InfraRed successful in obtaining ICSID’s rejection of annulment of award against Spain

Cuatrecasas represented InfraRed in the annulment proceedings with the ICSID against the InfraRed v. Spain award. The final rejection of the annulment of the award is an important and decisive victory in a process in which Spain had already been ordered to pay compensation of €28 million (plus interest and costs) to InfraRed as a result of its cuts to renewable energy incentives. 

Spain filed several claims with ICSID to annul the award on the grounds of (i) manifest excess of powers, (ii) failure to state reasons, and (iii) serious breach of fundamental procedural rules, all of which are provided for in Article 52 of the ICSID Convention. However, the ICSID ad hoc Commission (“the Commission”) rejected all its claims.

The Commission rejected Spain’s objection claiming that the Arbitral Tribunal (“Tribunal”) had manifested excess of powers by taking on jurisdiction of a dispute between companies of an EU Member State and another Member State. It also rejected the “clean hands” objection, under which InfraRed could not benefit from renewable incentives for allegedly having lied about the installed capacity of its plants. Also, it confirmed that the Tribunal’s conclusions about the installed capacity of InfraRed’s plants, although debatable, were correctly reasoned. The objections submitted by Spain only showed its dissatisfaction with the Tribunal’s decision, but not the existence of any flaw that could lead to the annulment of the award. 

The litigation and arbitration team handling this transaction 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.