AES Solar and others (PV Investors) v. Kingdom of Spain
ICSID · Investment (ICSID and treaty) · Spain · 10 Oct 2014
Why it matters
This case addresses a critical interpretive issue under the Energy Charter Treaty: whether Article 26(7) limits foreign-controlled local companies to ICSID arbitration or allows them to choose UNCITRAL or SCC rules. The dissenting opinion argues that the majority's interpretation is absurd and contrary to the treaty's object and purpose, potentially affecting many investment claims.
Summary
This is a concurring and dissenting opinion by Judge Charles N. Brower regarding a Preliminary Award on Jurisdiction in an investment treaty arbitration under the Energy Charter Treaty (ECT). The dispute involves 88 claimants, of which 62 are Spanish-incorporated companies controlled by nationals of other ECT contracting states. The majority of the tribunal found that it lacked jurisdiction over these 62 claimants because ECT Article 26(7) only allows such foreign-controlled local companies to bring claims under ICSID (or its Additional Facility), not under UNCITRAL or SCC rules. Judge Brower dissents, arguing that the majority's interpretation is wrong. He relies on VCLT Article 31, emphasizing the treaty's object and purpose (promotion and protection of investments) and context, including Understanding 3 in the Final Act, which broadly defines control without limiting arbitration options. He also argues that the majority's reading leads to an absurd result, discriminating among claimants based on the chosen arbitral rules. He examines the travaux préparatoires, particularly a Japanese delegation inquiry, and concludes that Article 26(7) was intended only to ensure compliance with ICSID's nationality requirements, not to restrict access to other arbitration rules. He cites numerous scholars supporting his view. The opinion does not state the final outcome of the case; it only addresses the jurisdictional issue.
The detail
Parties: AES Solar and others (PV Investors) v. Kingdom of Spain
Case number: PCA Case No. 2012-14
Outcome: italaw publishes the concurring and dissenting opinion by judge brower on preliminary award on jurisdiction in PCA Case No. 2012-14. See the original for the operative decision.
Applicable law: Energy Charter Treaty (ECT), Vienna Convention on the Law of Treaties (VCLT), ICSID Convention
Issues in play: Interpretation of ECT Article 26(7) regarding whether foreign-controlled Spanish companies can access UNCITRAL and SCC arbitration, or only ICSID.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.