The National Court has upheld the appeal filed by Iberdrola Energía España and has overturned the €25 million fine imposed on it by the National Commission for Markets and Competition (CNMC) for alleged manipulation of prices in the electricity market.
The controversy dates back to 2013, when the CNMC (National Markets and Competition Commission) determined that certain energy supply decisions from several Iberdrola hydroelectric plants had artificially inflated prices in the wholesale electricity market. The company maintained from the outset that its actions were based on principles of economic rationality related to the efficient management of available water resources in a context of drought and water scarcity.
The administrative decision was subsequently referred to the Anti-Corruption Prosecutor’s Office, as it was understood that the facts could constitute a crime under Article 281 of the Criminal Code. As a result, criminal proceedings were initiated, the processing of which led to the suspension of the administrative appeal.
The criminal proceedings concluded with an acquittal issued by the Central Criminal Court of the National Court in January 2024. This ruling, which became final as it was not appealed, rejected the existence of conduct intended to fraudulently alter prices and considered it legitimate to take into account factors such as the future availability of water resources and weather forecasts to evaluate the business decisions adopted by the company.
Once the contentious-administrative procedure was resumed, Iberdrola requested the annulment of the sanction on the basis of the principle of non bis in idem, since there was identity of facts, subject and legal basis between the administrative sanctioning procedure and the criminal procedure concluded with a final acquittal.
The National Court has accepted these arguments and declared that maintaining an administrative sanction based on the same facts already examined by the criminal courts is incompatible with the legal system. Consequently, it has ordered the complete annulment of the sanctioning resolution.
With this decision, a legal dispute that has lasted for more than a decade and has been analyzed by the criminal and administrative courts comes to an end.
The DLA Piper team that has represented Iberdrola in this proceeding has been led by José Manuel Sala, of counsel of the Litigation and Regulatory department, together with José María Barrios, partner of the same department.
In Sala’s words: “This resolution represents the definitive closure of one of the most relevant issues in energy regulation and sanctioning powers in recent years, and provides legal certainty in highly regulated areas such as energy, where business decisions must be assessed taking into account their economic and operational context.”
