Sun-Flower Olmeda GmbH & Co KG and others v. Kingdom of Spain

Case summary

At a glance

Parties: Sun-Flower Olmeda GmbH & Co KG and others (Respondent on Annulment) v. Kingdom of Spain (Applicant on Annulment)
Case no.: ICSID Case No. ARB/16/17 (Annulment Proceeding)
Forum and rules: ICSID Convention; ICSID Arbitration Rules 2006; place of proceeding Paris, France
Committee: Dyalá Jiménez (President), Fausto de Quadros, Mélanie Riofrio Piché
Sector: Renewable energy (photovoltaic)
Outcome: Spain's request to continue the stay of enforcement was dismissed, and the provisional stay ended on notification of the decision (29 April 2022).
Amount: The Award ordered Spain to pay EUR 28,974,354 (plus a gross-up amount) to Gilatz, EUR 18,360,528 to Sun-Flower Olmeda, and USD 224,446 plus EUR 1.25 million to the Claimants, almost EUR 49 million in total. The decision on costs of the stay phase was deferred.

The dispute

On 22 June 2021 an ICSID tribunal rendered an award against Spain in favour of Sun-Flower Olmeda GmbH & Co KG and the other claimants. The claimants are investors in photovoltaic projects. On 20 October 2021 Spain applied to annul the Award and asked for a stay of its enforcement. Spain argued that its application was serious and made in good faith, and that it would risk not recovering any amount paid if the Award were annulled. It also argued that EU State aid rules (Articles 107 and 108 TFEU) barred payment until the European Commission authorised it, and it refused to give security. The claimants argued that ICSID awards are immediately enforceable and that Spain was almost certain not to pay. They would accept a continued stay only if Spain posted security or gave an unconditional written undertaking to pay. Failing that, they asked for the stay to be lifted.

Key holdings

Under the ICSID Convention an award is presumed to be immediately enforceable, and there is no presumption or standard practice in favour of continuing a stay. A stay requires special circumstances that bring the case outside the run of usual annulment applications; on this point the Committee followed the Antin committee. Even where such circumstances exist, the Committee keeps its discretion. ¶¶ 61–64
On the burden of proof, the Committee followed the balanced approach of Standard Chartered. The party seeking the stay must show the grounds that require it. The party opposing the stay must support its own positive allegations, including any request that a stay be conditioned. ¶ 68
Spain did not show a real risk that it could not recover amounts paid. The reported sale of 64% of Sunflower SIT's shares was still subject to preconditions, and nothing showed that the claimants were in financial difficulty. ¶ 75
Spain's arguments on EU law and European Commission State aid review go to the heart of the annulment proceeding. It was premature to treat them as circumstances under Rule 54(4). ¶ 76
The claimants' assertion that Spain would almost certainly not pay was a hasty conclusion, given the size of Spain's economy. It is not the role of ad hoc committees to secure award creditors their 'spot in the queue'. Post-award interest is meant to compensate creditors for delay. ¶¶ 77–83
On balance, Spain did not establish a circumstance requiring a stay. The stay was therefore not continued, and the Committee did not need to address the claimants' proposal for a conditional stay. The provisional stay ended on notification of the decision, and costs were deferred to the final decision. ¶¶ 84–88

Procedural history

22 June 2021The Tribunal renders the Award against Spain.
20 October 2021Spain files its Application for Annulment, with a request to stay enforcement.
25 October 2021The ICSID Secretary-General registers the Application and notifies the parties of the provisional stay.
13 December 2021The ad hoc Committee is constituted.
21 February 2022First Session is held. Procedural Order No. 1 follows on 24 February 2022.
4 February – 1 April 2022The parties exchange two rounds of written submissions on the stay.
29 April 2022Decision on the Continuation of the Stay: the stay is lifted.