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

Filed

Czechia

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A tax advantage is a fiscal incentive where the government reduces or exempts selected activities, goods or actors from taxes.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

A policy instrument designed to support the development and acceleration of renewable energy sources by providing a guaranteed, above-market price for producers.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Actions to reduce emissions in energy generation and supply.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

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

Production of electricity and heat from solar irradiation.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

People with different national or cultural traditions from the dominant population

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector involves managing waste treatment, sanitation, pollution control and environmental cleanup.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

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

Policy instrument

Impacted group

Just transition

Renewable energy

Fossil fuel

Economic sector

Finance