Green Power K/S and Obton A/S v. Spain

Case summary

At a glance

Parties: Green Power Partners K/S and SCE Solar Don Benito APS (Denmark) v. the Kingdom of Spain (the case record lists the claimants as "Green Power K/S and Obton A/S"; the Award names them as shown here)
Case no.: SCC Arbitration V (2016/135)
Forum and rules: Arbitration Institute of the Stockholm Chamber of Commerce; SCC Arbitration Rules (2010); seat Stockholm, Sweden
Treaty: Energy Charter Treaty (Article 26)
Tribunal: Hans van Houtte (Chairperson), Inka Hanefeld, Jorge E. Viñuales
Sector: Renewable energy (solar photovoltaic)
Outcome: Unanimous award of 16 June 2022: the Tribunal declined jurisdiction on the intra-EU objection and dismissed the claims.
Amount: Claimed: EUR 43,204,887.00 for Green Power and EUR 31,122,645.00 for SCE, plus interest. Awarded: nothing. Arbitration costs (arbitrators' fees of EUR 203,910, EUR 122,346 and EUR 122,346, plus expenses, and SCC fees of EUR 53,466 plus expenses) split: 25% to each Claimant and 50% to Spain. Each party bears its own legal costs (Claimants had claimed EUR 2,575,177.21; Spain had claimed EUR 1,243,449.60).

The dispute

Two Danish companies, Green Power Partners K/S and SCE Solar Don Benito APS, invested between 2008 and 2011 in Spanish photovoltaic plants. Green Power held 15 plants, and SCE held the Don Benito solar park in Badajoz. The plants were remunerated with feed-in tariffs under RD 661/2007 and RD 1578/2008. Between 2010 and 2014 Spain cut back this regime: RD 1565/2010, RD-Law 14/2010, the 7% TVPEE tax under Law 15/2012, RD-Law 2/2013, and RD-Law 9/2013. The new regime of RD 413/2014 and MO IET/1045/2014 replaced the tariffs with a 'reasonable rate of return' model. The Claimants claimed that these measures breached the ECT and international law. Spain objected to jurisdiction on intra-EU grounds (ratione personae and ratione voluntatis, relying on Articles 267 and 344 TFEU, Achmea and Komstroy). It also raised taxation objections under Article 21 ECT concerning the TVPEE, and defended the merits. The European Commission took part as amicus curiae.

Key holdings

The intra-EU objection ratione personae fails. Denmark and Spain remain Contracting Parties in their own right even though the EU is also a party. The Claimants' EU citizenship does not erase their Danish nationality, and Spain's territory is the relevant 'Area'. ¶¶ 185–195
Article 26(6) ECT governs only the merits, not jurisdiction. Under Section 48 of the Swedish Arbitration Act, Swedish law as the law of the seat governs the arbitration agreement, and Swedish law includes EU law. EU law must therefore be applied to decide jurisdiction, as international law and as part of the law of the seat. ¶¶ 157, 165–172
Read under the Vienna Convention without EU law, Article 26 ECT is inconclusive for intra-EU cases. The Tribunal looked at Articles 1(3) and 25 ECT, the EC's 1997 Statement, and the Member States' Declaration of 15 January 2019. It treated that Declaration as an authentic interpretation shared by Spain and Denmark, not a retroactive change. ¶¶ 350–412
The reasoning of the CJEU in Achmea, confirmed for Article 26 ECT in Komstroy, applies. CJEU rulings interpret the law from its entry into force, so the fact that they came after the arbitration began does not matter. Spain's offer to arbitrate is not applicable in intra-EU relations, so there was no offer the Claimants could accept. ¶¶ 376–378, 436–445
State aid is at stake (Elcogás; Commission Decision SA.40348). It falls within the Commission's exclusive competence, which Article 1(3) ECT recognises. Deciding the claims would exceed the Tribunal's powers. The Claimants' estoppel argument was rejected. ¶¶ 448–455
The primacy of EU law is a question of lex superior. It prevails over Article 26 ECT, and Article 16 ECT cannot override it. The Tribunal unanimously upheld the objection ratione voluntatis, declined jurisdiction, and did not address the Article 21 ECT taxation objections. ¶¶ 469–480
On costs, the claims were not frivolous, and the Claimants helped make the proceedings efficient by agreeing to bifurcation. Each Claimant bears 25% of the arbitration costs and Spain bears 50%. Each party bears its own legal costs. ¶¶ 484–486, 492–493

Procedural history

8 September 2016Request for Arbitration filed with the SCC under Article 26 ECT.
15 December 2016The SCC Board fixes the seat in Stockholm, Sweden.
25 January 2017Procedural Order No. 1 confirms that the 2010 SCC Rules apply.
November 2018The proceedings are bifurcated. The European Commission is given leave to file an amicus curiae brief, which it filed on 14 December 2018.
7–8 February 2019Hearing on jurisdiction in Stockholm (Hearing (1)).
20 May 2019Procedural Order No. 8 reopens the proceedings after CJEU Opinion 1/17. The hearing is later postponed several times by agreement of the parties.
22 March 2022Virtual hearing on jurisdiction (Hearing (2)) after the Komstroy and PL Holdings judgments.
16 June 2022Award: the Tribunal declines jurisdiction and dismisses the claims.