This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Energy Charter Treaty, which entered into force on 16 April 1998 (the "ECT") and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on 14 October 1966 (the "ICSID Convention").

1. Solar Andaluz 1 GmbH & Co. KG
2. Solar Andaluz 2 GmbH & Co. KG
3.Solar Andaluz 3 GmbH & Co. KG
4.Solar Andaluz 4 GmbH & Co. KG
5.Solar Andaluz 5 GmbH & Co. KG
6.Solar Andaluz 6 GmbH & Co. KG
7.Solar Andaluz 7 GmbH & Co. KG
8.Solar Andaluz 8 GmbH & Co. KG
9.Solar Andaluz 9 GmbH & Co. KG
10.Solar Andaluz 10 GmbH & Co. KG
11.Solar Andaluz 11 GmbH & Co. KG
12.Solar Andaluz 12 GmbH & Co. KG
13.Solar Andaluz 13 GmbH & Co. KG
14.Solar Andaluz 14 GmbH & Co. KG
15.Solar Andaluz 15 GmbH & Co. KG
16.Solar Andaluz 16 GmbH & Co. KG
17.Solar Andaluz 17 GmbH & Co. KG
18.Solar Andaluz 18 GmbH & Co. KG
19.Solar Andaluz 19 GmbH & Co. KG
20.Solar Andaluz 20 GmbH & Co. KG
21.Solarpark Calasparra 251 GmbH & Co. KG
22.Solarpark Calasparra 252 GmbH & Co. KG
23.Solarpark Calasparra 253 GmbH & Co. KG
24.Solarpark Calasparra 254 GmbH & Co. KG
25.Solarpark Calasparra 255 GmbH & Co. KG
26.Solarpark Calasparra 256 GmbH & Co. KG
27.Solarpark Calasparra 257 GmbH & Co. KG
28.Solarpark Calasparra 258 GmbH & Co. KG
29.Solarpark Calasparra 259 GmbH & Co. KG
30.Solarpark Calasparra 260 GmbH & Co. KG
31. Solarpark Calasparra 261 GmbH & Co. KG
32. Solarpark Calasparra 262 GmbH & Co. KG
33. Solarpark Calasparra 263 GmbH & Co. KG
34. Solarpark Calasparra 264 GmbH & Co. KG
35. Solarpark Calasparra 265 GmbH & Co. KG
36. Solarpark Tordesillas 401 GmbH & Co. KG
37. Solarpark Tordesillas 402 GmbH & Co. KG
38. Solarpark Tordesillas 403 GmbH & Co. KG
39. Solarpark Tordesillas 404 GmbH & Co. KG
40. Solarpark Tordesillas 405 GmbH & Co. KG
41. Solarpark Tordesillas 406 GmbH & Co. KG
42. Solarpark Tordesillas 407 GmbH & Co. KG
43. Solarpark Tordesillas 408 GmbH & Co. KG
44. Solarpark Tordesillas 409 GmbH & Co. KG
45. Solarpark Tordesillas 410 GmbH & Co. KG
46. Solarpark Tordesillas 411 GmbH & Co. KG
47. Solarpark Tordesillas 412 GmbH & Co. KG
48. Solarpark Tordesillas 413 GmbH & Co. KG
49. Solarpark Tordesillas 414 GmbH & Co. KG
50. Solarpark Tordesillas 415 GmbH & Co. KG
51. Solarpark Tordesillas 416 GmbH & Co. KG
52. Solarpark Tordesillas 417 GmbH & Co. KG
53. Solarpark Tordesillas 418 GmbH & Co. KG
54. Solarpark Tordesillas 419 GmbH & Co. KG
55. Solarpark Tordesillas 420 GmbH & Co. KG
56. Solarpark Tordesillas 421 GmbH & Co. KG
57. Solarpark Tordesillas 422 GmbH & Co. KG
58. Solarpark Tordesillas 423 GmbH & Co. KG
59.Solarpark Tordesillas 424 GmbH & Co. KG
60.Solarpark Tordesillas 425 GmbH & Co. KG
61.Solarpark Tordesillas 426 GmbH & Co. KG
62.Solarpark Tordesillas 427 GmbH & Co. KG
63.Solarpark Tordesillas 428 GmbH & Co. KG
64.Solarpark Tordesillas 429 GmbH & Co. KG
65.Solarpark Tordesillas 430 GmbH & Co. KG
66.DSG Deutsche Solargesellschaft mbH
67.DSG Spanien Verwaltungs GmbH¹
68.Mr. Mathias Kruck
69.Mr. Joachim Kruck
70.Mr. Peter Flachsmann
71.Mr. Ralf Hofmann
72.Mr. Rolf Schumm
73.Mr. Frank Schumm
74.TS Abuzaderas 1 GmbH
75.TS Abuzaderas 2 GmbH
76.TS Abuzaderas 3 GmbH
77.TS Abuzaderas 4 GmbH
78.TS Abuzaderas 5 GmbH
79.TS Abuzaderas 6 GmbH
80.TS Abuzaderas 7 GmbH
81.TS Abuzaderas 8 GmbH
82.TS Abuzaderas 9 GmbH
83.TS Abuzaderas 10 GmbH
84.TS Abuzaderas 11 GmbH
85.TS Abuzaderas 12 GmbH
86.TS Abuzaderas 13 GmbH
87.TS Abuzaderas 14 GmbH
88.TS Abuzaderas 15 GmbH
89.TS Abuzaderas 16 GmbH
90.TS Abuzaderas 17 GmbH
91.TS Abuzaderas 18 GmbH
92.TS Abuzaderas 19 GmbH
93.TS Abuzaderas 20 GmbH
94.TS Abuzaderas 21 GmbH
95.TS Abuzaderas 22 GmbH
96.TS Abuzaderas 23 GmbH
97.TS Abuzaderas 24 GmbH
98.TS Abuzaderas 25 GmbH
99.TS Abuzaderas 26 GmbH
100.TS Abuzaderas 27 GmbH
101.TS Abuzaderas 28 GmbH
102.TS Abuzaderas 29 GmbH
103.TS Abuzaderas 30 GmbH
104.TS Avila eins GmbH
105.TRC Energy GmbH
106.TS Cuenca zwei GmbH
107.WBG GmbH
108.Sunburn Verwaltungs GmbH
109.TS Villalba GmbH
110.Tauber-Solar Sierra GmbH
111.ZKS GmbH
112.TS Cuenca 20 GmbH
113.TS Valtou GmbH
114.TS Cuenca 40 GmbH
115.Mr. Karsten Reiss
116.Mr. Jurgen Reiss²

• a declaration that the Tribunal has jurisdiction under the ECT and the ICSID Convention;

• a declaration that Spain has violated Part III of the ECT and international law with respect to Claimants' investments;

• compensation to Claimants for all damages they have suffered as set forth in this Memorial and as will be further developed and quantified in the course of this proceeding;

• all costs of this proceeding, including (but not limited to) Claimants' attorneys' fees and expenses, the fees and expenses of Claimants' 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.⁴

• a declaration that the Tribunal had jurisdiction under the ECT and the ICSID Convention;

• a declaration that Spain has violated Part III of the ECT and international law with respect to Claimants’ investments;

• compensation to Claimants for all damages they have suffered as set forth in this Reply and Claimants’ Memorial on the Merits and as will be further developed and quantified in the course of this proceeding;

• all costs of this proceeding, including (but not limited to) Claimants’ attorneys’ fees and expenses, the fees and expenses of Claimants’ 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.⁵

• a declaration that the Tribunal has jurisdiction under the ECT and the ICSID Convention for all of Claimants’ 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 Claimants’ investments;

• compensation to Claimants for all damages they have suffered as set forth in their Memorial on the Merits and in their 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) Claimants’ attorneys’ fees and expenses, the fees and expenses of Claimants’ 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.⁶

• a declaration that the Tribunal had jurisdiction under the ECT and the ICSID Convention;

• a declaration that Spain has violated Part III of the ECT and international law with respect to Claimants' investments;

• compensation to Claimants for all damages they have suffered as set forth in their submissions;

• all costs of this proceeding, including (but not limited to) Claimants' attorneys' fees and expenses, the fees and expenses of Claimants' 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.⁷

a) To declare its lack of jurisdiction over the claims of the Claimant Party or, if applicable, the inadmissibility of said claims.

b) Subsidiarily, in the event that the Arbitral Tribunal decides that it has jurisdiction to hear this dispute, to dismiss all the claims of the Claimant Party regarding the Merits, as the Kingdom of Spain has not breached the ECT in any way, pursuant to section IV herein, with regard to the Merits.

c) Subsidiarily, to dismiss all the Claimant Party's claims for damages as the Claimant has no right to compensation, in accordance with section V herein; and

d) Order the Claimant Party 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.⁸

a) Declare its lacks [sic] of jurisdiction to settle the claims of the Claimants, or if the case may be, their inadmissibility, in accordance with what is set forth in section III of this Document, referred to Jurisdictional Objections;

b) Alternatively, 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 of the case, as the Kingdom of Spain has not breached the ECT in any way, pursuant to sections IV and V herein, referred to the Facts and the Merits, respectively;

c) Alternatively, to dismiss all the Claimants' claims for damages as they are not entitled to compensation, in accordance with section V of this Document; and

d) Sentence the Claimants 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 and up to the date of their actual payment.⁹

a) It declares its lack of jurisdiction to hear the claims of the Claimants, or where appropriate, their the [sic] inadmissibility, in accordance with what is stated in section II of this Respondent's Post-Hearing Brief in reference to 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 rejects all the claims of the Claimants on the merits, since the Kingdom of Spain has not in any way breached the ECT, in accordance with what is set forth in sections III and IV of the present Brief, regarding the Facts and the Merits of the case.

c) Secondarily, that it dismisses all of the Claimants’ compensatory claims, as the Claimants have no right to compensation, pursuant to that stated in section V herein; and

d) To Order the Claimants' 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 and the date of their actual payment.¹⁰

1. The DSG Deutsche Solargesellschaft Group (the "DSG Group") and the Tauber Solar Investors Group (the "TS Investors Group") as defined herein (collectively, "Claimants") hereby request the initiation of an arbitration proceeding against the Kingdom of Spain ("Spain") under the Convention and Rules of the International Centre for Settlement of Investment Disputes ("ICSID"). Claimants file this Request for Arbitration pursuant to Article 25 of the ICSID Convention, ICSID Institution Rules 1 and 2, and Article 26(4)(c) of the Energy Charter Treaty ("ECT" or "Treaty"). [Emphasis in the original]

On 19 January 2016, the Secretary-General notified the Parties that all three arbitrators had accepted their appointments and that the Tribunal was therefore deemed to have been constituted on that date in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings (the "Arbitration Rules"). Ms. Mairée Uran Bidegain, ICSID, was designated to serve as Secretary of the Tribunal.

On 19 February 2016, the Respondent made an application under ICSID Arbitration Rule 41(5), alleging that the claim was "manifestly without legal merit" (the "Respondent’s Rule 41(5) Objection"). On 2 March 2016, the Claimants filed observations on the Respondent’s Rule 41(5) Objection.

On 15 March 2016, the Tribunal held a first session with the Parties by teleconference in accordance with ICSID Arbitration Rule 13(1).

On 18 April 2016, the European Commission filed an Application for leave to intervene as a non-disputing party pursuant to ICSID Arbitration Rule 37(2) (the "European Commission’s Application").

■ Witness Statements of:

- Joachim Kruck, dated 21 July 2016
- Peter Flachsmann, dated 11 July 2016
- Klaus Matuschke, dated 28 July 2016
- Markus Karl, dated 19 July 2016
- Klaus-Bruno Flech, dated 18 July 2016
- Karsten Reiss, dated 19 July 2016

■ Expert Reports by:

- Brattle Group Quantum Report, dated 27 July 2016, with exhibits BQR-001 to BQR-174
- Brattle Group Regulatory Report, dated 27 July 2016, with exhibits BRR-001 to BRR-131
- Manuel Aragon Reyes, dated 7 July 2016
- Jaume Margarit, dated 7 July 2016

■ Exhibits C-001 to C-342

■ Legal Authorities CL-001 to CL-134.

■ Witness Statement of:

- Carlos Montoya, dated 27 October 2016, with exhibits¹⁷

■ Expert Reports by:

- Pablo Pérez Tremps and Marcos Vaquer Caballería, dated 25 July 2016
- Grant Geatrex, David Pérez López, Jesús Fernández Salguero and Carlos Montojo González, dated 31 October 2016, with exhibits DOC-001 to DOC-046

■ Exhibits R-016 to R-243

■ Legal Authorities RL-030 to RL-096.

■ Second Witness Statements of:

- Joachim Kruck, dated 25 April 2017
- Markus Karl, dated 25 April 2017
- Karsten Reiss, dated 20 April 2017

■ Rebuttal Expert Reports by:

- Brattle Group Rebuttal Quantum Report, dated 26 April 2017, with exhibits BQR-175 to BQR-188
- Brattle Group Rebuttal Regulatory Report, dated 26 April 2017, with exhibits BRR-132 to BRR-209
- Manuel Aragón Reyes, dated 5 April 2017
- Jaume Margarit, dated 18 April 2017

■ Exhibits C-343 to C-490

■ Legal Authorities CL-135 to CL-179.

■ Second Witness Statement of:

- Carlos Montoya, dated 27 June 2017, with exhibits¹⁸

■ Rebuttal Expert Reports by:

- Pablo Pérez Tremps and Marcos Vaquer Caballería, dated 21 June 2017
- Grant Greatrex, David Pérez López, Jesús Fernández Salguero and Carlos Montojo González, dated 27 June 2017, with exhibits DOC-048 to DOC-093

■ Exhibits R-244 to R-361

■ Legal Authorities RL-097 to RL-112.

On 13 February 2018, the Respondent proposed the disqualification of Mr. Gary Born, in accordance with Article 57 of the ICSID Convention and ICSID Arbitration Rule 9 (the "First Proposal"). On that date, the Centre informed the Parties that the proceeding had been suspended until the Proposal was decided, pursuant to ICSID Arbitration Rule 9(6).

The Parties were also informed that the Proposal would be decided by Professors Lowe and Douglas (the "Two Members"), in accordance with Article 58 of the ICSID Convention and ICSID Arbitration Rule 9(4).

On 27 February 2018, Mr. Gary Born furnished his explanations regarding the First Proposal in accordance with ICSID Arbitration Rule 9(3).

On 26 March 2018, the Tribunal invited the Parties to produce the judgment rendered by the Court of Justice of the European Union on 6 March 2018, in Case No. C-284/16, Slovak Republic v. Achmea B.V (the "Achmea Judgement"). The Parties were also invited to make written submissions on the implications for the present case of the Achmea Judgment by 27 April 2018.

On 22 June 2018, Mr. Gary Born submitted his resignation to the Secretary General of ICSID, and to Professors Lowe and Douglas, in accordance with ICSID Arbitration Rule 8(2).

On that same date, the Parties were notified of Mr. Born’s resignation and of the suspension of the proceeding. The Claimants were further invited to appoint an arbitrator in accordance with ICSID Arbitration Rule 11(1).

On 8 August 2018, Dr. Michael Pryles accepted his appointment as co-arbitrator in this case, and the Tribunal was reconstituted. Its members are Prof. Vaughan Lowe, QC, a national of the United Kingdom, President, appointed by agreement of the Parties; Dr. Michael Pryles AO, PBM, a national of Australia, appointed by the Claimant; and Prof. Zachary Douglas, QC, a national of Australia, appointed by the Respondent. The proceeding was resumed in accordance with ICSID Arbitration Rule 12.

The Parties have agreed that they will exchange further requests to add documents to the record in May 2019, prior to the hearing. Further, the Parties have agreed that they waive any objection to the timeliness of such requests under Procedural Order No. 1 on the basis that the opposing Party could have requested to add a document prior to May 2019, in the months after the Tribunal was reconstituted. This waiver of objections to timeliness will apply only to new legal authorities and exhibits regarding Spain's regulatory regime that have been made public after the Parties' original 12 February 2018 requests.

On 16 April 2019, the Respondent proposed the disqualification of Prof. Vaughan Lowe pursuant to Article 57 of the ICSID Convention and ICSID Arbitration Rule 9 (the "Second Proposal"). By letter of the same date, the Secretariat confirmed receipt of the Second Proposal and informed the Parties that (i) the Second Proposal would be decided by the other members of the Tribunal (the "Unchallenged Arbitrators") and (ii) the proceeding would be suspended until a decision had been taken on the Second Proposal.

On 28 April 2019, Prof. Lowe furnished his explanations on regarding the Second Proposal in accordance with ICSID Arbitration Rule 9(3).

Tribunal:
Prof. Vaughan Lowe QC President
Dr. Michael Pryles AO, PBM Arbitrator
Prof. Zachary Douglas QC Arbitrator

ICSID Secretariat:
Mr. Paul-Jean Le Cannu Secretary of the Tribunal

For the Claimants:
Counsel:
Mr. Reginald Smith King & Spalding
Mr. Kevin Mohr King & Spalding
Ms. Amy Frey King & Spalding
Mr. Jan Schafer King & Spalding
Mr. Christopher Smith King & Spalding
Ms. Violeta Valicenti King & Spalding
Mr. Karam Farah King & Spalding
Mr. Cristian Boruzi King & Spalding
Ms. Inés Vazquez García Gómez-Acebo & Pombo
Ms. Inés Puig-Samper Gómez-Acebo & Pombo
Ms. Cristina Matia Garay Gómez-Acebo & Pombo

Parties:
Mr. Andreas Nagel DSG
Ms. Mafalda Soto DSG / Brenes Abogados
Mr. Joachim Kruck (after examination) DSG
Mr. Peter Flachmann (after examination) DSG / KACO
Mr. Klaus Matuschke (after examination) DSG
Mr. Markus Schreck Tauber Solar
Mr. Antonio Jiménez Abraham Monereo Meyer Marinel-lo Abogados; Tauber Solar
Mr. Klaus-Bruno Fleck (after examination) Tauber Solar

For the Respondent:
Counsel:
Ms. María José Ruiz Sánchez Abogacía General del Estado
Mr. Pablo Elena Abad Abogacía General del Estado
Mr. Roberto Fernández Castilla Abogacía General del Estado
Ms. Almudena Pérez-Zurita Gutiérrez Abogacía General del Estado
Mr. Alberto Torró Molés Abogacía General del Estado

Court Reporter(s) :
Mr. Dante Rinaldi D-R Esteno, Spanish Court Reporter
Ms. María Eliana Da Silva D-R Esteno, Spanish Court Reporter
Ms. Luciana Sosa D-R Esteno, Spanish Court Reporter
Mr. Trevor McGowan The Court Reporter Ltd

Interpreters:
Mr. Jesús Getan Bornn English-Spanish
Ms. Amalia Thaler de Klemm English-Spanish
Mr. Marc Viscovi English-Spanish
Mr. Ralph Gerhardt English-German
Ms. Silke Schoenbuchner English-German
Ms. Barbara Weller English-German

On behalf of the Claimant(s):
Witness(es):
Mr. Joachim Kruck DSG
Mr. Peter Flachmann DSG / KACO
Mr. Klaus Matuschke DSG
Mr. Klaus-Bruno Fleck Tauber Solar
Mr. Markus Karl Tauber Solar
Mr. Karsten Reiss hagebau; Tauber Solar

Expert(s):
Mr. Jaume Margarit Independent Consultant, formerly Director of Renewable Energy at the IDAE
Dr. Manuel Aragón Reyes Autonomous University of Madrid (Professor of Constitutional Law) Mr. Carlos Lapuerta Brattle
Mr. Jose Antonio Garcia Brattle
Mr. Richard Caldwell Brattle
Mr. Alejandro Zerain Brattle
Ms. Aurora Velente Brattle

On behalf of the Respondent(s) :
Expert(s):
Dr. Marcos Vaquer Caballería Universidad Carlos III Madrid
Mr. Grant Greatrex Altran MaC Group
Mr. David Pérez López Altran MaC Group
Mr. Jesús Fernández Salguero Altran MaC Group
Mr. Carlos Montojo González Altran MaC Group
Mr. Antonio Sanchis Boscá Altran MaC Group

On 4 December 2019, pursuant to Section 16.3 of Procedural Order No. 1, the Respondent sought leave to file the Stadtwerke Award²⁰ and the BayWa Decision (the "4 December Section 16.3 Request").²¹ Further to the Tribunal’s invitation, the Claimants submitted comments on the 4 December Section 16.3 Request on 18 December 2019, along with their own request for leave to file additional legal authorities²² and a factual exhibit. The Respondent filed a response to the Claimants’ 18 December 2019 comments, including a request to file an additional legal authority,²³ on 9 January 2020.

The Tribunal notes that the Parties agree that the BayWa Decision and the Stadtwerke, OperaFund and Cube Awards should be admitted into the record by the Tribunal. By contrast, there is no agreement between the Parties as to the admission of the Claimants' proposed new factual exhibits, Royal Decree-Law (RDL) 17/2019 and statements by the Minister of Ecological Transition to the Spanish Parliament regarding RDL 17/2019.

The Tribunal has decided to allow the Parties to enter into the record the above-referred Decisions and Awards, including dissents, to the extent that they are publicly and freely available via the Internet and that either Party considers that the Tribunal should review them. As contemplated in Section 13 of PO1, the Tribunal does not require hard copies: it will be sufficient to send a list of such Decisions and Awards together with an indication of their legal authority number and where on the Internet they are to be found. The Tribunal does not wish to receive comments on these additional legal authorities.

The Tribunal further considers that no exceptional circumstances have been shown that would justify the admission of additional factual exhibits at this late stage. The Claimants' request for admission of further factual exhibits is therefore dismissed.

On 5 March 2020, the Respondent filed a request for leave to file the PV Investors Award²⁵ under Section 16.3 of PO1. The Claimants submitted comments on the Respondent's request on 9 March 2020.

The Tribunal recalls the Secretariat’s communication of 7 February 2020, which said that the Tribunal ‘will admit into the record any additional published decision or award issued in treaty arbitrations to which Spain is a party, on the conditions set forth in the Secretariat’s email of 24 January 2020. ’ Those conditions are that the Parties are allowed ‘to enter into the record the above-referred Decisions and Awards, including dissents, to the extent that they are publicly and freely available via the Internet and that either Party considers that the Tribunal should review them. As contemplated in Section 13 of PO1, the Tribunal does not require hard copies: it will be sufficient to send a list of such Decisions and Awards together with an indication of their legal authority number and where on the Internet they are to be found.’

The Tribunal confirms that it does not wish to receive comments from either Party on this additional legal authority immediately, and that it will invite a final comment, of limited length, from each Party on this and any other award or decision that has been published since the hearing. Those comments will be invited in the coming weeks, after which the Tribunal will formally close the proceedings.

On 26 October 2020, the Respondent submitted legal authorities RL-152 and 153 (the Decision on Jurisdiction, Liability and Directions on Quantum and the Dissenting Opinion of Mr. David R. Haigh Q.C., both issued on 31 August 2020 in Cavalum SGPS SA v. Kingdom of Spain (ICSID Case No. ARB/15/34)) and the Respondent’s consolidated list of legal authorities. The following day, the Claimants submitted Legal Authority CL-224 (the Decision on Jurisdiction, Liability and Directions on Quantum and the Dissenting Opinion of Prof. Pierre-Marie Dupuy, both issued on 8 October 2020 in STEAG GmbH v. Kingdom of Spain (ICSID Case No. ARB/15/4)) and the Claimants’ Consolidated List of Legal Authorities.

The Tribunal has decided that it would now be helpful to receive these submissions, in the form of a link to an on-line version of the Decision or Award in question and a brief comment (limited to 500 words for each Decision or Award) of its relevance to the case pleaded by the Party adducing the Decision or Award. The Parties should submit their comments simultaneously to the Tribunal secretary, by close of business (Washington DC) on Friday 04 December 2020. [Emphasis in the original]

On 22 March 2021, the Respondent submitted as legal authority RL-154 the Final Award rendered 8 March 2021 in Freif Eurowind Holdings Ltd. (United Kingdom) v. Kingdom of Spain, SCC Case V 2017/060, along with a consolidated List of Legal Authorities (RL). On 25 March 2021, the Respondent submitted an additional legal authority, the Decision on Jurisdiction and Liability issued on 17 March 2021 in Eurus Energy Holdings Corporation v. Kingdom of Spain (ICSID Case No. ARB/16/4) (legal authority RL-0155), and a consolidated List of Legal Authorities (RL). On 26 March 2021, the Tribunal through its Secretary acknowledged receipt of legal authorities RL-0154 and RL-0155, and indicated that it did not wish to receive any comment on them from either Party. The Tribunal also invited the Parties to confirm the accuracy of the lists of Party representatives and June 2019 hearing participants as provided to the Parties. On 29 March 2021, the Claimants confirmed the accuracy of the list of hearing participants with respect to the Claimants’ counsel, party representatives, fact witnesses, and experts, and requested certain modifications to the list of Claimants’ representatives. They also requested that the Respondent be required to submit the Partial Dissent of Arbitrator Oscar Garibaldi in the Eurus v. Spain case, which in their view the Respondent ought to have included with the Decision on Jurisdiction and Liability. By email of 4 April 2021 from the Secretariat, the Respondent was requested on behalf of the Tribunal to submit a copy of Mr. Garibaldi’s Partial Dissent in the interest of having a complete file. The Respondent submitted the Partial Dissent as legal authority RL-156 on 5 April 2021.

To work out the premiums, the voltage level on delivery of the power to the network, the effective contribution to environmental improvement, to primary energy saving and energy efficiency, the generation of economically justifiable useful heat and the investment costs incurred shall all be taken into account so as to achieve reasonable profitability.³⁸

3. The tariffs, premiums, incentives and supplements resulting from any of the revisions provided for in this section shall apply solely to the plants that commence operating subsequent to the date of the entry into force referred to in the paragraph above and shall not have a backdated effect on any previous tariffs and premiums.

The economic framework established in the present Royal Decree develops the principles provided in Law 54/1997, of 27 November, on the Electricity Sector, guaranteeing the owners of facilities under the special regime a reasonable return on their investments, and the consumers of electricity an assignment of the costs attributable to the electricity system which is also reasonable, although incentives are provided to playing a part in this market since it is considered that in this manner lower government intervention will be achieved in the setting of prices, together with better, more efficient, attribution of the costs of the system, particularly in respect of the handling of diversions and the provisions of supplementary services.

To this effect, a system which is analogous to that provided in Royal Decree 436/2004, of 12 March, is maintained, in which the owner of the facility may opt to sell their energy at a regulated tariff, which will be the same for all scheduling periods, or alternatively to sell this energy directly on the daily market, the term market, or through a bilateral contract, in this case receiving the price negotiated in the market plus a premium. In this latter case, an innovation is introduced for certain technologies, namely upper and lower limits for the sum of the hourly price in the daily market, plus a reference premium, such that the premium to be received for each hour may be limited in accordance with these values. This new system protects the promoter when the revenues deriving from the market price falls excessively low, and eliminates the premium when the market price is sufficiently high to guarantee that their costs will be covered, thus eliminating irrationalities in the payment for the technologies the costs of which are not directly related to the prices of petroleum in the international markets.

During the year 2010, on sight of the results of the monitoring reports on the degree of fulfilment of the Renewable Energies Plan (PER) 2005-2010, 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 2011-2020, there shall be a review of the tariffs, premiums, supplements and lower and upper limits defined in this Royal Decree with regard to 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, and a reasonable rate of profitability shall always be guaranteed with reference to the cost of money in the capital markets. Subsequently a further review shall be performed every four years, maintaining the same criteria as previously.

The revisions to the regulated tariff and the upper and lower limits indicated in this paragraph shall not affect facilities for which the deed of commissioning shall have been granted prior to 1 January of the second year following the year in which the revision shall have been performed.⁵⁴

Every 4 years the tariffs will be revised, bearing in mind compliance with the targets set. This will allow an adjustment to the tariffs in line with the new costs and the degree of compliance with the targets. The tariff revisions carried out in the future will not affect those installations already operating. This guarantee affords legal safety to the producer, providing stability to the sector and promoting its development. The new regulations will not be of a retroactive nature. The installations operating before January 1, 2008 may continue to adopt the previous regulations under the fixed tariff option throughout their working life.

The new text, which replaces Royal Decree 436/2004, fits into the energy policy commitment to drive forward the use of clean, native and efficient energies in Spain. The Government commitment to these energy technologies was the reason why the new regulations sought stability over time, which allows businessmen to carry out medium and long-term scheduling as well as a sufficient, fair return that, combined with stability, makes the investment and dedication to this activity attractive.

...

The new regulations will not be of a retroactive nature. The installations that are operational by January 1, 2008 may continue to adopt the previous regulations under the fixed tariff option throughout their operating life. When they take part in the market, they may maintain their prior regulation until December 31, 2012. These installations may voluntarily opt to abide by this new Royal Decree as from its publication.

It will be in 2010 that the tariffs and premiums set out in the proposal will be revised in accordance with the targets set in the Renewable Energies Plan 2005-2010 and in the Energy Efficiency and Savings Strategy and in line with the new targets included in the following Renewable Energies Plan for the period 2011-2020.

The revisions carried out in the future of the tariffs will not affect those Installations already in operation. This guarantee provides legal safety for the producer, affording stability to the sector and fostering its development.⁵⁷

The incentives under RD 661/2007 offered investors a fixed long-term tariff at rates equal or even higher - for relatively large facilities - than those offered under RD 436/2004. The full tariff would apply for twenty-five years, after which the facility would receive approximately 80% of the fixed tariff rate for the duration of the life of the facility. Further, the tariff would be adjusted annually under the consumer price index (CPI), which was also a clear indication that Spain would not arbitrarily modify the tariff in future years. Notably, the decree ensured that once a facility had been granted rights under the applicable tariff regime, any future revisions to the tariff rates would not impact those facilities. Thus, it was critically important for us to develop and finalize our facilities quickly so that they would receive the RD 661/2007 tariffs.⁵⁸

The development of this sector in Spain has totally outperformed the forecasts in 2005. To be precise, the target set for 2010 to attain 371 MW of photovoltaic energy was achieved in August 2007 and it is estimated that installed power at year-end 2008 will be fivefold the power target for 2010. Hence, since said goal has been surpassed, it is necessary to determine a new long-term target and a new legal framework which allows the continuity of the success achieved by this sector in Spain at reasonable costs. With this in mind, a Royal Decree has been approved which will allow 3,000 MW to be attained in 2010 and around 10,000 MW in 2020.⁶²

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, thereby reducing the excellent medium-term and long-term perspectives for this technology. 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.⁶³

Fifth additional provision. Modification of the compensation for generation by photovoltaic technology.

During the year 2012, based on the technological evolution of the sector and the market, and the functioning of the compensatory regime, compensation for the generation of electric power by photovoltaic solar technology may be modified.⁷¹

The objective of this Act is to harmonize our tax system with a more efficient use which greater respects [sic] the environment and sustainability, values which have inspired this reform of the tax system, and as such in line with the basic principles governing the tax, energy and, of course, environmental policies of the European Union.

In today's society, the increasingly greater effect of energy production and consumption on environmental sustainability requires a legislative and regulatory framework which guarantees for all the agents involved correct operation of the energy model which also contributes to preserving our rich environmental heritage.

The basic foundation of this Act lies in Article 45 of the Constitution, a precept in which the protection of our environment is established as one of [the] guiding principles of social and economic policies. One of the bases of this tax system reform will therefore be the internalization of the environmental costs arising from the production of electrical energy....

For this purpose and also with a view to favouring budgetary balance, Title I of this Act establishes a tax on the value of the production of electrical energy, of a direct and real nature, which is levied on the performance of activities of production and incorporation into the electricity system of electrical energy in the Spanish electricity system.⁸²

The data reported by the National Energy Commission in its report 35/2012 of the 20th of December on the order proposal establishing the access tolls are established from the 1st of January 2013 and tariffs and premiums of special regime facilities, has revealed the appearance of new deviations in estimates of costs and revenues caused by various factors, both for the end of 2012 and 2013, that in the current economic context, would render almost unfeasible their coverage with electric tolls and the items prescribed from the State General Budget.

These deviations are due largely to a higher growth in the cost of the special regime, due to an increase in the operation hours exceeding the projected and an increase in the compensation values after indexing to the Brent price, and a reduction of toll revenues due to a very sharp drop in demand which is consolidated for this exercise.

The proposed alternative would be a further increase in access tolls paid by electricity consumers. This measure would affect directly household economies and corporal [sic] competitiveness, both in a delicate situation, given the current economic situation.

Given this scenario, in order to alleviate this problem the Government has decided to adopt certain cost-reduction urgent measures to avoid the assumption of a new effort by consumers; helping them, through consumption and investment, to collaborate as well for the economic recovery.

Consequently, with the purpose of using a more stable index which is not affected by the volatility of unprocessed foods no[r] those from domestic fuels, all those remuneration updating methodologies that are linked to CPI shall substitute it by the Consumption Price Index to constant taxes with no unprocessed food nor energy products.⁸⁵

It shall be based on receiving the revenue derived from participation in the market, with an additional return that, if necessary, shall cover those investment costs that an efficient and well-managed company does not recover in the market. In this sense, according to community case law, a company shall be deemed as being efficient and well-managed if it has the necessary means for the development of its field, whose costs are those of an efficient enterprise in that field and considering the corresponding revenue and a reasonable profit for the execution of its functions. The aim is to ensure that the high costs of an inefficient company are not taken as reference.

…

This framework shall articulate a remuneration that shall allow renewable energy, cogeneration, and waste facilities to cover the costs necessary to compete in the market at an equal level with the rest of technologies and get a reasonable rate of return.

…

In this way, the Law carries out a balanced allocation of the costs attributable to the electricity system, electrical consumers and taxpayers, to the extent in which part of these costs are financed under the General State Budget.

Furthermore, Law 54/1997, of 27 November, stipulates the regulation on the concept of reasonable rate of return, setting it, in line with the legal principles on the particular case law developed within the last few years, within project profitability that will be focused, prior to taxes, on the average yield in the secondary market of State Obligations within ten years, by applying the appropriate differential.

In this way, the aim is to consolidate the continuous adaptation that the regulation has experienced, in order to keep this reasonable rate of return through a predictable system, subject to temporary realisation.⁹⁰

For purposes of the provisions of the penultimate paragraph of Article 30.4 of Law 54/1997, of 27 November, for the facilities that as of date of the entry into force of this Royal Decree law have the right to a feed-in tariff scheme, the reasonable rate of return shall focus, before taxes, on the average yield in the secondary market for ten years prior to the entry into force of this Royal Decree-Law of the Obligations of the State within ten years⁹¹ increased by 300 basic points, without prejudice to the revision envisaged in the last paragraph of that article.⁹²

Essentially, the continuous normative changes have entailed an important distortion to the normal operation of the electrical system and which needs to be corrected through action by the legislator which lends the regulatory stability that electrical activity requires. This regulatory safety, combined with the need to undertake the reforms needed to ensure the sustainability of system in the long-term and to resolve the existing shortcomings in system operation would recommend the approval of an overall reform of the sector, based on a new income and expenses regime for the electrical system which tries to return to the system the financial sustainability it lost a long time ago and whose eradication has not been achieved to date through the adoption of partial measures.

…

The present Law essentially sets out to establish the regulation for the Electrical Sector, ensuring electrical supply with the necessary quality levels and at the lowest possible cost, to ensure the economic and financial sustainability of the system and allow an effective competition level in the Electrical Sector, all within the environmental protection principles of a modern society.

…

The widespread awareness of the tariff deficit situation and the consequent threat to the very feasibility of the electrical system has led to the need to make major changes to the remuneration regime for regulated activities. In view of the progressive deterioration in the sustainability of the electrical system, the legal entities in the latter could no longer legitimately trust the maintenance of the parameters which had degenerated into the situation described and any diligent operator could anticipate the need for these changes.

For activities with regulated remuneration, the Law reinforces and clarifies the principles and criteria for establishing the remuneration regimes to which end the necessary costs will be considered to carry out activity by an efficient, well-managed company through the application of homogeneous criteria throughout Spain. These economic regimes will allow appropriate returns to be obtained with regard to the activity risk.

The technical and economic management of the system essentially maintains the other remuneration criteria, incorporating into the system operator’s remuneration incentives for the reduction of system costs deriving from the operation.

The high penetration of production technologies deriving from renewable energy sources, cogeneration and waste, included in the so-called special regime for electrical energy production, has meant that its unique regulation connected with power and its technology lacks any object. By contrast, it makes it necessary for regulation to consider these installations in a similar way to those of other technologies which will be integrated into the market and, in any case, for them to be considered because of their technology and impacts on the system, rather than because of their power which is why the differentiated concepts of ordinary and special regime are abandoned. This is why unified regulation is being carried out without prejudice to any unique considerations which need to be established.

The remuneration regime for renewable energies, cogeneration and waste will be based on the necessary participation in the market of these installations, complemented by market income with specific regulated remuneration which enables these technologies to compete on an equal footing with the other technologies on the market. This specific complementary remuneration will be sufficient to attain the minimum level required to cover any costs which, by contrast to conventional technologies, they cannot recover on the market and will allow them to obtain a suitable return with reference to the installation type applicable in each case.⁹⁵

Although, considering the circumstances existing at each moment in time, these provisions permitted the achievement of the purposes for which they were introduced, it cannot be overlooked that the forecasts prevailing when they were adopted were soon surpassed as a result of the highly favourable support framework. This circumstance, together with the fact that the costs of technology were gradually falling, made it necessary to make a series of amendments to the regulatory framework in order to guarantee both the principle of reasonable return and the financial sustainability of the system itself.

...

The measures adopted between 2009 and 2011 proved insufficient for fulfilling their intended aims and the regulatory framework was found to be suffering from certain failings—which remained uncorrected despite the huge effort made to adapt the regulation—seriously compromising the system's financial sustainability. This situation led to the adoption of Royal Decree-Act 1/2012, of 27th January, which suspended the remuneration pre-allocation procedures and withdrew financial incentives for new facilities generating electrical energy through cogeneration or from renewable energy sources or waste, and Royal-Decree Law 2/2013, of 1st February, on urgent measures for the electricity system and the financial sector, which, among other measures, amended Royal Decree 661/2007, of 25th May, eliminating the "market price plus premium" option applicable to certain technologies and establishing tariff-based remuneration for all special regime facilities, while at the same time modifying the criteria for updating the remuneration of regulated activities in the electricity system.

In this context—it having become apparent that the financial sustainability of the electricity system had to be guaranteed, that the successive amendments to the regulation required consolidation (among other reasons, to ensure the stringent and correct application of the principle of reasonable return), and that the regulatory framework needed to be reviewed in order to adapt it to the actual circumstances of the industry— Royal Decree-Act 9/2013, of 12th July, on urgent measures to ensure the financial stability of the electricity system, was passed.⁹⁸

Under this new framework, in addition to the remuneration earned by selling energy at market rates, facilities may also receive specific remuneration throughout their regulatory useful lives. This specific remuneration comprises an amount per unit of installed capacity, intended to cover any investment costs incurred by a standard facility that cannot be recovered through the sale of its energy on the market, known as "compensation for investments and an amount linked to operations, intended to cover any difference between a standard facility’s operating costs and the revenue generated from its participation in the energy production market, known as "compensation for operations".

The compensation for investments and compensation for operations applicable to a standard facility are to be calculated based on standard revenues from the sale of energy valued at market rates, standard operating costs required to perform the activity and the standard value of the initial investment—all three standard values established on the basis of an efficient, well-managed company. A set of compensation benchmarks will be established for each standard facility by order of the Ministry of Industry, Energy and Tourism....

The compensation for investments—and, where applicable, the compensation for operations—aims to cover the higher costs incurred by facilities that produce electricity from renewable energy, high-efficiency cogeneration and waste, so that they may compete on an equal footing with other technologies and obtain a reasonable return by reference to the standard facility applicable in each case.

Moreover, the concept of "reasonable return" on a project is introduced into the regulatory framework. In line with legal scholarship on this matter in recent years, reasonable return is set as a pre-tax return approximately equal to the average yield on ten-year government bonds in the secondary market for the 24-month period leading up to the month of May of the year prior to the commencement of a given regulatory period, increased by a spread.

…

Regulatory periods are to have a six-year duration. The first regulatory period spans from the date of entry into force of Royal Decree-Act 9/2013, of 12th July, to 31st December 2019. Each regulatory period is divided into two half-periods of three years each; the first half-period runs from the date of entry into force of Royal Decree 9/2013, of 12th July, to 31st December 2016.

The compensation benchmarks may be adjusted as part of a review conducted at the end of each regulatory half-period or period, pursuant to Article 14.1 of Act 24/2013, of 26th December.

All compensation benchmarks may be adjusted in the corresponding review, including the value upon which reasonable return is to be based over the remaining regulatory life of standard facilities.

…

Once a facility’s regulatory useful life⁹⁹ has elapsed, it will no longer receive the compensation for investments or compensation for operations. Such facilities may remain in operation, receiving only the remuneration earned on energy sales on the market.¹⁰⁰

a. The Tribunal lacks jurisdiction because the Claimants are not protected investors under Article 25 of the ICSID Convention. Alternatively, the Tribunal lacks jurisdiction due to the Respondent's lack of consent to having the multiple Claimants' claims heard in a single arbitration (the "Multi-Party Objection");¹¹²

b. The Tribunal lacks jurisdiction since the Claimants are not protected investors under the ECT. They are not nationals of another Contracting Party because both Germany and Spain are members of the EU, also a party to the ECT, and the ECT does not apply to disputes related to Intra-EU investments (the "Intra-EU Objection");¹¹³ and

c. The Tribunal lacks jurisdiction to decide on the alleged breach of Article 10(1) of the ECT arising from the introduction of the TVPEE by Law 15/2012. This is because Article 21 of the ECT enshrines a carve-out for taxation measures and the TVPEE is a taxation measure (the "Taxation Measure Objection").¹¹⁴

a. DSG Spanien Verwaltungs GmbH, DSG Deutsche Solargesellschaft mbH, Matthias Kruck, Joachim Kruck, Ralf Hofmann, Peter Flachsmann, Frank Schumm and Rolf Schumm have not demonstrated that they are investors in the plants;¹²⁹ and

b. Two of the Claimants, DSG Spanien Verwaltungs GmbH and Matthias Kruck, do not claim anything. Thus, there is no dispute as required by Article 25 of the ICSID Convention.¹³⁰

Third, the Claimants argue that several tribunals have recognized that multi-party arbitrations are permissible.¹⁴⁶ The correct standard for a multi-party arbitration, which has never been contested by the Respondent, is whether there is a common legal dispute, originated from the same facts and measures, and the relief sought is significantly similar.¹⁴⁷ There is no requirement that several named claimants in a single arbitration must hold "identical" investments.¹⁴⁸

a. They have not concealed any information and have taken great care to transparently describe their investments, their ownership and the damages claimed;¹⁵¹ as such, they have demonstrated their ownership, directly or indirectly, of all the assets related to their facilities;¹⁵²

b. DSG Spanien Verwaltungs GmbH and Mathias Kruck have not claimed any specific compensation to avoid double-counting; this does not affect the Respondent’s consent to arbitrate the dispute since these Claimants fulfil the jurisdictional requisites under the ECT and the ICSID Convention;¹⁵³

c. Deutsche Solar Ibérica Real State, S.L. and Solar Andaluz Grundstücks, S.L. are not Claimants in this proceeding. Some of the DSG Claimants share ownership of these companies and, as such, these two companies are investments in relation to the Projects in Alcolea, Calasparra and Todersillas;¹⁵⁴ and

d. DSG Deutsche Solargesellschaft GmbH holds contractual rights in relation to the Alcolea, Calasparra, and Tordesillas projects and these rights have been affected by the Respondent’s conduct;¹⁵⁵ in any event, the Claimants’ experts have ensured there will be no double recovery.¹⁵⁶

As previously explained, the 116 Claimants fall into two distinct (but informal) groups of investors that own investments related to solar photovoltaic plants in Spain. Those Claimants are listed and numbered in our letter of April 17, 2015.

Claimants numbered 1 through 73 in that list hold investments in three photovoltaic projects in Spain known as the Alcolea, Calasparra, and Tordesillas project (Request ¶¶ 2, 11-13, 33-39). Specifically, Claimants Joachim Kruck, Ralf Hofmann, Frank Schumm, Rolf Schumm, and Peter Flachsmann invested in the Alcolea solar park, which today consists of twenty 100 kW photovoltaic plants (see Request ¶¶ 12, 33). Those Claimants incorporated an engineering, procurement, and construction company in Spain called Solar Andaluz 2006 S.L. (Request ¶ 33), which constructed and financed the Alcolea project. Additionally, they incorporated Claimants Solar Andaluz 1-20 GmbH & Co. KGs in Germany, each of which owns a Spanish special purpose vehicle that in turn owns a 100 kW solar plant comprising the Alcolea project (Request ¶¶ 33, 35).

Claimants Joachim Kruck, Ralf Hofmann, and Peter Flachsmann further invested in two additional photovoltaic projects in Spain, called Calasparra and Tordesillas (Request ¶ 36). To manage construction of these projects, they formed DS Hispano Alemana Fotovoltaica Sociedad Unipersonal S.L. and incorporated Claimants Solarpark Tordesillas 401-430 GmbH & Co. KGs and Claimants Solarpark Calasparra 251-265 GmbH & Co. KGs (Request ¶¶ 36-38). Each of the Claimants Solarpark Tordesillas 401-430 GmbH & Co. KGs and Claimants Solarpark Calasparra 251-265 GmbH & Co. KGs owns a Spanish special purpose vehicle ("SPV") that in turn owns a 100 kW photovoltaic plant comprising the Calasparra and Tordesillas projects, respectively. The Claimants’ ownership interests in those SPVs and their ownership of the photovoltaic facilities are qualifying "investments."

Moreover, the investments of Claimant Kruck Beteiligungs GmbH include its contracts with all of the German limited partnerships named above to serve as their general partner (see Request ¶ 39). The investments of Claimants Peter Flachsmann, Joachim Kruck, and DSG Deutsche Solargesellschaft mbH ("DSG") include contractual rights and rights to money enshrined in operation and management contracts that Claimant DSG entered into with respect to each Spanish SPV (see id.). Further, Claimants Peter Flachsmann, Joachim Kruck, Ralf Hofmann, Frank Schumm, and Rolf Schumm’s investments include contractual rights and rights to money derived from lease agreements that a company they own, Solar Andaluz Grundstucks S.L. (SAG S.L.), entered into with the Alcolea SPVs (id.).

Separate from the investments described above, Claimants numbered 74 through 116 in our letter of April 17, 2015, own investments in and related to ten different solar photovoltaic projects held through a number of different SPVs in Spain. Specifically, Claimants TRC Energy GmbH, Sunburn Verwaltungs GmbH, and TS Villalba GmbH own fifteen 100 kW photovoltaic plants in the Cuenca III project (see Request ¶ 42; see also CEX-13). Claimant Sunburn Verwaltungs GmbH further owns six 100 kW photovoltaic plants comprising the Cabeza Oliva project. Tauber-Solar Sierra GmbH owns two 100 kW mounted photovoltaic plants comprising the Pozoblanco Rooftop project.

Claimants TS Abuzaderas 1-30 GmbHs own thirty 100 kW photovoltaic plants comprising the Abuzaderas project (id.). Claimant TS Avila Eins GmbH owns twenty 100 kW solar plants comprising the Avila project (id.). Claimants Karsten and J ü rgen Reiss, as well as Claimants WBG GmbH, TS Cuenca zwei GmbH, TRC Energy GmbH own seven 100 kW photovoltaic plants comprising the Cuenca I project (id.). Claimant ZKS GmbH owns a 415 kW photovoltaic plant called Henibra and Claimant TS Cuenca 20 GmbH owns a 415 kW photovoltaic plant called Boguar (see Request ¶ 43; see also CEX-13). Claimant TS Valtou GmbH owns a 476 kW photovoltaic plant called Valtou, and Claimant TS Cuenca 40 GmbH owns a 340 kW photovoltaic plant called Juan del Valle (id.). The Claimants’ ownership interests in their respective Spanish SPVs and their ownership of the respective photovoltaic facilities are qualifying "investments."¹⁶⁵

The relevant provision of ECT is Article 26, which reads as follows:

ARTICLE 26

SETTLEMENT OF DISPUTES BETWEEN AN INVESTOR AND A CONTRACTING PARTY

(1) 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 concern an alleged breach of an obligation of the former under Part III shall, if possible, be settled amicably.

(2) If such disputes can not be settled according to the provisions of paragraph (1) within a period of three months from the date on which either party to the dispute requested amicable settlement, the Investor party to the dispute may choose to submit it for resolution:

(a) to the courts or administrative tribunals of the Contracting Party party to the dispute;

(b) in accordance with any applicable, previously agreed dispute settlement procedure; or

(c) in accordance with the following paragraphs of this Article.

(3) (a) Subject only to subparagraphs (b) and (c), each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article.

(b) (i) The Contracting Parties listed in Annex ID do not give such unconditional consent where the Investor has previously submitted the dispute under subparagraph (2)(a) or (b).

(ii) For the sake of transparency, each Contracting Party that is listed in Annex ID shall provide a written statement of its policies, practices and conditions in this regard to the Secretariat no later than the date of the deposit of its instrument of ratification, acceptance or approval in accordance with Article 39 or the deposit of its instrument of accession in accordance with Article 41.

(c) A Contracting Party listed in Annex IA does not give such unconditional consent with respect to a dispute arising under the last sentence of Article 10(1).

(4) In the event that an Investor chooses to submit the dispute for resolution under subparagraph (2)(c), the Investor shall further provide its consent in writing for the dispute to be submitted to:

(a) (i) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington, 18 March 1965 (hereinafter referred to as the "ICSID Convention"), if the Contracting Party of the Investor and the Contracting Party party to the dispute are both parties to the ICSID Convention; or

(ii) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention referred to in subparagraph (a)(i), under the rules governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre (hereinafter referred to as the "Additional Facility Rules"), if the Contracting Party of the Investor or the Contracting Party party to the dispute, but not both, is a party to the ICSID Convention;

(b) a sole arbitrator or ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (hereinafter referred to as "UNCITRAL"); or

(c) an arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce.

(5) (a) The consent given in paragraph (3) together with the written consent of the Investor given pursuant to paragraph (4) shall be considered to satisfy the requirement for:

(i) written consent of the parties to a dispute for purposes of Chapter II of the ICSID Convention and for purposes of the Additional Facility Rules;

(ii) an "agreement in writing" for purposes of article II of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958 (hereinafter referred to as the "New York Convention"); and

(iii) "the parties to a contract [to] have agreed in writing" for the purposes of article 1 of the UNCITRAL Arbitration Rules.

(b) Any arbitration under this Article shall at the request of any party to the dispute be held in a state that is a party to the New York Convention. Claims submitted to arbitration hereunder shall be considered to arise out of a commercial relationship or transaction for the purposes of article I of that Convention.

(6) A tribunal established under paragraph (4) shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law.

(7) An Investor other than a natural person which has the nationality of a Contracting Party party to the dispute on the date of the consent in writing referred to in paragraph (4) and which, before a dispute between it and that Contracting Party arises, is controlled by Investors of another Contracting Party, shall for the purpose of article 25(2)(b) of the ICSID Convention be treated as a "national of another Contracting State" and shall for the purpose of article 1(6) of the Additional Facility Rules be treated as a "national of another State".

(8) The awards of arbitration, which may include an award of interest, shall be final and binding upon the parties to the dispute. An award of arbitration concerning a measure of a sub-national government or authority of the disputing Contracting Party shall provide that the Contracting Party may pay monetary damages in lieu of any other remedy granted. Each Contracting Party shall carry out without delay any such award and shall make provision for the effective enforcement in its Area of such awards.

The express terms of ECT Article 26 are clear. It makes provision for the arbitration of "a dispute" or "the dispute" between the parties to it, and thus indicates an assumption that it is what might be called a ‘single’ or a ‘unitary’ dispute that will come before an arbitral tribunal. Article 26(3)(a) refers to "consent to the submission of a dispute to international arbitration", and in adding qualifications (not relevant here) to that provision, paragraphs (3)(b) and (c) refer respectively to "the dispute" and "a dispute" in the singular. Similarly, Article 26(4) addresses situations in which an Investor chooses to "submit the dispute" for resolution, referring consistently to "the dispute." Article 26(5), (7), and (8) also refer throughout to "a dispute" or "the dispute", in the singular.

The only elements of the language of Article 26 that might suggest that it is possible to file multiple ‘disputes’ as a single ‘case’ appear in Article 26(1) and (2). Those paragraphs refer to "disputes", and appear to refer to disputes in the plural. Those paragraphs are, however, setting out general provisions applicable to each and every dispute "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 concern an alleged breach of an obligation of the former under Part II." Paragraph (1) says that such disputes (i.e., each and every dispute within the definition in paragraph (1)) "shall, if possible, be settled amicably." Paragraph (2) opens by referring to "such disputes", i.e., the disputes identified by paragraph (1): it provides (with emphasis added) that "[i]f such disputes can not be settled according to the provisions of paragraph (1) within a period of three months from the date on which either party to the dispute requested amicable settlement, the Investor party to the dispute may choose to submit it for resolution..." But its meaning would be more accurately rendered by stating that the words "if any such dispute" cannot be so settled it may be submitted for resolution. It would be completely and obviously nonsensical to say that all disputes falling with Article 26(1) must remain unsettled before any such dispute may be submitted for resolution.¹⁶⁹

For these reasons, the Tribunal finds that the consent to arbitrate given in ECT Article 26, and specifically in Article 26(3) is a consent to accept the submission of a dispute to a tribunal, and does not amount to consent to submit two or more distinct disputes to a tribunal in a single proceeding. This is not a question of the ECT or the ICSID Convention or Arbitration Rules imposing "a requirement of separate consent to a multi-party arbitration", as the Claimants put it:¹⁷¹ it is a question of the precise scope of the Respondent’s actual consent.

The TS Investors Group made all of the foregoing investments in Spain in reliance on certain incentive regimes that Spain specifically established to attract the type of projects that the TS Investors Group owns and operates. The TS Investors Group developed or acquired six of the projects mentioned above — Cuenca I, Cuenca III, Cabeza Oliva, Pozoblanco Rooftop, Abuzaderas and Gotarrendura — with the expectation that those parks would benefit from the remunerative regime established in Royal Decree 661/2007 of May 25, 2007, regulating the activity of electrical energy generation by means of renewable facilities ("RD 661"). TS Investors Group expected its four additional solar projects — Henibra, Boguar, Valtou and Juan del Valle — to benefit from the remunerative regime established in Royal Decree 1578/2008 of September 26, 2008 ("RD 1578").

Both RD 661 and RD 1578 contained attractive remuneration schemes that made creating photovoltaic facilities in Spain worthwhile and economically viable. The TS Investors Group would not have invested in Spain by acquiring and developing those photovoltaic facilities in the absence of the incentives included in that legislation.¹⁸⁴

a. the DSG Claimants and the TS Claimants were at no stage prior to these proceedings in contact with one another;

b. there is no evidence that they shared a one and the same approach to their respective investments or common facilities;

c. they did not invest in the same projects; and

d. the two groups took their advice from different sources and in different ways and at different times.¹⁸⁹

The Preliminary Award on Jurisdiction in the PV Investors case¹⁹⁰ contains a careful and detailed consideration of the question of multiple claims, reviewing earlier decisions on the topic. The PV Investors tribunal distinguished between "aggregate proceedings", in which multiple, individual claimants bring claims in their own name ab initio in one single arbitration, and "consolidation", in which pending parallel proceedings are joined into a single one, finding that the joinder of claims in consolidation requires specific consent but that aggregate proceedings do not.¹⁹¹ Importantly, however, the PV Investors tribunal referred to the need for a "sufficient connection" between the claimants in that case. It said,

... the Tribunal is satisfied that a sufficient connection exists between them to justify hearing the Claimants’ claims in one single arbitration. The Claimants complain of the same measures taken by Spain in relation to the PV sector, which they allege have negatively affected their investments. In addition, they invoke the same Treaty provisions and claim the same type of relief. Thus, the Tribunal does not believe that any diversities in the Claimants’ situations would make the proceedings unmanageable or unworkable.¹⁹²

As was noted above, this might be described as a being the result of a jurisdictional defect, because the Claimants have not accepted the ‘offer' to arbitrate made by the Respondent in ECT Article 26 but have in effect proposed an alternative mode of arbitration of disputes, permitting the concurrent handling of a number of disparate disputes in a single proceeding, to which the Respondent has not agreed.

As was indicated above, the Tribunal will now address the question whether it has jurisdiction ratione personae over each of the DSG Claimants. Jurisdiction ratione personae exists under ECT Article 26(1) if there is a dispute "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 concern an alleged breach of an obligation of the former under Part III" of the ECT. An "Investor" is defined in ECT Article 1(7). So far as is material it reads as follows:

"Investor" means:

(a) with respect to a Contracting Party:

(i) a natural person having the citizenship or nationality of or who is permanently residing in that Contracting Party in accordance with its applicable law;

(ii) a company or other organisation organised in accordance with the law applicable in that Contracting Party

The registration certificates of Claimants 66 and 67,²⁰⁴ the private companies DSG Deutsche Solargesellschaft mbH and Kruck Beteiligungs GmbH (later renamed DSG Spanien Verwaltungs GmbH²⁰⁵), have established their German nationality. So, too, have the registration certificates of Claimants 1-65, the limited liability partnerships Solar Andaluz 1-20 GmbH & Co. KG, Solarpark Calasparra 251-265 GmbH & Co. KG, and Solarpark Tordesillas 401-430 GmbH & Co. KG.²⁰⁶ Each being a "company or other organization organized in accordance with the law applicable in [Germany]", these companies and limited partnerships fall within the definition of an investor in ECT Article 1(7)(a)(ii). As nationals of Germany, the Claimants are also "nationals of another Contracting State" within the meaning of Article 25 of the ICSID Convention. The Tribunal therefore decides that it has jurisdiction ratione personae over these Claimants under ECT Article 26 and Article 25 of the ICSID Convention.

ECT Article 1(6) sets out the definition of an "investment." Together with its accompanying ‘Understanding’, it reads as follows:

(6) "Investment" means every kind of asset, owned or controlled directly or indirectly by an Investor and includes:

(a) tangible and intangible, and movable and immovable, property, and any property rights such as leases, mortgages, liens, and pledges;

(b) a company or business enterprise, or shares, stock, or other forms of equity participation in a company or business enterprise, and bonds and other debt of a company or business enterprise;

(c) claims to money and claims to performance pursuant to contract having an economic value and associated with an Investment;

(d) Intellectual Property;

(e) Returns;

(f) any right conferred by law or contract or by virtue of any licences and permits granted pursuant to law to undertake any Economic Activity in the Energy Sector.

A change in the form in which assets are invested does not affect their character as investments and the term "Investment" includes all investments, whether existing at or made after the later of the date of entry into force of this Treaty for the Contracting Party of the Investor making the investment and that for the Contracting Party in the Area of which the investment is made (hereinafter referred to as the "Effective Date") provided that the Treaty shall only apply to matters affecting such investments after the Effective Date.

"Investment" refers to any investment associated with an Economic Activity in the Energy Sector and to investments or classes of investments designated by a Contracting Party in its Area as "Charter efficiency projects" and so notified to the Secretariat.

[UNDERSTANDING] With respect to Article 1(6)

For greater clarity as to whether an Investment made in the Area of one Contracting Party is controlled, directly or indirectly, by an Investor of any other Contracting Party, control of an Investment means control in fact, determined after an examination of the actual circumstances in each situation. In any such examination, all relevant factors should be considered, including the Investor’s

(a) financial interest, including equity interest, in the Investment;

(b) ability to exercise substantial influence over the management and operation of the Investment; and

(c) ability to exercise substantial influence over the selection of members of the board of directors or any other managing body.

Where there is doubt as to whether an Investor controls, directly or indirectly, an Investment, an Investor claiming such control has the burden of proof that such control exists.

On the other hand, Article 16 of the ECT establishes the rules of compatibility between earlier and later treaties. Relying on Electrabel v Hungary, the Respondent argues that "Article 16 ECT is not applicable" and that "if the ECT and EU law remained incompatible notwithstanding all efforts at harmonisation,... EU law would prevail over the ECT’s substantive protections and that the ECT could not apply inconsistently with EU law to such a national’s claim against an EU Member State."²³⁰ In any event, investor and investment protections under EU law are complete and at least as favourable as the protections provided under the ECT.²³¹

Moreover, the general rule in international law is that when two treaties share the same subject-matter, an earlier-in-time treaty applies unless it is found to be incompatible with the later-in-time treaty.²⁴⁸ For the Claimant, it is unclear whether the ECT and the EU treaties share the same subject-matter and, even if they did, as many tribunals have concluded, there is no incompatibility between them.²⁴⁹

1.1 Scope of the amicus curiae brief

3. As set out in the request for leave to intervene as amicus curiae, the Commission's request is at this stage limited to the question whether your Arbitral Tribunal has jurisdiction to hear the case. The Commission takes the view that when concluding the ECT, the European Communities (including EURATOM) and their Member States have not created obligations under international law inter se with regard to investment promotion and protection. They have only created such obligations with regard to third countries, that is countries that are not EU Member States, and investors that are companies or citizens of those third countries. As a consequence, investors that are incorporated under the laws of an EU Member State ("EU investors") cannot bring an ISDS case against an EU Member State on the basis of [Article] 26 ECT....

4. The Commission also wishes to inform the Arbitral Tribunal that the Kingdom of Spain has notified the disputed measures, i.e. its national support scheme for electricity production from renewable energy sources (referred to by the Kingdom of Spain as the so-called "special regime") and the subsequent adoption of various legislative and regulatory measures approved by the Spanish Parliament and the Spanish Government that affect producers of electricity from renewable energy sources, to the Commission on the basis of Article 108(3) of the Treaty on Functioning of European Union ("TFEU"). Should the Arbitral Tribunal take the view that in order to decide the dispute in front of it, it becomes necessary to analyse the compliance of special regime, in so far as it applies to electricity production from renewable energy sources, with State aid rules, for example for assessing whether the investors had legitimate expectations, the Commission invites the Arbitral Tribunal to suspend the dispute until the Commission has taken a view on Spain's notification....

1.2. Summary of the Commission’s position and precedent

5. In a nutshell, the Commission’s argument can be summarized as follows: Investment protection for investments carried out by an EU investor in another EU Member State is governed by Union law, in particular the rules of free movement of capital and freedom of establishment, the general principles of Union law, the Charter of Fundamental Rights of the European Union ("Charter of Fundamental Rights"), and relevant secondary legislation. Pursuant to Article 3(2) TFEU, EU Member States are prohibited from concluding an agreement between themselves which might affect rules of Union law or alter their scope. It follows that Member States lack the competence to conclude bilateral or multilateral international agreements concerning such protection of investments.

6. That has two consequences:

7. First, the Kingdom of Spain, on the one hand, and the Federal Republic of Germany, on the other hand, when ratifying the ECT, were Member States of the European Communities and did not have the competence to enter into inter se obligations concerning protection of investments made by EU investors. That competence lay with the European Communities (and now lies with the Union and EURATOM). A detailed analysis of the ECT also shows that the ECT can be interpreted consistent with those competences, and that the Contracting Parties of the ECT did not have the intention of creating inter se obligations concerning investment protection for EU investors between EU Member States.

8. Second, the appropriate forum for the claimants to bring an action against the Kingdom of Spain is the competent national court or tribunal, which is the juge du droit commun du droit de l'Union ("the ‘ordinary’ courts within the Union legal order"). In that forum, the claimants could have relied on the relevant rules of Union law, and they could have asked the competent judge to decide whether the ECT, which is part of Union law, applies to their case or not, as that question is ultimately a question of Union law. If necessary, those courts and tribunals would have the possibility, and, for the judge in last instance, the obligation, to refer the question of the applicability of the ECT to EU investors when investing in another Member State to the European Court of Justice ("ECJ").

9. In recent years, the number of cases brought by investors from one EU Member State against another EU Member State under the ECT has significantly increased. The Commission considers that all those proceedings are brought in an incompetent forum, and that investors should bring those cases in the competent national courts and tribunals, which are the ordinary judges of Union law (for the investors).

10. The Commission therefore seeks systematically to intervene in such arbitration proceedings of which it believes that they have been brought in an incompetent forum, as they involve issues of Union law.²⁶⁴

ECT Article 26 sets out the dispute settlement provisions pursuant to which the Claimants' application in this case has been filed. Because of its importance, it is quoted (in part) again here.

Article 26

Settlement of Disputes between an Investor and a Contracting Party

(1) 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 concern an alleged breach of an obligation of the former under Part III shall, if possible, be settled amicably.

(2) If such disputes can not be settled according to the provisions of paragraph (1) within a period of three months from the date on which either party to the dispute requested amicable settlement, the Investor party to the dispute may choose to submit it for resolution:

(a) to the courts or administrative tribunals of the Contracting Party party to the dispute;

(b) in accordance with any applicable, previously agreed dispute settlement procedure; or

(c) in accordance with the following paragraphs of this Article.

(3) (a) Subject only to subparagraphs (b) and (c), each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article.

…

(4) In the event that an Investor chooses to submit the dispute for resolution under subparagraph (2)(c), the Investor shall further provide its consent in writing for the dispute to be submitted to:

(a) (i) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington, 18 March 1965 (hereinafter referred to as the "ICSID Convention"), if the Contracting Party of the Investor and the Contracting Party party to the dispute are both parties to the ICSID Convention;

The question whether this is a "dispute" (in the singular) was addressed in the section above on the ‘multi-party objection’. The next question is whether the dispute is, in the words of ECT Article 26(1), a dispute "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 concern an alleged breach of an obligation of the former under Part III [of the ECT]." The only question here is whether the Claimants are "Investors" of "another Contracting Party." If they are, the remaining requirements in Article 26(1) are plainly met.

Clearly, it is not the simple fact that the EU is an ECT Contracting Party that is relevant: it is the relationship between the EU and the two States involved in this case. But nothing in the wording of ECT Article 26 points to the conclusion that because the EU is itself a Contracting Party, Germany and Spain cease to be distinct Contracting Parties vis-à-vis one another. Provision could have been made to that effect in ECT Article 26; or an additional "Understanding" of the kind attached to many ECT Articles (including Article 26 itself)²⁶⁶ could have been adopted in relation to Article 26; or some other provision in the ECT could have made plain the relationship between EU Law and the ECT; or an instrument of the EU could have made explicit to EU States how they and their nationals were to act in relation to disputes covered by the substantive provisions of the ECT, and perhaps have invited other ECT Contracting Parties to agree to what would have been a regional derogation from the terms of the Treaty.

There is a further point of great importance. The ECT itself does make provision for circumstances where two treaties appear to be in conflict. ECT Article 16, together with the Decision relating to its application, reads as follows:

Article 16

Relation to Other Agreements

[DECISION] With respect to the Treaty as a whole

In the event of a conflict between the treaty concerning Spitsbergen of 9 February 1920 (the Svalbard Treaty) and the Energy Charter Treaty, the treaty concerning Spitsbergen shall prevail to the extent of the conflict, without prejudice to the positions of the Contracting Parties in respect of the Svalbard Treaty. In the event of such conflict or a dispute as to whether there is such conflict or as to its extent, Article 16 and Part V of the Energy Charter Treaty shall not apply.*

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 or V 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.

*Decision n. 1 with respect to the Energy Charter Treaty (Annex 2 to the Final Act of the European Energy Charter Conference).

The ordinary meaning of these words is plain. Applied in this context they mean that nothing in the ECT derogates from any provision of any of the EU treaties in relation to investment promotion and protection (ECT Part III) or from any right to dispute resolution; and nothing in the EU treaties derogates from any provision of any of the ECT in relation to investment promotion and protection (ECT Part III) or from any right to dispute resolution. The explicit reference to the Svalbard Treaty highlights the silence of Article 16 in relation to the EU treaties. It is difficult to see that any reader of the ECT and of Article 16 in particular could fail to draw from it an understanding that the ECT and the EU treaties were intended by ECT Contracting Parties (including the EU) to co-exist, with investors entitled to take the benefit of the more favourable treaty provision in any particular case.

The Tribunal was referred by the Parties and by the European Commission as amicus curiae to the awards of other tribunals on this point and to the relevant decisions of the Court of Justice of the European Union, and it has considered them carefully. The Tribunal understands that the EU, as an REIO, will decide for itself on the relationship between its legal order and international law, as must any system of municipal law. But just as the Union Court may consider itself bound to uphold the supremacy of EU law, this Tribunal must apply the rules and principles of international law, in accordance with ECT Article 26(6). EU law, like municipal laws, has a very important role in the development and the application of international law; but it cannot prevail over it.

Article 21

Taxation

(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.

The Respondent denies that for a measure to be covered by the carve - out of Article 21(1) of the ECT, such measure must not only fall within the definition of a Taxation Measure in ECT Article 21(7)(a)(i) but must also (as the Claimants contend) be shown to be bona-fide. However, should the Tribunal accept that this is the case, the Respondent submits that the TVPEE is in fact a bona-fide taxation measure.²⁷¹ The Respondent does not challenge the Tribunal's jurisdiction to rule upon alleged breaches of Article 13 of the ECT arising out of the TVPEE, which is a matter specifically addressed by ECT Article 21(5).²⁷²

The Claimants argue that under case law, for a measure to be considered a bona fide tax measure, it must: (1) be imposed by law; (2) be imposed on a broad class of persons; and (3) raise money for the State’s treasury to be used for public purposes. They concede that the TVPEE was imposed by law but state that it does not fulfil requisites (2) and (3).³⁰⁰

The question whether the TVPEE is a tax arises under ECT Article 21(1), and is thus a question of treaty interpretation. The classification of the TVPEE in domestic law, while plainly a matter to be taken into account, is not determinative.

Title I of this Act establishes a tax on the value of the production of electrical energy, of a direct and real nature, which is levied on the performance of activities of production and incorporation into the electricity system of electrical energy in the Spanish electricity system. This tax will be levied on the economic capacity of electrical energy producers whose installations give rise to significant investments in the electrical energy transport and distribution networks in order to be able to evacuate the energy loaded thereto, and entail, by themselves or as results of the existence and development of the said networks, unquestionable environmental effects, as well as the generation of highly significant costs necessary for maintaining the guarantee of supply. The tax will be applied to the production of all generation installations.³⁰⁹

The Tribunal accordingly decides that the TVPEE was a tax, and that it engages the operation of ECT Article 21(1). Claims brought under ECT Article 10 based on the effect of the TVPEE are therefore outside the jurisdiction of the Tribunal.

It is to be noted that, as the Respondent has pointed out,³¹⁰ the tax carve-out under ECT Article 21(1) does not affect claims of violations of ECT Article 13 (Expropriation).³¹¹ As the Respondent has also pointed out, ECT Article 21(5) requires an Investor alleging expropriation to "refer the issue of whether the tax is an expropriation or whether the tax is discriminatory to the relevant Competent Tax Authority." ECT Article 21(5) reads as follows:

Article 21

Taxation

(5) (a) Article 13 shall apply to taxes.

(b) Whenever an issue arises under Article 13, to the extent it pertains to whether a tax constitutes an expropriation or whether a tax alleged to constitute an expropriation is discriminatory, the following provisions shall apply:

(i) The Investor or the Contracting Party alleging expropriation shall refer the issue of whether the tax is an expropriation or whether the tax is discriminatory to the relevant Competent Tax Authority. Failing such referral by the Investor or the Contracting Party, bodies called upon to settle disputes pursuant to Article 26(2)(c) or 27(2) shall make a referral to the relevant Competent Tax Authorities;

(ii) The Competent Tax Authorities shall, within a period of six months of such referral, strive to resolve the issues so referred. Where non-discrimination issues are concerned, the Competent Tax Authorities shall apply the non-discrimination provisions of the relevant tax convention or, if there is no non-discrimination provision in the relevant tax convention applicable to the tax or no such tax convention is in force between the Contracting Parties concerned, they shall apply the non-discrimination principles under the Model Tax Convention on Income and Capital of the Organisation for Economic Co-operation and Development;

(iii) Bodies called upon to settle disputes pursuant to Article 26(2)(c) or 27(2) may take into account any conclusions arrived at by the Competent Tax Authorities regarding whether the tax is an expropriation. Such bodies shall take into account any conclusions arrived at within the six-month period prescribed in subparagraph (b)(ii) by the Competent Tax Authorities regarding whether the tax is discriminatory. Such bodies may also take into account any conclusions arrived at by the Competent Tax Authorities after the expiry of the six-month period;

(iv) Under no circumstances shall involvement of the Competent Tax Authorities, beyond the end of the six-month period referred to in subparagraph (b)(ii), lead to a delay of proceedings under Articles 26 and 27.

(1) The jurisdictional objection based upon the relationship between the ECT and EU law is rejected; [paragraph 295, above]

(2) The jurisdictional objection based upon the tax carve-out in ECT Article 21 is upheld, and claims brought under ECT Article 10 based on the effect of the TVPEE are outside the jurisdiction of the Tribunal; [paragraph 322, above]

(3) The objection referred to as the multi-party objection is upheld in part, and the Tribunal decides that it will not proceed to determine the merits of the claims of the TS Claimants because they are not part of ‘the dispute' that the Respondent agreed to arbitrate; [paragraphs 238-239, above]

(4) The Tribunal will proceed to determine the merits of the claims of the DSG Claimants; [paragraphs 244, 253 above]

(5) A written submission may be made by (i) the group of DSG Claimants and (ii) the Respondent, in accordance with paragraphs 242-243 above, each explaining the position specifically in relation to the claims of DSG Claimants; [paragraph 243, above]

(6) The Tribunal will take the necessary steps to proceed with the determination of the remaining questions, including questions bearing upon jurisdiction, relating to the DSG claims; [paragraphs 252-253, above] and

(7) The question of costs is reserved for decision in the context of its Award. [paragraph 325, above]