Section 28 of the Madrid Provincial Court has upheld the April 2022 ruling against ACS, brought by Iberdrola, for unfair competition. The decision confirms the court’s stance that Iberdrola faced actions aimed at harming its market standing, reinforcing a long-standing dispute between the two energy giants.
In the ruling dated March 5, the court rejects the appeal filed by the Florentino Pérez-led group against the Mercantile Court’s April 19, 2022 verdict and orders ACS to cover the costs of the second-instance proceedings. The outcome underscores the court’s view that the challenged conduct had measurable consequences in the competitive landscape and warranted judicial remedy.
The events trace back to February 22, 2021, when the online publication El Confidencial carried a report with the headline, Florentino Pérez prepares a 2.6 billion euro suit against Iberdrola over Villarejo. This publication appeared shortly before Iberdrola released its earnings, creating a moment of heightened market sensitivity around the company’s results.
Following the article, and prior to Iberdrola filing its results on February 24, the energy company sought a formal correction from ACS regarding the information disclosed. The absence of a corrective response led Iberdrola to pursue legal action before the Madrid Mercantile Court No. 4, which issued the 2022 judgment in Iberdrola’s favor for the full amount claimed.
The court’s reasoning highlighted that the publication constituted a denigrating act intended to undermine Iberdrola by casting doubt on its market position. The substantial sum of 2.6 billion euros, representing a large portion of Iberdrola’s 2020 net profit, was considered ample to sow uncertainty among investors and market participants.
The court found that the information was disseminated in a context where Iberdrola’s results were upcoming, and the timing amplified the perceived impact on the company’s credibility. It concluded that ACS aimed to damage Iberdrola’s reputation rather than present a balanced, factual account of the situation. A subsequent ACS response did not retract the initial publication; instead, it issued a statement denying involvement in the asserted legal action, which the court viewed as insufficient to negate the impact of the original report.
The Madrid Provincial Court also upheld the ruling on appeal, deeming the publication of a high-impact news item about a publicly traded company within a close window to its financial results to be seriously damaging. The appellate court observed that ACS did not dispute the news directly and merely issued a clarification, which the court considered inadequate as a corrective measure.
Moreover, the tribunal determined that ACS both leaked and disseminated the information, and that the release was capable of harming Iberdrola’s market reputation and its perceived solvency in the eyes of investors and lenders. The decision thus affirmed that the publication carried an objectively adverse effect on Iberdrola’s standing in the market.
In terms of future remedies, the parties were advised that a cassation appeal could be filed within twenty days of notification, addressed to the same Madrid court, with the Supreme Court’s First Chamber set to review matters based on procedural or substantive errors and in accordance with applicable jurisprudence. This follow-up avenue would depend on meeting the high court’s criteria for a cassation appeal and establishing a compelling legal or jurisprudential interest for review. [Citations: Audiencia Provincial de Madrid records, 2022-2023; Spanish Supreme Court guidelines on cassation appeals].