Pomoc państwa - Bułgaria - Pomoc państwa SA.114457 (2025/NN) - Bułgaria - Orzeczenie arbitrażowe na rzecz ACF Renewable Energy Limited (ICSID w sprawie nr ARB/18/1) - Zaproszenie do zgłaszania uwag zgodnie z art. 108 ust. 2 Traktatu o funkcjonowaniu Unii Europejskiej
POMOC PAŃSTWA - BUŁGARIAPomoc państwa SA.114457 (2025/NN) - Bułgaria - Orzeczenie arbitrażowe na rzecz ACF Renewable Energy Limited (ICSID w sprawie nr ARB/18/1) Zaproszenie do zgłaszania uwag zgodnie z art. 108 ust. 2 Traktatu o funkcjonowaniu Unii Europejskiej(Tekst mający znaczenie dla EOG)(C/2026/1272)
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European Commission
Directorate-General for Competition
State aid Greffe
1049 Bruxelles/Brussel
BELGIQUE/BELGIE
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TEKST STRESZCZENIA
Bułgaria zgłosiła środek w dniu 10 czerwca 2024 r. Władzom bułgarskim przesłano kilka kwestionariuszy, które zostały następnie wypełnione i odesłane.
5 stycznia 2024 r. trybunał arbitrażowy ustanowiony pod auspicjami Międzynarodowego Centrum Rozstrzygania Sporów Inwestycyjnych ("ICSID") wydał orzeczenie arbitrażowe, w którym nakazał Bułgarii wypłacenie ACF Renewable Energy Limited odszkodowania w wysokości 61,04 mln EUR, wraz z odsetkami od tej kwoty oraz wkładem w koszty postępowania arbitrażowego, stwierdzając, że Bułgaria naruszyła Traktat karty energetycznej ("TKE") ("orzeczenie").
ACF Renewable Energy Limited, skarżący w postępowaniu arbitrażowym ACF Renewable Energy Limited przeciwko Republice Bułgarii, które zakończyło się wydaniem orzeczenia, jest spółką zarejestrowaną na podstawie prawa Republiki Malty. W połowie 2012 r. spółka ACF Renewable Energy Limited dokonała inwestycji w bułgarski sektor energii ze źródeł odnawialnych, kupując elektrownię fotowoltaiczną Karadżalowo w drodze nabycia przedsiębiorstwa będącego właścicielem elektrowni. Elektrownia była wówczas beneficjentem systemu wsparcia energii ze źródeł odnawialnych, wdrożonego przez Bułgarię w 2011 r. System ten został zmieniony przez Bułgarię po raz pierwszy w 2013 r., a następnie w latach 2014 i 2015. W 2016 r. Komisja oceniła zmieniony system i pomoc realizowaną w ramach tego systemu, opierając się zarówno na Wytycznych z 2014 r. w sprawie pomocy państwa na ochronę środowiska i cele związane z energią, jak i Wytycznych z 2008 r. w sprawie pomocy państwa na ochronę środowiska, po czym uznała pomoc za zgodną z rynkiem wewnętrznym na podstawie art. 107 ust. 3 lit. c) TFUE i podjęła decyzję o niewnoszeniu zastrzeżeń (sprawa SA.44840).
W postępowaniu arbitrażowym wszczętym przez beneficjenta ACF Renewable Energy Limited przeciwko Bułgarii argumentował on, że zmiany systemu wsparcia energii ze źródeł odnawialnych zmniejszyły prognozowane dochody z elektrowni, w którą zainwestował ACF Renewable Energy Limited, w porównaniu z sytuacją, gdyby zmian tych nie wprowadzono.
Bułgaria stwierdziła, że skutkiem orzeczenia będzie niezgodna z rynkiem wewnętrznym pomoc państwa. Według Bułgarii celem środka jest zrekompensowanie beneficjentowi, ACF Renewable Energy Limited, zmian regulacyjnych, które państwo to wprowadziło w swoim systemie wsparcia energii ze źródeł odnawialnych.
Na obecnym etapie Komisja uważa, że spełnione są kumulatywne kryteria istnienia pomocy państwa i że środek stanowi pomoc państwa.
Bułgaria nie przedstawiła argumentów, które mogłyby uzasadnić środek na podstawie art. 107 ust. 2 lub art. 107 ust. 3 TFUE. Na obecnym etapie postępowania Komisja wyraża wstępne wątpliwości dotyczące zgodności środka z rynkiem wewnętrznym, a w szczególności potencjalnego naruszenia traktatów UE przez środek pomocy. Zważywszy, że orzeczenie zostało wydane w oparciu o przewidziany w art. 26 TKE mechanizm arbitrażu w sporach pomiędzy inwestorem a państwem, Komisja uważa na obecnym etapie, że orzeczenie to może być sprzeczne z art. 19 ust. 1 TUE, art. 267 i 344 TFUE oraz z ogólnymi zasadami prawa Unii dotyczącymi wzajemnego zaufania i autonomii.
Zgodnie z art. 16 rozporządzenia Rady (UE) 2015/1589 wszelka niezgodna z prawem pomoc może podlegać odzyskaniu od beneficjenta.
PISMO
The Commission wishes to inform Bulgaria that, having examined the information supplied by your authorities on the measure referred to above, it has decided to initiate the procedure laid down in Article 108(2) of the Treaty on the Functioning of the European Union ('TFEU').
1. PROCEDURE
(1) On 10 June 2024, Bulgaria notified to the Commission, pursuant to Article 108(3) TFEU, the arbitration award rendered on 5 January 2024 by the Arbitration Tribunal (the 'Tribunal'), established under the auspices of the International Centre for Settlement of Investment Disputes ('ICSID'), in the arbitration proceedings ACF Renewable Energy Limited v. Republic of Bulgaria 1 . The award rendered in conclusion of those proceedings orders Bulgaria to pay ACF Renewable Energy Limited ('ACF') compensation, together with interest on this sum and a contribution towards the costs of the arbitration proceedings, due to Bulgaria's breach of the Energy Charter Treaty (the 'ECT') 2 (the 'Award').
(2) The Commission requested additional information to Bulgaria on 7 August 2024, 21 January 2025, 15 May 2025,13 October 2025 and 18 December 2025. The Bulgarian authorities submitted responses by letters dated 10 October 2024, 28 February 2025, 16 July 2025, 28 October 2025 and 6 January 2026.
(3) On 15 December 2025, the Bulgarian authorities exceptionally agreed to waive their rights deriving from Article 342 TFEU, in conjunction with Article 3 of Council Regulation No 1/1958 3 , and to have this Decision adopted and notified in English.
2. BACKGROUND IN CONNECTION WITH INTRA-EU ARBITRATION
(4) As consistently considered by the Commission 4 and held by the Court 5 , intra-EU investor-State arbitration mechanisms arising from international treaties such as Bilateral Investment Treaties ('BITs') and the ECT are contrary to EU law, and in particular to Article 19(1) of the Treaty on the European Union ('TEU'), Articles 267 and 344 TFEU and the principle of autonomy of the EU legal order.
(5) On 6 March 2018, the Court of Justice held in its Achmea judgment that investor-State arbitration clauses in intra-EU BITs are incompatible with the EU Treaties, and in particular with Articles 267 and 344 TFEU, because such clauses have an adverse effect on the autonomy of Union law 6 .
(6) The reasoning set out in the Achmea judgment is equally applicable to the intra-EU application of the ECT as stated by the Court of Justice in the Komstroy judgment 7 . In this judgment, the Court of Justice held that a provision such as Article 26 ECT is intended to govern bilateral relations between two of the Contracting Parties to the ECT, in an analogous way to the provision of the BIT at issue in the case giving rise to the Achmea judgment 8 . The Court added that intra-EU arbitration proceedings initiated in accordance with Article 26 ECT would remove from the jurisdiction of Member States' courts, and hence, from the system of judicial remedies which the second subparagraph of Article 19(1) TEU requires them to establish in the fields covered by Union law, disputes which may concern the application or interpretation of that law 9 . The Court found that Article 26(2), point (c), of the ECT must therefore be interpreted as not being applicable to disputes between a Member State and an investor of another Member State concerning an investment made by the latter in the first Member State 10 .
(7) In the Romatsa order, the Court of Justice further held that an arbitral award delivered in proceedings between a Member State and an investor from another Member State, on the basis of an arbitral clause provided for in an international agreement, is incompatible with EU law, in particular with Articles 267 and 344 TFEU, and therefore cannot produce any effect, and cannot be executed 11 . In such a case, a court of a Member State may not in any case proceed with the enforcement of such an award in order to enable its beneficiaries to obtain the payment of damages under such an award 12 .
(8) The Commission and the Member States took several actions to implement or otherwise ensure the effectiveness of the judgments of the Court of Justice.
(9) On 15 January 2019, Member States signed a declaration on the consequences of the judgment of the Court of Justice in Achmea and on investment protection in the European Union 13 .
(10) On 5 May 2020, 23 Member States signed an agreement for the termination of intra-EU BITs. This agreement entered into force on 29 August 2020 14 . The other Member States terminated their intra-EU BITs bilaterally, so that all intra-EU BITs have been formally removed from the legal order 15 .
(11) On 26 June 2024, the EU and Member States signed a declaration on the legal consequences of the Komstroy judgment and common understanding on the non-applicability of Article 26 ECT as a basis for intra-EU arbitration proceedings 16 . They also closed negotiations on the text of a formal international agreement between themselves designed to put an end to the continuation of intra-EU arbitration proceedings that are contrary to Union law 17 . In particular, the declaration and the agreement clarify, for the benefit of courts and arbitral tribunals, that the arbitration clause provided in the ECT does not apply - and has never applied - to relations between an EU investor and another Member State.
(12) On 27 June 2024, the Union and Euratom notified their respective withdrawals from the ECT to the depositary of the ECT 18 , since it was found that in the absence of any substantial modifications, the ECT is no longer compatible with the principles of the Paris Agreement, the requirements of sustainable development and the fight against climate change, as well as with modern standards of investment protection. In addition, as explained in the explanatory memorandum of the Commission's proposal for the decision of withdrawal, the ECT is incompatible with the principle of autonomy of Union law, as it does not include some of the safeguards identified by the Court of Justice in the CETA opinion 19 in order to conclude that the arbitration awards would not have the 'effect of preventing the EU institutions from operating in accordance with the EU constitutional framework' 20 . These withdrawals took effect on 28 June 2025.
(13) On 10 September 2025, the EU approved an inter se agreement signed by all but one EU Member States, expressing their view that the ECT's investor-state arbitration clause 'cannot and never could' serve as a legal basis for intra-EU investment arbitration 21 .
3. BACKGROUND ON BULGARIAN RENEWABLES SUPPORT MEASURES
(14) In this section, the Commission provides, by way of background, a short description of the Bulgarian renewables schemes that led to the arbitration proceedings and, finally, the Award.
3.1. The Bulgarian renewables schemes
The 2011 Energy from Renewable Sources Act (ERSA)
(15) In May 2011, Bulgaria adopted the 2011 Energy from Renewable Sources Act ('ERSA') that put in place a support scheme for the production of electricity from renewable energy sources ('2011 RES scheme').
(16) The 2011 RES scheme subsidised solar photovoltaic power plants by way of feed-in tariffs established by the Bulgarian energy regulator, the Energy and Water Regulatory Commission (the 'Regulator').
(17) In particular, Article 31 ERSA provided that electricity produced by solar photovoltaic power plants would be purchased by the public provider, the State-owned power company Natsionalna Elektricheska Kompania EAD ('NEK'), based on long-term power purchase agreements ('PPAs') concluded with RES producers for a period of 20 years at a feed-in tariff price ('FiT') established by the Regulator.
(18) Article 31 ERSA also provided that, in the case of solar photovoltaic power plants, the FiT would not be changed for the term of the PPA, that is, for a period of 20 years. However, the ERSA did not contain a similar provision (of no changes during the term of the PPAs) as regards the other elements of the 2011 RES scheme, notably as regards the number of annual production hours qualifying for purchase at the FiT.
The Reference Plant Used to Set the Feed-In Tariff
(19) On 20 June 2011, acting on the basis of the ERSA, the Regulator issued Decision No. C-18 for setting the FiT for electricity generated by renewable energy sources and hydropower plants up to 10 MW as of 1 July 2011 (the '2011 FiT Decision') 22 . By the 2011 FiT Decision, the Regulator set the FiT for large solar photovoltaic ('PV') power plants at BGN 485.60 per megawatt hour (MWh).
(20) The Regulator set the FiT at the levelized cost of electricity by estimating the required revenues to build and operate a reference plant and earn a reasonable return over a term of 20 years, taking into account typical investment and operating costs derived from the Regulator's assessment of comparative cost data as well as the estimated number of the reference plant's annual operating hours.
(21) The FiT of BGN 485.60/MWh was calculated as the FiT necessary to yield a pre-tax internal rate of return ('IRR') of the reference plant's weighted average cost of capital ('WACC') of 9 %.
Annual Production Cap
(22) On 20 December 2013, Bulgaria adopted an amendment 23 to the ERSA (the '2013 ERSA Amendment') with effect from 1 January 2014 capping the RES production eligible for the FiT at the average annual hours used by the Regulator in the original FiT calculation, as adjusted for the plant's own consumption (the 'Annual Production Cap') (while initially the total electricity produced by renewable installations was in practice purchased under the PPAs). Bulgaria explained that the aim of this Annual Production Cap was to reduce the risk of overcompensation that resulted from the implementation of the 2011 RES scheme in 2011 and 2012 24 .
(23) Bulgaria further amended ERSA with effect from 24 July 2015 25 to ensure that when NEK and end suppliers purchased electricity from RES plants at the FiT up to the Annual Production Cap, they reduced the FiT-eligible hours by a factor designed to account for the fact that RES plants themselves consume a portion of the electricity they produce (in other words, the RES plants' own consumption should not count as eligible for the FiT) 26 .
20 % Levy
(24) The 2013 ERSA Amendment also introduced, with effect from 1 January 2014, a 20 % levy on electricity generated by solar photovoltaic and wind producers (the '20 % Levy'), payable by NEK into the State budget and recoverable by NEK from RES generators via deductions from receivables owed by NEK to the generators. On 31 July 2014, the Bulgarian Constitutional Court declared the 20 % Levy unconstitutional and abolished it 27 .
Permanent Access Fee
(25) On 13 March 2014, the Regulator issued a decision 28 establishing a permanent access fee payable by solar photovoltaic and wind energy producers to the Electricity System Operator ('ESO') in order to compensate the ESO for the costs of additional reserves that the ESO had to maintain because of additional intermittent RES capacity connected to the grid ('Permanent RES Access Fee'). The Regulator also set the Permanent RES Access Fee in each of its annual tariff decisions during the period from 2015 to 2019.
(1)(13), of the Energy Act.
3.2. The 2016 Commission Decision
(26) On 9 March 2016, Bulgaria notified to the Commission the 2011 RES scheme in force at the time of the notification (the 'notified RES support scheme') 29 . In its notification, Bulgaria listed the following legal acts as the legal basis for the notified RES support scheme:
- ERSA, as amended (including, among others, the 2013 ERSA Amendment) 30 ;
- Ordinance No. 1 of 18 March 2013 on the regulation of electricity prices 31 ; and
- Ordinance on the regulation of electricity prices adopted under Council of Ministers Decree No 35 of
20 February 2004 32 .
(27) The RES support scheme in force at the time of the notification included the Annual Production Cap and the Permanent Access Fee but did not include the 20 % Levy (which had been abolished prior to the notification).
(28) On 4 August 2016, the Commission adopted its decision concerning the notified RES support scheme 33 (the '2016 Decision'). In the 2016 Decision, the Commission reviewed the compatibility of the notified RES support scheme with EU State aid rules, including with respect to '[p]hotovoltaic power plants', and noted that the scheme incorporated a 'reduction of the mandatory offtake quantity', i.e., the Annual Production Cap 34 . The Commission concluded that the notified RES support scheme 'constitutes State aid within the meaning of Article 107(1) TFEU' 35 . The 2016 Decision also stated that since Bulgaria breached the standstill obligation provided for in Article 108(3) TFEU by having implemented the aid before a final Commission decision, aid granted until the adoption of the 2016 Decision constitutes unlawful aid 36 .
(29) In its assessment of the FiT, the Commission noted that the FiT was calculated using a 'representative business entity' (i.e., the reference plant) and a 9 % rate of return before tax for 2011 and to 7 % before tax since 2012, which corresponded to the reference plant's 'weighted average cost of capital' and its production costs calculated using the levelized cost electricity ('LCOE') 37 . The Bulgarian authorities established specific FiT for different types of installations within each technology group, whereby for all types of renewable installations, the calculated LCOE was equal to the FiT and also exceeded the average market price 38 .
(30) Noting that the 2008 EU Guidelines on State Aid for Environmental Protection ('EAG') 39 limited the amount of permissible aid to the 'difference between the costs of production and the market price until plant depreciation' and no more than a 'normal return on capital', the Commission stated that 'all preferential purchase prices under [Bulgaria's] support scheme are equal to the LCOE of the relevant installations' 40 .
(31) The Commission concluded that the 9 % rate of return 'correspond[ed] to the level of the estimated weighted average cost of capital for renewable investors' and that '[i]n view of the evidence provided, the included rate of return is considered reasonable'. The Commission reached the same conclusion under the Guidelines on State aid for environmental protection and energy 2014-202 ('EEAG') 41 ( 42 .
(32) As part of its analysis, the Commission also considered complaints by RES producers that the 'profitability level of installations is negatively affected' by the Annual Production Cap. The Commission found the complaints meritless, stating that 'the most relevant rules in this respect are the proportionality (and cumulation) rules' of paragraph 109 of the EAG, and that 'the Commission has concluded that the aid scheme is compatible with the rules laid down in both the EAG [the 2008 EU State Aid Guidelines] and EEAG [the 2014 EU State Aid Guidelines]' 43 .
(33) The Commission accordingly decided not to raise objections against the notified RES support scheme incorporating the Annual Production Cap. With respect to the unlawful aid granted in breach of the standstill obligation until the date of the 2016 Decision, the Commission assessed the compatibility of such aid granted until 1 July 2014 based on the provisions of the EAG, and the compatibility of the aid granted after 1 July 2014 based on the provisions of the EEAG 44 . The Commission expressed regret that Bulgaria put the aid measure into effect in breach of the standstill obligation 45 , but decided not to raise objections to the aid on the grounds that it is compatible with the internal market pursuant to Article 107(3)(c) TFEU 46 .
3.3. 2018 Amendments to the ERSA
(34) On 5 May 2018, Bulgaria amended the ERSA to replace the FiT-based support scheme with a so-called feed-in premium ('FiP') support scheme for the duration of the relevant plant's original PPA term. Under the FiP support scheme, RES plants sold their output on the free and/or balancing market and received an additional payment (the 'premium') from the Electricity System Security Fund ('ESSF') for electricity generated up to the plant's Annual Production Cap pursuant to a 'contract-for-premium' concluded between the producer and the ESSF.
4. ACF AND ITS INVESTMENT
4.1. ACF Renewable Energy Limited
(35) ACF is the claimant in the arbitration proceedings ACF Renewable Energy Limited v. Republic of Bulgaria. ACF is a company incorporated under the laws of the Republic of Malta since 11 June 2012. ACF was created as a Special Purpose Vehicle by its shareholders 47 for the purpose of acquiring the Karadzhalovo solar photovoltaic power plant (the 'Karad Plant') in Bulgaria, which constituted ACF's main operating asset.
(36) According to the information submitted by ACF during the arbitration proceedings 48 .as well as by Bulgaria, ACF's shareholders include: the Saudi Arabia-based power company ACWA Power International ('ACWA Power') (42 %); the United States-based global investment management company BlackRock (following BlackRock's acquisition of the United States-based private equity fund First Reserve Corporation in 2017 which was the initial shareholder in ACF 49 ) (33 %); and the Turkey-based private equity fund Crescent Capital Advisory Limited (25 %). These entities hold their stakes in ACF through various subsidiaries; ACWA Power Plovdiv Holdings LTD that is affiliated with ACWA Power; Sunreserve International (Bulgaria) LTD that is affiliated with First Reserve and BlackRock; and Kora Investment Partners Limited that is affiliated with Crescent Capital. ACF's shareholders are active in the Union, including in the energy and investment sectors.
(37) Based on publicly available information 50 , ACWA Power is a developer, investor, and operator of power generation and desalinated water plants, with assets in operation, construction, or advanced development across 15 countries worldwide. According to ACF's statements during the arbitration proceedings, ACWA Power exercises control over ACF through its controlling interest of 42 % in ACF 51 . It also owns (through subsidiaries) the Karad Plant's operation and maintenance provider NOMAC Bulgaria EAD 52 . In its annual report for 2023, ACWA Power reported that it is entitled to a share of EUR 18.06 million of the EUR 43 million (net of legal costs) awarded to ACF in the arbitration proceedings against Bulgaria and that this amount will be recognised in the consolidated statement of profit or loss, once the settlement formalities are completed 53 . In the annual report for 2023 and 2024, ACWA Power reported a loan payable to the other shareholders of ACF amounting to Saudi Riyal 43 million (currently equivalent to approximately EUR 9.93 million), which was due for repayment in 2025 and carry a profit rate of 5,75 % p.a. 54 .
(38) BlackRock is a global asset manager and technology provider with offices in 38 different locations and has a number of assets across several EU countries 55 . It acquired the energy infrastructure investment business First Reserve Corporation in 2017. First Reserve Corporation is a private equity firm investing across Infrastructure Solutions, Value-Added Infrastructure and Resources strategies with exposure in energy, utility and industrial markets 56 . It has investments in the Union 57 .
(39) Crescent Capital is an 'independent private equity and asset management firm with a focus on energy and infrastructure investments in Turkey and surrounding regions' managing an investment portfolio of 'round USD 400 million which includes hydro, wind, solar assets under operation' 58 . It manages the Guernsey-based Clean Energy Transition Fund that has received funding from the European Investment Bank and the European Bank for Reconstruction and Development.
ACF's investment in the Karad Plant
(40) In the arbitration proceedings which resulted in the Award, ACF alleged that in mid-2012 it invested in Bulgaria's renewable energy sector by purchasing the Karad Plant through the acquisition of the company ZBE Partners EAD ('ZBE'), which owned the Karad Plant and was later renamed to ACWA Power CF Karad PV Park EAD ('ACWA Bulgaria') in December 2013.
(41) On 12 January 2012, ZBE submitted to the Regulator a license application concerning the Karad Plant together with a financial model and investment analysis. On 26 April 2012, the Regulator issued a license for electricity generation for the Karad Plant 59 . On 11 June 2012, the Regulator issued an authorisation to ZBE to commence the Karad Plant's licensed activity 60 . On 13 June 2012, ZBE signed a PPA for the Karad Plant with NEK 61 .
(42) On 28 June 2012, ACF purchased ZBE and thereby acquired the Karad Plant. The deal was done by means of a share purchase agreement by which ACF bought 100 % of the shares in ACWA Bulgaria (then ZBE) for the price of EUR 32 458 659.
(43) At the time of ACF's acquisition, the Karad Plant was benefitting from the 2011 RES scheme (i.e. prior to the 2013 ERSA Amendment and the subsequent amendments). The FiT applicable to the Karad Plant was the FiT of BGN 485.60/MWh that applied to large RES plants, as noted in recital(19) 62 . After 2013, the FiT-eligible production of the Karad Plant was capped starting at 1 188 MWh annually per each megawatt of plant capacity, the same figure 63 as that used in the 2011 FiT Decision and in the Regulator's underlying model of the reference plant. The 20 % Levy applied to the Karad Plant.
(44) On 31 December 2019, ACF sold the Karad Plant to the Austrian company Enery Development GmbH for EUR 28.6 million. The sale closed on 10 September 2020 and, as a result of this transaction, ACWA Bulgaria ceased to be an affiliate of ACF 64 .
5. DESCRIPTION OF THE MEASURE
5.1. Initiation of arbitration proceedings
(45) In February 2018, ACF brought an action against Bulgaria before the ICSID arbitration tribunal on the basis of the ECT and the ICSID Convention.
(46) In the arbitration proceedings, ACF claimed that Bulgaria's failure to fulfil legislative and regulatory commitments it made in relation to the Karad Plant constitutes a breach of Article 10 ECT 65 . ACF claimed that that based on the 2011 RES scheme that existed at the time of ACF's investment in mid-2012, ACF had a legitimate expectation that during the 20-year duration of the PPA, Bulgaria would not change any of the foregoing features of the 2011 RES scheme, and that ACF invested in the Karad Plant in reliance on those alleged expectations.
(47) According to ACF, after it made its investment in the Karad Plant, Bulgaria changed the 2011 RES scheme in several ways, and these changes violated Bulgaria's obligations under the ECT. In particular, ACF argued that by imposing the changes, Bulgaria abandoned the alleged guaranteed aspects of the RES regulatory regime and thus failed to treat ACF's investment fairly and equitably, and the changes to the regulatory regime undermined ACF's legitimate expectations on which it had made its investment.
(48) ACF sought an award of compensation of EUR 78.1 million based on the difference between cash flows expected with and without the regulatory changes 66 , using a valuation at the date of 31 December 2019 when ACF sold its investment in the Karad Plant to Enery Development GmbH. ACF also sought an award of interest on the claimed amount and legal and other costs.
(49) In the arbitration proceedings, Bulgaria opposed ACF's claims on multiple grounds, including among other things that, as a matter of EU State aid law, Bulgaria could not provide RES producers more State aid than needed to ensure a reasonable return, determined, inter alia, by reference to depreciation of investment costs plus a reasonable return as approved by the Commission in its 2016 Decision. Bulgaria explained that this meant that ACF could not have had a legitimate expectation of a higher return than that provided under the notified RES support scheme subject to the 2016 Decision. Bulgaria also argued that: (i) in the hierarchy of norms, the TFEU and the TEU prevail over the ECT; (ii) in view of the Achmea judgment and the Komstroy judgment, the ECT's investment treaty arbitration provisions were inapplicable to intra-EU disputes since Bulgaria's accession to the European Union; (iii) Bulgaria therefore never agreed to arbitrate under the ECT; and (iv) the Tribunal lacked jurisdiction.
5.2. The Tribunal's findings in the arbitration proceedings
(50) On 20 December 2019, the Tribunal issued a decision in which it established its jurisdiction. On 5 January 2024, the Tribunal issued the Award as a conclusion of the second phase of the proceedings on the merits.
(51) The Tribunal concluded that Bulgaria had breached Article 10(1) ECT by failing to accord fair and equitable treatment to ACF's investments 67 . That finding is based on the regulatory changes to the remuneration scheme for renewable installations that were brought about by legal acts that Bulgaria adopted from December 2013 onwards, as compared to the scheme that was in force at the time of ACF's investment, that is to say, the 2011 RES scheme 68 .
(52) The Tribunal ruled that Bulgaria's 2011 RES scheme as it existed at the time of ACF's investment guaranteed to RES producers a full offtake of all electricity at the feed-in tariff for 20 years without limitation on production hours.
(53) The Tribunal also concluded that the reasonable rate of return used by the Regulator and considered by the Commission in the 2016 Decision was not a maximum return and that ACF's legitimate expectations were not limited to expecting only a reasonable return (or an IRR of 9 %) 69 . The Tribunal briefly addressed Bulgaria's arguments about EU State aid rules in §§ 1656-1659 of the Award and concluded that it 'appears doubtful that EU case law on intra-EU investor's expectations regarding EU State aid schemes would have been relevant to the Tribunal's determinations' 70 . On that basis, the Tribunal concluded that Bulgaria violated ACF's legitimate expectations and that four of the changes complained of by ACF, including the Annual Production Cap 71 , the 20 % Levy 72 , the Permanent RES Access Fee 73 , and the transition from the FiT to the FiP 74 , were inconsistent with Bulgaria's obligations under the ECT.
(54) The Tribunal awarded to ACF compensation in the amount of EUR 61.04 million to be paid by Bulgaria. The Tribunal awarded ACF damages as follows: (i) EUR 53.4 million on account of the Annual Production Cap; (ii) EUR 2.2 million on account of the 20 % Levy; (iii) EUR 3.44 million on account of the Permanent RES Access Fee; (iv) EUR 1.7 million on account of the transition from FiT to FiP; and (v) EUR 0.3 million on account of the 75 % of legal fees and debt restructuring costs, for a total of EUR 61.04 million 75 .
(55) The Tribunal also awarded ACF annually compounded pre-Award interest over the amount of compensation from 31 December 2019 until the date of the Award at the rate of 12 months EURIBOR plus 2 % as valid on 31 December 2019, to be compounded annually, and post-Award interest over the awarded amount plus preaward interest due running from the date of the Award at the rate of 12 months EURIBOR plus 2 % 76 .
(56) In addition, the Tribunal awarded to ACF a portion of ACF's legal costs and expenses in the amount of EUR 264 833,90 and USD 5 690 631,54, and ACF's share of the costs of the ICSID proceeding, totalling USD 480 766,49 77 .
5.3. Beneficiary of the measure
(57) Bulgaria submitted that the beneficiary of the notified measure is ACF, since that party was the claimant in the arbitration proceedings that led to the Award and thus the party entitled to compensation set out therein 78 . The Award states that ACF sold its investment in ACWA Bulgaria to Enery Development GmbH but expressly retained all of its interests in the claims in the arbitration proceedings 79 . Enery Development GmbH was thus not a party to the arbitration proceedings and the Award provides the right to compensation exclusively to ACF and no right to compensation to Enery Development GmbH.
5.4. Legal basis of the measure
(58) Bulgaria indicated that the legal basis for the notified measure is the Award, which was rendered on the basis of the ECT and the ICSID Convention. Article 85(1) of the Bulgarian Constitution provides that '[t]he National Assembly ratifies and denounces international treaties by an Act of Parliament'.
(59) Bulgaria explained that it ratified the ECT by the Energy Charter Treaty Ratification Act promulgated in the State Gazette No. 64 of 30 July 1996 and the ICSID Convention by the ICSID Convention Ratification Act promulgated in the State Gazette No. 85 of 17 October 2000. The ECT entered into force for Bulgaria on 16 April 1998. The ICSID Convention entered into force for Bulgaria on 13 May 2001.
5.5. Objective of the measure
(60) According to Bulgaria, the objective of the notified measure is to compensate ACF for the regulatory changes made by Bulgaria to the support scheme for renewable installations that were brought about by legal acts that Bulgaria adopted and that amended the 2011 RES scheme (see section 3.1).
5.6. Form of support, budget and financing of the measure
(61) Bulgaria submitted that it has not paid any compensation to ACF under the Award. It further submitted that the form of support will consist in the payment of the compensation amount calculated by the Tribunal in the Award of EUR 61.04 million, the pre-award interests (for the period 31 December 2019 to 5 January 2024), as well as the post-award interests (from 5 January 2024).
(62) Bulgaria explained that the payment of the Award would be financed from the general budget of the Bulgarian State.
5.7. ACF's attempts to enforce the Award and Bulgaria's opposition
(63) On 13 June 2024, ACF initiated proceedings in the United States District Court for the District of Columbia (the 'District Court') to enforce the Award 80 . Bulgaria submitted that it filed a motion to dismiss the enforcement action on multiple grounds on 19 November 2024 and a request for a stay of the proceedings until the United States Supreme Court decides on the request for review submitted by Spain in connection with several ongoing enforcement actions in the United States against Spain in intra-EU investment arbitration awards 81 .
(64) Bulgaria also submitted that on 22 September 2025, the District Court entered an Order and Memorandum Opinion finding that it had jurisdiction and denied Bulgaria's request for a stay. However, the District Court has not issued a final judgment confirming the Award as of the date of this Decision.
(65) Therefore, the enforcement action commenced by ACF in the United States is ongoing at the date of this Decision.
6. ASSESSMENT OF THE MEASURE
6.1. Existence of aid
(66) Article 107(1) TFEU provides that 'aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market'.
(67) A measure constitutes State aid within the meaning of Article 107(1) TFEU, if it fulfils four cumulative conditions. First, the measure must be imputable to the State and financed through State resources. Second, the measure must confer an advantage to a beneficiary. Third, the measure must favour certain undertakings or economic activities (that is the advantage must be selective). Fourth, the measure must have the potential to affect trade between Member States and to distort, or threaten to distort, competition in the internal market.
(68) The Commission will assess whether the Award and, in any event, the implementation, payment, or execution of the Award (described below as the 'Implementation') constitutes State aid within the meaning of Article 107(1) TFEU.
6.1.1. Imputability and State resources
Imputability
(69) According to the case-law of the Union Courts, for a selective advantage to constitute aid within the meaning of Article 107(1) TFEU, it must, inter alia, be imputable to the State 82 . It must also be noted that, where an advantage is granted by a public authority, that advantage is, by definition, attributable to the State 83 .
(70) The Commission considers that the Award can be considered as imputable to Bulgaria because it results from Bulgaria's voluntary sovereign decision to sign and ratify the ECT and the ICSID Convention and to incorporate these instruments into its domestic legal order (recital(59)). Those treaties became part of Bulgarian law in accordance with the Bulgarian Constitution (recital(58)). By ratifying the ECT and the ICSID Convention, Bulgaria voluntarily accepted the possibility that arbitral awards could be rendered against it.
(71) As explained in recital(59), Bulgaria ratified the ECT, which entered into force on 16 April 1998 in Bulgaria and Bulgaria ratified the ICSID Convention, which entered into force in Bulgaria on 14 October 1966.
(72) The Tribunal issued the Award on the basis of its interpretation of the ECT and the ICSID Convention that Bulgaria voluntarily signed. The issuance of the Award has therefore been rendered possible by Bulgaria's decision to sign and ratify the ECT and the ICSID Convention
(73) In any event, the Commission notes that the Implementation of the Award can also be considered as imputable to Bulgaria.
(74) The case-law considers that an arbitral award delivered in proceedings between a Member State and an investor from another Member State, such as in the present case, is incompatible with Union law (in particular Articles 267 and 344 TFEU, Article 19 TEU and the general principle of autonomy) and therefore cannot produce any effect and cannot be executed 84 . For those reasons, the General Court also held in Micula that the State is necessarily 'involved' if it pays the compensation provided for in an arbitral award 85 .
(75) Because the Award cannot produce any effect in the EU legal order, Bulgaria is required to set aside the Award and cannot be considered as being under an obligation to pay, implement or execute it 86 .
(76) Any implementation of the Award in spite of that prohibition would directly involve an autonomous decision of the Bulgarian authorities and would be also imputable to the Bulgarian State. That holds true if Bulgaria voluntarily pays out on the Award, and if Bulgaria would attempt initially to oppose the recognition and execution of the Award before a court of a Member State or a third country, and either fails to prevent seizure of assets or takes the decision to pay the Award in order to prevent measures of asset discovery and ultimately seizure of assets not protected by sovereign immunity 87 . The Commission also notes, for the sake of completeness, that the recognition or execution of the Award by a Bulgarian court would equally be attributable to Bulgaria as the acts of all State organs, including the national courts or bailiffs, are imputable to Bulgaria.
State resources
(77) According to settled case-law, only advantages granted directly or indirectly through State resources can constitute State aid within the meaning of Article 107(1) TFEU 88 .
(78) In this case, the Award contains an obligation for Bulgaria to pay compensation of EUR 61.04 million plus interest for Bulgaria's breach of the ECT (recitals(54) and(55)).
(79) Bulgaria explained that if these amounts were to be paid, they would be financed from State resources, and more specifically the general budget of Bulgaria (see recital(62)).
(80) No payment by Bulgaria has taken place at the time of this Decision, not least because it would be contrary to Union law (recital(61)). However, as a result of the attempts by ACF to enforce the Award, there is a serious risk that Bulgaria will have to invest State resources in the payment of the Award (section 5.7). Such risk suffices for the finding of the presence of State resources 89 . In that context, the Court of Justice has held that it is irrelevant for the finding of State resources whether such use of State resources would violate Union law or national law.
(36) In that regard, it is apparent from the case-law of the Court that, from the moment when the right to receive support, provided through State resources, is conferred on the beneficiary under the applicable national legislation, the aid must be considered to be granted, so that the actual transfer of the resources in question is not decisive (see, to that effect, judgment of 21 March 2013, Magdebutger Muhlenwerke, C-129/12, EU:C:2013:200, paragraph 40).'
What is decisive is that the measure has produced effects 90 . As the aid entails a risk of direct payment by Bulgaria, from its budget, the Commission considers that the Award and, in any event, the implementation, which would consist of a direct payment, is financed by State resources.
Conclusion on imputability and State resources
(81) Based on the foregoing, the Commission preliminarily considers that the Award and, in any event, its Implementation can be considered as imputable to the Bulgarian State and is financed through State resources within the meaning of Article 107(1) TFEU.
6.1.2. Advantage and selectivity
Advantage
(82) An advantage, within the meaning of Article 107(1) TFEU, is any economic benefit which an undertaking would not have obtained under normal market conditions, that is to say in the absence of the State intervention 91 . The precise form of the measure is irrelevant in establishing whether it confers an economic advantage on the undertaking 92 .
(83) In that regard, in order to assess whether a Member State has conferred an advantage on a given undertaking, the financial situation of the undertaking following the measure should be compared with its financial situation if the measure had not been taken 93 .
(84) Moreover, the concept of 'advantage', which is intrinsic to the classification of a measure as State aid, is an objective one, irrespective of the motives of the persons responsible for the measure in question. Accordingly, the nature of the objectives pursued by State measures and their grounds of justification have no bearing whatsoever on whether such measures are to be classified as State aid. Article 107(1) TFEU does not distinguish between the causes or the objectives of State aid, but defines them in relation to their effects 94 .
(85) In the case at hand, it is clear that, the Award, and in any event the implementation, improves the financial situation of ACF compared to its financial situation without it. More specifically, the Tribunal awarded ACF EUR 61.04 million as compensation plus interests. The Award granted to ACF a right which, not only would ACF not have obtained under the normal market conditions, but which has financial value. This financial value could also be transferred to other beneficiaries, against suitable payment 95 .
(86) Under normal market conditions, i.e. without the Award handed down by an arbitration tribunal on the basis of Bulgaria's signature of the ECT and the ICSID Convention, ACF would not have been entitled to any compensation such as that obtained as a result of the Award, and there would be no title on the basis of which to seek implementation 96 .
(87) In addition, in accordance with the case-law of the Union Courts, where national legislation has established 'State aid' within the meaning of Article 107(1) TFEU, the payment of a sum claimed before the courts in accordance with that legislation also constitutes such aid 97 . While the case-law considers that a distinction must be drawn between claims for compensation for damage resulting from unlawfulness of State action and claims for the payment of amounts duly due under national legislation, where sums claimed before the courts, even formally as compensation, correspond to the payment of an advantage which the applicant is seeking pursuant to legislation, the action does not seek compensation for harm distinct from that consisting of the complete non-payment of the advantage to which the applicant considered he or she was entitled under that legislation 98 . The recipient of aid cannot circumvent the effective application of the rules on State aid by obtaining, without relying on Union law on State aid, a judgment granting compensation whose effect would enable it, definitively, to continue to implement the aid in question over a number of years 99 .
(88) In this case, firstly, as explained in recitals(53) -(55) of this Decision, the compensation awarded to ACF by virtue of the Award is calculated as the present value of all the cash flows that ACF would have continued to receive under the 2011 RES scheme that existed at the time of the investment. The Award has therefore the effect of re-establishing the situation ACF would have found itself in if the 2011 RES scheme, which constitutes unlawful State aid, continued to apply to ACF.
(89) The Commission considers that it is not necessary to establish that the 2011 RES scheme constitutes unlawful State aid in order for the Award to constitute State aid. In any event, the 2011 RES scheme constitutes State aid within the meaning of Article 107(1) TFEU (as already concluded by the Commission in the 2016 Decision), which was furthermore unlawful as it was implemented by Bulgaria without having been notified to, and authorised by, the Commission (see recital(33)).
(90) Finally, the Commission considers that the compensation for lost profits alone as granted by the Award, and in any event, its Implementation, constitutes an economic advantage not available under normal market conditions and in absence of the Award. Since the Award is considered as contrary to Union law for the reasons explained in Section 6.3.1, the Award has not been granted under normal market conditions. Therefore, irrespective of the qualification of the 2011 RES scheme as State aid, the Award and, in any event its Implementation, constitutes an advantage 100 .
(91) Therefore, the Commission considers that the compensation awarded by the Tribunal constitutes an economic advantage in favour of ACF that ACF would not have obtained under normal market conditions. ACF could also transfer the right to compensation and thus the economic advantage arising from the Award to another party. For this reason, the Commission considers that the Award, and in any event, its Implementation, shall be regarded as an economic advantage for ACF.
(92) Finally, the Commission adds that the Award constitutes an advantage for ACF, even if the Award as such contravenes Union law and cannot be executed under Union law. The decisive factor in determining whether a measure is State aid, and in particular for ascertaining whether that measure gives rise to more favourable treatment for a beneficiary than for others is the effects produced by the measure 101 . Accordingly, the fact that a measure is contrary to provisions of Union law other than Articles 107 and 108 TFEU does not mean that it cannot be classified as State aid, as long as it produces effects and has not been either repealed or declared
unlawful and, therefore, inapplicable 102 . In this case, ACF holds an award that has a monetary value, as confirmed by the existence of trade in arbitral awards, and that irrespective of the fact that the Award violates Union law for the reasons set out in Section 6.3.1. The Award exists and as such has never been repealed. The Commission considers that the Award is contrary to Union law (see Section 6.3.1) and remains liable to have an impact, as also illustrated by the ongoing proceedings engaged by ACF (see section 5.7).
Economic advantage granted to an undertaking
(93) The Court of Justice has consistently defined undertakings as entities engaged in an economic activity, regardless of their legal status and the way in which they are financed 103 . The classification of a particular entity as an undertaking thus depends entirely on the nature of its activities and more specifically whether these are economic. Moreover, the Court of Justice has consistently held that any activity consisting in offering goods and services on a market is an economic activity 104 .
(94) Separate legal entities may be considered to form one economic unit for the purpose of the application of State aid rules. That economic unit is then considered to be the relevant undertaking. To that end, it is necessary to take into consideration the existence of a controlling share and the existence of other functional, economic and organic links 105 . The Court of Justice has indicated the factors to be taken into account to determine the absence or existence of an economic unit 106 .
(95) The Award and, in any event its Implementation, grants an advantage to ACF, which is an undertaking that exercises an economic activity within the meaning of Article 107(1) TFEU. In this case, as recalled in recital(35), ACF is a company established in Malta and was created as a special purpose vehicle for the investment in Bulgaria and managed the Karad plant in Bulgaria. Therefore, it must be considered that it has been offering services on a market and therefore engaging in an economic activity. It is thus an undertaking within the meaning of Article 107(1) TFEU.
(96) In addition, on the basis of the information available, given the operational control of the shareholders over ACF and the links between the shareholders (through repayable loans) for the creation of ACF and the subsequent investments (see recitals(35) -(37)), it appears that there are structural and economic links between ACF and its shareholders. The Commission's preliminary view is that, based on the information available, ACF's ultimate shareholders, ACWA Power, Blackrock and Crescent Capital (through their subsidiaries) exercise control over ACF and thus ACF and its shareholders would constitute an economic unit for the purposes of the application of State aid rules.
Selectivity
(97) To fall within the scope of Article 107(1) TFEU, a State measure must favour 'certain undertakings or the production of certain goods'. Hence, not all measures that grant an undertaking an economic advantage fall under the notion of State aid, but only those which confer an economic advantage in a selective way upon certain undertakings or categories of undertakings or to certain economic sectors.
(98) According to settled case-law, where an individual aid is at issue, the identification of the economic advantage is, in principle, sufficient to support the presumption that a measure is selective. This is so, regardless of whether there are operators on the relevant markets that are in a comparable situation 107 .
(99) In this case, the Award is an individual aid constituting a separate legal act that grants a right to compensation only to ACF (see recital(54)). Therefore, the Commission considers that the advantage granted by the Award is selective, since it is awarded specifically to ACF, while other undertakings in a comparable legal and factual situation within that sector or other sectors are not eligible for aid and thus will not receive the same advantage.
Conclusion on advantage and selectivity
(100) Based on above, the Commission preliminarily considers that the Award and, in any event, its Implementation confers a selective advantage to ACF and its shareholders, which are considered as an undertaking (an economic unit), within the meaning of Article 107(1) TFEU.
6.1.3. Distortion of competition and effect on trade
(101) A measure granted by the State is considered to distort or threaten to distort competition when it is liable to improve the competitive position of the recipient compared to other undertakings with which it competes 108 . A distortion of competition within the meaning of Article 107 TFEU is thus assumed as soon as the State grants a financial advantage to an undertaking in a liberalised sector where there is, or could be, competition 109 . An advantage granted to an undertaking that distorts competition will normally also be liable to affect trade between Member States. Trade between Member States is affected where a measure strengthens the competitive position of the beneficiary undertaking as compared with other undertakings competing in intra-Union trade 110 .
(102) In this case, the beneficiary of the Award, and, in any event, its Implementation, is ACF and its shareholders, which are considered as an undertaking (an economic unit) and exercise an economic activity consisting of investing in infrastructure and energy in the Union (recitals(35) -(39)). The energy and investment sectors are liberalised sectors where there is intra-EU competition (recital(36)). Thus, any advantage granted to ACF, and its shareholders is liable to distort competition and to strengthen the competitive position of ACF and its shareholders as compared with other undertakings competing in intra-Union trade.
(103) Consequently, the Commission preliminarily considers that the Award and, in any event its Implementation are liable to affect trade between Member States and to distort, or threaten to distort, competition in the internal market.
6.1.4. Conclusion on existence of aid
(104) In view of the above, the Commission preliminarily considers that the Award and, in any event, the implementation constitutes State aid under the meaning of Article 107(1) TFEU.
6.2. Regarding the lawfulness of the aid
(105) Article 108(3) TFEU requires that the Member State concerned shall not put its proposed measure into effect until the Commission procedure has resulted in a final decision.
(106) According to well-established case-law, the decisive factor for establishing the date on which the right to receive State aid was conferred on its beneficiaries by a particular measure is the acquisition by those beneficiaries of a definitive right to receive that aid and to the corresponding commitment, by the State, to grant that aid. It is at that date that such a measure is liable to distort competition and affect trade between Member States, within the meaning of Article 107(1) TFEU 111 .
(107) In this case, the Award was delivered on 5 January 2024 and ordered Bulgaria to pay to ACF compensation of EUR 61.04 million plus interests. ACF was conferred the right to receive the compensation ordered in the Award on that date (5 January 2024). Based on the Tribunal's finding that the ECT applied to the dispute at hand, Article 26, paragraph(8) ECT means that Bulgaria is bound by the outcome of the arbitration proceedings and the right for ACF to receive the compensation under the Award was therefore conferred on 5 January 2024 and the aid was thus granted under the Award on this same date (that is to say, on 5 January 2024).
(108) Bulgaria notified the Award on 10 June 2024. Based on the information currently available, Bulgaria has not paid it, implemented it, or executed it.
(109) Since the aid was granted on 5 January 2024 before being approved by the Commission, the Commission therefore considers that the aid resulting from the Award is unlawful. The Commission also considers that the Implementation of the Award after the adoption of this Decision would also constitute unlawful aid.
6.3. Compatibility of aid
(110) Given that the Award, and in any event its Implementation, constitutes State aid within the meaning of Article 107(1) TFEU, such measure shall be prohibited unless it can be deemed compatible with the internal market pursuant to Article 107(2) or Article 107(3) TFEU.
(111) At the outset, the Commission recalls that when assessing the compatibility of a measure with the internal market under Articles 107(2) and 107(3) TFEU, the burden of proof is the principal responsibility of the Member State 112 . In this case, Bulgaria has not presented any arguments that could justify the measure under Article 107(2) or Article 107(3) TFEU.
(112) In any event, for the sake of completeness, the Commission has preliminary doubts as to whether the measure could be compatible with the internal market in so far as, for the reasons set out below, it preliminarily considers that the aid measure breaches EU law.
6.3.1. Breach of Union law
(113) According to settled case-law of the Court of Justice, 'State aid which, as such or by reason of some modalities thereof, contravenes provisions or general principles of EU law cannot be declared compatible with the internal market [...]. Indeed, where the modalities of an aid measure are so indissolubly linked to the object of the aid that it is impossible to evaluate them separately, their effect on the compatibility or incompatibility of the aid viewed as a whole must therefore of necessity be determined in the light of the procedure prescribed in Article 108 TFEU' 113 .
(114) At the outset, the Commission recalls that the Union courts consider that an international agreement cannot affect the allocation of powers fixed by the Treaties or, consequently, the autonomy of the Union legal system, observance of which is ensured by the Court 114 . That principle is enshrined in particular in Article 344 TFEU, by virtue of which the Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of dispute settlement other than those provided for in the Treaties 115 .
(115) In order to ensure that the specific characteristics and the autonomy of the EU legal order are preserved, the Treaties have established a judicial system intended to ensure consistency and uniformity in the interpretation of Union law 116 . In that context, in accordance with Article 19(1) TEU, it is for the national courts and tribunals and the Court of Justice to ensure the full application of Union law in all Member States and to ensure judicial protection of the rights of individuals under that law 117 . The judicial system as thus conceived has as its keystone the preliminary ruling procedure provided for in Article 267 TFEU, which, by setting up a dialogue between one court and another, and specifically between the Court of Justice and the courts and tribunals of the Member States, has the object of securing uniform interpretation of EU law, thereby serving to ensure its consistency, its full effect and its autonomy as well as, ultimately, the particular nature of the law established by the Treaties 118 .
(116) As explained in recitals(4) -(13), according to the case-law of the Court of Justice, Article 19 TEU and Articles 267 and 344 TFEU as well as the general principle of the autonomy of the EU legal order preclude a provision contained in an international agreement under which an investor of one Member States party to that agreement may, in the event of a dispute concerning investments in another Member State party to that agreement, bring proceedings against the latter Member State before an arbitral tribunal, the jurisdiction of which that Member State has undertaken to accept 119 .
(117) Indeed, by concluding such an agreement, the Member States party to it consent to remove from the jurisdiction of their own courts and, therefore, from the system of judicial remedies which the second subparagraph of Article 19(1) TEU requires them to establish in the fields covered by Union law disputes which may concern the application or interpretation of Union law. Such an agreement is therefore liable to lead to a situation in which those disputes are not settled in a manner which guarantees the full effectiveness of Union law 120 .
(118) In this case, the Award concerns a dispute between a Member State and an investor of another Member State and was adopted in the context of proceedings initiated on the basis of the investor-State arbitration mechanism laid down in Article 26 of the ECT.
(119) As held by the Court of Justice in the Komstroy judgment, the ECT is, by virtue of the act approving its conclusion by the Union and in accordance with Article 216 TFEU, part of the Union legal order such that the ECT itself is an act of Union law 121 . Therefore, any tribunal constituted under the ECT would be required to interpret, and even apply, Union law 122 .
(120) Moreover, as stated by the Court in the Komstroy judgment, an ad hoc tribunal, such as the Tribunal that adopted the Award, is not part of the judicial system of a Member State. It therefore means that it cannot be classified as a court or tribunal of a Member State within the meaning of Article 267 TFEU and is not therefore entitled to make a reference to the Court of Justice seeking a preliminary ruling on the interpretation of Union law 123 . As a result of the incompatibility with Union law that would ensue if an investor from one Member State was able to trigger that arbitration mechanism in a dispute concerning an investment made by it in another Member State, the Court of Justice found that Article 26 ECT must be interpreted as not applying to such a situation, i.e. an intra-EU dispute.
(121) Therefore, based on the above, the proceedings leading to the handing down of the Award lacked a legal basis. Article 26 ECT is not applicable to a dispute such as the one at hand between a Member State and investors of other Member States concerning an investment made by the latter in the first Member State. Bulgaria never made any offer to arbitrate such disputes. There is therefore no agreement to arbitrate, and a tribunal established on the basis of a provision that does not apply is not properly constituted. The Tribunal that was nonetheless established in this case suffers from the defects identified by the Court in Komstroy. It was constituted under Article 37(2)(b) of
the ICSID Convention which made the ICSID Convention applicable to the judicial review of its decisions, including the Award. Articles 52, 53 and 54 of the ICSID Convention provide only for limited review of the decisions concerning, in particular, the jurisdiction of the Tribunal. In this context, it must be considered that the Award rendered by the Tribunal is not subject to review by a court of a Member State capable of ensuring full compliance with Union law.
(122) Therefore, even setting aside the fact that it is null because lacking a legal basis, the Award must be regarded as incompatible with Union law. It cannot have any effect and cannot be enforced in order to receive payment of the compensation awarded 124 . In view of the above, the Commission considers that the Award, and, in any event, its Implementation, breach Union law, and in particular Article 19(1) TEU, and Articles 267 and 344 TFEU, as well as the general principle of the autonomy of the EU legal order.
6.3.2. Non-application of Article 351 TFEU
(123) Article 351 TFEU provides that ' [t]he rights and obligations arising from agreements concluded [...] for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of the Treaties'.
(124) According to settled case-law, the purpose of the first paragraph of Article 351 TFEU is to make clear, in accordance with the principles of international law, that the application of the EU Treaties does not affect the duty of the Member State concerned to respect the rights of non-member countries under a prior agreement and to perform its obligations thereunder 125 . The first paragraph of Article 351 TFEU has, therefore, the aim of protecting the rights of third countries by permitting the Member States concerned to perform their obligations under a prior international agreement 126 . On the other hand, it does not authorise the Member States to exercise rights under such agreements in their internal relations within the Union 127 .
(125) The case-law further considers that, for a rule of Union law to be deprived of effect as a result of an international agreement, pursuant to the first paragraph of Article 351 TFEU, two conditions must be fulfilled: the agreement must have been concluded before the entry into force of the EU Treaties in the Member State concerned and the third State concerned must derive from it rights which it can require that Member State to respect 128 .
(126) In this case, as explained in footnote(2), the ECT entered into force for Bulgaria on 16 April 1998 and Malta on 28 August 2001. As also noted in recital(59), the ICSID Convention entered into force for Bulgaria on 13 May 2001 and for Malta on 3 December 2003. Bulgaria joined the EU in 2007 and Malta in 2004. While Bulgaria and Malta signed the ECT and ICSID Convention before the accession to the EU, Article 26 ECT is, according to the Komstroy judgment, intended to govern bilateral relations 129 . In the present case, the bilateral relations are between two EU Member States 130 . The second condition laid down in Article 351 TFEU is therefore not met by either the ECT or the ICSID Convention.
(127) As a result, the application of State aid law in the present case does not affect rights and obligation protected under Article 351 of the TFEU.
In the light of the foregoing considerations, the Commission, acting under the procedure laid down in Article 108(2) of the TFEU, requests Bulgaria to submit its comments and to provide all such information as may help to assess the measure, within one month of the date of receipt of this letter. It requests your authorities to forward a copy of this letter to the potential recipient of the aid immediately.
The Commission wishes to remind Bulgaria that Article 108(3) of the TFEU has suspensory effect and would draw its attention to Article 16 of Council Regulation (EU) 2015/1589, which provides that all unlawful aid may be recovered from the recipient.
In this case, in addition to not paying, implementing, or executing the Award, Bulgaria shall ensure that no payment, implementation or execution of the Award is otherwise effected from the date of adoption of this Decision.
In order to comply with its obligations under Article 108(3) TFEU, Bulgaria shall also take all appropriate measures to prevent ACF, and any third party that has acquired or may acquire the Award, or any right thereunder, from seeking recognition, enforcement and execution of the Award, whether in Member States of the Union or in third countries.
Moreover, it shall be noted that it follows from the principle of sincere cooperation laid down in Article 4(3) TEU that the Member States, and in particular the national courts, have to take all measures that are necessary to guarantee the application and effectiveness of EU law, and in particular the rules of Union law on State aid laid down in Articles 107 and 108 TFEU 131 . As a result of this same principle of sincere cooperation, national courts have to take all measures that are necessary to guarantee the application and effectiveness of Article 19(1) TEU, Articles 267 and 344 TFEU, and the principle of autonomy of the EU legal order 132 . Therefore, in this case, the principle of sincere cooperation requires national courts of the Member States, including non-Bulgarian national courts, to not recognise, execute, or implement the Award, and to take all measures necessary to prevent the recognition, execution, or implementation of the Award (for example, by ordering undertakings established under their jurisdiction to cease any action designed to seek recognition or execution of the Award in other jurisdictions, and ordering them to pay penalty payments in case of non-compliance with the order to cease any such action).
The Commission warns Bulgaria that it will inform interested parties by publishing this letter and a meaningful summary of it in the Official Journal of the European Union. It will also inform interested parties in the EFTA countries which are signatories to the EEA Agreement, by publication of a notice in the EEA Supplement to the Official Journal of the European Union and will inform the EFTA Surveillance Authority by sending a copy of this letter. All such interested parties will be invited to submit their comments within one month of the date of such publication.
| Identyfikator: | Dz.U.UE.C.2026.1272 |
| Rodzaj: | ogłoszenie |
| Tytuł: | Pomoc państwa - Bułgaria - Pomoc państwa SA.114457 (2025/NN) - Bułgaria - Orzeczenie arbitrażowe na rzecz ACF Renewable Energy Limited (ICSID w sprawie nr ARB/18/1) - Zaproszenie do zgłaszania uwag zgodnie z art. 108 ust. 2 Traktatu o funkcjonowaniu Unii Europejskiej |
| Data aktu: | 2026-03-03 |
| Data ogłoszenia: | 2026-03-03 |