International Arbitration Newsletter - September 2020 | Regional Overview: Europe

Denmark

Denmark faces first investment treaty claim at ICSID

ICSID has received the first investment treaty claim against Denmark, filed by Donatas Aleksandravicius, a Lithuanian businessman, seeking compensation for damages caused by protestors at a construction site in Copenhagen.

The claim is being brought under the Lithuania-Denmark BIT and comes after settlement efforts between the parties failed.

In July, the Danish Ministry of Justice sent a letter to the claimant rejecting the claim and the claimant´s settlement proposal; citing, among other matters, the European Court of Justice´s ruling in Achmea, backing up the incompatibility of intra-EU BITs with EU law.

FRANCE AND SPAIN

Sovereign immunity no bar to claims againstSpain and France over oil spills

In a recent judgment, the London Commercial Court has ruled that Spain and France cannot use sovereign immunity to prevent litigation over both state´s failure to comply with arbitral awards rendered in 2013 in favor of London Steam-Ship Owners´ Mutual Insurance Association in connection with the Prestige catastrophe that took place two decades ago.

The insurance club filed two arbitrations against Spain and France. A sole arbitrator ruled in favor of the club in 2013 and both countries decided to challenge the awards.

On an appeal to the Spanish Supreme Court, the Court determined, among other matters, that the club was liable to the claimants, including Spain and France. The club filed actions against both countries last year, arguing that they should be liable for such sums and that their pursuit of civil actions was a breach of the 2013 arbitral awards.

The judge dismissed Spain´s and France´s arguments on sovereign immunity, since the actions fell within an exception contemplated in the UK State Immunity Act 1978.

The insurance club has additionally filed two further arbitration claims against Spain and France, seeking a declaration that both countries failed to comply with their obligation not to file direct civil claims that are not arbitrated in London.

Italy

ICSID tribunal rejects solar claim against Italy

An ICSID tribunal has ruled against the Italian entity Eskosol, 80% owned by Blusun, considering that the reforms to Italy´s renewable energy regime were not arbitrary nor irrational.

The arbitral panel stated that it had jurisdiction to hear the claim, contrary to what Italy alleged considering Eskosol’s insolvency in Italy and Blusun’s previous ECT claim over the same measures. The tribunal also held that the insolvency procedure didn´t make the bankruptcy receiver the controlling entity, given that he only manages the company´s assets as a trustee.

SPAIN

UNCITRAL tribunal prevents Iberdrola from filing identical second claim against Guatemala

An UNCITRAL tribunal has dismissed a claim filed by Iberdrola against Guatemala on the basis of res judicata, as a consequence of a previous ICSID arbitration in which Guatemala was succussful. In the earlier arbitration the tribunal declined jurisdiction in all the claims except for the one that was dismissed on the merits.

Iberdrola filed the new claim arguing again that the change in tariffs and the rulings by the Guatemalan courts breached the Spain-Guatemala BIT. It contended that it was possible to file a second claim based on international law and get a ruling on the merits, since the previous claims based on domestic law. 

The tribunal considered that both cases shared the same subject and cause of action between the same parties, and ordered Iberdrola to bear all the costs of the arbitration, including more than €600,000 in Guatemala´s arbitration and legal costs.

Spain succeeds in obtaining an extension to a stay of enforcement of award 

An ICSID panel agreed to extend a stay of enforcement of a €41 million award against Spain by the German solar investor SolEs Badajoz, and not require Spain to pay security to continue the stay.

The decision was made based on the existing risk of not regaining any of the enforcement payments if the award ended up being annulled. The tribunal held that there was a real possibility that the amounts paid to the German company by Spain would be redistributed to the solar investors´ parent companies.

It is thought to be the first case in which Spain has succeeded in obtaining an extension of a stay of enforcement in all the cases it is facing regarding its renewable energy reforms.