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• first, it found that there was nothing in the text of the ECT which precludes intra-EU disputes from its scope
• second, it referred to Article 16 of the ECT which provides for provisions of the ECT to take precedence over provisions of other international agreements that have been or are subsequently entered into by any of the contracting parties where they are more favourable to the investor or investment. The tribunal found in this regard that Article 26 of the ECT (containing the provision for investor-state arbitration) is more favourable to the investor than the EU treaties as the latter do not provide for a direct claim by an investor against a state and thus Article 26 obviates the need for an investor to bring the claim in the national courts of the host state (here, Spain). As such, the tribunal found that Article 16 of the ECT affords precedence to Article 26 over the EU treaties
• third, the tribunal decided that EU law is not in any event incompatible with the ECT because while the CJEU has exclusive jurisdiction over disputes between Member States, it does not as between private parties or between a private party and a state. It further found that nothing in EU law could be interpreted as precluding ISDS under the ECT and ICSID Convention

This analysis, which is consistent with and affirmed the analysis undertaken by previous tribunals addressed with this question, is of interest as on its face it may appear to be inconsistent with the view of the CJEU in Achmea. It does, however, indicate that arbitral tribunals may not feel bound by Achmea in relation to ECT claims.

Whether the award will be able to be enforced, however, is a different question. As this was an ICSID arbitration seated in Washington, any annulment proceedings will take place outside of the EU and thus will be outside the scope of any reference to the CJEU. Should enforcement measures be taken within the EU, though, it is highly likely that Spain will seek to oppose them on the basis of Achmea. Indeed, in a separate case involving an award made against Spain, Spain has recently asked the Swedish Court of Appeal to seek a preliminary ruling from the CJEU on the compatibility of the ECT with EU law in view of Achmea, and so it seems likely that this question will be dealt with directly by the CJEU in the not too distant future.

What was the background?

In 2007, Spain introduced a regime which was designed specifically to attract investors in the renewable energy market by offering significant incentives to installations that were registered within a short window. The claimant invested in three solar plants and registered them during this period to take advantage of these economic incentives. Subsequent legislation in 2012/2013 sought to reverse these incentives and ultimately repealed the previous legislation.

The claimant brought a claim under the ECT for breach of Article 10(1). The primary basis for this claim was that the investment had been made with the legitimate expectation that the projects would benefit from the incentives under the 2007 regime for their operational lifetimes, but that the measures introduced by Spain a few years later effectively abolished that regime, causing the claimant damage.

Spain challenged the claim not only on the merits (arguing primarily that the regime was always susceptible to change and that there was no guarantee that it would not) but also on a number of jurisdictional grounds, including that the claimant was not an investor under the ECT, that the claimant did not make any investment, that Spain invoked the denial of benefits clause in the ECT as the claimant did not have sufficient operations in the Netherlands, that part of the claim dealt with tax issues that were excluded from the ECT, and that this was an intra-EU dispute and thus incompatible with EU law.