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Are Market Competition and Investment Protection Incompatible in the EU Energy Sector?

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International Investment Law and Competition Law

Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

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Abstract

The chapter explores the interface between international investment law and EU competition law in the realm of renewable energy disputes. It underscores recent developments in the configuration of European Union (EU) investment policy and unveils the intricacies of the EU state aid regime. At the centre of this critical analysis lies the legal nature of the Energy Charter Treaty (ECT) as an international investment agreement. Whereas the Commission’s role in international investment law has increased over the last years, internal factors impede the development of an authentic EU investment policy. The chapter examines jointly the evolution of the case law of arbitral investment tribunals, the Court of Justice of the European Union (CJEU) and the European Commission’s position on intra-EU investment treaties and state aid in the energy sector.

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Notes

  1. 1.

    Decision of the European Commission C(2017) 7384 final, State Aid SA.40348 (2015/NN)—Spain, Support for electricity generation from renewable energy sources, cogeneration and waste, 10 November 2017.

  2. 2.

    See, for instance, Novenergia II—Energy & Environment (SCA) (Grand Duchy of Luxembourg), SICAR v. The Kingdom of Spain, SCC Case No. 2015/063. Proposed Brief of the European Commission on Behalf of the European Union as Amicus Curiae in Support of the Respondent, Novenergia II v Kingdom of Spain, US District Court for the District of Columbia, 28 February 2019. This brief contains a special reference to the Achmea Decision at page 2.

  3. 3.

    CJEU, Achmea, C-284/16, ECLI:EU:C:2018:158.

  4. 4.

    Ibid, para. 57.

  5. 5.

    To illustrate, in Spain, the national courts (Constitutional Court and Supreme Court) confirmed the legality of the reforms leaving the claimants empty-handed. See the rulings issued in 2018.

  6. 6.

    E.g. Declaration of the Member States of 15 January 2019 on the legal consequences of the Achmea judgment and on investment protection, available at https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/190117-bilateral-investment-treaties_en.pdf accessed 15 May 2019.

  7. 7.

    Declaration of the Member States of 15 January 2019 on the legal consequences of the Achmea judgment and on investment protection, available at https://ec.europa.eu/info/sites/info/files/business_economy_euro/banking_and_finance/documents/190117-bilateral-investment-treaties_en.pdf accessed 15 May 2019.

  8. 8.

    Talus (2015).

  9. 9.

    Lavranos (2018).

  10. 10.

    Ioan Micula, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. Claimants v. Romania Respondent, ICSID Case No. ARB/05/20, 11 December 2013.

  11. 11.

    State aid SA.38517(2014/C) (ex 2014/NN)—Romania. Implementation of Arbitral award Micula v Romania of 11 December 2013.

  12. 12.

    Ibid, para. 71.

  13. 13.

    Commission Decision (EU) 2015/1470 of 30 March 2015 on State aid SA.38517 (2014/C) (ex 2014/NN).

  14. 14.

    Ioan Micula, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, 11 December 2013, para. 308.

  15. 15.

    General Court, Cases T 624/15, T 694/15 and T 704/15, Judgment of 18 June 2019, Spain and Hungary intervened to support the Commission’s arguments (Micula Judgement).

  16. 16.

    Micula Judgement, paras 59–93.

  17. 17.

    Micula Judgement, paras 94–111.

  18. 18.

    Micula Judgement, para. 103.

  19. 19.

    Micula Judgement, para. 107.

  20. 20.

    Achmea B.V. v. Slovak Republic, PCA Case No. 2008-13, Award, 7 December 2012, para. 295.

  21. 21.

    Achmea B.V. v. Slovak Republic, PCA Case No. 2008-13, Award, 7 December 2012, B. The Tribunal’s Decision on Damages, paras 319–334.

  22. 22.

    Achmea B.V. v. Slovak Republic, PCA Case No. 2008-13, Award, 7 December 2012.

  23. 23.

    Selivanova (2018).

  24. 24.

    Charanne and Construction Investments v. Spain, SCC Case No. V 062/2012, Award, 21 January 2016.

  25. 25.

    Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Spain, ICSID Case No. ARB/13/36, Award, 4 May 2017.

  26. 26.

    Isolux Netherlands, BV v. Kingdom of Spain, SCC Case V2013/153, Award, 17 July 2016.

  27. 27.

    Blusun S.A., Jean-Pierre Lecorcier and Michael Stein v. Italian Republic, ICSID Case No. ARB/14/3, Award, 27 December 2016.

  28. 28.

    Novenergia II—Energy & Environment (SCA) (Grand Duchy of Luxembourg), SICAR v. The Kingdom of Spain, SCC Case No. 2015/063, Award, 25 February 2018.

  29. 29.

    Antin Infrastructure Services Luxembourg S.à.r.l. and Antin Energia Termosolar B.V. v. Kingdom of Spain, ICSID Case No. ARB/13/31.

  30. 30.

    Masdar Solar & Wind Cooperatief U.A. v. Kingdom of Spain, ICSID Case No. ARB/14/1.

  31. 31.

    On 31 December 2014, the Italian Republic notified the Depository of the ECT, its withdrawal from the treaty. According to the Article 47, para. 2 of the ECT (sunset clause), any such withdrawal shall take effect upon the expiry of one year after the date of the receipt of the notification by the Depositary. Accordingly, the withdrawal from the ECT by Italy became effective on the 1st January 2016.

  32. 32.

    Leal Arcas (2018).

  33. 33.

    Selivanova (2018) and Alvarez (2018).

  34. 34.

    Alvarez (2018).

  35. 35.

    AES Summit Generation Limited and AES-Tisza Erömü Kft v. Hungary, ICSID Case No. ARB/07/22, Award 23 September 2010.

  36. 36.

    Electrabel S.A. v. Hungary, ICSID Case No. ARB/07/19, Award, 25 November 2015.

  37. 37.

    AES Summit Generation Limited and AES-Tisza Erömü Kft v. Hungary, Expert Opinion of Professor Piet Eeckhout, ICSID Case No. ARB/07/22, 30 October 2008.

  38. 38.

    AES Summit Generation Limited and AES-Tisza Erömü Kft v. Hungary, Expert Opinion of Professor Piet Eeckhout, ICSID Case No. ARB/07/22, 30 October 2008.

  39. 39.

    More than thirty cases are still pending against Spain.

  40. 40.

    Real Decreto 1565/2010, Real Decreto Ley 9/2013, Real Decreto 413/2014 and Orden IET/1045/2014.

  41. 41.

    CJEU, Achmea, C-284/16, ECLI:EU:C:2018:158, paras 56 and 57.

  42. 42.

    Charanne and Construction Investments v. Spain, SCC Case No. V 062/2012, Award, 21 January 2016, para. 490.

  43. 43.

    Charanne and Construction Investments v. Spain, SCC Case No. V 062/2012, Award, 21 January 2016, paras 487 and 488.

  44. 44.

    Eiser Infrastructure Limited and Energía Solar Luxembourg S.à r.l. v. Spain, ICSID Case No. ARB/13/36, Award, 4 May 2017, para. 363.

  45. 45.

    Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV v. Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, paras 363–386.

  46. 46.

    Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV v. Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 363.

  47. 47.

    Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV v. Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 565.

  48. 48.

    Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV v. Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 409.

  49. 49.

    Antin Infrastructure Services Luxembourg Sàrl and Antin Energia Termosolar BV v. Spain, ICSID Case No. ARB/13/31, Award, 15 June 2018, para. 567.

  50. 50.

    Carducci (2018).

  51. 51.

    Carducci (2018).

  52. 52.

    Alvarez (2018).

  53. 53.

    Johnston and Block (2012). CJEU, Case C-490/10, EP v. Council, 6 September 2012.

  54. 54.

    Leal Arcas et al. (2016).

  55. 55.

    Council Regulation No 994/98 of 7 May 1998, amended by Council Regulation No 733/2013 of 22 July 2013.

  56. 56.

    Communication from the Commission—Guidelines on state aid for environmental protection and energy 2014–2020, OJ C 200, 28.6.2014, pp. 1–55.

  57. 57.

    UK state aid to nuclear energy concerning Hinkley Point C. On 12 July 2018, the General Court dismissed an action by Austria and Luxembourg that challenged the EC’s decision. Judgment in Case T-356/, Austria v. Commission.

  58. 58.

    CJEU, PreussenElektra AG v. Schleswag AG (2001) C-379/98.

  59. 59.

    Case C-573/12, Ålands Vindkraft AB, Judgment of the Court (Grand Chamber) of 1 July 2014, Ålands vindkraft AB v. Energimyndigheten.

  60. 60.

    1/1, C-204/12—Essent Belgium, Essent Belgium NV v. Vlaamse Reguleringsinstantie voor de Elektriciteits- en Gasmarkt. 11 September 2014.

  61. 61.

    Jones (2016).

  62. 62.

    Scholz and Vohwinkel (2017).

  63. 63.

    Authorisation for State aid pursuant to Articles 107 and 108 of the Treaty on the Functioning of the European Union. Cases where the Commission raises no objections (Text with EEA relevance, except for products falling under Annex I of the Treaty) (2017/C 442/02). Official Journal of the European Union, C 442, 22 December 2017.

  64. 64.

    Directive 2000/60/EC of the European Parliament and the Council of 23 October 2000.

  65. 65.

    Decision 2017/C 442, para. 152.

  66. 66.

    Directive 2008/98/EC on waste (Waste Framework Directive) of 19 November 2008.

  67. 67.

    Decision 2017/C 442, para. 153.

  68. 68.

    Decision 2017/C 442, 3.5.1, Assessment of State aid to existing installations, para. 154.

  69. 69.

    Decision 2017/C 442, 3.5.1. Comments of third parties and compliance with other EU law, para. 157.

  70. 70.

    European Commission. Energy law. SA.40348 Support for electricity generation from renewable energy sources, cogeneration and waste. Member state: Spain.

  71. 71.

    Sector: D.35.11—Production of electricity. Aid instrument: Direct grant. Scheme. Duration: From 11.06.2014 to 10.06.2024, 3.4.8. Compliance with environmental legislation.

  72. 72.

    Decision 2017/C 442, para. 155.

  73. 73.

    Decision 2017/C 442, para. 156.

  74. 74.

    Decision 2017/C 442, 3.6. Evaluation. para. 167.

  75. 75.

    Decision 2017/C 442, para. 168.

  76. 76.

    Decision 2017/C 442, para. 169.

  77. 77.

    Decision 2017/C 442, para. 170.

  78. 78.

    Decision 2017/C 442, para. 171.

  79. 79.

    Decision 2017/C 442, para. 172.

  80. 80.

    CJEU, Opinion of Advocate General Wahl in Kotnik, C-526/14, ECLI:EU:C:2016:102, para. 79. See also to that effect Order in Milchindustrie-Verband e.V. und Deutscher Raiffeisenverband e.V. v. Commission, T-670/14, EU:T:2015:906, para. 29.

  81. 81.

    Decision 2017/C 442, 3.5.2. General principles of Union law of legal certainty and legitimate expectations.

  82. 82.

    Decision 2017/C 442, para. 157.

  83. 83.

    Decision 2017/C 442, para. 158. In the very specific situation of the present case.

  84. 84.

    Case C-24/95, paras 13 and 14 and Judgment in case C-169/95, Spain v. Commission EU:C:1997:10. (paras 13 and 14); see also the Judgment in case C-169/9, Spain v. Commission EU:C:1997:10. EU:C:1997:163, para. 25.

  85. 85.

    Decision 2017/C 442, 3.5.3, para. 159.

  86. 86.

    Electrabel S.A. v. Hungary, ICSID Case No. ARB/07/19, Award, 25 November 2015; EDF v. Romania, ARB/05/13, Award, 8 October 2008, paras 279 to 283; Al Bahloul v. Tajikistan, SCC/64/2008, Award, 8 June 2010, paras 221 to 225; ADF Group v. United States of America, ARB(AF)/00/1, Award, 9 January 2003, para. 189.

  87. 87.

    In particular Articles 49, 52, 56, and 63 TFEU), as well as Articles 64(2), 65(1), 66, 75, 107, 108,65 215, 267 and Article 344 TFEU.

  88. 88.

    See, in particular, Articles 49, 52, 56, and 63 TFEU, as well as Articles 64(2), 65(1), 66, 75 and 215 TFEU.

  89. 89.

    Concerning the implementation of Articles 107 and 108 TFEU, see Decision (EU) 2015/1470 of the Commission of 30 March 2015 on state aid SA.38517 (2014/C) (ex 2014/NN) implemented by Romania—Arbitral award of 11 December 2013 in Micula v. Romania (OJ L 232 of 4.9.2015, p. 43). CJEU, Opinion 2/13, paras 168, 191, 194 and 258 first indent.

  90. 90.

    Ioan Micula, Viorel Micula, S.C. European Food S.A., S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, 11 December 2013, para. 317.

  91. 91.

    Decision 2017/C 442, para. 162. See Case C-370/12, Pringle EU:C:2012:756, paras 100 and 101. Cases C-249/06, Commission v. Sweden EU:C:2009:119, para. 42; C-205/06, Commission v. Austria EU:C:2009:118, para. 42; and Case C-118/07, Commission v. Finland EU:C:2009:715, para. 33. See also Case C-471/98, Commission v. Belgium (Open Skies) EU:C:2002:628, paras 137 to 142; and Opinion 2/13, paras 198, 199 and 208.

  92. 92.

    Decision 2017/C 442, para. 163.

  93. 93.

    Decision 2017/C 442, para. 158.

  94. 94.

    Decision 2017/C 442, para. 162.

  95. 95.

    Decision 2017/C 442, para. 164.

  96. 96.

    Decision 2017/C 442, para. 164.

  97. 97.

    Decision 2017/C 442, para. 164.

  98. 98.

    Decision 2017/C 442, para. 166.

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  1. Kingston University, London, UK

    Belen Olmos Giupponi

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  1. Law School, University of Zaragoza, Zaragoza, Spain

    Katia Fach Gómez

  2. Athens Public International Law Center, National and Kapodistrian University of Athens, Athens, Greece

    Anastasios Gourgourinis

  3. French National Centre for Scientific Research (CNRS)-CERSA, University Paris II Panthéon-Assas, Paris, France

    Catharine Titi

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Olmos Giupponi, B. (2020). Are Market Competition and Investment Protection Incompatible in the EU Energy Sector?. In: Fach Gómez, K., Gourgourinis, A., Titi, C. (eds) International Investment Law and Competition Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-33916-6_6

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