The renewable energy sector has long been attracting foreign investors’ attention. Given the substantial capital required and the long-term recoupment, investors in the renewable energy sector have a strong interest in the stability of this regulatory regime. Nevertheless, host States also have an inherent power to regulate the public interest, especially in fulfilling the State’s duty to protect its economic health. Accordingly, the State must prove that it acted consistently, transparently, and reasonably in modifying the current incentive regime, while the investors’ reasonable and legitimate expectations have been respected, given the relevant treaty so stipulated.

This month, Jus Mundi continues the special edition of the Arbitration Team of the Month featuring a government legal team. With the recent positive decision in Eurus Energy v. Spain and the latest victory in FREIF v. Spain, we are delighted to present the Ministry of Justice of the Kingdom of Spain and an interview with Mr. José Manuel Gutierrez Delgado, the head of the International Arbitration Department of the Abogacía General del Estado in Spain’s Government.


Spain has been one of the largest markets for investments in “green energy,” which is known for its incentives that attracted billions of euros from foreign investors. However, following a change of government in 2012, several changes were made to its regulatory framework for renewable energy, aiming to reduce the “tariff deficit.” In response to these regulatory changes, Spain has faced numerous investment arbitrations from investors following its renewables incentive regime and subsequent modifications. The State has fought hard on these claims and correspondingly introduced Royal Decree-Law 17/2019, guaranteeing higher returns for renewable energy investors who renounce their claims and awards against Spain.

Recent victory cases analysis: FREIF Eurowind Holdings Ltd v. Kingdom of Spain

In an award dated March 8, 2021, an SCC tribunal has dismissed a €135 million Energy Charter Treaty claim against Spain brought by FREIF Eurowind Holdings Ltd (FREIF), a private limited liability company incorporated under the laws of England. The dispute concerning legislative and regulatory guarantees and commitments that Spain implemented from 2004 through 2010 in its renewable energy sector and changes to its regulatory regime thereafter.


  • In 1994, Spain enacted RD 2366/1994, which created the Special Regime for electricity generators from renewable energy sources.
  • In 1997, Spain enacted Law 54/1997, which set down its aim to encourage investment in renewables and maintained a Special Regime for renewable energy facilities, affording producers certain rights and privileges.
  • In response to its EU obligations on electricity generation from renewable energy sources, Spain implemented RD 436/2004 (the “tariffs” were set for an initial term of 20 years, after which point, they would reduce in value to 83% of the tariff initially granted), which was later replaced by RD 661/2007 (the algorithm was amended, and a “floor” and “ceiling” were added to the premiums payable to investors).
  • In 2010, Spain adopted RD 1614/2010, which reduced certain incentives to pursue the objective of reducing the tariff deficit.
  • In 2011, FREIF purchased a 50% preferred equity interest in a portfolio of six operating wind parks.
  • In 2012, the Spanish government made alterations to the legal framework, which had supported the scheme of economic incentives. Law 15/2012 was enacted, which imposed a new 7% tax on both the value of electricity and the value of incentives provided under RD 661/2007.
  • In 2013 and 2014, the Special Regime was replaced by the New Regulatory Regime. Spain implemented a 7% tax on energy production and additional reductions to the incentives, along with a special remuneration calculated by reference to a Standard Facility.
  • In 2017, FREIF filed a Request for Arbitration pursuant to the terms of the Energy Charter Treaty (ECT).

Tribunal constitution

Tribunal’s decision

  • The tribunal upheld jurisdiction over FREIF’s claims, except for the tax imposed by Law 15/2012, which was sheltered under the ECT’s tax carve-out.
  • The tribunal ruled that Spain had not violated the ECT or international law concerning FREIF’s investments and awarded Spain its legal costs of €2.7 million and its share of the arbitration costs.

Legal rationale


  • Spain’s first jurisdictional objection concerns the application of the ECT to intra-EU disputes. The tribunal determined that the ECT applies to intra-EU disputes.
  • With respect to Spain’s taxation objection, the tribunal considered that the TVPEE introduced under Law 15/2012 is a bona fide taxation measure, which is subject to the ECT’s tax carve-out.
  • The tribunal turned to Spain’s third jurisdictional objection regarding the “fork in the road” or “electa una via” provision. It applied the triple identity test and further considered that the condition has not been met.


  • The tribunal first relied on FREIF’s three-step structure in analyzing whether its legitimate expectations have been frustrated:
    • Did Spain’s conduct create legitimate expectations on the part of FREIF?
    • Did FREIF rely on Spain’s conduct at the time it invested?
    • Did Spain subsequently fail to honor the expectations it created?
  • Spain accepted that it created an expectation of a reasonable rate of return under the principles of Law 54/1997; however, FREIF claimed that Spain guaranteed specific incentive rates under Royal Decree 661/2007 that would not be the subject of future revision.
  • The tribunal cited the RREEF tribunal that the threshold of the legitimacy of an expectation is high to account for a State’s regulatory power. Relying on FREIF’s due diligence (carried out by Linklaters), and in reference to the Supreme Court’s decisions, the tribunal took the view that Spain has the capacity to continue making regulatory changes in light of the political and economic realities. Consequently, the tribunal opined that FREIF could only expect a reasonable return under Law 54/1997, while its alleged expectation on the specific incentive rates of Royal Decree 661/2007 was not legitimate.
  • The tribunal went on determined whether Spain had failed to honor FREIF’s expectation of a reasonable return. It proceeded with 7% as the benchmark rate, which the tribunal considered appropriate, and found that the wind farms’ return exceeded the reasonable rate. Therefore, the tribunal by unanimity sided with Spain and concluded no frustration of FREIF’s legitimate expectations.
  • The tribunal then examined whether Spain had breached its duty of transparency and good faith. It held that FREIF failed to establish a lack of transparency prior to implementing the New Regulatory Regime, whereas the evidence supplied by Spain demonstrated that public consultation was conducted prior to the introduction of the New Regulatory Regime.
  • The tribunal next dismissed FREIF’s claim on Spain’s “Impairment Clause” breach based on its finding that Spain did not violate commitments and guarantees and acted in a reasonable and proportional manner addressing the tariff deficit.
  • The tribunal finally disposed of FREIF’s claim on Spain’s breach of “Umbrella Clause.” It held that the enactment of RD 1614/2010 was not the manifestation of an agreement entered into between the government and FREIF or with its investments as Spain had not entered into any “obligations” that are mandatory and legally binding.

Interview with Mr. José Manuel Gutierrez Delgado

  1. Congratulations on the victory of the FREIF v. Spain case! Can you share the strategy (legal grounds) adopted for the appointment/challenge of arbitrators?

The appointment of arbitrators is key in any arbitration proceedings regardless of whether it is an investment or commercial case. If we look at investment arbitration, there is a commonly held view that some arbitrators will have a more favourable attitude to investors whilst others may have a greater proclivity to favour nation-states. Nonetheless, in spite of this, we are stiving to move away from those perceptions/idea/conceptions.

For us the main factors when selecting an arbitrator are that they are hard-working people, capable of reading, understanding and engaging with the vast amount of documentation that we use throughout and, above all else, from them to act as ethical jurists. It is not really necessary for them to have had any major previous experience in investment arbitration, so long as they have the necessary legal training that would enable them to performing their obligations to a reasonable standard. This is the current approach that we adopted when making recent previous appointments.

  1. What do you think of the tribunal’s approach in summarizing previous awards and decisions, considering them “to be relevant” and “while not binding,” informed its reasoning?

It is always imperative to bear in mind that previous decisions are not a source of international law. In accordance with Article 38 of the International Court of Justice Statute they do not hold more value than the opinions of jurists and, consequently, we strive to remind the tribunal of this aspect during proceedings. From our perspective, we deem it to be somewhat dissatisfactory when tribunals decide to copy and paste previous tribunals decisions when delivering their awards. However, in spite of this, it is important to remember that most tribunals do adequately use these previous decisions, not as an authoritative source of international law but rather as a mere persuasive, but not binding, factor to be taken into account when delivering the awards on a given case.

  1. What are your thoughts on the tribunal’s analysis of investor’s legitimate expectations and the State’s regulatory power?

Of course, we concur with this reasoning not merely because we won the case but also due to the fact that in our estimation it is the correct analysis that ought to be followed. Decontextualized documents and a general allegation of legitimate expectations should never work when they are totally at odds with the jurisprudence of a Supreme Court, EU Law, and the plain reading of due diligence.

  1. The FET standard is one of the most frequently raised legal issues in renewable energy arbitrations. What’s your opinion about the State’s obligations on transparency, due process, and good faith?

All states must act in accordance with those principles and we are absolutely in favour of them. We aim to demonstrate that the legislative process followed was the adequate one, according to those standards and it was a legislative process that was no different than the one used to approve any other regulation.

  1. It has been more than one year since the Royal Decree 17/2019 has been approved, offering foreign investors economic incentives that can only be accessed if they dropped their cases. Do you think there will be more renewables investors renounce claims against Spain?

Evidently, we are unable to know what investors are actually intending on doing. Nevertheless, what we do know is that for a while all the investors thought that they were going to win their cases and they were going to have extra profits through the use of arbitration. Now the tide has turned and since we win the majority of cases investors should think twice before continuing with their cases, especially bearing in mind the potential costs that they will have to assume if they lose the case.

  1. Can you tell us about the State’s victory in Eurus v. Spain? What makes it special? Congrats for the favorable decision!

This is the second case (after BayWa) in which a Tribunal has firmly stated that EU Law must be applied. From our perspective, it is hard to comprehend why some tribunals do not seem to understand the fact that EU Law is applicable. After all in all EU Member States, perhaps quite unsurprisingly, EU Law will apply and any investor should be aware of this. The clear and brave statements of the Eurus Tribunal on this issue should be welcomed for all EU Member States and of course for the EU itself.

  1. What has been a favorite career memory for you?

We have had a great many deal of astonishing career memories. We have found joy in our hard work and, especially, during the hearings. Many times we face the same law firms acting in different cases and what we endeavour to do is to use alternative strategies to engage with the tribunal and achieve our desired aim, yet I am unable to deliver any further on this particular matter due to confidentiality reasons.

Track-record highlights

In addition to the above-mentioned victory over FREIF, the Kingdom of Spain has prevailed in several cases regarding reforms to its subsidy regime for renewable energy.

  • In June 2020, Spain prevailed in its bid to annul a €128 million award in Eiser v. Spain (the first ICSID annulment decision in a renewable energy arbitration against Spain). The ad hoc committee found that arbitrator Stanimir Alexandrov failed to disclose a longstanding professional relationship with one of the claimant’s expert witnesses from the Brattle Group, and thus annulled the award in its entirety on the grounds of improper constitution of the tribunal and serious departure from a fundamental rule of procedure.
  • In April 2020, Spain prevailed in a third-party funded investment treaty claim brought by a Canadian-owned mining company under the Panama – Spain BIT concerning a terminated gold concession. The majority declined jurisdiction and dismissed the case.
  • In December 2019, Spain defeated a €420 million Energy Charter Treaty claim brought by German solar investors. The majority held that Spain did not create any legitimate expectation of legal stability but merely a reasonable return expectation. The investors then filed for an annulment of the award in 2020 but later dropped their case earlier this year to benefit from the Royal Decree-Law 17/2019, which promised higher incentives.
  • In July 2016, Spain won the second Energy Charter Treaty claim brought by a Dutch investor over their solar generation assets targeting a wide range of measures on the revision of remunerative incentives governing renewable energy producers. The majority found that the new regulatory regime did not violate the investor’s legitimate expectations and concluded no expropriation occurred.
  • In January 2016, Spain won the first Energy Charter Treaty claims brought by a pair of Dutch investors over the State’s reforms to its renewable energy sector. The majority found that Spain’s measures did not violate investors’ legitimate expectations, and the reforms to the feed-in tariff regime did not amount to expropriation.
  • In August 2015, Spain defeated a €25 million claim brought by two Venezuelan-owned companies under the Spain – Venezuela BIT over a real estate project. The sole arbitrator found for Spain on the merits and dismissed all claims.

As mentioned above, Spain approved Royal Decree-Law 17/2019, which aims to end the pending treaty claims over its renewable energy reform by offering investors economic incentives that can only be accessed if they renounce their claims and awards against the State. The new law provides for a higher return of 7.398% until December 31, 2031, for investors with claims or international arbitration awards against Spain if they agreed to withdraw from ongoing arbitrations, waive the pursuit or enforcement of those claims and arbitration awards. A number of those investors have reportedly dropped their cases in exchange for Spain’s new incentives regime.

  • Masdar Solar & Wind Cooperatief has submitted a waiver renouncing its right to collect €64.5 million to benefit from the new incentives.
  • RREEF has agreed to waive the right to collect on €1.1 million in a €59.6 million award, while Spain is currently defending the award in annulment.
  • Stadtwerke also has agreed to drop their efforts to revive their claim in an annulment proceeding, which is now discontinued.
  • One of the claimants in the PV Investors case, Element Power Holdings, has also reportedly agreed to waive its €2.2 million share of compensation.

Table of investor-State arbitration cases involving the Kingdom of Spain (recent victories/pending cases)*

To see all types of cases involving the Kingdom of Spain available on Jus Mundi, please click here.

We selected a few recent victories and ongoing cases of the Kingdom of Spain in the table below.

CaseInstitutionYear of IntroLatest UpdateStatus
Eurus Energy Holdings Corporation and Eurus Energy Europe B.V. v. Kingdom of SpainICSID2016 March2021 MarchPending
FREIF Eurowind Holdings Ltd v. Kingdom of SpainSCC2017 March2021 MarchDecided in favor of State
RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of SpainICSID2013 November2021 MarchPending (Annulment)
InfraRed Environmental Infrastructure GP Limited and others v. Kingdom of SpainICSID2014 May2021 MarchPending (Annulment)
Landesbank Baden-Württemberg, HSH Nordbank AG, Landesbank Hessen-Thüringen Girozentrale and Norddeutsche Landesbank-Girozentrale v. Kingdom of SpainICSID2015 November2021 MarchPending
STEAG GmbH v. Kingdom of SpainICSID2015 January2021 FebruaryPending
Mitsui & Co., Ltd. v. Kingdom of SpainICSID2020 OctoberNot AvailablePending
Watkins Holdings S.à r.l. and others v. Kingdom of SpainICSID2015 November2021 JanuaryPending (Annulment)
Stadtwerke München GmbH and others v. Kingdom of SpainICSID2015 January2021 JanuaryDecided in favor of State
Hydro Energy 1 S.à r.l. and Hydroxana Sweden AB v. Kingdom of SpainICSID2015 October2020 DecemberPending (Annulment)
OperaFund Eco-Invest SICAV PLC and Schwab Holding AG v. Kingdom of SpainICSID2015 August2020 NovemberPending (Annulment)
Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of SpainICSID2013 October2020 OctoberPending (Annulment)
NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Kingdom of SpainICSID2014 May2020 SeptemberPending (Annulment)
Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Kingdom of SpainICSID2013 December2020 AugustPending (Annulment)
SolEs Badajoz GmbH v. Kingdom of SpainICSID2015 August2020 AugustPending (Annulment)
Cavalum SGPS, S.A. v. Kingdom of SpainICSID2015 August2020 AugustPending
Canepa Green Energy Opportunities I, S.á r.l. and Canepa Green Energy Opportunities II, S.á r.l. v. Kingdom of SpainICSID2019 February2020 AugustPending
Portigon AG v. Kingdom of SpainICSID2017 May2020 AugustPending
VM Solar Jerez GmbH and others v. Kingdom of SpainICSID2019 October2020 JulyPending
JGC Holdings Corporation (formerly JGC Corporation) v. Kingdom of SpainICSID2015 June2020 JulyPending
Sapec, S.A. v. Kingdom of SpainICSID2019 August2020 JunePending
E.ON SE, E.ON Finanzanlagen GmbH and E.ON Iberia Holding GmbH v. Kingdom of SpainICSID2015 August2020 MayPending
KS Invest GmbH and TLS Invest GmbH v. Kingdom of SpainICSID2015 June2020 MayPending
Sevilla Beheer B.V. and others v. Kingdom of SpainICSID2016 August2020 MayPending
Corcoesto, S.A. v. Kingdom of SpainPCA20162020 AprilDecided in favor of State
Cube Infrastructure Fund SICAV and others v. Kingdom of SpainICSID2015 June2020 AprilPending (Annulment)
9REN Holding S.a.r.l v. Kingdom of SpainICSID2015 April2020 AprilPending (Annulment)
Infracapital F1 S.à r.l. and Infracapital Solar B.V. v. Kingdom of SpainICSID2016 June2019 OctoberPending
European Solar Farms A/S v. Kingdom of SpainICSID2018 December2019 AugustPending
Antonio del Valle Ruiz et al v. Kingdom of SpainPCA2018 August2019 JunePending
GBM Global, S.A. de C.V., Fondo de Inversión de Renta Variable and others v. Kingdom of SpainICSID2018 October2019 JuneDiscontinued
Frank Schumm, Joachim Kruck, Jürgen Reiss and others v. Kingdom of SpainICSID2015 June2019 MayPending
EBL (Genossenschaft Elektra Baselland) and Tubo Sol PE2 S.L. v. Kingdom of SpainICSID2018 November2019 JanuaryPending
Itochu Corporation v. Kingdom of SpainICSID2018 July2018 DecemberPending
Aharon Naftali Biram, Gilatz Spain SL, Redmill Holdings Ltd and Sun-Flower Olmeda GmbH v. Kingdom of SpainICSID2016 June2018 NovemberPending
DCM Energy GmbH & Co. Solar 1 KG and others v. Kingdom of SpainICSID2017 October2018 JunePending
Isolux Infrastructure Netherlands B.V. v. Kingdom of SpainSCC2013 October2016 JulyDecided in favor of State
RENERGY S.à r.l. v. Kingdom of SpainICSID2014 August2016 FebruaryPending
CSP Equity Investment Sarl v. Kingdom of SpainSCC2013 JuneNot AvailablePending
Charanne B.V. and Construction Investments S.A.R.L. v. SpainSCC2012 May2016 JanuaryDecided in favor of State
Inversión y Gestión de Bienes, IGB, S.L. and IGB18 Las Rozas, S.L. v. Kingdom of SpainICSID2012 June2015 AugustDecided in favor of State

(Note*: This table is not exhaustive.)


José Manuel Gutiérrez Delgado (Head of the International Arbitration Department of the General Attorney’s Office, Department of Justice of the Kingdom of Spain).

José Manuel read his Law degree and his Economics degree at the Universidad Pontificia Comillas ICADE in Madrid. Doctoral Diploma in International Law at the UNED University. He has worked for 32 years in senior positions in many different fields at the Ministry of Justice and the Ministry of Economy and Taxes. Just to mention some of them in 2002 he was appointed General Director of Legal Policy and International Affairs in the Ministry of Justice, he has also been State Attorney at the Supreme Court, Secretary of the Taxpayer Ombudsman and from 2012 to 2018 he worked as Financial Counsellor of the Spanish Embassy to the United Kingdom. José Manuel is serving and has served as director in the Board of several corporations and is author of many publications in his areas of expertise.

Rafael Gil Nievas (Deputy Head of the International Arbitration Department of the General Attorney´s Office, Department of Justice of the Kingdom of Spain)

Rafael has more than 20 years of legal professional experience. He has the Madrid and NY Bar certifications and is graduated with honors by Columbia Law School (Harlan Fiske Stone academic honors) and by Universidad Complutense de Madrid and he is also a diplomat by Harvard Law School in Negotiation, Mediation and Controversies Resolution. Before joining the Spain’s Arbitration team, Rafael has been in private practice for years where he has also represented corporations in many commercial and investment disputes. He has lived in different countries where he has been chief legal officer of a multinational and legal director in one of the largest electricity companies in the world. He has also been Counselor of Justice in the EU where he participated in the negotiation of the Lisbon Treaty, investment treaties or many regulations such as the Rome I, Rome II and Company Law and Financial Regulations. Rafael was appointed chair of the EU Civil Law Committee and of the special group created by the Council of the EU to assess the legal respects of the Financial and Economic crisis. He has participated in many international negotiations being Spain’s representative in the Hague Conference of International Law. Currently he is a Spain’s delegate for the ICSID and Energy Charter Treaty modernization efforts. Rafael is serving and has served as director in the Board of several corporations.

María del Socorro Garrido Moreno (Deputy Head of the International Arbitration Department of the General Attorney’s Office, Department of Justice of the Kingdom of Spain)

Socorro has wide experience in arbitration proceedings of all kinds, from renewable energy to bank resolutions, where she has acted mainly in charge of legal regulatory aspects.  Throughout her professional career, she has specialized in both litigation and legal advice. She worked for several years as a deputy attorney on State Department of labor law, as well as in the Ministry of Economy and the Ministry of Justice mastering in I+D+i, public grants, and public procurements areas, and also advising multiple public entities. Socorro has authored numerous publications in her areas of expertise.

Alberto Torró Molés (Deputy Head of the International Arbitration Department of the General Attorney’s Office, Department of Justice of the Kingdom of Spain).

Alberto is State Attorney since 2015. He joined the International Arbitration Department in 2019, where he is involved in the representation of the Kingdom of Spain in investment arbitration cases (ICSID, SCC and UNCITRAL)

Pablo Elena Abad has a Law degree as well as a degree in Business Administration from Universidad Pontificia Comillas. After a short period of time at a top-tier Madrid law firm, he became State Attorney in 2013. Since then, he has acted as State Attorney in the Balearic Islands and as deputy-head of the Labor and Employment Department in the State Attorney’s Office – State Legal Service. He joined the International Arbitration Department in November 2018.

Elena Oñoro Sainz is a State Tax Inspector acting as counsel for Spain in investment arbitrations since she joined the Arbitration Department of the State Attorney’s Office in 2014. Prior to that she has worked as a lawyer at Freshfields Bruckhaus Deringer and held various positions in the Spanish Administration such as head of area of tax management of the Regional Unit of the Balearic Islands of the State Agency for Tax Administration, member of the Regional Economic-Administrative Tribunal of Madrid and head of tax advice of the cabinet of the Spanish Secretary of State for Finance.

Gabriela Cerdeiras Megías is a State Attorney since 2018. Her first assignment was at the State Attorney’s Office in Valencia, representing the Spanish Administration in all jurisdictions. In 2020 she joined the International Arbitration Department at the State Attorney’s Office in Madrid, where she is involved in the representation of the Kingdom of Spain in investment arbitration cases.

Lourdes Martínez de Victoria Gómez is a State Attorney since 2019. She joined the International Arbitration Department in 2020 after working at the State Attorney’s Office in Cádiz. She is now involved in investment arbitration cases representing the Kingdom of Spain. She holds a double degree in Business Administration and Law from ICADE.

Lorena Fatás Pérez is one of the team’s recent members. She joined the State’s Attorney Office in January 2018 and has been a member of the Board of Directors of Port Castelló. Previously, she worked for Uría Menéndez. Lorena regularly represents the Kingdom of Spain in investor-state disputes regarding the Energy Charter Treaty and collaborates in the coordination of enforcement procedures before australian and american courts.

Ana Fernandez-Daza Álvarez is a State Tax Inspector and a Senior Auditor in the Court of Auditors, who joined the team in 2020. She earned degrees in Economic Sciences and Business Studies from CUNEF and Law from UNED and obtained a Master Degree in Public Administration from IEF and EOI.  Ana has held various positions of responsibility within the Spanish Tax Administration Agency like General Director of Tax Collection when she participated in drafting and negotiating tax reforms. She has been the Financial Counselor at the Embassy of Spain in Washington DC since 2015 to 2020.

For more information on the Kingdom of Spain’s investment arbitration practice, click here.

Congratulations to the team again, and Jus Mundi wishes them good luck for the future!