Request for Arbitration Submitted against Spain

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.

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.

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.

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.

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.

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).

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.