Procedural Posture and Scope

This final Award, issued by an ICSID tribunal constituted under the Energy Charter Treaty (ECT), resolves the remaining issues of damages, interest, and costs in the arbitration between NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. (Claimants) and the Kingdom of Spain (Respondent). The Award follows the Tribunal's Decision on Jurisdiction, Liability and Quantum Principles of 12 March 2019, which found that Spain had breached its fair and equitable treatment (FET) obligation under Article 10(1) of the ECT. This Award quantifies the final monetary relief owed to the Claimants.

Quantification of Damages and Interest

The Tribunal's primary task was to finalize the quantum of damages based on the principles established in its prior Decision. The Claimants submitted a recalculated damages claim of EUR 290.6 million, based on the Tribunal's formula of a return on the capitalized value of their assets using the WACC of the Termosol Plants plus a 200 bps premium. The Respondent did not contest the mathematical accuracy of this recalculation. Accordingly, the Tribunal accepted and awarded EUR 290.6 million as the principal amount of compensation.

A key issue was the determination of pre- and post-judgment interest. The Tribunal had previously ruled that interest would be based on the 5-year Spanish sovereign bond rate as at the date of the Award. However, observing that this rate was effectively zero at the time of rendering the Award, the Tribunal found that a zero-interest award would be inconsistent with its finding that interest was appropriate. To resolve this, the Tribunal decided to apply the 5-year Spanish sovereign bond rate that was in effect at the date of its earlier Decision on Principles, which was 0.234%. It ordered that pre-judgment interest be applied at this rate from the valuation date (30 June 2016) to the date of the Award, and that post-judgment interest accrue at the same rate on all awarded sums until full payment.

Allocation of Costs

Pursuant to Article 61(2) of the ICSID Convention, the Tribunal exercised its discretion to allocate the costs of the proceeding and the parties' legal expenses. The Tribunal noted that while the Respondent lost on jurisdiction and the merits, its jurisdictional arguments were not trivial, and the Claimants' primary basis for assessing damages had been rejected. This mixed outcome warranted a partial allocation of costs. The Tribunal ordered the Respondent to bear two-thirds of the costs of the proceeding and one-third of the Claimants' legal and expert fees. The Award directs Spain to pay the Claimants USD 132,368.86 for its share of the proceeding costs and a further USD 4,147,031.81 plus EUR 1,042,135.3 for its share of the Claimants' costs.