REG - Berkeley Energia - Request for Arbitration Submitted against Spain

Berkeley EnergiaAnnouncement

28/05/2024 08:00

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RNS Number : 0689Q  Berkeley Energia Limited  28 May 2024

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 (mailto: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.

 

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