OperaFund and Schwab succeed with ICSID dismissal of Spain’s application for award annulment

Cuatrecasas has defended OperaFund Eco-Invest SICAV PLC (Malta) and Schwab Holding AG (Switzerland) in the annulment proceedings brought by Spain against the award, issued in September 2019, in the OperaFund and Schwab v. Spain case. The dismissal of the application for annulment confirms the award—resulting from Spain’s cutbacks in incentives for the renewable energy plants in which OperaFund and Schwab had invested—which had sentenced Spain to pay compensation of over €29 million, including interest and costs.

Spain made numerous allegations to set aside the award, grouped under three of the grounds listed in Article 52 of the ICSID Convention: a manifest excess of powers by the tribunal, a failure to state reasons, and a serious departure from a fundamental rule of procedure. However, the ICSID ad hoc committee dismissed all of them.

More specifically, the committee dismissed Spain’s plea that the tribunal had used a manifest excess of powers, claiming jurisdiction over a dispute between a company of a Member State of the European Union and another State that is part of the EU. The ad hoc committee held that not only was the tribunal’s competition decision reasonable, but also that the reasons were fully stated in every respect. The committee also held that that the tribunal had not breached any of Spain’s fundamental rights.

In short, the ad hoc committee concluded that none of the grounds for annulment put forward by Spain met the exacting standards required by Article 52 of the ICSID Convention to set aside an award. At most, they express Spain’s mere dissatisfaction with the result.

This is the second consecutive Cuatrecasas victory in ICSID annulment proceedings initiated by Spain against awards in which it has been sentenced to pay millions in compensation to foreign investors in the saga of renewable energy cases.

Litigation and Arbitration partner Alberto Fortún reflects that “Once again, an ICSID ad hoc committee has confirmed that the objections raised by Spain in the annulment proceedings are only differences of opinion over the result of an award and, therefore, do not meet the standard required to set aside an award under the ICSID Convention.”

The Litigation and Arbitration team handling this case was made up of Alberto Fortún, José Ángel Rueda, Miguel Gómez, Borja Álvarez, Gustavo Mata, José Ángel Sánchez, Lucía Pérez-Manglano, Ignacio Hernández and Elisa Salcedo.