BERKELEY ENERGIA LIMITED
NEWS RELEASE | 10 April
2024
Berkeley to Commence International Arbitration against
Spain
Berkeley Energia Limited
(Berkeley or the
Company) advises that the
Company, through its wholly owned subsidiary, Berkeley Exploration
Limited (BEL), will refer
its investment dispute with the Kingdom of Spain (Spain) to international arbitration
under the International Centre for Settlement of Investment
Disputes (ICSID).
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 Energy Charter Treaty (ECT) breaches, and that it proposed to
seek prompt negotiations for an amicable solution pursuant to
article 26.1 of the ECT. At the date of this announcement, the
Spanish government has not engaged in any discussions related to
the dispute and Berkeley has had no option but to take action and
enforce its rights at the Salamanca project through international
arbitration. BEL has engaged specialist
teams at Herbert Smith Freehills Spain LLP and LCS Abogados to
jointly prepare and submit the 'Request for Arbitration' to the
ICSID, and represent it in these proceedings.
Notwithstanding the investment
dispute, Berkeley remains committed to the Salamanca project and
continues to be open to a constructive dialogue with Spain.
Berkeley 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.
The Company will continue to update
the market in relation to this matter as required.
Classification: 2.2 Inside
Information
For
further information please contact:
Robert
Behets
Francisco
Bellón
Acting Managing
Director
Executive
Director
+61 8 9322
6322
+34 923 193
903
info@berkeleyenergia.com
DETAILS OF 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.
The Company 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 the
Company is now not allowed under the aforementioned new
law.
In November 2021, the Company
received formal notification from MITECO that it had rejected NSC
II at the Company's 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.
Berkeley strongly refutes the NSC's
assessment and, in the Company's 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.
Berkeley submitted documentation,
including an 'Improvement Report' to supplement the Company's
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 the Company, with strongly
supported arguments, dismantled all of the technical issues used by
the NSC as justification to issue the unfavourable report. The
Company 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, the Company 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 Company following
receipt of these files, it is clear that Berkeley, 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, the Company considers that
the NSC has acted in a discriminatory and arbitrary manner when
assessing the NSC II application for the Salamanca
project.
In Berkeley's strong opinion, MITECO
has rejected the Company'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 the Company.
In this regard, the Company believes
that MITECO have infringed regulations on administrative procedures
in Spain but also under protection afforded to Berkeley under the
ECT, which would imply that the decision on the rejection of the
Company's NSC II Application is not legal.
In April 2023, the Company's wholly
owned Spanish subsidiary, Berkeley Minera Espana (BME) submitted a
contentious-administrative appeal before the Spanish National Court
in an attempt to overturn the MITECO decision denying NSC
II.
Further, the Company 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
the Company 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.
The Company strongly disagrees with
the fundamentals of the TSJ's judgement and having submitted
cassation appeals against the TSJ judgements before the Spanish
Supreme Court, the Company has now withdrawn the appeals to
preserve its 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.