The Parties’ Experts agree on a number of points:

- each of the CSP projects fail to obtain the Tribunal’s target 6.86% after-tax lifetime project return under the New Regulatory Regime;¹

- the incremental cash flow² that is necessary for each of the CSP plants to obtain the Tribunal’s target 6.86% after-tax lifetime project return;³

- the damages analysis must translate the series of incremental cash flows into present value figures;⁴

- using a discounted cash flow ("DCF") model and adopting a "Valuation Date" of 30 June 2014, matching their respective expert reports and financial models;⁵

- projecting cash flows based on the expectations as of the Valuation Date, and discounting the projected cash flows to the Valuation Date using a discount rate based on market conditions as of the Valuation Date;⁶

- Using the same DCF model for the CSP projects to estimate damages for Legitimate Expectations (CSP) and the same DCF model for the wind projects to estimate damages for Retroactivity (Wind).⁷

On the other hand, the Parties disagree on several points regarding the calculation of damages for CSP Plants and the wind plants.

However, the experts disagree on the methodology to calculate the WACC within the APV method. But it is to be noted that, while Brattle does propose a complete alternative WACC to that end, BDO, which agrees that the WACC calculated by the Tribunal for determining the reasonable return does not fit the APV method, nevertheless uses "the Tribunal’s valuation methodology and parameters, such as the beta, the financial leverage, cost of debt, income tax rate, etc"¹⁸. As Brattle rightly states: "The Tribunal did not propose its WACC for the discount rate."¹⁹ Therefore, there is no objection to adopt a different methodology to calculate the WACC for evaluating the damages and, in this regard, the Tribunal is of the view that the WACC calculated by Brattle is more appropriate:

- The Tribunal notes that BDO only calculates its WACC with parameters used by the Tribunal in its Decision, while acknowledging that the Tribunal’s WACC was calculated for another purpose, without demonstrating why these parameters would also be relevant for the calculation of damages;

- In particular, the method used by the Tribunal to calculate the reasonable return does not appropriately take into account the financing of the debt in a way which should, in all fairness, be taken into account when evaluating the damages;

- As both Experts agree, it is also necessary to take into account (and deduct) the interest tax shield, which would not have been appropriate for calculating the return;

- As explained by Brattle, the use of BDO’s WACC results in the appearance of a present value gain at Arenales under the New Regulatory Regime, while both experts "agree that each of the CSP projects fail to obtain the Tribunal’s target 6.86% after-tax lifetime project return under the New Regulatory Regime."²⁰

- When applying the APV method, it is apposite to take June 2014 as the critical date for these calculations as both Experts agree.

When defining the methodology to calculate the reasonable return, the Tribunal explained:

"There can be no doubt that the ECT protects shareholder interests. As such, it ensures to them the right to a fair and equitable treatment, including the respect of their legitimate expectations. As the Tribunal already explained, the only legitimate expectations the Claimants had in this case was to obtain the reasonable return that the Respondent was committed to. It is therefore necessary to look precisely at the Respondent’s commitment. Both the Claimants and the Respondent agree that the reasonable return targeted by the Spanish law is a project IRR. The Tribunal see no reason to decide otherwise."²⁸

As a reminder: the Tribunal found in its Decision that the New Regime is retroactive because:

- It grants the investors a 7,398% return per year;

- The Claimants received more in the early years (before 2014) as they were under the old regime;

- As a result, Spain considered that the Claimants will have less than 7,398% in the future (after 2014) in order to compensate for the surplus that they had under the old regime.

In order to calculate the damages suffered by the Claimants, it is therefore necessary, as proposed by the Claimants’ Experts, to attribute to them the difference between:

- what they earned under the old regime and;

- the 7,398% target.

Interests (whether pre or post award) are a necessary consequence of the principle of full reparation. They are a compensation for the damage suffered by the loss of use of the principal sum during the period for which the payment thereof continued to be withheld. As noted by the Middle East Cement v. Egypt tribunal, "[i]nternational jurisprudence and literature have recently, after detailed consideration, concluded that interest is an integral part of the compensation due."⁶⁴ Interests have the function to reimburse the Claimant(s) for the delay in the payment of funds owed because "compensation must not be eroded by the passage of time or by the diminution in the market value"⁶⁵. Therefore, interests are awarded to ensure that the present value of the judgment equals the present value of the harm and the start date for the prejudgment interests should be the date of breach or loss⁶⁶. In this matter, the Arbitral Tribunal shares the view of the tribunal in Micula v. Romania which did "not see why the cost of the deprivation of money (which interest compensates) should be different before and after the Award [...]. Both are awarded to compensate a party for the deprivation of the use of its funds."⁶⁷ Consequently, interests should be paid from the date of the occurrence of the damages until that of the payment and there is no reason to make a distinction between the pre-Award and post-Award interests; in both cases, the purpose is to make good of the harm caused to the Claimants by the breaches of the Respondent’s obligations.

This is in keeping with Article 38 of the ILC Articles on Responsibility of States for Internationally Wrongful Acts:

"1. Interest on any principal sum due under this chapter shall be payable when necessary in order to ensure full reparation. The interest rate and mode of calculation shall be set so as to achieve that result.

2. Interest runs from the date when the principal sum should have been paid until the date the obligation to pay is fulfilled."⁶⁸

Moreover, this has been the general practice of ICSID tribunals.

Although it is conscious that there is no jurisprudence constante as to the choice between compound or simple interest, the Tribunal shares the view of the Santa Elena v. Costa Rica tribunal:

"[W]here an owner of property has at some earlier time lost [whether fully or partly] the value of his asset but has not received the monetary equivalent that then became due to him, the amount of compensation should reflect, at least in part, the additional sum that his money would have earned, had it, and the income generated by it, been reinvested each year at generally prevailing rates of interest."⁶⁹

In other words, "compound interest better reflects current business and economic realities and therefore the actual damage suffered by a party."⁷⁰

The Claimants have submitted the following claims for legal and other costs:

"the Claimants would not be covered by International Law and the costs incurred by the Respondent for its defense come from Spanish taxpayers and could have been used in other public needs instead. Therefore, the result of this arbitration should be neutral for the Spanish public budget."⁷⁷

The Respondents also argues that the Claimants’ behaviour has not been always presided by bona fide during the proceedings and points out several of the Claimants’ acts:⁷⁸

- Not providing 24 hours prior to the commencement of the hearing on jurisdiction with the power point presentations which were going to be used by them, in violation of Section 16.7.1 of Procedural Order No. 1;

- Requesting 134 categories of documents during the production phase and only providing a few of them with their Statements;

- Trying to submit new calculations by Brattle a few days before the hearings on the merits; - Wilfully omitting to submit important facts until the direct examination of two of their witnesses without meeting the prerequisites established by Procedural Order No.l, Section 18.3;

- Making baseless accusations that made Respondent’s counsel work more than required.