Post-Achmea Spanish solar award submitted for enforcement in US
October 04, 2018
A UAE-owned and Dutch-incorporated energy company has applied to a US court to enforce its €64.5 million Energy Charter Treaty award against Spain over reforms to its renewable energy sector – arising from the first intra-EU arbitration to be decided in the wake of the Achmea judgment.
The petition for enforcement of the ICSID award was filed by Masdar Solar & Wind Cooperatief in the US District Court for the District of Columbia on 28 September. The award is the fourth won against Spain by a solar investor under the ECT and the third to be the subject of enforcement proceedings in the US.
“To date, Spain has not paid any portion of the award,” the petition says. It also notes that in late August, the tribunal issued a decision denying an application by Spain for a stay of enforcement of the award, making it “immediately enforceable” under the ICSID Convention. It has also requested payment of the award in euros, the currency specified in the award.
Masdar is represented in the US enforcement proceedings by a team from Allen & Overy in Washington, DC. The firm was counsel to Masdar in the arbitration and is also acting in six other ICSID cases against Spain, and one UNCITRAL case, using lawyers in the London, Paris, Madrid and Amsterdam offices.
An ICSID tribunal composed of UK arbitrator John Beechey, Gary Born of the US and Brigitte Stern of France handed down the award last May, concluding that specific commitments had been made to Masdar, including in certificates registering its investment, that were reneged on in violation of the fair and equitable treatment guarantees of the ECT.
The solar group filed its claim in 2014 over its investments in the acquisition and development of three concentrated solar power installations in Spain, claiming that it was induced to invest by regulations introduced in 2007 which guaranteed an inflation-linked feed-in tariff to qualifying installations for their operational lifetime.
Those regulations were repealed in 2013 and a new remuneration model introduced the following year.
The amount of quantum owed by Spain was a source of disagreement for tribunal members, with the €64.5 million figure eventually agreed upon by a majority of Beechey and Born.
Since the award was handed down in May, Spain has accrued over €2.5 million in interest, with that figure continuing to rise.
In relation to the Achmea judgment (which was handed down by the Court of Justice of the European Union two months before the award and held that the Treaty on the Functioning of the European Union precludes investor-state arbitration mechanisms in agreements between EU member states) the tribunal issued a significant finding. It said the judgment could not be applied to multilateral treaties such as the ECT – a view that has since been rejected in a communication issued by the European Commission in July.
The Masdar award marked Spain’s third defeat in the line of claims the state faces over its renewable energy reform, following awards handed down in favour of investment funds Eiser Infrastructure and Novenergia in May 2017 and last February respectively.
A fourth loss for the state followed in June, when an ICSID tribunal made up of Colombia’s Eduardo Zuleta, Chile’s Francisco Orrego Vicuña and Canada’s J Christopher Thomas QC ordered the state to pay €112 million to a Luxembourg and Dutch company owned by Paris-based fund Antin Infrastructure Partners.
Eiser and Novenergia are both also seeking enforcement of their awards in the US courts.
Spain defeated the first two claims it faced, brought by Dutch entities Charanne I and Isolux, although the first of these concerned measures introduced in 2010, while the other cases relate to a further set of reforms introduced in 2013.