|2005 PER||2005-2010 Renewable Energy Promotion Plan|
|Abandoned Projects||Fotovoltaica Lobón, Solar Lobón and Solar de Botoa|
|Accuracy’s First Expert Report||Respondent’s First Expert Report by Accuracy dated 28 October 2016|
|Accuracy’s Second Expert Report||Respondent’s Second Expert Report by Accuracy dated 29 May 2017|
|Albiñana||Spanish law firm CMS Albiñana y Suarez de Lezo|
|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings 2006|
|Cavalum or the Claimant||Cavalum SGPS, S.A., public limited company incorporated under the laws of Portugal|
|CJEU||Court of Justice of the European Union|
|Cl. Mem.||Claimant’s Memorial on the Merits dated 25 July 2016|
|Cl. PHB||Claimant’s Post Hearing Brief dated 18 September 2018|
|Cl. Rej.||Claimant’s Rejoinder on Jurisdiction and Response to the EC’s Amicus Curiae Brief dated 7 July 2017|
|Cl. Reply||Claimant’s Reply on the Merits and Counter-Memorial on Jurisdiction dated 28 March 2017|
|CL-#||Claimant’s Legal Authority|
|CWS-MHB1||Claimant’s First Witness Statement by Ms. Maria Helena Brandão dated 25 July 2016|
|CWS-MHB2||Claimant’s Second Witness Statement by Ms. Maria Helena Brandão dated 27 March 2017|
|CWS-JP1||Claimant’s First Witness Statement by Mr. José Valentim Pereira da Cunha dated 25 July 2016|
|CWS-JP2||Claimant’s Second Witness Statement by Mr. José Valentim Pereira da Cunha dated 28 March 2017|
|CWS-SLM||Claimant’s Witness Statement by Ms. Sonia López Mera dated 25 July 2016|
|Disputed Measures||RD 1565/2010, RDL 14/2010, Law 15/2012, RDL 2/2013, RDL 9/2013, Law 24/2013, MO IET/1045/2014 and RD 413/2014|
|EC’s First Application||European Commission’s First Application for Leave to Intervene as a Non-Disputing Party dated 18 April 2016|
|EC’s Second Application||European Commission’s Second Application for Leave to Intervene as a Non-Disputing Party dated 17 January 2017|
|EC’s Third Application||European Commission’s Third Application for Leave to Intervene as a Non-Disputing Party dated 16 May 2018|
|ECT||Energy Charter Treaty which entered into force for the Kingdom of Spain and Portugal on 16 April 1998|
|EPC||European and Community Patents Court|
|FTI’s First Quantum Report||Claimant’s First Quantum Report by Mr. Richard Edwards of FTI Consulting dated 22 July 2016|
|FTI’s Second Quantum Report||Claimant’s First Quantum Report by Mr. Richard Edwards of FTI Consulting dated 28 March 2017|
|FTI’s First Regulatory Report||Claimant’s First Regulatory Report by Dr. Boaz Moselle and Dr. Dora Grunwald of FTI Consulting dated 22 July 2016|
|FTI’s Second Regulatory Report||Claimant’s Second Regulatory Report by Dr. Boaz Moselle and Dr. Dora Grunwald of FTI Consulting dated 28 March 2017|
|Hearing||Hearing on Jurisdiction and the Merits held from March 12 to 16 March 2018 in London|
|ICSID Convention||Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965|
|ICSID or the Centre||International Centre for Settlement of Investment Disputes|
|IRR||Internal Rate of Return|
|Law 2/2011||Law 2/2011, of 4 March 2011, on Sustainable Economy, published in the Official Gazette No. 55 of 5 March 2011|
|Mr. Margarit’s Testimony||Videoconference held by the Tribunal and the Parties on 28 June 2018, for the cross-examination of the Claimant’s Witness, Mr. Jaume Margarit|
|New Regulatory Framework||RDL 9/2013, Law 24/2013; RD 413/2014; and Order IET/1045/2014|
|PO1||Procedural Order No. 1, dated 5 May 2016, concerning procedural matters|
|RDL 14/2010||Royal Decree-Law 14/2010, of 23 December 2010, establishing urgent measures for the correction of the tariff deficit of the electricity sector, published in the Official Gazette no. 312 of 24 December 2010|
|RAIPRE||Special Regime (Registro de Instalaciones de Producción en Régimen Especial)|
|REIOs||Regional Economic Integration Organizations|
|Request||Request for arbitration from Cavalum against Spain dated 27 July 2015|
|Resp. C-M||Respondent’s Counter-Memorial on the Merits and Memorial on Jurisdiction dated 28 October 2016|
|Resp. PHB||Respondent’s Post Hearing Brief dated 18 September 2018|
|Resp. Rej.||Respondent’s Rejoinder on the Merits and Reply on Jurisdiction dated 2 June 2017|
|RL-#||Respondent’s Legal Authority|
|Spain or Respondent||The Kingdom of Spain|
|TEC||Treaty Establishing the European Community|
|TEU||Treaty on the European Union|
|TFEU||Treaty on the Functioning of the EU|
|Tr.-E Day [#] [Speaker(s)] [page:line]||English Transcript of the Hearing|
|Tribunal||Arbitral tribunal constituted on 22 January 2016|
|TVPEE||7% tax on the production of electricity, established by Law 52/2012|
|VCLT||Vienna Convention on the Law of Treaties|
AES Summit Generation Limited and AES-Tisza Erömü Kft. v. The Republic of Hungary, ICSID Case No. ARB/07/22, Award, 23 September 2010 ("AES Summit v. Hungary (Award)"), Legal Authority RL-0039.
Antin Infrastructure Services Luxembourg S.à.r.l. & Antin Energia Termosolar B.V. v. The Kingdom of Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018 ("Antin v. Spain (Award)"), Legal Authority CL-0199.
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 ("BayWa v. Spain (Decision on Jurisdiction, Liability and Directions on Quantum)"), RL-0095.
Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italian Republic, ICSID Case No. ARB/14/3, Award, 27 December 2016 ("Blusun v. Italy (Award)"), Legal Authority CL-0192.
Case Concerning the Factory at Chorzów, PCIJ Rep, Series A, No. 17, Judgment, 13 September 1928 ("Factory at Chorzów (Judgment)"), Legal Authority CL-0116.
Charanne B.V. and Construction Investments S.A.R.L. v. Kingdom of Spain, SCC 062/2012, Final Award and Dissent, 21 January 2016 ("Charanne v. Spain (Final Award)"), Legal Authority RL-0049/CL-0004.
Compañía del Desarrollo de Santa Elena S.A. v. The Republic of Costa Rica, ICSID Case No. ARB/96/1, Final Award, 17 February 2000 ("Compañía del Desarrollo de Santa Elena S.A. v. Costa Rica (Final Award)"), Legal Authority CL-0108.
Cube Infrastructure Fund SICAV and others v. Kingdom of Spain, ICSID Case No. ARB/15/20, Decision on Jurisdiction, Liability and Partial Decision on Quantum, 19 February 2019 ("Cube v. Spain ("Decision on Jurisdiction, Liability and Partial Decision on Quantum)"), Legal Authority RL-0094.
EDF (Services) Limited v. Romania, ICSID Case No ARB/05/13, Award, 8 October 2009 ("EDF v. Romania (Award)"), Legal Authority CL-0054.
Eiser Infrastructure Limited and Energia Solar Luxembourg S.À R.I. v. Kingdom of Spain, ICSID Case No. ARB/13/36, Award, 4 May 2017 ("Eiser v. Spain (Award)"), Legal Authority CL-0191.
Eiser Infrastructure Limited and Energia Solar Luxembourg S.À R.I. v. Kingdom of Spain, ICSID Case No. ARB/13/36, Decision on Annulment, 11 June 2020 ("Eiser v. Spain (Annulment Decision)"). Legal Authority RL-102.
Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability. 30 November 2012. ("Electrabel v. Hungary (Decision on Jurisdiction, Applicable Law and Liability)"). Legal Authority CL-0070.
Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Award, 25 November 2015. ("Electrabel v. Hungary (Award)"). Legal Authority RL-0048.
El Paso Energy International Company v. The Argentine Republic, ICSID Case No. ARB/03/15, Award. 31 October 2011 ("El Paso v. Argentina (Award)"). Legal Authority CL-0053.
EnCana Corporation v. Republic of Ecuador, LCIA Case No. UN 3481, Award, 3 February 2006 ("EnCana v. Ecuador (Award)"). Legal Authority RL-0027.
Enron Corporation and Ponderosa Assets, L.P v. The Argentine Republic, ICSID Case No ARB/01/3. Award. 22 May 2007 ("Enron v. Argentine Republic (Award)"). Legal Authority CL-0062.
Foresight Luxembourg Solar 1 S.À.R.L ., Foresight Luxembourg Solar 2 S.À.R.L ., Greentech Energy Systems A/S, GWM Renewable Energy I S.P.A., GWM Renewable Energy II S.P.A. v. Kingdom of Spain, SCC Arb V 2015/150. 14 November 2018 ("Foresight v. Spain (Final Award"). Legal Authority CL-0217.
Invesmart, B.V. v. Czech Republic, UN-0036-01, Award, 26 June 2009 ("Invesmart v. Czech Republic (Award)"), Legal Authority RL-0019.
Ioan Micula, Viorel Micula and others v. Romania, ICSID Case No. ARB/05/20, Award, 11 December 2013. ("Micula v. Romania (Award)"). Legal Authority CL-0014.
Isolux Infrastructure Netherlands, B.V. v. Kingdom of Spain (SCC Case V2013/153), Award, 12 July 2016 ("Isolux v. Spain (Award)"). Legal Authority RL-0075/CL-0176.
LG&E Energy Corp., LG&E Capital Corp., and LG&E International, Inc. v. The Argentine Republic, ICSID Case No ARB/02/1, Decision on Liability, 3 October 2006 ("LG&E v. Argentine Republic (Decision on Liability)"). Legal Authority CL-0063.
Mamidoil Jetoil Greek Petroleum Products Societe Anonyme S.A. v. Republic of Albania, ICSID Case No. ARB/11/24. Award. 30 March 2015 ("Mamidoil v. Albania (Award)"). Legal Authority CL-0173.
Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1, Award. 16 May 2018 ("Masdar v. Spain (Award)"). Legal Authority CL-0198/RL-0091.
Mr. Jurgen Wirtgen, Mr. Stefan Wirtgen, Mrs. Gisela Wirtgen, JSW Solar (zwei) GmbH & Co. KG v. The Czech Republic, PCA Case No. 2014-03, Final Award, 11 October 2017 ("Wirtgen v. Czech Republic (Final Award)"). Legal Authority RL-0087.
OperaFund Eco-Invest SICAV PLC and Schwab Holding AG v. Kingdom of Spain, ICSID Case No. ARB/15/36, Award, 6 September 2019 ("OperaFund v. Spain (Award)"), Legal Authority CL-0225.
Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/08, Award, 11 September 2007 ("Parkerings v. Lithuania (Award)"), Legal Authority CL-0060.
Plama Consortium Limited v. The Republic of Bulgaria, ICSID Case No. ARB/03/24, Award, 27 August 2008 ("Plama v. Bulgaria (Award)"), Legal Authority RL-0034.
The PV Investors v. Spain, PCA Case No. 2012-14, Final Award, 28 February 2020 ("PV Investors v. Spain (Award)"), Legal Authority RL-100.
The PV Investors v. Spain, PCA Case No. 2012-14, Concurring and Dissenting Opinion of Charles N. Brower, 28 February 2020 ("PV Investors v. Spain (Dissenting Opinion)"), Legal Authority RL-101.
RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Jurisdiction, 6 June 2016 ("RREEF v. Spain (Decision on Jurisdiction)"), Legal Authority CL-0135.
RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spai n, ICSID Case No. ARB/13/30, Decision on Responsibility and on the Principles of Quantum, 30 November 2018 ("RREEF v. Spain (Decision on Responsibility and Principles of Quantum)"), Legal Authority RL-0093.
Saluka Investments B.V. v. The Czech Republic, UNCITRAL, Partial Award on Jurisdiction and Merits, 17 March 2006, ¶ 307 ("Saluka v. Czech Republic (Partial Award)"), Legal Authority CL-0055.
Stadtwerke München GMBH, RWE Innogy GMBH, and Others v. Kingdom of Spain, ICSID Case No. ARB/15/1, Award, 2 December 2019, ("Stadtwerke v. Spain (Award)")
Slowakische Republik (Slovak Republic) v. Achmea BV, Court of Justice of the European Union, Case C-284/16, Judgment, 6 March 2018 ("Achmea ruling"), Legal Authority CL-0205.
Técnicas Medioambientales Tecmed S.A. v. United Mexican States, ICSID Case No ARB(AF)/00/2, Award, 29 May 2003 ("Tecmed v. United Mexican States (Award)"), Legal Authority CL-0056.
Vattenfall AB, Vattenfall GmbH, Vattenfall Europe Nuclear Energy GmbH, Kernkraftwerk Krummel GmbH & Co. oHG, Kernkraftwerk Brunsbuttel GmbH & Co. oHG v. Federal Republic of Germany, ICSID Case No. ARB/12/12, Decision on the Achmea Issue, 31 August 2018 ("Vattenfall v. Germany (Decision on the Achmea Issue)"), Legal Authority CL-0216.
Waste Management, Inc. v. United Mexican States, ICSID Case No. ARB(AF)/00/3, Award, 30 April 2004 ("Waste Management v. United Mexican States (Award)"), Legal Authority CL-0057.
WNC Factoring Ltd (United Kingdom) v. The Czech Republic, PCA Case No. 2014-34, Award, 22 February 2017 (WNC v. Czech Republic (Award)"), Legal Authority RL-0076.
Yukos Universal Limited (Isle of Man) v. The Russian Federation, PCA Case No. AA 227, Final Award, 18 July 2014 ("Yukos v. Russia (Final Award)"), Legal Authority RL-0073.
Lord Lawrence Collins President
Mr. David R. Haigh Q.C. Arbitrator
Sir Daniel Bethlehem Q.C. Arbitrator
Francisco Grob D. Secretary of the Tribunal
For the Claimant:
Mr. Kenneth Fleuriet King & Spalding
Mr. Reginald Smith King & Spalding
Mr. Kevin Mohr King & Spalding
Ms. Isabel San Martín King & Spalding
Mr. Antoine Weber King & Spalding
Mr. Carlos Cardoso Cavalum
Mr. José Alzate FTI Consulting
Mr. Joel Franks FTI Consulting
Ms. Kristina Danilova FTI Consulting
Mr. Diego Santacruz Descartín Abogacía General del Estado
Mr. Antolín Fernández Antuña Abogacía General del Estado
Ms. Mónica Moraleda Saceda Abogacía General del Estado
Ms. Elena Oñoro Sáinz Abogacía General del Estado
Ms. Amaia Rivas Kortazar Abogacía General del Estado
Ms. Raquel Vázquez Meco Instituto para la Diversificación y Ahorro Energético
Ms. Laura Cózar Accuracy
Mr. Alberto Fernández Accuracy
Mr. Carlos Canga Accuracy
Ms. Julie Dasse Accuracy
Mr. Trevor McGowan English Court Reporter
Mr. Paul Pelissier English Court Reporter
Mr. Dionisio Rinaldi Spanish Court Reporter
Mr. Jesus Getan Bornn English-Spanish Interpreter
Ms. Amalia Thaler - de Klemm English-Spanish Interpreter
Mr. Marc Viscovi English-Spanish Interpreter
Ms. Maria Fordham Portuguese-Spanish Interpreter
Mr. Cristóvão Leitão Portuguese-Spanish Interpreter
On behalf of the Claimant:
Mr. José Valentim Pereira da Cunha Cavalum
Ms. Maria Helena Brandão Cavalum
Ms. Sonia López Mera Cavalum
Mr. Manuel Aragón Reyes
Dr. Dora Grunwald FTI Consulting
Dr. Boaz Moselle Cornerstone
Mr. Richard Edwards FTI Consulting
On behalf of Spain:
Mr. Carlos Montoya Rasero Instituto para la Diversificación y Ahorro Energético
Prof. Dr. Pablo Pérez Tremps Universidad Carlos III de Madrid
Prof. Dr. Marcos Váquer Caballería Universidad Carlos III de Madrid
Mr. Eduard Saura Accuracy
Mr. Stéphane Perrotto Accuracy
Mr. Christophe Schmit Accuracy
a declaration that the Tribunal has jurisdiction under the ECT and the ICSID Convention for all of Cavalum’s claims, thereby rejecting Respondent’s jurisdictional objections in full;
a declaration that Spain has violated Part III of the ECT and international law with respect to Cavalum’s investments;
compensation to Cavalum for all damages it has suffered as set forth in its Memorial on the Merits and in its Reply Memorial on the Merits and as may be further developed and quantified during the course of this proceeding;
all costs of this proceeding, including (but not limited to) Cavalum’s attorneys’ fees and expenses. the fees and expenses of Cavalum’s experts. and the fees and expenses of the Tribunal and ICSID;
pre- and post-award compound interest at the highest lawful rate from the Date of Assessment until Spain’s full and final satisfaction of the Award; and
any other relief the Tribunal deems just and proper.
a) declare its lack of jurisdiction to hear the claims of the Claimant, or if applicable their inadmissibility, in accordance with what is set forth in section III of this Memorial, referring to Jurisdictional Objections; and
b) Subsidiarily, in the event that the Arbitral Tribunal decides that it has jurisdiction to hear this dispute, to dismiss all the Claimants' claims regarding the Merits, as the Kingdom of Spain has not breached the ECT in any way, pursuant to sections IV and V herein, referring to the Facts and the Merits, respectively;
c) Secondarily, to dismiss all the Claimant's claims for damages as the Claimant has no right to compensation, in accordance with section V herein; and
d) Order the Claimant to pay all costs and expenses derived from this arbitration, including ICSID administrative expenses, 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 until the date of their actual payment.
- Don Alvaro PV plant ("Don Alvaro"), located in Extremadura, which has an installed nominal power capacity of 1.5 MW and was commissioned in May 2008. Cavalum owns 100% of this facility.
- La Albuera PV plant ("La Albuera"), located in Extremadura, which has an installed nominal power capacity of 2.0 MW and was commissioned in July 2008. Cavalum owns 50% of this facility.
- Fuente de Cantos PV plant ("Fuente de Cantos"), located in Extremadura, which has an installed nominal power capacity of 4.0 MW and was commissioned in July 2008. Cavalum owns 50% of this facility.
- La Roda PV plant ("La Roda"), located in Castilla-la- Mancha, which has an installed nominal power capacity of 2.0 MW and was commissioned in August 2008. Cavalum owns 100% of this facility.
- Riosalido PV plant ("Riosalido"), located in Castilla-la- Mancha, which has an installed nominal power capacity of 1.5 MW and was commissioned in September 2008. Cavalum owns 100% of this facility.
- Talarrubias PV plant ("Talarrubias"), located in Extremadura, which has an installed nominal power capacity of 1.9 MW and was commissioned in June 2010. Cavalum owns 51% of this facility.
- Solarwell PV plant ("Solarwell"), located in Extremadura, which has an installed nominal power capacity of 2.5 MW and was commissioned in January 2013. Cavalum owns 51% of this facility.
|Plant||Claimant's Investment||RAIPRE Registration||Sources|
|Don Alvaro||21 Aug. 2007||30 June 2008||Agreement on Sale/Purchase of Rights (C-198); RAIPRE Registration (C-205)|
|La Albuera||23 Nov. 2007||28 Aug. 2008||Joint Participation Agreement (C-194); RAIPRE Registration (C-211)|
|Fuente de Campos||23 Nov. 2007||4 Sept. 2008||Joint Participation Agreement (C-194); RAIPRE Registration (C-213)|
|La Roda||2 May 2008||25 Aug. 2008||Deed of Incorporation and EPC/O&M Agreements (C-215, C-217, C-219); RAIPRE Registration (C-224)|
|Riosalido||2 May 2008||25 Aug. 2008||Deed of Incorporation and EPC/O&M Agreements (C-216, C-218, C-220); RAIPRE Registration (C-222)|
The expropriation was unlawful because it did not satisfy the four cumulative requirements for a lawful expropriation outlined in Article 13 ECT. Spain’s retroactive legislation does not fall within the traditional scope of a State’s police powers, because the disputed measures are unreasonable and discriminatory and they also resulted in a substantial deprivation. Spain’s measures inflicted substantial harm on Claimant’s investments without serving a legitimate purpose. While the draconian measures did have the effect of reducing the tariff deficit, they did so in a manner that arbitrarily and disproportionately affected renewable energy investors, causing severe financial ham.
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 Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, 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.185
(2) "Contracting Party" means a state or Regional Economic Integration Organization which has consented to be bound by this Treaty and for which the Treaty is in force.
(3) "Regional Economic Integration Organization" means an organization constituted by states to which they have transferred competence over certain matters a number of which are governed by this Treaty, including the authority to take decisions binding on them in respect of those matters.
(10) "Area" means with respect to a state that is a Contracting Party:
(a) the territory under its sovereignty, it being understood that territory includes land, internal waters and the territorial sea;...
With respect to a Regional Economic Integration Organization which is a Contracting Party, Area means the Areas of the member states of such Organization, under the provisions contained in the agreement establishing that Organization.
(1) The provisions of this Treaty shall not be so construed as to oblige a Contracting Party which is party to an Economic Integration Agreement (hereinafter referred to as "EIA") to extend, by means of most favoured nation treatment, to another Contracting Party which is not a party to that EIA, any preferential treatment applicable between the parties to that EIA as a result of their being parties thereto.
(2) For the purposes of paragraph (1), "EIA" means an agreement substantially liberalizing, inter alia, trade and investment, by providing for the absence or elimination of substantially all discrimination between or among parties thereto through the elimination of existing discriminatory measures and/or the prohibition of new or more discriminatory measures, either at the entry into force of that agreement or on the basis of a reasonable time frame.
A Regional Economic Integration Organization shall, when voting, have a number of votes equal to the number of its member states which are Contracting Parties to this Treaty; provided that such an Organization shall not exercise its right to vote if its member states exercise theirs, and vice versa.
(1)Article 267 TFEU (formerly, with immaterial differences, Article 177 EEC Treaty and Article 234 TEC)
The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:
(a) the interpretation of the Treaties;
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.
(2) Article 344 TFEU (formerly, with immaterial differences, Article 219 EEC Treaty and Article 292 TEC)
Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein.
(3) Article 351 TFEU (formerly, with immaterial differences, Article 234 EEC Treaty and Article 307 TEC)
The rights and obligations arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties.
To the extent that such agreements are not compatible with the Treaties, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.
In applying the agreements referred to in the first paragraph, Member States shall take into account the fact that the advantages accorded under the Treaties by each Member State form an integral part of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other Member States.
Where two or more Contracting Parties have entered into a prior international agreement, or enter into a subsequent international agreement, whose terms in either case concern the subject matter of Part III ["Investment Promotion and Protection". which includes Articles 10 and 13] or V ["Dispute Settlement". which includes Article 26] of this Treaty,
(1) nothing in Part III or V of this Treaty shall be construed to derogate from any provision of such terms of the other agreement or from any right to dispute resolution with respect thereto under that agreement; and
(2) nothing in such terms of the other agreement shall be construed to derogate from any provision of Part III or V of this Treaty or from any right to dispute resolution with respect thereto under this Treaty, where any such provision is more favourable to the Investor or Investment.
The effect of Article 26.1-3 ECT is that where there arise "Disputes between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the latter in the Area of the former" which cannot be settled amicably, then the Investor party may submit it to a form of dispute resolution including ICSID arbitration "if the Contracting Party of the Investor and the Contracting Party to the dispute are both parties to the ICSID Convention" and in such a case "each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration... in accordance with the provisions of this Article" (Article 26.3.a), and the tribunal "shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law" (Article 26.6).
1. Subject to Article 103 of the Charter of the United Nations, the rights and obligations of States parties to successive treaties relating to the same subject matter shall be determined in accordance with the following paragraphs.
3. When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation ..., the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.
4. When the parties to the later treaty do not include all the parties to the earlier one:
(a) as between States Parties to both treaties the same rule applies as in paragraph 3;
(b) as between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations.
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.
Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if:
(a) the possibility of such a modification is provided for by the treaty; or
(b) the modification in question is not prohibited by the treaty and:
(i) does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations;
(ii) does not relate to a provision, derogation from which is incompatible with the effective execution of the object and purpose of the treaty as a whole.
(1) Does Article 344 TFEU preclude the application of a provision in a bilateral investment protection agreement193 between Member States of the European Union (a so-called intra-EU BIT) under which an investor of a Contracting State, in the event of a dispute concerning investments in the other Contracting State, may bring proceedings against the latter state before an arbitral tribunal where the investment protection agreement was concluded before one of the Contracting States acceded to the European Union but the arbitral proceedings are not to be brought until after that date?
(2) If question (1) is to be answered in the negative: Does Article 267 TFEU preclude the application of such a provision?
Furthermore, all the Member States and the Union have ratified the Energy Charter Treaty, signed at Lisbon on 19 December 1994. That multilateral treaty on investment in the field of energy operates even between Member States, since it was concluded not as an agreement between the Union and its Member States, of the one part, and third countries, of the other part, but as an ordinary multilateral treaty in which all the Contracting Parties participate on an equal footing. In that sense, the material provisions for the protection of investments provided for in that Treaty and the [investor-State dispute settlement] mechanism also operate between Member States. I note that if no EU institution and no Member State sought an opinion from the Court on the compatibility of that treaty with the EU and FEU Treaties, that is because none of them had the slightest suspicion that it might be incompatible.194
(1) An international agreement cannot affect the allocation of powers fixed by the Treaties or, consequently, the autonomy of the EU legal system, observance of which is ensured by the court.195
(2) That principle is enshrined in particular in Article 344 TFEU, under which the Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for in the Treaties: CJEU Opinion 2/13 (European Convention on Human Rights).196
(3) The autonomy of EU law with respect both to the law of the member states and to international law is justified by the essential characteristics of the EU and its law, relating in particular to the constitutional structure of the EU and the very nature of that law.197
(4) EU law is characterised by the fact that it stems from an independent source of law, the Treaties, by its primacy over the laws of the Member States, and by the direct effect of provisions which are applicable to their nationals and to the Member States themselves.198
(5) Those characteristics have given rise to a structured network of principles, rules and mutually interdependent legal relations binding the EU and its Member States reciprocally and binding its Member States to each other: Opinion 2/13, paras 165-167.199
(6) The Member States are obliged, by reason, inter alia, of the principle of sincere co-operation, to ensure the application of and respect for EU law, and to take for those purposes any appropriate measure to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the EU: Opinion 2/13, paras 168 and 173.200
(7) In order to ensure that the specific characteristics and the autonomy of the EU legal order, it is for the national courts and tribunals and the CJEU to ensure the full application of EU law in all Member States and to ensure judicial protection of the rights of individuals under that law.201
(8) The EU judicial system has as its keystone the preliminary ruling procedure provided for in Article 267 TFEU, which has the object of securing uniform interpretation of EU law, thereby serving to ensure its consistency, its full effect and its autonomy as well as the particular nature of the law established by the Treaties: Opinion 2/13, para. 176.202
(1) Under the terms of BIT Article 8.6, the arbitral tribunal was called on to rule on possible infringements of the BIT, but in order to do so it was obliged to take account in particular of the law in force of the Contracting Party concerned and other relevant agreements between the Contracting Parties, and might therefore be called on to interpret or indeed to apply EU law, particularly the provisions concerning the fundamental freedoms, including freedom of establishment and free movement of capital.203
(2) The arbitral tribunal was not part of the judicial system of the Netherlands or Slovakia, and it was the exceptional nature of the tribunal's jurisdiction compared with that of the courts of the two Member States that was one of the principal reasons for the existence of Article 8 of the BIT.204
(3) Consequently, it could not be classified as a court or tribunal "of a Member state" within the meaning of Article 267 TFEU.205
(4) Under Article 8.7 of the BIT, the decision of the arbitral tribunal was final, and, pursuant to Article 8.5 of the BIT, the arbitral tribunal was to determine its own procedure applying the UNCITRAL arbitration rules and was itself to choose its seat and consequently the law applicable to the procedure governing judicial review of the validity of the award.206
(5) Because the arbitral tribunal chose to sit in Frankfurt am Main, German law was applicable to the procedure governing judicial review of the validity of the arbitral award, but the review was a limited review, concerning in particular the validity of the arbitration agreement under the applicable law and the consistency with public policy of the recognition or enforcement of the arbitral award.207
(6) By contrast with commercial arbitration, where the requirements of efficient arbitration proceedings justify limited review of arbitral awards by the courts of the Member States, provided that the fundamental provisions of EU law can be examined in the course of that review and, if necessary, be the subject of a reference for a preliminary ruling,208 arbitration proceedings under Article 8 of the BIT derive from a treaty by which Member States agree to remove from the jurisdiction of their own courts, and hence from the system of judicial remedies in the fields covered by EU law,209 disputes which may concern the application or interpretation of EU law.210
(7) By concluding the BIT, the Member States established a mechanism for settling disputes between an investor and a Member State which could prevent those disputes from being resolved in a manner that ensured the full effectiveness of EU law, even though they might concern the interpretation or application of that law.211
(8) In a passage on multilateral treaties the CJEU said:
It is true that, according to settled case-law of the Court, an international agreement providing for the establishment of a court responsible for the interpretation of its provisions and whose decisions are binding on the institutions, including the Court of Justice, is not in principle incompatible with EU law. The competence of the EU in the field of international relations and its capacity to conclude international agreements necessarily entail the power to submit to the decisions of a court which is created or designated by such agreements as regards the interpretation and application of their provisions, provided that the autonomy of the EU and its legal order is respected (see, to that effect, Opinion 1/91 (EEA Agreement-I) of 14 December 1991, EU:C:1991:490, paragraphs 40 and 70; Opinion 1/09 (Agreement creating a unified patent litigation system) of 8 March 2011, EU:C:2011:123, paragraphs 74 and 76; and Opinion 2/13 (Accession of the EU to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraphs 182 and 183).
In the present case, however, apart 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. Article 8 of the BIT is such as to call into question not only the principle of mutual trust between the Member States but also the preservation of the particular nature of the law established by the Treaties, ensured by the preliminary ruling procedure provided for in Article 267 TFEU, and is not therefore compatible with the principle of sincere cooperation...212
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 Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, 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.
The Achmea case concerns the interpretation of EU law in relation to an investor-state arbitration clause in a bilateral investment treaty between Member States. The Member States note that the Achmea Ruling is silent on the investor-state arbitration clause in the Energy Charter Treaty. A number of international arbitration tribunals post the Achmea Ruling have concluded that the Energy Charter Treaty contains an investor-State arbitration clause applicable between EU Member States. This interpretation is currently contested before a national court in a Member State.214 Against this background, the Member States underline the importance of allowing for due process and consider that it would be inappropriate, in the absence of a specific judgment on this matter, to express views as regards the compatibility with Union law of the intra EU application of the Energy Charter Treaty.215
The Court of Justice has admittedly already stated in that regard that an international agreement providing for the creation of a court responsible for the interpretation of its provisions and whose decisions are binding on the institutions, including the Court of Justice, is not, in principle, incompatible with EU law; that is particularly the case where, as in this instance, the conclusion of such an agreement is provided for by the Treaties themselves. The competence of the EU in the field of international relations and its capacity to conclude international agreements necessarily entail the power to submit to the decisions of a court which is created or designated by such agreements as regards the interpretation and application of their provisions (see Opinions 1/91, EU:C:1991:490, paragraphs 40 and 70, and 1/09, EU:C:2011:123, paragraph 74).
Nevertheless, the Court of Justice has also declared that an international agreement may affect its own powers only if the indispensable conditions for safeguarding the essential character of those powers are satisfied and, consequently, there is no adverse effect on the autonomy of the EU legal order (see Opinions 1/00, EU:C:2002:231, paragraphs 21, 23 and 26, and 1/09, EU:C:2011:123, paragraph 76; see also, to that effect, judgment in Kadi and Al Barakaat International Foundation v Council and Commission, EU:C:2008:461, paragraph 282).
In particular, any action by the bodies given decision-making powers by the ECHR, as provided for in the agreement envisaged, must not have the effect of binding the EU and its institutions, in the exercise of their internal powers, to a particular interpretation of the rules of EU law (see Opinions 1/91, EU:C:1991:490, paragraphs 30 to 35, and 1/00, EU:C:2002:231, paragraph 13).217
(1) The Tribunal is "the judge of its own competence:" ICSID Convention, Article 41(1).
(2) The question of jurisdiction must be distinguished from the question of applicable law, or choice of law. As indicated above, Article 42.1 provides that the "Tribunal shall decide a dispute in accordance with such rules of law as may be agreed by the parties..."
(3) In the present case Article 26.6 ECT provides that the "tribunal established... shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law."