Review of the Award in Green Power Partners K/S and SCE Solar Don Benito APS v the Kingdom of Spain
2022 Investment Arbitration Outlook Uría Menéndez, n.º 10
Danish renewable energy investors Green Power Partners K/S and SCE Solar Don Benito APS (‘Claimants’) started arbitration proceedings against the Kingdom of Spain (‘Respondent’) in 2016 under Article 26 of the Energy Charter Treaty (‘ECT’). The arbitration proceedings were brought before the Arbitration Institute of the Stockholm Chamber of Commerce (‘SCC’) and were seated in Stockholm. The tribunal analysed and upheld Respondent’s ratione voluntatis objection (i.e., Respondent did not consent to intra-EU arbitration) and declared it lacked jurisdiction to hear the dispute.
This is the first award after Achmea and Komstroy in which an arbitral tribunal upheld an intra-EU jurisdictional objection. Despite being an ECT-based arbitration, the tribunal relied on EU law, which it stressed applied to the case either as the domestic law of the lex arbitri – as part of the applicable law under Article 26 of the ECT – or simply as international law. However, in a carefully worded award, the tribunal refrained from opining on the nature of EU law and instead simply stated that EU law is to be taken into account as part of any of the potentially applicable laws.
This article provides a blueprint on the tribunal’s reasoning in the Award and highlights the consequences of applying EU law.