The countries of the European Union have agreed to terminate all the arbitration mechanisms that could be accepted by international investors as a result of bilateral treaties between States and which were assuming multimillion-dollar compensation to international funds. The decision comes after the Court of Luxembourg will find that the existence of these courts is incompatible with Community law. The commitment acquired by the countries goes further and considers that arbitrations deriving from the Energy Charter are also contrary to community law. This pact reinforces the path opened by European justice for Spain to deal much more favorably with the conflict arising from the cut to renewable energies, in which claims are being played for more than 8,000 million euros.
Brussels held on Thursday the decision of the Twenty-eight to end the bilateral treaties by which they submitted to arbitration instruments that The Community executive had consistently considered that they were contrary to European regulations. The ruling of the Court of Justice of the EU in the Achmea case He gave the reason. As a result of that ruling, the member countries have decided to put an end to all these agreements by means of a declaration in which they assume the legal consequences of that sentence. "Union legislation takes precedence over bilateral investment treaties between member states. Consequently, all the arbitration clauses between investors and States […] they are not applicable, "says the document.
The commitment does not mean that investment fund claims do not continue to arrive, but community sources maintain that it will be much more complicated. Spain, in particular, faces an avalanche of investors who considered themselves harmed by the cut in premiums for renewables by the Government of Mariano Rajoy. Last August, the Minister for the Ecological Transition, Teresa RiberaHe said that there were more than 40 arbitration proceedings in progress that, collectively, claimed more than 8,000 million euros from Spain.
The declaration of the Twenty-eight, endorsed by the European Comission, not only closes the door to continue using these mechanisms in the future, but it also intends to render ineffective the ongoing procedures. The member countries only undertake not to challenge agreements or awards that can no longer be canceled and were fulfilled before the ruling of the Luxembourg Court was issued. But not the rest. Even so, this commitment affects all intra-community treaties. That is, it does not affect mechanisms that could have been agreed with countries outside the EU. In fact, Ribera herself admitted that the International Center for Settlement of Investment Disputes (ICSID) of the World Bank is being much more reluctant to Spain's arguments.
The arbitrations of the Energy Charter
One of the main problems faced by Spain in defending the illegality of arbitration was that investors accepted the European Energy Charter, which also incorporated these arbitration mechanisms. Its multilateral nature put Spain's arguments at a disadvantage. The document reached by the Twenty-eight understands, nevertheless, that the Achmea judgment has "legal consequences" on "all proceedings pending for investment arbitration within the EU" initiated "under bilateral investment treaties" between member countries but also "of the European Energy Charter"
The declaration of the Twenty-eight is in line with the position of the European Comission, that it considered that the international awards that were granting millionaire investments to the investors in the sector of the renewable ones did not have any value, not even if wielded the Letter of the Energy. For Brussels, only national and European courts have the exclusive competence to interpret Community regulations and guarantee investor protection.
This Thursday the Commission has also celebrated that the Member States "have committed themselves to take action to ensure that the Energy Charter can not be used as a basis for arbitration between investors" and countries. "This will ensure that all EU investors receive equal treatment and full compliance with EU legislation. This is what the single market is all about, "said Vice President of the European Commission, Valdis Dombrovskis.