Charanne B.V. and Construction Investments S.A.R.L. v. Spain

The case "Charanne B.V. and Construction Investments S.A.R.L. v. Spain" (SCC Case No. 062/2012) involves a dispute under the Energy Charter Treaty (ECT) between the claimants, Charanne B.V. and Construction Investments S.A.R.L., and the respondent, the Kingdom of Spain. The claimants invested in the Spanish renewable energy sector, specifically in photovoltaic plants, based on Spain's regulatory framework that included a ""Feed-In Tariff"" (FIT) regime established by RD 661/07 and RD 1578/08. This regime was intended to incentivize investments by guaranteeing certain tariffs for a minimum of 25 years. The dispute arose when Spain implemented regulatory changes in 2010, which included RD 1565/2010 and RDL 14/2010, altering the FIT regime. The claimants argued that these changes violated their legitimate expectations and the fair and equitable treatment standard under Article 10(1) of the ECT, as they had relied on the stability of the original regulatory framework when making their investments. The tribunal, seated in Madrid and operating under the SCC Arbitration Rules (2010), found in favor of Spain. It concluded that there was no indirect expropriation of the claimants' investments and that the changes did not violate the ECT's fair and equitable treatment standard. The tribunal determined that Spain retained its regulatory power to amend the regime, and the claimants' expectations were not deemed legitimate in the context of the regulatory changes.