On 15 June 2018, an ICSID tribunal unanimously held that Spain had breached the fair and equitable treatment standard in Article 10(1) of the Energy Charter Treaty (ECT). It ruled that Spain had breached that standard when it eliminated the "essential characteristics" of the feed-in remuneration regime granted to renewables (including concentrated solar power facilities) and replaced it by a wholly new regime, whose calculation methodology was found not to be based on any "identifiable criteria". The tribunal ordered Spain to pay EUR 112 million, plus interest, as well as 60% of the costs of the proceedings and of the claimants' legal costs.
This is the fourth decision rendered on the merits against Spain in cases brought as a result of the legislative changes it introduced in the renewables framework between 2012 and 2014. It is also the second decision, post Slovak Republic v Achmea BV, C-284/16, ECLI:EU:C:2018:158, where an ICSID tribunal has affirmed jurisdiction and rejected the intra-EU objection raised by Spain.
Finally, this latest decision reflects that ECT investment tribunals in cases against Spain seem to be following similar approaches and formulations of the applicable ECT standards to assess the treaty violations denounced by foreign investors holding interests in the Spanish renewable sector. (Antin Infrastructure Services Luxembourg Sàrl and another v Kingdom of Spain (ICSID Case No. ARB/13/31), 15 June 2018.) (Tribunal: E. Zuleta (President), J. Christopher Thomas (respondent), F. Orrego Vicuña (claimants).)
Practical Law UK, 04-Jul-2018.