Spain has lost its first case in an international arbitrage court, namely the World Bank’s Ciadi, related to the cuts applied to the renewables remuneration from 2010.
The parties involved have already been informed of the ruling, which is in favour of the UK Company Eiser Infrastructure Ltd. and its Luxembourg subsidiary Energy Solar Luxembourg, which was advised by Allen & Overy.
When it made its renewables investment, Eiser’s partners in Spain were Elecnor and the engineering firm Aries. It had a 36.95% stake in Aries Solar Termoeléctrica (Aste), which has two 50 MW thermo-solar plants in Alcázar de San Juan (Ciudad Real), as well as 33.83% de Dioxipe Solar (Astexol), which is developing a 50 MW thermo-solar plant in Badajoz.
The investment committed to these three plants is 935 million euros and it was made in 2007, the same year in which the decree law 661/2007 was approved. This new law gave a rapid boost to the renewable energies business in Spain.
Afterwards, the sector was hit by various cuts to its remuneration system, the first of which was implemented in 2010 under the PSOE government. The last one was in 2013, when the PP’s electricity reform was approved.
The Ciadi’s ruling on the cuts is the first setback for Spain in the international courts. In January 2016, the Stockholm Arbitrage Court also ruled on the case brought by Charanne B.V. and Construction, Investements, two companies linked to Isolux, related to cuts in the photovoltaic sector. But on that occasion, the outcome was in favour of Spain. The Ciaidi ruling is the first against the Spanish state on the matter of renewable energy payments.
The Supreme Court and the Constitutional Court’s rulings on this matter had also supported the government’s cuts over the last few years.
There are now almost 30 lawsuits from international investors pending in the Ciadi, related to the cuts in renewables remuneration in Spain. Domestic investors cannot file a claim with an international court.