Abengoa, on the day of a key shareholders meeting, has lost its award on renewables for 1,180 million against Spain, just when the engineering group is asking the country for help. This is the verdict of the Arbitration Institute of the Stockholm Chamber of Commerce, according to financial sources. It is one of the key arbitration bodies in resolving disputes over renewables in Spain as a result of the 2013 change in legislation.
The fronts that Abengoa has open are multiple. The most important is the rescue process, which has been in suspense since the summer of last year, but there is another that will be resolved faster: the dispute with Spain on account of the 2013 regulation, in which incentives for renewable energies were reduced .
The Government of Mariano Rajoy, with a certainly complicated situation from the budgetary point of view, decided to replace the green energy premium system with another with a guaranteed minimum profitability of 7.398%. In June 2013, Abengoa submitted the request for arbitration for six solar thermal plants.
The company then enlisted the services of the Cuatrecasas law firm to fight the case. The State Bar, meanwhile, represented Spain. Abengoa did not accept the improved guaranteed remuneration in 2019 in exchange for not claiming and preferred to proceed with the arbitration. This Tuesday it was known that, at least in this instance, he has lost the battle.
Other companies also agreed to go to specialized organizations to discern who is right: the investor or the country. The verdicts, which in any case can be appealed, have been for all tastes throughout this time.
Precisely, last March, the Stockholm Chamber of Arbitration Institute – the same one that will rule on the Abengoa case – rejected that the Freif fund, which was bought by BlackRock in 2017, has to be compensated with 124 million euros for the cutback to renewables in Spain. The agency has also ordered the fund to pay 2.7 million euros for legal costs.
On the other hand, in September of last year it was known that Spain partially lost another of the awards of the half thousand arbitrations presented by investors affected by the cut in renewables. It was due to a claim presented by the Portuguese Cavalum SGPS before the ICSID (arbitration body of the World Bank) against Spain.
The number of claims against Spain initially amounted to 50 for about 10 billion euros. The first two decisions on these disputes were favorable to Spain, but later there was a barrage of resolutions contrary to its interests. The good news for the country is that claimants’ compensation expectations are significantly reduced, around 60%, once the amount is agreed.