|Annulment Application or Application||Spain's application dated 21 July 2020 for annulment of the Award|
|Arbitral Tribunal or Tribunal||Arbitral tribunal constituted on 31 March 2016 in the original proceeding|
|Arbitration Rules or ICSID Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings 2006|
|Award||Final award rendered on 21 January 2020 in the original arbitration proceeding|
|Claimants||Watkins Holdings S.à r.l.; Watkins (Ned) B.V.; Watkins Spain, S.L.; Redpier, S.L.; Northsea Spain S.L.; Parque Eólico Marmellar, S.L.; and Parque Eólico La Boga, S.L.|
|Committee||Ad hoc annulment committee constituted on 13 January 2021 comprising Professor Lawrence Boo Geok Seng (president), Ms Olufunke Adekoya (member), and Ms Dyalá Jiménez Figueres (member)|
|Convention or ICSID Convention||Convention on the Settlement of Investment Disputes between States and Nationals of Other States dated 18 March 1965|
|ICSID||International Centre for Settlement of Investment Disputes|
|Parties||Claimants and Spain|
|Rejoinder||Claimants' Rejoinder on Continuation of the Stay of Enforcement, dated 5 April 2021|
|Reply||Spain's Reply in support of the Continuation of the Stay of Enforcement of the Award, dated 18 March 2021|
|Request||Spain's request for stay of enforcement of the Award and continuation of such stay pending the Committee's decision on the Annulment Application|
|Response||Claimants' Response to Spain's Request for Stay of Enforcement, dated 4 March 2021|
|Spain||Kingdom of Spain|
|Submission||Spain's Submission in support of the Continuation of the Stay of Enforcement of the Award, dated 18 February 2021|
|TFEU||Treaty on the Functioning of the European Union|
|Watkins Parent Companies||Watkins Holdings S.à r.l. and Watkins (Ned) B.V.|
i. Watkins Holdings S.à r.l., a private limited liability company incorporated under the laws of Luxembourg;
ii. Watkins (Ned) B.V., a limited liability company incorporated under the laws of the Netherlands;
iii. Watkins Spain, S.L., a private limited liability company incorporated under the laws of Spain;
iv. Redpier, S.L., a private limited liability company incorporated under the laws of Luxembourg;
v. Northsea Spain S.L., a private limited liability company incorporated under the laws of Spain;
vi. Parque Eólico Marmellar, S.L., a private limited liability company incorporated under the laws of Spain; and
vii. Parque Eólico La Boga, S.L., a private limited liability company incorporated under the laws of Spain.
|21 July 2020||ICSID received from Spain an application for the annulment of the award rendered on 21 January 2020 in the original arbitration proceeding, together with annexes. In its Annulment Application, Spain also requested a stay of the enforcement of the Award.|
|31 July 2020||The Secretary-General of ICSID registered the Annulment Application, in accordance with Rule 50(2)(a) of the ICSID Arbitration Rules. Together with the notice of registration, the Secretary-General informed the parties of the provisional stay of the Award, in accordance with Rule 54(2) of the ICSID Arbitration Rules.|
|14 January 2021||The Secretary-General, in accordance with Rule 52(2) of the ICSID Arbitration Rules, notified the parties that all members of the ad hoc Committee had accepted their appointments, and that the Committee was therefore deemed to have been constituted, and the annulment proceedings to have begun, as of 14 January 2021, pursuant to Rules 6(1) and 53 of the ICSID Arbitration Rules. The Committee is composed of Professor Lawrence Boo Geok Seng, a national of Singapore, as president; Ms Olufunke Adekoya, a national of the United Kingdom and Nigeria, as member; and Ms Dyalá Jiménez Figueres, a national of Costa Rica, as member. All three members of the Committee were appointed by the Chair of the ICSID Administrative Council, in accordance with Article 52(3) of the ICSID Convention. On the same date, the parties were notified that Mr Francisco Grob, Legal Counsel at ICSID, had been appointed as Secretary of the Committee.|
|21 January 2021||The Committee directed that the provisional stay of the enforcement of the Award would be maintained until it had had an opportunity to review all of the parties' submissions and to issue a further decision on the matter, thereby extending the time limit under Rule 54(2) of the ICSID Arbitration Rules.|
|22 February 2021||The Committee held the first session by video conference, with the following participants: Members of the Committee: Professor Lawrence Boo, President of the Committee Ms Olufunke Adekoya, Member Ms Dyalá Jiménez Figueres, Member ICSID Secretariat: Mr Francisco Grob, Secretary to the Committee On behalf of the Claimants: Ms Marie Stoyanov, Allen & Overy Mr Antonio Vázquez-Guillén, Allen & Overy Mr Pablo Torres, Allen & Overy Mr Gonzalo Jiménez-Blanco, Allen & Overy On behalf of Spain: Mr Alberto Torró Molés, Abogacía General del Estado Mr Lorena Fatás Pérez, Abogacía General del Estado Ms María del Socorro Garrido Moreno, Abogacía General del Estado|
|18 February 2021||Spain filed its Submission in support of the Continuation of the Stay of Enforcement of the Award, together with annexes ("Submission").|
|26 February 2021||The Committee issued Procedural Order No. 1, which provides, inter alia, that the applicable arbitration rules are those in force as of 10 April 2006, and that the procedural languages are English and Spanish.|
|4 March 2021||The Claimants filed its Response to Spain's Request for Stay of Enforcement, together with annexes ("Response").|
|18 March 2021||Spain filed its Reply in support of the Continuation of the Stay of Enforcement of the Award, together with annexes ("Reply").|
|5 April 2021||The Claimants filed its Rejoinder on Continuation of the Stay of Enforcement, together with annexes ("Rejoinder").|
|28 April 2021||The Committee held the Hearing on Stay of Enforcement of the Award by video conference, with the following participants: Members of the Committee: Professor Lawrence Boo, President of the Committee Ms Olufunke Adekoya, Member Ms Dyalá Jiménez Figueres, Member ICSID Secretariat: Mr Francisco Grob, Secretary to the Committee Mr Frederico Salon Kajganich, ICSID Paralegal On behalf of the Claimants: Ms Marie Stoyanov, Allen & Overy Mr Antonio Vázquez-Guillén, Allen & Overy Mr Pablo Torres, Allen & Overy Ms Lucinda Critchley, Allen & Overy On behalf of Spain: Mr Alberto Torró Molés, Abogacía General del Estado Ms Lorena Fatás Pérez, Abogacía General del Estado Ms María del Socorro Garrido Moreno, Abogacía General del Estado|
[…] that the stay of enforcement of the Award is continued and maintained in effect, without security or other conditions, until the decision on the Annulment Application is rendered by the Committee in this proceeding.
(a) dismiss the Request in its entirety;
or, alternatively, if the Committee were to grant Spain's Request,
(b) condition the maintenance of the stay of enforcement on Spain providing security within 30 days of the Committee's decision in the form of:
(i) a payment of the full amount of the Award inclusive of accrued interest into an escrow account maintained by a reputable international bank located in the United States or elsewhere outside the European Union; or alternatively,
(ii) an irrevocable and unconditional bank guarantee for payment of the Award in full inclusive of accrued interest issued by a reputable international bank located in the United States or elsewhere outside the European Union; or alternatively,
(iii) a binding and unconditional written undertaking executed by Spain's Secretary of State for Energy that the Award, including interest, will be paid in the event that the Application is rejected, the Application is withdrawn or the annulment proceedings are discontinued, along with the designation of an agent for service in the United States and a waiver of sovereign immunity as to the attachment of its assets; and
(c) order that if Spain fails to provide security within 30 days of the Committee's decision, the stay will automatically be lifted and the Award enforceable;
and, in all cases; and
(d) order Spain to bear all fees and costs associated with the Request.
In the event that the Committee decides to grant the Claimants' alternative pleas (b)(i) or (b)(ii), the Claimants also request to be consulted on the terms of the relevant escrow or bank guarantee arrangement, which should in all cases allow immediate collection by the Claimants should the Application be rejected, the Application be withdrawn or the annulment proceedings otherwise be discontinued at the request of or as a result of an action by Spain.
(5) The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request.
The Claimants argue that the use of the word 'require' under Article 52(5) of the ICSID Convention makes clear that there should be "a sense of necessity" in the circumstances for the stay of enforcement to continue.9 In this regard, the Claimants cite, amongst other cases, Antin v Spain, where the ad hoc committee held that "the circumstances which should exist for a stay to be required must, at the very least, rise above those which are common to most stay applications".10
Claimants' Response, para. 20.
Claimants' Response, para. 28: Infrastructure Services Luxembourg S.à r.l. and Energia Termosolar B.V. (formerly Antin Infrastructure Services Luxembourg S.à r.l. and Antin Energia Termosolar B.V.) v Kingdom of Spain, ICSID Case No. ARB/13/31, Decision on the Continuation of the Provisional Stay of Enforcement of the Award, 21 October 2019, para. 60.
Article 31(1) of the Vienna Convention on the Law of Treaties13 provides that treaties "shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms […] in their context". It is therefore only appropriate that the Committee first considers the ordinary meaning of Article 52(5).
The Parties also refer to the finality of ICSID awards,19 which is spelt out under Article 53(1) of the Convention:
(1) The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.
Rule 54 of the ICSID Arbitration Rules, which deals with stay of enforcement, may well be the best indication available within the ICSID Convention and Arbitration Rules as to which party bears the burden of proof. It provides as follows:
Stay of Enforcement of the Award
(1) The party applying for the interpretation, revision or annulment of an award may in its application, and either party may at any time before the final disposition of the application, request a stay in the enforcement of part or all of the award to which the application relates. The Tribunal or Committee shall give priority to the consideration of such a request.
(2) If an application for the revision or annulment of an award contains a request for a stay of its enforcement, the Secretary-General shall, together with the notice of registration, inform both parties of the provisional stay of the award. As soon as the Tribunal or Committee is constituted it shall, if either party requests, rule within 30 days on whether such stay should be continued; unless it decides to continue the stay, it shall automatically be terminated.
(3) If a stay of enforcement has been granted pursuant to paragraph (1) or continued pursuant to paragraph (2), the Tribunal or Committee may at any time modify or terminate the stay at the request of either party. All stays shall automatically terminate on the date on which a final decision is rendered on the application, except that a Committee granting the partial annulment of an award may order the temporary stay of enforcement of the unannulled portion in order to give either party an opportunity to request any new Tribunal constituted pursuant to Article 52(6) of the Convention to grant a stay pursuant to Rule 55(3).
(4) A request pursuant to paragraph (1), (2) (second sentence) or (3) shall specify the circumstances that require the stay or its modification or termination. A request shall only be granted after the Tribunal or Committee has given each party an opportunity of presenting its observations.
Rule 54(4) in particular stipulates that the party requesting a stay or modification or termination of stay "shall specify the circumstances that require the stay or its modification or termination". Notwithstanding this, it does not expressly state that the burden of proof per se is incumbent on the applicant seeking the stay. The Committee therefore has some difficulty accepting that the burden lies only on Spain simply because "[t]he application was made by Spain for the stay to be maintained",32 as asserted by the Claimants, when Claimants have also presented their observations and positions to the contrary and seeking a termination of the stay. The Committee is unable to discern any principle under Rule 54(4) of the Arbitration Rules that the burden of proof lies solely with Spain.
Hearing Transcript, pg. 38, lines 4-5.
Spain in its Application cited the following as grounds for annulment:
i. That the arbitral tribunal in the original proceeding ("Arbitral Tribunal") lacked jurisdiction on the basis that the case at hand was an intra-European Union dispute, meaning a dispute between a European Union ("EU") member State and investors from other EU member States. According to Spain this means that no arbitration could be filed validly under Article 26 of the ECT since that breaches EU law, particularly Articles 267 and 344 of the Treaty on the Functioning of the European Union ("TFEU"),38, mandatory among member States ;39
ii. That the Arbitral Tribunal failed to apply the proper law (being EU law) to the merits of the dispute and to the determination of its jurisdiction;40
iii. That there was a serious departure from a fundamental rule of procedure in that the Arbitral Tribunal jeopardised Spain's right to be heard;41
iv. That the Award failed to state reasons in respect of the Arbitral Tribunal's findings on the merits and damages;42 and
v. That the Award failed to state reasons for not applying EU law.43
The Claimants moreover argue that the purported conflict caused by Spain's EU law obligations pertains to the merits and is therefore irrelevant to the determination of whether to continue or lift the stay.48 They also submit that "Spain cannot use [this purported conflict] as a shield to escape its obligations to comply with the Award, which stem from the ICSID Convention",49 and contend that Spain's arguments in this respect are simply an attempt to "postpone" dealing with such conflict.50 According to the Claimants, cases involving Spain also demonstrate that as far as Spain's purported conflict of international law obligations is concerned, the stay should be even lifted altogether.51
Spain submits that while the risk of non-payment of the Award "may be relevant to consider, it has not been found determinative by arbitral precedents".55 More significantly, Spain points out that being the fifth-largest economy in the European Union, and ranking 13th among all countries in the world in terms of gross domestic product, there is "no danger" of Spain not having the financial resources to pay on the Award.56 It also indicates that there is no history of non-compliance with international obligations on its part,57 and contends that its notification of the Award to the European Commission is proof that it has taken the "appropriate steps" to pay the Award and therefore demonstrates that it abides by its international obligations.58 According to Spain, the European Commission has in fact already specifically determined that payment of the Award is notifiable State aid under Articles 107 and 108 of the TFEU,59 and that payment under the Award has been suspended until the European Commission has rendered a decision thereon.60
As discussed above in paragraph 40, the Committee does not agree that there will be any solvency issue or risk of non-payment by Spain such that if the Claimants succeed, there would be nothing left for it to recover under the Award. The Award has provided not just for monetary compensation but also that the same compensation attracts interest at 2.16% per annum compounded monthly,75 which is a rate above the rate for Spanish government bonds.76 This means that for any delay in receiving any money due to them under the Award, the Claimants would be more than adequately compensated by the interest that will have accrued. While the Committee agrees with the Claimants that "[p]ost-award interest cannot […] serve as an excuse to defer payment of the Award that is final and binding",77 the Committee does not agree that continuing the stay undermines the finality of the Award. Permitting a stay is in fact a further step to preserve the Award's eventual finality so that if affirmed by the annulment process, there will be no doubt as to its universal finality and enforceability.
i. Claimants 1 and 2, the parent companies of the remaining Claimants ("Watkins Parent Companies"), have sold their assets in Spain, including their shareholdings in those remaining Claimants.82
ii. The Watkins Parent Companies are shell companies with "no relevant economic activity".83
iii. The Watkins Parent Companies do not have total assets that are sufficient to guarantee repayment of the Award.84
iv. The Watkins Parent Companies "do not have significant cash amounts".85
v. Claimants 6 and 7's profits are all distributed to the current owners and not the Claimants, their assets are not of sufficient value for repayment of the Award, and they have pledged all the cash flows and collection rights generated by the wind farm to their lenders.86
vi. It is unclear whether the Claimants even have the right to collect the Award.87
I. Grants Spain's request for the stay of enforcement of the Award to be continued and maintained in effect, without security or other conditions, until the decision on the Annulment Application is rendered by the Committee;
II. Reserves its right to modify or terminate the stay at any time; and
III. Reserves its decision on costs for determination in the Committee's final decision on the Annulment Application.
Already registered ?