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Antaris Solar GmbH and Dr. Michael Göde v. The Czech Republic - judgment

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Antaris Solar GmbH and Dr. Michael Göde v. The Czech Republic - opinion

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The arbitration case involved Antaris GmbH, a German commercial company, and Dr. Michael Gode ("Claimants") against the Czech Republic ("Respondent"). The Claimants filed a claim against the Czech Republic concerning alleged violations of the Energy Charter Treaty (ECT) and the bilateral investment treaty between Germany and the Czech and Slovak Federal Republic, signed on October 2, 1990. Specifically, they argued that legislative changes made by the Respondent—specifically, measures introduced by the Czech government to address the financial burden caused by the solar energy boom—negatively impacted their investments in photovoltaic power plants. These changes included the implementation of the Solar Levy, which was a tax imposed on solar installations receiving excessive feed-in tariffs (FiTs), and the removal of the 5% cap on the reduction of FiTs for solar plants connected to the grid from 2011 onward. The Respondent argued these changes were necessary due to - among other things - concernd over state aid rules under EU law.

Consequently, the Claimants requesed that the Tribunal issued a declaration stating that the Respondent's actions constitute unfair treatment in violation of the ECT and the German BIT; they also sought compensation for losses incurred due to these breaches. The Respondent, in turn, requests the dismissal of all claims on the grounds including of lack of jurisdiction over taxation measures under the ECT.

The Tribunal found that Solar Levy did not qualify as a taxation measure under Czech law or within the meaning of Article 21(7) ECT. Despite being administered like a tax and titled 'levy', substantial considerations suggest otherwise. The Tribunal found no requirement for an express stabilisation provision to establish a legitimate expectation. However, it concluded that investors should have been aware that dealing with the solar boom was a fast-moving political issue and legislative changes were possible. Finally, three-quarters of arbitration costs should be borne by Claimants while Respondent should be awarded legal costs. All claims made by Claimants were dismissed, and they were ordered to pay within 28 days a sum of US$1.75 million and GBP 178,125.50 to the Respondent.

Antaris Solar GmbH and Dr. Michael Göde v. The Czech Republic

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Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

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Antaris Solar GmbH and Dr. Michael Göde v. The Czech Republic - judgment

Target

Policy instrument

Just transition

Renewable energy

Fossil fuel

Economic sector

Finance