The Danger of the Interpretation of Facts: Legal Uncertainty in the Spanish Saga Cases

Nataša Rajković ()
Additional contact information
Nataša Rajković: Faculty of Law, Pompeu Fabra University, 08002 Barcelona, Spain

Laws, 2024, vol. 13, issue 3, 1-16

Abstract: Enhancing legal certainty is one of the main values that are sought in the investor–state dispute settlement system. The importance of legal certainty is strengthened in the case of renewable energy investments, which are in the global public interest, long-term and capital-intensive up-front. The first part of the paper presents the importance of legal certainty in investment arbitration in general, its limits and its importance in the context of the green energy transition. In addition, it addresses the special features of renewable energy investments. The second part of the paper analyses from the perspective of legal certainty the Spanish renewable energy cases initiated under the Energy Charter Treaty (ECT), which deal with similar factual and legal issues. In this respect, the paper presents the varying weight tribunals gave to the important facts that led them further to conclude whether Spain breached the fair and equitable treatment standard, and if so, whether the investor was entitled to full compensation or a reasonable rate of return. In addition, it presents different approaches to perceiving the stability provision of Article 10 (1) of the ECT. The paper concludes that it remains uncertain to what extent RE investors will be protected under the ECT’s stability condition in the case of fundamental or small-scale changes. Although one group of arbitrators may argue that the fundamental change triggers per se a breach of a stability condition, others may argue that for the breach to be established, the host state’s measures must be arbitrary, unreasonable or discriminatory. Moreover, the threat to legal certainty might not only be the vague provisions of the ECT but also the significant discretion tribunals have towards the interpretation of facts, leading to different outcomes. Indeed, it is at the discretion of arbitrators to consider whether the timing of investment, presence of evidence indicating possible regulatory changes, and the reasonable rate of return prescribed in Spain’s domestic law will be relevant or irrelevant.

Keywords: legal certainty; investment arbitration; Energy Charter Treaty; renewable energy sector; fair and equitable treatment; facts (search for similar items in EconPapers)
JEL-codes: D78 E61 E62 F13 F42 F68 K0 K1 K2 K3 K4 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2075-471X/13/3/27/pdf (application/pdf)
https://www.mdpi.com/2075-471X/13/3/27/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jlawss:v:13:y:2024:i:3:p:27-:d:1384752

Access Statistics for this article

Laws is currently edited by Ms. Heather Liang

More articles in Laws from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().