NEWS RELEASE | 28 May
2024
Submission of Request for Arbitration initiates Arbitration
Proceedings against Spain
Berkeley Energia Limited
(Berkeley) advises that its
wholly owned subsidiary, Berkeley Exploration Limited (BEL), has now filed a Request for
Arbitration (Request) for
its investments in Spain through its Spanish subsidiary, Berkeley
Minera España SA (BME),
initiating arbitration proceedings against the Kingdom of Spain
(Spain) before the
International Centre for Settlement of Investment Disputes
(ICSID).
Spain's actions against BME and the
Salamanca project have violated multiple provisions of the Energy
Charter Treaty (ECT) and as
part of its Request, BEL is seeking preliminary compensation in the
order of US$1 billion (US$1,000,000,000) for these
violations.
As previously announced, in November
2022, BEL submitted a written notification of an investment dispute
to the Prime Minister of Spain and the Ministry for the Ecological
Transition and the Demographic Challenge (MITECO) informing them of the nature of
the dispute and the ECT breaches, and that it proposed to seek
prompt negotiations for an amicable solution pursuant to article
26.1 of the ECT. To date, the Spanish government has still not
engaged in any discussions related to the dispute and BEL has now
filed its Request in order to enforce its rights at the Salamanca
project through international arbitration. The Request has jointly been submitted by specialist teams at
Herbert Smith Freehills Spain LLP and LCS Abogados who will
represent BEL in the arbitration proceedings.
Notwithstanding the investment
dispute, BEL remains committed to the Salamanca project and
continues to be open to a constructive dialogue with Spain. BEL is
ready to collaborate with the relevant Spanish authorities to find
an amicable resolution to the permitting situation and remains
hopeful discussions can take place in the near term.
In the next phase of proceedings,
tribunal members will be selected and appointed, and thereby
formally establishing the tribunal.
Berkeley will provide a further
update on the arbitration proceedings as required.
Classification: 2.2 This announcement contains inside
information
For
further information please contact:
Robert
Behets
Francisco
Bellón
Acting Managing
Director
Chief operating Officer
+61 8 9322
6322
+34 923 193
903
info@berkeleyenergia.com
BACKGROUND TO THE DISPUTE
In April 2021, the Spanish
Government approved an amendment to the draft climate change and
energy transition bill relating to the investigation and
exploitation of radioactive minerals (e.g. uranium). The Government
reviewed and approved the amendment to Article 10 under which: (i)
new applications for exploration, investigation and direct
exploitation concessions for radioactive materials, and their
extensions, would not be accepted following the entry into force of
this law; and (ii) existing concessions, and open proceedings and
applications related to these, would continue as per normal based
on the previous legislation. The new law was published in the
Official Spanish State Gazette and came into effect in May
2021.
BEL's wholly owned subsidiary, BME
currently holds legal, valid and consolidated rights for the
investigation and exploitation of its mining projects, including
the 30-year mining licence (renewable for two further periods of 30
years) for the Salamanca project, however any new proceedings
opened by BME is now not allowed under the aforementioned new
law.
In November 2021, BME received
formal notification from MITECO that it had rejected NSC II at the
Salamanca project following and unfavourable report for the grant
of NSC II issued by the Board of the Nuclear Safety
Council (NSC) in July
2021.
BEL strongly refutes the NSC's
assessment and, in its opinion, the NSC adopted an arbitrary
decision with the technical issues used as justification to issue
the unfavourable report lacking in both technical and legal
support.
BME submitted documentation,
including an 'Improvement Report' to supplement the its initial NSC
II application, along with the corresponding arguments that address
all the issues raised by the NSC, and a request for its
reassessment by the NSC, to MITECO in July 2021.
Further documentation was submitted
to MITECO in August 2021, in which BME, with strongly supported
arguments, dismantled all of the technical issues used by the NSC
as justification to issue the unfavourable report. BME again
restated that the project is compliant with all requirements for
NSC II to be awarded and requested its NSC II Application be
reassessed by the NSC.
In addition, BME requested from
MITECO access to the files associated with the Authorisation for
Construction and Authorisation for Dismantling and Closure for the
radioactive facilities at La Haba (Badajoz) and Saelices
El Chico (Salamanca), which are owned by ENUSA Industrias
Avandas S.A., in order to verify and contrast the conditions
approved by the competent administrative and regulatory bodies for
other similar uranium projects in Spain.
Based on a detailed comparison of
the different licensing files undertaken by the BME following
receipt of these files, it is clear that BME, in its NSC II
submission, has been required to provide information that does not
correspond to: (i) the regulatory framework, (ii) the scope of the
current procedural stage (i.e., at the NSC II stage), and/or (iii)
the criteria applied in other licensing processes for similar
radioactive facilities). Accordingly, BEL considers that the NSC
has acted in a discriminatory and arbitrary manner when assessing
the NSC II application for the Salamanca project.
In BEL's strong opinion, MITECO has
rejected the BME's NSC II Application without following the legally
established procedure, as the Improvement Report has not been taken
into account and sent to the NSC for its assessment, as requested
on multiple occasions by BME.
In this regard, the BEL believes
that MITECO have infringed regulations on administrative procedures
in Spain but also under protection afforded to BEL under the ECT,
which would imply that the decision on the rejection of BME's NSC
II Application is not legal.
In April 2023, BME submitted a
contentious-administrative appeal before the Spanish National Court
in an attempt to overturn the MITECO decision denying NSC
II.
Further, BME also received formal
notifications in December 2023 which upheld appeals submitted by a
non-governmental organisation, Plataforma Stop Uranio, and the city
council of Villavieja de Yeltes (the appellants) to revoke the first
instance judgements related to the Authorisation of Exceptional
Land Use (AEUL) and the
Urbanism License (UL),
which annuled both the AEUL and UL
The AEUL and the UL were granted to
BME in July 2017 and August 2020 by the Regional Commission of
Environment and Urbanism, and the Municipality of Retortillo
respectively (Regional
Government).
The appellants subsequently filed
administrative appeals against the AEUL and the UL at the first
instance courts in Salamanca. The administrative appeals against
the AEUL and UL were dismissed in September 2022 and January 2023
respectively.
One of the appellants subsequently
lodged appeals before the High Court of Justice of Castilla y León
(TSJ), with the TSJ
delivering judgements in December 2023 to revoke the first instance
judgements and declare the AEUL and the UL null.
BME strongly disagrees with the
fundamentals of the TSJ's judgement and having submitted cassation
appeals against the TSJ judgements before the Spanish Supreme
Court, BME withdrew the appeals to preserve BEL's rights under
international arbitration.
The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.