|AEE||Wind Power Business Association|
|APV||Adjusted Present Value|
|Antaris Award||Antaris Solar GmbH and Dr Michael Göde v. Czech Republic (PCA Case n° 2014-01), Final Award, May 8, 2018|
|Antin Award||Antin Infrastructure Services Luxembourg S.à.r.l and Antin Energia Termosolar B.V. v. Kingdom of Spain, ICSID Case No. ARB/13/31, Award, June 15, 2018|
|Arbitration Rules||ICSID Rules of Procedure for Arbitration Proceedings|
|BCG||Boston Consulting Group|
|Borawind||Borawind Energy, S.L.|
|Bridgepoint||Bridgepoint Advisers Limited|
|CAPM||Capital Asset Pricing Model|
|CJEU||Court of Justice of the European Union|
|CL-[#]||Claimants’ Legal Authority|
|Claimants or Watkins||Watkins Holdings S.à r.l.; Watkins (Ned) BV; Watkins Spain, S.L.; Redpier, S.L.; Northsea Spain S.L.; Parque Eólico Marmellar, S.L.; and Parque Eólico La Boga, S.L.|
|Claimants’ Memorial||Claimants’ Memorial on the Merits dated November 14, 2016|
|Claimants’ Rejoinder||Claimants’ Rejoinder on Jurisdiction dated March 7, 2018|
|Claimants’ Reply||Claimants’ Reply on the Merits and CounterMemorial on Jurisdiction dated September 28, 2017|
|Claimants’ Post-Hearing||Claimants’ Post-Hearing Brief dated September 7, 2018|
|Claimants’ Post-Hearing Reply||Claimants’ Post-Hearing Reply Brief dated October 31, 2018|
|Claimants’ Submission on Costs||Claimants’ Submission on Costs dated November 30, 2018|
|CNE||National Energy Commission|
|CNMC||National Commission on Markets and Competition|
|Commission’s Application||European Commission’s Application dated January 16, 2017|
|Commission’s Request||European Commission’s Request for Reconsideration dated March 23, 2017|
|CPI||Consumer Price Index|
|DCF||Discounted Cash Flow|
|Disputed Measures||Law 15/2012, RDL 2/2013, RDL 9/2013, Law 24/2013, RD 413/2014 and the June 2014 Order|
|ECT||Energy Charter Treaty dated December 17, 1994, which entered into force on April 16, 1998 with respect to Spain, Luxembourg and the Netherlands|
|FET||Fair and Equitable Treatment|
|Fifth Claimant||Northsea Spain S.L.|
|First Accuracy Report||Expert Report by Accuracy dated February 10, 2017|
|First Ayuso Statement||First Witness Statement of Mr. Juan Ramón Ayuso dated February 9, 2017|
|First Brattle Quantum Report||Expert Report on quantum by the Brattle Group dated November 14, 2016|
|First Brattle Regulatory Report||Expert Report on regulatory matters by the Brattle Group dated November 14, 2016|
|First Claimant||Watkins Holdings S.á r.l.|
|First Moreno Statement||First Witness Statement of Mr. Felipe Moreno Zabala dated November 14, 2016|
|Fourth Claimant||Redpier, S.L.|
|ICSID or Centre||International Centre for Settlement of Investment Disputes|
|ICSID Convention||Convention on the Settlement of Investment Disputes between States and Nationals of Other States|
|ICSID Institution Rules||Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings|
|IDAE||Institute for Diversification and Saving of Electricity|
|June 2014 Order||Ministerial Order IET/1045/2014 dated June 16, 2014|
|Law 15/2012||Law 15/2012 on Tax Measures for Energy Sustainability dated December 27, 2012|
|Law 24/2013||Law 24/2013 on the Electricity Sector dated December 26, 2013|
|Ministry||Ministry of Industry, Tourism and Commerce|
|Parque Arroyal||Parque Eólico Arroyal (49.5 MW)|
|Parque El Perul||Parque Eólico El Perul (49.6 MW)|
|Parque La Lastra||Parque Eólico La Lastra (11.69 MW)|
|Parque Lodoso||Parque Eólico Lodoso (49.5 MW)|
|Parque Lora 1||Parque Eólico Lora 1 (49.6 MW)|
|Parque Lora 2||Parque Eólico Lora 2 (49.6 MW)|
|Parque Marmellar||Parque Eólico Marmellar (49.5 MW)|
|Parque Sargentes||Parque Eólico Sargentes (24 MW)|
|Pre-Assignment Register||Pre-Assignment Register mechanism established in RDL 6/2009|
|Project Companies||Marmellar SL and La Boga SL|
|RAIPRE||Registro Administrativo de Instalaciones de Producción en Régimen Especial|
|RD 2818/1998||Royal Decree 2818/1998 dated December 23, 1998|
|RD 436/2004||Royal Decree 436/2004 dated March 12, 2004|
|RD 661/2007||Royal Decree 661/2007 dated May 25, 2007|
|RD 1614/2010||Royal Decree 1614/2010 dated December 7, 2010|
|RD 413/2014||Royal Decree 413/2014 dated June 6, 2014|
|RDL 7/2006||Royal Decree-Law 7/2006 dated June 23, 2006|
|RDL 6/2009||Royal Decree-Law 6/2009 dated April 30, 2009|
|RDL 2/2013||Royal Decree-Law 2/2013 dated February 1, 2013|
|RDL 9/2013||Royal Decree-Law 9/2013 dated July 12, 2013|
|REIOs||Regional Economic Integration Organizations|
|REP||Renewable Energy Plan|
|Request for Arbitration||Request for Arbitration dated October 26, 2015, accompanied by Exhibits C-1 to C-33|
|Respondent’s Counter-Memorial||Respondent’s Counter-Memorial on the Merits and Memorial on Jurisdiction dated February 10, 2017|
|Respondent’s Rejoinder||Respondent’s Rejoinder on the Merits and Reply on Jurisdiction dated January 9, 2018|
|Respondent’s Post-Hearing||Respondent’s Post-Hearing Brief dated September 7, 2018|
|Respondent’s Post-Hearing Reply||Respondent’s Post-Hearing Reply Brief dated October 31, 2018|
|Respondent’s Submission on Costs||Respondent’s Submission on Costs dated January 16, 2019|
|RL-[#]||Respondent’s Legal Authority|
|RREEF Decision||RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.a.r.l v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Responsibility and Principle of Quantum, November 30, 2018|
|Second Accuracy Report||Expert Report by Accuracy dated January 9, 2018|
|Second Ayuso Statement||Second Witness Statement of Mr. Juan Ramon Ayuso dated January 9, 2018|
|Second Brattle Quantum Report||Second Expert Report on quantum matters by the Brattle Group dated September 28, 2017|
|Second Brattle Regulatory Report||Second Expert Report on regulatory by the Brattle Group dated September 28, 2017|
|Second Claimant||Watkins (Ned) BV|
|Second Moreno Statement||Second Witness Statement of Mr. Felipe Moreno Zabala dated September 28, 2017|
|SES||Spanish Electric System|
|Seventh Claimant||Parque Eólico La Boga, S.L.|
|Sixth Claimant||Parque Eólico Marmellar, S.L.|
|Spain or Respondent||Kingdom of Spain|
|TMR||Tarifa Media de Referencia|
|Third Claimant||Watkins Spain, S.L.|
|Tribunal||Arbitral Tribunal constituted on March 31, 2016|
|TVPEE||Impuesto sobre el valor de la producción de energía eléctrica|
|UNFCCC||United Nations Framework Convention on Climate Change|
|Vattenfall Decision||Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12, Decision on the Achmea Issue, August 31, 2018|
|VCLT or Vienna Convention||Vienna Convention on the Law of Treaties|
|Wind Farms||Wind farm sites located in the province of Castilla y León in Spain (Parque Arroyal, Parque El Perul, Parque La Lastra, Parque Lodoso, Parque Lora 1, Parque Lora 2, Parque Marmellar, Parque Sargentes)|
|1997 Electricity Law or Law 54/1997||Law 54/1997 on the Electricity Sector dated November 27, 1997|
|2001 Renewables Directive||European Parliament and Council Directive 2001/77/CE on the promotion of electricity produced from renewable energy sources in the internal electricity market dated September 27, 2001|
|2009 Renewables Directive||European Union 2009 Directive on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC dated April 23, 2009|
Tan Sri Dato’ Cecil W.M. Abraham President of the Tribunal
Dr. Michael Pryles Arbitrator
Prof. Dr. Hélène Ruiz Fabri Arbitrator
ICSID Secretariat :
Ms. Catherine Kettlewell Secretary of the Tribunal
For the Claimants :
Ms. Marie Stoyanov Allen & Overy LLP
Mr. Antonio Vazquez-Guillén Allen & Overy LLP
Mr. Antonio Jiménez-Blanco Allen & Overy LLP
Mr. David Ingle Allen & Overy LLP
Mr. Alexandre Fichaux Allen & Overy LLP
Mr. Tomasz Hara Allen & Overy LLP
Mr. Pablo Torres Allen & Overy LLP
Mr. Valentin Bourgeois Allen & Overy LLP
Ms. Carmen de la Hera Allen & Overy LLP
Mr. Carlos Lapuerta The Brattle Group
Mr. Richard Caldwell The Brattle Group
Mr. José Antonio García The Brattle Group
Ms. Annika Opitz The Brattle Group
Ms. Henna Trewn The Brattle Group
Mr. Juan Arteche Bridgepoint
Mr. Felipe Moreno Self-employed
For the Respondent :
Mr. Diego Santacruz Descartín State Attorney’s Office Ministry of Justice
Ms. Mónica Moraleda Saceda State Attorney’s Office Ministry of Justice
Ms. Elena Oñoro Sainz State Attorney’s Office Ministry of Justice
Mr. Antolín Fernández Antuña State Attorney’s Office Ministry of Justice
Mr. Joaquín Garrigos Millán State Attorney’s Office Ministry of Justice
Ms. Almudena Pérez-Zurita Gutiérrez State Attorney’s Office Ministry of Justice
Ms. Carmen María Roa Tortosa IDAE
Mr. Juan Ramón Ayuso Ortiz IDAE
Mr. Eduard Saura Accuracy
Mr. Nicolas Barsalou Accuracy
Ms. Laura Cózar Accuracy
Mr. Alberto Fernández Accuracy
Mr. Carlos Canga Accuracy
Ms. Aurea Alvarez Accuracy
Court Reporters :
Mr. Trevor McGowan The Court Reporter Ltd.
Mr. Paul Pelissier DR-Esteno
Ms. Luciana Sosa DR-Esteno
Mr. Juan María Burdiel Pérez
Mr. Jesus Getan Bornn
Ms. Amalia Thaler-de Klemm
On behalf of Claimants :
Mr. Felipe Moreno Zavala
Mr. José Antonio García
Mr. Carlos Lapuerta
Mr. Richard Caldwell
On behalf of Respondent :
Mr. Juan Ramón Ayuso
Mr. Eduard Saura
Mr. Nicolas Barsalou
a) The Tribunal grants the Respondent’s request to introduce into the record the RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.a.r.l v. Kingdom of Spain (ICSID Case No. ARB/13/30) Decision on Responsibility and Principle of Quantum dated 30 November 2018 ("RREEF Decision");
b) The Tribunal also grants leave to introduce the Partial Dissenting Opinion of Prof. Robert Volterra to the RREEF Decision requested by the Claimants;
c) The Tribunal invited the Parties to comment on the RREEF Decision and the Partial Dissenting Opinion of Prof. Robert Volterra;
d) The Respondent was to file its comments by 3 May 2019 and the Claimants were to file their comments by 17 May 2019.
a) DECLARING that Spain has breached Article 10(1) of the ECT; and
b) ORDERING that Spain:
i) provide full restitution to the Claimants by re-establishing the situation which existed prior to Spain's breaches of the ECT, together with compensation for all losses suffered before restitution; or
ii) pay the Claimants compensation for all losses suffered as a result of Spain's breaches of the ECT; and
in any event:
iii) pay the Claimants pre-award interest at a rate of 1.16% compounded monthly; and
iv) pay post-award interest, compounded monthly at a rate to be determined by the Tribunal on the amounts awarded until full payment thereof; and
v) pay the Claimants the costs of this arbitration on a full-indemnity basis, including all expenses that the Claimants have incurred or will incur in respect of the fees and expenses of the arbitrators, ICSID, legal counsel, experts and consultants; and
vi) any such other and further relief that the Tribunal shall deem just and proper.3
a) Declare its lack of jurisdiction over the claims of the Claimants 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 Claimants regarding the Merits, as the Kingdom of Spain has not breached the ECT in any way, pursuant to section III herein, with regard to the Merits.
c) Subsidiarily, to dismiss all the Claimant’s claims for damages as the Claimant has no right to compensation, in accordance with section V herein; and
d) Order the Claimant to pay all costs and expenses derived from this arbitration, including ICSID administrative expenses, arbitrators’ fees, and the fees of the legal representatives of the Kingdom of Spain, their experts and advisors, as well as any other cost or expense that has been incurred, all of this including a reasonable rate of interest from the date on which these costs are incurred until the date of their actual payment.5
1) The Spanish Constitution of 1978, which is the supreme legislation of the Spanish Legal System.
2) Statute Law, which is of two kinds, namely: (a) organic law and (b) ordinary laws.
3) Royal Decree Law, which, as regulation, has the force of law. The Constitution authorises the Spanish Government to approve Royal Decree Law in situations of extraordinary need or urgency. The approval of Royal Decree Law is subject to strict conditions, controls, and limits and requires subsequent Parliamentary validation.
4) Royal Decree, which is a regulatory standard that emanates from the Government. It complements or implements laws and is hierarchically inferior to them.
5) Ministerial Orders, which are a regulatory standard emanating from one or several ministerial departments.
In order to determine the premiums, account shall be taken of the level of delivery voltage of the energy to the grid, effective contribution to improvement of the environment, saving in primary energy and energy efficiency, production of economically justifiable useful heat and the investment costs which have been incurred, in order to achieve reasonable rates of return by reference to the cost of money in the capital market.18
1. During 2006, [...] the tariffs, premiums, incentives and supplements defined in this Royal Decree shall undergo revision. [...]. Every four years, starting from 2006, a new revision shall take place.
2. The tariffs, premiums, incentives and supplements resulting from any of the revisions provided for in this section shall come into force on January 1st of the second year subsequent to the year that the revision has been carried out.
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. [...].32
iv. The 2005-2010 Renewable Energy Plan
[A]lthough the growth experienced by the special electricity generation regime as a whole has been noteworthy, the targets set for certain technologies are still far from being achieved. From the point of view of compensation, the business of the production of electrical energy under the special regime is characterised by the possibility that the compensation system can be supplemented by the receipt of a premium under the terms and conditions established in the regulations, in order to determine which such factors as the voltage level of the energy delivered into the grid, the contribution to the improvement in the environment, primary energy saving, energy efficiency, and the investment costs incurred, may all be taken into account.41
a) Sell the electricity to the system through the transport or distribution grid, receiving for it a regulated tariff, which shall be the same for all scheduling periods expressed in Euro cents per kilowatt/hour.
b) Sell the electricity in the electrical energy production market. In this case the sale price of the electricity shall be the price obtained in the organised market or the price freely negotiated by the proprietor or the representative of the facility, supplemented where appropriate by a premium, in Eurocents per kilowatt/hour.45
[t]he values of the tariffs, premiums, supplements, and lower and upper limits to the hourly price of the market as defined in this Royal Decree, for Category b) [...] shall be updated on an annual basis using as a reference the increase in the CPI less the value set out in the Additional Provision One of the present Royal Decree.48
In 2010, in view of the results of the follow-up reports on the extent to which the Renewable Energy Plan for 2005-2010 and the Energy Savings and Efficiency Plan for Spain (E4) have been achieved, as well as the new objectives included in the next Renewable Energy Plan for 2011-2020, tariffs, premiums, additional payments, and lower and upper thresholds set out in this royal decree will be reviewed, taking into account the costs associated with each of these technologies, the degree of participation of the special regime in meeting demand and its impact on the technical and economic management of the system, guaranteeing reasonable returns with reference to the cost of money on capital markets. Every four years thereafter a new adjustment will be carried out using the above criteria.
The adjustment to the regulated tariff and the lower and upper threshold referred to in this section will not affect the facilities for which the start-up document was issued before January 1 of the second year in which the adjustment was implemented.49
[f]or wind technology facilities adhered to Royal Decree 661/2007, of 25 May, the revisions of the tariffs, premiums and upper and lower limits referred to in article 44.3 of the aforementioned Royal Decree, shall not affect facilities registered definitively in the Administrative Registry of production facilities entitled to the special regime that is maintained by the Directorate-General for Energy and Mining Policy as of 7 May 2009, nor to those that would have been registered in the Remuneration Pre-assignment Registry under the fourth transitional provision of Royal Decree-Law 6/2009, of 30 April, and that were to meet the obligation envisaged in article 4.8 thereof.68
a series of measures which are urgent, balanced, proportional and reaching, aimed at guaranteeing the financial stability of the electricity system as an unavoidable prerequisite for the economic sustainability thereof and to ensure a secure supply, and which are addressed to all electricity sector activities.81
4. Additionally, subject to the terms that the Council of Ministers might adopt pursuant to Royal Decrees, in relation to the remuneration for the generation of electricity calculated according to market price, installations may receive a specific remuneration [the Special Payment] composed of an amount per unit of installed capacity. Such amount shall cover, as appropriate, the investment costs of a standard installation that cannot be recovered through the sale of energy, as well as an amount for the operation of the installation to cover, as the case may be, the difference between exploitation costs and the revenues obtained from the participation of such a standard installation in the market.
For the calculation of that specific remuneration, the following elements shall be considered, based on the installation’s regulatory useful life and by reference to the activities carried out by an efficient and well administered business:
a) The standard revenues for the sale of generated energy valued at market price of production;
b) The standard exploitation costs; and
c) The standard value of the initial investment.
To that effect, the costs or investments determined by laws or administrative regulations that do not apply to the Spanish territory shall not be considered in any case. In the same manner, only those costs and investments related to the activity of electric energy generation can be taken into account.
As a result of the individual characteristics of the electricity system in the Spanish islands or the extra-peninsular territories, a standard installation for each of those electricity systems may be defined.
This remuneration regime shall not exceed the minimum required level to cover the costs that are necessary for installations to compete on an equal footing with the rest of the technologies in the market in order to allow those installations to obtain a reasonable return, by reference to the standard installation, as the case may be. Notwithstanding the above, exceptionally, the remuneration regime might also include an incentive to investments and timely execution of an installation, if this was going to result in a significant cost reduction for the Spanish islands or the extra-peninsular territories’ electricity systems.
Such reasonable return will be based on, before taxes, the average returns in the secondary market of the State's ten-year bonds plus the adequate differential.
The parameters of the remuneration regime can be revised every six years.84
1. Parque Eólico Lodoso (49.5 MW) ("Parque Lodoso");
2. Parque Eólico El Perul (49.6 MW) ("Parque El Perul");
3. Parque Eólico La Lastra (11.69 MW) ("Parque La Lastra");
4. Parque Eólico Lora 1 (49.6 MW) ("Parque Lora 1");
5. Parque Eólico Lora 2 (49.6 MW) ("Parque Lora 2");
6. Parque Eólico Sargentes (24 MW) ("Parque Sargentes"); and
7. Parque Eólico Arroyal (49.5 MW) ("Parque Arroyal" and, together, the "Wind Farms").103
"upon fulfilment of the conditions precedent applicable to the Wind Farms, the entire share capital of the Project Companies were transferred to Watkins Spain, Redpier and Northsea."112 On the same day, according to the Claimants, "the intragroup loans in place between the Project Companies and the sellers were transferred to Watkins Holdings, Redpier Holdings S.à r.l. and Northsea Holdings S.à r.l."113
• First, Spain asserts that the Tribunal lacks ratione personae jurisdiction because the law of the European Union ("EU") precludes the applicability of the ECT to disputes involving investments in an EU state by EU investors (the intra-EU Objection);
• Second, Spain contends that the 7% TVPEE, created by Law 15/2012 of 27 December 2012 on fiscal measures for energy sustainability, is a tax measure which falls outside the scope of protection of the ECT (the TVPEE Objection).
[...] the Tribunal concludes that Article 307 EC precludes inconsistent preexisting treaty rights of EU Member States and their own nationals against other EU Member States; and it follows, if the ECT and EU law remained incompatible notwithstanding all efforts at harmonization, that 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.133
• As for Achmea, the Claimants note that the CJEU has ruled on the matter in its recent judgment of 6 March 2018, and held that the submission to arbitration set forth in Article 8 of the BIT between the Netherlands and Slovakia is incompatible with EU law. According to the Claimants, the case must however be distinguished because "(i) the CJEU only addresses a BIT and not the ECT, a circumstance which the CJEU itself goes out of its way to highlight; and (ii) the CJEU's decision is not binding on this Tribunal which, as confirmed by numerous arbitral precedents, is not called upon to apply EU law."178 The Claimants further explain that there are several differences between the Netherlands-Slovakia BIT and the ECT. The Claimants analyse that in this case, "[Article 26(6) ] provides that disputes shall be solely resolved on the basis of (i) the ECT and (ii) applicable rules of international law."179 This Tribunal would then not be called to apply EU law.180 The Claimants further argue that, different from the Achmea case, this case is "been brought before ICSID,"181 the question before the CJEU "has no relevance in this ECT arbitration"182 as Spain, The Netherlands and Luxembourg had already acceded the EU when the ECT was ratified, and "the Tribunal derives its jurisdiction from the ECT and it is not bound by the decisions of European Institutions."183
• As for Micula v. Romania, the Claimants observe that Spain fails to mention that no Intra-EU Objection was raised by Romania in the Micula v. Romania jurisdictional proceedings, that the objection was only raised by the Commission, intervening as a non-disputing party, during the annulment proceedings, and that the ad hoc committee dismissed the Commission’s submission, holding that the tribunal had not lacked jurisdiction to hear the Claimants’ claims. The Claimants also note that Spain refers to an application to the CJEU to annul the Commission’s decision of 30 March 2015 on the non-enforceability of the arbitral award in Micula v. Romania, payment of which has been deemed by the Commission to constitute illegal State aid. For the Claimants, the application relates to whether the enforcement within the EU of an arbitral award pursuant to Article 54 of the ICSID Convention could be considered incompatible with EU law; it does not concern jurisdiction-related matters.
Article 21(1) provides:
1) Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties. In the event of any inconsistency between this Article and any other provision of the Treaty, this Article shall prevail to the extent of the inconsistency.227
2) Article 7(3) shall apply to Taxation Measures other than those on income or on capital, except that such provision shall not apply to: [...]
3) Article 10(2) and (7) shall apply to Taxation Measures of the Contracting Parties other than those on income or on capital, except that such provisions shall not apply to: […]
4) Article 29(2) to (8) 63 shall apply to Taxation Measures other than those on income or on capital.
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: [...]230
Finally, the Claimants sustain that Spain’s labelling of the measure as a tax under its internal law is irrelevant to determine whether Article 21 is applicable, as it has been supported by several authorities.287 The Respondent gives the TVPEE an appearance of a tax by channelling the funds levied through the Law 15/2012 through the State Budget and then return to the electricity system.288 Even if the measure was enacted in compliance with its domestic law, the Claimants contend that this is irrelevant if the Respondent is evading its international obligations.289 Furthermore, for Claimants, the fact that it complies with the definition of tax under international law as Respondent contends, does not demonstrate that the TVPEE is bona fide.290
(...) According to settled case-law of the Court, the autonomy of EU law with respect both to the law of the Member States and to international law is justified by the essential characteristics of the EU and its law, relating in particular to the constitutional structure of the EU and the very nature of that law. EU law is characterised by the fact that it stems from an independent source of law, the Treaties, by its primacy over the laws of the Member States, and by the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves. Those characteristics have given rise to a structured network of principles, rules and mutually interdependent legal relations binding the EU and its Member States reciprocally and binding its Member States to each other (see, to that effect, Opinion 2/13 (Accession of the EU to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraphs 165 to 167 and the case-law cited).
EU law is thus based on the fundamental premise that each Member State shares with all the other Member States, and recognises that they share with it, a set of common values on which the EU is founded, as stated in Article 2 TEU. That premise implies and justifies the existence of mutual trust between the Member States that those values will be recognised, and therefore that the law of the EU that implements them will be respected. It is precisely in that context that the Member States are obliged, by reason inter alia of the principle of sincere cooperation set out in the first subparagraph of Article 4(3) TEU, to ensure in their respective territories the application of and respect for EU law, and to take for those purposes any appropriate measure, whether general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the EU (Opinion 2/13 (Accession of the EU to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraphs 168 and 173 and the caselaw cited).312
a) the obligation under Article 10(1) to accord, at all times, to the Claimants' investment, "stable, equitable, favourable and transparent conditions,"
b) the obligation under Article 10(1) to accord, at all times, to the Claimants' investment, fair and equitable treatment ("FET"), and
c) the obligation under Article 10(1) to observe obligations it had entered into with the Claimants or their investments (the Umbrella Clause).342
• Law 15/2012, introducing the TPVEE which, according to the Claimants, amounts to a tariff cut;
• RDL 2/2013, which, inter alia, deprived the Claimants of "the most attractive support scheme option under RD 661/2007," the Premium option (which offered the possibility of maximizing revenues by way of selling to the market when demand in the network was the highest);
• RDL 9/2013, which revoked RD 661/2007 and established a New Regime for RE power-generation installations radically different from the framework established by RD 661/2007;
• Law 24/2013, which, inter alia, (i) repealed the distinction between Ordinary Regime and Special Regime established by RDL 9/2013, (ii) put conventional and RE generators on an equal footing and, most importantly, (iii) established the applicability of a "reasonable return" over the entire life of the plant, thereby implementing a "maximum degree" retroactivity. According to the Claimants, both the future and past income streams were thus affected: "the Project Companies would be penalised for their past returns" and "Spain introduced "maximum degree" retroactivity by directly impacting the past income streams of the plant, effectively altering the rules of the game over the energy already produced and already sold on the market by the Claimants."
• In June 2014, 11 months after Spain announced the New Regime, the Government passed the necessary implementing regulation to fully define the economic regime that would henceforth apply to RE installations. The first measure was RD 413/2014 of 6 June 2014 as an implementing measure, and the June 2014 Order that fixed the compensation parameters for a standard installation.