Case Report (free download)
Case Report by Francisco Zuluaga Ospina, Editor Diego Luis Alonso Massa
In a decision rendered on May 4, 2017, the International Centre for Settlement of Investment Disputes addressed an issue concerning the changes in the renewable energy regulatory framework of Spain. In 2007, Claimants invested in the renewable energy sector, taking into consideration the special subsidies granted by Respondent in favor of renewable energy producers. After a few years, the regulatory framework was changed due to the deficit of the subsidy regime. In spite of the fact that the Respondent assured Claimants on several times that their investment would not be affected by new regulations, the subsidy regime in which they were registered was abrogated. The new regulatory framework deprived Claimants of all the revenues foreseen under the repealed subsidy regime and subjected them to new taxes and tariffs. Claimants alleged that they have lost the entire value of their investment and that Respondent breached its obligations under the Energy Treaty Charter (ETC).
The Tribunal held Spain liable for breach of Energy Treaty Charter obligations, considering that its new regulations violated the Fair and Equitable Treatment standard under the ETC. Compensation for the damages caused was set in the amount of EUR 128 million.
Jurisdiction - Competence of the Arbitral Tribunal; Treaty Obligations - Fair and Equitable Treatment; Damages - Determination of Value of Compensation.
Case report provided by International Arbitration Case Law (IACL)
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