STATUS OF INVESTMENT ARBITRATION IN THE RENEWABLE ENERGY SECTOR IN SPAIN

Between 2004 and 2007, the Kingdom of Spain enacted an attractive tax and legal framework to promote foreign investment in the renewable energy sector, which generated a significant flow of foreign capital. However, since 2008, the energy sector suffered a financial déficit and the incentives previously established were gradually reduced by Spanish authorities. By 2013, the incentives had been entirely removed, leading to an economic impact on foreign investment. Foreign investors who suffered losses as a result of the regulatory measures brought multiple investment claims against the Kingdom of Spain before the International Centre for Settlement of Investment Disputes (ICSID) and other arbitral institutions, based on the provisions of the Energy Charter Treaty. This document analyzes the complexities, factual issues, and legal implications surrounding the ‘Spanish saga’ cases and seeks to clarify the prospects for international investment law within the European Union.