Solar claims against EU Member States dominate at ICSID

The explosion of Energy Charter Treaty (ECT) claims against Spain made the EU the most sued region according to ICSID’s most recent caseload statistics.

The report (published 22 January) shows that EU Member States received 19 claims in 2015, over a third of all the claims registered at the ICSID in that year.

The vast majority – 15 cases – were filed against Spain, with three against Italy and one against Austria. All except the claim against Austria relate to reforms to the solar energy subsidy regimes.

The sudden growth in claims comes after a decline over the previous years. In 2015 a a new all-time record of 52 new claims were filed (in 2014, only 38 cases were filed). In total, Spain is defending 26 claims over its renewable energy market filed at ICSID and other institutions.

Meanwhile, 2015 saw only two new claims against states in South America, which had historically been the most-sued region.

Due to the claims against Spain, there has also been a rise in ECT claims at ICSID, which used to be relatively rare. While historically the ECT formed the basis for less than 9% of claims, in 2015 thisrose to 33%. Likewise the field of power disputes has expanded, being the subject matter of 42% of all new claims filed in 2015 compared to 17% in the past. The historical mainstay of oil, gas and mining disputes, however, accounted for only 19% of new claims in 2015.

The 15 cases against Spain highlight another trend in the statistics: apart from Spain and Italy – the recipients of the solar claims – very few states in 2015 had to deal with more than one new case.

In terms of the outcomes of arbitrations, tribunals continued to comply with historical trends. 47% of awards in 2015 upheld claims in part or in full, while 33% dismissed all claims and 20% declined jurisdiction.

Summing up, it can be concluded that claims against EU Member States will continue to increase, which makes the need for optimal investment protection through BITs and the ECT even more urgent.

As a specialized consultancy, GIP stands ready to advise on the best BIT/ECT protection available to your investment.