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Lawyers, other representatives, expert(s), tribunal’s secretary

Award

Glossary
AEEG Authority for Electrical Energy and Gas (Autorita per l'Energia Elettrica ed il Gas)
Claimants Greentech Energy Systems A/S, NovEnergia II Energy & Environment (SCA) SICAR, and NovEnergia II Italian Portfolio SA
Conto I Ministerial Decree No. 18908 of 28 July 2005 of the Ministry of Productive Activities, as integrated and amended by Ministerial Decree No. 20998 of 6 February 2006 of the Ministry of Productive Activities.
Conto II Ministerial Decree of 19 February 2007 from the Ministry of Economic Development
("onto III Ministerial Decree of 6 August 2010 from the Ministry of Economic Development
Conto IV Ministerial Decree of 5 May 2011 from the Ministry of Economic Development and the Ministry of Environment, Land and Sea
Conto V Ministerial Decree of 5 July 2012 from the Ministry of Economic Development and the Ministry of Environment, Land and Sea
Directive 2001/77/EC Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market
Directive 2009/28/EC Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable energy sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC
EC European Commission
ECT Energy Charter Treaty
EU European Union
FET Fair and Equitable Treatment
Greentech Greentech Energy Systems A/S
GSEGestore dei Servizi Energetici (formerly, Gestore della rete di trasmissione nazionale Spa ("GRTN"))
Lisbon Treaty Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community,

signed at Lisbon, 13 December 2007
MGP Scheme Off-take regime providing for minimum guaranteed prices, as provided in Law no. 239 of 23 August 2004, AEEG Resolution no. 34/2005, and AEEG Resolution no. 280/2007
NIP NovEnergia II Italian Portfolio SA
NovEnergia NovEnergia II Energy & Environment (SCA) SICAR
PV photovoltaic
Respondent The Italian Republic
Romani Decree Legislative Decree No. 28/2011 of 3 March 2011
Salva Alcoa decree Law Decree No. 105 of 8 July 2010, converted into law by Law No. 129 of 13 August 2010
SCC Arbitration Institute of the Stockholm Chamber of Commerce
SCC Rules Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (in force as of 1 January 2010)
Spalma-incentivi Decree Law Decree No. 91/2014 of 24 June 2014
TAR Regional Administrative Tribunal (Tribunale Amministrativo Regionale)
TEU Treaty on European Union
TFEU Treaty on the Functioning of the European Union
Vienna Convention or VCLT Vienna Convention on the Law of Treaties, 23 May 1969

I. Introduction

A. The Parties and Counsel

1. Claimants

1.
Greentech Energy Systems A/S ("Greentech") is a company incorporated under the laws of the Kingdom of Denmark, with its corporate address at Frederiksborggade 15, 3 Floor, DK - 1360 Copenhagen K, Denmark.
2.
NovEnergia II Energy & Environment (SCA) SICAR ("NovEnergia") is a company incorporated under the laws of the Grand Duchy of Luxembourg, with its corporate address at 28 Boulevard Royal, L-2449 Luxembourg.
3.
NovEnergia II Italian Portfolio SA ("NIP") is a company incorporated under the laws of the Grand Duchy of Luxembourg, with its corporate address at 28 Boulevard Royal, L-2449 Luxembourg. NovEnergia owns a 97.6% interest in NIP and 100% of the voting shares of NIP.1
4.
Greentech, NovEnergia, and NIP are collectively referred to as the "Claimants".
5.
During the proceedings, Claimants were represented by King & Spalding and Orrick, Herrington & Sutcliffe, as set forth below:

Mr. Kenneth R. Fleuriet

Ms. Amy Roebuck Frey

Ms. Hélo'íse Hervé

King & Spalding LLP

12 Cours Albert 1er

75008 Paris, France

Mr. Reginald R. Smith

Mr. Kevin D. Mohr

King & Spalding LLP

1100 Louisiana, Suite 4000

Houston, Texas 77002, USA

Mr. Christopher S. Smith

King & Spalding LLP

1180 Peachtree St NE

Atlanta, Georgia 30309, U.S.A.

Mr. Carlo Montella

Ms. Cristina Martorana

Ms. Anna Spano

Ms. Daria Buonfiglio

Mr. Alberto Tedeschi

Orrick, Herrington & Sutcliffe LLP

Corso G. Matteotti, 10

20121 Milano, Italy

Ms. Pina Lombardi

Orrick, Herrington & Sutcliffe LLP

Piazza della Croce Rossa, 2

00161 Roma, Italy

2. Respondent

6.
The respondent is The Italian Republic ("Italy" or "Respondent").
7.
During the proceedings, Respondent was represented by:

Avvocatura Generale dello Stato

Via dei Portoghesi

00186 - Roma (I)

Avv. Gabriella Palmieri

Avv. Sergio Fiorentino

Avv. Paolo Grasso

Avv. Giacomo Aiello

Supported by:

Prof. Avv. Maria Chiara Malaguti

External Counsel to

the Legal Service of the

Ministry of Foreign Affairs

8.
Claimants and Respondent shall be referred to collectively as the "Parties."

3. Intervening Third Party

9.
The European Commission, which intervened as a non-disputing party in the proceedings, was represented by Mr. Steven Noe, Mr. Tim Maxian Rusche, and Ms. Petra Nemeckova, members of the Legal Service of the European Commission.

B. The Arbitral Tribunal

10.
The members of the Arbitral Tribunal ("Tribunal") are:

Professor William W. Park Boston University Law Faculty 765 Commonwealth Avenue Boston, Massachusetts 02215, USA

Mr. David R. Haigh, Q.C.

525 8th Avenue S.W. #2400 Calgary, Alberta T2P 1G1, Canada

Professor Giorgio Sacerdoti Via Monte Napoleone 20 20121 Milano, Italy

C. Brief Summary of the Dispute

1. Background

11.
The present dispute arises out of investments by NovEnergia, NIP and Greentech in Italian companies owning a total of 134 PV plants located in Italy. The investments were made during the period from 2008 to 2013. Claimants allege that they were induced to make those investments inter alia by Italian legislation, regulatory decrees, and contractual provisions that provided financial incentives. Foremost among those measures were the Conto Energia decrees providing for incentive tariff premiums (fees added to the market price) lasting for a twenty-year period starting from each PV plant's connection to the grid and execution of an agreement with the Gestore dei Servizi Energetici (GSE). Thereafter, beginning in 2012, Italy implemented a series of measures that allegedly diminished the value of the incentives and culminated in Law Decree No. 91/2014 of 24 June 2014 (the "Spalma-incentivi Decree"), which allegedly harmed Claimants and their respective investments.
12.
Claimants alleged that Italy accorded their investments unfair and inequitable treatment, failed to observe obligations entered into with respect to their investments, and unlawfully impaired their investments through unreasonable or discriminatory measures, in breach of Article 10(1) of the Energy Charter Treaty ("ECT").2 Claimants requested declaratory relief and damages in the amount of EUR 25.06 million.3
13.
Respondent raised jurisdictional objections, chief among which was that the ECT is not applicable to investment disputes between EU investors and an EU Member State. The EC, as a non-disputing intervening party, has echoed the "intra-EU disputes" objection. As to the merits, Respondent asked that the Tribunal find that the ECT was not breached and that Claimants' requests for declaratory relief and damages be rejected. Respondent's arguments are addressed below.

2. Applicable Arbitration Rules

14.
These proceedings have been conducted in accordance with the Arbitration Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (in force as of 1 January 2010) (the "SCC Rules"), supplemented by the First Procedural Order dated 27 January 2016 (adjusted 20 July 2016) ("First Procedural Order").

3. Place of Arbitration

15.
As confirmed by the SCC in its letter dated 22 October 2015, the seat of the arbitration was fixed as Stockholm, Sweden.
16.
Oral hearings were held in Paris, France, in accordance with the Tribunal's discretion to hold hearings in a place other than the seat of the arbitration under Article 20(2) of the SCC Rules and in agreement with the Parties.

4. Language of the Arbitration

17.
The Tribunal determined that the procedural language of the arbitration was English, pursuant to Article 21(1) of the SCC Rules.

II. Procedural History

18.
On 7 July 2015, the Claimants filed a Request for Arbitration with the SCC pursuant to Article 2 of the SCC Rules seeking to institute arbitral proceedings under Article 26(4)(c) of the ECT, which provides that an Investor may submit certain disputes meeting the requirements of Article 26 to an "arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce."
19.
On 15 September 2015, the Respondent filed its Answer to the Request for Arbitration.
20.
In their Request for Arbitration, dated 7 July 2015, the Claimants appointed David R. Haigh, Q.C. as a co-arbitrator.4
21.
By letter dated 9 October 2015, Respondent appointed Professor Giorgio Sacerdoti as a co-arbitrator.
22.
The Parties agreed that the chairperson of the Arbitral Tribunal ("Tribunal") would be jointly selected by the co-arbitrators, subject to agreement by the Parties.
23.
By letter dated 12 November 2015, the two co-arbitrators jointly appointed Professor William W. Park as chairman of the Tribunal and the SCC confirmed his appointment on 16 November 2015.
24.
By letter dated 18 November 2015, the SCC confirmed that it had referred the case file to the Tribunal.
25.
On 19 December 2015, the Tribunal requested that the two sides submit comments by 15 January 2016 on (i) the Tribunal's jurisdiction to order that restrictions beyond those contained in the SCC Rules be put in place regarding the making of public statements, and (ii) the reasons why such additional restrictions should, or should not, be ordered.
26.
On 21 January 2016, the Tribunal held a telephone conference during which the Parties discussed organizational matters, including the Parties' positions regarding confidentiality.
27.
On 27 January 2016, the Tribunal issued the First Procedural Order setting forth a procedural calendar providing for two rounds of pre-hearing memorials in which the Parties were required to submit all evidence (factual exhibits, legal authorities, witness statements, and expert reports) upon which they wished to rely. After considering the Parties' proposals regarding confidentiality, the Tribunal adopted the following provisions in the First Procedural Order:

XIV. Confidentiality

54. The Tribunal confirms the confidentiality obligations included in Article 46 of the SCC Rules and the law of the chosen seat in Sweden.

55. In declining to impose broader confidentiality stipulations at this time, the Tribunal remains open to consideration of more focused confidentiality provisions which, for example, might protect particular classes of documents.

28.
In the First Procedural Order, the Tribunal determined that any decision regarding bifurcation of the procedure into jurisdictional and merits phases would be decided following submission of the first round of memorials, and after consultation with the Parties.5
29.
On 1 April 2016, Claimants filed their Statement of Claim according to Article 24 of the SCC Rules.
30.
By letter dated 21 April 2016, the Tribunal requested that the time for rendering the final awarded be extended. On 26 April 2016, the SCC granted an extension until 29 December 2017.
31.
On 20 July 2016, the Tribunal issued an amended First Procedural Order.6
32.
On 15 September 2016, Respondent filed its Statement of Defense according to Article 24 of the SCC Rules.
33.
In its Statement of Defense, Respondent requested that the Tribunal bifurcate the proceedings into separate jurisdictional and merits phases, requesting that the Tribunal decide upon its jurisdiction first.7 In the alternative, Respondent requested that the Tribunal suspend the arbitral proceedings pending a decision by the Italian Constitutional Court regarding Article 26 of the Spalma-incentivi Decree.8
34.
On 10 October 2016, Claimants submitted Objections to Respondent's Requests for Bifurcation and Suspension.
35.
On 17 October 2016, Respondent submitted its Reply to Claimants' Objections regarding bifurcation and suspension.
36.
On 21 October 2016, Claimants submitted their Rejoinder to Respondent's Reply on Bifurcation and Suspension.
37.
By an order dated 31 October 2016, the Tribunal, upon consideration of the Parties' submissions, decided neither to bifurcate nor to suspend the proceedings.
38.
On 16 December 2016, Claimants submitted their Reply Memorial.
39.
By email on 21 December 2016, the EC submitted to the Tribunal an Application of the EC for Leave to Intervene as a Non-Disputing Party in these proceedings.
40.
On 24 December 2016, the Tribunal acknowledged receipt of the EC's application and invited the Parties to provide observations on the EC's application by 6 January 2017.
41.
On 6 January 2017, Claimants submitted their comments on the EC's application for leave to intervene as a non-disputing party.
42.
On 9 January 2017, Respondent submitted its comments on the EC's application for leave to intervene as a non-disputing party. The Respondent's submission of 9 January 2017 reiterated the Respondent's request to bifurcate the proceedings.
43.
By an order dated 17 January 2017, the Tribunal granted leave for the EC to intervene on a limited basis. The EC was permitted to file a written amicus curiae submission, without oral presentation at hearings, without having access to the evidentiary record in the arbitration, and without causing any delay in the hearings fixed for June 2017. The Parties and the EC were directed to confer directly in order to propose a mutually acceptable timetable for the EC's intervention and the Parties' observations and to submit by 27 January 2017 a joint progress report on their efforts to agree upon a timetable. The Tribunal, considering Respondent's additional request for bifurcation in its 9 January 2017 submission, again weighed all of the relevant factors, including the EC's intervention, and declined to order a bifurcation of the proceedings.
44.
By email exchanges on 26 January 2017, the Parties confirmed their agreement on a time table for submission of the EC's amicus curiae brief and the Parties' respective comments. According to that agreement, the EC was to submit its amicus curiae brief by 28 April 2017, but not before Respondent had submitted its Rejoinder Memorial, and the Claimants and Respondent were to submit their observations on the EC's submissions simultaneously on 28 May 2017.
45.
On 21 March 2017, the Tribunal suggested that the Parties liaise among themselves to provide a joint and consolidated electronic file including all substantive submissions organized by (i) pleadings, (ii) exhibits, (iii) witness statements, (iv) expert reports, and (v) legal authorities, informing the parties that the Tribunal would later discuss with the Parties the preparation of a common hard copy for the hearings and a core bundle of key exhibits.
46.
On 23 March 2017, the EC suggested to the Tribunal that the Parties make available to the EC their respective lists of legal authorities already submitted in the proceedings, so that the EC could limit its submission of new authorities to only those not yet submitted by the Parties.
47.
On 23 March 2017, the Tribunal acknowledged receipt of the EC's suggestion regarding the lists of legal authorities and invited the Parties to express their observations on the matter. The Tribunal proposed that the Parties, subject to their mutual agreement, may submit a common list of legal authorities to the EC.
48.
On 27 March 2017, Respondent submitted its Rejoinder Memorial.
49.
On 10 April 2017, pursuant to paragraph 25 of the First Procedural Order,9 Claimants designated the following fact and expert witnesses of Respondent whom Claimants wished to examine at the hearing:

• Professors Enrico Laghi, Mauro Paoloni and Corrado Gatti (quantum experts)

• Professors Giovanni Serges and Vicenzo Zeno-Zencovich (Italian law experts)

• Mr. Daniele Bacchiocchi (witness)

• Mr. Luca Miraglia (witness)

50.
On 10 April 2017, pursuant to paragraph 25 of the First Procedural Order,10 Respondent designated the following fact and expert witnesses of Claimants whom Respondent wished to examine at the hearing:

• Professor Antonio d'Atena (legal expert)

• Mr. Richard Edwards (quantum expert)

• Dr. Boaz Moselle and Dr. Dora Grunwald (regulatory experts)

• Mr. Alessandro Reitelli (witness)

• Mr. Bernardo Lucena (witness)

• Mr. Diego Percopo (witness)

• Mr. Francesco Vittori (witness)

• Mr. Gabriele Bartolucci (witness)

• Ms. Lucia Segni (witness)

• Mr. Ottavio Lavaggi (witness)

51.
On 28 April 2017, the EC submitted an amicus curiae brief, with 31 annexes thereto, regarding jurisdictional issues.
52.
On 28 May 2017, Claimants submitted their observations in response to the EC's amicus curiae brief, as well as an updated legal authority index.
53.
By email of 29 May 2017, the Tribunal invited the Parties to confer on proposed hearing protocols regarding, inter alia, (i) time allocation, (ii) witness presentation, (iii) confirmation of arrangements for a court reporter and interpretation, and (iv) the Parties' expectations on the scope of crossexamination, and to provide a joint draft proposal for protocols by 5 June 2017.
54.
By email of 30 May 2017, the Tribunal reminded the Parties that the First Procedural Order required submission of a joint agenda for the pre-hearing conference by 1 June 2017, but in light of the time limit for submitting proposed hearing protocols, the Tribunal requested that the joint agenda also be submitted by 5 June 2017. Also on 30 May 2017, the Tribunal invited Respondent to comment on the status of its observations regarding the EC's amicus curiae brief, which were due on 28 May 2017.
55.
On 30 May 2017, in response to the Tribunal's query regarding the status of Respondent's observations on the EC's submission, Respondent commented that "the position of the Commission largely coincide with that of Italy and consequently the Respondent feels no need to further elaborate on individual points."
56.
By letter of 6 June 2017, Claimants requested leave to introduce into the case record the Italian Court of Cassation Decision (no. 10411) of 27 April 2017 and the Pubblico Ministero /Procurer General's brief submitted on 20 September 2016.
57.
By email of 7 June 2017, the Tribunal invited Respondent to comment on Claimants' request by 18:00 CET on 12 June 2017.
58.
On 8 June 2017, the Tribunal held a pre-hearing call with representatives of the Parties.
59.
By letter of 12 June 2017, Respondent submitted its observations on Claimants' request for leave to introduce into the case record the Italian Court of Cassation Decision (no. 10411) of 27 April 2017 and the Pubblico Ministero /Procurer General's brief submitted on 20 September 2016, objecting to admission of the latter into the record.
60.
By email of 12 June 2017, Claimants proposed a sequence for presentation of Claimants' witnesses and confirmed that Claimants would not require Professor Enrico Laghi to appear to give testimony. Claimants confirmed that their respective instructing representatives to attend the hearings would be Mr. Ottavio Lavaggi for NovEnergia and Mr. Alessandro Reitelli for Greentech.
61.
By order of 13 June 2017, the Tribunal confirmed that, as agreed by the Parties, Professor Enrico Laghi would not appear at the hearings. Additionally, the Tribunal ordered that fact witnesses, other than instructing representatives and experts who may be present in the hearing room at all times, be allowed to remain in the hearing room only after providing their oral testimony. Further, the Tribunal ordered that Respondent designate its instructing representative by close of business on 21 June 2017, and invited Respondent to propose a sequence for presentation of its witnesses by 19 June 2017. Finally, the Tribunal noted that both sides had agreed to admit the Italian Court of Cassation decision (No. 10411) of 27 April 2017, and decided to defer its decision on whether to admit the report of the Pubblico Ministero /Procurer General until having a discussion with counsel on the first day of the hearings.
62.
By email of 19 June 2017, Respondent designated Mr. Daniele Bacchiocchi as its instructing representative and submitted a proposed sequence for presentation of its witnesses.
63.
On 20 June 2017, Respondent provided the Tribunal and the Claimants with a letter from Respondent's expert, Professor Giovanni Serges, stating that Professor Serges would not attend the hearing due to other professional commitments. Professor Serges had been scheduled for examination at the hearing on 30 June 2018.
64.
From 26 to 30 June 2017, the Tribunal held a hearing at the ICC Hearing Centre on 112 avenue Kléber, in Paris, France. Attending the hearing were:

Tribunal Members

• Prof. William W. Park, Chairman of the Tribunal

• Mr. David R. Haigh, Q.C., Arbitrator

• Prof. Giorgio Sacerdoti, Arbitrator

Appearing on behalf of the Claimants

• Mr. Kenneth R. Fleuriet, King & Spalding

• Ms. Amy Roebuck Frey, King & Spalding

• Mr. Reginald R. Smith, King & Spalding

• Mr. Kevin D. Mohr, King & Spalding

• Ms. Magali Garin, King & Spalding

• Ms. Elena Mitu, King & Spalding

• Ms. Cristina Martorana, Orrick, Herrington & Sutcliffe LLP

• Mr. Alberto Tedeschi, Orrick, Herrington & Sutcliffe LLP

Claimants' Witnesses

• Mr. Ottavio Lavaggi (instructing representative for NovEnergia)

• Mr. Alessandro Reitelli (instructing representative for Greentech)

• Mr. Gabriele Bartolucci

• Mr. Bernardo Lucena

• Mr. Diego Percopo (by video)

• Mr. Francesco Vittori

Claimants' Experts

• Mr. Richard Edwards, FTI Consulting LLP (quantum)

• Dr. Boaz Moselle, FTI Consulting LLP (regulatory)

• Dr. Dora Grunwald, FTI Consulting LLP (regulatory)

Appearing on behalf of the Respondent

• Avv. Giacomo Aiello, Avvocatura Generale dello Stato

• Avv. Pasquale Puciarello, Avvocatura Generale dello Stato

• Avv. Prof. Maria Chiara Malaguti, External Counsel to the Legal Service of the Ministry of Foreign Affairs

Respondent's Witnesses

• Mr. Daniele Bacchiocci, GSE (instructing representative for Respondent)

• Mr. Luca Miraglia, GSE

Other Attendees for Respondent

• Avv. Marta Capriulo, GSE

• Dr. Valerio Venturi, GSE

Respondent's Experts

• Prof. Mauro Paoloni (quantum)

• Prof. Corrado Gatti (quantum)

Court Reporter

• Ms. Claire Hill, Claire Hill Realtime Reporting Limited

Interpreters

• Ms. Delfina Genchi

• Ms. Anna Collins

• Ms. Enrica Dal Santo

65.
The Parties did not at any time during the proceedings request leave to file posthearing briefs. At the hearing, the Tribunal did note on the record that it might later ask further questions of the Parties as such questions might arise during deliberations.11
66.
On 23 October 2017, the SCC confirmed that Jeremy M. Bloomenthal had been appointed as an administrative secretary of the Tribunal.
67.
By letter of 4 December 2017, the Tribunal requested that the date for rendering the final award be extended until 30 May 2018. On 5 December 2017, the SCC invited the Parties to comment on the Tribunal's request by 8 December 2017. On 5 December 2017, in separate responses to the SCC's letter, Respondent and Claimants stated that they had no objections to the proposed extension. By letter of 6 December 2017, the SCC granted an extension until 30 May 2018 for the Tribunal to render the final award.
68.
On 6 March 2018, the ECJ issued a judgment in the case of Slovak Republic v. Achmea,12 the outcome of litigation discussed by the Parties in their submissions on bifurcation and jurisdiction and, in particular, the Respondent's prior request to suspend the present arbitration pending the ECJ's decision. On 7 March 2018, the Tribunal invited the Parties to comment on any impact that the ECJ's Slovak Republic v. Achmea decision might have on the present arbitration. The Tribunal fixed a time limit of fourteen (14) days from the date of the Tribunal's communication for the Parties to make submissions by simultaneous exchange.
69.
On 12 March 2018, Claimants requested that the Tribunal admit to the record the CJEU Advocate General's Opinion of 19 September 2017 on Case C-284/16. On 12 March 2018, acknowledging receipt of Claimants' request, the Tribunal and invited Respondent to comment on Claimants' request by no later than close of business (CET) on 16 March 2018. On 14 March 2018, after receiving on that day Respondent's comment on Claimants' request, the Tribunal admitted the Advocate General's Opinion into the record.
70.
Concerning the Parties' comments on the 6 March 2018 CJEU decision in Achmea, on 15 March 2018, Claimants requested leave to submit a very limited number of additional legal authorities to respond to specific issues. On 16 March 2018, the Tribunal confirmed that each side would be allowed to "attach key legal authorities essential to proper understanding of that CJEU decision and its relevance for the current proceedings."
71.
On 23 March 2018, the SCC transmitted to the Tribunal simultaneously the respective submissions of Claimants and Respondent dated 22 March 2018 concerning the impact of the Achmea decision. The Parties' submissions were timely, as the Tribunal's invitation of 7 March 2018 to file submissions was received after midnight on 8th March, C.E.T., hence the last day to submit their observations was on 22nd March.
72.
By letter dated 17 April 2018, the Tribunal requested that the SCC extend the time for rendering the final award in light of the Parties' submissions on the Achmea decision. On 20 April 2018, the SCC granted an extension until 30 June 2018.
73.
On 25 May 2018, Ms. Claire Hill, the court reporter for the June 2017 hearing, communicated with the Tribunal in relation to an unpaid invoice issued to Respondent for Respondent's portion of the hearing transcription fees.
74.
On 28 May 2018, the Tribunal directed the Parties to comment within seven calendar days on the SCC Secretariat's suggestion that, if the Respondent refuses to pay the invoice, the SCC pay the invoice and claim the cost as an expense after the award has been rendered.
75.
On 4 June 2018, Claimants commented that they did not object to the SCC's suggested course of action, barring an indication from Respondent that payment would be immediately forthcoming.
76.
Respondent did not provide any comments in response to the Tribunal's direction of 28 May 2018.
77.
On 4 June 2018, Claimants sought leave to introduce into the record the 16 May 2018 award in Masdar Solar & Wind Cooperatief v. Spain,13 proposing that the Parties be permitted to submit comments not exceeding five pages within one or two weeks' time. Claimants asserted that introduction of the Masdar award was appropriate because:

1) the Masdar tribunal directly addresses the subject of the parties' submissions on Achmea dated 22 March 2018, 2) the Masdar award post-dates those submissions, and 3) the Masdar award is the only ECT award (to date) that has addressed the relevance (or lack thereof) of the ECJ's Achmea decision to an ECT arbitration....

78.
On 5 June 2018, the Tribunal invited Respondent to comment by 12 June 2018 on Claimants' request concerning the Masdar award.
79.
By email on 12 June 2018, Respondent stated that it agreed with the proposal to introduce the Masdar award and requested leave to comment on the merits in addition to the jurisdictional aspects on which it understood Claimants wished to make comments. Respondent stated that it would need more than five pages in which to make its comments and that the two-week time limit proposed would be insufficient in light of its obligations in other cases.
80.
On 13 June 2018, the Tribunal acknowledged Respondent's agreement with Claimants' request for leave to introduce and submit comments on the Masdar award. The Tribunal, noting the divergence between Claimants and Respondent as to the timing, length, and scope of the comments, directed counsel to confer immediately and file a joint proposal not later than 18 June 2018. The Tribunal also reminded Respondent of the Tribunal's earlier request for attention to the unpaid portion of fees for Ms. Claire Hill, the court reporter.
81.
On 15 June 2018, Claimants stated that the Parties had conferred on the timing, length, and scope of their proposed comments, and had agreed to simultaneously submit on 6 July 2018 comments not limited in scope and not to exceed fifteen pages. Later that same day, the Tribunal approved the Parties' agreement regarding submissions on the Masdar award, subject to Respondent confirming its agreement to those conditions.
82.
Also on 15 June 2018, the Tribunal requested that the SCC extend the time for rendering the final award in light of the Parties' intention to file new submissions on 6 July. On 18 June 2018, the SCC granted an extension until 31 August 2018 to render the award.
83.
On 6 July 2018, the Parties submitted their respective comments on the Masdar award.
84.
On 9 July 2018, Respondent objected to Claimants' reference, in their comments on the Masdar award, to an award in Antin Infrastructure Services Luxembourg et al. v. Spain, and requested leave to comment on the Antin award and also on the award in Antaris Solar et al. v. Czech Republic.14
85.
Also on 9 July 2018, the Tribunal wrote to the Parties, provisionally granting Respondent leave to comment on the Antin award within ten days thence, subject to a principled objection from Claimants.
86.
On 11 July 2018, Claimants responded to Respondent's objections regarding the Antin award and to Respondent's request to submit comments on the Antin and Antaris awards. Claimants expressed the view that further submissions were not necessary and would risk prolonging the case indefinitely, as other awards involving renewable energy investments were likely to be rendered soon. Claimants proposed, if further comments were to be allowed, that they be submitted simultaneously on 20 July 2018, and that the proceedings be closed thereafter.
87.
On 13 July 2018, the Tribunal granted each side the opportunity to file simultaneously, at 15:00 Central European Time on 20 July 2018, its final set of comments touching on the Antin and Antaris awards. The Tribunal directed that no further submissions would be allowed after that filing, "absent special permission from the Tribunal on an application submitted for good cause shown."
88.
On 20 July 2018, the Parties submitted their respective comments regarding the Antin and Antaris awards.
89.
On 24 July 2018, Respondent sought leave to introduce into the record the EC's Communication of 19 July 2018 on protection of intra-EU investment,15 which Respondent asserted it had been unable to submit earlier. According to Respondent, the Communication is material to the arbitration because it:

... articulat[es] on protection of rights of EU investors when making investments within the European Union to be compared to investment protection ensured by international investment treaties, as well as the implications of the ECJ Achmea decision for the interpretation of the ECT (Press release (IP/18/4528).

Also, according to Respondent:

The European Commission is the guardian of EU treaties and consequently this document is of extreme relevance in the assessment of issues such as the relationships between the EU treaties and the ECT, and interpretation of Article 16 ECT.

90.
On 29 July 2018, in response to Respondent's request, the Tribunal invited the Parties to submit simultaneously any observations on the EC's 19 July 2018 Communication and its admission in this case, directing the Parties to coordinate the precise timing and modality of their simultaneous submissions. The Tribunal noted that Section 31 of the First Procedural Order only allows admission of additional evidence on an exceptional basis and at the Tribunal's discretion. Further, the Tribunal noted that its 13 July 2018 direction strictly limited any further submissions by the Parties after their comments on the Antin and Antaris awards. Accordingly, the Tribunal ordered:

Following these simultaneous observations no further submissions shall be made or documents admitted absent an extraordinary and exceptional showing of good cause.

91.
On 1 August 2018, the Tribunal requested that the SCC extend the time for rendering the final award, in light of submissions filed by the Parties on 6 July and 20 July, submissions expected to be filed in August regarding the EC's Communication of 19 July 2018 (COM(2018) 547/2), and the need for the Tribunal to consider and address the Parties' views prior to rendering its award. Also on 1 August 2018, the SCC granted the Tribunal's request, fixing the time for rendering the award as 31 October 2018.
92.
By email of 7 August 2018, Claimants informed the Tribunal of the Parties' agreement that each side would file comments, limited to two pages, regarding the EC's 19 July 2018 Communication, by submitting their respective comments to the SCC on 8 August 2018. Claimants requested that the SCC transmit the submissions to the Tribunal after receiving both sets of comments.
93.
By email of 9 August 2018, the SCC transmitted to the Tribunal the Parties' respective comments, dated 8 August 2018, regarding the EC's 19 July 2018 Communication.
94.
On 3 October 2018, the EC wrote to the Tribunal stating inter alia that "the Commission would be available 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."
95.
By letter dated 16 October 2018, the SCC transmitted to the Parties the Tribunal's proposal to extend the time for rendering the final award, to which both sides expressed that they had no objection.
96.
By letter dated 19 October 2018, the SCC fixed the date for rendering the award as 2 January 2019.
97.
By an Order dated 16 October 2018, the Tribunal decided not to admit additional observations from the EC regarding the ECJ's judgment in Achmea v. Slovak Republic, noting that the Parties had already filed multiple observations addressing the ECJ's judgment and that, as such, additional observations would not be helpful.
98.
Also on 16 October 2018, the Tribunal directed each side to file a cost submission by simultaneous exchange on 25 October 2018, and each side to file a response to the other side's cost submission by simultaneous exchange on 5 November 2018. The Tribunal further directed that, "Upon the Tribunal's receipt of the response cost submissions, the proceedings will be closed pursuant to Article 34 of the 2010 SCC Arbitration Rules."
99.
On 25 October 2018, Claimants filed their cost submission. Respondent filed its cost submission on 29 October 2018.
100.
On 5 November 2018, Claimant filed a response on cost submissions. On 9 November 2018, Respondent confirmed that it had no objection to Claimants' statement of costs, and filed a further comment on certain payment difficulties.
101.
Being satisfied that the Parties have had a reasonable opportunity to present their cases, the Tribunal, on 10 November 2018 declared the proceedings closed pursuant to the SCC Rules.
102.
On 7 December 2018, the SCC determined the costs of the arbitration, discussed below further.

III. Factual Background

A. Introduction

103.
This section provides a brief background and summary of the regulatory framework in force when the investments were made; a description of Claimants' investments; and a summary of the legal measures from 2012 to 2015 on which Claimants' claims are based.
104.
Except where the context shows otherwise, the facts summarized below are not disputed by the Parties, although the Parties differ as to their legal significance and consequences.

B. EU Initiatives and Italian Legislation

105.
In 1998, Italy signed the Kyoto Protocol to the United Nations Framework Convention on Climate Change and committed to reduce carbon dioxide emissions by 8% by the end of 2012.16
106.
On 27 September 2001, the European Parliament and Council enacted Directive 2001/77/EC, requiring Member States to "take appropriate steps to encourage greater consumption of electricity produced from renewable energy sources.."17 The Directive listed reference values by which the Member States were supposed to adopt "national indicative targets" for the consumption of renewable energy to be achieved by 2010. The reference values for the European Community and Italy were 22% and 25%, respectively.18
107.
Italy implemented Directive 2001/77/EC by enacting Legislative Decree No. 387 on 29 December 2003, which provided that specific criteria to promote solar energy would be set forth in ministerial decrees adopted by the Minister of Productive Activities in consultation with the Ministry of Environment and Protection of Natural Resources.19
108.
Legislative Decree No. 387 provided that the criteria established through the 20 implementing decrees must not impose any new costs on the state budget.20 It also provided that incentives "[f]or electricity produced by photovoltaic conversion of solar energy [shall] provide for a specific rate with decreasing amount and duration, such as to ensure a fair return on the costs of investment and operation."21 The "decreasing amount" of the incentive rates was related to the anticipated operational cost reductions as PV technology improved.22

C. The Conto Energia Decrees

109.
In 2005, pursuant to Legislative Decree No. 387, Italy initiated a system by which qualified PV facility operators received incentive payments for each unit of electricity generated, which were paid in addition to the wholesale electricity prices which those operators received. This was effected through a series of so-called "Conto Energia" (Energy Account) ministerial decrees. The incentive tariffs were structured as a premium that accrued in addition to the market prices received by PV operators, although this framework was somewhat modified under the fifth Conto Energia decree, discussed below. Each of the Conto Energia decrees expressly provided that the tariff premiums, once granted, would be paid for a twenty-year period commencing from the date of a PV plant's entry into operation.
110.
Since Legislative Decree No. 387 did not allow the costs of incentives to be borne by the state, those costs were passed on to electricity consumers through electricity bills.23 The AEEG (Authority for Electrical Energy and Gas) collected those fees from consumers to cover the incentive tariff costs. The GSE was the state-owned company responsible for paying the incentive tariffs to electricity producers under the Conto Energia decrees.24
111.
The GSE confirmed the right to a specific tariff rate by means of a letter to the person or company holding the project rights to a PV facility, as well as by a contract entered into with the person or company. Contracts between the GSE and the owners of PV facilities became effective on the date when the PV facility entered into operation.25
112.
The first Conto Energia decree, which applied to eligible PV facilities under 1 MW in capacity, was enacted on 28 July 2005 (as amended in 2006, "Conto I").26Conto I, prior to its amendment in 2006, set a national target for total PV capacity of 300 MW, which was raised to 1000 MW in 2006.27
113.
Conto I provided for eligible PV facilities to receive fixed incentive premiums for a twenty-year period. PV facilities receiving authorization under Conto I in 2005 and 2006 received tariff premiums within the ranges below, while those qualifying after 2006 received slightly lower rates.

• EUR 0,445 per kWh for plants between 1 kW and 20 kW;

• EUR 0,460 per kWh for plants between 20 kW and 50 kW; and

• EUR 0,490 per kWh for plants between 50 kW and 1 MW.28

114.
Conto I (prior to the 2006 amendment) provided for tariffs to be adjusted upward for inflation according to the ISTAT (Italian National Statistics Institute) index.29 The inflation adjustment was revoked in the 2006 amendment to Conto I,30 and subsequent Conto Energia decrees did not provide for an ISTAT inflation adjustment.
115.
Under Conto I, a PV operator seeking to obtain incentive tariffs was required to submit a formal request. After receiving a provisional authorization, the developer had to commence and complete construction and connect to the grid within a certain time limits - no later than twenty-four months from the authorization to grid connection.31
116.
By the summer of 2006, 387 MW of new PV capacity had been accepted under Conto I and further applications under Conto I were suspended until March 2007 due to the capacity threshold for 2006 being already met.32
117.
The second Conto Energia decree ("Conto II") was enacted on 19 February 2007.33Conto II eliminated the preliminary authorization phase that existed under Conto I and instead provided that PV producers could apply for the incentive benefits upon entry into operation of their facilities.34Conto II provided for an increased capacity threshold, permitting facilities over 1 MW to apply for incentive tariffs, and a cumulative installed capacity of 1,200 MW.35
118.
Under Conto II, eligible PV facilities could obtain incentive tariffs at rates that varied depending upon certain criteria, including the facility's nominal capacity and size, and when the facility entered into operation. The rates were lower than those under Conto I. Facilities entering into operation prior to 31 December 2008 received a slightly higher rate than those which entered into operation between 1 January 2009 and 31 December 2010.36
119.
The period of eligibility for Conto II was extended by the so-called "Salva Alcoa" decree, which enabled PV plants built by 31 December 2010 and entering into operation by 30 June 2011 to benefit from the Conto II incentives.37
120.
On 23 April 2009, during the time when PV facilities began receiving incentive tariffs under Conto II, the European Parliament and Council enacted Directive 2009/28/EC on the promotion of the use of energy from renewable sources.38 Directive 2009/28/EC set mandatory national targets for each EU Member State for renewable energy production, setting forth a target for Italy of 17% of its gross energy consumption to derive from renewable energy sources by 2020.39
121.
The third Conto Energia decree ("Conto III") was enacted on 6 August 2010.40 Under Conto III, eligible PV facilities entering into operation by 31 December 2011 could obtain tariff premiums ranging from EUR 0,251 per kWh to EUR 0,362 per kWh, with plants entering into operation in 2012 and 2013 receiving a somewhat reduced rate.41 Qualification of new PV facilities under Conto III was available until the threshold of 3,000 MW in cumulative installed capacity was reached, although facilities that entered into operation within fourteen months of the date when the threshold was reached could also receive the tariffs.42
122.
Italy implemented Directive 2009/28/EC by issuing Legislative Decree 28 of 3 March 2011, referred to as the "Romani Decree".43 The Romani Decree implemented various changes, inter alia, a shorter qualifying period for Conto III tariffs, requiring eligible plants to enter into operation by 31 May 2011 instead of 31 December 2013, the original cut-off date.44 In connection with the modified qualifying period, the Ministry of Economic Development was to establish revised incentive tariffs for PV plants entering into operation after 31 May 2011, resulting in the fourth Conto Energia decree.45 The Romani Decree also required that future incentive tariff decrees take into account cost reductions already achieved for PV technology and the level of incentives being offered in other EU countries.46
123.
The fourth Conto Energia decree ("Conto IV") was enacted on 5 May 2011.47Conto IV provided that eligible PV plants entering into operation between 31 May 2011 and 31 December 2016 could qualify for incentive tariffs lasting for a twenty-year period according to rates set forth therein.48
124.
Conto IV instituted measures to limit the increasing costs of the incentive tariff programs, including by setting caps on total program costs for semester, precluding approval of further PV facilities within a semester once the threshold had been reached.49 Additionally, Conto IV set a national target of 23,000 MW of cumulative installed capacity, which was said to correspond to an annual cost for the incentives of between EUR 6 billion and EUR 7 billion.50
125.
The fifth and final Conto Energia decree ("Conto V") was enacted on 5 July 2012 and entered into force on 27 August 2012.51 The preamble to Conto V references positive progress toward meeting Italy's mandatory national target of 17% under Directive 2009/28/EC.52Conto V provided that it would cease to apply thirty days after the AEEG issued a resolution stating that Italy had added EUR 700 million to the total cost of the incentive tariffs program, amounting to a total cost of EUR 6.7 billion per year.53 Thus, as the AEEG issued the resolution on 6 June 2013, the tariffs provided for under Conto V became unavailable to new PV facilities after 6 July 2013.54
126.
As mentioned above, Conto V provided for a somewhat altered structure of tariff incentives, intended to reduce costs to end-consumers. PV plants up to 1 MW could qualify for an "all-inclusive tariff" consisting of the price of the electricity, the value of the incentive premium, plus a further specific tariff for self-consumed energy.55 PV plants over 1 MW received a fluctuating amount based on the difference, if positive, between the "all-inclusive tariff" and the "hourly zonal price".56

D. Tariff Recognition Letters and GSE Agreements

127.
Each PV operator receiving incentives under the Conto Energia framework first received confirmation of its right to a specific tariff in a letter from the GSE ("Tariff Recognition Letter"), which expressly stated that the tariff would remain constant for a twenty-year period. An example of the wording in a Tariff Recognition Letter under Conto II is as follows:

With reference to the photovoltaic plant named [name of the relevant plant], we hereby communicate the admission to the incentive tariff under Ministerial Decree 19 February 2007, equal to 0.3460 euro/kWh. (…) The tariff will be recognized for a twenty year period(…) the tariff is constant (…) for all the twenty year period.57

128.
Afterward, the operator would enter into a contract with the GSE. These agreements ("GSE Agreements") set forth the specific tariff incentive rate that the PV operator would receive and the specific dates comprising a twenty-year period during which the incentive would be paid. The relevant contractual wording was substantively the same in GSE Agreements under Conto I, Conto II, Conto III and Conto IV, and the present dispute does not concern PV facilities granted incentives under Conto V. As an example of the relevant wording, one GSE Agreement under Conto III provided:

The tariff to be granted to the photovoltaic plant [Ferrante] pursuant to this Agreement is equal to 0.3140 €/kWh and is constant in current currency". (...) This Agreement is effective as of 29 April 2011 and will expire on 28 April 2031.58

E. Minimum Guaranteed Prices under Off-Take Regime

129.
In addition to feed-in tariff premiums under the Conto Energia decrees, Legislative Decree No. 387 also established an "off-take regime" whereby the GSE directly purchased electricity from certain smaller renewable energy producers at minimum guaranteed prices ("MGP Scheme").59 The MGP Scheme was designed to ensure economic survival and minimum remuneration of smaller facilities, regardless of the trend of market prices, since those facilities were considered to have higher relative operating costs. Under the MGP Scheme, PV plants with a capacity below 1 MW received either a certain minimum guaranteed price or the market wholesale price, whichever was greater. The minimum guaranteed prices were introduced by AEEG Resolution no. 34 in 2005,60 which was replaced by Resolution no. 280 in 2007.61 PV plants eligible for the off-take regime could also benefit from tariff incentives under the first four Conto Energia decrees.
130.
Further, similar to the GSE Agreements under the Conto Energia decrees, PV producers that participated in the MGP Scheme entered into contracts with the GSE. Those contracts had a one-year term that was subject to automatic renewal, with terms and conditions set by the AEEG.

F. The Claimants' Investments

1. NovEnergia's and NIP's solar investments in Italy

2. Greentech's solar investments in Italy

G. The Disputed Measures

1. The Spalma-incentivi Decree

143.
With Conto V reaching its target annual cost of EUR 6.7 billion in July 2013, Italy took steps to reduce the electricity cost burden on consumers attributable to the incentive programs. On 23 December 2013, Italy enacted Law Decree No. 145/2013, referred to as the "Destinazione Italia" law decree.75 The Destinazione Italia law decree provided two options for PV plant producers: i) to continue to receive the Conto Energia incentives at the same rate for the remainder of the twenty-year period, but to foreclose the possibility of receiving additional incentives thereafter; or ii) to accept reductions to the Conto Energia incentives, but to receive them for seven additional years, for a total of twenty-seven years.76 This constituted Italy's attempt to re-modulate the incentive mechanisms on a voluntary basis.
144.
On 24 June 2014, Italy enacted Law Decree No. 91/2014, known as the "Spalma-incentivi Decree", pursuant to which the tariffs previously granted to PV facilities over 200 kW according to the five Conto Energia decrees were modified as from 1 January 2015.77

a. Changes to Incentive Tariff Amount and Duration

145.
Article 26(3) of the Spalma-incentivi Decree provided that producers would have a choice from among three options for the method of calculating new tariffs that would apply to PV facilities. Should the PV plant owner not make an election by 30 November 2014, Option C (described below) would apply.78

• Under Option A, Italy would pay a new, reduced incentive tariff over twenty-four years (commencing from the PV plant's entry into operation), instead of the original twenty-year term. The level of reduction was based on how many years remained in the original twenty-year period, according to the following table:79

Residual incentivizing period (Years) Percentage of reduction of the incentive
12 25%
13 24%
14 22%
15 21%
16 20%
17 19%
18 18%
above 19 17%

For example, if the PV producer at that time had fifteen years remaining under the applicable Conto Energia decree, then the producer would receive the incentives for nineteen more years at a rate reduced by 21%

• Under Option B, the original twenty-year period would be the same. The tariff rate would be reduced between 2015 and 2019, then increased in subsequent years according to percentages established by decree of the Ministry of Economic Development. The relevant decree was adopted on 17 October 2014.80

• Under Option C, the twenty-year disbursement period would be maintained, but the tariff rate would be reduced by a fixed percentage based on a PV plant's nominal capacity: a 6% reduction for plants with a nominal capacity between 200 kW and 500 kW; a 7% reduction for plants with a nominal capacity between 500 kW and 900 kW; and an 8% reduction for plants with a nominal capacity over 900 kW.81

b. Changes to Disbursement Mechanism

146.
In addition to changing the Conto Energia incentive tariffs, the Spalma-incentivi Decree altered the way in which they were disbursed. According to Claimants, before the Spalma-incentivi Decree, incentive tariffs were paid based on actual electricity generated monthly.82 Claimants' quantum expert, Mr. Edwards, stated that tariffs for a given month would be paid at the end of the second month thereafter. For example, the incentive tariff for electricity generated in January would be paid at the end of March.83
147.
Article 26(2) of the Spalma-incentivi Decree specified that, as from the second half of 2014, the GSE would pay tariffs in constant monthly installments based upon 90% of a plant's estimated yearly average production of electricity. The balance adjustment payment, based on actual production, would be paid by 30th June of the following year.84
148.
According to Respondent, the GSE defined the disbursement methods under Article 26(2) with approval by the Ministry of Economic Development by Decree of 16 October 2014.85 Respondent states that the advance installment was an estimate based on each PV plant's production in the prior year, and that where historical data from the entire prior year was not available, a regional average was to be used.86
149.
In addition to modifying the amount, duration, and disbursement mechanism of the incentive tariffs, the Spalma-incentivi Decree repealed and replaced the administrative fee provided for under Article 10(4) of Conto V, basing the new fee solely on the PV plant's capacity, instead of its effective output of energy.87 The new fee ranged from EUR 1.20 per kW (for plants above 1 MW of capacity) to EUR 2.20 per kW (for plants between 3 and 6 kW of capacity) and was payable 88 annually by off-setting incentive tariff payments due under GSE Agreements.88

2. Modification of Minimum Guaranteed Price Scheme

150.
From 2011 until 2013, the MGP Scheme underwent a review and consultation process, with the AEEG requesting data from electricity producer associations and from the Politecnico di Milano, which produced a report in July 2013.89 Italy modified the MGP Scheme at the end of 2013. On 31 October 2013, the AEEG issued a consultation document that proposed to define the minimum guaranteed prices based on the average operating costs of renewable energy facilities, plus 8%.90 For PV facilities, the minimum guaranteed price would be approximately EUR 37.8 per MWh produced. Then, on 19 December 2013, the AEEG issued Resolution No. 618/2013/R/EFR ("Resolution 618"), establishing a minimum guaranteed price of EUR 38.9 per MWh.91 Resolution 618 also reduced the cap on eligible electricity generation from 2 million kWh per year to 1.5 million kWh per year.92
151.
On 23 December 2013, under the Destinazione Italia law decree (discussed above), PV facilities over 100 kWh in capacity that were receiving Conto Energia tariffs were excluded from the MGP Scheme.93 Only plants not exceeding 100 kWh in capacity could still obtain both the minimum prices and the Conto Energia tariffs.

3. Cancellation of ISTAT Inflation Adjustment

152.
As described above, Conto I, as originally implemented in 2005, included an inflation adjustment according to the ISTAT index.94 The inflation adjustment was, however, revoked in 2006 pursuant to an amendment to Conto I.95 Subsequent Conto Energia decrees did not provide for an inflation adjustment.
153.
The revocation measure was contested by several PV producers in 2006 in the Regional Administrative Tribunal ('TAR") of Lombardia, which issued decisions in three separate, unconsolidated cases. The TAR declared the measure null and void as violating a general prohibition of retroactive legal acts and general principles of legal certainty and protection of the legitimate expectations of citizens.96
154.
The GSE appealed the three TAR decisions in 2007, one of which was affirmed by the Consiglio di Stato in April 2008.97 However, when the second case came before the Consiglio di Stato, it referred the matter to the plenary session of the court, which held in February 2012 that the cancellation of the inflation adjustment was valid and had no retroactive effect.98 The third appeal concluded in 2013 with a result consistent with that of 2012.99
155.
The GSE issued several communications, the significance of which is disputed by the Parties, during and after the appellate proceedings. In 2009, the GSE issued a press release, informing the market of its decision not to seek repayment of the ISTAT adjustments paid until that time.100 On 26 March 2013, the GSE issued a press release stating that the Consiglio di Stato had upheld the cancellation of ISTAT adjustments and stating that the GSE would no longer provide ISTAT-adjusted tariffs.101 In March 2015, the GSE announced that it would claim reimbursement of ISTAT adjustment amounts granted since 2005 by offsetting past payments against future payment of Conto I tariffs. In 2016, the GSE notified PV producers of the amounts of overpayments that the GSE planned to recover.

4. Administrative Fee and Imbalance Costs

156.
One feature of Conto V was a new requirement that, starting from 1 January 2013, all PV producers receiving incentive tariffs pursuant to any of the five Conto Energia decrees pay an annual administrative fee.102 The administrative fee - fixed at EUR 0.00005 per kWh - was intended to cover the GSE's management, audit, and control costs.103
157.
Conto V expressly permitted the administrative fee to be collected by means of an offset, according to a method determined by the GSE.104 The GSE implemented its collection by offsetting the administrative fee from the GSE's first payment of incentive tariffs to each producer in a given year.105
158.
As noted above, the Spalma-incentivi Decree repealed and replaced the administrative fee provided for under Article 10(4) of Conto V, basing the new fee solely on the PV plant's capacity, instead of its effective output of energy. According to Claimants, the new fee ranged from EUR 1.20 per kW (for plants above 1 MW of capacity) to EUR 2.20 per kW (for plants between 3 and 6 kW of capacity) and was payable annually by off-setting incentive tariff payments due under GSE Agreements.106
159.
An additional requirement coming into effect on 1 January 2013, but not stemming from the Conto Energia decrees, was the requirement that PV producers pay imbalance costs, i.e., costs attributable to the failure to make accurate projections of the amounts of electricity capacity that would be injected into the electricity grid. Before that date, non-renewable energy producers were required to project the amount of electricity that they would inject into the grid, pursuant to AEEG Resolution 111/06 of 9 June 2006 ("Resolution 111"),107 which enabled Terna (the Italian grid operator) to balance electricity supply with demand. Producers deviating from their injection schedules were required to pay imbalance costs.108 PV producers were effectively exempt from paying imbalance costs under Resolution 111.109 Their exemption was ended by Resolution 281/2012/R/EFR of 5 July 2012 ("Resolution 281").110
160.
Some renewable energy producers challenged Resolution 281 and Resolution 493 in the Italian administrative court, and first-instance decisions in their favor were upheld on appeal before the Consiglio di Stato on 9 June 2014.111 The Consiglio di Stato determined that the two resolutions were discriminatory because they failed to differentiate among programmable and non-programmable energy sources. As a result of that decision, it is undisputed by the Parties that the GSE reimbursed renewable energy producers which had already paid imbalance costs under Resolution 281.112
161.
On 23 October 2014, the AEEG issued Resolution 522/2014/R/EEL ("Resolution 522"), which again imposed imbalance costs on renewable energy producers.113 Although Respondent asserts that Claimants have not stated whether they paid sums requested under Resolution 522, Claimants assert that renewable energy producers have been paying these imbalance costs since 1 January 2015.114

5. 2015 Italian Constitutional Court Decision regarding "Robin Hood" Tax

162.
In 2008, Italy enacted a windfall profits tax, nicknamed the "Robin Hood" tax, which applied to oil, gas, and other traditional energy companies, excluding PV, biomass, and wind energy producers from its scope.115 The corporate income tax rate for companies with an annual gross income over EUR 25 million was increased from 27.5% to 33%,116 then to 34% in 2009.117
163.
In August 2011, renewable energy producers were no longer exempt from the Robin Hood tax. Producers with an annual gross income over EUR 10 million and taxable income over EUR 1 million became subject to the tax, and the tax rate was increased to 38%.118
164.
In June 2013, the scope of the Robin Hood tax was extended to cover companies with annual gross income of over EUR 3 million and taxable income of over EUR 300,000.119 As a result, according to Claimants, their PV plants become subject to the Robin Hood tax.120
165.
On 11 February 2015, the Italian Constitutional Court rendered a decision concerning the constitutionality of the Robin Hood tax.121 The Parties' respective interpretations of the decision differ. Claimants assert that the decision declared the extension of the Robin Hood tax to PV plants unconstitutional.122 Respondent asserts that the decision found the tax to have failed to respect "the principle of equality in contributive capacity, whereas considering its extension to renewable energy producers perfectly legitimate".123 In any event, the decision was applied on a going-forward basis (ex nunc), rather than from the date of the extension (ex tunc), and Italy did not reimburse Claimants for the sums previously collected under the Robin Hood tax.124
166.
Claimants assert that although they consider the extension of the Robin Hood tax to PV plants to have been unlawful, their claim is not based on the alleged unlawfulness of the tax measure.125 Instead, they argue, they "are only contesting whether the application of Italy's court decision on a going-forward basis (ex nunc) rather than an application that would deem the measure invalid from inception (ex tunc) was fair and in accordance with the ECT."126 Claimants assert that Italy's alleged failure to compensate them violated the FET clause because it constituted inconsistent, unfair treatment that was not in good faith, and was an arbitrary, unreasonable measure that impaired their investments.127 Furthermore, they assert that the measure violated the "effective means" clause of Article 10(12) ECT.128

6. Re-classification of PV Plants as Immovable and Movable Property

167.
Claimants assert that, since at least 2007, PV plants have been classified by the Italian Revenue Agency as "movable property".129 According to Claimants, in 2013, Italy re-classified most PV plants as immovable property, pursuant to Circular No. 36/E of 19 December 2013.130
168.
Claimants contend that the re-classification had several effects on PV plants. First, it reduced PV plants' depreciation rate to a maximum of 4% per year, previously maintained at 9%, which increased PV plant owners' taxable income.131 Also, it entailed that Claimants' PV plants would pay greater amounts of IMU charges and TASI charges than they had paid prior to Circular No. 36/E.132
169.
In late 2015, Italy introduced a new rule for classification of immovable property, providing that, as of 1 January 2016, the value of immovable property would be calculated without including the value of certain elements of the structure.133 According to Claimants, this rule substantially reduced the portions of PV plants deemed to be immovable property.134
170.
According to Claimants, Italy has not reimbursed Claimants for amounts they assert that Italy wrongfully collected, notwithstanding Italy's re-classification of PV facilities.135 Claimants contend that the failure of Italy to reimburse them is a violation of the ECT. Claimants assert, in particular, that Italy's failure to reimburse them for the allegedly mistaken classification of PV facilities as immovable property between 2013 and 2016 violated the FET clause because it constituted arbitrary, inconsistent, unfair treatment that was not in good faith, and was an unreasonable measure that impaired their investments.136

IV. Relief Requested

A. Claimants' request for relief

171.
Claimants requested that the Tribunal render an Award granting the following relief:

• a declaration that the Tribunal has jurisdiction over this dispute;

• a declaration that Italy has violated the Energy Charter Treaty and international law with respect to Claimants' investments;

• compensation to Claimants for all damages they have suffered, as set forth in Claimants' submissions and as may be further developed and quantified in the course of this proceeding;

• all costs of this proceeding, including (but not limited to) Claimants' attorneys' fees and expenses, the fees and expenses of Claimants' experts, and the fees and expenses of the Tribunal and the SCC;

• pre-award and post-award compound interest at the highest lawful rate from the Date of Assessment until Italy's full and final satisfaction of the Award; and

• any other relief the Tribunal deems just and proper.137

B. Respondent's request for relief

172.
Respondent requested that the Tribunal render an Award granting the following relief:

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

• Alternatively, decline jurisdiction over the totality of claims, since i) some of the attacked measures are exempted under Article 21 ECT, ii) the requirement of unconditional consent under Article 26 ECT is not satisfied as some other measures have been challenged in domestic courts, and iii) no amicable solution has been attempted for some further measures.

• Equally, decline jurisdiction as for application of the umbrella clause in the light of the exclusivity forum choice contained in the GSE Conventions.

• In a further alternative, decline admissibility of protection of the Claimants' alleged interests since these are barred from seeking relief, as: i) they had already addressed domestic courts for the same matters challenged here, and iii) these latter did not seek amicable solution for a number of claims.

• Suspend these proceedings until the Court of Justice of the European Union adopts its decision on the ACHMEA case under Article 19 of the SCC 2010 Arbitration Rules.138

173.
In the alternative, should the Tribunal determine that it has jurisdiction and that the claims are admissible, Respondent requested the following relief:

• 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 Claimants' investment.

• Equally, declare, on the merits, that the Respondent did not violate Article 10(1) ECT, fourth sentence, either, since it always adopted reasonable and nondiscriminatory measures to affect Claimants' investment.

• Finally 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.

• Consequently, declare that no compensation is due.139

174.
Further, if the Tribunal determines that any of Claimants' claims is valid, Respondent requested the following relief:

• Declare that damages were not adequately proved.

• In addition, declare that both the methods for calculation, and calculation itself of damages proposed by the Claimants are inappropriate and erroneous. This should also include factual incorrectness of figures.

• Order the Claimants to pay the expenses incurred by the Italian Republic in connection with these proceedings, including professional fees and disbursements, and to pay the fees and expenses of the Members of the Tribunal and the charges for the use of the facilities of the SSC, in accordance with Articles 43 and 44 of SCC 2010 Arbitration Rules.140

V. The Tribunal's Analysis

A. Overview

1. Summary of Conclusions

175.
For the reasons set forth below, the Tribunal concludes that it possesses jurisdiction under the ECT with respect to all of the Claimants' claims except for those concerning Italy's measures relating to the Robin Hood tax and the classification of PV facilities as movable or immovable, which fall outside the scope of the Tribunal's jurisdiction as they concern "Taxation Measures" under ECT Article 21.
176.
Respondent raised several formal objections, asserting that (i) Claimants have already initiated action in the Italian courts, (ii) Claimants failed properly to request amicable settlement prior to initiating this arbitration, and (iii) Claimants are precluded from having recourse to international arbitration based on the forum selection clauses in the GSE Agreements. The Tribunal, for reasons discussed below, rejects these objections.
177.
Also, Respondent objected that the substantive investment protections and investor-state arbitration provisions of the ECT do not apply to disputes involving an investor having the nationality of an EU Member State against an EU Member State, referred to as "intra-EU disputes". For reasons discussed below, the Tribunal concludes that Respondent's objections are not well founded. Nor, as explained below, does the ECJ's decision in Slovak Republic v. Achmea,141 hereinafter referred to as the "Achmea Decision", have any impact on the Tribunal's conclusion. Although the Tribunal in forming its conclusions has considered all of the Parties' arguments and grounds as well as those of the EC in its amicus curiae brief, the Tribunal addresses in this Award only the main arguments.
178.
The Tribunal notes that Respondent and the EC contended that the Tribunal must either find that it lacks jurisdiction or, alternatively, stay the proceedings pending the ECJ's decision in Achmea. The Tribunal was not, however, persuaded that a stay would be appropriate. Further, since the ECJ issued its decision in Achmea and the Parties have had opportunities to comment on the decision's possible impact on this arbitration, the Respondent's and the EC's respective proposals for a stay are moot and therefore not addressed in this Award.
179.
With respect to the merits of the claims remaining within the Tribunal's jurisdiction, the Tribunal concludes as follows:

(a) Regarding the incentive tariff reduction under the Spalma-incentivi Decree, a majority of the Tribunal (Messrs. Haigh and Park) finds that this measure undermined Claimants' legitimate expectations, failed to treat Claimants' investments transparently and consistently, and thus violated the FET clause. That majority also finds that the incentive tariff reduction portion of the Decree violated the impairment clause and breached the obligation set forth in the last sentence of ECT Article 10(1) (the "umbrella clause").

(b) Regarding the tariff payment term change under the Spalma-incentivi Decree, cancellation of the ISTAT inflation adjustment, and imposition of administrative fees and imbalance costs, the Tribunal finds that these measures did not violate the FET clause, the impairment clause, or the umbrella clause. Regarding modification of minimum guaranteed prices, a majority of the Tribunal (Messrs. Sacerdoti and Park) finds that this measure did not violate the FET clause, the impairment clause, or the umbrella clause.

180.
Set forth below are the law applicable to the dispute and the key treaty provisions on which the Tribunal relies.

2. Applicable Law

181.
Article 22 of the SCC Rules provides that the Tribunal "shall decide the merits of the dispute on the basis of the law(s) or rules of law agreed upon by the parties."
182.
As confirmed in the Tribunal's jurisdictional findings below, the Parties have consented to submit the present dispute to arbitration under the SCC Rules pursuant to Article 26(4)(c) of the ECT.
183.
Article 26(6) of the ECT provides that "[a] tribunal established under paragraph (4) shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law."
184.
Accordingly, this dispute shall be decided in accordance with the ECT and such rules and principles of international law as may be applicable. As to whether "applicable rules and principles of international law" in Article 26(6) ECT should be interpreted as including EU law, the Tribunal addresses this question in its jurisdictional analysis below.

3. Key Treaty Provisions

185.
ECT Article 26 sets forth the dispute resolution clause, providing, in relevant part, as follows:

(1) Disputes between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the latter in the Area of the former, which concern an alleged breach of an obligation of the former under Part III shall, if possible, be settled amicably.

(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 to the dispute;

(b) in accordance with any applicable, previously agreed dispute settlement procedure; or

(c) in accordance with the following paragraphs of this Article.

(3) (a) Subject only to subparagraphs (b) and (c), each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article.

(b) (i) The Contracting Parties listed in Annex ID do not give such unconditional consent where the Investor has previously submitted the dispute under subparagraph (2)(a) or (b).

(ii) For the sake of transparency, each Contracting Party that is listed in Annex ID shall provide a written statement of its policies, practices and conditions in this regard to the Secretariat no later than the date of the deposit of its instrument of ratification, acceptance or approval in accordance with Article 39 or the deposit of its instrument of accession in accordance with Article 41.

(c) A Contracting Party listed in Annex IA does not give such unconditional consent with respect to a dispute arising under the last sentence of Article 10(1).

(4) In the event that an Investor chooses to submit the dispute for resolution under subparagraph (2)(c), the Investor shall further provide its consent in writing for the dispute to be submitted to:

[...]

(c) an arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce.

186.
ECT Article 10(1) imposes the following host-state responsibilities with respect to the standard of treatment of foreign investors.

Each Contracting Party shall, in accordance with the provisions of this Treaty, encourage and create stable, equitable, favourable and transparent conditions for Investors of other Contracting Parties to make Investments in its Area. Such conditions shall include a commitment to accord at all times to Investments of Investors of other Contracting Parties fair and equitable treatment. Such Investments shall also enjoy the most constant protection and security and no Contracting Party shall in any way impair by unreasonable or discriminatory measures their management, maintenance, use, enjoyment or disposal. In no case shall such Investments be accorded treatment less favourable than that required by international law, including treaty obligations. Each Contracting Party shall observe any obligations it has entered into with an Investor or an Investment of an Investor of any other Contracting Party.

187.
ECT Article 21(1) excludes certain "taxation measures" from the scope of measures with respect to which rights or obligations are created under the ECT, providing as follows:

Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties. In the event of any inconsistency between this Article and any other provision of the Treaty, this Article shall prevail to the extent of the inconsistency.

ECT Article 21(7)(a) provides a definition of "Taxation Measures:

The term "Taxation Measure" includes:

(i) any provision relating to taxes of the domestic law of the Contracting Party or of a political subdivision thereof or a local authority therein; and

(ii) any provision relating to taxes of any convention for the avoidance of double taxation or of any other international agreement or arrangement by which the Contracting Party is bound.

188.
ECT Article 16(2).

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,

[...]

(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.

B. Jurisdiction

1. Formal Requirements

a. Parties and Nature of Dispute

189.
As a preliminary matter, ECT Article 26(1) requires that Respondent is a Contracting Party to the ECT and that Claimants are qualified "Investors of another Contracting Party", i.e., have a nationality different from that of Respondent.
190.
The following matters are uncontested. The Republic of Italy is a Contracting Party to the ECT, which entered into force for Italy on 16 April 1998.142 NovEnergia and NIP are both companies duly established under the laws of the Grand Duchy of Luxembourg, for which the ECT entered into force on 16 April 1998.143 Greentech is a company duly established under the laws of the Kingdom of Denmark, for which the ECT entered into force on 16 April 1998.144
191.
The ECT defines a protected "Investor" as "a company or other organisation organised in accordance with the law applicable in that Contracting Party."145 Accordingly, NovEnergia and NIP are Investors with respect to Luxembourg and Greentech is an Investor with respect to Denmark.
192.
As described above (Part III - Factual Background), Claimants acquired and developed a number of PV facilities and acquired certain rights in Italy. Respondent has not contested that Claimants' investments fall within the meaning of "Investments" under ECT Article 1(6), including the following, as quoted from the Statement of Claim.

(i) tangible and intangible property and property rights, including various photovoltaic facilities; (ii) shares and equity participation in Italian companies and photovoltaic facilities, as well as debt obligations with respect to those companies and facilities; (iii) rights to returns, claims to money, and claims to performance pursuant to contracts having economic value related to the photovoltaic facilities and related investments; (iv) rights conferred by law, specifically, the rights to fixed incentive tariffs conferred through various Conto Energia decrees and rights to guaranteed minimum prices granted in Italy's "off-take" regime; and (v) rights conferred by licenses, permits, and contracts, including rights to incentive tariffs for electricity produced by their photovoltaic facilities and guaranteed minimum prices granted in Italy's "off-take" regime.146

193.
ECT Article 26 covers disputes "which concern an alleged breach of an obligation of [a Contracting Party] under Part III" of the ECT.147 The present dispute concerns alleged violations by Italy of obligations under ECT Article 10(1), including the obligation to accord fair and equitable treatment, the obligation not to impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment, or disposal of investments, and the obligation to observe obligations entered into with an Investor or an Investment. The present dispute thus falls within the subject matter described in ECT Article 26(1).

b. Consent to Arbitration ("fork-in-the-road" objection)

194.
Claimants expressed their consent to SCC arbitration under ECT Article 26(4)(c) by filing the Request for Arbitration on 7 July 2015.148
195.
Respondent, however, contends that the conditions for finding it to have provided "unconditional consent to the submission of a dispute to international arbitration" under Article 26(3)(a) are not fulfilled.149 ECT Article 26(2)-(3) provides:

(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 to the dispute;

(b) in accordance with any applicable, previously agreed dispute settlement procedure; or

(c) in accordance with the following paragraphs of this Article.

(3) (a) Subject only to subparagraphs (b) and (c), each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article.

(b) (i) The Contracting Parties listed in Annex ID do not give such unconditional consent where the Investor has previously submitted the dispute under subparagraph (2)(a) or (b).

(ii) For the sake of transparency, each Contracting Party that is listed in Annex ID shall provide a written statement of its policies, practices and conditions in this regard to the Secretariat no later than the date of the deposit of its instrument of ratification, acceptance or approval in accordance with Article 39 or the deposit of its instrument of accession in accordance with Article 41.

196.
Respondent, as a Contracting Party "listed in Annex ID", asserts that Claimants have "previously submitted the dispute" (Art. 26(3)(b)(i)) "to the courts or administrative tribunals of the Contracting Party party to the dispute" (Art. 26(2)(a)) by filing claims in Italian administrative courts on the same or similar matters as addressed in this arbitration.150
197.
Respondent contends that several Italian administrative court actions were brought by parties, including companies owned by Claimants, regarding the measures at issue in this arbitration, including the Spalma-incentivi Decree.151 According to Respondent, claimants in those actions asserted violations of the Italian Constitution, the ECHR, the ECT, and certain EU directives.152 Respondent argues that a proper application of Article 26(3)(b)(i) would "focus on the real substance of the underlying rights as opposed to the form of the legal action".153 Alternatively, argues Respondent, the "triple-identity test" (identity of parties, cause of action, and object of the dispute) would here be met, since the domestic cases were instituted by Claimants' subsidiaries, the "measures at stake are exactly the same as in these proceedings", and the grounds include alleged violations of ECT Article 10.154
198.
In response, Claimants assert that they have not commenced domestic litigation in Italy and are not participating in any domestic Italian case.155 While Claimants concede that certain companies previously owned by NovEnergia and NIP did file some of the cases Respondent refers to, Claimants assert that none of Greentech's subsidiaries did so.156
199.
For the reason above, Claimants argue that the Italy cannot satisfy the first element of the triple-identity test, namely, that the previously filed domestic action and the subsequent arbitration claim involve the same parties.157 Also, according to Claimants, "the vast majority of tribunals have held that the parties to both disputes must be strictly identical" to satisfy the triple-identity test.158
200.
Regarding the argument that a possible alignment of interests between the local companies and Claimants should bar Claimants from seeking relief under the ECT, Claimants argue that such an alignment of interest is irrelevant and cannot be presumed to exist.159 Furthermore, Claimants assert, the ECT, unlike NAFTA, does not require companies in which a claimant holds interests to waive domestic remedies.160 Claimants refer to prior investment arbitration awards allegedly affirming investors' right to pursue treaty claims despite pending domestic proceedings by their local subsidiaries.161
201.
Claimants refers to Italy's "fork-in-the-road" declaration, stating that where a domestic claim is pending but not yet decided, the Investor may elect to withdraw the domestic claim "by procedural or lateral renouncement" and pursue arbitration.162 Thus, Claimants argue, even if they were parties in the domestic cases, which they deny, that would not prevent them from pursuing arbitration.
202.
As for the contention that the "similarity" of the domestic suits to this arbitration bars Claimants from pursuing the latter, Claimants make two arguments. First, it would be "fundamentally unfair" to apply such an analysis, since Claimants - not party to the domestic lawsuits - cannot comment meaningfully on their scope and Italy's description of the facts would need to be accepted at face value.163 Second, this arbitration covers a broader scope of Italian measures than the domestic suits and concerns application of the ECT and international law.164 Although Italy has asserted that the ECT was invoked in the domestic lawsuits, this occurred in only some of them, and Italy has not demonstrated that an Italian court can rule on the basis of the ECT or international law in a case involving domestic parties.165
203.
In its Rejoinder, Respondent first argues that Claimants, while showing evidence of a demerger, did not prove that this ended their ownership of the companies in the domestic litigation. Further, since the demerger occurred after the arbitration commenced, the conditions for Respondent's unconditional consent were not fulfilled.166 Second, Respondent argues for a "more flexible interpretative approach" toward the identity of parties, but even under a stricter approach, Respondent asserts that the companies in the domestic suits and NovEnergia "should be considered as the same party".167 Respondent argues that this follows from the fact that NovEnergia controls those local companies but would itself lack standing to participate in the administrative cases.168 Third, Respondent argues that it is unfair if a decision by the Italian Constitutional Court, which "addresses the compatibility of the Spalma-incentivi Decree with both EU law and the ECHR", does not bar the parties to the domestic law proceedings from raising the same claims in this arbitration, asserting that those domestic parties are "materially" the same as Claimants here.169
204.
Having reviewed the Parties' arguments, the Tribunal has not been persuaded to adopt a non-literal interpretation of ECT Article 26(3)(b)(i), which provides, "[t]he Contracting Parties listed in Annex ID do not give such unconditional consent where the Investor has previously submitted the dispute under subparagraph (2)(a) or (b)." The term, "Investor", is unambiguous. In the context of Article 26, sub-paragraph (1) of which refers to "[d]isputes between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the latter in the Area of the former", the Italian subsidiaries of Claimants in this arbitration cannot be understood to be "Investors" but are, instead, to be treated as "Investments" which are located "in the Area of" Italy.
205.
Given that Respondent has not shown that Claimants have previously submitted the present dispute to Italian courts or administrative tribunals, there is no ground to deny, based on a fork-in-the-road argument, that Italy has given its unconditional consent pursuant to ECT Article 26(3)(a). Accordingly, the Tribunal rejects Respondent's objection.

c. Request for Amicable Settlement

206.
ECT Article 26(1) provides that disputes falling within its scope "shall, if possible, be settled amicably" and, under Article 26(2), "[i]f 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:... (c) in accordance with the following paragraphs of this Article."
207.
On 7 November 2014, Greentech sent a letter to Italy notifying it of a dispute regarding alleged violations of the ECT by Italy and offering to settle the dispute amicably.170 On 15 December 2014, NovEnergia and NIP sent a letter to Italy notifying it of a dispute regarding alleged violations of the ECT by Italy and offering to settle the dispute amicably.171 Claimants filed the present arbitration on 7 July 2015. It is not contested that Italy did not respond to Claimants' letters.
208.
Respondent contends that the Request for Arbitration and Statement of Claim asserted new ECT claims regarding the following measures which, Respondent contends, must be considered to fall outside the scope of the letters of 7 November 2014 and 15 December 2014:172

• The GSE's request in March or April 2015 for reimbursement of inflation-adjusted amounts of tariff incentives received under Conto I;173

• The GSE's adoption in May 2015 of technical rules regarding modifications to PV plants, including an obligation to notify the GSE of certain modifications;174

• Italian Constitutional Court Decision No. 10 of 11 February 2015 declaring the Robin Hood tax unconstitutional, with application ex nunc ;175 and

• Rules pursuant to Law No. 208/2015, which from 1 January 2016 reduced the portions of PV plants deemed immovable, and the allegedly unfair decision of Italy not to compensate for prior classification.176

209.
According to Respondent, Claimants' assertion that these measures relate to the "same subject matter" as the dispute submitted in their 2014 letters relies on such a broad interpretation of subject matter that "anything [that] happened in Italy after they built their plants would fit into these proceedings..."177 For example, regarding the Italian Constitutional Court Decision on the Robin Hood tax and the effect of Law No. 208/2015 on classification of PV plants as immovable property, Respondent asserts that these allegedly "fiscal provisions of a general nature" do not fall within "the same subject matter as claims against renewable energy support schemes."178
210.
Claimants, on the other hand, contend that their 2014 letters were broadly drafted, discussed the dispute in detail, and were submitted to Respondent more than six months before filing the arbitration.179 According to Claimants, the measures that Italy objects to on this basis concern the same subject matter as the dispute submitted.180 Claimants argue that one must distinguish a "measure" from a "dispute" and that the requirement is only to submit the "dispute" to the counterparty rather than to identify every measure.181
211.
Claimants refer to decisions of several investment arbitration tribunals holding that the requirement to submit a dispute for amicable settlement prior to commencing arbitration does not require a complete or detailed notice.182 Furthermore, according to Claimants, a party may bring additional claims which relate to the same subject matter.183 Claimants refer to an ECT case under the SCC rules, AMTO v. Ukraine, which stated the following in regard to ECT Article 26(2):

A party can request amicable settlement of a dispute without identifying any ECT claims, and an Investor may have good reason not to formulate claims at this stage.

[…]

In the subsequent Request for Arbitration the Investor was free to frame its claim as it wished, provided they related to the same dispute..184

212.
Claimants argue that it would be procedurally inefficient and unfair to halt the proceedings when they are already at an advanced stage, to require Claimants to file new notice letters in a separate arbitration, or to suspend these proceedings pending a renewed notice period.185 They also contend that Italy suffers no prejudice from inclusion of these claims, to which Italy had ample time to respond after receiving notice in Claimants' submissions.186 Under the circumstances, Claimants contend that their position is supported by both arbitral tribunals and by scholarly writing affirming that a notice or amicable settlement requirement is generally a "procedural" rather than "jurisdictional" matter, which may bewaived.187

d. Dispute settlement clauses in GSE Agreements

214.
Respondent asserts that the Tribunal lacks jurisdiction because the GSE Agreements and minimum guaranteed price contracts contain exclusive forum selection clauses that refer disputes to Italian court.188 The forum selection clauses provide as follows:

For any dispute arising out of, or in any way related to the interpretation and/or execution of this Convention and the acts it refers to, the Parties agree on the exclusive jurisdiction of the Court of Rome.189

216.
Respondent asserts that the SGS v. Philippines tribunal considered that exclusive jurisdiction clauses in contracts prevail over dispute settlement provisions in investment treaties, because the latter are general provisions that presumably do not override "specific provisions of particular contracts, freely negotiated between the parties" and because such treaties are intended to "support and supplement, not to override or replace the actually negotiated investment arrangements made between the investor and the host State."194 According to Respondent, the SGS v. Philippines tribunal's view was followed by the tribunal in BIVAC v. Paraguay.195
217.
Further, Respondent quotes from a decision in the Aguas del Tunari v. Bolivia arbitration, regarding the possibility of an investor's waiver of its right to arbitration under a treaty and the extent to which an exclusive forum selection clause might effect a waiver.196 In this context, Respondent asserts that "we cannot underestimate that investors, including the Claimants, have indeed addressed the administrative Court of Rome to have the GSE Conventions and the relevant regulatory acts annulled because of inconsistency, inter alia, with the ECT."197
219.
Second, Claimants characterize the present arbitration as not relating to claims for breach of contract, but about alleged violations of obligations under the ECT, with the GSE Agreements only serving as evidence of the alleged treaty violations.201 Claimants assert that SGS v. Philippines, BIVAC v. Paraguay, and the ad hoc committee decision in Vivendi support the position that a forum selection clause in a contract between the claimant and the host state will not deprive a tribunal of jurisdiction where the "the fundamental basis of the claim is a treaty laying down an independent standard by which the conduct of the parties is to be judged.."202
221.
The Tribunal notes that, as Claimants are not party to the GSE Agreements, the forum selection clause therein could not constitute an "applicable, previously agreed dispute settlement procedure" under ECT Article 26(2)(b). Article 26(2) applies only to the "Investor party to the dispute". While Claimants are parties to the present dispute, the Italian companies that executed GSE Agreements are not. The ability of Italian companies not party to this dispute to sue under the GSE Agreements does not convert the forum selection clause therein to an "applicable, previously agreed dispute settlement procedure" with respect to Claimants.

2. Objections under Article 21 of the ECT

a. Non-reimbursement of Robin Hood Tax Payments

(i) Respondent's Position

222.
Regarding the Robin Hood tax's extension to certain PV plants, Respondent asserts that it was "unequivocally" a taxation measure, citing the Italian Constitutional Court's own statement: "[u]ndisputed is the fiscal nature of the tax, since the tax on corporate income [TARES] is a direct tax... constituting a compulsory levy based on an economically significant parameter, and connected to the public spending.."203
223.
Respondent also asserts that by claiming that the application of the Constitutional Court's decision ex nunc instead of ex tunc was not legitimate, Claimants are in fact claiming that the tax was wrongfully imposed and Italy refused to compensate them for those payments.204 Respondent asserts that this would "go back to the evaluation of the substance of the Robin Hood Tax and become de facto a claim on the taxation measure."205
224.
Accordingly, argues Respondent, Claimants' claim is against a "Taxation Measure" under ECT Article 21, and falls outside the Tribunal's jurisdiction.

(ii) Claimants' Position

225.
Claimants draw a distinction between, on one hand, claiming that the Robin Hood tax's extension to PV plants was wrongful and, on the other hand, claiming that the Italian Constitutional Court decision to apply its ruling on a going-forward basis was wrongful.206 In Claimants' own words, they "are only contesting whether the application of Italy's court decision on a going-forward basis (ex nunc) rather than an application that would deem the measure invalid from inception (ex tunc) was fair and in accordance with the ECT."207 Also, at the hearing, Claimants' counsel asserted, "our claim is that the court in Italy fundamentally was unfair and inequitable by declaring a measure unconstitutional but then saying, 'We'll only apply this ruling going forward, and for the two years you have paid these unconstitutional Robin Hood taxes you won't get a refund', so it's about the court decision and the court's handling of the future versus the past. It's not about the taxation measure itself."208

(iii) Tribunal Analysis

226.
ECT Article 21(1) (first sentence) provides:

Except as otherwise provided in this Article, nothing in this Treaty shall create rights or impose obligations with respect to Taxation Measures of the Contracting Parties.

227.
The Tribunal is asked to decide whether the Italian Constitutional Court's decision, the meaning of which is itself contested by the Parties,209 violates the ECT, noting that Claimants contend that their grievance is that the court itself applied its decision ex nunc rather than ex tunc. If, however, the Tribunal were to find that the court's application of its ruling violated the ECT, the Tribunal would need to determine whether the damages claimed by Claimants are to be awarded. The damages sought are the same amounts they have alleged were "wrongfully collected from them" during the 2013-2015 period.210 For the Tribunal to award compensatory damages for the Constitutional Court's application of its decision ex nunc, which allegedly wrongfully failed to order reimbursement of taxes "wrongfully collected", would appear to "create rights or impose obligations with respect to Taxation Measures" of Italy. In this instance, the Tribunal does not consider the distinction between the court's decision on the Robin Hood tax and the Robin Hood tax itself to be a meaningful one. Accordingly, the Tribunal concludes that Claimants' claims relating to the Robin Hood tax under Article 10(1) and 10(12) of the ECT are outside the Tribunal's jurisdiction.

b. Re-classification of PV Plants as Immovable and Movable Property

(i) Respondent's Position

228.
Respondent asserts that the re-classification of PV plants from movable to immovable property was "unequivocally" a taxation measure.211 Alternatively, Respondent argues, the re-classification was "ancillary" to a taxation measure by defining the latter's scope.212 Respondent asserts that the subject of Claimants' grievance is "not the definition of the plants as immovable as such, but the consequence of that definition, which takes their assets to be subject to taxation."213
229.
Therefore, according to Respondent, the re-classification of PV plants as immovable property was a taxation measure falling outside the Tribunal's jurisdiction under ECT Article 21.

(ii) Claimants' Position

230.
Claimants rebut Respondent's Article 21 objection, arguing that "the only relevance [Claimants'] claim has to taxes is the fact that immovable property is subject to certain charges (IMU and TASI) whereas movable property is not."214 Claimants state that they "are not contesting the application of those taxes."215 Thus, they argue, the Tribunal's exercise of jurisdiction would not "create rights or impose obligations with respect to Taxation Measures".

(iii) Tribunal Analysis

231.
The Parties have not contested that the IMU and TASI charges are Taxation Measures under ECT Article 21. The issue is whether the Tribunal, if it were to find that the re-classification of PV plants violated or did not violate the ECT, would "create rights or impose obligations with respect to Taxation Measures."
232.
If, for example, the Tribunal were to find that the re-classification violated the ECT, the Tribunal would need to determine whether to award the damages Claimants are seeking. The damages asserted by Claimants are, as described by Claimants' quantum expert, for the additional amounts of IMU and TASI charges paid in respect of years 2013 to 2015.216
233.
In light of the above, whether Claimants' claim is that a measure changing the scope of applicability of a Taxation Measure or a Taxation Measure itself violates Article 10(1) of the ECT, the damages Claimants seek are for the amount they allegedly overpaid in respect of the Taxation Measure. Thus, awarding damages for the overpayment would "create rights or impose obligations with respect to Taxation Measures". The Tribunal therefore concludes that Claimants' claim regarding re-classification of PV plants as immovable property falls outside the Tribunal's jurisdiction pursuant to ECT Article 21.

c. Administrative Fee

(i) Respondent's Position

234.
According to Respondent, "Taxation Measures" under Article 21 are equivalent to "fiscal measures" (or "tributi") under Italian law, falling into three categories: "imposta (tax), tassa (fee) and contributo (contribution).."217 Despite the use of "imposte" in the Italian version of Article 21(7)(a)(i), Respondent opposes an interpretation that limits "Taxation Measures" to meaning "imposta" under Italian law, noting that Article 21(7)(a) uses the word "includes", which Respondent interprets as introducing a non-exhaustive list.218 Additionally, Respondent asserts that a narrow meaning of "imposte" or "misure fiscali" would create a risk that exceptions to Article 21, e.g., for expropriation claims under Article 13, are construed too narrowly, thus failing to protect investors. Respondent thus asserts that Taxation Measures should include a wider range of measures than those encompassed by "imposte".219
235.
Regarding prior arbitral decisions dealing with the topic of taxation measures under BITs and the ECT, Respondent interprets their significance differently from Claimants. Respondent argues, inter alia, that the standard for a "taxation law" set forth in Murphy v. Ecuador would be satisfied by the administrative fee, as it is a mandatory levy, imposed for public purposes on a class of persons, and there is no direct benefit to the taxpayer.220 Denying Claimants' argument that the administrative fee was intended to cover a specific service, namely, the GSE's management, monitoring and verification tasks, rather than to raise general revenue, Respondent asserts that the fee was imposed on "all operators whose plants can be subject to auditing and investigation", regardless of which Conto Energia decree the operator's plant might fall under.221
236.
Referring to domestic Italian law, Respondent interprets two decisions by the Italian Constitutional Court regarding certain charges on public utilities or services.222 According to Respondent, in Decision 335/2008, regarding a tariff for sewer and water treatment services, the Court found that the measure was not a fiscal measure, based on a "synallagma" or reciprocity between the amounts paid and the services provided.223 On the other hand, in Decision 238/2009, regarding a charge for municipal waste services, Respondent asserts that the Court found that it was a fiscal measure.224 According to Respondent, the Court considered there to be "no synallagmatic relationship" as the charge was payable based on the kind of house owned rather than the services received, and the citizen could not refuse to pay just by declining the service.225 Respondent asserts that the administrative fee meets the standard for a fiscal measure set forth in the court decisions, since the fee is mandatory, is related to quantities of incentivized electricity produced, is established annually, and is not related to an identifiable specific service actually received by the PV producer.226
237.
Respondent also argues that since consumers also paid a portion of the GSE's costs through "Component A3" of their electricity bills, which Respondent construes as a fiscal measure, this charge must also be deemed a fiscal measure in respect of PV producers.227
238.
Finally, in rebuttal of Claimants' arguments that administrative fees would not be subject to Italian tax courts or subject to double-taxation treaties, Respondent argues that this is circular reasoning. If, Respondent asserts, the administrative fee is found to be a fiscal measure, then it will be subject to the tax court jurisdiction, and if they are not covered by a treaty, that will be simply because of a matter of a narrow definition used in the treaty.228

(ii) Claimants' Position

239.
Claimants construe Article 21 as having a narrower scope, noting that the official Italian version of the ECT defines Taxation Measures by reference to "imposte".229 Also, when it comes to characterizing the nature of the disputed measures, Claimants consider that although Italian law is relevant, stating that "the domestic characterization of a disputed measure may be helpful in ascertaining its nature", domestic legal notions are not determinative of the meaning of taxation measures in a treaty.230
240.
Claimants next refer to arbitral decisions explaining the general notion of taxation measures under BITs as well as the ECT, as measures imposed on classes of persons, having the public purpose of raising general revenue for the State, and not providing a direct benefit to the taxpayer.231 Claimants note that one tribunal looked to the "plain text" of the provision imposing the contested measure and the constitutional framework in which it was enacted.232 The tribunal in the Yukos arbitration considered that only "bona fide taxation measures" fall within ECT Article 21.233
241.
Claimants assert that, under their interpretation of Taxation Measures, the administrative fee was not such a measure, because it was intended to cover a specific service - the GSE's management, monitoring and verification tasks - rather than to raise general revenue for Italy.234 They assert that the administrative fee is never referred to as a "tax" (imposte) in the provisions introducing the fee, but is instead referred to as a contribution (contributo) to the GSE in Conto V, and as an additional tariff (tariffe) owed to the GSE under Law Decree No. 91/2014.235 They also contend that Italian tax authorities had no role in "enacting, imposing, or collecting" the fee.236 Nor, according to Claimants, does the administrative fee correspond to the definition of "imposte" under Italian law, since that notion also refers to "contribut[ion] to the general public expenditure" and being "not related to any specific benefit, service, or activity provided by public institutions".237
242.
As an additional ground asserted by Claimants for their position, they assert that administrative fees are outside the scope of measures subject to Italian tax court jurisdiction. This is because, Claimants assert, the fee is intended to cover the GSE's service costs and is also subject to VAT.238 Finally, Claimants argue, double-taxation treaties include a definition of the "imposte" covered by those treaties but Claimants assert they "are not aware" of any such treaty that includes administrative fees (or a similar fee) in that definition.239

(iii) Tribunal Analysis

243.
The Tribunal has considered the Parties' respective submissions regarding Respondent's Article 21 jurisdictional objection to the administrative fee measure under Conto V. Taking into account the various considerations raised by the Parties, the Tribunal finds that the administrative fee does not constitute a Taxation Measure and affirms its jurisdiction to decide the claims asserted by Claimants.
244.
In reaching this conclusion, the Tribunal need not determine whether Respondent's broad interpretation or Claimants' narrower interpretation of Taxation Measures is correct. Characterizing relationships as "synallagmatic" or "reciprocal" provides a useful way to distinguish a tax from another form of charge, in the sense that the latter notion ("charge") implicates a more direct reciprocity of payment for services. In this connection, the Tribunal notes that the administrative fee was established specifically to cover the GSE's costs of managing the incentive programs from which PV producers benefited. This suggests a degree of reciprocity. The Tribunal also notes that Respondent does not deny that the GSE paid value added taxes (VAT) on amounts received from PV producers, and that the fee was not collected for the general revenue of Italy. Taken together, these factors indicate that the administrative fee is not a Taxation Measure under the ECT.

d. Imbalance Costs

(i) Respondent's Position

245.
After setting forth its general interpretation of "Taxation Measures" under Article 21 (summarized above), Respondent proceeds to argue that the imbalance costs charged to PV producers constituted a Taxation Measure. Respondent first discusses the measure in relation to what it construes as an "ordinary" notion of taxation measures, then in relation to Italian law.
246.
A taxation measure, under the ordinary notion described by Respondent, "is a matter related to the imposition of a liability on classes of persons to pay money to the State for public purposes and without any direct benefit to the taxpayer."240 Respondent asserts that the imbalance costs measure is compatible with this interpretation, stating that "[i]t is absolutely uncontroversial that fiscal measures can also address the costs of specific services.."241
247.
Respondent, applying the above notion to imbalance costs, asserts: the imbalance costs measures were "mandatory, do not correspond to an identifiable specific service obtained from Terna that would qualify reciprocal obligations, and are connected to the public spending by linking to the dispatching activities of Terna and on the guarantee of the security of the system."242
248.
Turning to Italian law, Respondent repeats the arguments it made regarding the GSE's administrative fee, citing to Italian Constitutional Court decisions.243 Respondent asserts that imbalance costs are, like a charge for municipal waste services, a fiscal measure, since the PV producer may not refuse to pay the charges simply by not utilizing the services.244 Referring to Terna's monopoly, Respondent asserts that the payment of imbalance costs to Terna would be considered "material tributes" or "factual tributes" under Italian law and hence a fiscal measure.245

(ii) Claimants' Position

249.
Similar to Claimants' argument regarding the GSE administrative fee, Claimants argue that the imbalance costs were not intended to increase the State's revenues, but instead to place some of the costs of the electricity dispatching services on PV producers.246 Next, Claimants assert, Italy's tax authorities were not involved in "enacting, imposing, or collecting" the imbalance costs, and Italy never characterized these costs as a "tax" prior to this arbitration.247 Instead, the AEEG imposed the costs through Resolution 281 and Resolution 522, which allegedly referred to the imbalance costs as "compensations" but never as "taxes".248
250.
Next, Claimants assert that even if a purely domestic Italian law test were applied, the imbalance costs would not constitute "taxes" ("imposte"), since these relate to the specific services that Terna provides.249 Claimants argue that an official definition published on the AEEG's website characterizes imbalance costs as "network and dispatching services", rather than as "taxes".250 Furthermore, since the imbalance costs are, according to Claimants, subject to corporate income tax and VAT, this implies that they are non-fiscal in nature and would not be subject to Italian tax court jurisdiction.251 Finally, just as Claimants argued regarding administrative fees, double-taxation treaties include a definition of the "imposte" covered by those treaties. Claimants assert they "are not aware" of any such treaty that includes imbalance costs (or a similar fee) in that definition.252

(iii) Tribunal Analysis

251.
Having considered the Parties' submissions and arguments, the Tribunal is not persuaded that imbalance costs payable by PV producers pursuant to AEEG Resolution 281 and AEEG Resolution 522 constitute a Taxation Measure under ECT Article 21. The Tribunal thus affirms its jurisdiction to decide the claims asserted by Claimants.
252.
In reaching this conclusion, the Tribunal notes that the imbalance costs relate to electricity dispatching services, an identified service, and thus are not allocated to the State's general revenue. Further, Respondent did not deny Claimants' assertion that corporate income taxes and VAT were paid on amounts received from PV producers, that the AEEG did not categorize imbalance costs under the category of "taxes" but instead categorized them as "network and dispatching services", and that Italy has not otherwise treated imbalance costs as a tax. Taken together, these factors minimize the significance of Respondent's assertion that the mandatory nature of the charges make them similar to charges for municipal waste services, which themselves might not constitute a Taxation Measure under the ECT.

3. "Intra-EU" Jurisdictional Objections

a. Respondent's Position

253.
As summarized below, Respondent contends that Article 26 of the ECT does not apply to disputes initiated by an investor from one EU Member State against a different EU Member State. Such "intra-EU disputes", Respondent argues, were never intended to fall within the scope of Article 26, as the ECT's language and context show.253 Alternatively, Respondent argues that even if the ECT originally applied to intra-EU disputes, that was no longer true after adoption of the Lisbon Treaty.254 Further, Respondent argues that the nature of the EU legal system and, in particular, Article 344 of the TFEU preclude intra-EU disputes under the ECT.

(i) Argument based on Contracting Parties' original intention

254.
Respondent's main argument for an original intention to exclude intra-EU disputes under the ECT is based on the ECT's conflicts provision (Article 16) and on other provisions of the ECT and related documents (e.g., the 1991 European Energy Charter), which Respondent interprets as showing the establishment of a "more favourable" regime for EU Member States that is separate from that available to non-EU parties to the ECT.
255.
Respondent refers to ECT Article 16, which provides:

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.255

256.
According to Respondent, under sub-paragraph (1) of Article 16, the ECT's investment protection and investor-state dispute settlement provision will not derogate from a separate international agreement that is "more favourable" to the investor.
257.
As a next step, Respondent seeks to establish that when the ECT was concluded, there was an international agreement that was more favourable to EU investors that prevails over the ECT, and hence over Article 26.
258.
Thus, Respondent refers to Article 25 which, in pertinent part, provides:

The provisions of this Treaty shall not be so construed as to oblige a Contracting Party which is party to an Economic Integration Agreement (hereinafter referred to as "EIA") to extend, by means of most favoured nation treatment, to another Contracting Party which is not a party to that EIA, any preferential treatment applicable between the parties to that EIA as a result of their being parties thereto.256

259.
According to Respondent, Article 25 reflects the recognition that EU Member States need not extend to third states that are ECT Contracting Parties the "preferential treatment" that EU Member States accord one another. Respondent concludes that Article 25 shows that such preferential treatment between EU Member States "prevails" over the ECT, applying the "more favourable" conflict rule of Article 16.257
260.
Next, invoking the ECT's context and purpose, Respondent refers to two documents relating to the ECT - a Decision and a Declaration appended to the ECT - which refer to conditions whereby investors not party to an "Economic Integration Agreement" can obtain treatment thereunder. Decision No. 5 relating to Article 24(4)(a) and Article 25 provides:

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.258

261.
Declaration No. 5 with respect to ECT Article 25 provides:

The European Communities and their Member States recall that, in accordance with article 58 of the Treaty establishing the European Community:

(a) companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the Community shall, for the right of establishment pursuant to Part Three, Title III, Chapter 2 of the Treaty establishing the European Community, be treated in the same way as natural persons who are nationals of Member States; companies or firms which only have their registered office within the Community must, for this purpose, have an effective and continuous link with the economy of one of the Member States;

(b) "companies and firms" means companies or firms constituted under civil or commercial law, including co-operative societies, and other legal persons governed by public or private law, save for those which are non-profitmaking.

The European Communities and their Member States further recall that:

Community law provides for the possibility to extend the treatment described above to branches and agencies of companies or firms not established in one of the Member States; and that, the application of Article 25 of the Energy Charter Treaty will allow only those derogations necessary to safeguard the preferential treatment resulting from the wider process of economic integration resulting from the Treaties establishing the European Communities.259

262.
In Respondent's view, the above Decision and Declaration "cannot but confirm the intention of the Contracting Parties to cover only situations external to the EU."260 From this, the Respondent asserts that if a non-EU investor became entitled to the treatment owed among EU investors, then it would obtain the dispute resolution mechanisms available in the EU and would thereby relinquish the "double protection" afforded by ECT Article 26.261
263.
As further contextual grounds for its position, Respondent refers to the preamble to the 1991 European Energy Charter, mentioning the EU's internal energy market; ECT Article 2, stating that the ECT is established "in accordance with the objectives and principles of the Charter"; and certain EU Directives and a Commission Proposal for a Council Directive pre-dating the ECT's adoption, as allegedly demonstrating the intention of the EU and Member States to "regulate intra-EU situations exclusively within the Internal Market rules" and to establish their own dispute resolution procedure.262 In particular, Article 26 of the Commission Proposal provided, "Member States shall establish a dispute resolution procedure by which the parties can settle disputes on matters covered by this Directive."263
264.
Respondent also asserts in support of its position a general practice of the EU and its Member States, beginning from the Electrabel case, of objecting to the jurisdiction of arbitral tribunals in intra-EU disputes brought pursuant to the ECT.264

(ii) Argument based on adoption of Lisbon Treaty

265.
As an argument in the alternative, Respondent contends that the 2007 Lisbon Treaty was a legitimate inter se agreement among the EU Member States that modified their rights and obligations and removed intra-EU disputes from the scope of ECT Article 26.265
266.
To establish the legitimacy of the alleged inter se agreement modifying the ECT, Respondent contends that the Lisbon Treaty is a "successive treat[y] relating to the same subject-matter" as the ECT, falling within Article 30 of the Vienna Convention on the Law of Treaties ("VCLT"), and that this inter se modification complies with VCLT Article 41.266
267.
Respondent asserts that the ECT and Lisbon Treaty relate to the same subject matter because they "factually cover the same situation of an investor entering a foreign market in the hope of not being unduly discriminated or frustrated in its investment, as well as being duly protected by fair judicial or quasi-judicial mechanisms against misuse of power."267 Next, Respondent provides two alternative interpretations of VCLT Article 30, both of which allegedly result in EU law prevailing over provisions of the ECT.
268.
First, Respondent refers to VCLT Article 30(2), providing, "[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."268 Respondent asserts that ECT Article 16 falls directly within VCLT Article 30(2), as Article 16 "specifies that [the ECT] is subject to" a treaty "more favourable" than it with regard to provisions under ECT Parts III and V. The Lisbon Treaty, Respondent argues, provides "a more developed and articulated legal system" whose "protection of EU nationals against the acts of a Member State... cannot even be compared to" the ECT's level of protection.269 Further, according to Respondent, EU law protects "legitimate expectations" and is "much more advanced" than the ECT with respect to investment law.270 Therefore, Respondent argues, the ECT's investor-state arbitration provisions are prevailed over by dispute resolution systems available under EU law.
269.
Second, alternatively, Respondent asserts that the application of VCLT Article 30(4) produces the same result. As Respondent argues, Article 30(4) refers to situations where "the parties to the later treaty do not include all the parties to the earlier one." This would apply to the ECT and Lisbon Treaty because, Respondent argues, the parties to the Lisbon Treaty do not include all of the ECT parties (namely, the non-EU parties). Article 30(4)(a) then refers back to Article 30(3), so that, with regard to EU Member States, "the earlier treaty [namely, the ECT] applies only to the extent that its provisions are compatible with those of the later treaty [namely, the Lisbon Treaty]."271
270.
In connection with lack of compatibility between the ECT and the Lisbon Treaty, Respondent asserts that, upon the Lisbon Treaty's adoption, the previously shared competence among the EU and its Member States with respect to foreign direct investment ("FDI") was modified, allocating to the EU exclusive competence to conclude agreements with third parties on FDI issues.272
271.
Finally, VCLT Article 30(5) states that it is "without prejudice to article 41", which describes conditions for inter se modification of multilateral treaties. Respondent argues that the Lisbon treaty was a "perfectly legitimate" modification of the ECT as between EU Member States,273 which complied with sub-paragraph (b) of VCLT Article 41(1), providing in relevant part,

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

[...]

(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.

272.
With respect to sub-paragraph (b)(i), Respondent argues that the Lisbon Treaty did not affect non-EU Contracting Parties, which retained their rights under ECT Article 26.274 As for sub-paragraph (b)(ii), Respondent asserts that the modifications did not relate to an ECT provision "derogation from which is incompatible with the effective execution of the object and purpose" of the ECT as a whole, because non-EU Contracting Parties retained their rights under Article 26.275 Respondent asserts, "[o]utside the Union, the ECT is fully applicable, and investors of non-EU Contracting Parties have no obstacle to claim the application of the ECT through article 26 ECT."276

(iii) Respondent's further intra-EU dispute objections

273.
In further support of its intra-EU jurisdiction objection, Respondent also makes the following comments.
274.
First, seeking to buttress its argument that EU law provides a "more favourable" regime than the ECT, Respondent asserts that EU law protects "the whole investment life cycle" for EU investors, based on laws regarding the freedom of establishment and free movement of capital.277 In this connection, Respondent mentions that EU investors may take legal recourse against Member States in the courts and obtain preliminary rulings from the ECJ under Article 267 TFEU, thus ensuring the consistent application of EU law.278 According to Respondent, litigation in the EU courts provides "access to justice" and "predictability and rule of law".279
275.
Next, Respondent asserts that application of the ECT to intra-EU dispute "supports discrimination", stating as follows:

It is undeniable that giving only to some EU investors the right to have recourse to an arbitration mechanism against an EU Member State as an additional opportunity to recourse to national courts would seriously jeopardize such principle. However, if we apply international agreements like the ECT also to intra-EU disputes we do support discrimination.280

276.
Furthermore, anticipating arguments made more thoroughly by the European Commission in its Amicus Curiae submission, Respondent briefly argues that TFEU Article 344 prohibits Member States from submitting a dispute concerning interpretation or application of the EU treaties to any dispute settlement method not provided for in those treaties.281 Respondent considers that an arbitral tribunal is not a "court or tribunal of a Member State" under TFEU Article 267 and thus cannot refer questions to the ECJ.282 Since, in Respondent's view, the ECT is part of EU law, it is inconsistent with Article 344 for an EU investor to seek relief from an arbitral tribunal, but an EU investor may instead petition an Italian court for possible relief under the ECT.283
277.
Finally, Respondent, seeking to rebut Claimants' contention that "unanimous case law confirms the ECT's application to intra-EU disputes", argues that the arbitral awards cited by Claimants are insufficient to prove Claimants' contention, considering that other cases involving similar issues are still pending and none of the cases decided thus far has addressed all of the same legal issues involved in this arbitration.284

b. The European Commission's Amicus Curiae Brief

278.
The EC's argument, in outline, is that the ECT created no obligations among EU Member States. Alternatively, if the ECT did create certain obligations among them, those did not include any investment protection or investor-state dispute settlement obligations contained in ECT Part III and Article 26. Finally, if ECT Article 26 were applicable between EU investors and EU Member States, this would conflict with the Treaty on the Functioning of the European Union (TFEU), requiring resolution in the TFEU's favor by means of "harmonious interpretation" or applicable rules on conflict of laws.285

(i) Arguments against intra-EU obligations under the ECT

279.
The EC's first set of arguments contend that the ECT's text, in its ordinary meaning pursuant to VCLT Article 31, implies that EU Member States never offered to arbitrate with EU investors.286 The EC asserts that the ECT's definitions, voting provision, and a declaration of the EU pursuant to ECT Article 26(3)(b)(ii) (its "fork-in-the-road" declaration) demonstrate an understanding by the Contracting Parties that the EU Member States had transferred certain "competences" to the EU, pursuant to treaties establishing the EU.287 From these texts, the EC concludes that EU investors are barred from arbitrating against Member States under the ECT.
280.
The EC's review of definitions begins with the term "Regional Economic Integration Organization" ("REIO"), defined at ECT Article 1(3) as an organization to which states have "transferred competence over certain matters a number of which are governed by [the ECT]", and used in other definitions (namely, "Contracting Party" and "Area").288 The term "Contracting Party", defined at ECT Article 1(2), may refer to either a state or an REIO for which the ECT is in force. Pursuant to ECT Article 1(10), "Area" may refer to the territory of a state that is a Contracting Party, or to an REIO, whose "Area" comprises the "Areas of the member states of such Organisation,..." Noting that the definition of "Area" refers to "provisions contained in the agreement establishing that Organization", the EC concludes that the ECT recognizes that relationships among the EU Member States parties to the ECT are governed by EU treaties.289 The EC asserts that, according to its interpretation of "Area", an EU investor's investments in Italy would not be an "investment in the area of another Contracting Party, but in the area of the same Contracting Party", because all EU investors are located in the same "Area".290
281.
Next, the EC observes that ECT Article 36(7) provides that the REIO, when it votes, has the number of votes equal to the number of member states that are Contracting Parties, but that the REIO and Member States will not vote together on the same matters. The EC suggests that this, together with the definition of REIO, means that the EU and Member States may each vote on matters falling within their respective competences.291
282.
Additionally, the statement from the EU submitted pursuant to ECT Article 26(3)(b)(ii) provides that the Communities and Member States will, when necessary, determine which of them is the respondent in "arbitration proceedings initiated by an Investor of another Contracting Party."292 The EC asserts that the words "another" here implies that no arbitration could be initiated against the EU or the Member States by an EU investor.293
283.
The EC's second line of reasoning invokes the ECT's context, object, and purpose to support its contention that the ECT did not create inter se obligations between the Member States, asserting that the EU had a central role in negotiating the ECT, and that the Charter of Paris and the European Energy Charter, mentioned in the preamble to the ECT, "refer to the special role and status of the Union".294 The EC suggests that, when the ECT was negotiated, the EU and Member States "acted throughout the negotiations like one single block and with one voice (that of the Commission)."295 The EC cites scholarly writing to argue that this "single block" approach is similar to how the EU and Member States negotiated the WTO agreement, and reflects "the objective of the Community negotiators to create rights and obligations only between the Community and its Member States on the one hand and one or more third states on the other."296
284.
Further, the EC notes that, as a backdrop to the ECT's adoption, the 1990 summit leading to the Charter of Paris for a New Europe and the 1991 European Energy Charter, mentioned in the ECT's preamble, expressed a policy of unity and the goal of completing the EU's internal energy market.297 The EC takes the position that the EU's objective in concluding the ECT was to "create an international framework for cooperation in the energy sector between the European Communities, on the one hand, and Russia, the CIS and the countries of Central and Eastern Europe, on the other hand" and not to "influence [the EU's] internal energy policy."298
285.
From the above context, object, and purpose, the EC concludes that the ECT's Contracting Parties "understood... that - although in theory a possibility - the EU Member States did not intend to create inter se obligations between them."299
286.
As an additional ground for denying the existence of intra-EU obligations under the ECT, the EC contends that a "disconnection clause" is not required in order to exclude obligations among EU Member States that are parties to a multilateral treaty.300 According to the EC, arbitral tribunals that have confirmed jurisdiction over intra-EU ECT claims in light of the absence of a disconnection clause have relied upon Professor Christian Tietje's views, which the EC contends are not supported by other scholars or by treaty practice.301 The EC contends that, in the context of multilateral treaties to which the EU and Member States are parties, a disconnection clause is only required where the application of EU law instead of the multilateral treaty would be inconsistent with Article 41(1)(b) of the VCLT.302 The EC concludes that a disconnection clause is not required in the ECT to comply with Article 41(1)(b), and also asserts that disconnection clauses have generally been used in international treaties where the EU could not become a contracting party.303

(ii) Argument against intra-EU application of ECT Parts III and V

287.
In the alternative, the EC argues that even if the Member States had entered into certain inter se obligations under the ECT, those obligations would only cover areas for which they retained external competence, and would exclude the ECT's investment protection and investor-state dispute settlement provisions.304
288.
First, the EC advances a principle of international law, expressed as "liability follows competence", whereby international obligations and liability among an international organization and its member states are allocated according to special rules of the organization itself and not necessarily shared between the organization and its member states.305 This principle, asserts the EC, has been recognized in the International Law Commission's 2011 Draft Articles on the Responsibility of International Organizations ("DARIO"), WTO panel reports, and a decision of the International Tribunal for the Law of the Sea.306 The EC asserts that the principle applies to the EU and the Member States.307
289.
Next, the EC asserts that the EU possesses "exclusive external competence to conclude agreements with one or more third countries or international organisations" regarding foreign direct investment and areas affecting or altering the scope of common internal EU rules.308 Further, the EC asserts that a comprehensive body of EU legislation covers the internal energy market, ensuring freedom of establishment and free movement of capital, backed by a complete system of national courts and judicial remedies.309 Thus, according to the EC, for Member States to conclude an investment protection treaty creating obligations among themselves "might affect common rules or alter their scope" and thus interfere with the EU's exclusive competence under TFEU Article 3(2).310 The Member States' "shared competence" with the EU under TFEU Article 2(2) only applies within a Member State's territory, according to the EC.311 Therefore, the EC concludes, in light of the ECJ's decision in Pringle, Member States are prohibited from concluding an agreement that provides for substantive investor protections or investor-state arbitration.312
290.
The EC concludes that since ECT Part III and Article 26 are within the EU's external competence, the EU - but not the Member States - is bound by those provisions under international law.313

(iii) Argument that EU law prevails over conflicting ECT provisions

291.
The EC argues that both the substantive and investor-state arbitration provisions of the ECT would, if applied among EU Member States, conflict with EU law. According to the EC, the EU reaffirmed its position that TFEU Articles 267 and 344 conflict with such an interpretation when it signed the International Energy Charter in 2015, attaching a Declaration by the EU.314 The EU's Declaration provides:

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.315

292.
Regarding investment protection provisions, the EC asserts that there is "a risk of conflict on substance" between the ECT and EU law. This is because, according to the EC, if the Member States had entered into obligations inter se when they concluded the ECT, this would conflict with the EU's exclusive competence under TFEU Article 3(2).316
294.
The EC construes "applicable rules and principles of international law" in ECT Article 26(6) as incorporating EU law, but asserts that an arbitral tribunal does not constitute "a court or tribunal of a Member State" under TFEU Article 267 and thus may not refer issues to the ECJ for a preliminary ruling. Additionally, Article 344 TFEU encompasses, according to the EC, not only disputes between Member States and EU institutions, but also investor-state disputes.317 Therefore, the EC concludes, an arbitral tribunal constituted under the ECT to decide an intra-EU dispute would issue final and binding decisions on matters of EU law without having the ability to refer questions of EU law to the ECJ for a preliminary ruling. The EC asserts that this would,

violate Articles 267 and 344 TFEU, because that new dispute settlement system is outside the complete system created by those articles, and, in particular, does not have the possibility or the obligation to refer preliminary questions to the ECJ pursuant to Article 267 TFEU.318

295.
According to the EC, the possibility of court annulment proceedings at the arbitral seat is insufficient to avoid the alleged conflict between the ECT and the TFEU, because the reliance upon an annulment mechanism "transposes case-law from the field of commercial arbitration to the field of investment arbitration".319 The EC contends that commercial and investment arbitration differ in three ways: first, states are constrained when legislating in the public international law sphere and "may not limit the scope of application of Article 267 TFEU", whereas private parties enjoy contractual autonomy;320 second, investment arbitration concerns the behavior of a State acting as a public authority, not contractual rights;321 and third, investment treaty tribunals may determine that the seat of the arbitration is outside the EU, thus circumventing the supervisory authority of a juge d'appui to refer questions to the ECJ.322
296.
In light of the alleged conflict between the ECT and the EU treaties described above, the EC asserts that the Tribunal is required to resolve the conflict by applying either TFEU Article 351 or both Article 41(1)(b) and Article 30(4)(a) of the VCLT.323 Under either alternative, according to the EC, EU law prevails.
297.
According to the EC, TFEU Article 351 renders ECT Part III and Article 26 inapplicable as among EU Member States. TFEU Article 351 provides:

The rights and obligation arising from agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession, between one or more Member States on the one hand, and one or more third countries on the other, shall not be affected by the provisions of this Treaty.

To the extent that such agreements are not compatible with this Treaty, the Member State or States concerned shall take all appropriate steps to eliminate the incompatibilities established. Member States shall, where necessary, assist each other to this end and shall, where appropriate, adopt a common attitude.

In applying the agreements referred to in the first paragraph, Member States shall take into account the fact that the advantages accorded under this Treaty by each Member State form an integral part of the establishment of the Community and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other Member States.324

298.
According to the EC, since TFEU Article 351, first paragraph, expresses a "pacta sunt servanda guarantee" that prior agreements between Member States and third states shall not be affected by the TFEU's provisions but does not express such a guarantee with respect to prior agreements among Member States themselves, this implies by "a contrario reasoning" that prior agreements among Member States are superseded by the TFEU in case of any inconsistency.325 The EC cites ECJ case-law in support of this position with respect to certain multilateral treaties other than the ECT.326 The EC concludes that if TFEU Article is applied as a conflict rule, Part III and Article 26 of the ECT would become inapplicable between EU Member States.327
299.
As an alternative argument, the EC contends that if VCLT Articles 41(1)(b) and 30(4)(a) were applied to resolve a conflict between the ECT and EU law, Part III and Article 26 of the ECT would also be superseded.328 The EC (similar to Respondent) asserts that the conditions of VCLT Article 41(1)(b) would be met even if ECT Part III and Article 26 were rendered inapplicable as between EU Member States, as this would not affect the enjoyment of those provisions by nonEU Member States. Furthermore, asserts the EC, the "effective execution of the object and purpose of the [ECT] as a whole" would not be affected, since non-EU Member States would still be able to bring investor-state arbitrations.329
300.

VCLT Article 30 governs the application of successive treaties relating to the same subject matter. According to the EC, VCLT Article 30(4)(a) applies to the ECT (as an earlier treaty) and the EU Treaties of Amsterdam, Nice and Lisbon (the later treaties), and since the parties to the latter treaties do not include all the parties to the earlier one, then, "as between States Parties to both treaties the same rule applies as in paragraph 3."330 Therefore, VCLT Article 30(3) is to be applied as between the EU Member States, with the result that "the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty."331 Thus, asserts the EC, the ECT applies only where its provisions are compatible with the Treaties of Amsterdam, Nice and Lisbon.332 Applying the EC's earlier reasoning about inconsistency between EU law and intra-EU investor-state arbitration under the ECT, the EC concludes that Part III and Article 26 of the ECT are not applicable.

c. Claimants' Position

(i) Arguments in response to Respondent's objections

301.
Claimants counter the Respondent's "intra-EU" jurisdictional objections with arguments based on (i) the ECT's explicit terms, (ii) a line of consistent arbitral decisions, and (iii) the rules of treaty interpretation.333
302.
Regarding the ECT's explicit terms, Claimants assert that EU investors are authorized to bring claims in international arbitration against EU Contracting Parties, as Article 26 provides for dispute settlement "between a Contracting Party and an Investor of another Contracting Party relating to an Investment of the latter in an Area of the former."334 Claimants argue that this is clear from the lack of any exception in the ECT for certain Contracting Parties, noting that Italy, Denmark and Luxembourg are all Contracting Parties, and none made any exception to the applicability of Article 26 upon ratification. Claimants also note that ECT Article 46 precludes reservations, providing, "[n]o reservations may be made to this Treaty."335
303.
Claimants also note the absence of any express or implied "disconnection clause" in the ECT, arguing that the EU and the Member States, during negotiations for the ECT in which the EC itself played a key role, could have sought to include a disconnection clause but chose not to do so.336 Claimants assert that disconnection clauses have been included in other treaties to make certain provisions inapplicable as between EU Member States.337 Claimants also cite scholarly writing to reinforce its view that no form of disconnection clause is present in the ECT.338
304.
Claimants next challenge Respondent's application of ECT Article 16 which, according to Respondent, implies that the EU treaties prevail over allegedly incompatible provisions of the ECT because the EU treaties are "more favourable" to EU investors. Claimants dispute the latter assumption, arguing that, since EU law does not provide that EU investors may refer disputes against Member States to international arbitration whereas the ECT does so provide, the ECT contains more favourable provisions.339 According to Claimants, "Article 16 cannot be used to deny a benefit that the ECT affords to investors."340
305.
In response to Respondent's construal of ECT Article 25 as recognizing a preferential treatment among EU Member States that need not be extended to nonEU investors by virtue of most favoured nation treatment and "prevails" over the ECT, Claimants counter that Article 25 is silent about the standards of treatment and dispute resolution mechanisms available in an intra-EU context.341
306.
Further, regarding the Declaration pertaining to Article 25 whereby Member States may extend favorable treatment under EU law to "branches and agencies of companies or firms not established in one of the Member States", Claimants assert that the Declaration, like Article 25 itself, lacks relevance to whether the ECT is applicable to intra-EU disputes.342
307.
Claimants conclude their rebuttal to Respondent's textual and contextual arguments by referring to the documents and instruments executed temporally near the ECT's conclusion.
308.
According to Claimants, Decision No. 5 pertaining to Article 24(4)(a) and 25, appended to the ECT, merely states that EU Contracting Parties must afford nonEU investments with business activities within the EU the same treatment as investments of EU investors.343 Claimant concludes that Decision No. 5 does not prohibit EU investors in any way from having recourse to arbitration against an EU Member State.344
309.
Regarding the European Energy Charter and ECT Article 2, both raised by Respondent, Claimants argue that these "do not create a distinction between the European internal market and the adoption of the ECT" and cannot be understood to establish a "regime" different from the ECT. Additionally, Claimants argue that the dispute resolution mechanism mentioned in the Commission Proposal for a Council Directive, adopted by Directive 96/92/EC, was not intended to resolve intra-EU disputes regarding foreign investment, but instead was aimed at disputes "relating to the contracts, negotiations, and refusal of access or refusal to purchase."345
310.

As Claimants' second line of argument, Claimants refer to several ECT awards that have expressly denied any exception for intra-EU disputes to arbitration under Article 26, denied the existence of any disconnection clause in the ECT, and rejected the notion that the TFEU and the ECT are incompatible.346 According to Claimants, two of those awards have not been made public.347 Further, Claimants refer to several awards under bilateral investment treaties (BITs) that have also rejected intra-EU objections of the sort raised by Respondent and the EC.348

311.
As their third line of argument vis-á-vis Respondent's intra-EU jurisdictional objection, Claimants rebut Respondent's secondary argument, that the ECT became inapplicable to intra-EU disputes upon the Lisbon Treaty's adoption. Claimants argue that, contrary to Respondent's view, Article 30 of the Vienna Convention is not applicable, and even if it were, the supposed modification of the ECT would violate Article 41 of the VCLT. Additionally, Claimants interpret ECT Article 16 so that the Lisbon Treaty's adoption does not render the ECT inapplicable in intra-EU disputes.
312.

Claimants argue that the ECT and the Lisbon Treaty cannot be validly construed under Article 30 of the VCLT so as to limit certain ECT provisions. First, Claimants contend that Article 30, which determines "the rights and obligations of States parties to successive treaties relating to the same subjectmatter", does not apply to the ECT and the Lisbon Treaty, since the two treaties address different subject matters.349 Claimants base their contention on scholarly writing and on ECT and BIT awards in an intra-EU context, asserting that the right to commence international arbitration under a treaty is not the same as the right to bring litigation before a national court or the European Court of Justice.350

313.

Next, according to Claimants, even if the ECT and Lisbon Treaty did relate to the "same subject-matter", their provisions are not incompatible.351 Claimants quote extensively from BIT and ECT awards denying that the arbitration of intra-EU disputes is inconsistent with EU law. Claimants cite Electrabel for the proposition that an arbitral tribunal's application of EU law does not infringe the ECJ's interpretative "monopoly" over EU law.352 Claimants also view the substantive and procedural rights available under BITs and the ECT as merely exceeding - but not conflicting with - the rights available under EU and national law.353 Additionally, Claimants assert that arbitration does not conflict with the principle of mutual trust between EU countries.354 Thus, Article 30(3) of the Vienna Convention, providing that "the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty", could not apply to the relationship between the ECT and the later-concluded Lisbon Treaty.355

314.
Claimants also argue that Article 41 of the Vienna Convention, setting conditions for a valid inter se agreement to modify a multilateral treaty by two or more parties thereto, would preclude any "de-activation" of the ECT as between EU Member States through the Lisbon Treaty.356 Claimants assert that an interpretation of the Lisbon Treaty that eliminated EU investors' right of recourse to international arbitration "would be incompatible with the object and purpose of the ECT, which is to promote foreign energy investments by ensuring investors' rights to arbitration."357
315.
In response to Respondent's argument that the Lisbon Treaty prevails over the ECT in accordance with ECT Article 16, Claimants argue that Respondent have failed specifically to demonstrate that the Lisbon Treaty "offers more favorable provisions than the right of investor to access arbitration (Part V of the ECT) and the substantive protections afforded investments in Part III of the ECT."358 Claimants assert that the right to international arbitration is "fundamental to the ECT", citing arbitral case law and scholarly writing, and remark that Respondent has not referred to any provision of the Lisbon Treaty that is more favorable to investors than ECT Article 26.359

(ii) Observations on the EC's Amicus Curiae brief

316.
According to Claimants, the EC's contention that the ECT has not created obligations between EU Member States is contradicted by the ECT's explicit text and travaux préparatoires.360 Claimants refer, in the first instance, to ECT Article 26, observing that it contains no restriction on investors from certain Contracting Parties pursuing arbitration against a Contracting Party.361
317.
Next, Claimants contest the EC's assertion that a "disconnection clause" can be inferred from the ECT's provisions and related instruments, including the definitions of "REIO" and "Area" (ECT Articles 1(3) and 1(10)), a voting provision for REIOs (ECT Article 36(7)), and a fork-in-the-road declaration by the EU pursuant to ECT Article 26(3)(b)(ii).362 Claimants state that although the ECT's defined terms acknowledge that certain Contracting Parties belong to regional organizations, a disconnection clause cannot thereby be inferred.363
318.
Regarding Article 36(7), which provides that an REIO "shall not exercise its right to vote if its member states exercise theirs, and vice versa", Claimants argue that this should be interpreted as preserving EU Member States' autonomy in exercising rights as ECT Contracting Parties, not as placing them in a subordinate position vis-á-vis the EU.364 In this vein, ECT Article 44(3) explains that ratification of the ECT by the EU as an REIO will not be counted in addition to those deposited by the REIO's member states.365
319.
Regarding the EU's fork-in-the-road declaration under ECT Article 26(3)(b)(ii), relating to the determination of the proper respondent, Claimants deny that it addresses "who can and cannot bring arbitration claims."366 The relevant paragraph provides:

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 cases, upon request of the investor, the Communities and the Member States concerned will make such determination within a period of 30 days. (This is without prejudice to the right of the investor to initiate proceedings against both the Communities and their Member States).367

320.
Claimants construe the words "another Contracting Party" in the first sentence as having the same meaning as it has in ECT Article 26(1), which may refer to either EU Member States or non-EU Member States that are ECT Contracting Parties.368
321.
Claimants then turn to the ECT's historical context and original policy objectives as described by the EC in light of the European Energy Charter. Claimants argue that the EC lacks support for its assertion that it was "never intended that the ECT should influence [the EU's] internal energy policy".369 Claimants assert that the part of Johann Basedow's doctoral thesis that the EC cited does not support the EC's contention.370 Further, Claimants argue that Dr. Basedow's doctoral thesis shows that the EU's stance during ECT negotiations was opposed to carve-outs for certain signatories that the EC seeks to establish.371
322.
As additional context, Claimants cast doubt upon the EC's contention, by way of analogy to the WTO treaties, that EU Member States have a practice of not undertaking inter se obligations and always negotiate multilateral treaties with the EU as "one single block".372 Claimants pose as a counterexample a WTO dispute brought by Denmark against the EU.373
323.
Further relating to the context and interpretation of the ECT, Claimants allude to the EC's Declaration dated 20 May 2015 on behalf of the EU in relation to the International Energy Charter, arguing that the EC has effectively "admitted" that "something more" is needed to exclude intra-EU disputes from the ECT's dispute settlement mechanisms.374
324.
Claimants also assert that arbitral awards and scholarly writing, most of which was referenced in their Reply Memorial, support their position. Claimants refer, additionally, to ECT and BIT awards post-dating their Reply Memorial that have similarly rejected intra-EU jurisdictional objections.375 Claimants also seek to bolster support for the Charanne and RREEF Infrastructure awards, which Claimants contend were based on the ECT's clear terms and on Christian Tietje's article, which Claimants assert is consistent with other scholarly writings cited in the Reply Memorial.376
325.
Claimants next turn to the EC's contentions that the Member States lacked competence to enter into the ECT's investment protection and dispute resolution provisions, and therefore Respondent lacked international capacity to consent to, and be accountable for, such obligations.
326.
First, Claimants deny the EC's assertion that the EU had or acquired exclusive competence over investment protection and dispute resolution mechanisms.377 According to Claimants, the EU gained exclusive competence over "foreign direct investment", one facet of the EU's "common commercial policy", when the Lisbon Treaty came into force in 2009, but lacked exclusive competence in 1998 when the ECT came into force.378 Second, the ECJ's 16 May 2017 opinion allegedly confirms that the EU and Member States possess shared competence over non-direct investments and investor-state dispute settlement.379 Claimants allege that "non-direct investments" include "a number of categories of covered Investments as defined in Article 1(6) of the ECT".380 Therefore, Claimants argue, even after the TFEU's adoption, Member States still retain competence to conclude treaties implicating inter se obligations.381
327.
Claimants also deny the relevance of TFEU Article 3(2), which allegedly affirms the EU's exclusive competence over international agreements that "may affect common [EU] rules or alter their scope" and dispute the significance of the Pringle decision.382 First, the ECT came into force in 1998, before the adoption of TFEU Article 3(2). Second, the EU, during ECT negotiations, was within its competence and also well placed to prevent Member States from acting outside their competence, e.g., by including a disconnection clause. Third, the Pringle decision found no incompatibility with EU law where a Member State concluded a treaty that did not jeopardize EU rules or frustrate the EU's exercise of its competences.383 Claimants assert that the ECT does not impede EU objectives or threaten the ECJ's authority on EU law, but instead "establishes an additional layer or protection for investors".384
328.
In connection with the above arguments regarding competences, Claimants contend that Member States' capacity to be bound by a treaty cannot depend upon the "EU's internal distribution of competences", nor may a state "invoke the provisions of its internal law as justification for its failure to perform a treaty."385
329.
Claimants next seek to counter the EC's argument that, since intra-EU obligations under the ECT would conflict with TFEU Articles 267 and 344, the Tribunal should find that EU law supersedes the inconsistent ECT provisions pursuant to VCLT Articles 30 and 41 or TFEU Article 351. Claimants' arguments here parallel their responses to Italy's intra-EU objections.
330.
Claimants first address the premise of VCLT Article 30, that the ECT's investor-state arbitration provisions are inconsistent with the TFEU. Claimants assert that TFEU Article 267 is inapplicable, as there is no issue involving interpretation of EU law.386 Furthermore, according to Claimants, even if there were an issue of EU law, then the Svea Court of Appeal, the Swedish court competent to hear a motion to set aside this Award, would have the ability to request a preliminary ruling from the ECJ, thus allegedly satisfying Article 267.387 Claimants contest the EC's assertion that investment arbitrations and commercial arbitrations are different in any relevant sense and note that the EC incorrectly asserted that the present case is an ICSID case.388
331.

As for TFEU Article 344, preventing Member States from "submit[ting] a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein", Claimants assert that it is inapplicable here, as it only encompasses disputes involving Member States or EU institutions, not investor-state disputes.389 Claimants also assert that the phrase "of the Treaties" refers to the TFEU and the Treaty on the European Union (TEU), which does not include the ECT.390 According to Claimants, there is no risk of a conflict with Article 344 in this case, because there is no need to interpret EU law at all, and the possibility of the Tribunal taking EU law into account when interpreting non-EU law would not conflict with Article 344.391 Claimants cite to the Electrabel award for the view that the ECJ recognizes that its "exclusive jurisdiction does not prevent numerous other courts and arbitral tribunals from applying EU law", concluding that even if the Tribunal takes EU law into account, there is no conflict with TFEU Article 344.392

332.
Claimants argue that even if VCLT Article 30 were applicable, an inter se modification of the ECT that excluded investor-state arbitration would violate VCLT Article 41 because it would be incompatible with the ECT's "object and purpose., which is to promote foreign energy investments in part by ensuring investors' rights to arbitration."393
333.
In response to the EC's contention that TFEU Article 351, by omitting to refer to agreements between Member States, implies that such agreements could be superseded by EU law, Claimants argue that the ECT is not within the temporal scope of Article 351, which refers to agreements "concluded before 1 January 1958 or, for acceding States, before the date of their accession."394 Further, Claimants note that Article 351 refers to agreements "between one or more Member States on the one hand, and one or more third countries on the other", whereas the ECT is an agreement between all Member States as well as the EU, and thus may not fall within the scope of Article 351.395
334.
Finally, just as in their response to Italy's application of ECT Article 16, Claimants assert that Article 16 requires that parts III and V of the ECT prevail over any conflicting treaty that offers less favorable rights. Claimants assert that the ability to pursue arbitration in a neutral forum is more favorable to investors than pursuing litigation in the Italian domestic courts.396

d. Tribunal Analysis

335.
As a preliminary matter, the Tribunal notes the significant overlap between Respondent's submissions and the EC's Amicus brief on the Respondent's intra-EU jurisdictional objection. Their arguments are not, however, identical. Nonetheless, Respondent declined to submit observations with respect to the EC's Amicus brief, communicating by e-mail on 30 May 2017 that, "the position of the Commission largely coincide with that of Italy and consequently the Respondent feels no need to further elaborate on individual points." Accordingly, while the Tribunal has considered each of the arguments expressed by Respondent and the EC, given their extensive overlap, the Tribunal focuses on the main strands of argument.
336.
As explained below, the Tribunal finds the arguments for the intra-EU jurisdictional objection unpersuasive. Further, for reasons explained in Part V.B.4. of this Award, the European Court of Justice's decision in Achmea, and other legal authorities and positions expressed thereafter, do not lead to a different result.

(i) Alleged ab initio intention to exclude intra-EU disputes

337.
The Tribunal has considered Respondent's contention that the ECT was intended, ab initio, to exclude intra-EU disputes, and concludes that Respondent cannot be correct, as is clear from the ECT itself and a consistent line of arbitral jurisprudence.
338.
As is clear from the text of the ECT, there is no express provision excluding intra-EU disputes. Furthermore, the Tribunal finds that the ECT does not contain any implied "disconnection clause". Had the EU and Member States sought to exclude intra-EU disputes from the scope of the substantive and procedural protections under ECT Parts III and V, the Tribunal concludes that they would have done so by means of an express exclusion. The Tribunal is not persuaded otherwise by the textual and contextual references cited by Respondent and the EC.
339.
For example, Respondent suggests that ECT Articles 16 and 25 show an intention to preclude the application of Article 26 to intra-EU disputes.397 Respondent mentions Article 16, expressing that investors and investments will benefit from the "more favourable" provision in case of conflict between an earlier or later treaty whose terms relate to ECT Parts III or V. Respondent also notes that Italy, Denmark and Luxembourg entered into the EU treaties before the ECT, which Respondent claims address the same subject matter as the latter. Further, Respondent asserts that the EU treaties provide superior forms of investment protection and dispute resolution compared with those provided for under the ECT. Respondent refers to ECT Article 25, expressing that EU Member States need not extend the "preferential treatment" that they owe one another to third states, as suggesting that a more favorable regime applies as between EU Member States.398
340.
The Tribunal is not persuaded that the EU treaties offer EU investors a more favorable treatment with respect to either substantive protections or dispute resolution compared to the treatment accorded under ECT Parts III and V. Of particular relevance here is that investor-State arbitration is not provided for by the EU treaties. The Tribunal considers that Claimants correctly assert that "Article 16 cannot be used to deny a benefit that the ECT affords to investors."399
341.
Furthermore, although EU Member States may accord each other preferential treatment pursuant to ECT Article 25, this in itself does not demonstrate that the EU treaties provide for a dispute resolution method more favorable to investors and investments than ECT Article 26. The Tribunal therefore does not consider ECT Article 25 to be relevant to the interpretation of Article 16. Respondent does not explain how court litigation against a host state in the host state's courts could be more favourable to investors than investor-State arbitration before a neutral arbitral tribunal independent of the host state. Thus, the Tribunal concludes that an application of ECT Article 16 to the respective dispute resolution methods provided for under EU law and under ECT Article 26 would result in the latter prevailing over the former.
342.
The Tribunal also notes that arbitral jurisprudence has rejected the notion that the ECT contains an "implicit disconnection clause" that would exclude intra-EU disputes from application of ECT Article 26, holding that any exclusion for intra-EU disputes would have to be made expressly.400 As aptly put by the tribunal in RREEF Infrastructure v. Spain :

[W]hen the very essence of a treaty to which the EU is a party is at issue,... then precisely because the EU is a party to the treaty a formal warning that EU law would prevail over the treaty, such as that contained in a disconnection clause, would have been required under international law.

This follows from the basic public international law principle of pacta sunt servanda. If one or more parties to a treaty wish to exclude the application of that treaty in certain respect or circumstances, they must either make a reservation (excluded in the present case by Article 46 of the ECT) or include an unequivocal disconnection clause in the treaty itself. The attempt to construe an implicit clause into Article 26 of the ECT is untenable, given that that article already contains express exceptions to the "unconditional consent to the submission of a dispute to international arbitration or conciliation in accordance with the provisions of this Article" that had been agreed amongst the States Party.401

343.
That the lack of an express carve-out for intra-EU disputes implies the absence of such an exclusion is shown by the existence of certain specific exceptions. This was well explained by the tribunal in Eiser Infrastructure v. Spain :

Treaty law and practice provide familiar mechanisms for treaty makers wishing to limit or exclude application of particular provisions in particular situations. These were known and used in the ECT's texts, including by the predecessor to the European Union and its member countries. The treaty includes multiple limiting decisions and understandings, such as those providing that the treaty concerning Spitsbergen prevails over inconsistent provisions of the ECT in case of a conflict and limiting the scope of the treaty to "Economic Activities in the Energy Sector." In like vein, the European Communities and the Russian Federation agreed that trade in nuclear materials should be regulated by separate bilateral arrangements. Yet the EEC sought no similar clarifying provisions regarding what Respondent now contends is a major exclusion in the ECT's coverage. Respondent contends that no such express exclusion was included in the ECT because, for reasons analyzed below, it was obviously not required. The Tribunal is not persuaded.402

(ii) Alleged inter se modification of ECT by the Lisbon Treaty

344.
The Tribunal has considered Respondent's alternative contention that, even if the ECT did not originally preclude intra-EU disputes, the adoption of the Lisbon Treaty in 2007 was a legitimate inter se agreement whereby EU Member States removed intra-EU disputes from the scope of ECT Article 26. Respondent's arguments rely on Articles 30 and 41 of the VCLT. As explained below, the Tribunal is not persuaded by Respondent's arguments that the Lisbon Treaty modified the ECT as between EU Member States.
345.
Article 30 of the VCLT, titled "Application of Successive Treaties Relating to the Same Subject-Matter", provides as follows:

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.

5. Paragraph 4 is without prejudice to article 41, or to any question of the termination or suspension of the operation of a treaty under article 60 or to any question of responsibility which may arise for a State from the conclusion or application of a treaty the provisions of which are incompatible with its obligations towards another State under another treaty.

346.

As a preliminary matter, the Tribunal is not persuaded that VCLT Article 30 is applicable to the ECT and the Lisbon Treaty at all, insofar as Respondent has not demonstrated that the ECT and the Lisbon Treaty are "successive treaties relating to the same subject-matter", as VCLT Article 30(1) would require. The Tribunal's position here is consistent with that of the Electrabel tribunal in finding that the ECT and EU law do not have the same subject matter.403 Nonetheless, even if the ECT and the Lisbon Treaty were related to the same subject matter, the Tribunal could not conclude from Respondent's arguments based on VCLT Articles 30(2) and 30(4) that the Tribunal lacks jurisdiction.

347.
As regards VCLT Article 30(2), Respondent suggests that this provision encompasses ECT Article 16, as Article 16 "specifies that [the ECT] is subject to" a treaty "more favourable" than it with regard to provisions under ECT Parts III and V. Respondent, asserting that the Lisbon Treaty is more favorable to investors than the ECT, concludes that the Lisbon Treaty prevails over the ECT in those respects.404
348.
The Tribunal considers that Respondent's interpretation does not accord with the meaning of VCLT Article 30(2). ECT Article 16 does not "specify" that the ECT is subject to "an earlier or later treaty", nor does it refer to any particular treaty at all. Article 16 instead expresses a more general mechanism whereby a treaty with more favorable provisions is to apply. Thus, irrespective of whether the Lisbon Treaty provided more favorable or less favorable terms than the ECT, which is a question that could be addressed in the context of ECT Article 16 (and without reference to VCLT Article 30(2)), Article 16 is not the kind of treaty provision described by VCLT Article 30(2). Accordingly, the Tribunal rejects Respondent's argument regarding VCLT Article 30(2).
349.
With respect to VCLT Article 30(4)(a), which refers to Article 30(3), Respondent contends that "between EU Member States the ECT would only apply to the extent that its provisions are compatible with those of EU law."405 Respondent states that application of the ECT in an intra-EU context conflicts with EU law based on the Lisbon Treaty's re-allocation of external competences regarding certain matters.406
351.
Accordingly, as there is no conflict with EU law, if the Tribunal were to apply VCLT Article 30(4)(a), referring to Article 30(3), the Tribunal would conclude that the ECT applies to its full extent, not limited in any way by EU law.
352.
Accordingly, the Tribunal rejects Respondent's objections to the applicability of the ECT in an intra-EU context. Even if Article 30(4)(a) of the VCLT were applicable, it would be "without prejudice to Article 41" of the VCLT, as provided in Article 30(5) of the Treaty, requiring the Tribunal to consider whether the Lisbon Treaty's alleged modification of the ECT, as between the EU Contracting Parties, conflicts with Article 41 of the VCLT.
353.
Article 41 of the VCLT, titled "Agreements to Modify Multilateral Treaties Between Certain of the Parties Only", provides as follows:

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.

354.
Respondent and the EC both argued that "de-activating" the ECT's investment protection and dispute resolution provisions by inter se modification pursuant to the Lisbon Treaty would not violate VCLT Article 41(1)(b)(ii) because it would not "be incompatible with the effective execution of the object and purpose of the treaty as a whole."409 Although the positon of the Respondent and the EC remains somewhat unclear on this matter, they seem to rely, on the premise that non-EU investors could still invoke the ECT's investment protection and dispute resolution provisions, which is more relevant to Article 41(1)(b)(i), addressing the "enjoyment by the other parties of their rights under the treaty".410 Claimants, in turn, assert that eliminating the possibility to pursue investor-State arbitration would frustrate the ECT's "object and purpose... to promote foreign energy investments by ensuring investors' rights to arbitration."411 In this connection, the Tribunal has not been persuaded by the reasoning of the Respondent and the EC in relation to VCLT 41(1)(b)(ii). Rather, their reasoning seems more relevant to Article 41(1)(b)(i). On the other hand, the Tribunal does not find it necessary to determine whether suppression of ECT Article 26 in relation to EU investors would be "incompatible with the effective execution of the object and purpose of the treaty [i.e., the ECT] as a whole" under Article 41(1)(b)(ii), since it has already found that Article 30(4)(a) of the VCLT is not applicable in the present context.
355.
The EC raised an additional argument based on TFEU Article 351 to the effect that it suggests that prior agreements among Member States are superseded by the TFEU in case of any inconsistency.412 Claimants observed, in this connection, that Article 351 refers to "agreements concluded before 1 January 1958 or, for acceding States, before the date of their accession", and therefore that the ECT is outside the relevant temporal scope. The Tribunal agrees with Claimants, and also notes that Article 351 refers to incompatibility between the earlier agreement and the TFEU. The Tribunal, having found no inconsistency between the ECT and TFEU, concludes that TFEU Article 351 is inapplicable here.

4. The Achmea Decision and post-Achmea Matters regarding Intra-EU Objection

a. Invitation to File Observations

356.
As noted in the Procedural History (Part II of this Award), on 6 March 2018, the European Court of Justice issued its judgment in the case of Slovak Republic v. Achmea (the "Achmea Decision", as defined above).413 Shortly thereafter, the Tribunal invited the Parties to submit observations on any impact that the Achmea Decision might have on the present arbitration. The Tribunal received observations from both sides on 23 March 2018.
357.
Following the Parties' submissions on the Achmea Decision, the Tribunal accepted the filing of observations by both sides regarding three subsequent items of possible relevance to the Achmea Decision and other aspects of this dispute. As detailed in the Procedural History, both sides simultaneously submitted observations:

• on 6 July 2018, regarding the 16 May 2018 award in Masdar Solar & Wind Cooperatief v. Spain ;414

• on 20 July 2018, regarding the 15 June 2018 award in Antin Infrastructure Services Luxembourg et al. v. Spain and the 2 May 2018 award in Antaris Solar et al. v. Czech Republic ;415 and

• on 8 August 2018, regarding the EC's 19 July 2018 Communication on protection of intra-EU investment.416

358.
The below summaries and analysis of submissions on the Achmea Decision and post- Achmea developments focus on issues relating to the intra-EU jurisdictional objection. However, the Parties' submissions on post- Achmea developments extend beyond those issues, discussing the merits of the substantive claims under ECT Article 10(1) and the Taxation Measures exclusion under ECT Article 21. The Parties' submissions on the impact of the post- Achmea developments on these latter issues are not addressed in this section.

b. Claimants' Observations on Achmea Decision

359.
Claimants submit that the Achmea Decision lacks any relevance to the present arbitration for four main reasons.
360.
First, Claimants assert that the Tribunal's jurisdiction is exclusively grounded in ECT Article 26, whose express requirements are met in the present case, and thus the Tribunal must exercise its jurisdiction and proceed to render an award on the merits.417 Claimants cite recent ECT arbitral awards affirming that approach when faced with similar intra-EU objections.418 According to Claimants, the reference in ECT Article 26(6) to "this Treaty and applicable rules and principles of international law" does not support an interpretation whereby EU law enters into the Tribunal's jurisdictional analysis through the "back door", given the ECT's clear and explicit jurisdictional requirements. Claimants assert that such an interpretation has been flatly rejected by other tribunals and is unsupported by principles of treaty interpretation under the VCLT.419 One reason for not finding that Article 26(6) incorporates EU law is, according to Claimants, that the ECT is a multilateral instrument to which many non-EU Member States are Contracting Parties.420
361.
Second, according to Claimants, the Achmea Decision does nothing to upset recent arbitral jurisprudence, which has rejected any interpretation of the ECT expressly or impliedly excluding intra-EU disputes from the ECT's scope,421 and has found, in parallel with scholarly writings, that the ECT and EU law neither conflict with one another nor share the same subject matter.422 Further supporting an absence of any conflict, Claimants invoke Advocate General Wathelet's opinion in the Achmea case, stating that the EC could not "offer the slightest explanation of how the prohibition of illegal expropriation [under the Netherlands-Slovakia BIT] is incompatible with the EU and FEU Treaties."423 In the present arbitration, Claimants assert, they have not submitted any claims based on EU law, but only claims based on provisions of the ECT and under public international law.424
362.
Further, Claimants argue, even if the ECT and EU law were to conflict, which Claimants deny, then ECT Article 16 would prevail over conflicting provisions of EU law, including the ECJ's interpretation of Articles 267 and 344 of the TFEU in the Achmea Decision.425 Under Article 16(2), Claimants assert, no provision of any prior or subsequent agreement involving the Contracting Parties may derogate from any provision of the ECT that is more favourable to the Investor or Investment, including international arbitration under ECT Article 26.426 Claimants submit that the ECJ's prior jurisprudence considers a right to recourse to international arbitration to be "the most essential element of the BITs" and "an indispensable guarantee that encourages and protects investments."427
363.
Third, Claimants argue that even if the Achmea Decision is relevant to disputes under certain BITs, there are two different aspects that distinguish it from the present arbitration. First, the Achmea Decision concerned an arbitration provision of an intra-EU BIT to which the EU is not a party. According to Claimants, the ECJ expressly limited the application of the Achmea Decision to cases involving "a provision [for investor-state arbitration] in an international agreement concluded between Member States..."428 and cases involving "an agreement which was concluded not by the EU but by the Member States."429 Similarly, the ECJ held in another case that an investor-state dispute under the EU-Singapore Free Trade Agreement could be resolved through international arbitration, as long as both the EU and the Member States approved of this option.430 Thus, Claimants assert, the EU's participation as a Contracting Party to the ECT is one key difference between this case and that addressed by the Achmea Decision.