Spain fails to cancel a €28 million award to German company RWE

Real hearing.  As real as in court


The Commission To this Regarding the annulment procedure requested by Spain in the arbitration held with the German company RWE Innogy and the Spanish company RWE Innogy Aersa SAU for the reform of renewable energies, before the International Center for Settlement of Investment Disputes (ICSID), he ruled in favor of the two companies, rejecting the reasoning of the Spanish State Prosecutor that It is clear that the court exceeded its powers. Not to violate European Union law and apply the wrong law.

The Ad Hoc Committee is composed of the Finnish Karita Valgren Lindholm (Chair), the Guatemalan Alvaro Rodrigo Castellanos Howell and the Irishman Colm Oisen, appointed by the Chairman of the Administrative Board of the International Center for Settlement of Investment Disputes, with the secretariat of Mercedes Cordado Frits de Korovski.

Regarding the question of whether there was an abuse of the court’s powers in its decision on the applicable law and whether such abuse was clear. Spain claimed that the court ignored the applicable law and that there was also an incorrect application of it. According to the reasoning of the members of the court: “Spain points out that although the Court did not question whether EU law is international law, it has finally decided to ignore EU law as legal rules applicable to the substance of the matter, thus contradicting itself.” (Paragraph 341)

The committee defends the conclusion reached by the court – composed of Briton Samuel Wordsworth (president) and American Jude L. Kessler, appointed by the plaintiffs, and Frenchwoman Anna Jobin-Bret (appointed by Spain) – that EU law could not change the meaning of Article 26 or reformulate it so that it would be interpreted differently by Contracting Parties depending on their nationality. He also does not consider that “accepting the court’s jurisdiction constitutes an abuse of power, let alone a clear abuse.” (Paragraph 286)

Furthermore, “the Court rejected the idea that, given the existence of an EU internal market in the electricity sector and the EU Renewable Energy Directive, there should be any conflict with ECT or with the application of TCEs.” (Paragraph 349)

Arbitration

The lawsuit brought by RWE Innogy GmbH and RWE Innogy Aersa SAU was filed on 23 December 2014, and was the eighth lawsuit filed to date against the country in relation to renewable energies at the International Center for Settlement of Investment Disputes, in this case specifically for the investment it The group is blown away. And a hydroelectric power generation complex.

At the end of 2019, the Decision on Jurisdiction, Liability and Quantitative Principles was announced, which granted Spain that there had only been a breach of the Energy Charter Treaty (ECT) in relation to the recovery requirements of incentives already paid in the past and in relation to seven of the investor’s 24 plants.

The decision, which included a dissenting opinion by Judd Kessler, awarded the plaintiffs €28 million plus interest, plus the costs of the arbitration, plus the plaintiffs’ costs at the jurisdiction and liability stage, of the €273 million they claimed in compensation. Damage from the Spanish government’s energy reforms affecting the renewable energy sector, including a 7% tax on the income of power generators and reduced subsidies for renewable energy producers.

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