REVISTA DE DERECHO. AÑO XX (JULIO 2021),
Nº 39, PP. 9-10 | ISSN: 1510-5172 (PAPEL) - 2301-1610 (EN LÍNEA)
MARÍA EUGENIA BAGNULO CEDREZ - ARBITRAJE DE INVERSIÓN EN EL SECTOR
ENERGÉTICO - doi: https://doi.org/10.47274/DERUM/39.8
María Eugenia bagnulo cedrez*
Universidad
de la República (UDELAR), Uruguay.
ORCID iD: https://orcid.org/0000-0001-6568-9513
Recibido:
15/09/2020 - Aceptado: 29/05/2021
Para citar este artículo / To reference this article / Para citar
este artigo
Bagnullo Cedrez, M. A. (2021). Investment arbitration in the energy
sector. Revista de Derecho, 20(39) 183-216. https://doi.org/10.47274/DERUM/39.8
* Abogada por la Universidad de la República (Uruguay);
Licenciada en Relaciones Internacionales por la Universidad de la República
(Uruguay); LL.M. Energy and Natural Resources Law en Queen Mary University of London School of Law (Inglaterra)..
Investment arbitration in the energy sector
In what
circumstances is an investor entitled to compensation under the Fair and
Equitable Treatment standard of protection in the Energy Charter Treaty as a
result of the exercise by the states of the right to regulate to detriment of
investors? A special analysis on photovoltaic arbitration cases in Italy,
Spain and the Czech Republic.
Abstract: A significant development in the renewable
energy field has happened in several countries like Italy, Spain and the Chez
Republic over the last years mainly due to the state´s support for renewable
energy projects. However, because of the financial crisis, these countries
decided to review and change the policies. As a result of the changes
implemented renewable investors were affected in some manner. Consequently,
many arbitrations claim against these states have been brought under the Energy
Charter Treaty. The present Chapter analyses this jurisprudence. Based on the
results of these arbitrations the lack of consistency results evident.
Different interpretations around the Fair and Equitable Treatment standard and
how to find a balance between the need for a stable and predictable investment
framework and the sovereign right to regulate are the principal cause of
diverse decisions. The concept of the standard in the treaty is reviewed and
compared with the evolution of the concept in other investment agreements. In
conclusion, possible amendments to increase consistency in the arbitrations
under the Energy Charter Treaty will be proposed.
Key words: Fair and Equitable Treatment, Legitimate Expectations,
Investment Arbitration, Energy Charter Treaty, Regulatory Changes.
Arbitraje de inversión en el sector energético
¿En qué circunstancias un Inversor tiene derecho a recibir una compensación
en el marco de la provisión de Tratamiento Justo y Equitativo del Tratado de la
Carta de Energía como consecuencia del ejercicio del Estado de su derecho
regulatorio en detrimento de los inversores? Análisis de casos de arbitraje de
inversiones en el sector fotovoltaico en Italia, España y República Checa.
Resumen: Un desarrollo importante de las energías
renovables ha ocurrido en países como Italia, España y República de Checa en
los últimos años, principalmente debido al apoyo del estado a proyectos de
energía renovable. Sin embargo, debido a la crisis financiera, estos países
decidieron revisar su marco regulatorio. Como resultado de los cambios
implementados, los inversores en el sector renovable se vieron afectados. En
consecuencia, demandas de arbitraje de inversiones contra estos estados se han
presentado al amparo del Tratado de la Carta de la Energía. El presente
Capítulo analiza esta jurisprudencia. En base a los resultados de los
arbitrajes se evidencia la falta consistencia en los laudos arbitrales. Las
diferentes interpretaciones en torno al estándar de Tratamiento Justo y
Equitativo y a cómo equilibrar la necesidad (para el inversor) de un marco de
inversión estable y predecible y el derecho soberano (del Estado) a regular,
son la causa principal de las diversas soluciones. El concepto del Estándar de
Tratamiento Justo y Equitativo en el Tratado se revisa y se compara con la
evolución del concepto en otros tratados de inversión. En conclusión, se
propondrán posibles enmiendas para aumentar la certeza en los arbitrajes de
inversiones presentados al amparo del Tratado de la Carta de la Energía.
Palabras
clave: Tratamiento Justo y Equitativo, Expectativas
Legítimas, Arbitraje de Inversiones, Tratado sobre la Carta de Energía, Cambios
Regulatorios.
Arbitragem de investimento no setor energético
Em que circunstâncias um investidor tem o direito de ser
compensado no âmbito do tratamento justo e equitativo
previsto no Tratado da Carta de Energia, em consequência do exercício do Estado
do seu direito regulamentar em detrimento dos investidores? Análise de casos de
arbitragem de investidores no setor fotovoltaico em Itália, Espanha e República
Checa.
Resumo: Ocorreu um desenvolvimento importante das
energias renováveis em países como a Itália, Espanha e República Checa,
principalmente devido ao apoio do Estado a projetos de energias renováveis. No
entanto, devido à crise financeira, estes países decidiram rever o seu marco
regulatório. Em resultado das alterações introduzidas,
os investidores no setor das energias renováveis foram afetados.
Consequentemente, foram apresentados pedidos de arbitragem de investimentos
contra estes Estados com o amparo do Tratado da Carta da Energia. O presente
capítulo analisa esta jurisprudência. Com base nos resultados das arbitragens,
verifica-se a falta de consistência nas sentenças arbitrais. As diferentes
interpretações entorno do tratamento justo e
equitativo e a forma de equilibrar a necessidade (para o investidor) de um
quadro de investimento estável e previsível e o direito soberano (do Estado) de
regular, são a principal causa das diversas soluções. O conceito de padrão de
tratamento justo e equitativo no tratado é revisto e
comparado com a evolução do conceito em outros tratados de investimento. Em
conclusão, serão propostas possíveis alterações para aumentar a certeza nas
arbitragens de investimentos apresentadas com o amparo do Tratado da Carta da
Energia.
Palavras- chave: Tratamento Justo e Equitativo, Expectativas Legítimas, Arbitragem de
Investimentos, Tratado sobre a Carta de Energia, Mudanças Regulatórias.
1. Introduction
and background
Investment
in electricity generation from renewable energy sources is rarely considered to
be financially viable without state support (Selivanova, 2018, p.433). The
principal aim of which is to cover projects high investment costs and encourage
sustainable generation. Furthermore, the energy sector is characterized by the
existence of long-term contracts (Mistelis, 2018, p.153). The reason for this
is that energy projects involve large sums of capital investment and the use of
technology that generally has a long useful life (Scherer, 2018, p.14). The
application by a state of significant changes to these schemes or to the legal
framework which governs a renewable energy investment –after a project has been
constructed– may affect the investor’s expectations to receive a reasonable
return on their investment and to recover costs (Selivanova, 2018, p.433).
Investors
often seek guarantees that the legal framework in which an investment is made
will remain stable during the entire term of the contract. However, from the
state’s perspective, it is a challenge to grant the freezing of the legal
regime which governs the sector during such a long period of time. The
existence of conflicting interests between both parties –investors and states–
is, therefore, a fact. This, in some cases, gives rise to disputes. That
occurred during the financial crisis due to the over-subsidisation phenomenon.
Consequently, several states reversed some of the benefits initially conceded
to photovoltaic investors through schemes (Gallagher, 2018, p.250). Investors
in photovoltaic energy decided to invest considering a legal framework which
was subsequently changed in some way. When the changes that occurred in the
regulation did not have an impact on the terms of the business conducted by the
investors, the consequence is irrelevant. However, when the changes affect the
economic equation of the business, investment arbitration appears as the main
tool for the investors (Charles A., 2019, “Investment Disputes Involving the
Renewable Energy Industry under the Energy Charter Treaty”, Global Arbitration
Review).
The
state’s right to regulate and modify the existing legal framework –once the
investment was made– is not under debate. It constitutes an exercise of the
principle of state sovereignty, according to which it has right to regulate in
its domestic jurisdiction (Charanne v. Spain, SCC Case No. V
062/2012, Final Award, 2016, para. 449-503; Charanne v. Spain, SCC
Case No. V 062/2012, Partial Dissenting Opinion, 2015, para. 11; Eiser. v. Spain, ICSID Case No. ARB/13/36 (2017) Final Award,
para.362; Blusun v Italy Final Award, 2016, para. 317,367 y 372; Antaris
v Czech Republic, PCA Case No. 2014-01 Final Award, 2018, para.
360 y Antaris v Czech Republic, PCA Case No. 2014-01,
Dissenting Opinion of Gary Born, 2018, para. 39).
However,
certain limits should be imposed on the state’s right to regulate domestic
matters if such regulations adversely affect the foreign investor’s –previously
made– investments (Selivanova, 2018, p.433). It has been argued that
undertakings or representations that a state has made to attract renewable
investments might –in specific situations- create ´legitimate expectations´ for
the investors (Graham, 2018, p.221). Although certain tendency seems to be
appearing in case-law, there is still not a jurisprudence constante
regarding this matter. The breach by states of the legitimate expectations of
the investors is being considered by some arbitral tribunals (for instance: Eiser v. Spain, ICSID Case No. ARB/13/36, 2017; Infrastructure v. Spain, ICSID Case No. ARB/13/31, 2018; Masdar v. Kingdom of Spain, ICSID Case No. ARB/14/1, 2018, and CEF
v. Italy, SCC Case No. 158/2015, 2019) as a violation of the fair and
equitable treatment standard of protection (“FET”) under the Energy Charter
Treaty (“ECT” or Treaty). Article 10(1) of the ECT provides that: “Each
Contracting Party shall, in accordance with the provisions of this Treaty,
encourage and create stable, equitable, favourable and transparent
conditions for Investors of other Contracting Parties to make Investments
in its Area. Such conditions shall include a commitment to accord at all times
to Investments of Investors of other Contracting Parties fair and equitable
treatment”. Nevertheless, other tribunals –in analogous situations-
rejected claims regarding the breach of the FET provision, invoking similar
arguments (Charanne v. Spain, SCC Case No. V 062/2012 Final
Award (2016) para. 486-492; Blusun v Italy Final Award, 2016, para.
395).
In what circumstances is a foreign
investor entitled to compensation under the FET in the ECT as a result of the
exercise by the states of the right to regulate to detriment of investors? Significant development has occurred on
the case-law from Charanne to-date, and no comprehensive research
has been conducted on this evolution, this Chapter seeks to fill this gap and
contribute to the literature. Recommendations made could be useful for arbitral
tribunals’ in future renewable energy disputes. Besides, some amendments will
be proposed in the drafting of the ECT considering the different
interpretations around the FET concept. In addition, the progress some
International Investment Agreements have experienced in the manner how the
standard is defined will be considered.
This
Chapter will be divided into five sections. The first sets the context with a
brief introduction to the ECT from a theoretical perspective. It is focused on
the FET provision and the dispute resolution mechanism in the treaty (1).
The second consist of an analysis of the renewable case-law under the ECT
concerning states’ right to regulate (2). The third section presents the
conflict between a state’s right to regulate and investor’s legitimate
expectations. Different approaches to solve this conflict, identified in
case-law, will be presented (3). Some thoughts on stabilization clauses
in energy contracts and the impact they had and might have in future disputes
will be presented (4). The final section concludes with closing remarks (5).
The
state has the sovereign right to regulate and modify its legal framework.
Nevertheless, there are limits to the exercise of such power. In case the state
goes beyond these limits, a breach of the FET standard under the ECT occurs.
Therefore, a new right appears for the investor who is entitled to receive
compensation. A new discussion –not
subject to analysis herein- opened in the literature about the impact these
cases might have in the Energy Transition (Tienhaara K., 2008, p. 24).
2. Overview
of the Energy Charter Treaty
2.1. History,
Purpose and Modernisation
Since
the ECT was ratified by several states, investments in the energy sector have
experienced an increase in the substantive protections. The Treaty emerged in a
fossil fuel setting because of a gas supply crisis occurred during the period
of the cold war. Although it has been argued that its modernization is
required, it is the most broadly ratified investment agreement applicable to
energy investments and the unique multilateral treaty exclusively related to
energy (Gallagher, 2018, p.256). It provides investment substantive
protections, including a dispute settlement mechanism. The Treaty addresses a
varied range of aspects related to energy, namely: commerce; investments
(promotion, protection and treatment); energy efficiency, and environment.
The
treaty’s purpose is “to establish a legal framework to promote long-term
cooperation in the energy field” (Article 2 of the ECT, 1998). Thus, according
to its preamble, the aim of the Treaty is to encourage economic growth through
the adoption of measures to liberalise investment and trade in the energy
sector (preamble of the ECT, 1998). The preamble should not go unnoticed, as it
constitutes a tool of interpretation in accordance with the Vienna Convention
on the Law of Treaties (“VCLT”). As the Treaty does not contain a clear
definition of the FET, its preamble is used by tribunals as an interpretation
tool to determine its content and scope. The disputes reviewed below raised
´alleged breaches´ of some of the substantive protections of the Treaty. Since
the treaty does not contain a clear definition of the scope and content of
these protections, an exercise of interpretation is required to unravel their
meanings.
2.2. FET
Standard of Protection and Customary International Law
While
the substantive protections are examined –either by the literature or
tribunals–, the concepts of ´investor´ and ´investment´ always draw attention.
The reason for this is simple. These concepts define the scope of application of
the treaty protections determining the jurisdiction ratione materiae and
personae of the tribunal in case of disputes. The definition of
investment can be found in Article 1(6) of the Treaty (Article 1 of the ECT,
definition of “Investment”). Moreover, according to the Treaty, to be
categorized as an investment, the activity done by the investor must be
associated with an economic activity in the energy sector (An interesting
discussion about this could be find in this case: Limited Liability Company
Amto v. Ukraine, SCC Case No. 080/2005, Final Award, 2008, para. 42-43).
Besides, Article 1(5) defines ´economic activity in the energy sector´
comprising the construction and operation of power generation facilities
including those powered by wind and other renewable energy sources. Therefore,
in principle the disputes arising out of renewable energy projects –such as the
examined herein- are covered by the ECT provisions (Gallagher, 2018, p.257).
Regarding the concept of investor, it is defined in Article 1(7) of the Treaty
which, in comparison with other investment agreements, is considered broad.
Section
III of the Treaty contains the substantive protections for investments. It
covers the protections usually found in Bilateral Investment Treaties (“BITs”),
such as FET standard of protection; prohibition of discriminatory measures;
Most-Favoured-Nation Treatment, and payment of prompt, adequate, and
effective compensation for any nationalization or expropriation. The most
frequently successfully invoked substantive protection -in renewable energy
disputes raised out of regulatory changes- is the FET standard of protection
(Dolzer, 2012, p.1; McLachlan, 2017, p. 355-357). Most of the claims, as will
be exposed, are based on the states failure to provide a stable and transparent
regulatory environment in light of the investor’s legitimate expectations
(Cyrus, 2017, p.2).
Article
10 (1) of the ECT sets an obligation for the contracting parties to accord FET
standard of protection to investors without including a definition of the
standard. Consequently, investors often include claims for breaches of the duty
of FET in addition to claims brought under other substantial protections. It’s
been argued that investment treaties –like the ECT- are not self-contained regimes
(McLachlan, 2017, p. 296-329). Consistently, the meaning of their terms must be
interpreted considering the relevant rules of international law applicable in
the relations between the parties in accordance with Article 31(3) of the VCLT.
However, it has been asserted that defined by traditional means of
interpretation (wording, context, object and purpose) the FET concept
is challenging (Schill, 2012). Hence, the lack of definition and the absence of
an unanimously accepted meaning from state practice, determine the
exercise by tribunals of a significant law-making power in international
investment law (Schill, 2012, p.1). Although there is not precedent in
Investment-State Dispute Settlement (ISDS) (Cheng (2017) p.1014), Arbitral
Awards have become a persuasive authority –at the time of defining the content
of the standard- giving raise to what has been called ´normative expectations´(Schill, 2012, p.1). It implies that all stakeholders
involved in an investment dispute (state, investor, counsels) expect that the
tribunal decide future cases consistently with previous decisions. This flows
into the idea that investment treaties will and should be applied and
interpreted in the future based on how they were applied and interpreted in the
past (Schill, 2012, p.1). As will be reported, this tendency is not completely
followed in the analysed cases where prima facie inconsistency seems to
be the rule (Oliver, 2007, p. 225-243).
Notwithstanding
the above debate, while the FET standard continues being part of the ECT, it
will require to be interpreted. Concerning the link between FET and customary
international law, there is an extensive debate among authors. It is mainly
focused on whether the standard of protection is part of the Minimum Standard
of Treatment provided to foreign investors in customary international law or if
it includes a broader meaning.
There
is a consensus in jurisprudence that stability and predictability of the legal
framework are important components of the FET provision under the ECT. Some
authors have argued that the ECT confers investors operating in the energy
field greater protections against regulatory changes than other investment
treaties (Hober, 2018, p.175). This statement is based on Article 10 (1) of the
Treaty which refers to a state duty to create stable and transparent conditions
for foreign investments, as well as the commitment to accord Fair and Equitable
Treatment to such investments. Dolzer and Schreuer have identified from the
arbitral case law, factual situations or principles to which this standard has
been applied. These are: transparency; stability and the protection of
legitimate expectations; compliance with contractual obligations; procedural
propriety and due process; good faith, and freedom from coercion and harassment
(Dolzen, 2012, p. 1).
It
is accepted that a reversal of promises by a state that have led to legitimate
expectations in the investors will breach the FET standard (Azurix v
Argentine, ICSID Case No ARB/01/12, Final Award, 2006, para. 287; Glamis
v United States of America, UNCITRAL, Final Award, 2009, para. 22). Thus,
the issue to be addressed is what makes an investor’s expectation capable of
being considered ´legitimate´. Legitimate expectations are examined in
accordance with the host state’s legal framework, undertakings, and
representations made directly or implicitly by the host state (Levashova, 2019,
International Arbitration Law Library, Volume 50 (Kluwer Law International,
2019). The legal framework on which the investor is entitled to rely consists
of legislation and treaties, assurances contained in decrees, licences, as well
as contractual undertakings (Dolzen & Schreuer, 2012, p. 1). In addition,
tribunals have agreed that investor’s legitimate expectations must be analysed
in the light of the legal order of the host state at the time the investor made
the investment (Mondev v. United States of America, ICSID Case No. ARB
(AF)/99/2, Final Award, 2002, para. 156; and AES Summit v. The Republic of
Hungary, ICSID Case No. ARB/07/22, Final Award, 2010, para 9.3.8 and
9.3.18). It was noted that legitimate expectations are not subjective hopes and
perceptions, rather, they must be based on objective facts (Suez,
Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v.
Argentine Republic, ICSID Case No. ARB/03/19, Decision on Liability, 2010,
para. 228).
It
was pointed out that “changes to general legislation, in the absence of
specific stabilization promises to the foreign investor, reflect a legitimate
exercise of the host state’s governmental powers that are not prevented by a
fair and equitable treatment standard” (Total S.A. v. Argentine, ICSID
Case No. ARB/04/01, Decision on Liability, 2010, para. 164). However, what must
be considered is whether measures exceed normal regulatory powers and
fundamentally modify the regulatory framework for the investment beyond an
acceptable margin of change (El Paso v. Argentine, ICSID Case No.
ARB/03/15, Final Award, 2011, para. 402).
The
legitimate expectation and the proportionality criteria are the main tools
applied by tribunals in the case-law to evaluate whether the host-state
breached the FET provision under the ECT. In the following paragraphs, after a
special consideration of the dispute resolution mechanism under the ECT, an
analysis of the determination tribunals have done around this concept will be
conducted.
2.3. Dispute
Resolution Mechanism
International
arbitration is the principal tool used by investors under the ECT in case of
violation of its substantive protections. The procedures and
circumstances under which an investor of a contracting party might submit an
investment dispute to International Arbitration are set in Article 26 of the
ECT (Gaillard, 2018, p. 1). The Treaty contemplates a cooling off period
of three months from the request of amicable settlement. After this period, the
investor is entitled to choose to submit the dispute for resolution either to
the courts or administrative tribunals of the contracting party to the dispute,
or in accordance with a previously agreed dispute settlement procedure or to
International Arbitration. Article 26 of the ECT clearly grants this choice to
the claimant as it states that if the dispute cannot be amicably settled, “the
investor party to the dispute may choose to submit it for resolution”
(Gallagher, 2018, p. 262). Thus, under the ECT it is only at the investor’s
instigation that arbitration can be commenced. The text of the Treaty differs
significantly from other treaties which provide that a dispute may be submitted
at the request of either party to an ad hoc arbitral tribunal or
arbitration under the auspices of ICSID (See the Article 9(3) of the
China-Ethiopia BIT, 1980). Therefore, a fork in the road provision is
contained in the Treaty that potentially bars an investor’s claim if another
dispute-settlement mechanism has been selected (Gaillard, 2018, p.1). Moreover,
the Treaty gives right to any party involved in the dispute to set as a place
of arbitration a state that has ratified the New York Convention, which
reaffirms the enforceability of the award (Article 26 (5) (b) of the ECT). This
is notwithstanding the debate in cases of intra-European Union investment
arbitration awards which will not be examined herein (Achmea B.V. v. The
Slovak Republic, UNCITRAL, PCA Case No 2008-13, 2008). Therefore,
International Arbitration constitutes a guarantee for the investor. Point was
made that it would be of little benefit to foreign investors if they were
obliged to enforce their rights under investment treaties in the local courts
of the host state responsible for their mistreatment, since often the action
complained of is a change in the local law the relevant court is obliged to
uphold (King, 2012, p. 1). The investor is also afforded a wide choice in terms
of institutions and rules which can have a significant impact on its claim
(Article 26 (4) of the ECT).
The
above overview lays the foundations for the analysis of renewable energy
arbitration disputes in the next chapter.
3. Renewable
ECT Arbitrations and Investors’ Legitimate Expectations
3.1. Regulatory
changes and context of its implementation
Political
risk has always been a problem for renewable energy investors. An exponential
growth in renewables has occurred across the world–especially in Europe- during
the last decade. The growing focus on renewable energy was reflected in the
creation of the International Renewable Energy Agency (IRENA). IRENA is an
intergovernmental agency. Its principal objective in accordance with the
Article II of its Statute is to “promote the widespread and increased adoption
and the sustainable use of all forms of renewable energy”. The reasons for this
can be found either at a domestic or an international level. Concerning the latter,
-through treaties- several commitments were taken on by states to reduce
green-house gas (GHG) emissions to combat climate change (CC) (United Nations
Framework Convention on Climate Change (UNFCCC) signed in 1992 and entered into
force in 1994; Paris Agreement on Climate Change in 2015). Since then, they
intended to reproduce the assumed international obligations in their domestic
jurisdictions. Consequently, different supports were given at a local level to
incentivize renewable development. For instance, Feed-in-Tariffs (FIT); Feed-in
Premiums; green certificates; quota obligations; loans, and tax exemptions. The
FIT regime resulted in a tariff deficit, meaning that the subsidies the
government was paying to the operators of photovoltaic parks were higher than
the end-price the government charged for that energy. Conversely, because of
the financial crisis and over-subsidisation, several states decided to modify
the policies connected with the granted supports (Gallagher, 2018, p. 257). In
general, the regulatory modifications implemented by the states comprised
cutbacks on subsidies for renewable energy; creation of new taxes;
implementation of a state levy on solar energy, limitation of the term for
regulated tariffs; imposition of limits on equivalent production hours;
obligation to fulfil new technical requirements; obligation to pay a charge for
grid access, and the reversal of the prioritised dispatch (Restrepo, 2017, p.
8). Therefore, renewable investors who invested based on a regime that was then
modified were affected in some manner. Subsequently, several
investment-arbitration claims against host-states -mainly Spain, the Czech
Republic and Italy- have been brought under the ECT provisions.
The
fact is that these countries adopted measures to comply with their
international obligations to reduce GHG. It was the global financial crisis
that made the measures unsustainable. There are those who argue that tribunal
decisions should take the global intention to lower GHG emissions into account
and consider the international instruments supporting this aim (Restrepo, 2017,
p. 8). However, this approach is not considered in the Awards reviewed here.
This confirms that Tribunals have little room to review international law on
climate change. Some concerns have been expressed about the impact the awards
may represent to the aim of combating Climate Change (CC) (Restrepo, 2017, p.
8). The main concern is that it may incentivize host-states not to take CC
measures to avoid the risk of facing high value claims and eventually, adverse
decisions (Restrepo, 2017, p. 8). This phenomenon is well- known in literature
as ´regulatory chill´
(Baetens, 2011, p.11). Nevertheless, there is no evidence about its
occurrence, which must be evaluated over the next few years when pending cases
are finished and in relation to the subsequent conduct of states (Tienhaara,
2018, p.24).
3.2. Tendencies
and Unsuccessful Allegation of Indirect Expropriation
It
is a fact that the FET is the most successful substantive protection in the
studied cases. As explained, the modification of renewable regulation in Spain,
the Czech Republic and Italy resulted to date in sixty international
arbitration claims under the ECT (See list of all arbitrations filed against
Italy, Spain and The Czech Republic in THE ect database: https://energycharter.org/what-we-do/dispute-settlement/all-investment-dispute-settlement-cases/).
Investors’ who were affected as a consequence of the regulatory changes seek
protection under the substantive provisions of the ECT by means of investment
arbitration. This means that, currently, sixty out of one hundred and
twenty-two disputes brought under the ECT are related to the modification of
renewable’ regulations in the mentioned countries.
Firstly,
forty-five of these claims are against Spain; six (Charanne; Isolux;Antin;Eiser;Masdar;Novenergia)
of them have been resolved and
the awards are publicly available; two (Charanne &Isolux) concluded that Spain is not liable to pay damages
and the remaining four considered it is (Antin;Eiser;Masdar & Novenenergia). The regulatory changes that motivated
investors’ claims were different in Charanne and Isolux -cases
decided in favour of the state- in comparison with the regulatory changes
considered in Antin; Eiser; Masdar; Novenergia -decided in favour of the
investor. The existence of different regulations on which the claimants based
their claims and the different impact they caused in the investors’ business
seem to be prima facie the principal reasons for different Awards
(Kudrat, 2018, p. 5).
Secondly,
nine of these claims are against Italy; three (Blusun; CEF & Greentech)
of them have been resolved and the awards are publicly available; one concluded
that Italy is not liable to pay damages (Blusun) and the other two considered
it is (CEF & Greentech).
Thirdly,
six (Antaris; Voltaic; Photovoltaik; WA; ICW; ICW) of these claims are
against the Czech Republic; five (Antaris; Voltaic; Photovoltaik; WA; ICW)
of them have been resolved concluding that the state is not liable to pay
damages.
Hence,
out of a total of fourteen awards publicly available, eight have been decided
in favour of the host-state and six in favour of the foreign investor. However,
the jurisprudence changed significantly since the first Award was rendered in Charanne.
The vast number of pending cases against Spain and extra official information
accessible about the non-publicly available awards suggest that this tendency
would be probably modified rapidly (Tones, 2019).
As
was asserted, under the ECT different wording cannot serve as an explanation
for divergent interpretations (D’Agostino, 2007, p.50). However, the above
tendencies show how tribunals have achieved different conclusions considering
similar facts and a unique Treaty.
From
the reviewed awards emerges that substantive protections under which
most of the investors presented their claims in the hypothesis of regulatory
changes were the FET-standard and Indirect Expropriation. In the case of the
claims against Spain, four of the investors claimed jointly a violation of the
FET-standard and indirect expropriation (Charanne; Eiser;
Isolux ; & Novenergía,), while two investors (Antin; Masdar) merely claimed a breach of the FET-standard.
Concerning the claims filed against Italy, from the awards follow that merely
one of the investors claimed jointly a violation of the FET-standard and
Indirect Expropriation (Blusun), while two only claimed exclusively a
breach of the FET-standard (CEF & Greentech). Regarding the
claims filed against the Czech Republic, follows that all the investors claimed
solely a violation of the FET standard (see the following Final Awards: ICW,
para.125; Photovoltaik, para.124; Voltaic, para.125; WA
para. 125). Consequently, the above figures show that the FET standard is
preferred by the investors to base their claims in case of regulatory changes
by host-states. In addition, there is no case in which the investors invoked
exclusively indirect expropriation. In terms of the awards’ outcomes, it flows
that all the cases decided in favour of the investors (ICW; Photovoltaik;
Voltaic; WA; Antin; Eiser; Novenergia; Masdar;
CEF; and Greentech) the state liability was determined based
on a breach of the FET-standard. Thus, considering the above analysis, the FET
standard is not only the most preferred standard by the investors to base their
claims on, it is also the most successful of them.
Although
indirect expropriation is not subject to analysis herein, some brief assertions
will be done regarding the cause of its unsuccessful allegation. In Charanne
the Tribunal pointed out that the concept of expropriation is generally
accepted as ´a taking involving a deprivation of property´ (Charanne v.
Spain, SCC Case No. V 062/2012, Final Award, 2016, para 460).
The tribunal followed the standard of indirect expropriation under
international law, which requires the presence of a substantial effect on the
property rights of the investors (Charanne v. Spain, SCC Case
No. V 062/2012, Final Award, 2016, para 461). It was pointed out that a
loss of value considered as expropriation must be of such magnitude as to
amount to a deprivation of property (Charanne v. Spain, SCC Case
No. V 062/2012, Final Award, 2016, para 464). Consequently, it was
concluded that the claimants failed to prove that the disputed measures had an
effect tantamount to an expropriation (Charanne v. Spain, SCC Case
No. V 062/2012, Final Award, 2016, para 462). This conclusion
reflects the high threshold in jurisprudence to consider that government
measures amounted to an expropriation (Blusun v Italy, Final Award,
2016, para 408 & Greentech Energy Systems A/S, et al v. Italian
Republic, SCC Case No. V 2015/095 Final Award (2018), para. 727).
Normally,
in renewable energy cases involving adverse regulatory measures -as the studied
herein- investors remain in ownership of the affected investment, nonetheless
the investment has suffered a loss of value due to the regulatory changes
implemented. In the facts the investor continues operating the photovoltaic
park which continues to generate energy, and thus profit.
In
this sense, the Isolux Tribunal determined the non-occurrence of
expropriation after comparing the profitability of the investor at the time of
investing with the current profitability of the solar plants. Being the latter
higher, the tribunal concluded that ´in no way can a “severe” or “radical loss”
occurred concluding the not expropriator nature of the measures adopted by
Spain (Isolux Netherlands, BV v. Kingdom of Spain, SCC Case V2013/153,
Final Award, 2016 para. 852-853).
3.3. FET
as a protection against Host-State Regulatory Changes
The
allegation of a breach of the FET by investors in the cases is followed by a
response of the states denying such breach. The main arguments presented by
both parties will be presented here-after. As was pointed out, state support
has been a necessary precondition for investments in renewable projects
(Selivanova, 2018, p.433). Although currently renewables are becoming quite
competitive, when they were trying to compete at the beginning with a very
entrenched fossil fuel industry, they faced many challenges. Some of them were
inertia to change, high capital costs, and lack of appreciation of the urgency
of climate change mitigation (Outka, 2012, p. 65).
There
is consensus that the reversal of supports by host-states that had led to
legitimate expectations in the investors would violate the FET standard under
the ECT (Dolzer, 2012, p.1). However, as will be exposed, there is no general
agreement, neither in literature nor in jurisprudence, about when the investor
has a legitimate expectation that the legal framework would not be modified.
Thus, the key legal issue to be addressed is what makes an investor’s
expectation liable to be considered ‘legitimate’ (Tellez, 2012, p.27). A review
of the investors’ and host-states’ assertions about this concept will be
conducted in the following paragraphs.
The
rationale behind investors’ claims is the idea that the regulatory
modifications introduced by states have affected the legal and economic regime
established by previous regulation, on which they relied at the moment of
making their investments (Selivanova, 2018, p.433). They asserted
that the changes caused damages and thus it must be repaired (Tellez, 2012, p.
27). By means of a Treaty interpretation and referring to several case-law,
investors alleged that the FET standard imposes an obligation for the states to
maintain a stable and predictable legal framework (Charanne v Spain, Final
Award,, 2016, para. 293). They likewise
affirm to have a legitimate expectation that the legal framework considered
when investing would not be modified (Charanne v Spain Final Award, 2016,
para. 294). They pointed out that, via regulatory reforms, states
breached their obligations to provide FET under Article 10 (1) of the ECT. The
investors mostly recognized that states -as part of their sovereign power- are
permitted to change their regime under the ECT, but those changes must be
predictable and in line with investors’ expectations (Antin v Spain
Final Award, 2018, para. 414 & 377). To justify the existence of a
legitimate expectation, the criteria usually used –which is commonly accepted
in jurisprudence- consist of identifying certain elements in the conduct either
of the state or the investor. These elements are an explicit or implicit
representation made by the authorities of the state (about the freezing of the
legal framework); such representations must be relied by the investor at the
moment of investing, and the legitimacy and reasonableness of the expectations
at the light of the circumstances of the cases. Regarding the representations
made by states, investors alleged that mostly are contained in the legislation
–whatever form it adopts (Charanne v Spain, 2016, Final Award
para 295). In addition, could be identified -apart from the
legislation- in other type of evidence, such as press release; declarations
made by public officials; meetings with government representatives, and
publicity through which the state promotes the investment such as the Spain campaign, ´The
sun can be yours´(Antin
v Spain, 2018, Final Award, para. 366). In some cases investors alleged that the promise of stabilization
was indirectly contained in the legislation, while others -going beyond this
argument- affirmed that a stabilization clause with a specific commitment of
freezing the legal framework was expressly contained in the legislation
(Ivaylo, 2018).
Conversely,
the rationale behind host-states’ responses is that although the
FET standard provides that a stable regulatory framework must be granted to
investments, this does not imply that the legal system must be unmodified. The
idea that the FET standard is not a stabilisation clause is repeatedly alleged
by states. It was affirmed that they can continue to legislate responding to
changing circumstances if they do so in an equitable and reasonable manner (Charanne
v Spain Final Award, 2016, para. 355). States
alleged that the violation of legitimate expectations requires a specific
commitment that the legal framework that governed the investments would not be
modified (Charanne v Spain Final Award, 2016, para. 356). Thus, in
absence of a specific commitment, the only expectation that the investor would
have is that the legal framework would be modified. Host-states stated that
investors’ expectations must be objective, reasonable and legitimate. To
determine their scope, they observe what knowledge the investor had or should
have had about the regulatory framework in the country in which the investment
was done (Charanne v Spain Final Award, 2016, para. 364).
Therefore, they asserted that what makes a state measure reasonable is the
public interest pursued by it (Antaris v Czech Republic Final Award,
2018, para. 354). Thus, the adjustments to the legal framework are considered
by states to be coherent and reasonable as they aim to adapt to changing
economic circumstances and solve the problem of tariff deficit responding to a
public interest (Antaris v the Czech Republic Final Award, 2018, para.
365).
While
setting a general overview of the arguments presented either by investors or
host-states, tribunal determinations on the subject will be examined in the
following section. The strength of the arguments presented by both parties is
unquestioned. Beyond their arguments, some principles could be identified.
Behind states’ arguments, the principle of sovereignty (Byers, 2002,
p.47) and the public interest exception appear as a main ground. The
principle of sovereignty has been defined as “the full power of the state in
its territory and its independence from other states” (Feshenko, 1988, p.40).
This power includes the ability of the state to create their own legislation
and to modified it when circumstances so required. This idea governs the
states´ arguments the in the cases under study. Alternatively, in some
dissenting opinions of the cases under study, some argue that while there is a
right to regulate, it does not forgive a state of its obligation to compensate
(Charanne v Spain Dissenting Opinion Guido Tawil, 2015, para 5 & Antaris
v Czech Republic Dissenting Opinion Gary Born, 2018, para. 7). Conversely,
it has been pointed out that a compensation requirement would discourage
regulation and without forgiveness of liability, the right to regulate could
not exist (Giest, 2017, p.18).
In
addition, the public interest exception is used by states to justify the
regulatory changes implemented. It has been argued that generally acknowledged
that states need to be given some freedom for public interest regulation
(Giest, 2017, p.18). And thus, public interest exceptions are incorporated into
investment treaties to reduce liability when the regulation is intended to
benefit the public and prevent the chilling of such regulation (Giest, 2017,
p.18). In the reviewed cases states alleged that the regulatory changes
implemented responded to a public interest as a result of the financial crisis
being that an exception to the ECT promise of stability.
However,
under investor’s argument, the doctrine of no venire contra factum propium
or estoppel (Sombra, 2016, p.9) –by which the legitimate expectations
rule is influenced- is easily recognised. The doctrine of no venire contra
factum propium consists of the prohibition of disloyal or inconsistent
behaviour. It lies in avoiding contradictory behaviours regarding previous
manifestations of will that are based on good faith and that can cause
damages (Sombra, 2016, p.9). Similarly, the concept of estoppel in common law
is related to the protection of the practice of an initial behaviour that
results from a legitimate expectation that such practice conforms with good
faith (Sombra, 2016, p.9).
At
the end, it appears that after a confrontation between state rights to regulate
and investor legitimate expectations, that who wins the battle will obtain an award
in its favour. Thus, the decision-maker role that arbitrators play in these
cases is not simple. This not only because of the strength of the arguments
alleged by both parties, but also because of a rising concern about the
possible interference of international investment rules with domestic law
(Lise, 2014).
3.4. Tribunal
Approaches to FET Standard in the Context of Regulatory Changes
Due
to the lack of definition of the FET in the ECT, tribunals have interpreted the
provision differently. There is consensus in the jurisprudence that the duty to
provide FET implies an obligation to create a stable, equitable, favourable,
and transparent conditions for investments (Charanne v Spain Final Award,
2016, para. 447). The following have been construed by arbitral
tribunals as elements of the FET-standard: the legitimacy (reasonableness) of
investor expectations; the stability, predictability and transparency of
treatment by the state, and the absence of arbitrariness or discrimination in
such treatment (Restrepo, 2017, p. 8).
This
interpretation is done by means of a literary analysis of the text of the
treaty in terms of the meaning of the words ´fair´ and ´equitable´, in cooperation with some
provisions of its preamble in accordance with the criteria defined to interpret
treaties in the VCLT.
There
is also a compromise about the fact that the state cannot induce an investor to
make an investment generating legitimate expectations, to later ignore the
commitments that had generated such expectations (Charanne v Spain Final
Award, 2016, para. 486). It is also accepted that
investors’ legitimate expectations come from specific commitments of the state,
for example those assumed by means of a stabilization clause. Some tribunals
understood that in the absence of a specific commitment, an investor cannot
have a legitimate expectation that existing legal framework will not be
modified. However, regarding the rules that are not specifically addressed to a
particular investor –normally designed to encourage foreign investment-, there
is no consensus in tribunals about its ability to be considered as a source of
a commitment of the state. In this sense, some have expressed that the
existence of a specific commitment – whether of a contractual nature, or based
on statements or specific terms granted by the host-state– can be based on the
legal order in force when the investment was made (see Gary Born
and Guido Tawil dissenting opinions). This installed the
discussion about whether a representation is valid to create a legitimate
expectation in the investor, a debate that makes the lack of consistency
evident.
The
idea that the state has a reasonable degree of regulatory flexibility to face
to the changing circumstances in the public interest is generally accepted (Eiser
v Spain Final Award, 2017, para 387. However, those subsequent changes –in
case they happen- should be made fairly, consistently, and predictably, taking
into consideration the circumstances of the investment (Charanne v Spain Final
Award, 2016, para 500). Nevertheless, in some dissenting opinion
it’s been argued that if in the valid exercise of that regulatory power of the
host-state it affects acquired rights or legitimate expectations of the
investor, the state must compensate the damage caused (Charanne v Spain Dissenting
opinion Guido Tawil, 2016, para. 11).
There
is also consensus regarding the fact that the regulatory measures, to be in
violation of investors’ legitimate expectations must not have been reasonably
foreseeable by the investor (Charanne v Spain Final Award, 2016,
para 506). To prove this aspect, investors use either reports or other type
of evidence to support the fact of having done a due diligence process before
the investment decision to mitigate or avoid any type of risk that could appear.
This suggests how important the evidence may be in the resolution of this
cases. Although prima facie the expectation seems to be located in the
subjective scope of the investors, it is generally accepted by tribunals that
the legitimate expectation must be proved objectively and assessed on a
case-by-case basis (Antin v Spain, 2018, Final Award, para. 536). This
idea reveals the importance of the realization of a due diligence by the
investor prior to make the decision to do an investment. This is not only to
assess possible risks, and eventually mitigate or avoid them, but also to
pre-establish evidence to be prepared in case of dispute. The expectation is in
the subjective sphere of the investor who eventually will face the challenge to
make visible in an objective manner. The investor is who has the burden of
proving such expectations, thus, as was alleged, the strongest the evidence is,
the more likely to obtain an award in which the legitimate expectation be
recognized (Antaris v Czech Republic, 2018, Final Award, para. 368).
There
are other aspects that in a case by case basis are analysed by the tribunals
when assessing a legitimate expectation. For instance, the lifespan of the
technology used in a project -such as the solar panels-, or the term of the
lease agreement for the land above which the photovoltaic project is to be
built (Charanne v Spain Final Award, 2016, para 521 &
522). This elements contribute to exteriorize in some
way the expectations the investor has and the reasonableness of its
expectations at the light of the circumstances of the projects.
Some
tribunals refer to a test of proportionality when assessing the
regulatory changes. This test analyses that the modifications are not
capricious, unreasonable, arbitrary, contrary to public interest,
disproportionate or unnecessary, and do not suddenly and unpredictably
eliminate the essential characteristics of the existing regulatory framework (Charanne
v Spain, 2016, Final Award para. 517 & 539).
Others
refer to ´an acceptable margin of change´ in the regulation by the states in parallel to the ´margin of appreciation doctrine´ (see
dissenting opinion of Gary Born, 2018, para. 39). The basic idea behind is that
the state is entitled to a certain ‘room to maneuver’, within which its
conduct is exempt from full-fledged review. Tribunals appear to conclude that
the state retains a margin of discretion to balance the investor’s expectations
against public policy objectives and that only the exercise of regulatory power
exceeding that margin can constitute a breach of a state’s obligations under
the treaties’ FET standard.
The
Spanish, Czech and Italian renewable energy arbitrations are likely to focus on
whether the host-state acted with consistency, transparency, and reasonableness
in modifying the existing regime, and whether investors had legitimate
expectations that the legal framework would not be modified. As emerges from
the tribunals determinations, there is not an exclusively standard as to when
investors’ expectations deserve treaty protection under the FET standard, any
evaluation will depend on several aspects, such as the facts of the cases, the
evidence provided by the parties, the scope of the regulatory modifications
adopted, and the impact they caused on the investors. The legitimate
expectations’ rule developed by tribunals as an instrument to assess the breach
of the FET standard will be explained in detail in the following paragraph.
Such analysis will bring us a step closer to the answer this Chapter questions.
3.5. What
Attributes must an Expectation have to be considered as Legitimate?
As
was largely argued hereinbefore, it is accepted that a violation of a
legitimate expectation of the investor would derive in a breach of the
FET-standard. Since there is no provision in the ECT referring specifically to
investors’ legitimate expectations, the determination of the extent and content
of protection of such expectations is being assessed by Tribunals through a
review of the relevant case law on the matter (Tellez, 2010, para. 110).
The
lack of rigorous analysis by tribunals supporting the use of legitimate
expectations is noted in most of the reviewed awards. Some exceptions to this
rule are the cases against the Argentine Republic (Continental Casualty
Company v. The Argentine Republic, ICSID Case No. ARB/03/9, Final Award,
2009, para, 260-262; Total S.A. v. The Argentine Republic, ICSID Case
No. ARB/04/01, Decision on Liability, 2001, para. 113 and El Paso El Paso
Energy International Company v. The Argentine Republic, ICSID Case No.
ARB/03/15, Final Award, 31/10/2011, para. 356-364 which contain important
analysis of the subject matter and are constantly referred by tribunals in the
cases under study).
The
doctrine of legitimate expectation has been established on precedents —awards
citing prior awards that have mentioned the concept. However, as will be
explained, this approach without additional elaboration is unsatisfactory.
The rationale behind the legitimate expectations doctrine is that
the investor should not be protected from the ordinary business risk of an
investment, and that the expectations of the investor must have been reasonable
and legitimate in the context in which the investment was made. The logic
behind the rule is to encourage foreign investors to make adequate business
decisions based on the legal regime in force in the state, and the
representations made by the host-states. Therefore, this doctrine requires to
be assessed in a case by case basis.
It
has been argued that little justification has been provided by tribunals to
account for the use of legitimate expectations in the context of the
FET-standard (Potestá, 2013, p.88). This is surprising considering the lack of
explicit definition of the concept in the ECT. However, there is a tendency to
define the content of the standard in the last Investment Agreements. For
instance, the United States-Mexico-Canada agreement (USMCA) contains a
provision expressly excluding the legitimate expectations to the scope of the
FET standard (Article 14.6(4) of the USMCA). Conversely, the Investment
Agreement recently signed between the European Union and Vietnam (see
the Investment agreement between the European Union and Vietnam) provided
a clear definition of the FET standard including a protection of the investor´s
legitimate expectations in its scope. The latter seems to be the rule in the
last Investment Agreements, reason why some authors speaks about its evolution
(Behn, 2015, p.363). This reaffirms the need to modify the ECT to make it
participant of such evolution.
Tribunals
have accepted that the mere subjective belief held by the investors is
insufficient to create a legitimate expectation (Charanne Final Award,
2016, para 493). Therefore, some objective criteria have been identified in
jurisprudence to evaluate whether a legitimate expectation exists. The
following paragraphs identify different elements and forms in relation to which
a breach of legitimate expectations has been found by tribunals. The absence of
a clear definition of the standard in the text of the ECT obliges tribunals to
find mechanisms to define it. What is curious about the tribunal’s decisions is
the use of some extracts of other awards to underpin their positions, while
they were rendered under the scope of application of a different legal
framework (Chen, 2019, p.47). This installs the discussion -that will not be
subject to analysis herein- about whether there is a universal concept of the
FET-standard, or if, on the contrary, it has a different meaning and content
depending on the legal framework it is contained on.
Based
on the determinations of the tribunals in the case law analysed in this
dissertation, four elements can be identified as decisive in evaluating whether
the expectations of an investor are legitimate (Levashova,
2019, p.51). Firstly, the specific representations made by the host-state to an
investor. Concerning the representations, the analysis will include situations
where the investor invokes contractual commitments or unilateral
representations of the state through general legislation. Secondly, the
stability of the general regulatory framework will be assessed. Regarding
states right to regulate, it has been argued that unqualified protection of
legitimate expectations may have the effect of limiting the state’s right to
regulate (Potestá, 2013, p.88). That is why this issue will be addressed in the
following chapter, as it deserves specific analysis. Thirdly, tribunals
consider the economic and socio-political circumstances in the host-state at
the moment of the investment. And finally, the investor’s conduct before making
the investment -due diligence and risk assessment- will be examined as an
element also being considered by tribunals.
Regarding
the first element -specific representations by host-state- the arbitral
practice confirms that representations by the state are, in principle, capable
of creating legitimate expectations, and thus may be protected under the
FET-standard, if they are later unknown by the state. Regarding the form in
which the state can make those promises, commitments, or representations, lack
of consistency appears in case-law.
There
are two approaches in case-law to assess the existence of a state
representation. The first entails the host state to have made clear, direct and
specific assurances to the investor regarding the specific relationship -which
is normally a contract- that the legal framework will not be modified. As an
example, Charanne tribunal has affirmed that “in the absence of a
specific commitment, an investor cannot have a legitimate expectation that
existing rules will not be modified” (Charanne, Final Award, 2016, para. 499).
The second approach understands that the expectations could be based on
assurances of the state provided in general applicable laws of a country, or
the legal framework at the time of the investment. A tribunal is more likely to
find a breach of the FET where the host-state, implicitly or explicitly, made
specific representations, commitments, assurances or promises on which the
foreign investor relied in making the investment.
Some
claimants intended to rely on statements by the host-state in investment
promotion documents, in which it was asserted that high return in photovoltaic
sector could be reached. Another strategy used by claimants is invoking the
legal framework in force at the time of investing as the basis of their
legitimate expectations (Charanne, Final Award (2016) para. 491). Some
tribunals asserted that the investment promotion documents and the legislation
per se could not create a legitimate expectation that specific laws would not
modified (Charanne, Final Award, 2016, para. 496 & 497). However,
in some dissenting opinions –in all circumstances issued by arbitrators
appointed by investors-, a different position was expressed regarding this
matter (Gary Born and Guido Tawil Dissenting Opinions). It was
asserted that legitimate expectations could arise from the legal system in
force at the time of the investment. An UNCTAD publication on FET is used to
justify the idea that an investor may derive legitimate expectations from
“rules that are not specifically addressed to a particular investor, but which
are put in place with a specific aim to induce foreign investments and on which
the foreign investor relied in making his investment” (UNCTAD´FET: UNCTAD Series on issues
in International Investment Agreements II´, 2012).
Thus,
it is clear from case-law that not every representation or assurance creates
legitimate expectations. A certain degree of precision, specificity or lack of
ambiguity for representations to be enforced under the theory of legitimate
expectations is required. In this sense tribunals seem to follow the principles
set on the ILC Guiding Principles. This principles reflect the idea that
state’s statement would involve obligations for the expressing state “only
if it is stated in clear and specific terms” (Guiding Principles applicable
to unilateral declarations of States capable of creating legal obligations´,
in:<http://legal.un.org/ilc/texts/instruments/english/draft_articles/9_9_2006.pdf>).
The requirement of the specificity of the promise is analysed by
tribunals from different angles. Firstly, regarding the object or content of
the promise. Secondly, considering who the promise or representation is
addressed to. In terms of the content, what is assessed is whether there is a
promise to maintain the legal framework unmodified. Regarding the addressee of
the representation, what is discussed is if a promise addressed to a specific
investor is required, or if statements of a more general nature, such as
legislation or statements by politicians or government representatives directed
to investors, are able to create legitimate expectations.
In
Charanne, the tribunal asserted that the commitment of the state could
have been made based on a stabilization clause, or a statement directed to the
investors assenting that the existing regulatory framework will not change. The
Tribunal concluded that these declarations have not been addressed to the
investor. However, in the dissenting opinion of the same case, Tawil expressed
that the legitimate expectation can originate or be based on the legal order in
force when the investment is made. The Charanne decision was
determinant in the change of strategy adopted by the investor in later
arbitrations. This notwithstanding the fact that in Charanne the tribunal only
considered the first regulatory changes implemented by Spain. Thus, this case
can be distinguished on the facts to the subsequent awards against Spain which
considered additional regulatory changes. According to the tribunals, while in Charanne
the regulatory changes did conserve the principal characteristics of the
investment, in Eiser they did not. Consequently, one can easily arrive
at the conclusion that the main factor to determine proportionality was the
substantiality of the loss (Restrepo, 2017, p.101). For instance, in Eiser
the investors alleged that the decree, which was designed to attract
investment, contains a stabilization clause (Eiser Final Award, 2018,
para. 357). Although the tribunal did not analyse the nature of the decree
provision –whether it constitutes a stabilization clause-, it concluded that
´investors must expect that the legislation will change, absent a stabilization
clause or other specific assurance giving rise to a legitimate expectation of
stability´ (Eiser Final Award, 2018, para. 362).
However the Isolux tribunal based on an UNCTAD
report concluded that an investor may derive legitimate expectations not
only from specific commitments addressed personally, but also from rules that
are not specifically addressed to a particular investor but which are put in
place with a specific aim to induce foreign investments, and on which the
foreign investor relied in making his investment (“UNCTAD´FET: UNCTAD Series on issues in International
Investment Agreements II”, 2012). The Novenergia Tribunal
concluded that Spain actively promoted the perception of its legal framework as
stable, transparent, and welcoming to investors through its reports, ´The
Sun Can Be All Yours´ and other prospectuses creating legitimate
expectation that the legal framework was not going to be modified (Novenergia
v Spain, 2018, Final Award, para. 556). The Antin tribunal
concluded that state undertakings were sufficiently specific to generate
legitimate expectations for the investor. The tribunal based the decision on
the stabilization commitment contained in a decree and specific representations
addressed to the investor in meetings (Antin v Spain, 2018, Final Award,
para. 365).
In
the cases against Italy, Blusun tribunal states that, in the absence of
a specific commitment, the state has no obligation to grant subsidies such as
FIT, or to maintain them unchanged once granted (Blusun v Italy, 2016,
Final Award, para.319). The CEF tribunal, however, based the existence
of investor’s legitimate expectations on the recognition letters issued by the
state, in which certain fixed price and term were mentioned (CEF v Italy,
2019, Final Award, para. 211). The Tribunal also took into consideration the
agreements signed by the state and the investor; these, even though did not
contain a stabilization clause, did contain a clause of modification asserting
that the only mechanism to modify the contract was by mutual agreement in
writing (CEF v Italy, 2019, Final Award, para. 214).
In
the cases against the Czech Republic in Antaris the tribunal concluded
that “the provisions of general legislation applicable to a plurality of
persons or a category of persons, do not create legitimate expectations that
there will be no change in the law” (Antaris, 2018, Final Award, para.
360.6). However, in the dissenting opinion it was asserted that the state
enacted legislation that provided specific and unambiguous guarantees to
investors in renewable energy guaranteeing that specified minimum tariffs would
be payable for electricity produced by renewable energy sources for a period of
15 years, being this guarantees the instrument by which the legitimate
expectations were created (Antaris, Dissenting Opinion, para.7). In Photovoltaik,
the tribunal asserted that in the absence of a stabilization commitment -either
contractual, legislative, or individual- it is not possible to allege that
changes in the law applicable to the foreign investment in question were unlawful
(Photovoltaik, Final Award, para. 482).
There
is a general agreement in jurisprudence about the fact that if there is a
specific commitment of the state in an agreement about the freezing of the
legal framework –by a stabilization clause-, the lack of compliance with this
will determine a violation of the FET-standard. Nevertheless, when there is no
stabilization clause, the jurisprudence is divided. The general and less
specific the representation is -in terms of content and addressee- the less likely
to be considered valid to create legitimate expectations. However, this element
never is assessed alone, being evaluated considering the specific circumstances
of the case.
Regarding
the second element considered by tribunals when evaluating the existence of
legitimate expectations -stability of the regulatory framework- tribunals agree
that the FET-standard involve an element of stability of the regulatory
framework. Thus, some tribunals have been willing to extend protection under
this standard to the state’s duty to maintain a stable framework. Often, this
has been supported by reference to the ECT preamble, which refer to stability
of investments in the energy sector. However, certain tribunals have
asserted that, as a matter of principle, the state’s right to regulate cannot
be considered frozen or restricted as a result of the existence of investment
treaties. In Saluka Investments v Czech Republic, one can find repeated
statements to the effect that no investor may reasonably expect that the circumstances
prevailing at the time of the investment remain totally unchanged Tribunal
required due diligence from the investor, who ‘must anticipate that the,
circumstances could change, and thus structure its investment in order to adapt
it to the potential changes of legal environment’ (Saluka Investments B.V.
v. The Czech Republic, UNCITRAL, Partial Award, 17/03/2006).
Eiser tribunal recognized that the states have the right
to regulate -including the right to change existing regulations. However, the
tribunal noted that the ECT protected investors against what it characterized
as ‘fundamental’ and ‘unprecedented’ regulatory changes that led to a ‘totally
different’ regulatory regime than the one in place when the investment was
made, particularly when those changes had a significant negative impact on
prior investments that had been made in reliance on the previous regulations.
This right may involve some modifications in previous regulations when
necessary. In this sense was pointed out that the FET-standard cannot suppose
the freezing of the legal regulation of economic activities in contrast to the
state regulatory power and the evolutionary character of economic life (EDF
v. Romania, ICSID CASE No ARB 05/13 (Final Award) 08/10/2009, para. 217).
Accordingly, arbitral tribunals have emphasised, in rejecting claims based on
an alleged breach of the FET, that: ‘No investor may reasonably expect that the
circumstances prevailing at the time the investment is made remain totally
unchanged’. Rather, a determination ‘whether frustration of the foreign
investor’s expectations was justified and reasonable’ requires consideration of
‘the host-state’s legitimate right subsequently to regulate domestic matters in
the public interest’.
In
its assessment of the legitimacy of investor expectations, the tribunal
considered it pertinent, referring to Electrabel v Hungary, to look at
the information available to investors at the moment of the investment:
“Fairness and consistency must be assessed against the amount of information
that the investor knew and should reasonably have known at the time of the
investment and of the conduct of the host-state” (Electrabel S.A. v.
Republic of Hungary, ICSID Case No. ARB/07/19 (Final Award) 25/11/2015,
para7.78). For the legitimate expectations of investors to be violated, such
new regulatory changes should not be foreseeable for a prudent investor (Isolux
Netherlands, BV v Kingdom of Spain, SCC Case V2013/153 (Final Award) 12/07/
2016, para.781).
The
expectations as to the regulatory framework must be assessed in concreto
regarding all circumstances, including the specificities of the host-state, its
level of development, as well as the sector in which the investment was made.
However, if an alteration of the law has benefitted the investor, then the
latter’s legitimate expectations, far from being violated, are protected, and
enhanced (Tellez, 2012, p.432).
Another
element that tribunals consider is the reasonableness of the investors’
expectations in the specific economic and socio-political context of the
host-state. It is obvious that what an investor can legitimately expect
-particularly in terms of stability- cannot be alike in a developing country
than in a developed country. Tribunals have considered that the ´reasonableness
requirement´ intrinsic in the expectations requires a scrutiny of all the
circumstances that the investor should have considered when making the
investment, including the level of development in the host state. In the
analysis of this element -which prima facie seems to be objective- is
maybe where most of the subjective evaluations are made by tribunals.
For
instance, the WA tribunal finds that the changes introduced by the state
were part of the exercise of the sovereign right of the state to regulate
tariffs –in particular in the context of ´the solar boom´ (WA v Czech
Republic, Final Award, 2019, para.576). The tribunal also stated that, with
regard to the treaty obligation to maintain a stable and predictable legal
framework, in the absence of an express stabilization commitment, changes to
address the solar boom were within the state regulatory power (WA, Final
Award (2019) para. 586. The Voltaic tribunal in the same sense asserted
that “before the Claimant started its investment project, political and energy
sector circles in the Czech Republic were aware that the then current Incentive
Regime was problematic and, because of the solar boom, would become even more
problematic with time” (Voltaic v Czech Republic, Final Award, 2019,
para. 471). The context of the investment and the political situation are also
considered by tribunals to assess the existence of a legitimate expectation. Blusun
Tribunal asserted that the expectations were even less powerful since it was
clear that the incentives offered were subject to modification, considering
changing costs and improved technology (Blusun v Italy, Final Award,
2016, para. 371). Charanne tribunal, in the same line of thinking,
asserted that the investor could have easily foreseen possible adjustments to
the regulatory framework as the law of the host-state clearly left open the
possibility that the system of compensation applicable to photovoltaics could
be changed (Charanne, Final Award, 2016, para. 505).
As
emerges from the above exposition, the consideration of socio-economic
circumstances of the host-state contribute to shape the content of legitimate
expectations.
Finally,
another element that has been evaluated repeatedly by tribunals in the cases
under study is the ‘reasonableness’ of the investor expectations at the light
of its conduct.
It
has been recognized that expectations required to be analysed in concreto
in order to determine whether the investor has acted with due diligence and
thus can be said to hold the expectations in the specific circumstances. For
instance, Masdar tribunal asserted that if general legislation is
alleged as the source of an investor’s legitimate expectations, such investor
must demonstrate it has exercised appropriate due diligence, and it is
familiarised with the existing laws (Masdar, Final Award, 2018, para.
494).
The
rationale behind the tribunals’ assessment is in the idea that not all risks an
investment may face deserve protection under international investment law. For
instance, the investor is not protected from the ordinary business risk that
any investment implies. Thus, the investor must make the investment decision
based on a risk assessment, examining all potential complications in the
investment project, and the political and economic situations in particular. In
this sense, it is argued that, since the FET standard represents a certain
assurance to the investor, it does not play the role of insurance policy, and
thus it cannot protect the investor from all the risks that its investment may
face (Dolzer, 2012, p.1).
4. Renewable
Energy Disputes and State’s Right to Regulate
4.1. Conflict
between the investor’s legitimate expectation vs states’ right to regulate
According
to the ECT, it is unquestionable that host-states have a duty to encourage and
create stable, equitable, favourable and transparent conditions for investors.
However, it was repeatedly asserted in the awards that the article of the
treaty in which the stability duty is contained does not constitute per se
a stabilization clause (AES v. The Republic of Hungary, ICSID Case No.
ARB/07/22, Final Award, 23/09/2010, para. 9.3.29). Thus, states are entitled to
amend their regulatory framework -which is normally subject to change- to adapt
it to new circumstances that may appear (AES v. The Republic of Hungary,
ICSID Case No. ARB/07/22, Final Award, 23/09/2010, para. 9.3.29). The
right to make modifications in the domestic legislation is been widely recognized
as a key element of the sovereign rights of the states (Yaw, 2002, p.21). That
is why some tribunals have asserted that the FET-standard imposes the
obligation to implement regulatory changes in a way (Blusun v Italy,
2016, Final Award, para. 319.4). Consequently, a balance is required between
state’s rights to regulate and the obligation of the state to provide FET to
the foreign investor (Kudrat, 2018, p.87). After reviewing the awards in the
cases under study, either the arguments alleged by states or investors seem to
be valid. It was pointed out that the question on how to balance the interests
between both rights depends on the arbitrators’ discretion (Jaunius Gumbis
& Rapolas Kasparavicius, 2017, p.5). The diverse methods adopted to ´find a
balance´ between both conflicting rights have been the principal reason for
different decisions (Rivkin, 2015, p.130).
Different
approaches to resolve this conflict have been adopted in case-law. One of these
consists of the analysis of the circumstances that surround the decision of the
investor to make the investment. Another consist of the analysis of whether
there was a public interest behind the measure adopted by the state (see AES
Final Award , 2010). Through these approaches the
tribunals attempted to put itself in the position of both parties in the
conflict before making a decision. These approaches find their origins in the proportionality
and the sole effects doctrine (Gumbis, 2017, p.153).
The
sole effect doctrine assumes that the host-state has a compensation
obligation to the foreign investor if its actions significantly damage the
economic value of the investor’s assets (Gumbis, 2017, p.153). It is being
argued that this doctrine does not restrict the sovereign rights of the state
(Gumbis, 2017, p.153). This is because in case of breach by the state of its
international undertakings, the remedy is not an order to cease from exercising
sovereign powers, but to pay the investor a compensation for the damage caused
(Gumbis, 2017, p.153)).
The
proportionality doctrine obstructs the state’s liability if it is proved
that the adopted measures -in these cases the regulatory changes- were adopted
in a proportional manner, considering the investors´ expectations (Gumbis,
2017, p.153). This doctrine is based on a risk that the sole effects
doctrine creates by discouraging states from taking an action when there is
a need to protect the public interest. According to this doctrine, if
regulatory changes adopted by states are reasonable and proportional in light of
the circumstances, the investor has to accept the negative impact on its
investment without receiving a compensation. Accordingly, the ECT provides that
the treaty does not prevent any contracting party from taking any measure
considered necessary for the maintenance of public order (see Article
24.3(c) of the ECT). This provision gave the perfect argument to states to
allege the existence of a public interest behind the adopted measures and thus
break the causal link between them and the alleged damage. However, according
to some authors, the increase in the electricity price does not destabilise the
public order and thus falls outside the scope of an exception provision, such
as the one contained in ECT art 24(3)(c) (Reuter, 2015, p.12). Correspondingly,
it was pointed out that the responsibility for the risk of an excessive cost on
energy consumers lies in the scope of the host-state legislator rather than in
the foreign investor (Reuter, 2015, p.12).
The
arbitral tribunal may at its discretion apply one doctrine or the other to
balance states and investors interests in the specific circumstances. If the
proportionality doctrine is chosen, the threshold for the investor would be
high as it has to prove that the states’ measures were not proportional in light
of the circumstances given. It has been pointed out that the standard of FET
contains an element of proportionality (Scheu, 2017, p.449). The proportionality
test consists of three elements: suitability, necessity, and
proportionality stricto sense (Scheu, 2017, p.449). This three step
analysis assumes that the state is acting for the promotion of a public
interest. Consequently, before analysing whether a host state measure can be
characterized as proportional, it must be first established that the host state
has taken the action to pursue a legitimate purpose (Scheu, (2017) p.449).
Another
approach used in the cases under study is the doctrine
of margin of appreciation, which origins lie in the European Court of Human
Rights (ECHR) (Spielmann, 2012, p.381). The margin of appreciation is a tool
used by the ECHR in it assessments of those provisions of the European
Convention on Human Rights (ECOHR) and its Protocols that require balancing
with other rights, or need to be weighed against other aspects of the public
interest (Frantziou, 2019). Regarding this doctrine, it considers that national
authorities were better placed to determine whether measures implemented were
in the public interest because of their “direct knowledge of their society and
its needs” (Frantziou, 2019, p.1). It has been noted that this doctrine is one
of the forms in which the principle of proportionality appears (Henckels, 2015,
p.1). Notwithstanding the above, in some dissenting opinion it’s been argued
that the application of a margin of appreciation to a state´s FET under
investment treaties is not a generally accepted principle of international law.
Asserting that outside the ECHR there is no place for its application (Antaris,
Dissenting Opinion of Gary Born, para. 47-48).
The
principle of proportionality was adopted by most of tribunals to ground their
decisions on the cases under analysis. For instance, in Charanne, the
tribunal asserted that the proportionality of the measures is fulfilled as the
modifications to the legal framework are not capricious or unnecessary and do
not abruptly and unforeseeable eliminate the vital characteristics of the
existing legal framework (Charanne, Final Award, 2016, para. 517). Moreover,
the investor’s condition of expert in the energy market is used as an argument
to justify that it should have foreseen the legislation changes. Charanne
tribunal considered that regulatory changes were not disproportionate since
they did not modify the basic benefits of the investor (Charanne, Final
Award, 2016, para. 517).
In
Eiser the Tribunal emphasized the idea that Spain introduced a
completely new regulatory regime, which deprived claimants from all the value
of their investment, in a disproportionate manner. Furthermore, it was
highlighted that the measures adopted by the state in order to be justified
require a rational public policy aim and a rational act of the state in
relation to that policy (Eiser v Spain, Final Award, 2018, para. 418).
The impact of the measure on the investor should be proportional to the policy
objective sought. It is noted that the test of proportionality ´requires the
measure to be suitable to achieve a legitimate policy objective, necessary for
that objective, and not excessive considering the relative weight of each interest
involved´ (Electrabel S.A. v. Republic of Hungary, ICSID Case No. ARB/07/19,
Final Award, 25/11/2015, para.179).
Moreover,
a new approach involving CC has appeared in literature to complement the way in
which tribunals are addressing the balance of rights phenomenon. Although it
was not considered by tribunals in the reviewed awards, its rapid growth in
literature indicates that it probably would be alleged by the parties in future
disputes. The idea behind this approach is that investor-state arbitration may
became a threat to the aim of combating climate change, as it may encourage the
states not to take CC measures to avoid the risk of high value claims as a
consequence of eventual adverse decisions. Supporters state that tribunals
should take into consideration the interaction between investment arbitration
and CC, since its decisions and arguments may have an impact on CC (Restrepo,
2017, p.101). Thus, it is noted that, to a certain degree, tribunals make CC
law decisions (Restrepo, 2017, p.101). Supporters argue that the sole effect
doctrine must be considered by tribunals by means of adopting a wide
interpretation of representations; less harmful measures standard, and an
analysis of proportionality in the context of climate change. Consequently, the
balancing test must give a proper weight to the CC interest grounded on the
global intention to lower GHG emissions and the international instruments
supporting this aim (Restrepo, 2017, p.101).
Another
approach followed consist of limiting the existence of legitimate expectations
to stability contracts or other explicit representations. It has the advantage
of creating a certainty framework. Either the state creates legitimate
expectation by providing clear, specific, direct assurances –as it happens in the
case of stabilisation clauses- or it does not. However, this approach is
clearly favourable for the state interests in detriment of investors, as
frequently states refuse to include this type of clauses in their agreements
(Cameron, 2010, p.1). Nevertheless, in cases in which stabilization clauses are
present, the will of the states should not be unknown, being the specific
commitment a limit to its regulatory powers. In this line, Blusun
tribunal asserted that that FET standard conserves the state right to change
its laws to adapt to the changing circumstances, but subject to respect the
specific commitments made (Blusun v Italy, 2016, Final Award, para.
319.4).
Perhaps
the most novel approach regarding the balance between investors’ expectations
and state´s rights to regulate appeared in some recent BITs. The
Morocco-Nigeria treaty which entered into force in 2016 is an example of this
(Nigeria-Morocco BIT). It
contains a provision in its Article 23, called ´Right of State to Regulate´,
which recognizes the right of the states to take regulatory or other measures
to ensure that development in its territory is consistent with the goals and
principles of sustainable development. It also recognizes some limits to the
regulatory powers of the state referring to the balancing test in this terms:
“the rights to regulate shall be understood as embodied within a balance of the
rights and obligations of Investors and Investments and Host States, as set out
in the Agreement”. This BIT is in line with recommendations by the UNCTAD,
which called for the inclusion in investment treaties for the protection of the
environment (See the Road Map for International Investment Agreement
Reform: available in;
https://unctad.org/en/PublicationsLibrary/diaepcbinf2019d6_en.pdf, accessed
17/08/2019).
4.2. Role
of Stabilization Clauses in Renewable Energy Disputes
One
of the main features of energy agreements is that they are long-term contracts.
This is what makes these contracts vulnerable to political risk. As was noted,
the occurrence of significant changes in the law during the life of a project
is almost unavoidable. To mitigate that risk, the common practice is the use of
contract drafting as a mean of achieving the aim of stability through the
stabilization clauses (Mistelis, 2018, p.1). As was quite rightly
asserted, lawyers pretend to ´Play God´ with contract drafting under the
illusion that the draftsman can draft away all the vagaries of the future (Waelde,
1996, p.215). The principal aim of these clauses is to preclude the application
to an agreement of any subsequent legislative or administrative act issued by
the state which modify the investor situation (Kuyper, 1995, p.1)
Although
generally states do not accept the inclusion of this type of clause in their
agreements, sometimes they are used as a mechanism to attract investment. In
addition, as several renewable energy developments are built under project
finance structures the inclusion of this clause in agreements is sometimes a
requirement established by the financial institutions to granting credit (Lee,
2013, p.1). It has been pointed out that “the more stability there is at the
treaty level, the less stability is arguably needed at the contractual level”
(Lee, 2013, p.1). However, this assertion is not always true. In the scope of
the ECT the stability is generally accepted. Nevertheless, in absence of a
stabilization clause, some tribunals have been reluctant to accept the
existence of a specific commitment of the state possible to create a legitimate
expectation in the investor that the legal framework would not be modified.
In
this sense, Charanne Tribunal recognized that a specific commitment of
the state in the form of a stabilization clause is possible to create
legitimate expectations (Charanne Final Award, 2016, para.
489-490). Likewise, Antaris
Tribunal recognized the state power to modify the legislation asserting that
´at least in the absence of a stabilization clause´ is not prevented to
implement regulatory changes (Antaris, Final Award, 2018, para. 360.7).
The
tribunal in Masdar concluded that “on the basis of the due diligence
exercised by the investor, it had a legitimate expectation that the laws would
not be modified, as they included stabilisation clauses” (Masdar Final Award,
2018, para. 499).
In
conclusion, from the reviewed Awards follows that tribunals recognized the
existence of legitimate expectations because of a stabilization clause.
5. Conclusion
Based
on the reviewed awards it is possible to conclude that investors are entitled
to receive compensation under the FET provision of the ETC -in the scenario of
implementation of regulatory changes in its detriment- if a legitimate
expectation is violated. However, the diverse ways in which the concept of
legitimate expectation is being interpreted by tribunals and the different
approaches regarding how to balance investor´s expectations and state´s
sovereign right to regulate are the principal cause for divergent awards in
similar situations.
Thus,
the lack of consistency in case-law regarding this matter is, therefore, a
fact. Similar scenarios have resolved either in favour or against the state.
Although in theory there is no precedent in Investor State Dispute Settlement,
the common practice by the tribunals is using prior awards to ground their
decisions. Decide a dispute considering as the main tool the determination of a
previous tribunal seems to close the door to the evolution of the FET standard.
Regarding this, international investment agreements have evolved, including a
more detailed concept of the FET standard, comprising in some cases expressly
references to the legitimate expectations.
The
ECT requires to evolve urgently in the same direction. The Treaty does not
contain a clear definition of the FET-standard and it does not mention the
legitimate expectations rule. As a tool to mitigate the lack of consistency, a
clear definition of the standard must be included in the text of the treaty.
The way how the standard was recently defined in some BITs and the criteria set
to balance public and private interest may be a benchmark for the drafters of
the new Treaty.
Besides,
considering the role the evidence has in the resolution of these cases, it is
important for the investors to carry a due diligence prior to the decision of
investing. Similarly, the inclusion of stabilization clauses in energy
agreements is suggested at the light of the determinations made by tribunals in
the cases.
Finally,
the cases reviewed open a new discussion, which must be assessed the next
years, about the impact these awards may have in the Energy Transition.
Although some concerns have been expressed about an eventual regulatory
chill, nowadays there is no evidence of its occurrence. Nonetheless, and
due to the increasing number of awards decided against the states, if it
happens it would not be surprising.
Bibliographic references
1. Table of Arbitral Awards reviewed for
this Chapter
Awards divided by country
Italy
Blusun S.A., Jean-Pierre Lecorcier and
Michael Stein v. Italian Republic,
ICSID Case No. ARB/14/3, Final Award, (27/12/2016).
CEF Energía BV v. Italian Republic, SCC Case No. 158/2015, Final Award, (16/01/2019).
Greentech Energy Systems A/S, et al v.
Italian Republic, SCC Case
No. V 2015/095, Final Award, (23/12/2018).
Spain
Antin Infrastructure Services Luxembourg
S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of Spain, ICSID Case No. ARB/13/31, Final Award,
(15/08/2018).
Charanne and Construction Investments v.
Spain, SCC
Case No. V 062/2012, Final Award, (21/01/2016).
Eiser Infrastructure Limited and Energía
Solar Luxembourg S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/36, Final Award,
(04/05/2017).
Isolux Netherlands, BV v. Kingdom of
Spain, SCC
Case V2013/153, Final Award, (17/07/2016).
Masdar Solar & Wind Cooperatief U.A.
v. Kingdom of Spain,
ICSID Case No. ARB/14/1, Final Award, (16/05/2018)
Novenergia II - Energy & Environment
(SCA) (Grand Duchy of Luxembourg), SICAR v. The Kingdom of Spain, SCC Case No.
2015/063, Final Award, (15/02/2018).
The Czech Republic
Antaris Solar GmbH and Dr. Michael Göde
v. Czech Republic,
PCA Case No. 2014-01, Final Award, (02/05/2018).
ICW Europe Investments Limited v. Czech
Republic, PCA Case
No.214-22, Final Award, (15/05/2019).
Photovoltaic Knopf Betriebs GMBH v.
Czech Republic, PCA Case
No. 2014-21, Final Award, (15/05/2019).
Voltaic Network GmbH v. Czech Republic,
PCA Case No. 2014-20, Final Award, (15/05/2019).
WA Investments Europa Nova Ltd. v. Czech
Republic, PCA Case No. 2014-19,
Final Award, (15/05/2019).
Other Arbitration Awards
Achmea B.V. v. The Slovak Republic, UNCITRAL, PCA Case No 2008-13, Final
Award, (7/12/2012).
AES Summit Generation Limited and
AES-Tisza Erömü Kft v. The Republic of Hungary, ICSID Case No. ARB/07/22, Final Award,
(23/09/2010).
AES Summit Generation Limited and
AES-Tisza Erömü Kft v. The Republic of Hungary, ICSID Case No. ARB/07/22, Final Award,
(23/09/2010).
Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Final Award,
(14/07/2006).
Continental Casualty Company v The
Argentine Republic,
ICSID Case No ARB 03/9, Final Award, (05/09/2008).
Continental Casualty Company v. The
Argentine Republic,
ICSID Case No. ARB/03/9, Final Award, (05/09/2009).
EDF Services Limited v. Romania, ICSID CASE No ARB 05/13, Final Award,
(08/10/2009).
El Paso Energy International Company v.
The Argentine Republic,
ICSID Case No. ARB/03/15, Final Award, (31/10/2011).
El Paso Energy International Company v.
The Argentine Republic,
ICSID Case No. ARB/03/15, Final Award, (31/10/2011).
Electrabel S.A. v. Republic of Hungary, ICSID Case No. ARB/07/19, Final Award,
(25/11/2015).
Glamis Gold Ltd v United States of
America,
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Ioannis Kardassopoulos v. The Republic
of Georgia, ICSID
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Limited Liability Company Amto v.
Ukraine, SCC
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Mondev International Ltd. v. United
States of America,
ICSID Case No. ARB(AF)/99/2, Final Award, (12/10/2002).
Parkerings-Compagniet AS v. Republic of
Lithuania, ICSID
Case No. ARB/05/8, Final Award, (11/11/2007).
Robert Azinian, Kenneth Davitian, &
Ellen Baca v. The United Mexican States, ICSID Case No. ARB (AF)/97/2, Final Award,
(01/11/1991).
Saluka Investments B.V. v. The Czech
Republic,
UNCITRAL, Partial Award, (17/03/2006).
Sempra Energy International v. The
Argentine Republic,
ICSID Case No ARB/02/16, Final Award, (28/09/2007).
Suez, Sociedad General de Aguas de
Barcelona, S.A.and Vivendi Universal, S.A. v. Argentine Republic, ICSID Case No. ARB/03/19, Decision on
Liability, (30/07/2010).
Total S.A. v. The Argentine Republic, ICSID Case No. ARB/04/01, Decision on
Liability, (27/12/2010).
Total S.A. v. The Argentine Republic, ICSID Case No. ARB/04/01, Decision on
Liability, (27/12/201).
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