The arbitration court of the Stockholm Chamber of Commerce has given the Spanish State victory by ruling in its favor in the lawsuit filed by the investment company Freif Eurowind Holdings, a firm specializing in investment in British infrastructure that acquired the BlackRock fund in 2017 , due to the stoppage of renewable energy projects. The body has decided, unanimously by its three members, that Spain acted reasonably by eliminating subsidies for renewable installations in 2013 and does not have to satisfy the 124 million euros that the British firm claimed since 2017, according to what has been advanced the newspaper Expansion.
According to the ruling, Spain did not violate the Energy Charter of the European Union at any time and always acted in good faith without upsetting the expectations of the plaintiff firm, which will also have to pay the Kingdom of Spain just over three million in concept of coasts. The award concludes that Spain has fulfilled its obligation of Fair and Equitable Treatment, acting with transparency and good faith and without violating the legitimate expectations of the plaintiff.
The court declares that the only guarantee offered by Spain was a reasonable return. It also points out that, since Spain adopted the regulatory changes to tackle the tariff deficit, it had both the right and the obligation to adapt the remuneration system through a reasonable rate of return to protect its economic health. In addition, the award declares that the obligation not to harm the investments has not been violated. The Court indicates that it is not convinced that Spain’s measures caused damage to Freif’s investment and notes that the plaintiff’s own experts seem to acknowledge that there was no such deterioration.
The fund decided to maintain the demand and not take advantage of the royal decree approved by the Spanish Government in November 2019 (RD 17/2019) according to which a kind of amnesty was established for investors of renewable facilities that had been harmed by the decision of the Government of Mariano Rajoy to modify the legal and economic regime (RD-1 9/2013). The change was based on the establishment of a stable remuneration framework for the affected facilities, giving the option to the holders of the investment that the value on which the reasonable profitability established for the first regulatory period (that is, the current one) will revolve established during the two regulatory periods that follow. That is, they will maintain a reasonable profitability for their facilities of 7.398% until 2031.
The new regulation, which had a term until September 30 and was extended by the pandemic until December 18, 2020, only four of the investors who had sued have been accepted (Masdar Solar, The PV Investors, RREEF and Stadweke ). And like Freif, neither did many others of the total of 47 plaintiffs who may now see their interests harmed by this ruling.
Among those who resigned is Masdar Solar & Wind Cooperatief, a group from the United Arab Emirates that had won a lawsuit for 80 million (64.5 million principal). This was especially significant because it was the first time that a plaintiff who had a conviction in favor decided to opt for the solution offered by the Government, whose intention was precisely to tip the balance in the chain of awards filed in international courts, mainly in the International Center for Settlement of Investment Disputes (ICSID), of the World Bank.
Until then, 13 of the 47 lawsuits, such as that of Masdar, had received a conviction against Spain, which would have to pay, according to the provisional judgments, 858 million euros. But the State Bar discharged a battery of arguments to defend its patrimony, requiring its annulment, and achieved a change in the jurisprudence of the arbitration courts that resulted in six favorable awards. Those in which the sentence is below 30% of what was claimed are considered favorable (for example, the judgment of The PV Investors, which asked for 1,300 million plus interest and remained at 90 million and has also resigned).
The claims amounted to more than 7.7 billion. Added to Masdar’s resignation is the annulment in May of what had been the first conviction (worth 128 million) in favor of the British fund Eiser. Several millionaires succeeded that sentence (Nextera, for 290 million, and Antin, for 101). In addition, Solarpark, which was asking for six million from the Court in The Hague, withdrew, leaving about two dozen pending cases, with claims for more than 4,000 million. As many procedures are already failed. The first two, from Isolux and Charanne, are firm in favor of Spain, and the rest have provisional awards, all appealed by Spain. The amounts claimed amounted to 3,500 million, of which it is necessary to deduct around 300 million of the quoted resignations.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.