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TABLE OF SELECTED ABBREVIATIONS/DEFINED TERMS
AEEG Autorità per l'energia elettrica e il gas
Achmea ECJ Case C-284/16 (Slowakische Republik (Slovak Republic) v. Achmea BV)
Alpha Value Report No. 1 Expert Report of Alpha Value/Juan Camilo Rodríguez dated 13 December 2016, submitted by the Claimant
Alpha Value Report No. 2 Integration Expert Report of Alpha Value/Juan Camilo Rodríguez undated, submitted by the Claimant
Alpha Value Report No. 3 (REVISED) Update to Expert Reports of Alphavalue dated 10 April 2018, submitted by the Claimant
Althesys' Report Expert Report by Althesys dated 20 September 2017, submitted by the Claimant
Amicus Brief Amicus curiae brief submitted by the European Commission dated 31 May 2017
Bersani Decree Legislative Decree No. 79/1999 of 16 March 1999
CDP Cassa Depositi e Presitti
Claimant's Post Hearing Brief Claimant's Written Closing Submissions dated 1 June 2018
Claimant's Reply Claimant's Counter-Memorial on Jurisdiction and Reply on the Merits dated 20 September 2017
Commission's Communication Communication from the Commission to the European Parliament and the Council: Protection of Intra-EU Investment (COM(2018) 547/2)
DARIO Draft Articles on the Responsibility of International Organizations
DCF Discounted cash flow method
Destinazione Italia Decree Legislative Decree No. 145/2013 of 23 December 2013
EC European Commission
EC's Application EC's Application for Leave to Intervene as a Non-Disputing Party dated 24 October 2016
ECHR European Convention on Human Rights of 4 November 1950
ECJ European Court of Justice
ECOWAS Economic Community of West African States
ECT Energy Charter Treaty signed in December 1994 and in force since 16 April 1998
Energy Account I Energy Account regime introduced by Ministerial Decree of 28 July 2005 & Ministerial Decree of 6 February 2006
Energy Account II Energy Account regime introduced by Ministerial Decree of 19 February 2007
Energy Account III Energy Account regime introduced by Ministerial Decree of 6 August 2010
Energy Account IV Energy Account regime introduced by Ministerial Decree 5 May 2011
Energy Account V Energy Account regime introduced by Ministerial Decree of 5 July 2012
Eng. Boucher's Report Expert Report of Olivier Boucher from OB Consulting dated 6 September 2017, submitted by the Claimant
EU European Union
Exhibit C-# Claimant's Factual Exhibit
Exhibit CL-# Claimant's Legal Authority
Exhibit REX-# Respondent's Factual Exhibit
Exhibit RL-# Respondent's Legal Authority
FET Fair and equitable treatment standard
First GRIF Report First GRIF's Expert Economic Report dated 12 April 2017, submitted by the Respondent
First Opinion of Professors Onida and Randazzo First Expert Opinion of Profs. Onida and Randazzo dated 24 November 2016, submitted by the Claimant
First Witness Statement of Eng. Bacchiocchi First Witness Statement of Mr. Daniele Bacchiocchi dated 24 April 2017, submitted by the Respondent
First Witness Statement of Eng. Miraglia First Witness Statement of Mr. Luca Miraglia dated 21 April 2017, submitted by the Respondent
First Witness Statement of Mr. Levy First Witness Statement of Mr. Jacques Edouard Levy dated 15 November 2016, submitted by the Claimant
FPS Most constant protection and security obligation
GRIF Financial Report GRIF's Financial Expert Report dated 12 April 2017, submitted by the Respondent
GSE Gestore dei Servizi Energetici - GSE S.p.a.
GSE Conventions Conventions concluded between GSE and Belenergia's PV invested companies on feed-in tariffs and on minimum prices
GSE Conventions on feed-in tariffs Conventions concluded between GSE and Belenergia's PV invested companies on feed-in tariffs
GSE Conventions on minimum prices Conventions concluded between GSE and Belenergia's PV invested companies on minimum prices
Hearing Hearing on Jurisdiction and the Merits, held on 26 to 29 March 2018 in the World Bank Group Paris
ICJ International Court of Justice
ICSID Arbitration Rules ICSID Rules of Procedure for Arbitration Proceedings of 2006
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States of 18 March 1965
ICSID or the Centre International Centre for Settlement of Investment Disputes
ILC International Law Commission
ILC Articles on State Responsibility ILC Articles on Responsibility of States for Internationally Wrongful Acts of 2001
ILC Report on Fragmentation ILC Study Group Report on Fragmentation of International Law of 13 April 2006
Istat Istituto nazionale di statistica
ITLOS International Tribunal for the Law of the Sea
MISE Ministry of Economic Development (Ministero dello sviluppo economico)
MPS Monte dei Paschi di Sena
MSD Dispatching Service Market (Mercato per il Servizio di Dispacciamento)
OECD Organisation for Economic Co-operation and Development
OECD Glossary OECD Glossary of Tax Terms
PO1 Procedural Order No. 1 dated 12 September 2016, concerning the Procedural Calendar
PO2 Procedural Order No. 2 dated 6 November 2016, concerning the amended Procedural Calendar
PO3 Procedural Order No. 3 dated 5 March 2018, on the organization of the Hearing
Procedural Calendar Procedural Calendar attached to the PO1 as Annex A
Professor Bollino's Report Expert Report of Professor Carlo Andrea Bollino dated 11 September 2017, submitted by the Claimant
Professor Rojas' First Opinion First Expert Legal Opinion of Prof. Giacomo Rojas Elgueta dated 23 April 2017, submitted by the Respondent
Professor Rojas' Second Opinion Second Expert Legal Opinion of Prof. Giacomo Rojas Elgueta dated 15 December 2017, submitted by the Respondent
Protos' Report Expert Report by Protos S.P.A. dated 18 September 2017, submitted by the Claimant
PV Photovoltaic
PVGIS Photovoltaic Geographical Information System
PV Project Belenergia's investment in ten Italian SPVs having developed and operating 20 PV plants in Southern Italy
Request for Arbitration Request for Arbitration from Belenergia S.A. against the Italian Republic, received by the Centre on 7 August 2015, dated 30 July 2015
Respondent's Post Hearing Brief Respondent's Post Hearing Closing Statement dated 1 June 2018
Respondent's Rejoinder Respondent's Rejoinder on the Merits and Reply on Jurisdiction dated 15 December 2017
Retiro dedicato The GSE's purchase regime established by Legislative Decree No. 387/2003
RIA Regulatory Impact Analysis
Romani Decree Legislative Decree No. 28/2011 of 3 March 2011
Salva Alcoa Law Law No. 129/2010 of 13 August 2010
Second GRIF Report Second GRIF's Expert Report dated 15 December 2017, submitted by the Respondent
Second Opinion of Professors Onida and Randazzo Second Expert Opinion of Profs. Onida and Randazzo dated 31 August 2017, submitted by the Claimant
Second Witness Statement of Eng. Bacchiocchi Second Witness Statement of Mr. Daniele Bacchiocchi dated 15 December 2017, submitted by the Respondent
Second Witness Statement of Eng. Miraglia Second Witness Statement of Mr. Luca Miraglia dated 14 December 2017, submitted by the Respondent
Second Witness Statement of Mr. Levy Second Witness Statement of Mr. Jacques Edouard Levy dated 8 September 2017, submitted by the Claimant
SMEs Small and medium-sized enterprises
Spalma Incentivi Decree Legislative Decree No. 91 of 24 June 2014
SPVs Special Purpose Vehicles
Statement of Claim Claimant's Memorial dated 14 December 2016
Statement of Defense Respondent's Counter-Memorial on the Merits and Memorial on Jurisdiction dated 24 April 2017
Terna Terna S.p.A. – Rete Elettrica Nazionale, the manager of electricity transmission and dispatching activities
TEU Treaty on the EU
TFEU Treaty on the Functioning of the EU
Tr. [Day] [Speaker(s)] [page:line] Transcript of the Hearing
TRA Technical Regulatory Analysis
Tribunal Arbitral tribunal constituted on 18 May 2016, composed by Mr. Yves Derains, Prof. Bernard Hanotiau, and Prof. José Carlos Fernández Rozas
UNCLOS United Nations Convention on the Law of the Sea of 10 December 1982
VCLT Vienna Convention on the Law of Treaties of 23 May 1969
WACC Weighted average cost of capital

I. INTRODUCTION AND PARTIES

1.
This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") based on the Energy Charter Treaty which entered into force on 16 April 1998 ("ECT") and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on 14 October 1966 ("ICSID Convention").
2.
The Claimant is Belenergia S.A., a company incorporated under the laws of Luxembourg. ("Belenergia" or "Claimant").
3.
The Respondent is the Italian Republic ("Italy" or "Respondent").
4.
The Claimant and the Respondent are collectively referred to as the "Parties." The Parties' representatives and their addresses are listed above on page (i).
5.
This dispute relates to a series of measures implemented by the government of Italy that amended its legislation and altered the legal regimes applicable to the Claimant's Special Purpose Vehicles ("SPVs")1 through which the Claimant had invested in the photovoltaic ("PV") sector in Italy.
6.
The Claimant alleges that its investment benefited from "Conventions" signed with the Gestore dei Servizi Energetici ("GSE"), the State-owned energy regulatory agency. Claimant further alleges that these incentives were the main reason for its investment and that the measures implemented by the Respondent constitute breaches of the ECT.

II. PROCEDURAL HISTORY

A. Registration and Tribunal's Constitution

7.
On 7 August 2015, ICSID received a Request for Arbitration, from Belenergia against the Italian Republic ("Request for Arbitration") dated 30 July 2015. On 28 August 2015, the Centre requested the Claimant to submit support documentation to its Request. The Request was supplemented on 11 and 13 August 2015.
8.
On 22 September 2015, the Secretary-General of ICSID registered the Request in accordance with Article 36 of the ICSID Convention and notified the Parties of the registration. In the Notice of Registration, the Secretary-General invited the Parties to proceed to constitute an arbitral tribunal as soon as possible in accordance with Rule 7(d) of ICSID's Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings ("ICSID Arbitration Rules") and Articles 37 to 40 of the ICSID Convention.
9.
The Request contained the Claimant's proposal for the Arbitral Tribunal's ("Tribunal") constitution which was confirmed by Claimant's email dated 22 October 2015. On 3 November 2015, the Respondent agreed to the Claimant's proposal. The Centre acknowledged its receipt of the proposal on 5 November 2015. Pursuant to the Parties' agreement, the Tribunal would consist of three arbitrators, one to be appointed by each Party and the presiding arbitrator to be appointed by the two-party appointed arbitrators. In this communication, the Centre also acknowledged its receipt of the Claimant's appointment of Professor Bernard Hanotiau, a national of Belgium, as its party-appointed arbitrator.
10.
On 16 November 2015, following the appointment by the Claimant, Professor Hanotiau accepted his appointment as arbitrator.
11.
On 23 February 2016, the Claimant requested to the Chairman of the ICSID Administrative Council to appoint the arbitrator not yet appointed by the Respondent in accordance with Article 38 of the ICSID Convention and Arbitration Rule 4. On 29 February 2016, the Respondent stated that it was in the process of appointing an arbitrator.
12.
On 10 March 2016, the Italian Republic appointed Professor José Carlos Fernández Rozas, a national of Spain, as its party-appointed arbitrator. On 16 March 2016, Prof. Fernández Rozas accepted his appointment as arbitrator.
13.
Pursuant to the Claimant's proposal on its Request, and the Respondent's agreement to such proposal on 3 November 2015, the two-party appointed arbitrators, Prof. Hanotiau and Prof. Fernández Rozas, jointly elected on 8 May 2016, Mr. Yves Derains, a national of France, as the presiding arbitrator.
14.
On 12 May 2016, Mr. Derains accepted his appointment as the presiding arbitrator. On 13 May 2016, the Centre invited the Parties to submit any observations on this appointment no later than on 17 May 2016.
15.
Not having received any observations from the Parties, on 18 May 2016, the SecretaryGeneral, in accordance with Rule 6(1) of the ICSID Arbitration Rules, notified the Parties that all three arbitrators had accepted their appointments and that the Tribunal was therefore deemed to have been constituted on that date. Ms. Natalí Sequeira, ICSID Legal Counsel, was designated to serve as Secretary of the Tribunal.
16.
The Tribunal is composed by Mr. Yves Derains, a national of France, President, appointed by agreement of the co-arbitrators; Professor Bernard Hanotiau, a national of Belgium, appointed by the Claimant; and Professor Fernández Rozas, a national of Spain, appointed by the Respondent.
17.
On 7 June 2016, on request by the President of the Tribunal, the Centre enquired the Parties whether they agreed to the appointment of Ms. Aurore Descombes as his assistant in this case. Ms. Descombes provided a curriculum vitae and declaration of independence. Both Parties confirmed that they did not have any observations on Ms. Descombes appointment.

B. The First Session

18.
In accordance with ICSID Arbitration Rule 13(1), the Tribunal held a First Session with the Parties on 7 July 2016 by teleconference.
19.
Following the first session, on 12 September 2016, the Tribunal issued Procedural Order No. 1 ("PO1") recording the agreement of the Parties on procedural matters and the decision of the Tribunal on disputed issues. PO1 provides, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006, that the procedural language would be English, and that the place of proceeding would be Paris, France. PO1 also sets out a schedule for the merits phase of the proceedings ("Procedural Calendar"), attached as Annex A.

C. The European Commission's Application to Intervene

20.
On 24 October 2016, the European Commission ("EC") submitted an Application for Leave to Intervene as a Non-Disputing Party ("EC's Application") pursuant to Article 37(2) of the ICSID Arbitration Rules.
21.
On 26 October 2016, the Tribunal invited the Parties to submit their comments on the EC's Application. On 10 and 24 November 2016, the Claimant and the Respondent, respectively, submitted their observations on the EC's Application.
22.
On 16 December 2016, the Tribunal issued its Decision to grant the EC's Application and informed the Parties that it will fix a date for the submission of the EC's amicus curiae brief ("Amicus Brief"). On 3 April 2017, the Tribunal invited the EC to submit its amicus curiae brief by 31 May 2017 limited to issues of jurisdiction and to the issue whether Article 26 of the ECT applies to the dispute. On 8 May 2017, the Centre made the jurisdiction submissions and certain exhibits available to the EC as agreed by the Parties.
23.
On 31 May 2017, the EC filed an Amicus Brief accompanied by the supporting documentation, EC-1 to EC-41.

D. The Written Phase

24.
On 31 October 2016, the Claimant requested the Tribunal to stay the deadline for its submission of the Memorial ("Statement of Claim"), which in accordance with the Procedural Calendar was due on 21 November 2016, this due to the overlapping of deadlines triggered by the EC's Application. On 2 November 2016, the Respondent submitted its comments on the Claimant's request and requested the Tribunal to also stay all further deadlines and to establish new deadlines of further submissions.
25.
On 3 November 2016, the Parties submitted further observations on the Claimant's request to stay the Procedural Calendar.
26.
On 6 November 2016, the Tribunal issued Procedural Order No. 2 ("PO2"), confirming the schedule for the Parties to submit comments to the EC's Application and amending some deadlines in the Procedural Calendar.
27.
On 18 November 2016, Lexlitis notified that it was no longer going to represent the Claimant in this proceeding. On 21 November 2016, the Claimant requested the Tribunal to grant an extension to file its Statement of Claim to 7 December 2016 due to the change in legal representation. On 22 November 2016, the Centre informed the Parties that the Tribunal had suspended the time-limit for the Claimant's submission of its Statement of Claim and invited the Respondent to comment on the Claimant's request for the extension.
28.
On 23 November 2016, the Respondent submitted its agreement to the Claimant's request for the extension of its submission of its Statement of Claim. On 6 December 2016, the Tribunal granted the Claimant's request.
29.
On 6 December 2016, the Claimant requested a further extension to file its Statement of Claim to 14 December 2016. On 7 December 2016, the Tribunal granted this extension.
30.
On 14 December 2016, the Claimant filed its Statement of Claim, accompanied by the witness statement of Mr. Jacques Edouard Levy ("First Witness Statement of Mr. Levy"), the Expert Opinion of Professor Valerio Onida and Professor Barbara Randazzo ("First Opinion of Professors Onida and Randazzo"), the Expert Report of Alpha Value (Mr. Juan Camilo Rodríguez) ("Alpha Value's First Report") which contained Appendices 1-7, Factual Exhibits C-1M to C-29M, and Legal Exhibits CL-1M to CL-84M.
31.
On 13 February 2017, the Respondent requested the Tribunal to grant an extension to file its Counter-Memorial on the Merits and Memorial on Jurisdiction ("Statement of Defense"). On 14 February 2017, the Tribunal invited the Claimant to submit its observations on this request and invited the Parties to agree on a revised Procedural Calendar without modifying the hearing dates. On 21 February 2017, the Claimant confirmed that it had no objection on the Respondent's request of 13 February 2017, and transmitted to the Tribunal an agreed revised Procedural Calendar.
32.
On 21 February 2017, the Parties agreed to a revised Procedural Calendar.
33.
On 3 April 2017, by the President of the Tribunal's request, the Centre enquired if the Parties agreed to the replacement of Ms. Descombes with Ms. Ana Paula Montans as his assistant in this case. Ms. Montans provided her curriculm vitae and a declaration of independence. The Parties confirmed that they did not have any observations to Ms. Montans appointment.
34.
On 24 April 2017, the Respondent filed its Statement of Defense. This submission was accompanied by the Index of Factual Exhibits and Legal Authorities, the witness statements of: Mr. Daniele Bacchiocchi ("First Witness Statement of Eng. Bacchiocchi"), Eng. Luca Miraglia ("First Witness Statement of Eng. Miraglia"), the Expert Legal Opinion of Prof. Giacomo Rojas Elgueta ("Professor Rojas' Opinion") which contained Exhibits GRA-1 to GRA-40, GRIF's Expert Report ("First GRIF Report") which contained Exhibits GRIF-1 to GRIF-18, GRIF's Financial Expert Report ("GRIF Financial Report") which contained Exhibits GRIF-F1 to GRIF-F44, Factual Exhibits REX-1 to REX-62, and Legal Exhibits RLA-1 to RLA-32. In the Statement of Defense, Italy requested that (i) the proceedings be bifurcated requesting that the Tribunal decide on the jurisdictional objections before discussing the merits;2 and that (ii) the arbitration be suspended until the decision of the European Court of Justice ("ECJ") in Slowakische Republik (Slovak Republic) v. Achmea BV ("Achmea").3
35.
On 24 July 2017, the Respondent transmitted to the Tribunal the Parties' agreement to postpone the deadline for the submissions of the Claimant's Reply on the Merits and CounterMemorial on Jurisdiction to 20 September 2017 ("Claimant's Reply"), and the Respondent's Rejoinder on the Merits and Reply on Jurisdiction to 15 December 2017 ("Respondent's Rejoinder"). The Parties' agreement also requested the postponement of the hearing suggesting the end of January 2018 as a possible date.
36.
On 28 July 2017, the Tribunal confirmed the Parties' agreement of 24 July 2017, but informed that the hearing dates could not be confirmed at that time. On 30 July 2017, the Tribunal proposed to the Parties to hold the hearing on the week of 26 March 2018. The Tribunal asked the Parties to confirm their availability as soon as possible. On 2 August 2017, both Parties confirmed their availability to hold the hearing on the dates proposed by the Tribunal.
37.
On 28 August 2017, the Centre informed the Parties that Ms. Catherine Kettlewell, ICSID Legal Counsel, would serve as Secretary of the Tribunal, replacing Mrs. Natalí Sequeria.
38.
On 20 September 2017, the Claimant filed its Reply, accompanied by the second witness statement of Mr. Jacques Edouard Levy ("Second Witness Statement of Mr. Levy"), the Second Expert Opinion of Professor Valerio Onida and Professor Barbara Randazzo ("Second Opinion of Professors Onida and Randazzo"), and the following Expert Reports of: Olivier Boucher from OB Consulting ("Eng. Boucher's Report"), Emiliano Guerrieri and Giorgio Saraceno of Protos S.P.A. ("Protos' Report"), Alessandro Marangoni of Althesys Strategic Consultants ("Althesys' Report"), Prof. Carlo Andrea Bollino ("Professor Bollino's Report"), and the Integration Report of Alpha Value/Juan Camilo Rodríguez ("Alpha Value's Second Report") which contained Appendices 1 to 7, Factual Exhibits C-1RM to C-24RM, and Legal Exhibits CL-1RM to CL-165RM.
39.
On 15 December 2017, the Respondent filed its Rejoinder, accompanied by the second witness statements of: Mr. Daniele Bacchiocchi ("Second Witness Statement of Eng. Bacchiocchi"), Eng. Luca Miraglia ("Second Witness Statement of Eng. Miraglia"), the Second Expert Legal Opinion of Prof. Giacomo Rojas Elgueta ("Professor Rojas' Second Opinion") which contained Exhibits GRA-41 to GRA-58, GRIF's Second Expert Report ("Second GRIF Report") which contained Exhibits GRIF-R1 to GRIF-R4, Consolidated Indexes of Factual and Legal Exhibits, Factual Exhibits REX-63 to REX-71, and Legal Exhibits RLA-33 to RLA-36. Italy did not reiterate its request for bifurcation let alone its request for the suspension of the proceedings in the Rejoinder.
40.
On 11 January 2018, by the President of the Tribunal's request, the Centre enquired if the Parties agreed to the replacement of Ms. Montans with Dr. Ana Gerdau de Borja Mercereau as his assistant in this case. Dr. Gerdau de Borja Mercereau provided her curriculm vitae and a declaration of independence. The Parties confirmed that they did not have any observations to Dr. Gerdau de Borja Mercereau appointment and on 12 January 2018 the Centre sent a letter to confirm her appointment.
41.
On 8 March 2018, the Tribunal invited the Parties to provide its comments on the ECJ's decision in Achmea by 19 March 2018, and stated that it was prepared to admit such evidence into the record of the case.
42.
On 19 March 2018, each Party submitted its comments on the Achmea decision as instructed by the Tribunal on 8 March 2018.

E. The Oral Procedure

43.
On 27 February 2018, the President and the Secretary of the Tribunal held a pre-hearing telephone conference with the Parties.
44.
On 1 March 2018, the Tribunal requested the Parties to confirm whether they agreed to derogate from certain cross-examination rules which had been modified from the PO1 to the agreements expressed by the Parties in the pre-hearing agenda. The Parties agreed to the modification and cross-examination during the hearing would be limited to the contents of the witness or expert reports.
45.
On 5 March 2018, the Tribunal issued Procedural Order No. 3 ("PO3"), embodying the Parties' agreements and the Tribunal's decisions on procedural matters concerning the organization and logistical arrangements of the hearing.
46.
On 12 March 2018, as ordered in PO3, the Respondent submitted the annexes to Eng. Luca Miraglia's two witness statements of 21 April 2017 and 14 December 2017 which had not been previously submitted.
47.
On 19 March 2018, the Respondent requested leave from the Tribunal to submit an additional document into the record of this arbitration.
48.
On 21 March 2018, the Tribunal invited the Claimant to provide comments on the Respondent's request to submit an additional document into the case record, no later than on 22 March 2018. By a communication of 22 March 2018, the Claimant submitted its observations on the Respondent's request of 19 March 2018.
49.
On 22 March 2018, the Claimant indicated that it would provide certain improved translations which would be included in the hearing bundles. The Respondent commented on Claimant's request on the same date. On 23 March 2018, the Tribunal indicated "[i]n view of Respondent's comments, no modified translations should be introduced in the bundles at this stage. If there is an issue of translation in a witness statement relevant to the witness examination, the point will have to be raised at the time. The Parties will have to liaise after the hearing in order to decide if it is necessary to amend the translations on the record […]"
50.
On 23 March 2018, the Centre informed the Parties that the Tribunal had granted the Respondent's request of 19 March 2018, but for the sole purpose of "to serv[e] as a ground to impeach the witness Mr. Edouard Lévy at the Hearing."
51.
A hearing on Jurisdiction and the Merits was held in Paris, France, from 26 to 29 March 2018 ("Hearing"). The following persons were present at the Hearing:

Tribunal :

Mr. Yves Derains President
Prof. Bernard Hanotiau Arbitrator
Prof. José Carlos Fernández Rozas Arbitrator

ICSID Secretariat :

Ms. Catherine Kettlewell Secretary of the Tribunal

Assistant to the President of the Tribunal:

Dr. Ana Gerdau de Borja Mercereau

For the Claimant :

Mr. Elvezio Santarelli Watson Farley & Williams - Rome
Mr. Eugenio Tranchino Watson Farley & Williams - Rome
Mr. Andrew Savage Watson Farley & Williams - London
Mr. Robert Fidoe Watson Farley & Williams - London
Professor Eirik Bjorge Bristol University
Mr. Cameron Miles 3VB Barristers - London

Counsels' Assistants:

Mr. Diego Rovelli Watson Farley & Williams - Rome
Ms. Raffaela Colamarino Watson Farley & Williams - Rome
Mr. Jack Moulder Watson Farley & Williams - London

Parties:

Mr. Jacques Edouard Levy CEO Belenergia S.A.
Mr. Fabio Caggiula Belenergia S.A.

For the Respondent :

Avv Giacomo Aiello Avvocatura dello Stato
Avv. Sergio Fiorentino Avvocatura dello Stato
Avv. Pietro Garofalo Avvocatura dello Stato
Prof. Maria Chiara Malaguti MAECI – External Expert
Prof. Saverio Di Benedetto MAECI – External Expert

Parties:

Eng. Daniele Bacchiocchi GSE
Dott. Valerio Ventura GSE
Avv. Marta Capriulo GSE
Avv Cosimo Danilo Raimondi GSE
Avv. Paolo Berisio GSE

Observer:

Mr. Harshad Pathak Hanotiau & van den Berg

Court Reporters :

Ms. Diana Burden English Court Reporter
Ms. Laurie Carlisle English Court Reporter

Interpreters :

Mr. Jesus Getan Bornn English-Spanish Interpreter
Ms. Roxana Dazin English-Spanish Interpreter
Mr. Marc Viscovi English-Spanish Interpreter
Ms. Francesca Geddes English-Italian Interpreter
Ms. Monica Robiglio English-Italian Interpreter
Ms. Delfina Genchi English-Italian Interpreter

During the Hearing, the following persons were examined:

On behalf of the Claimant :

Mr. Jacques Edouard Levy CEO Belenergia S.A.
Prof. Valerio Onida Onida Randazzo e Associati Law Firm
Prof. Barbara Randazzo Onida Randazzo e Associati Law Firm
Prof. Carlo Andrea Bollino (Expert-witness) University of Perugia and AIEE (Italian Association for Energy Economics)
Prof. Alessandro Marangoni Althesys – Strategic Consultants
Mr. Juan Camilo Rodriguez Alpha Value
Dr. Olivier Boucher OB Consulting
Eng. Giorgio Saraceno Protos S.p.A
Eng. Emiliano Guerrieri Protos S.p.A.

On behalf of the Respondent :

Eng. Daniele Bacchiocchi GSE
Eng. Luca Miraglia GSE
Prof. Umberto Monarca GRIF
Prof. Cesare Pozzi GRIF
Prof. Davide Quaglione GRIF
Prof. Giacomo Rojas Elgueta Università Roma Tre
Prof. Ernesto Cassetta (not testifying) GRIF

52.
During the Hearing, each Party submitted various factual and legal exhibits, and the Tribunal admitted into the record the following: Factual Exhibits REX-72 to 73 and Legal Exhibits CL-166RM, CL-174RM through CL-177RM.

F. The Post-Hearing Procedure

53.
On 3 April 2018, the Claimant's counsel submitted an authorization to act on behalf Compagnia Solare 1 SRL issued by the judicial administrator of that company.
54.
On 10 April 2018, the Claimant submitted an Updated Expert Report of AlphaValue/Juan Camilo Rodríguez with Appendices 1 through 5 ("Alpha Value's Third Report").
55.
On 16 April 2018, the Tribunal requested the Parties to inform on the following: (i) agreement on the final version of the Hearing transcripts; (ii) disagreement on "improved translations" submitted at the Hearing; and (iii) submission of electronic versions of certain demonstratives and documents submitted at the Hearing.
56.
On 23 April 2018, the Tribunal confirmed the Parties' agreement to extend the deadline to submit corrections to the Hearing transcript and to accept the "improved translations" submitted by the Claimant during the Hearing.
57.
On 7 May 2018, the Claimant submitted the electronic versions of Exhibits C-25RM, C-26-RM, CL-178RM, an errata to the Althesys' Report, and the Parties' joint translation into English of Exhibit CL-3M with a point of disagreement.
58.
By email of even date, the Claimant submitted the corrected Hearing transcript as agreed by the Parties, with a point of disagreement in relation to Prof. Onida's testimony (Claimant's expert).
59.
On 11 May 2018, the Tribunal informed the Parties that the court reporter would be inserting their agreed changes to the Hearing transcript. The Tribunal took note of the Parties' disagreement on the translation of "proveddimento" in Prof. Onida's testimony, accepting the transcript with both translations and noting that it would "resolve the possible inconsistency if and when it is necessary for its decision."
60.
On 17 May 2018, the Secretariat informed the Parties that the Hearing transcript, as revised by the court reporter, was available in the case folder (Box).
61.
On the same day, the Parties requested a further correction to the transcript of Day 4 of the Hearing.
62.
On the next day, the Secretariat submitted to the Parties a new revised transcript of Day 4 of the Hearing, as agreed by the Parties.
63.
On 24 May 2018, the Claimant made a request to introduce the award rendered in Masdar Solar et al. v. Spain (ICSID Case No. ARB/14/1) as provided in PO1, ¶ 17.3, in order to refer to the same in its Post-Hearing Brief due on 25 May 2018. The Tribunal invited the Respondent to comment on the Claimant's request dated 24 May 2018.
64.
On the same day, the Respondent agreed with the Claimant's request on the condition that the Respondent was granted an extension of time until 1 June 2018 to submit its Post-Hearing Brief.
65.
Later on that day, the Claimant indicated that it agreed with the Respondent's request for a time extension.
66.
By letter dated 24 May 2018, the Secretariat informed the Parties of the Tribunal's decision to grant both Parties a time extension to file their Post-Hearing Briefs by 1 June 2018 and their Statements of Costs by 8 June 2018, considering that the time limits for these submissions were simultaneous.
67.
On 25 May 2018, the Claimant introduced the Masdar Solar et al. v. Spain award (Exhibit CL-179RM), as authorised by the Tribunal.
68.
The Parties filed simultaneous Post-Hearing Briefs on 1 June 2018.
69.
On 8 June 2018, the Claimant filed its Statement of Costs.
70.
On the same date, the Claimant objected to the Respondent's reliance in its Post-Hearing Brief on Decision No. 10795/2017 of Italy's Corte di Cassazione, arguing that this document was not on record, although an Italian version of this document had been provided to Prof. Onida at the Hearing.
71.
On 11 June 2018, the Respondent submitted Decision No. 10795/2017 in Italian and the respective English translation, stating that it would not object to the Claimant's commenting on it so long as it also had an opportunity to respond.
72.
By letter of the same date, the Secretary of the Tribunal informed the Parties of the Tribunal's decision to grant the Claimant a ten-day time limit to comment on the Corte di Cassazione 's Decision No. 10795/2017, to which Italy could respond within ten-days of receipt of the Claimant's comments. The Tribunal also informed that it would ignore any other comments unrelated to this decision. By the same letter, the Tribunal highlighted that if Italy did not provide its Statement of Costs (due on 8 June 218) on or before 18 June 2018, the Tribunal would assume that it had given up its claims on costs.
73.
By letter dated 19 June 2018, the Secretary of the Tribunal informed the Parties that the Tribunal had taken note of the fact that Italy did not present its Statement of Costs on 18 June 2018, pointing out that "[i]f Italy does not submit a Statement on Costs until 22 June 2018, the Secretariat will distribute to Italy the Claimant's Statement on Costs" and that "Italy shall not have an opportunity to submit a Statement on Costs after 22 June 2018."
74.
On 21 June 2018, the Respondent filed its Statement of Costs.
75.
On the same date, the Claimant requested a one-day time extension to submit its comments on Corte di Cassazione 's Decision No. 10795/2017.
76.
On 22 June 2018, the Tribunal granted the Claimant's request for a time extension dated 21 June 2018.
77.
On the same day, the Claimant submitted its comments on Corte di Cassazione 's Decision No. 10795/2017, informing that it would provide a revised English translation of the same in the following week.
78.
By email of even date, the Respondent filed its revised Statement of Costs.
79.
On 26 June 2018, the Claimant filed its English translation of Corte di Cassazione 's Decision No. 10795/2017.
80.
On the next day, the Tribunal informed the Parties that the Corte di Cassazione 's Decision No. 10795/2017 would be introduced into the record as Exhibit REX-74.
81.
On 2 July 2018, the Respondent filed its response to the Claimant's comments on Corte di Cassazione 's Decision No. 10795/2017.
82.
By letter dated 3 July 2018, the Secretary of the Tribunal informed the Parties that the Tribunal "(a) acknowledge[d] receipt of Italy's Reply to Claimant's Observations on Corte di Cassazione 's Decision No. 10795/2017 (Exhibit REX-74), and (b) declare[d] the discussion on the content and on the translation of this Decision closed."
83.
On 24 July 2018, the Respondent made a request to introduce the Communication from the Commission to the European Parliament and the Council Protection of intra-EU investment (COM(2018) 547/2) as provided in PO1, ¶ 17.3.
84.
On the next day, the Tribunal invited the Claimant to comment by 30 July 2018 on the Respondent's request to introduce dated 24 July 2018.
85.
On 30 July 2018, the Claimant filed its comments on the Respondent's request to introduce dated 24 July 2018.
86.
By letter dated 1 August 2018, the Secretary of the Tribunal informed the Parties that the Tribunal granted the Respondent's request to introduce the Communication from the Commission to the European Parliament and the Council Protection of intra-EU investment (COM(2018) 547/2), inviting the Parties to file simultaneous observations on the same by 8 August 2018, and noting that discussions on the matter will be closed thereafter.
87.
On 8 August 2018, the Parties filed simultaneous observations on the Communication from the Commission to the European Parliament and the Council Protection of intra-EU investment (COM(2018) 547/2).
88.
On 3 October 2018, the European Commission offered to "up-date its written observations in the light of judgment of the European Court of Justice in Case C-284/16 Achmea v Slovak Republic, and in particular to set out its view on the consequences of that judgment for pending arbitration cases based on the Energy Charter Treaty."
89.
By letter dated 8 October 2018, the Secretary of the Tribunal informed the European Commission, with the Parties in copy, that the Tribunal thanked the European Commission for its offer dated 3 October 2018 but found that additional amicus curiae submissions could not be accepted at such late stage of the proceedings, noting that "upon Italy's request the Communication from the Commission to the European Parliament and the Council: Protection of intra-EU Investment (COM(2018) 547/2) was introduced into the record as Exhibit REX-75 and that the Parties have filed simultaneous observations on this document on 8 August 2018."
90.
By letter dated 14 February 2019, the Respondent submitted a request for termination of the proceedings and, in the alternative, suspension of the proceedings, along with the EU Member States' Declarations of 15 and 16 January 2019.
91.
By letter of the same date, the Secretary of the Tribunal invited the Claimant to submit by 22 February 2019 its observations on the Respondent's request dated 14 February 2019.
92.
On 22 February 2019, the Claimant submitted its observations on the Respondent's request dated 14 February 2019.
93.
By email dated 7 June 2019, the Claimant informed the Tribunal that Mr. Andrew Savage was to be removed from the list of counsel of record for the Claimant.
94.
On 18 June 2019, Italy requested the suspension of the proceeding. On 20 June 2019, Belenergia filed its observations by invitation of the Tribunal. On 26 June 2019, the Tribunal decided to dismiss Italy's request for suspension on the following basis:

First, Italy submitted its Request for Suspension by letter dated 18 June 2019, although the Secretariat had informed the Parties on23 May 2019 that the Tribunal expected to be able to render the Award by the end of June 2019.15 Hence, Italy's Request for Suspension comes at a very late stage of the proceedings.

Second, the Joined Cases [ECJ Joined Cases C-798/18 and C-799/18] concern referrals to the ECJ by the Administrative Court of Lazio, while this is an ECT arbitration. Italy did not satisfy its burden of proving that the Joined Cases involve (i) the same parties (i.e. Belenergia is not a party to the Lazio dispute), (ii) the same object of the dispute, let alone (iii) the same cause of action.

Third, the Joined Cases are still pending before the ECJ. Thus, the purported risks of inconsistent decisions and legal uncertainty16 are hypothetical.

95.
The proceeding was closed on 26 June 2019.
96.
Although the procedural language of the arbitration is English,4 the Parties did not always present a full translation of the original documents presented in Italian. Consequently, when necessary the Tribunal quotes some excerpts of documents in Italian when they are not translated.

III. FACTUAL BACKGROUND

97.
The purpose of this Section is to provide a brief account of the factual background to the dispute. Although the Parties have no major differences in relation to events described, they often disagree on the legal consequences of these events, as summarised in Sections V and VI of this Award.

A. Italian Legislative and Regulatory Framework

98.
At its inception PV energy technology required a high upfront investment. In 1992, Italy sought to encourage PV investment with the adoption of Law No. 9/1991 in light of Italy's National Energy Plan of 1988.5 This Law established the CIP6 incentive scheme, which enshrined individual power purchase agreements concluded between ENEL S.p.a. and independent private producers with an eight-year duration.6
99.
Later in 1999, Italy adopted Legislative Decree No. 79/19997 in light of EU Directive 77/2001/EC8 on the promotion of electricity produced from renewal energy resources in the internal electricity market. Legislative Decree No. 79/1999 established the Green Certificates' scheme repealing the CIP6 incentive.9 The subsidy level of Green Certificates was associated with wind and biomass technology costs rather than PV technology costs, which meant that it was not attractive to PV investment.10
100.
In the 2000s, Italy adopted a new policy with PV-specific incentive mechanisms, including mechanisms associated with the 20-year life of PV plants like the feed-in tariffs under the Energy Account ("Conto Energia") regime,11 in addition to the minimum price incentive.

Energy Account Incentives (Feed-In Tariffs)

101.
The Energy Account regime was introduced by Legislative Decree No. 387/200312 in light of EU Directive 77/2001/EC. Article 7 of Legislative Decree No. 387/2003 directed the Minister for Production Activities and the Minister for the Environment to adopt ministerial decrees defining the criteria for promotion of electricity production from solar energy. Article 7(2) set forth that the criteria for promotion measures shall not entail burden on the State budget, be in accordance with EU laws, and include the conditions for PV incentives. Article 7(2)(d) of Legislative Decree No. 387/2003 required that incentives be "of decreasing amount and of duration such as to guarantee fair remuneration of the investment and operating costs." (emphasis added).
102.
Legislative Decree No. 387/2003 was implemented with the adoption of ministerial decrees providing for incentive tariffs (feed-in tariffs) pursuant to its Article 7, which provided as follows:

Article 7
Specific provisions for solar energy

1. Within six months from the date when this Decree enters into force, the Minister for Production Activities, in agreement with the Minister for the Environment and after consultation with the Joint Conference, shall adopt one or more decrees defining criteria for the promotion of electrical energy production from solar energy.

2. Without entailing any burdens on the State budget and in accordance with the Community laws in force, the criteria referred to in paragraph 1, shall:

a) establish the requisites of parties who might benefit from promotion measures;

b) establish the minimum technical requirements of plants and their components;

c) establish conditions concerning the cumulation of promotion measures with other incentives;

d) establish procedures to determine the size of promotion measures. For electricity produced by photovoltaic conversion of solar energy, they shall provide for a specific, incentive tariff, of decreasing amount and of duration such as to guarantee fair remuneration of the investment and operating costs;

e) establish a target for the rated power to be installed;

f) also fix the maximum limit of the cumulative electric power of all the plants that may benefit from the promotion measures; […]

103.
Ministerial Decree of 28 July 200513 and Ministerial Decree of 6 February 2006 set up the "Energy Account I." Article 6(3) of Ministerial Decree of 28 July 2005 on Energy Account I set forth the incentive tariff (feed-in tariff) in relation to PV plants with power exceeding 50kW and less than 1000kW, as follows:

Article 6
Criteria to determine the amount aimed at supporting photovoltaic plants with a rated power higher than 20 kW

[…] 3. In addition to the recognition of conditions referred to in Subparagraph 1, electricity produced by photovoltaic plants of a rated power exceeding 50 kW and less than 1000 kW, entered in whole or in part in the [electricity network], has the right, in accordance with the provisions of this decree, [to] an incentive tariff whose maximum measures are as follows:

a) Plants for which the application mentioned in Article 7, Paragraph 1, was [submitted] in 2005 and 2006: 0,490 euro/kWh for a period of twenty years;

b) Plants for which the application mentioned in Article 7, Paragraph 1, was submitted in the years following 2006: the value of the incentive tariff referred in point a) shall be reduced by 2%, with rounding to the third decimal place, for each of the years following 2006, without prejudice to the period of twenty years.

The amount of the incentive tariff actually recognized shall be determined by the rules set out in Article 7, in the maximum limit of the cumulated nominal power referred to in Article 12, Paragraph 3.

104.
Article 6(6) set forth the criteria for the revision of feed-in tariffs to be carried out on 1 January yearly, "on the basis of the annual rate of change, referred to in the previous 12 months, of consumer prices for the families of workers and employees reported by Istat."
105.
Article 11(1) of Ministerial Decree of 28 July 2005 provided that 300MW was the national target of accumulated PV power to be installed by 2015. Further, Article 12(3) of the same Ministerial Decree fixed at 40MW the accumulated nominal power limit of all PV plants that can obtain the feed-in tariff pursuant to Article 6(3). The overall accumulated nominal power limit was fixed at 100MW under Article 12(1) of the same Ministerial Decree.
106.
In 2007, Ministerial Decree of 19 February 2007 introduced the "Energy Account II" seeking to make corrections to the Energy Account I regime "introducing a simplified, stable and sustainable system of access to incentives."14 Article 6 of Ministerial Decree of 19 February 2007 fixed the incentive tariffs (feed-in tariffs), as follows:

Article 6
Incentive tariffs and period of entitlement

1. The electricity produced by photovoltaic systems, realized in accordance with this decree and entered into service during the period between the date of issue of the measure referred to in Article 10, Paragraph 1, and 31 December 2008, has the right to an incentivising tariff which, in relation to the nominal power and typology of the plant, referred to in art. 2, paragraph 1, letters b1), b2) and b3), takes the value set out in the next table (Euro/KWh values produced by the photovoltaic plant). The tariff identified on the basis of the same table is recognised for a period of twenty years from the date of entry into operation of the plant at a constant price throughout the entire period of twenty years.

123
Power Nominal of Plant P (Kw)Plants [referred to in] Art. 2, Coma 1, Letter (b1)Plants [referred to in] Art. 2, Coma 1, Letter (b2)Plants referred to [in] Art. 2, Coma 1, Letter (b3)
A1 minor or equal to P minor or equal to 30.400.440.49
B3 < P minor or equal to 200.380.420.46
CP>200.360.400.4415

107.
Article 12(1) of Ministerial Decree of 19 February 2007 set forth 3,000MW as the national target of accumulated PV power to be installed by 2016, while Article 13(1) fixed at 1,200MW the overall accumulated nominal power of PV plants that could obtain incentives.
108.
Article 16(1) of the same Decree contained a transitory provision in relation to Energy Account I, providing that "[t]he provisions of the Interministerial decrees of 28 July 2005 and 6 February 2006 continue to apply exclusively to photovoltaic plants that have already acquired, by 2006, the right to the incentive rates established by the same decrees."
109.
Ministerial Decree of 6 August 201016 introduced the "Energy Account III" designed to take effect on 1 January 2011. This Decree was adopted in light of Article 6(3) of Ministerial Decree of 19 February 2007, which foresaw the adoption of subsequent decrees with redefined incentive tariffs to be adopted every two years for plants becoming operational after 2010.
110.
Article 8 of Ministerial Decree of 6 August 2010 set forth tariff incentives (feed-in tariffs) for PV plants without innovative features becoming operational after 31 December 2010, as follows:

Article 8
Incentive tariffs

1. The incentive tariffs under this title shall apply to solar photovoltaic plants that come into exercise after new construction works, total refitting or repowering, on a date after 31 December 2010.

2. The electric energy produced by photovoltaic plants of this title that come into exercise within 31 December 2011, have the right to incentive tariff as determined in table A. The electric energy produced by photovoltaic plants of this title that enter into exercise in 2012 and 2013 have the right to the incentive tariff as defined in Table A, column C) reduced by 6% each year, with commercial rounding to the third decimal digit.

Table A

RELATED TARIFF
Power RangeA)B)C)
Plants entered into Exercise after the 31 December 2010 and within the 30 April 2011Plants entered into Exercise after the 30 April 2011 and within the 31 August 2011Plants entered into Exercise after the 31 August 2011 and within the 31 December 2011
Photovolt aic plants realized on buildingsOther photovol taic plantsPhotovolt aic plants realized on buildingsOther photovol taic plantsPhotovolt aic plants realized on buildingsOther photovol taic plants
[Kw][€/kWh][€/kWh][€/kWh][€/kWh][€/kWh][€/kWh] […]
2000,3550,3140,3350,3030,3140,266 […]

111.
Pursuant to Article 8(2) of Ministerial Decree of 6 August 2010, PV plants without innovative features starting operations in 2012 and 2013 were entitled to the same rate with a 6% reduction per annum and with commercial rounding to the third decimal place. Tables B and C of the same Decree set out incentive rates for PV plants with innovative features and PV plants concentrating photovoltaic installations, respectively.
112.
The tariffs set out in Table A above were granted for a 20-year period pursuant to Article 8(4) of Ministerial Decree of 6 August 2010 (Energy Account III). Article 3(1) of the same Decree fixed at 8,000MW the national target of accumulated PV power to be installed by 2020. In turn, the overall accumulated nominal power limit was fixed at (a) 3,000MW for PV plants without innovative features; (b) 3,000MW for PV plants with innovative features; and (c) 200MW for PV plants concentrating photovoltaic installations, pursuant to Article 12(2), (3) and (4) of the same Ministerial Decree, respectively.
113.
Before the Energy Account III took effect, Italy adopted Law No. 129/2010 of 13 August 2010 ("Salva Alcoa Law") to tackle delays in network connection faced by PV producers. The Salva Alcoa Law thus extended the 2010 tariffs under the Energy Account II until 30 June 2011 for plants certifying full installation by 31 December 2010 and start of operations by 30 June 2011.17 This means that the Energy Account II coexisted with the Energy Account III for six months.
114.
Later on 3 March 2011 Italy enacted Legislative Decree No. 28/201118 ("Romani Decree") implementing EU Directive 2009/28/EC.19 Article 23 on "General Principles" of the Romani Decree set forth the principles of efficiency, simplification, stability, harmonization and reduction of burden on consumers, seeking to "redefine" and "develop" incentives in light of "market mechanisms and the evolution of technologies of renewable sources and energetic efficiency," reading that:

Article 23
General Principles

1. This Title redefines the regulation of the support regimes applicable to the energy produced by renewable sources and energetic efficiency through the reorganization and strengthening of current incentive systems. The new regulation establishes a general framework in order to promote the energy production from renewable sources and energetic efficiency adequately to achieve the purposes under Article 3, through the provision of criteria and instruments that promote the efficacy, efficiency, simplification, stability in the long term of the incentive systems, pursuing at the same time the harmonization with other instruments that have similar purpose and the reduction of specific support burdens for consumers.

2. Further general principles of the redefinition and the development of incentive systems are the gradation of the action for the protection of investments made and the proportionality to the objectives, moreover the flexibility of the structure of support regimes, in order to take into account the market mechanisms and the evolution of technologies of renewable sources and energetic efficiency.20

115.
Among other amendments, the Romani Decree repealed Article 7 on "Specific provisions for solar energy" of Legislative Decree No. 387/2003, "[w]ithout prejudice to the acquired rights and the effects produced taking into account the provisions of Article 24, Paragraph 5, Letter c)."21 Article 24 of Romani Decree set forth the general criteria for PV incentives, as follows:

Article 24
Incentive mechanism

1. The production of electric energy from plants powered by renewable sources entered in exercise after 31 December 2012 is incentivized through instruments and on the basis of general parameters provided by Paragraph 2 and specific criteria under Paragraphs 3 and 4. The protection of not incentivized productions is shall be made with the instruments under Paragraph 8.

2. The production of electric energy from plants under Paragraph 1 is incentivized on the basis of the following general criteria:

a) the incentive has the aim to grant an equal remuneration of investments and functioning costs;

b) the duration of the right to the incentive is equal to the average standard life for the specific typologies of plants and starts from the date in which the plant came into exercise;

c) the incentive remain stable for the whole period of the right and may take into account the economic value of the energy produced;

d) the incentives are allocated through private contracts between the GSE and the responsible person of the plant, based on a standard contract defined by the Authority for the electric energy and gas, within three months from the date of come into force of the first of the decrees under paragraph 5;

e) without prejudice to Letter i) of this Paragraph and Letter c) of Paragraph 5, the incentive is assigned exclusively to the production of new plants, included plants realized after a total rebuilding, repowered plants, limited to the additional reproducibility, and from hybrid central, limited to the portion of the energy produced by renewable sources;

f) the incentive assigned to the electric energy produced by solar photovoltaic plants is greater for plants with high concentration (400 suns) and take account of the greater relation between the energy produced and the used surface; […]

5. With the decrees of Minister of Economic Development in agreement with the Minister for the Environment and the Protection of Land and Sea, and, for the competence profiles, with the Minister of Agricultural and Forestry Politics, heard the Authority for the electric energy and gas and the Unified Conference, pursuant to Article 8 of Legislative Decree 28 August 1997, No. 281, are defined the procedures to implement incentive systems under this Article, in accordance with the criteria set out in the preceding Paragraphs 2, 3 and 4. The decrees regulate, in particular:

a) the values of the incentives provided by paragraph 3 for plants that come into exercise starting from 1 January 2013 and the incentives auction base in application of paragraph 4, without prejudice to the different effective dates fixed pursuant to the implementing decrees provided by the Article 7 of Legislative Decree 29 December 2003, No. 387 as well as the power values, articulated for source and technology, of plants subject to tender procedures;

b) the procedures with which the GSE selects the subjects that are entitled to receive the incentive through tender procedures;

c) the procedure for the transition from the old to the new incentive mechanism. In particular, are determined the procedures with which the right to benefit of green certificates for the years subsequent to 2015, also from plants not powered by renewable sources, is switched over into the right to access, for the remaining period of right to green certificates, to an incentive included in the kind provided by paragraph 3, in order to grant the return on investments made;

d) the calculation procedure and application of the incentives for the productions attributed to renewable sources in hybrid centrals;

e) the procedure with which was modified the mechanism of net metering for plants, also in exercise, that access to this service, in order to simplify the use; […]

116.
After the enactment of the Romani Decree, Ministerial Decree of 5 May 201122 established the Energy Account IV for PV plants starting operation after 31 May 2011. The Preamble of Ministerial Decree of 5 May 2011 referred to the progressive reduction of tariffs in light of the evolution of PV technology costs and that subsidies may no longer be necessary.23 Article 1 of the same Ministerial Decree set forth the indicative national target of 23,000MW corresponding to cumulated annual incentives costs between € 6 billion to € 7 billion.
117.
Like Energy Account III, Energy Account IV provided for differentiated feed-in tariffs (a) for PV plants without innovative features; (b) for PV plants with innovative features; and (c) for PV plants concentrating photovoltaic installations, according to Article 12, Article 16, and Article 18 of Ministerial Decree of 5 May 2011, respectively. Paragraphs (2) of Article 12, Article 16, and Article 18 read that:

The incentive rate is recognised for a period of twenty years from the date of entry into operation of the plant and is constant in current currency throughout the period of incentive.24

118.
Annex 5 of the same Decree contained different tables with tariffs applying to these different types of PV plants depending on the date that a PV plant started operations. For example, Tables 1 to 4 set forth the feed-in tariffs under Energy Account IV for plants without innovative features starting in 2011 and subsequent years:

Table 1 [Tariffs for Year 2011]

JuneJulyAugust
Plants on buildingsOther photovol taic plantsPlants on buildingsOther photovol taic plantsPlants on buildingsOther photovol taic plants
[€/kWh][€/kWh][€/kWh][€/kWh][€/kWh][€/kWh] […]
2000,3250,2910,3150,2760,3030,263 [...]

Table 2 1 [Tariffs for Year 2011]

SeptemberOctoberNovemberDecember
Plants on buildingsOther photovol taic plantsPlants on buildingsOther photovol taic plantsPlants on buildingsOther photovol taic plantsPlants on buildin gsOther photov oltaic plants
[€/kWh][€/kWh][€/kWh][€/kWh][€/kWh][€/kWh][€/kW h][€/kW h] […]
2000,2980,2450,2850,2330,2650,2100,2460,189 […]

Table 3

1st Sem. 20122nd Sem. 2012
Plants on buildingsOther photovol taic plantsPlants on buildingsOther photovol taic plants
[€/kWh][€/kWh][€/kWh][€/kWh] […]
2000,2240,1720,2020,155 […]

Table 4 [Tariffs for 1st semester of year 2013]

Plants on buildingsOther photovoltaic plants
All inclusive tariffsSelf consumed tariffsAll inclusive tariffsSelf consume d tariffs […]
2000,2810,1830,2390,141 […]

Table 5 [Reductions on tariffs for subsequent semesters]

1st Semester2nd Semester
20139%
201413%13%
201515%15%
201630%30%

119.
In 2012, Ministerial Decree of 5 July 201225 set up the last Energy Account V referring in its Preamble to the fact that by March 2012 the cumulated annual cost of PV incentives reached € 5.6 billion, close to the cost cap set forth in Article 1 of Ministerial Decree of 5 May 2011. Consequently, Article 1(5) of Ministerial Decree of 5 July 2012 capped at € 6.7 billion the cumulated annual cost of PV incentives, as follows:

This Decree shall cease to apply, in any case, after thirty calendar days from the date of the achievement of cumulative indicative cost equal to 6.7 billion of euro[s] each year. The date of the achievement of the aforementioned value of 6.7 billion of euro[s] each year shall be communicate[d], based on the elements provided by the GSE, [by] the Authority for the Electric Energy and Gas, with the procedures mentioned in Paragraph 2.

120.
Article 5(1) of Ministerial Decree of 5 July 2012 provided, among other things, for incentive tariffs for plants with power up to 1MW, pursuant to its Annexes 5 to 7. Article 5(4) set forth that the "incentive tariff is recognized for a period of twenty years starting from the date of the plant coming into operation and is constant in currency for the whole incentive period." Further, Article 20(1) provided that the cost cap did not affect rights of PV plant owners acquired before the cap is reached:

Starting from the date indicated in Article 1, Paragraph 5, the present Decree and the dispositions of the previous incentives measures of the photovoltaic source that contributed to increase the cumulative costs reached at the mentioned date, shall cease to apply. The rights acquired up to the mentioned date are saved.26

121.
The Energy Account V ended when it reached the € 6.7 billion cost cap on 6 July 2013.27

The table below illustrates the duration of the Energy Accounts I to V:28

Ministerial DecreeEnergy Account No. Start Date End Date
Ministerial Decree of 28 July 2005 & Ministerial Decree of 6 February 2006 Energy Account I 30 September 2005 12 April 2007
Ministerial Decree of 19 February 2007 Energy Account II 13 April 2007 30 June 2011
Ministerial Decree of 6 August 2010 Energy Account III 1 January 2011 31 May 2011
Ministerial Decree 5 May 2011 Energy Account IV 1 June 2011 26 August 2012
Ministerial Decree of 5 July 2012 Energy Account V 27 August 2012 6 July 2013

122.
Later in 2013, Article 1(3) of Legislative Decree No. 145/201329 of 23 December 2013 ("Destinazione Italia Decree") provided PV plant owners with the option to continue with the incentive tariffs or to have the tariffs adjusted on a voluntary basis.30
123.
In 2014, the Spalma Incentivi Legislative Decree No. 91 of 24 June 2014 ("Spalma Incentivi Decree")31 reduced feed-in tariffs applying to all PV plants with a nominal power above 200kW, irrespective of GSE Conventions already in force. The Spalma Incentivi Decree was later confirmed by Conversion Law No. 116/2014 of 11 August 2014.32 Article 26(3) of Spalma Incentivi Decree as amended by Conversion Law No. 116/2014 provides as follows:

3. As from 1 January 2015, the tariff for the energy produced by systems, which rated power is above 200 kW, is reformulated, to the operator's choice, based on one of the following options to be communicated to GSE by 30 November 2014:

a) the tariff is supplied for a period of 24 years, from the entry into operation of the systems, and is therefore recalculated according to the percentage of reduction indicated in the table in Annex 2 to this decree;

b) subject to the twenty years period of supply, the tariff is reformulated providing a first period of use of an incentive reduced with respect to the current and a second period of use of an incentive equally increased. The percentages of remodulating are established by decree of the Minister of Economic Development, in consultation with the Authority for electricity, gas and water system, to be issued by 1 October 2014 so as, in case of acceptance of all those who are entitled to the option, to allow a saving of at least 600 million of euros per year for the period 2015-2019, compared with the expected supply with the applicable tariffs;

c) subject to the twenty years period of supply, the tariff is reduced by a percentage of the incentive recognized at the date of entry into force of this decree, for the remainder of the incentive period, in according to the following amounts:

1) 6 percent for systems with rated power above 200 kW and up to the rated power of 500 kW;

2) 7 percent for systems with rated power above 500 kW and up to the rated power of 900 kW;

3) 8 percent for systems with rated power above 900 kW.

In the event of no communication by the operator, GSE applies the option under c).33

124.
Subparagraphs (a), (b), and (c) of Article 26(3) above provided the PV plant owners with three possible choices following the regime change. The first choice under Article 26(3)(a) allowed PV plant owners to extend incentives from 20 to 24 years while reducing the feedin tariffs proportionally to the PV plant's lifetime. The second choice under Article 26(3)(b) kept the 20-year duration of incentives but varied the feed-in tariffs over time. Finally, the third choice under Article 26(3)(c) reduced in 6% to 8% incentives proportionally to the PV plant's nominal power (i.e. capacity). Finally, in the absence of choice by the PV plant owner, the third choice under Article 26(3)(c) applied. Belenergia's invested companies were deemed to have opted for the third choice, which automatically applied in the event of failure to expressly make a choice.34
125.
By the end of 2014, Article 22bis of Law No. 164/201435 of 11 November 2014 excluded from the application of Article 26 of Conversion Law No. 116/201436 certain Italian public entities and schools ("enti locali o scuole").

Minimum Price Incentives

126.
Running in parallel to the Energy Account regime described above, minimum price incentives also benefited certain PV plant owners like Belenergia's SPVs. Article 13(3) of Legislative Decree No. 387/200337 of 29 December 2003 provided that the GSE as the network operator could be requested by the PV plant owner to withdraw and thus purchase electricity from the PV plant, feeding electricity directly into the grid. The GSE purchase regime ("retiro dedicato") was acknowledged by Law No. 239/2004 of 23 August 2004 whose Article 1(41) provided that the AEEG will "determine[s] the modalities for the withdrawal of electricity […] referring to economic conditions."38
127.
The retiro dedicato regime established by Legislative Decree No. 387/2003 was implemented by resolutions adopted by the Autorità per l'energia elettrica e il gas39 ("AEEG"), namely, AEEG Resolution No. 34/200540 and later by AEEG Resolution No. 280/2007.41 PV plant owners adhering to this purchase regime could thus sell electricity directly to the GSE as an alternative to selling electricity on the wholesale market or to selling electricity through individual power purchase agreements concluded with consumers. The minimum prices established pursuant to this purchase regime took into account operating costs and were thus an alternative to market prices defined at hourly zonal prices ("prezzi zonali orari").42
128.
Once adhering to the GSE purchase regime, PV plant owners concluded with the GSE Conventions on minimum prices with an annual and renewable term pursuant to Article 3(6) of AEEG Resolution No. 34/2005 of 23 February 2005. Article 5.1(a) of the same Resolution set forth the minimum guaranteed prices limited to "the first two (2) million kWh annually withdrawn" from PV plants with power below 1MW adhering to the GSE purchase regime, without differentiation by source of renewable energy, as follows:

Article 5
Guaranteed minimum prices for plants powered by renewable sources of electrical power of up to 1 MW

5.1. For plants powered by renewable sources of electrical power of up to 1 MW, with the exception of hybrid plants, the first two (2) million kWh annually withdrawn from each plant by the network operator in accordance with Article 13, Paragraphs 3 and 4, of Legislative Decree no. 387/03, will be offered, in progressive brackets, the following minimum prices:

a) up to 500,000 kWh per year, EUR 95/MWh; over 500,000 up to 1,000,000 kWh per year, EUR 80/MWh; over 1,000,000 up to 2,000,000 kWh per year, EUR 70/MWh; […]43

129.
Article 5(4) of AEEG Resolution No. 34/2005 further provided that the minimum prices under Article 5(1) were subject to annual update in light of consumer prices for the families of workers and employees determined by the Istituto nazionale di statistica ("Istat").
130.
Later on 27 December 2006, AEEG Resolution No. 317/200644 determined that studies be carried out on the production costs of different sources of renewable energy seeking, among other things, to update AEEG Resolution No. 34/2005.
131.
On 6 November 2007, Article 7 of Annex A to AEEG Resolution No. 280/2007 set forth the minimum guaranteed prices differentiated by source of renewable energy subject to a 2 million kWh cap withdrawn from a PV plant, as follows:

7.1 The Authority shall establish the minimum guaranteed prices for the withdrawal of electricity injected annually by hydroelectric plants of average annual nominal power up to I MW and by plants powered by other renewable sources of rated active power up to I MW, with the exception of hybrid power plants. The guaranteed minimum prices are differentiated by source, they are defined by progressive brackets and refer to the calendar year.

7.2. The guaranteed minimum prices referred to in Paragraph 7.1, upon the request of the producer at the time of signing the agreement and as an alternative to the prices referred to in Article 6, shall be applied by GSE only for the first two (2) million kWh of electricity injected. The producer may alter this request no later than 31 December of each year, valid for the entire calendar year thereafter, by notifying GSE according to the instructions given by the latter. For the electricity injected every year and exceeding the first two (2) million kWh, GSE shall apply the prices referred to in Article 6.

[…] 7.5 Pending the measures referred to in Paragraph 7.1, the guaranteed minimum prices are set by applying, on an annual basis, to the values in force in the previous calendar year, the annual rate of change in consumer prices for families of workers and employees detected by lstat, rounded to the first decimal place according to commercial criteria. With reference to the year 2007, the guaranteed minimum prices assume the following values:

a) for the first 500,000 kWh per year, 96.4 EUR/MWh;

b) over 500,000 and up to 1,000,000 kWh per year, 81.2 EUR/MWh;

c) over 1,000,000 and up to 2,000,000 kWh per year, EUR 71.0/MWh.45

132.
AEEG Resolution No. 280/2007 provided that for energy withdrawn in excess of 2 million kWh, the hourly zonal price applied to prevent market distortions and limit public expenditure, as follows:46

ai fini del ritiro dedicato, si faccia riferimento al prezzo di vendita zonale, in quanto più aderente alle condizioni economiche di mercato per la vendita e perché garantisce la continuità con l'attuale deliberazione n. 34/05 […]

ai fini di ridurre i rischi di distorsione del mercato e di contenere gli oneri a carico della collettività derivanti da scostamenti dal regime di mercato, il GSE riconosca i prezzi zonali orari;

133.
Article 7.5 above set forth minimum prices for 2007 subject to annual update in light of consumer prices for the families of workers and employees determined by the Istat. On this basis, the AEEG published updates on the minimum prices for the years 2008 to 2011, depending on the kWh amount withdrawn annually, as follows:47
KWh Range2008200920102011
Up to 500,000 kWh per annum € 98.0/MWh € 101.1/MWh € 101.8/MWh € 103.4/MWh
Over 500,000 up to 1,000,000 kWh per annum € 82.6/MWh € 85.2/MWh € 85.8/MWh € 87.2/MWh
Over 1,000,000 up to 2,000,000 kWh per annum € 72.2/MWh € 74.5/MWh € 75.0/MWh € 76.2/MWh
134.
With the Romani Decree48 of 3 March 2011, Italy maintained the minimum price incentives, as follows:

8. Fermo restando quanto stabilito dall'articolo 13 del decreto legislativo 29 dicembre 2003, n. 387 in materia di partecipazione al mercato elettrico dell'energia prodotta da fonti rinnovabili, entra il 31 dicembre 2012, sulla base di indirizzi stabiliti dal Ministro dello sviluppo economico, l'Autorità per l'energia elettrica e il gas provvede a definire prezzi minimi garantiti, ovvero integrazioni dei ricavi conseguenti alla partecipazione al mercato elettrico, per la produzione da impianti a fonti rinnovabili che continuano ad essere eserciti in assenza di incentivi e per i quali, in relazione al perseguimento degli obiettivi di cui all'articolo 3, la salvaguardia della produzione non è assicurata dalla partecipazione al mercato elettrico. […]

135.
In July of the same year, AEEG Resolution No. 103/2011 of 28 July 2011 determined the calculation method of minimum prices differentiated by source of renewable energy for 2012 and 2013, and adopted a basic minimum price of € 76.20/MWh in light of a report by the Politecnico di Milano.49 The AEEG then issued minimum price updates for years 2012 and 2013 with different ranges corresponding to the kWh nominal amount withdrawn annually:50
KWh Range20122013
Up to 3,750 kWh per annum € 102.7/MWh € 105.8/MWh
Over 3,750 up to 25,000 kWh per annum € 92.4/MWh € 95.2/MWh
Over 25,000 up to 2,000,000 kWh per annum € 78.3/MWh € 80.6/MWh
136.
Later, on 19 December 2013, AEEG Resolution No. 618/201351 cut minimum prices to € 38.5/MWh for year 2014 limited to the first 1.5 million kWh annually withdrawn from PV plants, subject to annual updates in light of consumer prices for the families of workers and employees determined by the Istat.
137.
Four days later, Article 1(2) of Destinazione Italia Decree52 of 23 December 2013, later confirmed by Conversion Law No. 9/2013 of 21 February 2014, repealed minimum price incentives altogether. Pursuant to Article 1(2) of Destinazione Italia Decree the minimum guaranteed price for PV plants with incentives was fixed as equal to the applicable hourly zonal price ("prezzo zonale orario"), except for PV plants with power capacity up to 100kW.53

The Imbalance Costs

138.
Electricity transmission and dispatching activities are managed by Terna S.p.A. – Rete Elettrica Nazionale ("Terna") pursuant to Article 1(1) of Legislative Decree No. 79/1999 of 16 March 1999 ("Bersani Decree").54 Article 2(10) of Legislative Decree No. 79/99 defines dispatching as "the activity aimed at providing instructions for the use and the coordinated operation of production facilities, the network of transmission and auxiliary services."
139.
The Respondent explains that until 2012 imbalance costs for non-programmable renewable energy plants such as Belenergia's PV plants were fixed "as equal to the hourly zonal price, with the full residual share allocated to the end consumer."55 An imbalance is the discrepancy between the programmed and the injected electricity by a power plant, which, in the case of PV plants, is calculated in aggregate fashion, per market area.56 The unitary imbalance cost for a PV plant will depend on the aggregate imbalance of an electricity zone.
140.
If the unitary imbalance is positive (i.e. the PV plant has programmed injecting 80MWh but has actually injected 100MWh), two scenarios57 may follow depending on the aggregate zonal imbalance. If the aggregate zonal imbalance was negative, the PV plant is entitled to 80MWh multiplied by the hourly zonal price € 70/MWh plus 20MWh multiplied by the average selling price on the Dispatching Service Market or "Mercato per il Servizio di Dispacciamento" ("MSD") € 90/MWh, managed by Terna. If the aggregate zonal imbalance was positive, the PV plant is entitled to 80MWh multiplied by the hourly zonal price € 70/MWh plus 20MWh multiplied by the MSD average purchasing price € 50/MWh, as follows:

With Positive Imbalance Without Imbalance
Programme valuation € 5,600 € 5,600 € 5,600
Imbalance valuation if negative aggregate zonal imbalance € 1,800
Imbalance valuation if positive aggregate zonal imbalance € 1000
Total€ 7,400€ 6,600€ 5,600

141.
If the unitary imbalance is negative (i.e. the PV plant has programmed injecting 80MWh but has actually injected 60MWh), two scenarios may follow depending on the aggregate zonal imbalance. If the aggregate zonal imbalance was negative, the PV plant is entitled to 80MWh multiplied by the hourly zonal price € 70/MWh minus 20MWh multiplied by the average MSD selling price € 90/MWh. If the aggregate zonal imbalance was positive, the PV plant is entitled to 80MWh multiplied by the hourly zonal price € 70/MWh minus 20MWh multiplied by the average MSD purchasing price € 50/MWh.

With Negative Imbalance Without Imbalance
Programme valuation € 5,600 € 5,600 € 5,600
Imbalance valuation if negative aggregate zonal imbalance (€ 1,800)
Imbalance valuation if positive aggregate zonal imbalance (€ 1000)
Total€ 3,800€ 4,600€ 5,600

142.
AEEG Resolution No. 281/2012/R/EFR58 of 5 July 2012 adopted provisional measures to promote better planning by renewable energy plants allocating imbalance costs in excess of 20% of programmed electricity to renewable energy plant owners. After partial annulment of AEEG Resolution No. 281/2012/R/EFR, Italy explains that the AEEG issued Resolution No. 522/2014/R/EEL59 of 23 October 2014 encouraging better planning by non-programmable energy plants, noting the need for review of "the guidelines on imbalances for non-programmable renewable sources."
143.
On 28 July 2016, AEEG Resolution No. 444/201660 introduced imbalance costs to be charged on PV plant owners to compensate for dispatching costs of the electricity grid allegedly attributable to PV plants' discrepancies in planning the electricity amount injected into the grid. Pursuant to the Preamble of AEEG Resolution No. 444/2016, imbalance charges were justified:

[…] because of the general obligation for each dispatching user to program the amount of electrical emission and consumption with diligence, skill, prudence and foresight with regard to the system; as well as clarified by the administrative courts, it is an obligation which, although explained by the Authority with Resolution 525/2014/R/eel, was already inherent in the previous legislation of dispatch in particular in Paragraphs 14.1 and 14.3 of Resolution 111 (original version); this provision, pending a thorough and complete reform of the dispatching service (which hopefully will solve the problem in a more radical manner), introduces mechanisms to provide: (a) a more effective incentive to plan with diligence, skill, prudence and security and, at the same time, (b) to enable the Authority to detect more easily possible breaches of this obligation (also for the purpose of prescribing and / or disciplinary measures).

144.
The Parties disagree on whether imbalance costs charged to PV plant owners with the adoption of AEEG Resolution No. 444/2016 is a taxation measure (the Parties' position is summarised below in ¶¶ 215-226 and 280-282).

B. The Claimant's Investment

145.
The Claimant is a company incorporated in Luxembourg acting as an investor in the PV energy sector. Belenergia was initially financed by the Belgian company Bel A Venture SRL, the holding company of the investor and entrepreneur Mr. Vincent Bartin.61 Belenergia invested in ten Italian SPVs having developed and operating 20 PV plants in Southern Italy ("PV Project") between September 2011 and December 2013. Nineteen of these plants had a capacity of just under 1MW.
146.
For development of the PV Project, Belenergia established a corporate structure in which it featured as the company holding 100% participating interest in nine of 10 SPVs, as follows: Acquaviva SRL (100%); Brindisi Solar SRL (100%); Casamassima Solare SRL (100%); Compagnia Solare 1 SRL (100%); Compagnia Solare 2 SRL (100%); Compagnia Solare 3 SRL (100%); Puglia Energia SRL (100%); Solaria Real Estate SRL (100%); Società di Produzione Energia Solare SRL (100%).62 Belenergia owns and controls Solar Solution Puglia SRL with a 59% participating interest since 6 December 2013,63 as follows:64
Solar Solution Puglia's Ownership
Belenergia SA 59%
PE Invest SRL 41%
147.
Solar Solution Puglia SRL and Puglia Energia SRL merged by incorporation into Solaria Real Estate SRL in early 2016.65 Consequently, the Conventions concluded with the GSE in relation to the merging companies' PV plants were transferred to Solaria Real Estate SRL.
148.
Later in 2016 Belenergia shifted Solaria Real Estate SRL' s control to its Italian subsidiary Belenergia Mezz Finance SRL which, in turn, is owned by Belenergia Solaire Luxembourg SA, a Luxembourg company owned and controlled by the Claimant (Belenergia SA).66

Claimant's Three Waves of Investment and the Energy Account Regime

149.
The Claimant's investment in Italy took place in three waves. Belenergia first invested in the SPVs Casamassima Solare SRL, Compagnia Solare 1 SRL, Compagnia Solare 2 SRL, Compagnia Solare 3 SRL, and Puglia Energia SRL in September 2011.67 This first wave of investment took place about four months after Energy Account IV took effect. Because all plants belonging to these PV companies started operations between June and August 2011, they were all granted feed-in tariffs under Energy Account IV pursuant to Ministerial Decree 5 May 2011.
150.
Belenergia's second investment wave took place between April and July 2013 with the acquisition of Società di Produzione Energia Solare SRL, Solaria Real Estate SRL, Acquaviva SRL, and Brindisi Solar SRL.68 This investment wave took place when Energy Account V was effective. Energy Account V quickly reached its cap on 6 July 2013 and thus ceased to apply to new plants. Irrespective of the regime applying to new plants at the time of investment, the PV plants of these invested companies received tariffs under previous Energy Accounts. Solaria Real Estate SRL 's plants started operations in December 2008, benefiting from tariffs under Energy Account I (Ministerial Decree of 28 July 2005).69 In turn, Acquaviva SRL 's and Brindisi Solar SRL 's plants started operations between August and October 2009 receiving feed-in tariffs under Energy Account II (Ministerial Decree of 19 February 2007). Società di Produzione Energia Solare SRL 's three plants started operations between June 2011 and February 12 receiving feed-in tariffs under Energy Account IV (Ministerial Decree 5 May 2011).
151.
The third and last investment wave took place in December 2013 with Belenergia's acquisition of Solar Solution Puglia SRL.70 At this time, Energy Account V no longer applied to new plants. Because Solar Solution Puglia SRL 's both plants started operations in November 2011 and March 2012, they were entitled to tariffs under Energy Account IV.
152.
The Table below illustrates Belenergia's three investment waves in the 10 invested companies whose PV plants were entitled to feed-in tariffs:71

InvestedPV CompanyAcquisition Date by BelenergiaIncorporationDateStart ofOperationsNominalPower (kW)Energy Account
FIRST INVESTMENT WAVE
Casamassima Solare SRL 29 Sept. 2011 3 June 2009 Plant 1 Leporano1 : 26 Aug. 2011 939.06 Energy Account IV (Min. Decree 5 May 2011)
Plant 2 Faggiano1 : 31 Aug. 2011 955.71
Compgania Solare 1 SRL 29 Sept. 2011 12 Mar. 2010 Plant 1 Adelfia1 : 30 June 2011 937.02 Energy Account IV (Min. Decree 5 May 2011)
Plant 2 Casamassima1 30 June 2011 939.06
Compagnia Solare 2 SRL 29 Sept. 2011 12 Mar. 2010 Plant 1 Ugento1 : 30 June 2011 996.87 Energy Account IV (Min. Decree 5 May 2011)
Compagnia Solare 3 SRL 29 Sept. 2011 12 Mar. 2010 Plant 1 Nardo1 : 27 June 2011 957.60 Energy Account IV (Min. Decree 5 May 2011)
Plant 2 Massafra1 : 30 Aug. 2011 946.68
Puglia Energia SRL 29 Sept. 2011 29 Mar. 2007 Plant 1 Sternatia : 30 June 2011 6549.12 Energy Account IV (Min. Decree 5 May 2011)
SECOND INVESTMENT WAVE
Società di Produzione Energia Solare SRL 29 April 2013 3 June 2009 Plant 1 Taranto Masseria Giulianello : 29 Feb. 2012 939.8472 Energy Account IV (Min. Decree 5 May 2011)
Plant 2 Contrada Titolato : 30 June 2011 916.88
Plant 3 La Torrata : 28 July 2011 917.61
Solaria Real Estate SRL 9 July 201373 6 Dec. 2005 Plant 1 Racale500kW : 18 Dec. 2008 504 Energy Account I (Min. Decree of 28 July 2005)74
Plant 2 Brindisi300kW : 1 Feb. 2009 302.40
InvestedPV CompanyAcquisition Date by BelenergiaIncorporationDateStart ofOperationsNominalPower (kW)Energy Account
Plant 3 Brindisi250kW : 1 Feb. 2009 252
Acquaviva SRL 9 July 2013 26 June 2008 Plant 1 Acquaviva 1 : 4 Aug. 2009 993.84 Energy Account II (Min. Decree of 19 Feb. 2007)
Plant 2 Acquaviva 2 3 Aug. 2009 596.64
Brindisi Solar SRL 9 July 2013 8 Sept. 2008 Plant 1 Racale498 : 15 Oct. 2009 498.96 Energy Account II (Min. Decree of 19 Feb. 2007)
Plant 2 Brindisi805 : 28 Oct. 2009 804.96
THIRD INVESTMENT WAVE
Solar Solution Puglia SRL 6 Dec. 2013 30 June 2009 Plant 1 Martano : 30 Mar. 2012 991.76 Energy Account IV (Min. Decree 5 May 2011)
Plant 2 Castrignano : 30 Nov. 2011 906.20

GSE Conventions on Feed-In Tariffs

153.
Each invested PV company concluded with the GSE Conventions on feed-in tariffs for each of their PV plants ("GSE Conventions on feed-in tariffs"). For example, because the SPV Acquaviva SRL possessed two plants Acquaviva 1 and Acquaviva 2, Acquaviva SRL received two different GSE letters75 of admission to the relevant feed-in tariff and concluded two different GSE Conventions on feed-in tariffs under the applicable Energy Account regime.
154.
Each GSE Convention on feed-in tariffs contained information on the PV plant receiving the tariffs, including (a) its nominal power capacity, (b) the Ministerial Decree applying to the plant, (c) the applicable feed-in tariff, (d) the possibility of assignment of future credits, (e) the Convention's duration, (f) the choice of forum, and (g) other final provisions. The GSE Convention concluded by the PV company Acquaviva SRL in relation to its plant Acquaviva 1 illustrates this, as follows:76

Tariffs Photovoltaic Convention

Convention n. I08F06196607 for the recognition of incentive tariffs for the production of electric energy from photovoltaic plants pursuant to Ministerial Decree 19 February 2007, and resolution of electric energy and gas authority n. 90/07

With this Convention

Between

The Italian Electric Services - GSE S.p.a., […]

And

ACQUAVIVA S.P.A., with its registered office in Via DURINI, 18, Milan, Tax Code and VAT No. 06257020963, represented by Mr. LUCA FAEDO, born in Vicenza (VI) 06.02.1963 (data format inglese), acting as legal representative and responsible of the photovoltaic plant above mentioned convention, hereinafter called "Producer" hereinafter, jointly, also called "the Parties"

whereas

- As requested, according to GSE protocol 09.30.2009, it was sent an application for "incentive rate" provided by Ministerial Decree 19 February 2007, for the photovoltaic plant defined ACQUAVIVA, rated power of 992,84 kW, located in San Domenico n.snc. Comune di Acquaviva delle fonti (BA);

- This application for the incentive rate is identified by GSE with the n. 103172;

- The GSE, with its own letter transmitted to the Producer, has communicated the value of incentive rate, recognized for the photovoltaic plant mentioned above, equal to 0,3530 E/kWh; […]

Article 1
Scope of this Agreement

The scope of this Convention is the grant by the GSE to the Producer, of the incentive for the electrical energy produced by solar energy through photovoltaic conversion incentivized by Article 7 of D.lgs.387/03, Ministerial Decree 19 February 2007 and Resolution n.90/07.

Article 2
Effective date and the amount of incentive

The incentive tariff is granted in respect to the photovoltaic plant which is the object of this Convention for a period of 20 years starting from 4 August 2009 at a constant amount, in the current currency, is equal to amount of, 0,3530 Euro/kWh.

Article 3
Procedure of the release for incentive tariffs

The payment of incentive tariffs will be performed by GSE on the basis of the measures provided for the in the resolution of A.E.E.G. n.88/07, and in accordance with the payment procedures governed by the resolution n.90/07. […]

Article 4
Assignment of credits

The GSE will proceed to fulfil its own payment obligation of the credits towards the assignee subject to the following conditions:

a) The assignment of credits concerns all the remaining credits held by the transferor to the GSE;

b) The credits will be assigned to a single assignee;

c) The assignment of credits contract:

(i.) Shall be entered into after this Convention;

(ii.) Shall drawn up exclusively in accordance with specific provision of the standard model published on GSE's web site www.gse.it), the contents of which may not be modified in any part;

(iii.) Shall be notarized by public agreement or executed as a private agreement authenticated by notary, pursuant to Article 69 of D.R. n. 2440/1923, and sent to the GSE by registered letter (Raccomandata A/R);

(iv.) has got this Convention as annex, as integral and substantial part of that assignment of credits;

(v) The notification to GSE has to be accompanied by the express and informed consent of the assignor in respect of personal data by the assignor, pursuant to Article 23 of D.lgs. 196/03, in order to allow the GSE to proceed to assess the assignor, according to Article 48 bis of D.P.R. 19 September 1973, n. 602, when the assignment of credit is notified;

d) The verification, provided for in point c) (v) shall have a positive outcome (notably there will not be any failure of the obligation to pay taxes);

e) The assignment of credits has to be expressly accepted by the GSE using registered letter (Raccomandata A/R) sent to assignor and assignee;

The acceptance of the credits assignment does not affect the GSE's right to oppose against the assignee the set-off that GSE would have been able to claim against the assignor.

The possible re-assignment of remaining credit to previous assignor has to be:

(a. 1) in the same form as the assignment of credits was written the first time, this implies:

(i) drafted by notarised public act or private agreement authenticated by notary;

(ii) drawn up exclusively filling the ad hoc field, of standard model published on GSE's web site (www.gse.it) which contents may not be changed in any part;

(b.1) undersigned by both parties; G. Supplementary Documents Page 20556 of (c.1) notified to GSE using registered letter (Raccomandata A/R) and the new bank account requested for the credits payment;

(d.1) expressly accepted by the GSE through registered letter (Raccomandata A/R) to the parties;

The re-assignment of remaining credits, will not change the GSE's right to claim, against the previous assignor, a set-off that GSE would have been able to claim against the assignee.

The GSE will pay the remaining credits to the original creditor from the second month subsequent to that of acceptance of the re-assignment of credits.

The above provisions of this article will be applied also if the credit assignment is made by the assignee to third parties, with the exception of point c (ii) and a.1 (il)

The conditions laid down in paragraph 1, with the exception of point c. (ii), and laid down in paragraph 3, with the exception of point (a.2), of this article will be applied also in case of:

(a.2) collection mandate (revocable/irrevocable) given to third parties;

(b.2) transfer in pledge of credits. […]

Article 8
Effective date and duration

This Convention will be effective from 4 August 2009 and will terminate on 3 August 2029.

This Convention will terminate by law and will be declared ineffective between the parties if the Producer falls under any case of termination pursuant to Article 10 of Law n. 575/1965 as subsequently amended and integrated, or if the aforementioned situation provided for by Article 10, Paragraph 3 of Resolution n.90/07 occurs.

Article 9
Jurisdiction

Any proceedings deriving from or in any case connected to the interpretation or the execution of this Agreement and connected documents shall be settled before the Court of Rome.

Article 10
Completion of this Convention

For the completion of this Convention the Producer has to print, from the web site, the specific Declaration of Acceptance and send it to GSE, signed with the attached copy of his own valid document.

This Convention will be effective once the GSE accepts the mentioned Declaration, making available on the website the copy for the Producer, undersigned by its own legal representative.

Following the entrance into legal force of this convention, any possible agreement to amend or add the content of the Convention, shall be a nullity unless agreed in writing.

The parties are aware that every declaration originating from this Convention are given pursuant to DPR. 445/00.

In accordance with Clause 1341 and 1342 of the Italian Civil Code, the Parties specifically approve the following Clauses, after having carefully reviewed them:

Article 2 "Effective date and value of incentive", 3 "Procedure for the release of the incentive tariffs", 4 "Assignment of credits", 5 "Liability", 9 "Jurisdiction", 10 "Completion of this Convention", provided by this Convention. […]

155.
Article 4 above expressly provided for the possibility of assignment of future receivables of the SPV founded on the feed-in tariffs granted under the GSE Convention. In this respect, Belenergia explains that it assigned most of these receivables to banks to help finance its investment; the GSE Conventions' income stream served as the basis for the receivables' assignment as a collateral for bank loans.77
156.
For example, Recital (e) of the Assignment Agreement of receivables generated by the PV plant Faggiono 1, owned by Casamassima Solare SRL, expressly provided that the banks (assignees) sought to acquire through this Agreement "all the pro solvendo receivables, present and future, due to the Assignor from [the] GSE under the Agreement as a collateral for the loan agreed between [Casamassima Solare SRL] and [the banks]." Among other representations and guarantees provided by the banks, Section 4.3 of the Assignment Agreement stipulated that:

4.3 The Assignees also declare that they are aware that:

(a) The assigned receivables are derived from the recognition in relation to the Assignor of subsidised rates to produce photovoltaic energy by the plant described in more detail in the Agreement;

(b) The payment of subsidised rates, in other words the receivables assigned by virtue of this document, shall be performed by the GSE on the basis of the current measures defined in resolutions passed by the authority for electricity and gas.78

157.
Finally, the forum selection clause under Article 9 of the GSE Conventions on feed-in tariffs conferred jurisdiction upon Rome courts. The Parties disagree on whether this forum selection clause affects the Tribunal's jurisdiction (see below ¶¶ 206-214 and 260-279).

GSE Conventions on Minimum Prices

158.
Moreover, each invested SPV with plants of up to 1MW adhered to the GSE's purchase regime in relation to each of the respective plants with of up to 1MW selling thus electricity directly to the GSE. Once having adhered to the GSE purchase regime, these PV companies concluded with the GSE Conventions on minimum prices ("GSE Conventions on minimum prices") in relation to each PV plant of up to 1MW, as follows:79

InvestedPV CompanyAcquisition Date by BelenergiaStart of OperationsNominal Power (kW)Date of GSE Convention on minimum prices
FIRST INVESTMENT WAVE
Casamassima Solare SRL 29 Sept. 2011 Plant 1 Leporano1 : 26 Aug. 2011 939.06 11 October 2011
Plant 2 Faggiano1 : 31 Aug. 2011 955.71 11 October 2011
Compgania Solare 1 SRL 29 Sept. 2011 Plant 1 Adelfia1 : 30 June 2011 937.02 6 October 2011
Plant 2 Casamassima1 30 June 2011 939.06 6 October 2011
Compagnia Solare 2 SRL 29 Sept. 2011 Plant 1 Ugento1 : 30 June 2011 996.87 6 October 2011
Compagnia Solare 3 SRL 29 Sept. 2011 Plant 1 Nardo1 : 27 June 2011 957.60 6 October 2011
Plant 2 Massafra1 : 30 Aug. 2011 946.68 11 October 2011
SECOND INVESTMENT WAVE
Società di Produzione Energia Solare SRL 29 April 2013 Plant 1 Taranto Masseria Giulianello : 29 Feb. 2012 950.0080 16 May 2011
Plant 2 Contrada Titolato : 30 June 2011 916.88 11 October 2011
Plant 3 La Torrata : 28 July 2011 917.61 11 October 2011
Solaria Real Estate SRL 9 July 201381 Plant 1 Racale500kW : 18 Dec. 2008 504.00 8 April 2009
Plant 2 Brindisi300kW : 1 Feb. 2009 302.40 15 April 2009
Plant 3 Brindisi250kW : 1 Feb. 2009 252 10 April 2009
Acquaviva SRL 9 July 2013 Plant 1 Acquaviva 1 : 4 Aug. 2009 993.84 26 October 2009
Plant 2 Acquaviva 2 3 Aug. 2009 596.64 26 October 2009
Brindisi Solar SRL 9 July 2013 Plant 1 Racale498 : 15 Oct. 2009 498.96 11 January 2010
Plant 2 Brindisi805 : 28 Oct. 2009 804.96 22 January 2010
THIRD INVESTMENT WAVE
Solar Solution Puglia SRL 6 Dec. 2013 Plant 1 Martano : 30 Mar. 2012 991.76 30 May 2012
Plant 2 Castrignano : 30 Nov. 2011 906.20 20 March 2012

159.
As set out in the table above, Belenergia's PV invested companies concluded GSE Conventions on minimum prices between April 2009 and May 2012 on the basis of the "retiro dedicato" regime established by Legislative Decree No. 387/2003, implemented by AEEG resolutions. For example, the GSE Convention on minimum prices concluded by the PV company Acquaviva SRL in relation to the plant Acquaviva 1 contained provisions (a) identifying the PV plant and its power in kW; (b) determining the applicable AEEG Resolution; (c) fixing the conditions for delivering electricity and the electricity price; (d) prohibiting assignment of credits founded on the minimum price incentives; (e) determining the Convention's duration; (f) setting forth rules on termination and on the choice of forum, as follows:82

Agreement Concerning the Purchase ("Ritiro") of Electric Energy

Pursuant To Article 13, Paragraphs 3 And 4, of Legislative Decree

No. 387/03 And Article 1, Paragraph 41 Of Law No. 239/04

Procedure Number: Rid 006952

With this Agreement

The Italian Electric Services - GSE S.p.a., […]

And

Acquaviva S.R.L., […] hereinafter called "Producer" hereinafter, separately or jointly, also called the Party or the Parties,

whereas

- Legislative Decree December 29, 2003, No. 387 (hereinafter Legislative Decree No. 387/03), at Article 13, Paragraphs 3 and 4, provides that the Italian Energy and Gas Authority (hereinafter the "Authority") sets the ways for purchasing "per il ritiro" electric energy, referring to the economic conditions of the market; […]

- the Producer operates the photovoltaic plant fed by solar source so called ACQUAVIVAl, located in the Municipality of Acquaviva delle fonti (BA), with an installed power equal to 993,84 KW and to KVA, and that this plant is defined as not programmable pursuant to the resolution AEEG No. 111/06;

- the Producer submitted the application "istanza" to the GSE for purchasing "per il ritiro" of the electric energy, pursuant to Article 13, Paragraphs 3 and 4, of Legislative Decree No. 387/03 and Article 1, Paragraph 41, of Law No. 239/04; […]

Article 1
Object of this Agreement

This Agreement has as its object the regulation of the technical-economic[] conditions of the purchase "ritiro", by the GSE, further to the request of the Producer, for electric energy in accordance with Article 13, paragraphs 3 and 4, of Legislative Decree No. 387/03 and/or Article 1, Paragraph 41, of Law No. 239/04, produced and injected into the grid by the forementioned plant, as well as the economic conditions referring to the transportation and displacement in injection "dispacciamento in immissione" services.

Article 2
Delivery of electric energy to the GSE

The electric energy which is the subject of this Agreement is the entire amount of the electric energy injected into the grid, equal to the gross energy produced by the plant, net of the energy taken by the auxiliary services, by the workshop, if any, by the self-used electric energy "autoconsumata", by the losses of transformation and of line up to the point of delivery to the grid and by the energy sold in accordance with the long-term agreements mentioned by Article 13, Paragraphs 3 and 4, of Legislative Decree No. 387/03 and/or Article 1, Paragraph 41, of Law No 239/04. This electric energy is deemed delivered to the GSE at the point of interconnection to the electric grid, competence of Enel Distribution S.p.a., located in the Municipality of Acquaviva delle fonti (BA), with voltage equal to 20 kV.

The produce Breaches of the rules referring to the operating by the Producers shall be deemed to be of the exclusive liability of the Producer himself.

Possible amounts of energy taken by the grid are the subject of separated commercial agreements not entered into with the GSE and not regulated by this Agreement.

With regard to the consideration, the electric energy injected into the grid and the subject of this Agreement is increased, in the case of points of injection in low and medium voltage, of a one percentage factor pursuant to the same ways provided for in Article 12, Paragraph 6 letter

a), of Attachment A of the resolution AEEG No. 111/06 and subsequent modifications and integrations. […]

Article 4
Considerations for the purchase "ritiro" of the energy and considerations for covering the costs borne by the GSE for the access to the regime, so called "Regime Dedicato."

The prices given by the GSE to the Producer for the purchasing ("per il ritiro") of the energy which is the subject of this Agreement are defined in Articles 6 and 7 of the resolution AEEG No. 280/07 and subsequent modifications and integrations.

The prices due from the Producer to the GSE in order to cover the administrative costs for the access to the regime so called "regime dedicato" are defined in article 4, paragraph 2 letter e), of the resolution AEEG No. 280/07 and subsequent modifications and integrations.

Article 5
Considerations for the transmission service

The considerations for the transmission service are regulated between the Producer and the SE in accordance with Article 4, Paragraph 2 letter b), of the Resolution AEEG No. 280/07 and any future possible modifications and addition.

Article 6
Considerations of imbalance "sbilanciamento" referring to plants fed by programmable sources

With regard to plants fed by programmable sources, the considerations of imbalance "sbilanciamento" are regulated between the Producer and the GSE pursuant to article 8 of the resolution AEEG No. 280/07. […]

Article 9
Assignment of credits and payments

The credits generated from this Agreement cannot be object of credit assignment or pledge. […]

Article 13
Effective Date and Duration of the Convention

This Agreement will be effective from 4 August 2009.

The Parties agree to tacitly renovate this Agreement yearly, registered letter with receipt, except in case of termination to be communicated by the Producer, to the GSE, with a registered letter with at least 60 days in advance in respect to the termination.

In case of early withdrawal during the year, the GSE can start a new Convention for the purchasing (ritiro dedicato) of energy, exclusively in the subsequent year of the withdrawal.

Article 14
Resolution, withdraw and suspension of the Convention

This Convention shall be considered terminated and shall not be deemed in force between the Parties if the Producer breaches the provisions of Clause 10 of Law 575/1965 as amended and integrated.

In case of non-fulfilment of obligations provided for this Agreement, in case of changes, amendments related to the requested authorization for the exercise of the plant, in case of appeal actions against the authorisation, or in case of Authority's provisions that affect the availability, functionality or productively of the plant, the GSE has the right to suspend the contract, as well as to terminate the contract, without prejudice to its right for damages and the recover, including by adjustment between the bills related to different pending contract relationship, of any advantage wrongly received by the producer.

Pursuant to Point 6 of Resolution AEEG ARG/elt 4/10, the GSE has the right to terminate the underwritten agreement by the producer related to the productive unit mentioned in the Point 5 of Resolution ARG/elt 4/10 in case of non-fulfilment to the provision of that resolution.

The Producer is enabled to terminate this Agreement by registered letter giving notice at least 60 days in advance from the date in which the Producer intends terminate this Agreement.

If one of the condition listed for the release of "regime dedicato" will be not valid anymore, this Agreement will terminate according to article 1456 civil code.

Article 15
Competent jurisdiction

Any proceedings deriving from or in any case connected to the interpretation or the execution of this Agreement and connected documentation shall be settled before the Court of Rome.

Article 16
Amendment and renvoi

The premises are integral and substantial part of this Agreement.

In relation to any matters not expressly included in this Agreement, the Parties agree to refer to the resolution AEEG n. 280/07, the Applicable Law concerning the interconnection of the plants to the grid and electric energy, and if applicable, the provisions of the Italian Civil Code.

The GSE has the discretion to modify the Agreement's clause according to potential changes and updates introduced [to] resolution AEEG 280/07, with prejudice to the possibility for the producer to terminate this contract relationship according to Article 14.

The producer is aware that every declarations originating from this Convention are provided pursuant to DPR 445/00. […]

160.
Nine of ten Belenergia's PV companies benefited from minimum prices extending through different periods starting with the conclusion of the respective GSE Convention until the minimum price reduction by AEEG Resolution No. 618/201383 and the final cut by the Destinazione Italia Decree by the end of the same year.
161.
The forum selection clause under Article 9 of the GSE Conventions on minimum prices conferred jurisdiction upon Rome courts. The Parties disagree on whether this forum selection clause affects the Tribunal's jurisdiction (see below ¶¶ 206-214 and 260-279).
162.
Finally, Parties disagree on the private or public character of the GSE Conventions, and on whether these Conventions are "accessory" to public regulatory acts, referring and citing to Italian courts' decisions on the Conventions (the Parties' position is summarised below in ¶¶ 431-443 and 505-511).

IV. THE PARTIES' REQUESTS FOR RELIEF

A. The Claimant's Request for Relief

163.
The Claimant's request for relief appears in its Statement of Claim, not modified thereafter:

222. In view of the above, the Claimant hereby requests that the Tribunal:

a. Declare that the Respondent has breached its obligations under Articles 10(1), (2) and (3) ECT as set out in Part V above.

b. Award the Claimant damages in compensation for losses suffered as a result of these breaches as set out in Part IV above, plus interest thereon from the due date for payment of such damages until the actual date of payment.

c. Order the Respondent to pay all costs incurred in connection with these arbitral proceedings, including the administrative costs of ICSID, the fees and costs of the arbitrators and all legal and other expenses incurred by the Claimant, including the fees of its legal counsel, experts and consultants, plus interest thereon from the date on which such costs are incurred by the Claimant until the date of payment.

223. For the avoidance of doubt, the Claimant reserves the right to amend the relief sought in light of the submission of further claims against the Respondent, the amending, supplementing, or augmenting of any of its claims here submitted, or the submission of counterclaims by the Respondent.84

B. The Respondent's Request for Relief

164.
Italy's most recent request for relief appears in its Post-Hearing Brief, as follows:

In jurisdiction and admissibility,

A. Decline jurisdiction to decide, as the ECT does not cover intra-EU disputes.

B. Alternatively, decline jurisdiction over the totality of claims, since:

a) as for feed-in tariffs (and minimum guaranteed prices), the requirement of unconditional consent under Article 26 ECT is not satisfied as the GSE Conventions contain exclusive jurisdiction clauses in favour of domestic courts;

b) the measures on imbalance charges are exempted under Article 21 ECT, and

c) no amicable solution has been attempted for measures on imbalance charges, should these not be considered as covered by Article 21 of the ECT.

C. In a further alternative, decline admissibility of protection of the Claimant alleged interests as this is barred from seeking relief, since

a) an exclusive forum clause was selected between the Claimant and the GSE in the GSE Conventions, and

b) the Claimant did not seek amicable solution for the claim on imbalance charges.

Should the Tribunal retain to have jurisdiction over the case and that claims be either totally or partially admissible

D. Declare, on the merits, that the Respondent did not violate Article 10(1) ECT, first and second sentence, since it did not fail to grant fair and equitable treatment to the Claimant's investment.

E. Declare, on the merits, that the Respondent did not violate Article 10(1) ECT, third sentence, second part, since it always adopted reasonable and non-discriminatory measures to affect Claimant's investment.

F. Declare, on the merits, that Article 10(1) ECT, last sentence (the so-called "umbrella clause") does not apply in the case at stake, or, alternatively, that the Respondent did not violate it neither through statutory or regulatory measures, nor the GSE Conventions.

G. Declare, on the merits, that Article 10(1) ECT, third sentence, first part, does not apply to the case at stake or, alternatively, that the Respondent did not violate it.

H. Declare, on the merits, that Article 10(2) and (3) ECT does not apply to the case at stake, or alternatively that the Respondent did not violate it since it never adopted discriminatory measures to comparable situations unduly benefitting Italian investors.

Consequently,

I. Declare that no compensation is due.

In the unfortunate event that the Tribunal were to recognise legitimacy to one of the Claimant's grievances,

J. Declare that damages were not adequately proved.

K. Declare that both the method for calculation and the calculation itself of damages proposed by the Claimant are inappropriate and erroneous.

In all cases,

L. Reduce proportionally any eventually recognised damages to conform to the fact that in the Reply the Claimant abandoned its claims on both guarantee minimum prices and imbalance costs.

M. Order the Claimant to pay all relevant expenses and disbursements by the Respondent because of these proceedings in accordance with ICSID Arbitration Rules.85

V. JURISDICTION AND ADMISSIBILITY

165.
The following provides an overview of the Parties' respective claims and defences. This summary has been prepared to set in context the decisions made by the Tribunal in this Award, and is not an exhaustive description of the arguments presented during this arbitration through the written and oral submissions of the Parties. The fact that a particular submission is not expressly referenced below should not be taken as any indication that it has not been considered by the Tribunal.

A. The Respondent's Position

166.
Italy states that some of its jurisdictional objections have been interpreted at times as "admissibility" objections by the Claimant. Should this be the case, the Respondent submits that such jurisdictional objections also serve as grounds for non-admissibility.86

(1) The ECT Does Not Apply to Intra-EU Disputes

167.
The Respondent claims that the ECT does not apply to intra-EU disputes, the appropriate forum for Belenergia's claims being Italian courts that could eventually refer the question of ECT's applicability to intra-EU investors to an ECJ's preliminary ruling. Italy's EU jurisdictional objection on this basis is grounded as follows: (a) the ECT's interpretation under international law in view of the pre-existing Treaty establishing the European Community ("EC Treaty") prevents ECT application to intra-EU disputes; (b) the EU's evolution affects ECT application under international law on treaty succession; (c) the EU legal order already protects foreign investment; and (d) the ECJ's decision in Slovak Republic v. Achmea confirms that this Tribunal lacks jurisdiction.

(a) The ECT's interpretation under international law in view of the preexisting EC Treaty prevents ECT application to intra-EU disputes

168.
In a preliminary note, Italy states that it is undisputed (a) that the EU Member States involved in this arbitration were Members of the European Community ("EC") at the time of ECT's adoption; and (b) that the EC (now the EU) and the EU Member States are bound by ECT obligations under international law.87 Italy adds that it has never agreed or acquiesced to ECT jurisdiction; neither has any other Member State.88
169.
According to Italy, the Parties disagree on the extent that ECT obligations bind the EU and its Member States inter se. In Italy's view, this is a question "of intent."89 It rejects the ECT's interpretation proposed by Belenergia.90
170.
The Respondent submits that the ECT should be interpreted "in good faith, in accordance with the ordinary meaning to be given to its terms in their context and in the light of its object and purpose" under Article 31 of the Vienna Convention on the Law of Treaties91 ("VCLT").92 It adds that treaty interpretation may include recourse to supplementary means of interpretation under Article 32 VCLT.93
171.
Italy cites the definitions of "Contracting Party," "Regional Economic Integration Organization," and "Area" under Articles 1(2), 1(3) and 1(10) ECT when arguing that the ECT's interpretation should consider the overlapping areas between the EU and its Member States.94 In its view, the EU's internal allocation of competences notwithstanding geographical boundaries bears on external competences and on the ECT's interpretation.95
172.
The Respondent also relies on Article 25 ECT, stating that the EU treaties are an "Economic Integration Agreement" ("EIA") having the same subject-matter of the ECT, "substantially liberalizing […] trade and investment."96 Also, under Article 25 ECT the EU Member States have adopted a "preferential treatment" that prevails and is recognised by the ECT.97
173.
Moreover, Italy submits that Article 16 ECT provides for a "conflict rule" meaning that "nothing in Part III or V of the ECT [can] be construed to derogate from any provision of the EU Treaties as for investment promotion and protection, or from any right to dispute resolution [under EU law]. "98 The Respondent rejects the Claimant's proposed reading of Article 16 ECT,99 stating that a "systematic", "good faith" interpretation100 of the ECT's text suggests that:

[…] the EU is recognized by the ECT as a unified legal system, based on an international treaty whose provisions on the same matters as those covered by the ECT prevail over the ECT itself, and consequently that Contracting Parties signed the ECT under the mutual understanding that this would not apply to intra-EU situation.101

174.
If the Tribunal finds that the ECT's textual interpretation is not sufficiently clear, Italy argues that the ECT's context shows that it does not apply to intra-EU disputes. Italy states that Decision in Annex 2(5) ECT102 on Articles 24(4)(a) and 25, and the EU's and Member States' Declaration on Article 25103 provide context to this interpretation.
175.
In the Respondent's view, the combined reading of ECT's Annex 2(5) Decision and of Article 25 Declaration on EIA treatment to investments of investors of non-EU Contracting Parties with EIA presence supports its position. Accordingly, this Decision (confirmed by the Declaration) approves that an investor of a non-EU Party with presence in the EIA "would have no right to apply Article 26 [ECT] to protect its position, but would be covered by EU law and refer to [EU dispute resolution] mechanisms."104 Italy adds that the language of the Article 25 Declaration suggests that it relates to "investments."105
176.
As preparatory work relevant to ECT's interpretation, Italy refers to the 1991 European Energy Charter106 that sought to "integrate the energy sector of the Soviet Union and Eastern Europe countries at the end of the Cold War with that of Europe."107 Article 2 ECT refers to the "objectives and principles" of the Charter in the following terms:

This Treaty establishes a legal framework in order to promote longterm cooperation in the energy field, based on complementarities and mutual benefits, in accordance with the objectives and principles of the Charter.

177.
Italy adds that the recitals108 of the European Energy Charter distinguish between the EU's internal market on energy within the EU, on one hand, and the ECT's adoption, on the other.109 In addition, at the ECT's conclusion several EU Directives in the energy sector had already been or were to be adopted (e.g. Directive 90/547/EEC110 and Directive 91/296/EEC111).112 To illustrate, the European Commission's 1992 Proposal on common rules for the internal electricity market provided in its Article 26113 a specific dispute settlement provision for "disputes […] between an investor and a Member State."114
178.
Italy differs with Belenergia that ECT-related documents at its adoption indicate that the ECT was to apply generally and to intra-EU disputes. In its view, the absence of an express exclusion [disconnection clause] cannot result in an ECT's wide application.115
179.
Italy rejects Belenergia's argument that "unanimous case law confirms the ECT's application to intra-EU disputes."116 In its view, the Claimant relies on four to five decisions of dozens of pending arbitrations; these decisions mainly discuss the compatibility between Article 26 ECT and Articles 267 and 344 of the Treaty on the Functioning of the European Union ("TFEU"), but not all international law arguments made in this arbitration.117
180.
According to the Respondent, practice also shows that the ECT does not cover intra-EU disputes, because (a) no intra-EU investment disputes had been instituted under the ECT before the Electrabel v. Hungary arbitration in 2007; (b) no intra-EU investment dispute between EU Member States that were ECT Parties at its conclusion had been raised until today; (c) EU Member States have consistently objected to ECT arbitral jurisdiction, the European Commission having applied to intervene as amicus curiae. Because the ECT does not apply ab initio to intra-EU matters, Italy concludes that Article 26 ECT is not a valid legal basis for this arbitration.118

(b) The EU's evolution affects ECT application under international law on treaty succession

181.
Italy further submits that the EU has evolved in a way that prevents the ECT's application to intra-EU disputes. While energy is a shared internal competence, the Lisbon Treaty "strongly modified the balance of external competences of Member States and the Union. "119 As a result, the "original allocation of competences" justifying participation of the EU and the Member States at the time of ECT's adoption has changed with the EU requiring further uniformity of its legal order.120 The Respondent states that the ECT as a mixed agreement is part of the EU legal order applying within the EU subject to the ECJ's guardianship.121 It argues, however, a potential ECT inconsistency with the EU's non-discrimination principle.122
182.
As for Article 30 VCLT on successive treaties, Italy argues that the Lisbon Treaty prevails over the ECT provisions because both instruments cover the same subject-matter. Italy relies123 on the 2006 ILC Study Group Report on Fragmentation of International Law ("ILC Report on Fragmentation") to argue that the Lisbon Treaty and the ECT have the same subject-matter. The Respondent explains that Article 30 VCLT does not require "exact coincidence of provisions or even objectives;" it suffices that EU and ECT provisions equally cover integration efforts and investor protection, being "institutional [ly] linked."124
183.
Italy also submits that the so-called "conflict rule" under Article 16 ECT favours the intra-EU jurisdictional objection, EU law being more favourable to investors than the ECT. It highlights that Article 16 ECT concerns inter se agreements between some of the parties on topics in Parts III and V of the ECT on protection standards and dispute settlement. Accordingly, by ratifying the ECT third States accepted that EU law exclusively applied between EU Member States in intra-EU situations.125 This interpretation is, according to Italy, favoured by Article 30(2) VCLT126 providing that "[w]hen a treaty specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail."127
184.
Italy asserts that intra-EU questions falling under the ECT are subject to EU law under Articles 30(3) and 30(4)(a) VCLT, while extra-EU questions under the ECT are subject to the ECT under 30(4)(b) VCLT.128 The Respondent adds that the argument that Article 307 EC on Previous Agreements of Member States (now Article 351 TFEU) trumps Article 16 ECT cannot prevail because Article 307 only applies to treaties prior to 1958 between the original EU Member States (as in this arbitration).129
185.
Finally, Italy argues that the Lisbon Treaty is "a perfectly legitimate inter se agreement derogating from the general rules of the ECT by reinforcing the treatment of investors and investments within the EU."130 Article 41(1)(a) VCLT permits this inter se agreement between EU Member States parties to the ECT, which is exempt from any Article 41(2) VCLT notification.131
186.
Moreover, Italy relies on the combined reading of the applicable law clause Article 26(6) ECT providing that an ECT tribunal shall decide "the issues in dispute in accordance with this Treaty and applicable rules and principles of international law" and the offer to arbitrate under Article 26(3). According to Italy, EU law applies to the issues in dispute within the meaning of "applicable rules and principles of international law," making inapplicable Italy's and Luxembourg's offer to arbitrate under the ECT.132 Italy adds that the ECT offer to arbitrate is discriminatory against Italian nationals, thereby breaching EU law.133
187.
The Respondent differs with the Claimant that Article 41 VCLT does not favour inter se obligations applying only between EU Member States parties to the ECT.134 Firstly, the ECT does not prohibit agreement on special rules (which differ from treaty reservations).135 Secondly, stronger EU rules as inter se obligations applying between Member States do not hinder ECT rights of non-EU Member States.136 Thirdly, an inter se agreement does not affect non-EU investors' right to ECT arbitration.137

(c) The EU legal order already protects foreign investment

188.
Italy submits that EU law's specific features confirm that the ECT does not apply to intra-EU matters under international law. It explains that among the fundamental features of the EU legal order are the EU law's primacy over Member States law and the direct effect of EU provisions.138 Further, the ECJ and national courts of Member States are the guardians of the EU legal order, cooperating between them through the use of preliminary rulings under Article 267 TFEU.139 Another fundamental feature is "mutual trust" between EU Member States in the promotion of EU common values through their national legal systems and courts.140
189.
Italy refers to the EU principle of conferral governing the attribution of internal and external competences between the Union and the Member States. The Respondent submits that energy is a shared internal competence and foreign direct investment is an exclusive internal competence since the Lisbon Treaty.141 Under EU law, the Member States cannot (i) conclude international agreements affecting common rules, meaning that investment promotion and protection and energy fall within EU's external competence,142 and that "Member States cannot invoke international agreements they have concluded between themselves to justify a failure to comply with Union law."143
190.
The Respondent argues that the internal market is an EU cornerstone. According to Italy, the provisions on freedom of establishment and free movement of capital and payments prohibit (i) "directly discriminatory measures by the host Member State, inter alia, in relation to investment;" and (ii) "any other restrictions, even those of non-discriminatory measures" deterring establishment and investment from other Member States.144 Italy adds that EU freedom of establishment and free movement of capital provisions and the EU's Charter of Fundamental Rights protect EU investors' "right to property" against expropriation and "freedom to conduct a business," subject to public policy, security and health restrictions under Articles 52 or 65 TFEU.145
191.
Italy disagrees with Belenergia that EU does not offer equivalent substantive or procedural protection. In its view, the EU provides (i) for wide investor protection, including protection of legitimate expectations through the principles of reasonableness and proportionality of public acts; and (ii) for access to justice to national courts subject to ECJ's control ensuring predictability and the rule of law.146 Italy further submits that the Achmea decision highlighted that investors are not fully protected in investment treaty arbitration because arbitral tribunal cannot refer matters of EU law to the ECJ.147
192.
Finally, the Respondent adds that EU law has created a separate legal order148 from those of the Member States forbidding them to agree on investment protection rules inter se. Citing the decision in the MOX Plant (Commission v. Ireland) case, Italy alleges (i) that under Article 344 TFEU Member States cannot submit an intra-EU dispute to ECT arbitration; and (ii) that "an international agreement cannot affect the allocation of responsibilities defined in the Treaties and, consequently, the autonomy of the Union's legal system, compliance with which is the task of the ECJ to ensure."149 Italy refers to the European Commission's statement on behalf of the Union when signing the 2015 International Energy Charter:150

It is declared that, due to the nature of the EU internal legal order, the text in Title II, Heading 4, of the International Energy Charter on dispute settlement mechanisms cannot be construed so as to mean that any such mechanisms would become applicable in relations between the European Union and its Member States, or between the said Member States, on the basis of that text.

193.
Italy relies on the MOX Plant (Commission v. Ireland) case in which the ECJ found that by bringing an UNCLOS claim raising matters of EU environmental legislation against the United Kingdom, Ireland had breached Article 344 TFEU.151 Italy also cites ECJ's Opinion 1/09 finding that the creation of a European and Community Patents Court was incompatible with EU law.152 The fact that the present dispute also concerns a private party is irrelevant.153
194.
Italy concludes that Italian courts are the "appropriate forum" for the Belenergia's claims.154

(d) The ECJ's decision in Achmea confirms that this Tribunal lacks jurisdiction

195.
Italy submits that the ECJ's decision in Achmea155 confirms the Tribunal's lack of jurisdiction in relation to intra-EU disputes, which are non-arbitrable in light of the sincere cooperation duty of Member States under EU law.156 Italy refers to Electrabel v. Hungary, arguing that EU law is part of international law and therefore applicable to matters of jurisdiction and merits under Article 26(6) ECT.157
196.
According to Italy, the Achmea decision confirmed that intra-EU investment arbitration is incompatible with EU law breaching Articles 267 and 344 TFEU and the autonomy principle of EU law, this arbitration being thus incompatible with EU law.158 The ECJ's reasoning in Achmea applies to arbitration under Article 26 ECT, the circumstances of this arbitration being identical to those of Achmea under Article 8 of the Netherlands-Slovakia BIT.159 Italy adds that the ECT's multilateral character does not affect the bilateral character of the obligation to arbitrate under Article 26 ECT,160 noting that Achmea generally referred to agreements concluded between the EU Member States and did not distinguish between BITs and mixed agreements like the ECT, let alone multilateral agreements.161
197.
Moreover, Italy posits that the ECJ confirmed in Achmea that arbitral tribunals cannot request preliminary rulings under Article 267 TFEU. It adds that Wathelet AG's Opinion was based on the premise that arbitral tribunals could request preliminary rulings to the ECJ, which was rejected by the Court.162 Thus, this arbitration breaches the ECJ's monopoly to give the final word on EU law matters.163
198.
Italy adds that this Tribunal should adopt the principle of harmonious interpretation to exclude ECT application between EU Member States.164 Alternatively, the Respondent argues that any conflicts between the ECT and EU law should be ruled in favour of EU law.165 In any event, Italy submits that the principle of harmonious interpretation favours an interpretation of the ECT as not applying between EU Member States.166 The Respondent highlights that EU law already provides for investment protection, the ECT Contracting Parties sharing the understanding that the ECT would not apply to intra-EU situations.167
199.
According to Italy, whether EU law can apply to the dispute is a decisive point of the Achmea decision: it is undisputed in this arbitration that Italy's PV policies sought to comply with EU law.168 It then cites the Achmea' s decision, as follows:169

39 It must be ascertained, first, whether the disputes which the arbitral tribunal mentioned in Article 8 of the BIT is called on to resolve are liable to relate to the interpretation or application of EU law.

40 Even if, as Achmea in particular contends, that tribunal, despite the very broad wording of Article 8(1) of the BIT, is called on to rule only on possible infringements of the BIT, the fact remains that in order to do so it must, in accordance with Article 8(6) of the BIT, take account in particular of the law in force of the contracting party concerned and other relevant agreements between the contracting parties.

41 Given the nature and characteristics of EU law mentioned in paragraph 33 above, that law must be regarded both as forming part of the law in force in every Member State and as deriving from an international agreement between the Member States.

42 It follows that on that twofold basis the arbitral tribunal referred to in Article 8 of the BIT may be called on to interpret or indeed to apply EU law, particularly the provisions concerning the fundamental freedoms, including freedom of establishment and free movement of capital.170

200.
Italy further submits that the Achmea 's rationale applies to this arbitration irrespective of whether the arbitral seat is within the EU.171 It cites the European Commission's decisions against Spain and the Czech Republic finding that "awards rendered by arbitral tribunals under the ECT in cases concerning intra-EU situations constitute State aids to be authorised by the Commission before being executed."172
201.
Italy also objects to the Masdar v. Spain tribunal's reading of the Achmea decision, including the tribunal's reference to the Wathelet AG's Opinion, noting that the ECJ disagreed with his Opinion.173 The Respondent submits that Belenergia's reliance on an alleged distinction between BITs and the ECT by Wathelet AG is unwarranted, adding that the ECJ has not discussed the ECT because it simply was not at issue in Achmea.174 According to Italy, Wathelet AG's remark that no EU institution or Member State has challenged the ECT is immaterial because the ECT is not limited to intra-EU situations.175
202.
Italy also argues that the Communication from the Commission to the European Parliament and the Council: Protection of intra-EU Investment176 is relevant for this arbitration, showing that the Achmea decision also affects ECT jurisdiction. In Italy's view, the Commission's Communication, despite its non-binding character, shows how the European Commission would decide as a body entrusted with the responsibility to ensure the application of the EU treaties and to oversee the application of EU law pursuant to Article 17(1) of the Treaty on European Union ("TEU").177 Among other matters, the Respondent adds that the Commission's Communication highlights the ECT's incompatibility with EU law and the risk of forum shopping, parallel proceedings, and double recovery.178
203.
According to Italy, the Achmea decision confirms that an award on the merits would not be recognised and enforced in the seat of arbitration179 (France), the host State (Italy), and the State of the investor's nationality (Luxembourg).180 In this respect, Italy refers to Article 42 of the ICC Rules and Article 32.2 of the LCIA Rules on the tribunal's duty to render an "enforceable" award.181 Thus, the Tribunal should refuse to entertain jurisdiction in this arbitration because of "its inability to discharge the essential mandate to produce an enforceable award."182
204.
Moreover, Italy relies on a Declaration dated 15 January 2019183 by 22 Member States including Italy to request the termination of the proceedings, citing, among others, an excerpt that declares the international arbitration provision under the ECT incompatible with the EU Treaties:

Furthermore, international agreements concluded by the Union, including the Energy Charter Treaty, are an integral part of the EU legal order and must therefore be compatible with the Treaties. Arbitral tribunals have interpreted the Energy Charter Treaty as also containing an investor-State arbitration clause applicable between Member States. Interpreted in such a manner, that clause would be incompatible with the Treaties and thus would have to be disapplied [sic].184

205.
In the alternative, Italy relies on a Declaration dated 16 January 2019185 by Luxembourg, together with Finland, Malta, Slovenia and Sweden, requesting the suspension of the proceedings, based on the incompatibility between the ECT and the EU, which "should be left for the national judge of the CJEU to[] decide[]."186

(2) The Exclusive Jurisdiction Clause Under The GSE Conventions Leads To Italy's Lack Of Unconditional Consent Under Article 26 ECT

206.
The Respondent submits that the GSE Conventions' exclusive jurisdiction clause triggers the fork-in-the-road rule under Articles 26(2) and 26(3) ECT187 and bars arbitral jurisdiction over all ECT claims related to GSE Conventions, including matters about incentives through feed-in-tariffs and minimum prices, their rates and duration.188 Italy adds that Rome courts' exclusive jurisdiction under the GSE Conventions also bars ECT jurisdiction over umbrella clause claims on reduction of incentives, and on modification or repeal of minimum prices.189 The Respondent submits that the exclusive jurisdiction clause under the GSE Conventions on feed-in-tariffs and on minimum prices provides that:

[f]or any dispute arising out of or in any case connected to the interpretation and/or execution of the [Convention] and the documents referred to therein the Parties agree on the exclusive jurisdiction of the Court of Rome.190

207.
According to the Respondent, Italy's unconditional consent to arbitrate under Article 26(3) ECT is subject to subparagraph (b) of Article 26(2), which expressly allows the parties "to agree on a specific settlement procedure for a dispute or a set of disputes alternative to arbitration."191 In the Respondent's view, Article 26(3) excludes Italy's unconditional consent to arbitration in case of "any applicable, previously agreed dispute settlement procedure."192 The combined reading of Articles 26(2)(b) and 26(3) ECT therefore means that the exclusive jurisdiction of Rome courts in the GSE Conventions bars Italy's unconditional consent to arbitrate.193
208.
Italy disagrees with the Claimant's interpretation of Article 26 ECT. According to Italy, the contract-based, exclusive jurisdiction clause under the GSE Conventions is sufficient to trigger the fork-in-the-road rule; thus, commencement of litigation before Rome courts is unnecessary.194 The conclusion of the GSE Conventions as standard form contracts does not affect this argument.195
209.
The Respondent asserts that the broad language of the exclusive jurisdiction clause ("any dispute arising out of or in any case connected to the interpretation and/or execution of the [Convention] and the documents referred to therein") supports Italy's lack of unconditional consent to arbitrate.196 In the Respondent's view, this clause refers to disputes direct- and indirectly related to the GSE Conventions.197 To illustrate, the Respondent refers to litigation before the Tribunale Amministrative Regionale per il Lazio – Roma against two decrees of Ministero dello sviluppo economico ("MISE") implementing the Spalma-Incentivi.198 In this litigation brought against MISE and GSE, the Respondent submits that energy producers challenged the MISE decrees before Rome courts on ECT grounds (among other grounds).199
210.
The Respondent alleges that the SGS v. Philippines decision supports this argument because it affirms that "exclusive jurisdiction [clauses] prevail over dispute settlement clauses in investment treaties."200 Having applied the principle generalia specialibus non derogant, the SGS v. Philippines tribunal was correct holding that a specific, contract-based, exclusive jurisdiction clause affects arbitral jurisdiction. This specific clause prevails over a general, treaty-based jurisdiction clause like Article 26 ECT, unless "the treaty clearly intended to override contractual provisions."201 On the contrary, the Respondent sustains that the combined reading of Articles 26(2)(b) and 26(3) ECT, and that previous litigation before Rome courts by other energy producers support its interpretation.202 In addition, the GSE Conventions' conclusion was subsequent to the ECT's signature, confirming Italy's intention not to give its unilateral consent to ECT arbitration.203
211.
Italy flags contradictions in the Claimant's argument that the fundamental basis of the dispute is not the interpretation and "execution" of GSE Conventions covered by the exclusive jurisdiction clause, but sovereign acts implementing the Spalma-Incentivi Decree and the Law of Conversion, including sovereign acts amending the GSE Conventions.204 Italy argues that contract breaches ought to relate to contract "execution;"205 Claimant is not able to distinguish GSE Conventions' breaches from the purported ECT breaches (FET and umbrella clause). The Claimant's "carte blanche" accusation is groundless, because (i) the incentives were not cancelled but re-modulated; and (ii) Italian courts remain open to Belenergia.206
212.
Alternatively, if the Tribunal finds that Italy's objections to the other ECT claims should not prevail— quod non— Italy submits that the umbrella clause claim remains inadmissible. In support of this argument, the Respondent cites the SGS v. Philippines and the BIVAC v. Paraguay decisions. According to the Respondent, "[i]t would be contradictory to invoke a contractual clause providing for a specific obligation of conduct, but not to invoke, nor take into account, the contractual clause providing for another obligation, regarding the exclusivity of the forum."207 The Respondent highlights that the jurisdiction clause in BIVAC v. Paraguay had the same content as the GSE Conventions' clause.208
213.
The Respondent disagrees with the Claimant on classifying this objection as one of admissibility rather than jurisdiction. Italy also disagrees with the BIVAC v. Paraguay tribunal's findings on admissibility.209 Even if the Tribunal considers the objection as one of admissibility— quod non— the Respondent states that the same conclusions generally apply to all Article 10(1) ECT claims, including the umbrella claim.210
214.
First, the exclusive jurisdiction clause under the GSE Conventions applies as a "previously agreed dispute settlement procedure" under Article 26(2)(b) ECT. This leads to Claimant being deemed to having "submitted" its dispute "in accordance with" the GSE Convention's forum clauses. As a result, Respondent's "unconditional consent" to arbitration under Articles 26(2)(b) and 26(3) is barred, and Claimant's claims are inadmissible.211 According to the Respondent, this argument is irrespective of the umbrella clause under Article 10(1) ECT and thus of the distinction between contract and treaty claims.212 Second, and, if the Tribunal finds that the umbrella clause under the last sentence of Article 10(1) ECT applies to the dispute— quod non— the Respondent asserts that the GSE Conventions' exclusive jurisdiction clauses render umbrella claims inadmissible, referring to the SGS v. Philippines findings.213 The Respondent adds that in BIVAC v. Paraguay the tribunal declared umbrella clause claims inadmissible, giving effect to the contract's forum selection clause.214 The Respondent finds it surprising the Claimant's exclusive reliance on the ECT as applicable law, when contract claims would be subject to Italian law instead.215

(3) Imbalance Costs Are "Taxation Measures" Within the Meaning of Article 21(7) ECT

215.
The Respondent argues that the definition of "Taxation Measures" under Article 21(7) ECT is "extremely large" and refers to "an open-ended category of measures."216 Pursuant to Article 21(7), a "Taxation Measure" has to be in domestic legislation or in an international treaty and has to have a "fiscal" character, as defined by domestic law.217 To illustrate, the Respondent refers to the double-taxation treaty between Italy and the Netherlands.218 This double-taxation treaty does not define future "similar taxes" that may fall within its scope under its Article 2(4); rather, its Article 3(2) states that undefined terms will have the meaning ascribed to them under domestic tax law of the relevant State party.219
216.
According to the Respondent, under Italian law "fiscal" measures are classified as "imposta" (tax), "tassa" (fee) or "contributo" (contribution), irrespective of the name of the measure:220

(a) a fee is paid in consideration for a public service requested by an individual;

(b) a tax is proportionate to the contributing capacity of an individual, paid for general public services; and

(c) a contribution is a compulsory levy paid by certain individuals because they benefit, directly or indirectly from certain public services, irrespective of whether individuals have requested these services.

217.
In the absence of legislative measures indicating the "fiscal" character of a specific measure, Italy states that the Italian Constitutional Court's definition of "fiscal" measures applies. Pursuant to the Italian Constitutional Court, the features of "fiscal" measures are: (a) mandatory contribution; (b) "absence of exact reciprocity between the parties"; and (c) link between this contribution and public spending with a relevant economic purpose.221 The Respondent adds that Article 23222 of the Italian Constitution requires that "fiscal" measures be established by law.223 Fees, taxes and contributions under Italian law fall therefore within the meaning of "Taxation Measures" under Article 21(7) ECT.224
218.
Moreover, the Respondent submits that the Glossary of Tax Terms (the "OECD Glossary") of the Organisation for Economic Co-operation and Development (the "OECD") defines tax as "a compulsory unrequited payment to the government."225 The OECD qualifiers "compulsory" and "unrequited" (unreciprocated) used in the definition precisely correspond, in the Respondent's view, to the first and second features of "fiscal" measures pursuant to the Italian Constitutional Court.226 The terms "payment to the government" could, in turn, refer to the third feature, that is, contribution toward public spending.
219.
The Respondent submits that the OECD Glossary also defines the sources of tax law,227 domestic sources being "primary legislation, such as acts or laws, and secondary legislation such as regulations, decisions, circulars, orders, etc." On the international sources of tax law, the OECD Glossary refers to the OECD model tax treaty as an interpretative tool. To illustrate, Respondent cites Article 2(1) of the 2014 OECD Model Tax Treaty,228 which applies to income and capital taxes "irrespective of the manner in which they are levied."229
220.
The 2014 OECD Model Treaty does not define the characteristics of income and capital taxes in its Article 2(2), let alone define "substantially similar" future taxes under Article 2(4). Pursuant to Article 3(2) of the 2014 OECD Model Treaty, Respondent therefore concludes that these definitions will have "the meaning that [they] have at that time under the law of that State [;] any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State."230
221.
The Respondent submits that the imbalance costs are "Taxation Measures" because they are levied as a contribution to "the general mechanism of storage of electricity by Terna [the Italian electricity transmission system operator] (the Italian system operator), based on advance projections of the quantity each producer would estimate to inject in the national grid and deviations therefrom."231
222.
The Respondent highlights the Claimant's admission in ¶ 126 of the Statement of Claim that imbalance costs (charges) used to be levied from the final users ("energy consumers") before the adoption of AEEG Resolution No. 444/2016.232 Adoption of AEEG Resolution No. 444/2016 caused public service charges (funding Terna's electricity storage) to be levied from energy producers like Claimant rather than energy users. AEEG Resolution No. 444/2016 did not change the "fiscal" character of the imbalance charges; rather, it merely changed the general category of individuals from which these charges were levied.233
223.
The Respondent adds that under Article 1(1) of Legislative Decree No. 79/1999234 electricity transmission and dispatching activities are reserved to the State, "granted in concession to Terna", the manager of the national transmission network.235 In turn, Article 2(10) of Legislative Decree No. 79/99 defines "dispatching" activities as instructing the use and the coordinated operation of production facilities, the transmission network, and auxiliary services. As the sole concessionary of these activities, Terna sets forth the rules on dispatching contracts, including provisions on access conditions and imbalance coverage. The GSE acts as a commercial contract intermediator vis-à-vis energy producers under AEEG Resolution No. 280/2007,236 reinforcing the regulatory character of electricity dispatching activities. In this respect, the Respondent cites decisions by the Italian Constitutional Court holding that GSE contract payments are "material/factual" contributions despite their contractual formulation, their contractual formulation being weakened by the GSE's intermediation and by the prevalence of non-market-based considerations.237
224.
Respondent asserts that Terna has the duty to grant non-discriminatory access to energy producers, but this does not prevent it from levying specific charges from them. In this respect, the Respondent refers to litigation before Italian courts about imbalance costs imposed on energy producers under AEEG Resolution No. 281/2012238 on nonprogrammable renewable sources.239 It submits that producers challenging this Resolution referred to "imbalance costs" as contributions within the meaning of Article 23 of the Italian Constitution.240 In addition, the Consiglio di Stato has declared that imbalance costs under AEEG Resolution No. 281/2012 should be levied from a "general category of producers" not discriminating in the calculation method between producers.241
225.
The Respondent stresses that Claimant's arguments rejecting the "fiscal" character of imbalance charges are groundless. Claimant's position is inconsistent with treaty interpretation and with the meaning of "fiscal" measures under domestic and international law.242 The Italian legislature's failure to expressly designate imbalance costs as "Taxation Measures" is irrelevant; rather, their "fiscal" features are clear under interpretative principles of tax law.243
226.
In conclusion, the Respondent submits that the imbalance costs claim falls outside the Tribunal's jurisdiction. Imbalance costs are therefore "Taxation Measures" under Article 21(7) ECT, from a domestic and international law perspective,244 because (i) they are a mandatory contribution; (ii) they are not reciprocated by a specific service by Terna; and (iii) they cover public spending with Terna's dispatching activities and with guaranteeing the system's security.245 Alternatively, the Respondent submits that the imbalance costs dispute is an intra-EU dispute equally falling outside the Tribunal's jurisdiction.246

(4) The Waiting Period Under Articles 26(1) And 26(2) ECT

227.
The Respondent submits that the Claimant's belated introduction of the imbalance costs claim infringes the waiting period requirement under Article 26 ECT, the Tribunal therefore lacking jurisdiction to rule on it. The waiting period under Article 26 ECT is a pre-condition to the Respondent's consent to arbitrate.247 It further submits that the Amicable Solution Letter of 8 December 2014 and the Request for Arbitration of 30 July 2015 refer only to claims on feed-in tariffs and on minimum prices, and not to the imbalance costs claim.248 According to the Respondent, the Claimant raised—for the first time—the imbalance costs claim in its Statement of Claim of 14 December 2016, on autonomous grounds. Grounded on the AEEG Resolution No. 444/2016, the imbalance costs claim is unrelated to the other claims on incentive measures.249
228.
On the distinction between jurisdictional and admissibility objections, the Respondent submits that this distinction is "blurring."250 If the Tribunal finds that the waiting period objection has an admissibility character, the Respondent requests the Tribunal to consider its arguments on jurisdiction regardless of this objection's character.

B. The Claimant's Position

(1) Italy's Intra-EU Dispute Jurisdictional Objection Is Unfounded

229.
The Claimant rejects Italy's jurisdictional objection that the present dispute is an intra-EU dispute falling outside the scope of the ECT, for the following reasons: (a) the ECT was originally conceived to apply to intra-EU disputes; (b) the ECT applies to intra-EU disputes irrespective of subsequent EU developments; and (c) the ECJ's decision in Slovak Republic v. Achmea does not affect this arbitration.

(a) The ECT was originally conceived to apply to intra-EU disputes

230.
The Claimant asserts that its arguments draw on the interpretative guidance of Articles 31 and 32 VCLT,251 favouring the "ordinary meaning" of treaty provisions, including their context and the parties' subsequent practice.252 The Claimant also states that the Respondent has failed to produce "a single award in which a tribunal has agreed with an argument that the operation of the EU treaties bar[s] [ECT] jurisdiction."253 Several awards, including RREEF v. Spain, Blusun v. Spain, and Isolux v.Spain confirm a consistent pattern of decisions rejecting the intra-EU objection.254 Although the Claimant accepts that the Tribunal is not bound by these decisions, there are "cogent reasons" to rely on past decisions, because, as stated by Professor Christoph Schreuer, "[r]eliance on past decisions is a fundamental feature of any orderly decision process."255
231.
The Claimant disagrees with Italy and the European Commission that the ECT could not have created inter se obligations between the EU Member States and that EU Member States should apply EU law in their inter se relations and not the ECT. Citing the Blusun v. Italy256 award, the Claimant submits that the inter se doctrine, although applied between Commonwealth States, was never recognised as customary international law.257 Because the inter se doctrine is no international customary rule, its efficacy requires an express treaty provision; thus, Italy's argument that the relations between EU Member States are not subject to international law (and to the ECT) fails.258 The Claimant refers to arbitral decisions rejecting the application of the inter se doctrine to intra-EU affairs (Blusun v. Italy, Charanne v. Spain, Electrabel v. Hungary, RREEF v. Spain and Isolux v. Spain).259
232.
Belenergia also objects to Italy's and to the European Commission's argument that the ECT did not give rise to inter se obligations between the EU Member States because the Member States had no competence to enter into ECT obligations, rejecting Italy's and the European Commission's reading of Articles 1(2),260 1(3),261 1(10),262 16263 and 25264 ECT.265 Relying on Blusun v. Italy, Belenergia submits that Articles 6 and 46 VCLT266 do not support Italy's position, adding that no limitation on Member States' competence was ever communicated at the time of ECT's signature.267
233.
The Claimant also disagrees that the application of the inter se doctrine is a question "of intent." In the Claimant's view, there is no "unequivocal disconnection clause," or "express provision or clear understanding" that could lead to the application of the inter se doctrine in the present case.268 The Claimant adds that the ECT text is "the only and most recent expression of the common will of the parties." Pursuant to VCLT treaty interpretation rules, "if the intention of the parties was to include in the ECT a disconnection clause regarding the EU, they can be trusted to have expressed that in the wording of the treaty."269 On the contrary, Belenergia submits that the ECT Parties have included a disconnection clause to the Svalbard Treaty but not in relation to the EU in Annex 2(1) ECT; the Svalbard disconnection clause in Annex 2(1) ECT provides that:

In the event of a conflict between the treaty concerning Spitsbergen of 9 February 1920 (the Svalbard Treaty) and the Energy Charter Treaty, the treaty concerning Spitsbergen shall prevail to the extent of the conflict.270

234.
Claimant also cites examples of express disconnection clauses in relation to the EU provided in international agreements other than the ECT:271

Article 47(1) of the 2005 Convention on the stepping up of cross-border cooperation, particularly in combating terrorism, cross-border crime and illegal migration (Schengen III Agreement)

The provisions of this Convention shall apply only in so far as they are compatible with European Union law.

Article 27 of the 1988 Convention on Mutual Administrative Assistance in Tax Matters

Notwithstanding the rules of the present Convention, those Parties which are members of the European Economic Community shall apply in their mutual relations the common rules in force in that Community.272

235.
The Claimant relies on the principle expressio unius est exclusio alterius, stating that the omission of a EU disconnection clause in the ECT should be interpreted as entirely excluding it.273 The Claimant also cites another excerpt from the Svalbard disconnection clause under the ECT: "[i]n the event of such conflict [between the Svalbard treaty and the ECT] or a dispute as to whether there is such conflict or as to its extent, Article 16 and Part V of the Energy Charter Treaty shall not apply." Express exclusion of Article 16 ECT's274 application to treaty conflicts covered by the Svalbard disconnection clause shows that an EU disconnection clause could not have been implicit.275
236.
Moreover, the Claimant rejects Italy's reliance on ECT's preparatory work as a supplementary means of interpretation under Article 32 VCLT. According to the Claimant, recourse to a treaty's preparatory work for interpretation purposes can only take place when interpretation under Article 31 VCLT "leaves the meaning ambiguous or obscure" or "leads to a result which is manifestly absurd or unreasonable."276 Citing the Blusun v. Italy decision, the Claimant argues that it is not permissible to rely on preparatory works when the treaty terms are clear. In any case, the Claimant refers to the Blusun v. Italy tribunal's finding that "the travaux préparatoires seem to point against implying a disconnection clause: one was proposed during the course of the Energy Charter Treaty negotiations, but was rejected."277
237.
Neither can the ECT's context, purpose or objective establish a disconnection clause, in the Claimant's view. In particular, the purported ECT's context expressed in Annex 2(5) ECT below does not support Italy's interpretation:

An Investment of an Investor referred to in Article 1(7)(a)(ii), of a Contracting Party which is not party to an EIA or a member of a free-trade area or a customs union, shall be entitled to treatment accorded under such EIA, free-trade area or customs union, provided that the Investment:

(a) has its registered office, central administration or principal place of business in the Area of a party to that EIA or member of that free-trade area or customs union; or

(b) in case it only has its registered office in that Area, has an effective and continuous link with the economy of one of the parties to that EIA or member of that free-trade area or customs union.278

238.
The Claimant explains that the ECT's textual interpretation should prevail and that the ECT Contracting Parties have failed to include an express disconnection clause.279 Italy's interpretation seeking to establish their "intention" to adopt an implied disconnection clause falls afoul of the pacta sunt servanda principle under Article 26 VCLT.280
239.
Belenergia rejects the European Commission's comparison with the WTO as unfounded under Articles 31 to 33 VCLT.281 Nothing in the ECT terms, their context, object or purpose, or its preparatory work suggest an implied EU disconnection clause. On the contrary, the ECT's Title 1 on Objectives provides no reference to the EU, reading as follows:

Within the framework of State sovereignty and sovereign rights over energy resources and in a spirit of political and economic cooperation, they undertake to promote the development of an efficient energy market throughout Europe, and a better functioning global market, in both cases based on the principle of non-discrimination and on market-oriented price formation, taking due account of environmental concerns. They are determined to create a climate favourable to the operation of enterprises and to the flow of investments and technologies by implementing market principles in the field of energy.282

240.
In the Claimant's view, the purported ECT's purpose that its adoption was separate from "the completion of the internal market on energy within the EU" cannot support Italy's argument on the disconnection clause.283
241.
Belenergia also disagrees that subsequent ECT practice under Article 31(3)(b) VCLT284 could affect this Tribunal's jurisdiction. Referring to the 2016 International Law Commission's ("ILC") Report, the Claimant alleges that Italy has failed to show any subsequent practice consistent with Article 31(3)(b) VCLT that "specifically and purposefully relates" to the ECT.285

(b) The ECT applies to intra-EU disputes irrespective of developments after its conclusion

242.

The Claimant argues that subsequent developments to the ECT's conclusion do not bar ECT arbitral jurisdiction. The facts that no intra-EU investment arbitrations under the ECT were commenced before 2007 and that EU Member States have presented EU-related jurisdictional objections in ECT proceedings are irrelevant and do not qualify as subsequent practice under Article 31(3)(b) VCLT.286 The Claimant adds that the Electrabel v. Hungary decision does not support Italy's argument that the ECT covers only extra-EU disputes. Italy's argument is misleading because the Electrabel v. Hungary tribunal did not have to and did not decide on an intra-EU dispute.287

243.

The Claimant also disagrees with Italy's argument on successive treaties relating to the same subject-matter under Article 30 VCLT288 because (i) the Lisbon Treaty and the ECT do not have the same subject-matter; (ii) even if they had the same subject-matter— quod non— the Lisbon Treaty does not prevail over the ECT, since there is no incompatibility between these treaties.289 Accordingly, Article 30 VCLT does not apply in the circumstances; this is the approach adopted in Electrabel v. Hungary and Blusun v. Italy.290

244.
Belenergia submits that there is no incompatibility in the dispute resolution methods under Article 26 ECT and Article 344291 of the TFEU, and that this is supported by previous arbitral decisions. It disagrees that an impossibility to request an ECJ's preliminary ruling (i) under the applicable rules, or (ii) from courts of an arbitral seat outside the Union may cause EU Member States to breach Article 344 TFEU. According to the Claimant, Italy cannot rely on EU law to invalidate the ECT, on Article 46 VCLT grounds.292 Article 46 provides that the parties (EU Member States and the EC) to a treaty (the ECT) cannot—as a rule—rely on their internal law (EU law included) vitiating their treaty-making competence.
245.
The Claimant rejects Italy's accusation that the ECT discriminates against EU citizens. In its view, the ECT "extends to all Member States and is necessarily neutral in this regard."293 Belenergia adds that bilateral investment agreements are not discriminatory either, because it can hardly be argued that they adversely affect the functioning of the internal market.294
246.
Moreover, the Claimant submits that Article 16 ECT is not a conflict rule barring ECT application to intra-EU disputes.295 On the contrary, the Claimant argues that the conflict rule under Article 16 ECT allows treaties to coexist.296 The Claimant adds that Article 16 does not apply to conflicts between treaties whose subject-matter is different, citing Electrabel v. Hungary.297 Even if the ECT and the EU treaties covered the same subjectmatter, EU law cannot prevail under the conflict rule because it is not more favourable to investors than the ECT.298 According to the Claimant, ECT protection is broader than EU law especially in the post-establishment phase, including the fair and equitable treatment standard ("FET") and investor-State arbitration. The Claimant favours a harmonious interpretation of the ECT with EU law.299
247.
In any event, Belenergia posits that the ECT is the "constitution" of the Tribunal; thus, the ECT should prevail in case of any contradiction with EU law. In Belenergia's view, interpretation under Article 31(3)(c) VCLT taking into account "[a]ny relevant rules of international law applicable in the relations between the parties" cannot be used "to negate rights expressly granted in the Treaty."300
248.
Belenergia also objects to Italy's and to the European Commission's argument on the ECT's derogation by the Lisbon Treaty under Article 41 VCLT.301 The Claimant points out that derogation by certain ECT Contracting Parties is barred pursuant to Article 46 ECT, providing that "[n]o reservations may be made to this Treaty."302 The Claimant also points out that derogation would be "incompatible with the effective execution of the object and purpose of the [ECT] as a whole."303 And, even if derogation were possible, the Contracting Parties to the Lisbon Treaty have failed to notify the other ECT Contracting Parties under Article 41(2).304
249.
Finally, Belenergia rejects Italy's and the European Commission's arguments founded on EU competition law and commercial arbitration as being irrelevant for this arbitration.305

(c) The ECJ's decision in Achmea does not affect this arbitration

250.
In a preliminary remark, the Claimant submits that the ECJ's decision in Achmea306 does not affect this arbitration. Firstly, Belenergia argues that, irrespective of the ECJ's findings, the Tribunal has jurisdiction under Article 26(6) ECT, the ECT being its "constitutional instrument."307 Moreover, the Claimant raises three reasons why the Achmea decision has no bearing on this arbitration.
251.
First, differently from Achmea (founded on the Netherlands-Slovakia BIT), this arbitration is founded on the ECT providing for a different applicable law clause. While the Netherlands-Slovakia BIT provided for the application, among others, of "of the law in force of the Contracting Party concerned" and "other relevant agreements between the Contracting Parties", Article 26(6) ECT provides for the application of "this Treaty and applicable rules and principles of international law."308 Relying on Eiser v. Spain, Belenergia argues that EU law does not fall within the meaning of Article 26(6), not being applicable to these proceedings.309
252.
Belenergia further disagrees with Italy that EU law is part of international law and thus applies pursuant to Article 26(6) ECT. Belenergia cites the Rainbow Warrior case, noting that the expression "applicable rules and principles of international law" refers to customary international law, which does not include EU law even if it arises under international treaty.310 The Claimant also submits that the statements in relation to the application of EU law by the Blusun and Masdar tribunals were made without an analysis of Article 26(6) ECT.311
253.
Moreover, Belenergia argues that Italy's argument based on Article 31(3)(c) VCLT is unfounded because "[a]ny relevant rules of international law" within the meaning of this provision refers to general international law as customary international law.312 Belenergia further sustains that Article 31(3)(c) VCLT cannot be used to substitute let alone negate treaty rights.313
254.
Second, Belenergia argues that, differently from Achmea, the EU is a Contracting Party to the ECT.314 According to the Claimant, "by concluding or acceding to the ECT, the Member States of the EU and the EU itself established a mechanism for settling disputes between an investor and an EU Member State."315 This does not prevent that these disputes be "resolved in a manner that ensures the full effectiveness of EU law," the ECT being compatible with EU law.316
255.
Third, Belenergia adds that the ECJ in Achmea acknowledged that an international agreement establishing a court "is not in principle incompatible with EU law."317
256.
Fourth, Belenergia argues318 that the Masdar v. Spain319 award confirms that the Achmea decision has no bearing on ECT arbitrations. According to the Masdar tribunal, the Achmea decision applies only to BITs and does not consider multilateral treaties like the ECT to which the EU is a party.320 The Claimant also adds that the RREEF v. Spain321 decision on jurisdiction is not an outlier; rather it is consistent with the awards in Novenergia v. Spain322 and Eiser v. Spain.323
257.
Fifth, the Claimant objects to Italy's reliance on the Communication from the Commission to the European Parliament and the Council: Protection of intra-EU Investment324 because: (a) this Communication is not a legally binding authority pursuant to Articles 288 to 292 of the TFEU; and (b) it does not present "more than bare assertions" with "no reasoned analysis" on how the Achmea decision could affect the Tribunal's jurisdiction.325
258.
Belenergia also objects to Italy's request for termination of the proceedings, arguing that the Member States' Declarations dated 15 January 2019326 and 16 January 2019327 cannot affect the Tribunal's jurisdiction as they postdate the date when the Tribunal was seized of the dispute and its date of registration on 22 November 2015.328 According to Belenergia, these Declarations are not different from the Commission's Communication to the European Parliament and the Council: Protection of intra-EU Investment,329 not to mention that Luxembourg is not a signatory of the Declaration dated 15 January 2019.330 Belenergia relies on Luxembourg's declaration dated 16 January 2019,331 providing that "it would be inappropriate, in the absence of a specific judgment on the matter, to express views as regards the compatibility with Union law of the intra EU application of the Energy Charter Treaty."332
259.
Further, Belenergia objected to Italy's alternative request for suspension of the proceedings, arguing that Luxembourg's Declaration dated 16 January 2019 does not state that its signatories intended the suspension of ECT arbitral proceedings.333 Even if it were the case (quod non), the Tribunal is the judge of its own competence as per Article 41(1) of the ICSID Convention.334 Belenergia relies on decision of the RREEF et al. v. Spain tribunal, finding that even if there were an incompatibility between EU law and the ECT, "EU law does not and cannot trump public international law."335

(2) The GSE Conventions' Clause Conferring Exclusive Jurisdiction on Rome Courts Does Not Trigger The ECT's Fork-In-The-Road Clause

260.
The Claimant denies Italy's objection on lack of unconditional consent to arbitrate under Article 26 ECT, as follows: (a) Belenergia has not previously "submitted" the investment dispute to the Rome courts under the GSE Conventions triggering the fork-in-the-road clause under Article 26(3)(b) ECT, as interpreted pursuant to Article 31 VCLT;336(b) Belenergia has not previously "submitted" the investment dispute to Rome courts under Article 26(3)(b) ECT as interpreted and applied by arbitral tribunals; (c) Italy has failed to show that Rome courts' jurisdiction cover the same dispute, the same cause of action, and the same parties of this arbitration; and (d) Italy's objection is one of admissibility, not capable of barring the Tribunal's jurisdiction.

(a) Belenergia has not previously "submitted" the investment dispute to Rome courts under the GSE Conventions triggering the fork-in-the-road clause under Article 26(3)(b) ECT, as interpreted pursuant to Article 31 VCLT

261.
Belenergia disagrees with the Respondent that the exclusive jurisdiction clause under the GSE Conventions automatically triggers the fork-in-the-road in Article 26(3)(b) ECT.337 In the Claimant's view, the fork-in-the-road clause is only triggered with the actual filing of the dispute before Rome courts, "a forum expressly stipulated" under Article 26(2) ECT.338 It adds that an existing exclusive jurisdiction clause "does not mean that the investor has 'submitted' a dispute for resolution to a particular dispute settlement procedure"339 under Article 26(3) ECT.340 In the Claimant's view, an exclusive jurisdiction clause could be a "previously agreed dispute settlement procedure" under Article 26(2)(b), which does not equal to "filing" an investment dispute.341
262.
According to the Claimant, neither the Claimant nor its SPVs have commenced any proceedings, let alone claimed any relief before Rome courts or any other forum.342 It adds that they merely agreed on Rome courts' jurisdiction over contract claims under the GSE Conventions.343 The Claimant therefore asserts that all dispute settlement methods under Article 26 were available to it at the time that it filed its Request for Arbitration.344
263.
The Claimant argues that Article 26 ECT should be interpreted "in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose" pursuant to Article 31(1) VCLT; it adds that its "context" "shall comprise […] the text, including its preamble and annexes" for interpretation purposes under Article 31(2) VCLT.345 The Claimant points out that the Tribunal should only have recourse to supplementary means of interpretation under Article 32 VCLT (ECT's preparatory work) if Article 26 ECT is not sufficiently clear, which is not the case.346
264.
The Claimant submits that the textual interpretation of Article 26 ECT indicates that:

(a) the expression "disputes" concern existing disputes and not future disputes, the 3-month waiting period under Article 26(2) supporting this interpretation;

(b) the term "choose" in Article 26(2) implies that the Claimant can choose between different options, including the option of "[a] previously agreed dispute settlement procedure" under Article 26(2)(b), but not excluding other options;

(c) the terms "submit" and "submitted" in Articles 26(2), 26(3)(b) and 26(4) "refer to the decision to file suit rather than to an agreement that exists before the choices under Article 26(2) even arise."347

265.
Moreover, the Claimant asserts that an interpretation of Article 26 ECT in its context and in light of its purpose suggests that (a) proceedings have to be filed to trigger the fork-in-the-road clause; and (b) a party can file proceedings and subsequently withdraw from them, without triggering the fork-in-the-road clause, provided that no final dispute resolution took place.348 In support of this argument, the Claimant refers to Articles 26(3)(b)(i) and 26(3)(b)(ii),349 and to Italy's Statement of 17 December 1997 of Annex ID ECT.350
266.
Even if Belenergia had actually filed a suit before Rome courts— quod non— it would nonetheless have access to ICSID arbitration provided that it withdrew its claims pursuant to Italy's Statement of 17 December 1997. The Claimant therefore concludes that the exclusive jurisdiction clause in favour of Rome courts under the GSE Conventions cannot bar ICSID jurisdiction.351

(b) Belenergia has not previously "submitted" the investment dispute under Article 26(3)(b) ECT as interpreted and applied by arbitral tribunals

267.
The Claimant submits that arbitral decisions confirm that the fork-in-the-road clause is triggered when an investor chooses to file proceedings before host State courts or under some other dispute settlement mechanism.352 In this sense, it cites the decisions in Toto v. Lebanon, holding that a claim is barred when it was "already brought before a different judicial forum", and in Maffezini v. Spain, finding that this is "final and irreversible."353
268.
Drawing a parallel with the present case, Belenergia submits that the Lanco v. Argentina354 tribunal held that an exclusive jurisdiction clause in favour of Argentine courts under a concession agreement did not bar ICSID jurisdiction under the US-Argentina BIT.355 The Claimant adds that the fork-in-the-road clause under Article VII of the US-Argentina BIT resembles the ECT one.356

(c) Italy has failed to show that the Rome courts' jurisdiction clause covers the same dispute, the same cause of action and the same parties of this arbitration

269.
Even if the exclusive jurisdiction clause under the GSE Conventions in favour of Rome courts could trigger the fork-in-the-road clause under Article 26(3) ECTquod non— the Claimant argues that the "triple identity test" under fork-in-the road clauses is not fulfilled. The Claimant refers to various arbitral decisions in support of the "triple identity test" requiring (i) the same dispute, (ii) the same cause of action, and (iii) the same parties, as conditions for triggering the fork-in-the-road clause.357
270.
Referring to Vivendi I,358 the Claimant adds that its investment claims do not allege a cause of action under the GSE Conventions, but under the ECT. Because the present dispute does not satisfy the "triple identity test", the fork-in-the-road clause of Article 26(3) ECT could not have been triggered.359

(d) Italy's objection is one of admissibility; thus, it does not bar the Tribunal's jurisdiction

271.
Belenergia argues that the Respondent has made a "taxonomical error" when referring to the fork-in-the-road objection as one of jurisdiction rather than admissibility.360 The GSE Conventions' jurisdiction clause was contained in standard form contracts. As such, these contracts were not freely negotiated, a purported jurisdictional choice triggering the fork-in-the-road rule being therefore invalid.361 The objection being one of admissibility of claims, this Tribunal enjoys discretion and procedural flexibility to proceed to the merits despite Respondent's objection.362

(3) The GSE Conventions' Exclusive Jurisdiction Clause Does Not Bar The Tribunal's Jurisdiction Or Render Any Claims Inadmissible

272.
The Claimant objects to Italy's jurisdictional and admissibility objection under Articles 26(2)(b) and 26(3) ECT favouring Rome courts' exclusive jurisdiction under the GSE Conventions363 in the light of SGS v. Philippines, as follows: (a) the GSE Conventions' exclusive jurisdiction clause has no effects on the Claimant's umbrella clause claim under Article 10(1) ECT; (b) a stay of the umbrella clause claim would be inappropriate; and (c) the GSE Conventions' exclusive jurisdiction clause has no effects on the other Claimant's claims.

(a) The GSE Conventions' exclusive jurisdiction clause has no effects on the Claimant's umbrella clause claim under Article 10(1) ECT

273.
First, the Claimant submits that the present dispute is distinguishable from the SGS v. Philippines dispute.364 In SGS v. Philippines the claimant SGS had concluded a customs inspection contract with the Philippines containing a broadly worded exclusive jurisdiction clause. After the Philippines' refusal to extend the contract's duration and to pay several invoices, SGS brought FET, expropriation and umbrella clause claims before an ICSID tribunal. The tribunal held that the entirety of SGS claims arose from the contract providing for exclusive jurisdiction of Philippine courts, and suspended the proceedings.
274.
Conversely, Belenergia states that the present dispute is not limited to contract claims: it "aris[es] from legislative and regulatory measures with contractual elements, particularly insofar as the FiT and RDI Conventions [the GSE Conventions] inculcated a legitimate expectation of stability on the part of the Claimant."365 The Claimant adds that the jurisdiction clause of the GSE Conventions is not broadly worded as the one in SGS v. Philippines because it covers only disputes "connected to the interpretation and/or execution of the [Conventions] and the documents referred to therein."366 The Claimant explains that the dispute does not fall within the scope of the jurisdiction clause of the GSE Conventions because:

[…] it concerns (a) sovereign acts of the Italian state through the implementation of the Spalma Incentivi Decree and Law of Conversion, neither of which are mentioned in [the GSE Conventions]; and (b) the unilateral amendment of [the GSE Conventions] through these same sovereign instruments, an act distinct from interpretation and execution.367

275.
To interpret the jurisdiction clause of the GSE Convention as barring arbitral jurisdiction would be, in the Claimant's view, the same as giving Italy carte blanche to change the GSE Conventions as it pleases, including "reducing the FiT and RID [minimum prices] to zero."368
276.
Second, the Claimant argues that the SGS v. Philippines 's classification of umbrella clause claims as contract claims is legally wrong. The Claimant refers to SGS v. Paraguay,369 among other decisions, explaining that an umbrella clause claim is a treaty claim; thus, treaty jurisdiction cannot be displaced by a contract's jurisdiction clause.370

(b) A stay of the umbrella clause claim would be inappropriate

277.
According to Belenergia, a stay of the umbrella clause claim would be inappropriate. The Claimant refers to the SGS v. Paraguay 's findings refusing to suspend the arbitration because umbrella claims were not mere contract claims covered by an exclusive jurisdiction clause.371 The Claimant disapproves the SGS v. Philippines 's decision suspending the umbrella clause claim because (i) giving prevalence to an exclusive jurisdiction clause risks making the umbrella clause useless; (ii) staying the umbrella clause claim creates uncertainty; and (iii) an umbrella clause claim is a claim for treaty breach and not contract breach.372 Belenergia also submits that the Tribunal should not suspend the arbitration because Claimant's claims extend beyond mere contract breaches, differently from the SGS v. Philippines dispute.373

(c) The GSE Conventions' exclusive jurisdiction clause has no effects on the other Claimant's claims

278.
The Claimant disagrees with the Respondent that the exclusive jurisdiction clause under the GSE Conventions could bar any claims based on the re-modulation of tariff incentives and on the modification/cancellation of the minimum prices.374 The Claimant argues that the Respondent overlooks the distinction between treaty and contract claims. Referring to arbitral decisions and to a scholarly writing, the Claimant states that:

The fundamental basis of [its] claim (save under the umbrella clause) is not the [GSE Conventions], but the Spalma Incentivi Decree and the Law of Conversion that – among other things – unilaterally modified these agreements through the sovereign power of the Italian state. Thus, to paraphrase the tribunal in BIVAC v. Paraguay, the nonumbrella clause claims of the Claimant here turn on the interpretation and application of the ECT and the acts of the Respondent (as puissance publique), not on the interpretation of the [GSE Conventions] as such – although these instruments will necessarily be part of the overall legal and factual matrix, particularly insofar as violation of the legitimate expectations are concerned for the purposes of the FET analysis.375

279.
The Claimant concludes that even if SGS v. Philippines applied to this arbitration— quod non— it could only affect the umbrella claim but not the other claims.376 The fork-in-the-road clause under Article 26(3) has not been triggered because neither the Claimant nor its subsidiaries commenced proceedings before Rome courts. No "final and irreversible" choice of forum being made by Claimant or its subsidiaries, the Claimant's claims are admissible under Article 26 ECT.377

(4) Imbalance Costs Are Not "Taxation Measures" Within the Meaning of Article 21(7) ECT

280.
Objecting to the Respondent's position, the Claimant argues that imbalance costs do not possess a "fiscal" character; thus, the imbalance cost claims do not fall within the meaning of the "Taxation Measures" exception to ECT application under its Article 21.378 The Claimant submits that the ordinary meaning of the treaty terms defining "Taxation Measure" under Article 21(7)379 confirms this.380
281.
According to Belenergia, the references in Article 21(7) to "taxes of the domestic law of the Contracting Party" and to "taxes of any convention for avoidance of double taxation or of any other international agreement" imply that only "specific provisions in Italy's tax legislation or in its treaties" can trigger the ECT exception on "Taxation Measures."381 Imposition of additional costs from electricity supply variations caused by weather changes382 on PV producers rather than on energy consumers cannot be, in the Claimant's view, equated to "Taxation Measures" under the ECT for a simple reason.383 The reason being that these additional imbalance costs do not refer to "specific provisions in Italy's tax legislation or in its tax treaties" within the meaning of Article 21(7)(a)(i) and (ii) ECT.384
282.
The Claimant further argues that the preparatory work on the ECT corroborates its view. The introduction of the expression "includes" in Article 21(7)(a) ECT by French, Canadian and Norwegian negotiators suggests that the expression "includes" has the same sense as the expression "means". As a result, the definition of "Taxation Measures" in items (i) and (ii) of this provision is "exhaustive" and should be interpreted restrictively.385 The Claimant therefore disagrees with the Respondent that "Taxation Measures" are broadly defined. In support of a restrictive interpretation of "Taxation Measures" the Claimant refers to scholarly writings by Professor Emmanuel Gaillard and Mr. Mark McNeil, and to the Yukos v. Russia and the EnCana v. Ecuador awards.386 In particular, the Claimant submits that the Respondent has failed to show that imbalance costs are "'sufficiently clearly connected' to the existing framework of Italian taxation law to be considered a taxation measure within the meaning of Article 21(7)."387 The Claimant adds that imbalance costs' "arbitrary nature is apparent from the context of their imposition."388

(5) The Waiting Period Under Articles 26(1) And 26(2) ECT

283.
Belenergia argues that it has complied with the 3-month waiting period under Articles 26(1) and 26(2) ECT389 through its Letter of 8 December 2014390 ("Amicable Solution Letter") to the Respondent.391 According to Belenergia, the waiting period under Article 26 ECT does not bar the Tribunal's jurisdiction over the Claimant's imbalance costs claim for two reasons.
284.
First, the waiting period under Article 26 ECT, a mere procedural requirement, does not hinder ECT jurisdiction.392 The Claimant alleges that the Respondent has made a "taxonomical" mistake when referring to the waiting period as barring jurisdiction, rather than the admissibility of claims.393 It refers to the findings in SGS v. Pakistan and in Abaclat v. Argentina rejecting the "jurisdictional" character of a waiting period objection, among other decisions.394 It concludes that—at most—the Tribunal could find that the imbalance costs claim is "temporarily inadmissible," but not outside its scope of jurisdiction.395
285.
Second, negotiations between the Parties on the imbalance costs claim would have been futile because the 3-month waiting period would have elapsed by the Hearing date.396 The Claimant refers to the Respondent's "complete lack of enthusiasm" about other "properly brought" claims by the Claimant under Article 26 ECT, as purportedly admitted by the Respondent.397 In the Claimant's view, the Respondent "has shown a complete lack of appetite for negotiation," not having reached out to the Claimant for discussions; the Respondent has adopted a similar attitude toward other PV investors, which sought to challenge the PV measures before Italian courts.398 For all these reasons, the Claimant concludes that the Respondent would not have acted differently in relation to the imbalance costs claim.
286.
The Claimant adds that by the Hearing date the 3-month waiting period would have elapsed. It then refers to case decisions and to an article by Professor Christoph Schreuer, favouring the admissibility of claims whose waiting period has elapsed in the interim of the proceedings.399 In Belenergia's view, requiring the Claimant to commence separate ICSID proceedings on the imbalance costs claim would lead to inefficiency and would not serve the interests of justice.400

C. The European Commission's Amicus Curiae Brief

287.
The Tribunal has given due consideration to the amicus curiae Brief ("Amicus Brief") of the European Commission, which has proven useful. The Tribunal therefore thanks the European Commission for its Amicus Brief. The Tribunal highlights, however, that the European Commission is not a Party to this arbitration. The Tribunal will therefore respond only to the arguments made by the Parties, taking into consideration the observations of the European Commission.

D. The Tribunal's Decision

(1) Does Italy's EU Jurisdictional Objection Bar the Tribunal's Jurisdiction?

288.
The Tribunal will consider below (a) the applicable law to the dispute; (b) whether the ECT has created inter se obligations between the EU Member States; (c) whether successive EU treaties could have affected the Tribunal's jurisdiction as per Article 30 VCLT; (d) whether an inter se modification of the ECT as per Article 41 VLCT could have affected the Tribunal's jurisdiction; and (e) whether the Tribunal should refrain from exercising its jurisdiction because of an alleged risk of non-recognition and non-enforcement of the award.

(a) Applicable law

289.
At the Hearing,401 when discussing the effects of the Achmea decision on the Tribunal's jurisdiction, the Parties disagreed on whether EU law could be relevant to resolving this question. According to the Claimant, Article 26(6) ECT's reference to the ECT and to "applicable rules and principles of international law" should be interpreted to include only the ECT and customary international law excluding the application of EU law, relying on the Rainbow Warrior case.402 In turn, Italy sustains that EU law applies as part of international law.
290.
Article 42(1) of the ICSID Convention provides that this Tribunal "shall decide in accordance with such rules of law as may be agreed by the parties." In turn, the applicable law clause under Article 26(6) ECT provides that the Tribunal "shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law." In light of Article 26(6)'s text, the Tribunal disagrees with Belenergia that the expression "applicable rules and principles of international law" should be read to exclude EU law.
291.
The Rainbow Warrior case differs from this case because its disputing parties disagreed on whether France's primary obligations were governed by conventional or customary law. Hence, the matter before the Rainbow Warrior tribunal was whether conventional or customary law governed French primary obligations (including the hierarchy between conventional and customary sources of law) rather than whether other international law rules were applicable at all.
292.

Several investment treaty tribunals have considered that EU law is part of international law, including ECT arbitral tribunals in the Electrabel, Blusun and RREEF cases.403 This Tribunal cannot therefore accept Belenergia's narrow reading of the text of Article 26(6) ECT to exclude the application of EU law when its text expressly refers to "applicable rules of international law." This Tribunal concurs with the Electrabel tribunal that "all EU legal rules are part of a regional system of international law and therefore have an international legal character."404 Further, the Tribunal sees a certain contradiction in the Claimant's position which assumes that intra-EU Member State investments are international investments and refuses to accept that EU law is part of international law. Hence, the Tribunal finds that it can apply EU law as part of international law and "where relevant should apply European law as such"405 to the extent that the ECT regime permits it.

293.
Moreover, the Parties agree that the treaty interpretation rules of the VCLT apply to this dispute. This Tribunal can therefore apply the ECT provisions and international law including the VCLT when relevant.

(b) Has the ECT created inter se obligations between the EU Member States?

294.
Italy argues that the ECT has not created obligations binding the EU Member States and the EU inter se, noting that this interpretation should prevail in light of VCLT interpretation principles and of the EU's and its Member States' "intent." In turn, Belenergia rejects the inter se doctrine as not representative of customary international law, submitting that the ECT was conceived to apply to intra-EU disputes creating obligations between the EU Member States, in accordance with Articles 31 and 32 VCLT.
295.
The Tribunal has to decide whether the ECT applies to the relations inter se of EU Member States. Like the Blusun tribunal, which also decided on the same issue in relation to ECT jurisdiction, this Tribunal will interpret the ECT in good faith and pursuant to the ordinary meaning of the ECT's terms in their context and in light of the ECT's object and purpose.
296.
Historically, the Great Britain relied on the inter se doctrine when affirming the British Empire's "diplomatic unity" by rejecting the application inter se of multilateral treaties to which British Dominions were also parties.406 As pointed out in Blusun v. Italy, this was not accepted in the absence of an express treaty provision or a clear understanding of the parties to that treaty supporting the application of the inter se doctrine.407 This is consistent with the premise that multilateral treaties apply prima facie equally between the parties pursuant to the pacta sunt servanda rule under Article 26 VCLT, subject to express provisions to the contrary.
297.
The Tribunal therefore departs from the premise that like any other multilateral treaty the ECT applies prima facie equally between the parties unless the contrary is supported by express provision. To respond to Italy's reliance on the inter se doctrine, the Tribunal will interpret the ECT's text in accordance with the principles of treaty interpretation of the VCLT.
298.
First, the ECT's Preamble recalls that the ECT sought to adopt "on a secure and binding international legal basis" the commitments under the 1991 European Energy Charter, of which the European Communities ("EC") and the Euratom were signatories together with the EC Member States at the time. Nothing in the European Energy Charter suggests that it did not apply to EC Member States inter se. Like the EU, which by way of Article 47 of the TEU408 has been conferred legal personality, the EU Member States Parties to the ECT are equally independent entities with legal personality in their own rights. To recall the historical origins of the inter se doctrine, the EU Member States are not Dominions or protectorates from the EU, as illustrated, inter alia, by the principle of conferral.
299.
Neither does the definition of "Contracting Party" under the ECT indicate an inter se exclusion with respect to the EU Member States. Rather, "Contracting Party" is defined in Article 1(2) ECT as a State or a "Regional Economic Integration Organisation" ("REIO") that has consented to be bound by the ECT. Pursuant to this definition, the ECT applies equally between the Contracting Parties so defined.409
300.
Further, Article 2 ECT on the treaty's purpose sets forth the objective "to promote long-term cooperation in the energy field, based on complementarities and mutual benefits." Article 2 contains no hint of an inter se exclusion either.
301.
Second, the Decision in Annex 2(5) ECT on Articles 24(4)(a) and 25 provides, among other matters, that an investment of an investor of a non-party to an Economic Integration Agreement ("EIA") is entitled to EIA treatment if it "has its registered office, central administration or principal place of business within the EIA area," and that if the investor has only its registered office in the EIA, it has to present "an effective and continuous link with the economy" of one of the EIA parties to be able to benefit from EIA treatment. Contrary to Italy's allegation, this Decision, together with the Declaration on Article 25, contemplates different types of corporate presence within the EU, which cannot be interpreted to exclude the ECT application from the EU Member States' relations inter se.
302.
Third, Italy's and the European Commission's submissions on the Member States' lack of competence to enter into ECT obligations lack support. Article 1(3) ECT's definition of REIO as an organisation to which its member States "have transferred competence over certain matters" and Article 1(10) ECT's definition of "Area" of an REIO as meaning "the Areas of the member states of such Organisation" cannot be interpreted as referring to EU Member States' lack of competence to conclude the ECT. Neither could Article 25 ECT on the MFN exception in relation to non-parties to EIAs be construed to imply the EU Member States' lack of competence to conclude the ECT. Further, Article 16 ECT setting forth a non-derogation clause of more favourable provisions towards investors and investments in relation to past and future international agreements cannot warrant this purported lack of competence either.
303.
Rather, the fact that EU Member States were required to participate in the ECT as a mixed agreement implies that the EU Member States and the EU had overlapping or complementary competences to conclude the ECT. As the Blusun tribunal rightly put it, "[t]he mere fact that the EU is a party to the ECT does not mean that the EU Member States did not have competence to enter into inter se obligations in the Treaty. Instead, the ECT seems to contemplate that there would be overlapping competences."410 Thus, the ECT text does not suggest that EU Member States have transferred exclusive competence over all matters of investment and dispute resolution to the EU. If the EU Member States had envisaged not having competence over inter se obligations, the EU would have included a declaration of competence in light of other declarations made in relation to mixed agreements like the EU Declaration of Competence to the FAO.411
304.
Fourth, the Tribunal agrees with the Blusun tribunal that "nothing in the text of the ECT[] carves out or excludes issues arising between Member States."412 The Tribunal disagrees with Italy that the inter se doctrine applies as a matter of "intent." Rather, Articles 31 to 33 VCLT give preference to the treaty's text as its main source of interpretation.
305.
As discussed above, the ECT's text in its context and in light of the ECT's object and purpose does not support an interpretation disconnecting relations between Member States from the ECT. Italy's argument on an alleged "disconnection" clause is thus unfounded. The ECT Parties have included the following "disconnection" clause in relation to the Svalbard Treaty:

DECISION With respect to the Treaty as a whole

In the event of a conflict between the treaty concerning Spitsbergen of 9 February 1920 (the Svalbard Treaty) and the Energy Charter Treaty, the treaty concerning Spitsbergen shall prevail to the extent of the conflict, without prejudice to the positions of the Contracting Parties in respect of the Svalbard Treaty. In the event of such conflict or a dispute as to whether there is such conflict or as to its extent, Article 16 and Part V of the Energy Charter Treaty shall not apply.

306.
In light of the principle expressio unius est exlusio alterius according to which when one or more things of a class are expressly referred to others of the same class are excluded, the Tribunal considers that if the ECT Parties intended to provide an intra-EU "disconnection clause," they would have done it expressly as they did with the Svalbard Treaty.
307.
Moreover, the Tribunal disagrees with Italy that "subsequent practice in the application" of the ECT could support, together with the ECT's context, Italy's jurisdictional objection within the meaning of Article 31(3)(b) VCLT. Article 31(3)(b) VCLT provides that "[a]ny subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation" shall be taken into account together with the treaty's context.
308.
The Tribunal does not see how the following facts could support Italy's argument on Article 31(3)(b) VCLT: (i) that intra-EU ECT arbitrations had not been instituted before 2007; (ii) that certain of the EU Member States, which featured as respondents in investment arbitrations, have "consistently" objected to jurisdiction; and (iii) that no ECT Contracting Party has ever intervened in favour of ECT jurisdiction in these arbitrations. These isolated facts cannot establish the agreement of all ECT Contracting Parties within the meaning of Article 31(3)(b). Neither could the European Commission's Statement413 in relation to the 2015 International Energy Charter be relevant because this is a different treaty. Rather, this Statement highlights instead the fact that the EU has provided none in relation to the EU Member States' inter se relations under the ECT.
309.
Differently from the ECT, other multilateral treaties like the 2005 Schengen III Agreement414 and the 1988 Convention on Mutual Administrative Assistance in Tax Matters415 contain express clauses on the relations between EU Member States inter se, which is not the case of the ECT. In the absence of an express provision, the Tribunal finds that Italy's allegation that the ECT has not created obligations binding the EU Member States inter se fails.
310.
Finally, the Tribunal dismisses Italy's alternative argument that inter se obligations cannot cover areas falling under EU competence. As demonstrated above, the fact that EU Member States participated in the ECT as a mixed agreement implies that EU Member States and the EU had overlapping or complementary competences over ECT matters.
311.
The Statement submitted by the European Communities to the Secretariat of the Energy Charter pursuant to Article 26(3)(b)(ii) of the Energy Charter Treaty provides as follows:

The European Communities are a regional economic integration organisation within the meaning of the Energy Charter Treaty. The Communities exercise the competences conferred on them by their Member States through autonomous decision-making and judicial institutions.

The European Communities and their Member States have both concluded the Energy Charter Treaty and are thus internationally responsible for the fulfilment of the obligations contained therein, in accordance with their respective competences.

The Communities and the Member States will, if necessary, determine among them who is the respondent party to arbitration proceedings initiated by an Investor of another Contracting Party. In such case, upon the request of the Investor, the Communities and the Member States concerned will make such determination within a period of 30 days (1).

The Court of Justice of the European Communities, as the judicial institution of the Communities, is competent to examine any question relating to the application and interpretation of the constituent treaties and acts adopted thereunder, including international agreements concluded by the Communities, which under certain conditions may be invoked before the Court of Justice.

Any case brought before the Court of Justice of the European Communities by an investor of another Contracting Party in application of the forms of action provided by the constituent treaties of the Communities falls under Article 26(2)(a) of the Energy Charter Treaty (2). Given that the Communities' legal system provides for means of such action, the European Communities have not given their unconditional consent to the submission of a dispute to international arbitration or conciliation.

As far as international arbitration is concerned, it should be stated that the provisions of the ICSID Convention do not allow the European Communities to become parties to it. The provisions of the ICSID Additional Facility also do not allow the Communities to make use of them. Any arbitral award against the European Communities will be implemented by the Communities' institutions, in accordance with their obligation under Article 26(8) of the Energy Charter Treaty.416

312.
Nothing in the text of this Statement suggests a derogation from this Tribunal's jurisdiction. Rather, the text above seems to refer to the allocation of liability between the EU and its Member States, which is not at stake. The text's reference to the ECJ's competence does not include any restrictive expression in relation to this Tribunal's jurisdiction. The same Statement also reads that that the European Communities cannot participate in ICSID proceedings. Thus, this Tribunal finds that the above Statement has no bearing on ECT arbitral jurisdiction under the ICSID Convention in this arbitration.
313.
In relation to Italy's reliance on the ECT's preparatory work as a "supplementary means" of interpretation under Article 32 VCLT, the Tribunal considers this impermissible because the terms of the ECT are clear against Italy's interpretation of the ECT.417
314.
In light of the foregoing, the Tribunal concludes that the ECT binds equally its Contracting Parties including the EU Member States inter se pursuant to the pacta sunt servanda rule under Article 26 VCLT.

(c) Have successive EU treaties affected the Tribunal's jurisdiction pursuant to Article 30 VCLT?

315.
Italy sustains that the EU has evolved in a way that prevents ECT application to intra-EU disputes, referring to Article 30 VCLT on successive treaties. According to the Respondent, the Lisbon Treaty prevails over the ECT because they relate to the same subject-matter. Italy makes, first, an argument based on the combined reading of Article 30(2) VCLT and Article 16 ECT, and, second, an argument based on the lex posterior rule under Article 30(4)(a) VCLT, stating that the Lisbon Treaty prevails to the extent of any incompatibility with the ECT. Belenergia objects to this by arguing that the Lisbon Treaty and the ECT do not relate to the same subject matter, and that, even if they did, they are not incompatible with each other.
316.
Article 30 VCLT sets forth rules on the relationship between successive treaties relating to the same subject-matter, including the lex posterior rule that successive treaties prevail over the earlier if the treaties are incompatible, as follows:

Article 30. A PPLICATION OF S UCCESSIVE T REATIES R ELATING TO THE S AME S UBJECT -M ATTER

1. Subject to Article 103 of the Charter of the United Nations, the rights and obligations of States parties to successive treaties relating to the same subject-matter shall be determined in accordance with the following paragraphs.

2. When a treaty specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail.

3. When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty.

4. When the parties to the later treaty do not include all the parties to the earlier one:

(a) As between States parties to both treaties the same rule applies as in paragraph 3;

(b) As between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations […]

317.
Italy's reliance418 on the ILC Report on Fragmentation to argue that the Lisbon Treaty and the ECT have the same subject-matter is unwarranted. According to the ILC Report on Fragmentation, the "test" on whether two treaties deal with the same subject-matter should be carried out on a case-by-case basis seeking to establish "an institutional connection between 'chains' or clusters of treaties that are linked institutionally and that States parties envisage as part of the same concerted effort." This Tribunal does not find that this connection or concerted effort exists because the EU treaties do not provide for investorState arbitration under the ICSID Rules.
318.
Even if the Tribunal would consider that the Lisbon Treaty and the ECT dealt with the same subject-matter, it would note that the combined reading of Article 16 ECT and Article 30(2) VCLT could not lead to ECT derogation as the earlier treaty. Article 16 sets forth a non-derogation clause of more favourable provisions towards investors and investments in relation to past and future international agreements, as follows:

Where two or more Contracting Parties have entered into a prior international agreement, or enter into a subsequent international agreement, whose terms in either case concern the subject matter of Part III or V of this Treaty,

(1) nothing in Part III or V of this Treaty shall be construed to derogate from any provision of such terms of the other agreement or from any right to dispute resolution with respect thereto under that agreement; and

(2) nothing in such terms of the other agreement shall be construed to derogate from any provision of Part III or V of this Treaty or from any right to dispute resolution with respect thereto under this Treaty, where any such provision is more favourable to the Investor or Investment. (emphases added)

319.
Because the ECT provides for a more favourable dispute resolution mechanism this cannot be derogated by the Lisbon Treaty. Article 26 ECT confers upon investors of a Contracting Party the right to directly initiate international arbitration such as ICSID arbitration against another Contracting Party, after a short waiting period with the possibility of raising claims based on ECT's rights and obligations, directly effective before an arbitral tribunal. The EU judicial system does not offer a similar option for investors, which have to act in the courts of the State that allegedly damaged their investment, under national procedural rules, in the language admitted in these courts and with the obligation to engage local lawyers. Hence, the conflict rule under Article 16 ECT confirms, as a lex specialis, the investor's right to international arbitration under Article 26 ECT, as being a more favourable dispute resolution mechanism.
320.

The Tribunal is unconvinced by Italy's Article 30(4)(a) argument on the lex posterior rule in case of incompatibility between earlier and successive treaties. The Tribunal finds complementarity rather than incompatibility between the ECT and the Lisbon Treaty, from a substantive and a procedural perspective.419 From a substantive law perspective, EU rules establishing the internal market are complementary to ECT rules, including rules prohibiting discrimination.

321.
From a procedural perspective, this Tribunal finds that Article 26 ECT on investor-State arbitration is complementary rather than incompatible to the remedies of the EU legal order. The Tribunal is well aware of the ECJ's Achmea420 decision holding Article 8 of the Netherlands-Czech and Slovak Federal Republic BIT inconsistent with Articles 267 and 344 TFEU. According to the ECJ, an offer to arbitrate by the EU Member States such as the one under Article 8 of this BIT:

(a) violates Article 344 TFEU which sets forth the principle that "Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for" in the EU treaties;421 and

(b) removes dispute settlement from the jurisdiction of EU Member States and from the EU judicial system with "mechanisms capable of ensuring the full effectiveness of the rules of the EU" such as referring questions of EU law for a preliminary ruling by the ECJ, in breach of Article 267 TFEU.422

322.
Yet ¶ 58 of the ECJ's decision in Achmea reads as follows:

In the present case, however, apart from the fact that the disputes falling within the jurisdiction of the arbitral tribunal referred to in Article 8 of the BIT may relate to the interpretation both of that agreement and of EU law, the possibility of submitting those disputes to a body which is not part of the judicial system of the EU is provided for by an agreement which was concluded not by the EU but by Member States. Article 8 of the BIT is such as to call into question not only the principle of mutual trust between the Member States but also the preservation of the particular nature of the law established by the Treaties, ensured by the preliminary ruling procedure provided for in Article 267 TFEU, and is not therefore compatible with the principle of sincere cooperation referred to in paragraph 34 above.423 (emphasis added)

323.
First, the Achmea decision does not concern a treaty to which the EU itself participates as a Party. The ECJ expressly relies above on the fact that the BIT was concluded between the EU Member States without the participation of the EU. This Tribunal agrees with the Masdar v. Spain424 tribunal that the ECJ's reasoning cannot be transposed to the ECT, which is a mixed agreement with the EU as a Contracting Party. Italy is pre-empted from relying on the principle of sincere cooperation between the Union and the Member States under Article 4(3) of the TEU425 when the EU is a Party to the ECT.
324.
Second, this Tribunal takes note of the ECJ's perception of inconsistency of the Member States' offer to arbitrate with Articles 267 and 344 TFEU. Nevertheless, this is the perspective from the EU legal order. As determined in ¶¶ 290-292 above on the applicable law, EU law can be applied to the extent that the ECT regime permits its application. This Tribunal considers that different international law regimes can communicate to the extent that their own rules permit it. This Tribunal has been constituted and exercises its jurisdiction under the ECT regime to which the EU is a Contracting Party. A treaty means what it says. No text or conflict rule under ECT suggests that an ECJ's decision pertaining to the EU legal order could derogate from the offer to arbitrate under Article 26 ECT as pertaining to the ECT as an independent international law regime.
325.
Moreover, the European Commission's Communication426 on the Protection of Intra-EU Investment following the ECJ's Achmea decision presents an EU legal order perspective. Even from an EU legal order perspective a communication of the European Commission is a non-binding instrument, not to mention that it cannot bind an ICSID Tribunal.
326.
As to the Member States' Declarations dated 15 January 2019427 and 16 January 2019,428 Luxembourg is only signatory of the 16 January 2019 Declaration, together with Finland, Malta, Slovenia and Sweden, while Italy is signatory of the 15 January 2019 Declaration, together with other 21 Member States. Italy's declaration provides that the ECT, to which the Union is a Contracting Party, is an integral part of the EU legal order and thus need to be compatible with the EU Treaties and that interpreting the ECT investor-State arbitration clause as applicable between Member States "would be incompatible with the Treaties and thus would have to be disapplied."429
327.
Yet, Luxembourg's declaration provides that it would be inappropriate to express views on the compatibility between EU law and the intra-EU application of the ECT, as follows:

The Achmea case concerns the interpretation of EU law in relation to an investor-state arbitration clause in a bilateral investment treaty between Member States. The Member States note that the Achmea judgment is silent on the investor-state arbitration clause in the Energy Charter Treaty. A number of international arbitration tribunals post the Achmea judgment have concluded that the Energy Charter Treaty contains an investor-State arbitration clause applicable between EU Member States. This interpretation is currently contested before a national court in a Member State [Set-aside proceeding in Svea Court of Appeal, Case No 4658-18, Novenergia II- Energy & Environment (SCA) (Grand Duchy of Luxembourg), SI CAR vs the Kingdom of Spain, SCC Arbitration (20 15/06)]. Against this background, the Member States underline the importance of allowing for due process and consider that it would be inappropriate, in the absence of a specific judgment on this matter, to express views as regards the compatibility with Union law of the intra EU application of the Energy Charter Treaty.430

328.
Regardless of the Declarations above, the Tribunal is the judge of its own competence as per Article 41(1) of the ICSID Convention. The undertakings of the signatories of the declaration signed by Italy use the future tense not only in relation to the future of intra-EU BITs but also in relation to the ECT, as follows:

[…] 5. ln light of the Achmea judgment, Member States will terminate all bilateral investment treaties concluded between them by means of a plurilateral treaty or, where that is mutually recognised as more expedient, bilaterally.

[…] 8. Member States will make best efforts to deposit their instruments of ratification, approval or acceptance of that plurilateral treaty or of any bilateral treaty terminating bilateral investment treaties between Member States no later than 6 December 2019. They will inform each other and the Secretary General of the Council of the European Union in due time of any obstacle they encounter, and of measures they envisage in order to overcome that obstacle.

9. Beyond actions concerning the Energy Charter Treaty based on this declaration, Member States together with the Commission will discuss without undue delay whether any additional steps are necessary to draw all the consequences from the Achmea judgment in relation to the intra-EU application of the Energy Charter Treaty.

329.
The language in the future tense above is clear that neither the intra-EU BITs nor the ECT have been terminated.
330.
More, Luxembourg's declaration as the Contracting Party of the investor's nationality in this arbitration differs from Italy's declaration, the Contracting Party hosting the investment, in relation to the compatibility between the ECT and EU law. The Tribunal does not see how these declarations could be reconciled and thus cannot apply them in the present case as Italy's unilateral declaration enshrined in the Member States' Declaration dated 15 January 2019431 cannot trump the inter se obligations under the ECT binding on Italy and Luxembourg. Thus, Italy's request for termination or suspension of the proceedings dated 14 February 2019 cannot stand on the basis of these declarations.
331.
Third, Italy's reference to the MOX Plant (Commission v. Ireland) case is not convincing because it omits that the ECJ relied on Article 282 UNCLOS in its reasoning in this case. The Commission brought infringement proceedings against Ireland for having instituted arbitration proceedings against the UK on the basis of Chapter VII of UNCLOS. Although the UNCLOS is a mixed agreement like the ECT, Article 282 UNCLOS provides that dispute settlement procedures under general, regional or bilateral agreements "shall apply in lieu of the procedures provided for in this Part [i.e. in UNCLOS], unless the parties to the dispute otherwise agree." The ECJ expressly referred to Article 282, as follows:

It follows from Article 282 of the Convention that, as it provides for procedures resulting in binding decisions in respect of the resolution of disputes between Member States, the system for the resolution of disputes set out in the EC Treaty must in principle take precedence over that contained in Part XV of the Convention.432

333.

Finally, the Tribunal is unconvinced that ECJ's Opinion 1/09 bears on this dispute because Opinion 1/09 concerned a mere draft agreement on the European and Community Patents before the EU, its Member States, and third countries could even accede to it. Conversely, the EU and its Member States signed and ratified the ECT on the basis of decisions by the European Council and the Commission.433 In any case, Opinion 1/09 enshrines a perspective from the EU legal order that cannot be transposed to the ECT's regime.

334.
Thus, the Tribunal finds that successive EU treaties have not affected the Tribunal's jurisdiction pursuant to Article 30 VCLT.

(d) Has there been an inter se modification of the ECT under Article 41 VCLT affecting the Tribunal's jurisdiction?

335.
The Respondent argues that the Lisbon Treaty is an inter se agreement between the EU Member States modifying the ECT pursuant to Article 41 VCLT. Belenergia objects to this, relying on Article 46 ECT prohibiting reservations and on Article 41(2) VCLT requiring notification of modification.
336.
Article 41 VCLT provides for the possibility of an inter se modification (a) when this possibility is provided in the treaty, and (b) when, in the absence of a modification provision, the inter se modification does not affect the enjoyment of third States parties and does not derogate from a provision whose derogation is incompatible with the object and purpose of the treaty, in which case notification of modification is required, as follows:

Article 41 AGREEMENTS TO MODIFY MULTILATERAL TREATIES BETWEEN CERTAIN OF THE PARTIES ONLY

1. Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if:

(a) The possibility of such a modification is provided for by the treaty; or

(b) The modification in question is not prohibited by the treaty and:

(i) Does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations;

(ii) Does not relate to a provision, derogation from which is incompatible with the effective execution of the object and purpose of the treaty as a whole.

2. Unless in a case falling under paragraph l(a) the treaty otherwise provides, the parties in question shall notify the other parties of their intention to conclude the agreement and of the modification to the treaty for which it provides.

337.
On the possibility of modification under Article 41(1)(a) above, the ECT expressly provides in Article 46 that "[n]o reservations may be made to this Treaty." Hence, failing notification pursuant to Article 41(2) VCLT, the Tribunal cannot favour Italy's argument on the alleged inter se modification.

(e) Could the Tribunal refuse to exercise its jurisdiction because of an alleged risk of non-recognition and non-enforcement of the award?

338.
Italy argues that there is a risk of award non-recognition and non-enforcement after the Achmea decision, citing Article 42 ICC Arbitration Rules (effective 1 March 2017) and Article 32.2 LCIA Arbitration Rules (effective 1 October 2014) on the Tribunal's obligation to render an enforceable award.
339.
This arbitration is based on the ICSID Convention, which establishes a self-contained system independent from national legal systems. ICSID awards may be subject to limited annulment grounds under Article 52 of the ICSID Convention, and it is within this legal framework that this Tribunal must be concerned by the enforceability of its award. Under the ICSID Convention, the recognition obligation is unconditional under Article 54(1), although enforcement of pecuniary obligations is subject to the law of the place of enforcement under Article 54(3). The Tribunal therefore finds that, at this stage, Italy's concerns are unfounded in relation to award recognition and hypothetical in relation to award enforcement.
340.
Based on the foregoing, the Tribunal dismisses Italy's EU jurisdictional objection in light of the following findings: (a) EU law can apply as part of international law and "where relevant should apply European law as such"434 to the extent that the ECT regime permits this; (b) the ECT binds equally between its Contracting Parties including the EU Member States inter se pursuant to the pacta sunt servanda rule under Article 26 VCLT; (c) successive EU treaties have not affected the Tribunal's jurisdiction as per Article 30 VCLT; (d) failing notification pursuant to Article 41(2) VCLT, a purported inter se modification of the ECT cannot affect the Tribunal's jurisdiction; and (e) Italy's concerns are unfounded in relation to award recognition and hypothetical in relation to award enforcement at this stage.

(2) Do the Exclusive Jurisdiction Clauses under the GSE Conventions Bar Jurisdiction?

341.
Italy submits that the Tribunal lacks jurisdiction because the broad terms of the choice of forum clause conferring exclusive jurisdiction upon Rome courts under the GSE Conventions would trigger the fork-in-the-road rule under Articles 26(2) and 26(3) ECT. Belenergia objects to Italy's position.
342.
The choice of forum clause under the GSE Conventions (on feed-in tariffs and minimum prices) confers jurisdiction upon Rome courts, as follows:

Any proceedings deriving from or in any case connected to the interpretation or the execution of this Agreement and connected documents shall be settled before the Court of Rome.435

343.
Article 26(2)(b) and (3) stipulate that the ECT Contracting Parties give their "unconditional consent" to arbitration except if an investor chooses to submit the dispute for resolution "in accordance with any applicable, previously agreed dispute settlement procedure," as follows:

[…] (2) If such disputes cannot be settled according to the provisions of paragraph (1) within a period of three months from the date on which either party to the dispute requested amicable settlement, the Investor party to the dispute may choose to submit it for resolution:

(a) to the courts or administrative tribunals of the Contracting Party party t