Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of Spain

Case summary

At a glance

Parties: Antin Infrastructure Services Luxembourg S.à r.l. (Luxembourg) and Antin Energia Termosolar B.V. (Netherlands), later renamed Infrastructure Services Luxembourg S.à r.l. and Energia Termosolar B.V., v. the Kingdom of Spain
Case no.: ICSID Case No. ARB/13/31
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules 2006
Treaty: Energy Charter Treaty (Article 26)
Tribunal: Dr. Eduardo Zuleta (President), Mr. J. Christopher Thomas QC, Prof. Francisco Orrego Vicuña (Award). Mr. Klaus Reichert replaced Prof. Orrego Vicuña, who died before the Decision on Rectification.
Ad hoc Committee: Mr. Cavinder Bull SC (President), Prof. Dr. Nayla Comair-Obeid, Mr. José Antonio Moreno Rodríguez
Sector: Renewable energy; concentrated solar power
Outcome: Spain was found to have breached fair and equitable treatment (ECT Article 10(1)). The award was reduced on rectification and upheld on annulment. Australian and English courts recognised it. The European Commission later declared it incompatible State aid.
Amount: Invested: about EUR 139.5 million. Total claim: EUR 148 million (as described in the Decision on Rectification). Awarded: EUR 112 million, reduced to EUR 101 million on rectification, with interest at 2.07% compounded monthly from 20 June 2014. Costs: USD 635,431.70 towards the costs of the proceedings and GBP 2,447,008.61 towards legal costs. Annulment costs: Spain to bear all costs of the proceeding and to pay EUR 2,310,379.38.

The dispute

The claimants, a Luxembourg company and a Dutch company in the Antin group, bought shareholdings in 2011 in two 49.9 MW concentrated solar power plants in Granada, Andasol-1 and Andasol-2. They invested in reliance on the feed-in-tariff regime of RD 661/2007. Between 2012 and 2014 Spain adopted the Disputed Measures: Law 15/2012, RDL 2/2013, RDL 9/2013, Law 24/2013, RD 413/2014 and Ministerial Order IET/1045/2014. These measures replaced that regime with a remuneration system based on a "reasonable return". The claimants brought claims under the Energy Charter Treaty for breach of fair and equitable treatment, impairment by unreasonable measures, and breach of the umbrella clause. Spain raised four jurisdictional objections, including the intra-EU objection and an objection to claims concerning the TVPEE tax. On the merits it argued that investors could expect only a reasonable return and that the claimed damages were speculative.

Key holdings

The Tribunal has jurisdiction under the ECT and the ICSID Convention, except over the claims arising from the TVPEE. Three of Spain's four jurisdictional objections were rejected. Spain breached Article 10(1) ECT by failing to accord fair and equitable treatment. Award ¶¶ 745, 748(a)–(b)
Damages were assessed by DCF. Historical losses were refused. For valuation purposes the useful life of the Andasol Plants is 25 years, not the 40 years the claimants put forward. The Tribunal deducted EUR 36 million for the shorter lifetime and awarded EUR 112 million. Interest runs at 2.07% compounded monthly, both before and after the award. Award ¶¶ 714, 725, 733–734
Costs were allocated by relative success. Spain bears its own costs and pays 60% of the costs of the proceedings (USD 635,431.70) and 60% of the claimants' legal costs (GBP 2,447,008.61). Award ¶ 747
Rectification: the figure of EUR 148 million in ¶ 725 wrongly included EUR 11 million of historical losses that the Tribunal had refused. Future cash flows are therefore EUR 137 million and compensation is EUR 101 million. Spain's other requests were rejected as disagreements with the Tribunal's methodology, not clerical errors, and so was its request to adjust costs. Decision on Rectification ¶¶ 32, 37, 40
The provisional stay of enforcement was not continued. There is no presumption in favour of a stay. Spain's risks of recovering sums paid and its conflicting EU-law (State aid) obligations were not circumstances requiring a stay. Decision on Stay ¶¶ 67, 72–77, 81, 85
Annulment rejected on all three grounds: manifest excess of powers, serious departure from a fundamental rule of procedure, and failure to state reasons. The Tribunal's estimate of EUR 36 million for the lifetime difference lacked detailed explanation but was a permissible exercise of judgment. Spain bears all costs of the proceeding and pays EUR 2,310,379.38 of the claimants' legal costs. Decision on Annulment ¶¶ 255–256, 268
By acceding to the ICSID Convention, Spain submitted to the jurisdiction of other Contracting States' courts under Article 54. It therefore cannot rely on state immunity to resist recognition, as distinct from execution. The Full Court of the Federal Court of Australia held this under s 10 of the Foreign States Immunities Act 1985, and the English Court of Appeal under s 2(2) of the State Immunity Act 1978. Court of Appeal [2024] EWCA Civ 1257 ¶¶ 96, 103

Procedural history

1 November 2013Request for arbitration filed with ICSID.
7 August 2014Tribunal constituted.
19–25 October 2016Hearing on jurisdiction and merits held in Paris.
15 June 2018Award: breach of fair and equitable treatment; EUR 112 million awarded.
27 July 2018Petition to enforce the Award filed in the US District Court for the District of Columbia.
29 January 2019Decision on Rectification by the reconstituted Tribunal, which included Klaus Reichert. Compensation reduced to EUR 101 million.
22–23 May 2019Spain files its application for annulment, which is registered with a provisional stay. On 1 August 2019 the Federal Court of Australia stays the Australian enforcement proceeding at the claimants' request.
21 October 2019The ad hoc Committee decides not to continue the stay of enforcement.
24 February 2020 – 25 June 2021Federal Court of Australia: Stewart J rejects Spain's immunity plea. The Full Court affirms that Spain has no immunity, sets aside the first-instance orders, and on 25 June 2021 recognises the Award and enters judgment for EUR 101 million plus interest and costs, with no derogation from immunity from execution. The European Commission is ordered to pay the costs of its failed intervention.
30 July 2021Decision on Annulment: Spain's application rejected.
18 March 2022High Court of Australia grants Spain special leave to appeal.
24 May 2023English High Court (Fraser J) dismisses Spain's application to set aside the registration order of 29 June 2021. The Court of Appeal dismisses Spain's appeal on 22 October 2024.
27 January 2025US District Court for the District of Columbia lifts the stay of the enforcement action.
24 March 2025The European Commission declares the Award incompatible State aid. Spain must not pay it and must take measures to prevent its recognition and enforcement.

Tribunal, counsel and experts

Decided by: Eduardo Zuleta President
J. Christopher Thomas Co-arbitrator
Francisco Orrego Vicuña Co-arbitrator (died; passing notified 2 October 2018)
Klaus Reichert Co-arbitrator — appointed by the claimant (replaced Prof. Orrego Vicuña; appointed 14 November 2018)
Cavinder Bull Committee president — appointed by the institution
Nayla Comair-Obeid Committee member — appointed by the institution
José Antonio Moreno Rodríguez Committee member — appointed by the institution
Julian Flaux Judge, Court of Appeal of England and Wales
Loren L. Alikhan Judge, US District Court for the District of Columbia
For the claimant: Allen & Overy LLP · Gibson, Dunn & Crutcher LLP · Norton Rose Fulbright · Kobre & Kim
For the respondent: Abogacía General del Estado · Squire Patton Boggs · K&L Gates LLP · Simmons & Simmons LLP
For other participants: Lipman Karas
Experts: Thomas R. Mancini (claimant) · Jorge Servert (respondent)