Japanese investor wins damages over Spanish solar reforms

An ICSID tribunal has ordered Spain to pay a Japanese investor over €23.5 million plus interest and costs after finding that changes to the state’s renewable energy regime frustrated its legitimate expectations.  

A tribunal consisting of Korea’s Hi-Taek Shin as chair, Austrian academic August Reinisch and Argentine academic Mónica Pinto issued the final award on 9 November in favour of JGC Holdings. The investor had sought up to €161 million plus interest.

It follows a decision in May in which the tribunal unanimously found that changes to Spain’s remuneration regime for solar power producers introduced from mid-2013 onwards breached the Energy Charter Treaty’s fair and equitable treatment standard.

Shin and Reinisch (who was appointed after JGC’s original appointee Rudolf Dolzer of Germany passed away last year) also formed a majority in concluding that additional changes introduced between 2012 and mid-2013 also breached the same ECT standard. Pinto dissented.

The tribunal unanimously declined jurisdiction over claims relating to a 7% charge on electric power production, which it said fell within a carve-out for tax measures in the ECT.

JGC was represented by Cuatrecasas in Madrid and Nagashima Ohno & Tsunematsu in Tokyo. As with most of its renewables cases, Spain was represented by government lawyers at its Abogacía General del Estado.

JGC invested in two concentrated solar power plants near Córdoba, in the Andalusia region of southern Spain, in 2010. It launched the ICSID claim in 2015, one of numerous investors to bring claims in response to measures adopted by Spain to combat a mounting electricity tariff deficit.

Spain initially contested the tribunal’s jurisdiction on the basis of the European Court of Justice’s ruling on intra-EU investment arbitration in Achmea – despite the fact JGC is not from the EU. The state withdrew the objection after the ECJ ruled in 2019 that the ISDS provisions in the EU’s trade agreement with Canada were compatible with EU law.

A six-day hearing on jurisdiction and merits took place in Paris in 2018. Last year, Shin and Pinto rejected Spain’s bid to disqualify Reinisch following his appointment to replace Dolzer.

In its May decision, the tribunal rejected Spain’s arguments that a decision of its Supreme Court meant that JGC should have been aware of the possibility of sweeping changes to the regulatory regime. A due diligence report on the project by Clifford Chance alerted JGC to possible amendments but not to a change of paradigm, it said.

The tribunal said the ECT requires states to maintain the fundamental stability of a regulatory regime and avoid overturning its essential characteristics. It concluded that regulatory changes introduced from mid-2013 to 2014 radically altered the regime and frustrated JGC’s legitimate expectations.

The majority also found this was the case for measures dating from 2012 when the Spanish government stepped up efforts which ultimately dismantled the feed-in remuneration scheme. The changes were not just marginal in nature, it said.

On quantum, the tribunal concluded it would use a valuation date of June 2014 and a discounted cashflow method as proposed by JGC’s experts, Compass Lexecon, subject to corrections.

Spain was ordered to pay JGC 25% of the total cost of the arbitration and 40% of its legal fees and costs. The tribunal granted pre-award interest at a rate of nearly 2.75%, with post-award interest of 1.6% compounded monthly.



JGC Holdings Corporation (formerly JGC Corporation) v. Kingdom of Spain (ICSID Case No. ARB/15/27)


  • Hi-Taek Shin (Korea) (chair) (appointed by the ICSID secretary-general)
  • Mónica Pinto (Argentina) (appointed by Spain)
  • August Reinisch (Austria) (appointed by JGC)*

*appointed following the passing away of Rudolf Dolzer (Germany) on 3 April 2020

Secretary of the tribunal

  • Mercedes Cordido-Freytes de Kurowski

Counsel to JGC

  • Cuatrecasas Gonçalves Pereira

Alberto Fortún Costea, Luis Pérez de Ayala, José Ángel Rueda García, Antonio Delgado Camprubí, Borja Álvarez Sanz, Antonio María Hierro Viéitez, Gustavo Mata Morreo, José Ángel Sánchez Villegas, Ana Martínez Valls and Elisa Salcedo Sanchez in Madrid

  • Nagashima Ohno & Tsunematsu

Yoshimi Ohara in Tokyo

Counsel to Spain

  • Abogacía General del Estado

José Manuel Gutiérrez Delgado, Gabriela Cerdeiras Megías, José Luis Gómara Hernández, Lorena Fatas Pérez, Antolín Fernández Antuña, Roberto Fernández Castilla, Ana Fernández-Daza Alvarez, Patricia Froehlingsdorf Nicolas, María del Socorro Garrido Moreno, Rafael Gil Nievas, Lourdes Martínez de Victoria Gómez, Elena Oñoro Sainz, Amaia Rivas Kortazar, Mariano Rojo Pérez, María José Ruiz Sánchez, Diego Santacruz Descartin and Alberto Torró Molés in Madrid

Expert witnesses for JGC

  • Compass Lexecon

Jorge Padilla, Alejandro Requejo, Antón García, Rui Pratinha and Ria Abichandani

  • Fichtner

Johannes Daniel Kretschmann

  • OCA Global (formerly at Diseprosa)

Juan María Castillo and Alberto Saavedra

Expert witnesses for Spain

  • Econ One Research

Daniel Flores, Juan Riveros and José Díaz

  • STA

Jorge Servert

  • Marcos Vaquer and María José Santos of the Universidad Carlos III de Madrid





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