The soap opera for the cut in renewable premiums reaches the US court. The first funds that have been victorious before the ICSID, the international arbitration court that depends on the World Bank, have gone to the US court to request that Spain pay the compensation to which it has been sentenced, which at the moment amounts to 800 million, or that assets of that value be seized. The State, for its part, tries to delay this process as much as possible.
At the moment, Spain has received 17 sentences from the ICSID for the decision of the Rajoy Government to cut the profitability guaranteed by the State to the renewable plants. Of these 17 setbacks, on two occasions the claimants –the RREEF and Masdar Solar funds, respectively– decided to renounce the execution of their awards in exchange for being able to benefit from the shield of a return of 7.4% over 25 years for renewable plants proposed in 2019 by the Vice President of Ecological Transition, Teresa Ribera, for those who renounced litigation with the State for the 2014 decision. Each of them has renounced collecting some 60 million.
The vast majority, therefore, have pending payment of fines that already total more than 800 million, and that the experts consulted raise to 7,000 million when the twenty processes still open before the arbitral tribunals are ruled. Interest must be added to these consigned amounts, which exceed 2% per month.
The Spanish State refuses to pay the consigned amounts and uses a judgment of the CJEU that does not recognize the validity of international treaties between member countries of the EU, given that the investors who bet on Spanish renewables before 2014 did so through subsidiaries in Luxembourg or the Netherlands for tax reasons.
Every time Spain suffers a legal setback before this body, the strategy is always the same. The funds go swiftly to the US justice system to start a procedure whereby, if Spain refuses to pay, the judge agrees to an embargo of Spanish assets in the US. Spain, for its part, exhausts the way to claim an annulment by another court of the ICSID itself, a kind of appeal before this arbitration court. At the moment practically all the files end up on the table of a court in the State of Columbia, which has decided to suspend the procedures for the seizure of Spanish assets until the ICSID pronounces its final decision before the resources of Spain.
He has managed to get the ICSID to annul a single process, that of Eiser, for 128 million. But the arbitral tribunal has given final approval to another five, those of Nextera, Antin, Watkins Holdings, Infrared and JCG. And the judicial process has been reactivated immediately. These are already claiming before the US justice the seizure of assets from Spain, despite the fact that the State pleads at all times to paralyze the processes. The sources consulted indicate that it is foreseeable that Spain will appeal any type of decision against it to the highest possible instances.
The choice of US courts is not accidental. Investors try to prevent the execution of the awards from falling on the justice of any EU country and that the competent court dismiss their claims based on that ruling of the CJEU. In the case of Antin, that the French fund sold the procedure to other investors, it has also decided to go to court in Australia to put more pressure on Spain.
The US justice is also one of the fastest to execute conflicts of this type. But investors choose this country to claim mainly because Spain has assets in the US that can be seized. International regulations establish that in any case, assets intended for state use are free from any seizure, but not commercial ones. In other words, the funds could not seize, for example, the dependencies of the Spanish embassy in Washington, but they could seize US bonds or dollars. “The first step is to identify how many assets Spain has in the US that can be seized,” comment legal sources consulted by this newspaper.
The sources consulted coincide in discounting that Spain will resort as much as possible and even to the highest possible instances to avoid the payment of these awards or that the funds remain with Spanish assets in the United States. Only when the State has exhausted all judicial channels the moment in which this conflict with the main investors in renewables can be resolved after eight years. They anticipate that then an indemnity will be privately agreed, less than that consigned by the ICSID, but that the funds prefer to collect at once.
- Stockholm. Although most of the investors affected by the cut in the renewable premium have chosen to go to the ICSID, the arbitration body that depends on the World Bank, some of them have chosen to claim before the Stockholm Chamber of Commerce. Unlike the World Bank court, in this case the parties must reach an agreement on the arbitral venue of the procedure, while the ICSID does not have a venue and its awards can be applied to any jurisprudence. In the case of proceedings whose arbitration venue is in Europe, the plaintiffs have a difficult time claiming seizure of assets due to the position of the CJEU.
- Uncitral. Much less frequent is that the parties go to Uncitral, the arbitration court that depends on the UN. The rules to apply in these procedures must be agreed between the parties and, given the complexity of the process, only a couple of funds have claimed there against Spain.