[REDACTED]

LUTHER RECHTSANWALTSGESELLSCHAFT MBH

Gansemarkt 45

20354 Hamburg

Germany

Tel.: +49 40 18067 12766

Email: [REDACTED] @luther-lawfirm.com

[REDACTED]@ luther-lawfi rm.com

Ministry of Finance Independent Unit 9006

International Protection of Investments and Foreign Receivables

Petr Plásil

Marie Talasová

Markéta Filipová

Letenská 15

118 10 Praha 1

Czech Republic

Tel.: + 420 257 041 111

E-mail: petr.plasil@mfcr.cz

marie.talasova@mfcr.cz

marketa.filipova@mfcr.cz

Karolína Horáková

Weil, Gotshal & Manges s.r.o. advokátní kancelár

Charles Bridge Center

Krizovnicke nam. 193/2

Prague, Czech Republic

Tel.: +420 22140 7303

Fax: +420 22140 7310

E-mail: karolina.horakova@weil.com

In addition, until 16 July 2015, the Respondent was represented by:

stephen P. Anway sQUIRE sANDERs (Us) LLP

30 Rockefeller Plaza

New York, New York 10112

Tel.: +1 216 479 8279

E-mail: stephen.Anway@squiresanders.com

David W. Alexander sQUIRE sANDERs (Us) LLP

2000 Huntington Center

41 south High street

Columbus, ohio 43215

United states of America

Tel.: +1 614 365 2801

E-mail: David.Alexander@squiresanders.com

Rostislav Pekar Mária Lokajová

SQUIRE SANDERs, V.o.s., ADVOKÁTNÍ KANCELÁR Václavské námestí 57/813 110 00 Prague 1 Czech Republic

Tel.: +420 221 662 289

E-mail: Rostislav.Pekar@squiresanders.com

Maria.Lokajova@squiresanders.com

Zachary Douglas

MATRIX CHAMBERS

Griffin Building Gray’s Inn London WC1R 5LN

Tel.: +44 020 7404 3447 E-Mail::zacharydouglas@matrixlaw.co.uk

From 17 July 2015, the Respondent has been represented by:

Paolo Di Rosa

ARNOLD & PORTER KAYE SCHOER LLP

601 Massachusetts, NW Washington DC 20001

USA

E-mail:Paolo.DiRosa@apks.com Dmitri Evseev

ARNOLD & PORTER KAYE SCHOER LLP

Tower 42

25 old Broad street London EC2N 1HQ United Kingdom

E-mail:Dmitri.Evseev@apks.com

"The operator of the transmission system or the operators of distribution systems are obliged to primarily connect the devices according to section 3 (hereinafter referred to as the "devices") to the transmission system or to the distribution systems on their locality [...]".¹⁰

"The operators of the local distribution systems and the operator of the transmission system are obliged to buy out every electricity from the renewable sources, to which the support applies, and to enter into the contract on supply […]".¹¹

"The producer of the electricity from the renewable sources, to which the support applies, has the right to chose, whether he offers his electricity for buy-out according to the subsection 4 or whether he requires the green bonus for it".¹⁵

"In order for the 15-year pay-back period to be assured through the support by Purchasing Prices of electricity produced from renewable sources, technical and economic parameters of an installation producing electricity from renewable sources must be satisfied, where the producer of electricity from renewable sources shall achieve, with the given level of Purchasing Prices

a) an adequate return on invested capital during the total life of the installation, such return to be determined by the weighted average cost of capital (WACC), and

b) the net present value of the cash flows after tax over the total life of the installation, using a discount rate equal to WACC, at least equal to zero".¹⁷

o Under Public Notice No. 150/2007, the FIT was to apply "throughout the lifetime of the facility producing electricity";²⁰

o Through Public Notice No. 475/2005, the "lifetime of the facility producing electricity" was set at 15 years;²¹

o Through Public Notice No. 364/2007, this period was increased to 20 years.²² The reasons for the increase were described as follows:

"[T]he lifespan of the facilities shall be modified; owing to the progress in the industry, the lifespan has increased from 15 years to 20-25 years; it is proposed to count on 20 years. However, this involves the issue of the ageing of the panels because the panel output at the end of its lifespan is not the same as its output once it is installed. This is why it is proposed to count on the year-on-year decline in the panel output by 0.8% of the nominal output per year".²³

"The proposed changes are in response to the need to eliminate all legal means for the indirect support of electric power generation from renewable resources (mainly solar power plants) that is no longer justified, and therefore they are making taxation on environmentally friendly power generation sources and facilities stricter and eliminating the tax-exempt status of income from the operation of environmentally friendly power generation facilities. In order to simplify legal regulation and enable easier administration, the elimination of this exempt status for other environmentally friendly facilities has also been proposed".²⁷

"Subject-Matter of Levy from Electricity from Solar Radiation

The subject-matter of the levy for the electricity from the solar radiation (hereinafter referred to as the "levy") is the electricity generated from the solar radiation in the period of time from January 1, 2011 to December 31, 2013 in the device that was put into operation in the period of time from January 1, 2009 through December 31, 2010".³⁰

"Persons subject to the Levy

(1) The payer of the levy is the producer, if he generates the electricity from the solar radiation.

(2) The payer remitting the levy is the operator of the transmission system or the operator of the local distribution system".³¹

"[W]hether there existed on the part of the affected operators of [solar plants] such a strong, constitutionally-relevant interest in the keeping of the existing stipulated-in-law price for electricity from renewable sources, and the stipulated amounts of green bonuses, without having such support curtailed by the levy, that such interest would outweigh the public interest in reducing the stipulated electricity prices".³⁵

"The Constitutional Court consequently concurred with the conclusion that the consequence of the enactment of the parts of Act No. 402/2010 Coll. that were challenged by the petitioners consists, in the case of investors that commissioned their installations during the period from 1 January 2009 to 31 December 2010, merely of the fact that the extent of their profits was temporarily affected by the amount of the newly-introduced levy and the resulting extension of the payback period on their investment. However, the system of support and the principles for setting regulated prices, as regulated in Act No. 180/2005 Coll., continue to guarantee such conditions as to enable investors to achieve a simple payback period on investment of 15 years. In relation to the payback period, the change is merely reflected in the fact that the payback will be achieved in a longer time horizon (but one that is maintained by the act) than the producers of electricity from renewable sources had expected."³⁶

"The means that were selected for attaining such objectives seem to be reasonable and appropriate, since as follows from the materials presented, the levy on electricity from solar radiation was set so as to continue to guarantee a fifteen year payback period on investment, the period guaranteed by the law. [T]his was not an extreme measure, the production of electricity from renewable sources continues to be subsidized to a significant extent".³⁸

"[T]he challenged provisions responded to the need to eliminate, through the use of all legal means, the indirect support provided for the production of electricity from ecological sources, support that was no longer justified at that time, particularly as concerned solar installations, and such provisions therefore made the tax regime applicable to ecological sources and installations stricter by ending the tax exemption on income from the operation of ecological installations.

The relevant legal regulation concurrently aimed to fulfill a major public interest (that of keeping energy prices stable, keeping the public debt from rising etc.), an aim which, in the spirit of the case-law of the Constitutional Court, can be used to justify even potential interference with the legitimate expectations of taxpayers.

It is therefore evident that the reasons and objectives of the challenged legal regulation, which was used to cancel the exemption from income tax with regard to income from the operation of solar installations […] are identical to the reasons and objectives that led to the enactment of the legal regulation stipulating the levy on electricity from solar radiation, and accordingly the Constitutional Court makes reference to paragraphs [above] that fully fit this issue. For the sake of completeness, the Constitutional Court would like to add that the income tax exemption was also cancelled with regard to other ecological installations. Taxpayers could use this exemption for the last time in the tax period that commenced in 2010, which means that the change also applies to taxpayers that commissioned their ecological energy sources and installations before these amendments entered into force".³⁹

"The principle of legal certainty cannot be viewed as being identical to a requirement of absolute unchangeability of legal regulation, since legal regulation is subject to, among other things, social and economic changes and the requirement of ensuring that the state budget remains stable.

[…]

[T]he Constitutional Court has not ignored the fact that it had been the state that guaranteed, by means of a law, a fifteen year payback period on investment and a certain amount of revenues per unit of electricity produced from renewable sources, thereby motivating the affected entities to undertake entrepreneurial activities in the area of energy production from renewable sources.

As was stated above, however, the Constitutional Court concurrently feels that it is legitimate for lawmakers, after objectively ascertaining that a change has occurred in the investments in PVPP, to take the step of regulating support for the production of electricity from RES, to regulate it in a manner so as to maintain the balance between inputs and revenues that had been established by the original version of [the Act on Promotion], a balance that was expressed by the fifteen year payback period […] and a firmly-established amount of revenues".⁴⁰

"The fact that the investment made is not capable in certain years of its existence of generating a sufficient cash flow to cover the repayment of interest and the principal amount of the loan that is provided for a period shorter than the expected payback period does not mean that such investment cannot be expected to be paid back - there is only a problem with cash flow, resulting from various requirements pertaining to its amount in the course of the lifespan of the investment, not from the fact that the investment as a whole would not be paid back. Therefore, not only the issue of simple payback of the investment (in the sense of statutory guarantees), but also another issue of adequate profit from carrying out business on a regulated market must be perceived in relation to the overall period of the expected 20-year lifespan of photovoltaic panels. The Constitutional Court has addressed the issue of profitability in a comprehensive manner (i.e. also with respect to the method of determining the purchase prices) and has not found any defects in the amended version of [the Act on Promotion] that would automatically collide with any constitutionally guaranteed rights of photovoltaic plant operators".⁴²

"In certain specific, individually assessed cases, the application of [the Solar Levy] could indeed, in the opinion of the Constitutional Court, be contrary to the Constitution; however, these would only be cases where the charges would have liquidation effects and or would affect the very substance of the electricity producer in terms of its assets".⁴³

• For the Claimants:

o Counsel

[REDACTED], Luther Rechtsanwaltsgesellschaft Luther Rechtsanwaltsgesellschaft Luther Rechtsanwaltsgesellschaft

[REDACTED], Luther Rechtsanwaltsgesellschaft Luther Rechtsanwaltsgesellschaft

o Party Representative

[REDACTED] Wirtgen

o Experts:

[REDACTED] Onyx Energy Consulting

[REDACTED] Onyx Energy

[REDACTED] Alvarez & & Marsal

[REDACTED] Alvarez & & Marsal

o Witnesses:

[REDACTED]

• For the Respondent:

o Counsel

Paolo Di Rosa, Arnold & Porter LLP Dmitri Evseev, Arnold & Porter (UK) LLP Mallory Silberman, Arnold & Porter LLP Peter Nikitin, Arnold & Porter (UK) LLP Bart Wasiak, Arnold & Porter (UK) LLP Aimée Reilert, Arnold & Porter LLP Dara Wachsman, Arnold & Porter (UK) LLP

Karolina Horáková, Weil, Gotschal & Manges s.r.o. Advokátní kancelár Libor Morávek, Weil, Gotschal & Manges s.r.o. Advokátní kancelár Pavel Kinnert, Weil, Gotschal & Manges s.r.o. Advokátní kancelár

o Party representatives

Marie Talasová, Ministry of Finance of the Czech Republic Anna Bilanová, Ministry of Finance of the Czech Republic

o Experts

Wynne Jones, Frontier Economics Ltd.

Michael Peer, KPMG Ceská republika, s.r.o.

Jiri Urban, KPMG Ceská republika, s.r.o. (colleague of Mr. Peer)

o Witness

[REDACTED]

"Claimants invested in 2009 and 2010 in three PV-plants in the Czech Republic. Their investment decision was based on explicit guarantees contained in the Support Scheme, among others, that the feed-in tariff given at the time of commissioning the plants would be guaranteed for twenty years. The Support Scheme also preserved long-term income tax exemptions and shortened depreciation periods. The Czech Republic endorsed these benefits at home and abroad in order to attract foreign investors.

Based on these guarantees, Claimants, having procured due diligence reports to assess the factual and legal risks involved, proceeded with their investment. At the time of their investments, the introduction of the solar levy was in no way foreseeable. Claimants relied on the explicit guarantees that the Czech Republic itself deemed to be in full compliance with EU law.

Respondent has tried to argue that the guarantee for a return on investment within fifteen years [was the] "operative basis" of the Support Scheme. Claimants have shown that this term coined by Respondent for the purpose of these proceedings finds no basis whatsoever in the wording of the Support Scheme, the legislative history, the representations of the Czech Republic or the decisions of domestic courts. Respondent also failed to show that Claimants or any other investors received "windfall profits" as a result of an alleged drop in prices for solar panels between 2009 and 2010. Furthermore, Respondent has not submitted any evidence suggesting that the solar levy was introduced to curb "windfall profits". Instead, the legislative documents show that the solar levy was simply introduced to reduce the effect of the solar subsidies on the national budget and on the consumer prices.

Finally, Respondent has failed to explain what any other due diligence, besides the extensive due diligence reports obtained from three law firms by Claimants, should have brought to light and why this should have discouraged Claimants to invest in the Czech Republic. All of Claimants three PV-plants are currently operating and there are no pending disputes with Czech authorities regarding the permits or licenses of those plants.

This is not a dispute about naive or negligent investors rushing-in to benefit from "windfall profits". It is a dispute about experienced businessmen investing in the Czech Republic on the basis of highly specific legislative guarantees which they were invited to rely on by the Czech Republic. In essence, the question that has to be decided is whether states should be allowed to open the honeypot to attract foreign investors and then, once those investors commit serious capital to the host country, to retract and circumvent long-term guarantees and simply fail to hold-up their end of the bargain".⁴⁷

"I. DECLARE that the Czech Republic has breached its obligations towards Claimants under the BIT;

II. ORDER the Czech Republic to pay damages to the Claimants, currently calculated to [EUR 19,012,000]⁴⁸ and pre- and post award interest on the damages in an amount of 2,23 % from 01.01.2014 until date of payment, compounded annually;

III. ORDER the Czech Republic to compensate Claimants for their costs of arbitration in an amount to be specified later together with interest thereon and, as between the parties, alone to bear all costs for the arbitration including compensation and fees to the Arbitral Tribunal and the administrative costs of the PCA".⁴⁹

"Claimants therefore ask the Tribunal to

I. Declare that the Czech Republic has breached its obligations towards Claimants under the BIT;

II. Order the Czech Republic to pay, together with an appropriate pre-and post award interest rate since 1.1.2015,

1. For damages [sic] relating to the plant Struharov to claimants Jürgen Wirtgen and Stefan Wirtgen each TEUR 1,105.3 including tax consequences,

2. For damages to the plant Svétlá

a. to Claimant JSW Solar (zwei) GmbH & Co. KG TEUR 7,171.50 including tax consequences; (OR)

b. if the Tribunal finds it has no jurisdiction over Claimant JSW Solar (zwei) GmbH & Co. KG, to Claimants Jürgen Wirtgen, Stefan Wirtgen and Gisela Wirtgen TEUR 2,390.50 each including tax consequences,

3. For damages to the plant Vernérov

a. to Claimant JSW Solar (zwei) GmbH & Co. KG TEUR 9,629.50 including tax consequences, (OR)

b. if the Tribunal finds it has no jurisdiction over Claimant JSW Solar (zwei) GmbH & Co. KG, to claimants Jürgen Wirtgen, Stefan Wirtgen and Gisela Wirtgen TEUR 3,209.80 each including tax consequences

III. In the alternative,

1. order the Czech Republic to pay, together with an appropriate pre-and post award interest rate since 1.1.2015,

a) For damages [sic] relating to the plant Struharov to claimants Jürgen Wirtgen and Stefan Wirtgen each TEUR 580.50,

b) For damages to the plant Svétlá

(1) to Claimant JSW Solar (zwei) GmbH & Co. KG TEUR 3,766.90; (OR)

(2) if the Tribunal finds it has no jurisdiction over Claimant JSW Solar (zwei) GmbH & Co. KG, to claimants Jürgen Wirtgen, Stefan Wirtgen and Gisela Wirtgen TEUR 1,255.60 each,

c) For damages to the plant Vernérov

(1) to Claimant JSW Solar (zwei) GmbH & Co. KG TEUR 5,057.90, (OR)

(2) if the Tribunal finds it has no jurisdiction over Claimant JSW Solar (zwei) GmbH & Co. KG, to claimants Jürgen Wirtgen, Stefan Wirtgen and Gisela Wirtgen TEUR 1,686 each.

d) Declare that the Czech Republic shall compensate the Claimants for any and all tax that may be levied by the tax authorities on them as a consequence of any damages being awarded to them in accordance with III 1. (a) - (c) above,

and

IV. Order the Czech Republic to compensate Claimants as joint creditors for their costs of arbitration in amount to be specified later together with interest thereon and, as between the parties, alone to bear all costs for the arbitration including compensation and fees to the Arbitral Tribunal and the administrative costs of the PCA".⁵¹

"Like thousands of other investors, Claimants raced to take advantage of the massive decline in solar panel costs [...], before the price drop could be reflected in the regulated subsidy price. In doing so, Claimants hoped to earn substantially more than the rate of return targeted by the regulation. However […] Claimants never received any assurances of stabilization of the regime, or assurances that the State would refrain from measures that could reduce their excess profits. Unlike a traditional business, Claimants’ investments were (and remain) almost wholly shielded from market risk for a period of 20 years. This does not mean, however, that they were also shielded from the risk of legislative change. To the contrary, in a subsidy-based regulated environment and in the absence of market forces, it is the State and its energy regulator that must protect the public interest by ensuring that industry subsidies do not result in windfall profits at the expense of electricity consumers and taxpayers.

[…]

Claimants’ [arguments] are largely divorced from reality. Some of these arguments rely on the denial of basic facts, including the dramatic decline in solar panel prices by mid-2009 and the resulting imbalance between the fixed subsidies and the profit levels targeted by the regulation. Other arguments attempt to shift focus away from the key benchmarks of investment return (within 15 years) and reasonable profit (over the 20-year lifetime of the solar plants), by emphasizing other provisions, such as those providing for fixed tariff rates, which in fact were not modified at all by the Tax Measures. By the same token, Claimants’ repeated references to "contracts and licenses" embodying their supposed guarantees lose sight of the fact that none of these documents contained any guarantees whatsoever with respect to taxation, profitability, or even the RES Scheme more broadly.

Claimants’ Reply also fails to acknowledge the clear relevance of EU law to the core issues in this case. [T]he EU Treaties remain part of the applicable law in this arbitration, regardless of the fact that the seat of this arbitration is outside the EU […] EU law is important both to the merits of the dispute and to the issue of enforceability of the award

[…]

Claimants fail to establish that the Tribunal has jurisdiction to entertain claims for alleged injury to Claimant JSW Solar KG, because that entity does not qualify as an "investor" within the meaning of the BIT. The fact that JSW Solar KG does not qualify as an investor under the BIT means that all claims for alleged injury to that entity must be excluded from this arbitration.

In any event, all of the Claimants have utterly failed to substantiate their merits claims. As discussed below, Claimants assert claims under three different provisions of the BIT — the umbrella clause, the fair and equitable treatment clause, and the full protection and security clause — which ultimately boil down to two unfounded theories of liability: first, that the Government supposedly altered domestic law in circumstances when it was internationally-bound not to do so; and, second, that the measures are flawed because they allegedly were intended to deliberately harm Claimants. Each of these theories founders on both law and fact".⁵²

"For the foregoing reasons, and reserving the right to further develop and expand its submission and request for relief, the Czech Republic respectfully requests the Tribunal to:

a) order a stay of the present proceedings until the European Commission issues a decision in the proceedings regarding state aid represented by the RES Scheme as applicable to installations commissioned before 1 January 2013 (the other requested relief thus being in the alternative);

b) declare that the Tribunal does not have jurisdiction ratione personae over Claimant JSW Solar (zwei) GmbH & Co. KG;

c) declare that the Czech Republic has not breached the Treaty;

d) dismiss all of the Claimants’ claims in their entirety;

e) order the Claimants to pay the costs of these arbitral proceedings, including the cost of the Tribunal and the legal and other costs incurred by the Czech Republic, on a full indemnity basis; and

f) order the Claimants to pay interest on any costs awarded to the Czech Republic, in an amount to be determined by the Tribunal".⁵³

"For the reasons set forth above, the Czech Republic respectfully reiterates its request that the Tribunal (a) reject Claimants’ claims in their entirety because (with regard to JSW Solar KG) they are outside the Tribunal’s jurisdiction and, in any case, are entirely lacking in merit; and (b) issue an award of costs and fees (including all legal fees and expenses), and interest thereon, in favor of the Czech Republic".⁵⁴

"APPLICABLE PROCEDURAL RULES

This arbitration shall be governed by (in the following order of precedence):

a) The mandatory rules of the law on international arbitration applicable at the seat of the arbitration;

b) These Terms of Appointment and the procedural rules issued by the Arbitral Tribunal, as will be reflected in Procedural Order No. 1 and any amendments thereof.

44. If the provisions therein do not address a specific procedural issue, the applicable procedural issue shall be determined by agreement between the Parties or, in the absence of such agreement, by the Arbitral Tribunal".

"APPLICABLE SUBSTANTIVE LAW

The applicable law, in addition to the application of the BIT which is uncontroversial, will be subject to briefing by the Parties and determined by the Tribunal".

"(1) Disputes concerning investments between a Contracting State and an investor from the respective other Contracting State should as far as possible be settled amicably between the parties to the dispute.

(2) If the dispute cannot be settled within six months of the date on which it was raised by one of the parties to the dispute, it shall, at the request of the investor from the other Contracting State, be submitted to arbitration.

[…]"

• The Parties "numerous" attempts to settle the dispute amicably have failed.⁸⁴ Hence, the requirement of Article 10(1) of the Treaty is met.

• Each of the Claimants has accepted the Respondent’s offer to arbitrate contained in Article 10(2) of the Treaty:

o Claimants 1, 2 and 4, i.e. Jürgen Wirtgen, Stefan Wirtgen and JSW Solar (zwei) GmbH & Co. KG, have accepted the offer by filing the Request for Arbitration on 24 June 2013;

o Claimant 3, i.e. Ms. Gisela Wirtgen, has accepted the offer to arbitrate by her letter of 6 January 2014.

• The present dispute concerns "investments". Article 1(1) of the Treaty contains a broad definition of "investment", which includes "ownership of movable and immovable property" and "shares of companies and other kinds of interest in companies". Moreover, there is common ground that the Claimants made an allocation of resources for a long duration at their risk when they invested through JSW Solar v.o.s., JSW Solar (zwei) k.s. and FVE Verne s.r.o. in the construction and operation of three PV plants in the Czech Republic.

• The Respondent does not dispute that Claimants 1, 2 and 3 qualify as "investors" as defined in Article 1(3) of the BIT.

"[Für die Zwecke dieses Vertrag] bezeichnet der Begriff "Investor" eine natürliche Person mit standigem Wohnsitz oder eine juristische Person mit Sitz im jeweiligen Geltungsbereich dieses Vertrags, die berechtigt ist, Kapitalanlagen zu tatigen".⁹⁸

"[Pro úcely této Dohody] Pojem "investor" znamená fyzické osoby se stálym bydlistém nebo právnické osoby se sídlem v okruhu püsobnosti této Dohody, jez jsou oprávnény jednat jako investori".⁹⁹

• In the Request for Arbitration, the Claimants translated Article 1(3) as:

"[For the purposes of this Agreement] an "Investor" is either a natural person who has its permanent residence in a contracting state or a juridical person with its seat in one of the Contracting States".¹⁰⁰

• In the SoC, the Claimant then translated Article 1(3) somewhat differently:

"investor" means a "natural person with permanent residence or a legal entity with registered office in the respective area of jurisdiction of this Treaty who or which is entitled to make investments.¹⁰¹

• In the SoD, the Respondent provided its translation:

""investor" shall mean a natural person with permanent residence or a juridical person with its seat in the territory covered by the application of this Treaty and authorized to act as an investor".¹⁰²

• In the Reply, the Claimant appeared to agree¹⁰³ with the Respondent’s translation just quoted:

"the term "investor" means a natural person with permanent residence or a legal entity [read "juridical person"] with registered office in the respective area of jurisdiction of this Treaty who or which is entitled to make investments (emphasis supplied)".¹⁰⁴

"a natural person with permanent residence or a juridical person with its seat in the territory covered by the application of this Treaty and authorized/entitled to act as an investor".

"the term "investments" covers assets of any kind which are invested by investors from one Contracting State in the territory of the other Contracting State in accordance with the internal legislation of the respective other State."

"Each Contracting State shall in its territory promote as far as possible investments by investors from the other Contracting State and admit such investments in accordance with its legislation. Each Contracting State shall in every case accord investments fair and equitable treatment."

"a body recognized by the law as being entitled to rights and duties in the same way as a natural or human person, the common example being a company".¹¹⁴

"Based on the wording of Article 1(2)(b) BIT and the situation under Italian law, it has to be concluded that not only entities with full legal capacity qualify as "juridical persons" under Article 1(2)(b) BIT. Under Article 36 Italian Civil Code […] associations not recognized as legal entities (hereinafter "non-recognized associations") have the procedural capacity to stand in court and to be represented by their president or director. In other words, whilst non-recognized associations may not have legal personality, they possess certain attributes of legal personality and in particular the right to sue and to be sued. To the extent that the relevant Claimants had the capacity to make the relevant investment, and that they also have the statutory right to litigate in their own names, and that their constituents all have the requisite nationality, the "juridical person" requirement of Article 25(2)(b) ICSID Convention must be considered satisfied".¹¹⁶

"Where a non-natural investor falls within the definition of juridical persons provided for in the BIT, and where such investor has under the law applicable to it the legal capacity to acquire an investment protected under the BIT and to sue and to be sued, it would be contrary to the purpose of the BIT and the ICSID Convention to deny such investor the capacity to initiate ICSID arbitration. Indeed, it would make no sense to allow on one hand an investor to make an investment protected under the BIT, and deny on the other hand such investor the right to invoke protection under the BIT for violation of the rights attached to such investment".¹²¹

"recognising that the encouragement and reciprocal protection of such investments are suitable means to strengthening all forms of economic initiatives, especially those associated with private enterprise".¹²³

• While some German BITs contain a separate definition of "investor" for each Contracting State, 13 German BITs (including the German-Czech BIT) do not;

• Out of these 13, two treaties (Germany-Poland (1989) and Germany-Russia (1989)) pre-date the Treaty and have definitions of "investor" similar to the one of the Treaty;¹³⁴

• 9 of the remaining 10 treaties that post-date the Treaty contain language "[association/organization] with or without legal personality".¹³⁵ The Germany-Mexico BIT employs an altogether different formulation speaking of "commercial companies or other companies or associations";¹³⁶

• All of the treaties examined that contain a separate definition of "investor" for each Contracting State whether they pre-date or post-date the Treaty, use the wording "[association/organization] with or without legal personality" within that definition.

"With regard to the nature of the capacity necessary for corporations to benefit from the protection of the BIT and be a party to the present arbitration, the Tribunal is of the opinion that neither Article 1(2)(b) BIT nor Article 25 ICSID Convention limits the scope of eligible entities to those having full legal capacity, and also encompasses entities which enjoy limited civil capacity to the extent that such entities have the capacity to make an investment under the BIT and further to sue and to be sued".¹⁴⁵

"The proposed changes are in response to the need to eliminate all legal means for the indirect support of electric power generation from renewable resources (mainly solar power plants) that is no longer justified, and therefore they are making taxation on environmentally friendly power generation sources and facilities stricter and eliminating the tax-exempt status of income from the operation of environmentally friendly power generation facilities. In order to simplify legal regulation and enable easier administration, the elimination of this exempt status for other environmentally friendly facilities has also been proposed."²³⁸

"Since more than three quarters of costs need to be spent for the technological part of solar power facilities and only one quarter needs to be spent for the construction part of solar power facilities, and the construction part is usually included in depreciation group 4 with a depreciation period of 20 years (and in the case of construction projects for a definite period even 30 years), the specified changes have been proposed only for the technological part of the assets. For the purpose of easier application of the proposal, the technological part, which consists particularly of solar panels, converters and switches, is defined by its inclusion in the Standard Production Classification groups with code 31.10, 31.20 or 32.10. The change has been proposed in view of the fact that in the case of solar technology there has been a sharp decrease in acquisition prices, particularly for solar panels, and an increase in their efficiency."²³⁹

"Before settling on a Solar Levy, the Ministry of Industry and Trade requested ERO to assess whether simple payback and return on investment parameters would still be met. We assessed the proposed levy and determined that investors would still receive simple payback of their investment in less than 15 years and that return over the life of the investment would remain appropriate, i.e. above the 7% WACC. We therefore considered that the levy was properly calibrated to reduce the excessive profit provided by the Subsidies."²⁴¹