The Desertec Concept and the ICSID Convention - Investing into North African Solar Power - page 193

exists, the more it will contribute. 494 A determination must be on a case by case
assessment, 495 but most tribunals agree on the necessity of a duration element. 496
The duration must be assessed in the light of the investor s overall commitment. 497

Older case law indicates that this prerequisite should not be too strict. 498
An overall duration of at least 2 years seems to be sufficient. With regard to the
Desertec Concept, the issue of duration does not cause any problems. An investor as
well as Morocco probably plan to have a long-term relationship. The figures
concerning possible profit (see Tables 1.1 , 1.2 and 1.3 ) from the Desertec project
also indicate that there must be a minimum cooperation of 30 years between an
investor and Morocco/ONE. Consequently, the Desertec Concept satisfies the
requirement of duration.

'

3.7.3 Risk

As mentioned above the Desertec Concept should encompass a PPA or subsidy or
feed-in tariffs. This might cause problems with the Salini requirement “risk”. All
forms of support might breach the requirement of risk, and thus might not be an
investment. Hence, it is necessary to analyze the Salini tribunal decisions. In
addition, other tribunals which have dealt with the topic of risk and the literature
will be assessed.

3.7.3.1 ICSID Case Law and the Literature s Approach

'

The Salini tribunal seems to differ between economic and political/legal risks. 499
The longer the investment takes, the more risk is involved. 500 This list included the
burden to carry the change of contract, a potential increase of labor costs because of
a change of respective Moroccan laws, an unforeseen incident (not force majeure),
and an ' ( ... ) increase or decrease in volume of the work load not exceeding 20 % of
the total contract price. '

501 Finally, the tribunal highlighted that it does not depend
on whether the risk was taken freely. 502

494

ICSID [2007] ARB/05/10—Award, 37 para 111.

495

Loncle ( 2006 ), 319 (326-327).

496

ICSID [2010] ARB/07/20—Award, 35-36 para 110; ICSID [2010] ARB/08/20, 28-29 para 80.

497

Peterson ( 2009b ).

498

ICSID [2005] ARB/03/08—Award, 14 para 14(ii); cf ICSID [2005] ARB/03/29, 35-36 paras
132-133.
499 ICSID [2001] ARB/00/4, 609 (623) para 55.
500 ICSID [2001] ARB/00/4, 609 (623) para 56.
501 ICSID [2001] ARB/00/4, 609 (623) para 55.
502 ICSID [2001] ARB/00/4, 609 (623) para 55.