This Award, issued by an ICSID tribunal constituted under the Energy Charter Treaty (ECT), renders the final decision on damages and costs in the dispute between two German investors and the Kingdom of Spain. The Award incorporates and builds upon the tribunal's prior Decision on Jurisdiction, Liability and Directions on Quantum of 2 December 2019, which found that Spain had breached its obligation of stability under ECT Article 10.1, but only to the extent of the retroactive "claw-back" of subsidies previously paid to the Claimants. All other claims were rejected. Following that decision, the parties and their experts were unable to reach an agreement on the quantum of damages, requiring the tribunal to resolve the outstanding issues.

Tribunal's Decision on Damages

The tribunal unanimously determined the quantum of damages by adopting a four-step analytical framework. First, it established the valuation date as 13 July 2013, the date the relevant Spanish legislation (RDL 9/2013) was introduced. Second, it calculated the Standard Net Asset Value (NAV) of the Claimants' plants as of that date, siding with the Claimants' methodology based on the formula prescribed in the Spanish legislation itself, rather than the Respondent's proposal to use book value from audited financial statements. The tribunal concluded the Standard NAV was EUR 73.413 million.

Third, the tribunal calculated the present value of the harm caused to the Claimants by the unlawful claw-back, arriving at a figure of EUR 22.006 million as of the valuation date. In this, it accepted the use of ex-post data to avoid over- or under-compensation. Fourth, addressing the most contentious quantum issue, the tribunal determined the applicable pre-award interest rate. It rejected the Claimants' argument for a 7.398% rate (the target rate of return under the disputed measures), reasoning that this was a pre-tax investment growth figure and there was no basis to assume the awarded damages would have earned such a return. Instead, the tribunal accepted the Respondent's proposal to apply an interest rate equivalent to the six-month EURIBOR, compounded semi-annually, finding it appropriate for a risk-free sum.

Tribunal's Decision on Costs

In light of the balanced findings across the various phases of the arbitration—where each party prevailed on significant issues (e.g., Claimants on the claw-back breach and NAV methodology; Respondent on the scope of liability and the interest rate)—the tribunal determined that a balanced allocation of costs was fair. It ordered each party to bear its own legal representation costs and for the costs of the arbitration (ICSID and tribunal fees) to be shared equally between the parties.

Operative Part (Award)

The tribunal unanimously ordered the Kingdom of Spain to pay the Claimants EUR 22.006 million in compensation. Interest on this amount is to be calculated at the six-month EURIBOR rate, compounded semi-annually, from 13 July 2013 until the date of payment.