Recently, on September 29th 2020, the German Constitutional Court (BVerfG) ruled in a new constitutional complaint procedure initiated i.a. by Vattenfall AB, that may have influence on the decision in the pending ICSID proceeding.
We remember: Because of the reactor accident in Fukushima, Japan, in 2011 the Federal Government of Germany withdrew a service life extension for the 17 German nuclear power plants that had been decided just a few months earlier. Legal bases are amendments of the german law for nuclear plants (Atomgesetz, AtG). By the end of 2022 at the latest, all reactors must be taken offline on fixed dates.
Already in 2016, following lawsuits from E.ON, RWE and Vattenfall, the German Constitutional Court (Bundesverfassungsgericht, BVerfG) ruled that the 13th amendment to the Atomic Energy Act (AtG), which sealed this turnaround, encroached on the fundamental right of ownership because it limited the possibility of use for a time. Among other things, this was disproportionate because it was foreseeable that some of the companies concerned would not be able to use their allocated residual electricity, so the reasoning at the time.
The BVerfG found, that the legal structuring of ownership was permissible in itself, but that it lacked “the constitutionally necessary compensation regulation”. The corporations must therefore be adequately compensated for investments that have become pointless and forfeited production rights. The legislature actually wanted to comply with this with the 16th AtG amendment (not yet in force).
The BVerfG found now that despite the new (16th) amendment of the AtG, this is still contrary to the german constitution and infringes substantial rights of their owners (Decision BvR 1550/19, 29.09.2020). The BVerfG finds, that the Bundesrepublik Deutschland as the legislative body of this law, is “still obliged to make new regulations as soon as possible”, because between other reasons the financial compensation for the affected power plant operators is unreasonably regulated.
The new regulation is unsuitable for remedying the violations of fundamental rights, as the BVerfG has now decided. The 16th AtG amendment had (a) neither come into force (the EU Commission has neither given its approval, nor has the Directorate-General for Competition received a “binding notification”), (b) nor was it sufficient to remedy the fundamental rights violations identified in 2016.
According to the First Senate of the BVerfG, it will not be sufficient to put the 16th AtG amendment into force unchanged, since the violations of the fundamental right of property cannot be remedied by the § 7f para. 1 AtG contained therein.
The arbitration proceeding Vattenfall AB and others against the Federal Republic of Germany, ICSID case no. ARB / 12/12, has been pending at the International Center for the Settlement of Investment Disputes (ICSID) since May 2012.
From November 21st to November 27th 2020 (with the exception of November 26th) oral hearings have taken place in the arbitration proceedings. The negotiations have been broadcasted via internet video stream. The broadcasts of the hearing can be accessed via the following link: https://icsid.worldbank.org/cases/case-database/case-detail?CaseNo=ARB/12/12 (Materials).