Commission declares Arbitration award ordering Spain to pay compensation in favour of Antin is illegal and incompatible State aid
Today, the European Commission (Commission) has issued its decision finding that an arbitration award ordering Spain to compensate Antin for changes to a renewable electricity support measure constitutes illegal State aid and orders Spain to refrain from paying or implementing the arbitration award in any form.
The Commission assessed an arbitration award issued in June 2018 which ordered Spain to compensate Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. (‘Antin’) with EUR 101 million, plus interest. The dispute stemmed from Spain’s modification of a renewable energy support scheme originally established in 2007. Spain later revised the framework in 2013 thereby affecting investors like Antin.
Antin initiated arbitration proceedings under the Energy Charter Treaty (‘ECT’), claiming compensation for the financial losses caused by the 2013 modifications. In response, the arbitral tribunal ruled in Antin’s favor in 2018. Spain later notified the Commission of the award for assessment under EU State aid rules.
Following an in-depth investigation launched in 2021, the Commission has now concluded that the implementation, payment, or execution of the arbitration award constitutes State aid under Article 107(1) TFEU and is incompatible with the internal market.
The Commission held that a measure that breaches other provisions of EU law cannot be declared compatible under State aid rules. Intra-EU arbitration, where an investor from one Member State brings a dispute against another Member State before an investor-State arbitration tribunal, violates fundamental EU legal principles, including the ultimate jurisdiction of the Court of Justice of the European Union (CJEU) and the overarching principle of autonomy of the EU legal order. The dispute at hand was intra-EU as both investors bringing the dispute against Spain are registered in Luxembourg and the Netherlands.
Therefore, the Commission concluded that the arbitration award breaches Article 19(1) TEU and Articles 267 and 344 TFEU, as well as the general principle of autonomy of the EU legal order and cannot consequently be found to be compatible with the functioning of the internal market.
Given that the arbitration award has not been paid yet, there is no recovery ordered. However, Spain must refrain from enforcing the award.
For more information, see the Commission’s PR.