International Arbitration Newsletter - February 2020 | Regional Overview: Europe

Italy

Claim over wind park seizure threatens Italy

Hamburg Commercial Bank, a German bank, has filed an ICSID claim against Italy under the Energy Charter Treaty (ECT).

The dispute arises from the seizure by the Italian authorities of a wind farm built with a €230 million loan provided by Hamburg Commercial due to the alleged connection of an indirect minority shareholder of the project with the Ndrangheta Mafia, an organized criminal group.

Hamburg Commercial's request for arbitration is based on the fact that Italy would have expropriated its investment both through the confiscation of the farm and through the actions taken by the Italian courts which heard the case. It also alleges a violation of the ECT's standard of fair and equitable treatment.

Cyprus

ICSID tribunal upheld jurisdiction over a mass intra-EU claim against Cyprus

In 2015, 956 Greek investors filed an ICSID claim against Cyprus with the aim to recover deposits and bonds in the Bank of Cyrus and the Laiki Bank –which is now defunct- for €300 million. They allege those deposits and bond were confiscated by Cyprus as a result of a €10 billion bailout agreement subscribed with the so-called “Troika”, composed of the European Commission, the European Central Bank and the International Monetary Fund.

The ICSID tribunal has agreed to hear the claim brought by the investors under the 1992 Greece-Cyprus bilateral investment treaty, as well as to reject the state’s jurisdictional objection based on the Achmea ruling by the European Court of Justice on intra-EU bilateral investment treaties.

Spain

Spain ordered to compensate another investor over reforms to its renewable energy subside regime

Recently, it has come to light the decision of an ICSID tribunal upholding, but only partially, the claim filed by the German investor RWE Innogy against Spain over the reforms in the renewable energy sector.

In a decision issued at the end of December  2019, the tribunal concluded that the reforms disproportionately affected RWE, but they did not breach the investor’s legitimate expectations.

The tribunal directed the parties to reach an agreement on the amount of compensation owed by Spain. In case no agreement is reached, the tribunal will decide on the amount itself.

Spain wins challenge of the Swedish arbitrator

The Stockholm Chamber of Commerce (SCC) upheld the request by Spain to remove Swedish arbitrator Kaj Hóber, appointed by the English claimant company FREIF Eurowind in arbitration proceedings initiated against Spain under the Energy Charter Treaty (FREIF Eurowind v Kingdom of Spain (SCC Case No. 2017/060).

Although the reasons for Hóber’s disqualification have not been made public, it seems that his previous dissenting opinion in another treaty case against Spain concerning reforms in the renewable energy sector (ICSID Stadtwerke case) could have been the cause.

Spain beaten by new renewables award

In a new case under the Energy Charter Treaty concerning reforms to the renewable energy sector, Spain has been ordered to pay €77 million (Watkins Holdings S.à.r.l. and others v. Kingdom of Spain; ICSID Case No. ARB/15/44).

This is 13th award going against Spain as a result these reforms. It puts an end the recent positive results in favour of Spain..

US court grants Spain a stay of enforcement of solar award

The US District Court of Columbia has admitted Spain's request to suspend the enforcement of an Energy Charter Treaty award in favour of Novenergia, which ordered Spain to pay €53 million.

The decision of the Court follows Spain’s request based on the appeal opened in Sweden with the aim of setting aside the award at the Svea Court of Appeal. In view of this, the American Court has considered that the issues are of importance to the European Union, which is in a better position for initial review in its courts.