The decision on jurisdiction, liability and, quantum in Cavalum v. Spain , rendered on 31 August 2020, is yet another case arising out of changes to the renewable energy regime in Spain. In 2016, Cavalum (the claimant) initiated an investment claim against Spain under the Energy Charter Treaty (ECT), arguing that the value of its investments had been destroyed because of the State’s modification of the regulatory regime. The claimant alleged that Spain had violated the fair and equitable treatment (FET) standard under Article 10(1) ECT by: (1) frustrating its legitimate expectations; (2) altering the investment framework in a fundamental manner; (3) treating the investor non-transparently, inconsistently and, in bad faith. In this blog, I discuss the tribunal’s assessment of the legitimate expectations based on the stability of a regulatory framework with the focus on the role of an investor’s due diligence.
- Renewable energy ICSID case
- The legitimate expectations based on the stability of a regulatory framework
- Focus on an investor’s due diligence
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This blog was published in Investment & Commercial Arbitration Review.