains unaltered [...] thus recognizing a relatively broad margin to the "ius variandi" of the Administration in a regulated sector involving general interests.[...] the jurisprudence has established limits [...] with regard to the retroactive modification of this remuneration framework, in particular "that the requirements of the Law on the Electrical Sector are observed with regard to the reasonable return of investments.
Lastly, the sector is sensitive to the economic situation in Spain and the exceptional fall in the demand for electricity, which may require measures of joint responsibility that, in the case of wind energy, must be limited in time and scope, in proportion to the specific needs of this technology and its contribution to the electrical system.170
On 26 October 2010, the Ministry of Energy issued a report in which it stated in reference to what would become Article 5.3 of the proposed regulation:
Article 4 of the project, to compensate the above restriction, also guarantees to the thermoelectric facilities covered by the Royal Decree 661/2007 and affected by it, that future quadrennial reviews rates, bonuses and upper and lower limits for this kind of technology, provided in Article 44.3 thereof, shall not apply to them.171
On 4 November 2010, after the Government decided to divide the new regulation into two decrees (i.e. RD 1614/2010 and RD 1565/2010), a new explanatory report (Memoria) of the draft Royal Decree (1614/2010) ("2010 Regulatory Impact Report") was issued. It states:
The installed power objectives set out under the Renewable Energy Plan 2005-2010 have been reached or exceeded for the solar thermal and wind power technologies. While this development can be considered a major achievement for all actors involved [...] it has also caused problems that need to be addressed before they pose an irreversible threat to the economic and technical sustainability of the system.
[…] This Royal Decree provides a series of austerity measures to contribute to transferring to society the gain from the proper evolution of these technologies in terms of competitiveness in relative costs, reducing the deficit of the power system, while safeguarding the legal security of investments and the principle of reasonable profitability.172
In relation to the limit introduced for operating hours for which premiums would be payable, the 2010 Regulatory Impact Report noted that:
The remuneration values of Royal Decree 661/2007 were calculated in order to obtain reasonable profitability rates and by taking the installations' average operating hours of these three technologies as an initial hypothesis. These operating hours can be found in the Renewable Energy Plan 2005-2010, for all technologies. Subsequently, during actual system operation, it was shown that the hours of operation of the installations, in some cases, exceed those initially expected, for various reasons, technological improvement, over-installation, etc. In any case, this means that, for them, the remuneration obtained exceeds that which is considered reasonable.173
Regarding future revisions, it stated that:
[…] as compensation for the reduction in remuneration for the given period, the wording of Article 44 of Royal Decree 661/2007 is amended, thereby guaranteeing the installations in operation, and those pre-allocated, that the value of the regulated and maximum tariffs, as well as the value of the bonus [premium], will stay the same over time.174
On 3 December 2010, the Government announced the approval of RD 1614/2010 with the following press release:
The Council of Ministers has approved a Royal Decree that regulates remuneration of electricity production by the wind and concentrated solar power technologies.
The new regulations, which were agreed with both sectors last July, have the main objectives of obtaining savings to benefit consumers and to make the objectives of promotion of renewable energies compatible with those of limiting electricity production costs to guarantee the sustainability of the electricity system.
The regulation also involves reinforcement of the visibility and stability of the regulation of these technologies in the future, and guarantees the present premiums and tariffs of Royal Decree 661/2007 as of 2013 for facilities in operation and for those included on the pre-register.
The premiums are reduced by 35 per cent for wind technology installations adhered to said Royal Decree of 2007 and those with a power exceeding 50 MW linked to those of the special regime, for the period between the date of this Royal Decree coming into force and December 31, 2012.
From January 1, 2013, these installations shall recover the premium values, as the premiums set in the Ministerial Order of 2009 that reviews the tariffs and premiums of the special regime installations, shall be applicable.176
A few days later, on 23 December 2010, a new access toll was introduced by Royal Decree Law 14/2010 on urgent measures for the correction of the tariff deficit in the electricity sector ("RDL 14/2010"). All electricity producers, both under the Ordinary and Special Regimes, were required to pay a toll to use the transportation and distribution grids. RDL 14/2010 also limited the annual operating hours amenable to premium for which PV installations could receive feed-in-tariffs. The Preamble contained the following recitals:
The impact of the global crisis, which traverses the Spanish economy, has led to a significant decline in the demand for electric energy […] Thus, a set of provisions is established, so that all industry agents contribute, in a further and combined effort, to the reduction of the deficit of the electricity system. Special attention and care has been taken not to affect the economic-financial balance of companies within the sector […] to ensure that […] power generation companies under the special regime receive adequate and reasonable compensation. […]
[…] it seems reasonable that producers under the special regime also make a contribution to mitigate the extra costs of the system; this contribution should be proportional to the characteristics of each technology, […] and the existing margin in remuneration, while guaranteeing in any case a reasonable profitability. This method has been used with the same purpose during the approval in recent months by the Government of regulatory measures aimed at electricity producers using wind turbine, thermosolar and cogeneration technologies.183
After the Council of Ministers' meeting at which RDL 14/2010 was approved, the Government issued the following press release:
The Council of Ministers has adopted a Royal Decree Law containing a number of measures to reduce the regulated costs of the electric power system; the primary goal of this Royal Decree Law is to ensure the system's economic sustainability and help eliminate the so-called tariff deficit according to the schedule established in 2009.
The electric power sector is going through an exceptional situation caused by a sudden drop in electricity demand. [...]
The direct consequence of this situation has been a loss of revenue for the whole system, as well as an increase in total regulated costs, due to the effects of the fall in demand.
Since 2009, the Government has adopted a series of measures to rationalize regulated costs and reduce the tariff deficit. […]
In 2010, the Government has continued to work on cost reduction and has adopted a number of technical measures to improve quality:
-Agreement with the wind sector, which temporarily reduces their premiums by 35%, limits the number of hours eligible for premiums, [...] eliminates the option to pay market price plus premium (more advantageous than the regulated tariff option) for all plants registered in the pre-registry for one year; delays the entry into operation of plants registered in the preregistry; and limits the number of hours with the right to receive premiums based on the different technologies in place.184
On 26 January 2011, the Minister of Energy, Miguel Sebastián Gascón, appeared before the Lower House of the Parliament. He stated:
[…] since 2009, the Government has been working to adopt a set of measures whose common denominator is the streamlining of regulated costs and the reduction of the tariff deficit […]185
These actions in 2009, [...] have continued to be used in 2010, first, after reaching an agreement with the wind farm sector, reducing their premiums temporarily by 35 percent and permanently limiting the number of hours they are entitled to premiums. […]186
All these measures have come about from dialogue, both with the sectors affected as well as with the main political forces. But these measures of 2009 and 2010 have not been enough. The imbalances have been accentuated as a consequence of the appearance of a series of adverse circumstances, in some cases exceptional, of which I should like to highlight two. Firstly, the above forecast growth of some of the regulatory costs during 2010, in particular the premiums of the special regime, and secondly, the evolution of electricity demand, which in 2009 fell 4.7%. This is the first fall in electricity demand after 25 years of sustained increases of around 4% per year. These decreases in electricity demand reduce the income of the system and entail fixed costs that have to be paid by fewer users of electricity, which raises the cost per user. These two circumstances have increased the tariff deficit and have meant that the measures adopted thus far to guarantee the progressive reduction of the tariff deficit in a balanced way among all sector agents proved to be inefficient. Consequently, the need to urgently approve new measures.187
In March 2011, the consulting firm Pöyry published a report on the "Current and Future Trends in the Spanish Solar Industry". The report states:
[…] the zero deficit target is unlikely to be met by the end of 2012 […]. If the zero tariff deficit target by end of 2012 is postponed, it will open up the opportunity to more deficit generation. Considering the Government behaviour, it is likely that future changes might be implemented if considered needed. […] We feel that the Government is in a position to continue with the same energy policy, if considered a requirement, including implementation of further reductions in remuneration to renewables and non – renewable technologies.189
In June 2011, APPA lodged an appeal against RD 1565/2010 in which it stated:
A number of judgments by that High Court [i.e. Supreme Court] have rested on the argument that changing the special remuneration regime for electricity generation to reflect changing circumstances over time is in the hands of the legislator, subject solely to the requirement that such changes respect the provisions of section 30.4 of the Electricity Sector Act, so that the modifications do not affect "reasonable rates of return with regard to the cost of money in capital markets" as guaranteed in the aforementioned Act. These Supreme Court judgments are those handed down on 25 October 2006; 20 March 2007; 3 December 2009; 9 December 2009 (Tarragona Power, S.L.) and another of the same date.190
|8 September 2011 - Renerco [under BayWa's control] buys shares from Shell and brings its own participation in the SPVs from 32.6% up to 73%. The purchase price was not disclosed to the Tribunal.|
On 27 January 2012, the new Spanish Government passed Royal Decree-Law 1/2012 ("RDL 1/2012").191 RDL 1/2012 suppressed the feed-in remuneration regime of RD 661/2007 for new Special Regime facilities. Facilities which, at the time of the entry into force of RDL 1/2012, had been finally registered in the RAIPRE – such as the Claimants' Wind Farms – were excluded from its scope of application. The preamble summarises the efforts made by RDL 6/2009 and RDL 14/2010 to address the tariff deficit. It then states:
[…] the measures adopted so far have not been sufficient, and the final purpose of eliminating the tariff deficit as from 2013 is still in jeopardy.
In light of the above, it was considered appropriate to withdraw the economic incentives for certain special regime facilities and for certain ordinary regime facilities using similar technologies, as well as to suspend the remuneration pre-allocation procedures established for them, in order to address the problem of the electricity sector high tariff deficit in a more favourable environment. By adopting this measure [RDL 1/2012], the Government has chosen to limit its scope to special regime facilities not yet registered in the Remuneration Pre-Allocation Registry, except where such condition is due to the Administration's failure to comply with the relevant time limit for making a decision. Along these lines, it has been decided to limit the scope of this measure in order to prevent it from affecting investments already made with regard to ordinary regime facilities, not subject to the pre-allocation scheme.
This Royal Decree-Law maintains the remuneration regime established in the legal system for facilities already in operation and for those already registered on the Remuneration Pre-Allocation Registry.192
On the same day the Government issued a press release, stating that further measures needed to be taken to correct the tariff deficit, reaffirming the need for renewable energy support, and noting that…
The regulation is not retroactive, i.e., it will not affect facilities already in operation, premiums already authorised or facilities already registered in the pre-allocation registries.193
On the same day RDL 1/2012 was approved, a press conference was held. The new Minister of Energy, Mr. José Manuel Soria López, affirmed that the new regulation would not affect vested rights:
[…] this Royal Decree-Law does not in any way affect any vested rights, not only of the holders of renewable energy plants already in operation, but also of the companies which have been granted a preallocation, regardless whether they have started to operate the plant or not. By this, I mean that this provision does not foresee any kind of retroactivity; we only consider it from now onwards.194
|12 March 2012: Renerco gets to the current 74% of shares in the SPVs|
In December 2013, Respondent adopted Law 24/2013, which superseded Law 54/1997. The purpose of this Law was to implement the new renewable energy framework envisaged by RDL 9/2013. It provided that remuneration under the new renewables support scheme should be "compatible with the economic sustainability of the electrical [sic] system" and would:
not exceed the minimum level required to cover costs which allow production installations from renewable energy sources [...] to compete on an equal footing with the other technologies on the market and which allows a reasonable return to be earned on the installation type in each applicable case.206
IT-00652 facilities are considered to have covered their estimated CAPEX (and OPEX) and to have obtained a rate of return higher than 7,398% prior to the end of the 20-year regulatory life.210 To make this determination, payments received under the Special Regime are computed. Thus, as the table below shows, these facilities do not receive an "investment incentive" under MO IET/1045/2014. Nor do they receive an "operating incentive", because their estimated OPEX is lower than expected market revenues.211
|Código de Identificación||Vida Útil Regulatoria (años)||Retribución a la Inversión Rinv 2013 (*) (€/MW)||Retribución a la Operación Ro 2013 (€/MWh)||Horas de funcionamiento máximo para la percepción de Ro 2013 (h)||Nº Horas equivalentes de funcionamiento mínimo Nh 2013 (**) (h)||Umbral de funcionamiento Uf 2013 (**) (h)|
Source: MO IET/1045/2014, p. 46531, R-0115 (SPA Original), C-0216
For instance, the Constitutional Court held in various decisions that the Disputed Measures did not breach the Spanish principle of legislative expectations or the prohibition against retroactivity. The Court reiterated its previous jurisprudence on the distinction between the proscribed and permissible retroactivity of a norm. It considered that RDL 9/2013 was not impermissibly retroactive as it "does not affect economic rights already consolidated and definitively incorporated into the assets of the recipient, or expired or consummated favourable legal situations."214 It also stressed that the changes were not unforeseen if one considers the growing tariff deficit, the economic crises and the changes already introduced. For the Court:
[...] the disputed measures certainly involve a change from the previous system, a decision that the legislature adopted as urgent in view of the situation in which the electricity system found itself. The change that has taken place cannot be described as unexpected, since the changing circumstances affecting that sector of the economy, made it necessary to make adjustments to this regulatory framework, as a result of the difficult circumstances of the sector as a whole and the need to guarantee the required economic balance and proper management of the system. There are, therefore, no grounds for arguing that changing the compensation system under review was unforeseeable for a 'prudent and diligent economic operator', based on the economic circumstances and the insufficient measures taken to reduce persistent and continuously rising deficits in the electricity system not sufficiently tackled with previous provisions.215
For its part, the Supreme Court found in one of the first judgments concerning an appeal against RD 413/2014 and MO IET/1045/2014, handed down by majority on 1 June 2016 and often referred to in subsequent decisions, as follows:
[…] this Court has insisted when faced with the succession of regulatory changes, that it was simply not possible to recognise an 'unchangeable entitlement' pro futuro for titleholders of facilities for production of electricity subject to the special system, thereby guaranteeing the unchanging nature of the remuneration framework passed into law by the regulatory legislator. The proviso in this regard was that prescriptive entitlements of the Electricity Sector Act should be adhered to in relation to reasonable profitability of investments. [...] the jurisprudence of this Court has been consistent over the years.216
In another majority decision issued by the Supreme Court on 12 July 2016, with regard to a challenge brought by AEE (the wind energy association), the Court held:
[…] of course there does not exist, or at least it is not invoked in the claim, any kind of commitment or external sign, directed by the Administrative authority to the appellants, in relation to the immutability of the regulatory framework in place at the time when the renewable energy production began.
Nor do we believe that the system in place at that time could alone be deemed to be a conclusive enough external sign to generate the legitimate expectation in the appellant; i.e. the rational and well-founded belief that the electrical power remuneration regime that it produced could not be altered in the future, as no provision of the RD 661/2007, by which its facilities were protected, guaranteed that the regulated tariff would not be subject to change.
In this regard, the jurisprudence of this Court has been constant over the years on pointing out, in the interpretation and application of the authorising rules of the legal and economic system applicable to electricity production using renewable energy sources, which guarantee the right to the reasonable rate of return on investments made by the owners of these facilities, but do not recognise their unalterable right to maintain the remuneration framework approved by the holder of regulatory power unaltered [...]217
A relevant fact during the years of Claimants' investments was the increasing tariff deficit, which was publicly funded. This was exacerbated by the world financial downturn of 2008, although it was not caused by it. By 2013, the accumulated deficit was almost EUR 30 billion, as shown in the following tables published by the International Energy Agency based on figures from the Ministry of Energy.221
In March 2001, the CJEU found in the case PreussenElektra v. Schleswag that the obligation imposed by German Law on regional electricity distribution companies to purchase electricity from renewable energy sources at fixed minimum prices did not constitute state aid:
In this case, the obligation imposed on private electricity supply undertakings to purchase electricity produced from renewable energy sources at fixed minimum prices does not involve any direct or indirect transfer of State resources to undertakings which produce that type of electricity.
Therefore, the allocation of the financial burden arising from that obligation for those private electricity supply undertakings as between them and other private undertakings cannot constitute a direct or indirect transfer of State resources either.
In those circumstances, the fact that the purchase obligation is imposed by statute and confers an undeniable advantage on certain undertakings is not capable of conferring upon it the character of State aid within the meaning of Article 92(1) of the Treaty.226
In April 2009, the EU issued Directive 2009/28/EC, which repealed Directive 2001/77/EC and increased the EU's community-wide target for total energy from renewable sources from 12% by 2010 to 20% by 2020.229 Member States were directed to follow the Guidelines on state aid for environmental protection and energy, approved the year before.230 These Guidelines provided that "the aid amount must be limited to the minimum needed to achieve the environmental protection sought."231 To do so:
Member States may grant operating aid to compensate for the difference between the cost of producing energy from renewable sources, including depreciation of extra investments for environmental protection, and the market price of the form of energy concerned. Operating aid may then be granted until the plant has been fully depreciated according to normal accounting rules. Any further energy produced by the plant will not qualify for any assistance. However, the aid may also cover a normal return on capital.232
The EC added:
As a general comment, the Commission recalls that there is ʽno right to State Aidʼ. A Member State may always decide not to grant an aid, or to put to an end to an aid scheme [...]237
In the very specific situation of the present case, where a Member State grants State aid to investors, without respecting the notification and stand-still obligation of Article 108(3) TFEU, legitimate expectations with regard to those State aid payments are excluded. That is because according to the case-law of the Court of Justice, a recipient of State aid cannot, in principle, have legitimate expectations in the lawfulness of aid that has not been notified to the Commission.238
[…] In an intra-EU situation, Union law is part of the applicable law, as it constitutes international law applicable between the parties to the dispute. As a result, based on the principle of interpretation in conformity, the principle of fair and equitable treatment cannot have a broader scope than the Union law notions of legal certainty and legitimate expectations in the context of a State aid scheme. [...] This has been expressly recognised by Arbitration Tribunals.239
[...] If they award compensation, such as in Eiser v Spain, or were to do so in the future, this compensation would be notifiable State aid pursuant to Article 108(3) TFEU and be subject to the standstill obligation.240
On 6 March 2018, the CJEU issued its Achmea decision. The CJEU concluded that the arbitration clause in Article 8 of the Netherlands-Slovakia BIT is incompatible with Articles 267 and 344 TFEU:
[…] Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.241
The Court held that it was incompatible, on the grounds that:
(1) In deciding a claim under the BIT, the tribunal could be required to apply EU law "as forming part of the law in force in every Member State and as deriving from an international agreement between the Member States".242
(2) The tribunal was not "situated within the judicial system of the EU" …in that its decisions are subject to mechanisms capable of ensuring the "full effectiveness of EU law".243
(3) "[A]part from the fact that the disputes falling within the jurisdiction of the arbitral tribunal referred to in Article 8 of the BIT may relate to the interpretation both of that agreement and of EU law, the possibility of submitting those disputes to a body which is not part of the judicial system of the EU is provided for by an agreement which was concluded not by the EU but by Member States". Thus Article 8 of the BIT "has an adverse effect on the autonomy of EU law".244
(4) In the circumstances, "Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the BIT, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept".245
The Claimants' request for relief as stated in their Memorial on the Merits is as follows:
(i) DECLARING that the Respondent's actions and omissions with respect to the Claimants' Investment in the Wind subsectors in Spain amount to breaches of the Respondent's obligations under Part III of the Energy Charter Treaty, as well under the applicable rules and principles of international law;
(ii) ORDERING the Respondent to pay to the Claimants compensation in the amount of EUR 61,931,524; compensation which may be increased;
(iii) ORDERING the Respondent to pay the entire costs of the arbitration and all legal costs incurred by the Claimants;
(iv) ORDERING the Respondent to pay to the Claimants pre-and post-award interest accrued on all amounts claimed, compounded monthly, until full payment thereof; and,
(v) ORDERING any such further relief as the Arbitral Tribunal may deem appropriate.
Claimants' request for relief as stated in the Claimants' Reply on the Merits and Counter Memorial on Jurisdiction is as follows:
(i) DECLARING that the Arbitral Tribunal has jurisdiction to hear all claims submitted by the Claimants under the Energy Charter Treaty and, consequently, rejecting each of the preliminary objections that the Respondent raised against the jurisdiction of the Arbitral Tribunal in its Memorial on Jurisdictional Objections of June 15, 2016;
(ii) DECLARING that the Respondent's actions and omissions with respect to the Claimants' Investment in the Wind subsector in Spain amount to breaches of the Respondent's obligations under Part III of the Energy Charter Treaty, as well as under the applicable rules and principles of international law;
(iii) ORDERING the Respondent to pay to the Claimants compensation in the amount of EUR 67,347,516 (amount that may be increased);
(iv) ORDERING the Respondent to pay the entire costs of the arbitration and all legal costs incurred by the Claimants;
(v) ORDERING the Respondent to pay to the Claimants pre-and post-award interest accrued on all amounts claimed, compounded, until full payment thereof, at the rates specified by the Claimants;
(vi) DECLARING that the Arbitral Tribunal's Award is made net of all taxes, and that the Respondent may not impose any tax on the Claimants arising from the Arbitral Tribunal's Award;
(vii) ORDERING the Respondent to indemnify the Claimants for the amount of any additional tax liability in Germany and/or elsewhere, in relation to the compensation awarded in the Arbitral Tribunal's Award;
(viii) ORDERING any such further relief as the Arbitral Tribunal may deem appropriate.
The Claimants' request for relief as stated in the Claimants' Rejoinder on Jurisdiction is as follows:
(i) DECLARING that the Arbitral Tribunal has jurisdiction to hear all claims submitted by the Claimants under the Energy Charter Treaty and, consequently, REJECTING each of the preliminary objections that the Respondent raised against the jurisdiction of the Arbitral Tribunal in its Counter-Memorial on the Merits and Memorial of Preliminary Objections of June 15, 2016 and kept in its Reply on Preliminary Objections of April 7, 2017;
(ii) DECLARING that the Respondent's actions and omissions with respect to the Claimants' Investment in the Wind subsector in Spain amount to breaches of the Respondent's obligations under Part III of the Energy Charter Treaty, as well as under the applicable rules and principles of international law and, consequently, ORDERING the Respondent to pay compensation in the terms set out in the Claimants' Reply on the Merits of February 6, 2017 (points (iii) to (viii) of the Reply's Petitum);
(iii) ORDERING the Respondent to pay the entire costs of the arbitration and all legal costs incurred by the Claimants, in particular the legal costs incurred by the Claimants to address (i) the preliminary objections raised by the Respondent in its Memorial of June 15, 2016 and (ii) the requests to submit an amicus curiae brief by the European Commission on February 16, 2016 and January 17, 2017.
(iv) ORDERING the Respondent to pay to the Claimants pre-and post-award interest accrued on all amounts claimed, compounded, until full payment thereof, at the rates specified by the Claimants; and,
(v) ORDERING any such further relief as the Arbitral Tribunal may deem appropriate.
The Respondent requests the Tribunal in its Counter-Memorial on the Merits and Memorial on the Jurisdiction (reiterated in its Rejoinder on the Merits and Reply on Jurisdiction) to:
a) Declar[e] lack of jurisdiction for hearing the Claimants' claims or, if applicable, their inadmissibility, pursuant to that laid down in the Memorials of Jurisdictional Objections and Reply to the Jurisdictional Objections;
b) Secondarily in the event that the Arbitration Tribunal were to decide that it has jurisdiction to hear the present dispute, that it should reject all the claims of the Claimants on the merits, since the Kingdom of Spain has not breached in any way, the ECT, in accordance with what is set forth in sections II and III of the present Writ;
c) Secondarily, dismiss all of the Claimants' compensatory claims, as the Claimants have no right to compensation, pursuant to that stated in section IV herein; and
d) It condemns the Claimants to pay all costs and expenses derived from this arbitration, including ICSID administrative expenses, arbitrators' fees, and the arbitrators' fees and the fees of the legal representatives of the Kingdom of Spain, their experts and advisors, as well as any other cost or expense that has been incurred, all of this including a reasonable rate of interest from the date on which these costs are incurred and the date of their actual payment.
Before Achmea, the intra-EU objection had been repeatedly raised before investment tribunals, both in the context of the ECT and of intra-EU BITs, and repeatedly rejected.270 It was equally rejected, for detailed reasons given, by Advocate-General Wathelet in Achmea.271 It was however accepted by the CJEU in that case, leading this Tribunal to order further written and oral briefing as described in paragraphs 49, 50, 51, 55, 57, and 58 above.
In agreement with all other tribunals which have faced this issue, the Tribunal holds that the TVPEE is a taxation measure excluded from its jurisdiction under Article 10.1 of the ECT by Article 21.1 of the ECT, which provides:
(1) Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties. In the event of any inconsistency between this Article and any other provision of the Treaty, this Article shall prevail to the extent of the inconsistency.332
In the Tribunal's view, the term "taxation measure" should be given its normal meaning in the context of the ECT. According to the tribunal in EnCana v. Ecuador :
The question whether something is a tax measure is primarily a question of its legal operation, not its economic effect. A taxation law is one which imposes a liability on classes of persons to pay money to the State for public purposes. The economic impacts or effects of tax measures may be unclear and debatable; nonetheless a measure is a taxation measure if it is part of the regime for the imposition of a tax. A measure providing relief from taxation is a taxation measure just as much as a measure imposing the tax in the first place.333
In the Claimants' view, however, for a taxation measure to fall within Article 21.1 of the ECT it must have been enacted in good faith. This additional bona fide test was applied by the tribunals in Yukos v. Russia and in Hulley v. Russia. In Yukos the tribunal found that:
[…] the carve-out of Article 21 (1) can apply only to bona fide taxation actions, i.e. actions that are motivated by the purpose of raising general revenue for the State. By contrast, actions that are taken only under the guise of taxation, but in reality aim to achieve an entirely unrelated purpose (such as the destruction of a company or the elimination of a political opponent) cannot qualify for exemption from the protection standard of the ECT under the taxation carve-out in Article 21(1).342
By contrast the Spanish Constitutional Court in its decision of 4 December 2014 upheld the TVPEE on the ground that:
[…] the challenged provisions do not exceed the freedom of configuration of the legislator, who is in no way prevented from employing taxation as an economic policy instrument in particular sectors … which means for ordinance or extra-fiscal purposes … The widespread application of the tax in question responds to an option open to the legislator, who while respecting constitutional principles, has a broad margin for establishing and setting up the tax. This margin cannot be constrained by demands for a differentiation that is not constitutionally obligatory, however much the appellant feels this is appropriate or necessary, nor by expectations of the maintenance of the pre-existing tax scheme – which in itself, would prevent any kind of legislative innovation.349
But it only does so if the TVPEE is not a "tax measure on income or on capital". Article 21.7.b of the ECT defines this term broadly as:
[…] all taxes imposed on total income, on total capital or on elements of income or of capital, including taxes on gains from the alienation of property, taxes on estates, inheritances and gifts, or substantially similar taxes, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
The Claimants allege five causes of action arising under the ECT:
(a) indirect expropriation (Art. 13 of the ECT);
(b) breach of the umbrella clause (Art. 10(1) of the ECT, last sentence);
(c) breach of fair and equitable treatment (Art. 10(1) of the ECT, second sentence);
(d) breach of the obligation of most constant protection (Art. 10(1) of the ECT, third sentence);
(e) impairment of the investment by unreasonable or discriminatory measures (Art. 10(1) of the ECT, third sentence).