LIST OF DEFINED TERMS | |
AA | Appointing Authority |
Achmea judgment | Judgment of the Grand Chamber of the Court of Justice of the European Union in the matter of Slovak Republic v. Achmea BV dated 6 March 2018 |
2010 Action Plan | National Renewable Energy Action Plan 2010 of the Czech Ministry of Industry and Trade of July 2010 |
Act on Income Tax | Act No. 586/1992 |
Act on Promotion | Act No. 180/2005 |
BIT | Agreement between the Government of the Federal Republic of Germany and the Government of the Czech and Slovak Federal Republic for the Promotion and Protection of Investments of 2 October 1992 |
Braun Opinion | Due diligence report prepared by bpv Braun Partners dated 27 May 2010 |
Charter | The Czech Republic's Charter of Fundamental Rights and Freedoms |
Claimant or Photovoltaik | Photovoltaik Knopf Betriebs-GmbH |
Claimant's Submission on Costs | Claimant's Submission on Costs dated 16 June 2017 |
CJEU or ECJ | Court of Justice of the European Union |
Claimant's Application | Claimant's Application for Leave to Submit a Rejoinder on Jurisdiction and a Supplemental Report on Quantum, submitted by letter dated 11 November 2016 |
Claimant's Comments on Achmea | Claimant's Comments on the impact of the Achmea judgment on the Tribunal's jurisdiction submitted on 9 June 2018 |
Claimant's Reply on Achmea | Claimant's Reply on the impact of Achmea on the Tribunal's jurisdiction submitted on 17 December 2018 |
Claimant's Supplemental Submission on Costs | Claimant's supplemental submission on costs dated 11 January 2019 |
Counter-Memorial | Respondent's Counter-Memorial dated 15 October 2015 |
CSR-Netherlands BIT | Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federal Republic of 1 October 1992 |
2001 Directive | 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 |
2009 Directive | Directive 2009/28/EC of the European Parliament and the Council of 23 April 2009 on the promotion of the use of energy from renewable sources amending and subsequently repealing Directives 2001/77/EC and 2003/30/E |
EC | European Commission |
EC's Decision | European Commission's decision in case "SA.40171 (2015/NN) — Czech Republic Promotion of electricity production from renewable energy sources" of 28 November 2016 |
ECT | Energy Charter Treaty of 16 April 1998 |
Environmental Aid Guidelines | Guidelines of the EC on environmental aid that are meant to facilitate the assessment of situations in which environmental State measures meet the requirements of the exemption |
ERO | Czech Energy Regulatory Office |
EUROSOLAR | European Association for Renewable Energy |
Explanatory Report | Explanatory Report on the Act on Promotion issued by the Czech Parliament on 12 November 2003 |
FET | Fair and Equitable Treatment |
First Notification | Notification of the Czech Republic concerning the enactment of Act No. 165/2012, submitted to the European Commission on 8 January 2013 |
FiT | Fixed purchase prices or Feed-in-Tariffs |
Government or Respondent | Government of the Czech Republic |
Green Bonuses | Green Bonuses |
2001 Guidelines | 2001 Community Guidelines on State aid for environmental protection |
2008 Guidelines | 2008 Guidelines on State aid for environmental protection |
2014 Guidelines | Guidelines on State aid for environmental protection and energy 2014–2020 |
Indicative 2010 Target | The Czech Republic's national target for the contribution of electricity produced from RES to the gross electricity consumption by 2010 |
ILC Draft Articles | International Law Commission Draft Articles on State Responsibility |
Incentive Regime | Incentives for RES producers introduced through a combination of tariff and non-tariff mechanisms |
27 July 2004 Letter | Commission's letter to EUROSOLAR of 27 July 2004 |
July 2014 Judgment | Decision of the Supreme Administrative Court, Case No. 9 Afs 13/2013, 10 July 2014 |
Knĕžmost or SPV | FVE Kněžmost s.r.o. (formely Drobil-Reality s.r.o.), a Czech limited liability company incorporated on 10 January 1995 |
May 2012 Constitutional Court Judgment | Judgment, Czech Constitutional Court, Case No. Pl. ÚS 17/11, 15 May 2012 |
Mazars Opinion | Roever Broenner Susat Mazars GmBH & Co. KG's opinion on German tax law |
Memorial | Claimant's Memorial (including Response on Jurisdiction) dated 29 June 2015 |
New Act on Promotion | Act No. 165/2012 Coll., which amended certain arrangements under the Act on Promotion and entered into force partly on 1 January 2013 and partly upon its publication on 30 May 2012 |
NoA | Claimant's Notice of Arbitration dated 22 April 2014 |
Non-Impairment Standard | Prohibition of arbitrary and discriminatory treatment |
PCA or Registry | Permanent Court of Arbitration |
Petitioners | Group of Czech senators who brought a challenge to the Czech Constitutional Court, seeking the annulment of the measures at issue |
Photovoltaik | Photovoltaik Knopf Betriebs-GmbH |
Pricing Regulation | ERO Regulation No. 140/2009 Coll. |
Rejoinder | Respondent's Rejoinder dated 6 October 2016 |
Rejoinder on Jurisdiction | Claimant's Rejoinder on Jurisdiction dated 10 January 2017 |
Reply | Claimant's Reply Submission (including Rejoinder on Jurisdiction) dated 6 April 2016 |
RES | Renewable energy sources, including photovoltaic plants |
RES Regime | The Czech Republic's regime for renewable energy sources |
Respondent's Comments on Achmea | Respondent's Comments on the impact of the Achmea judgment on the Tribunal's jurisdiction submitted on 17 May 2018 |
Respondent's Reply on Achmea | Respondent's Reply on the impact of Achmea on the Tribunal's jurisdiction submitted on 3 December 2018 |
Respondent's Submission on Costs | Respondent's Submission on Costs dated 17 June 2017 |
Respondent's Targeted Requests | Respondent's Application for Leave to Make Further Targeted Requests for Production of Documents submitted on 17 July 2015 |
Respondent's Updated Submission on Costs | Respondent's Updated Submission on Costs dated 11 January 2019 |
Response | Respondent's Response to the Notice of Arbitration dated 23 May 2014 |
5% rule or 5% limitation | Rule under Article 6(4) of the Act on Promotion pursuant to which the ERO was not allowed to decrease the FiT in any given year by more than 5% of the value of the FiT in the previous year |
Second Notification | Second notification of the RES support mechanisms in respect of RES plants commissioned before 1 January 2013 filed by the Czech Republic with the European Commission on 11 December 2014 |
Subsidies or Tariffs | FiT and Green Bonuses |
TAL | Tax Administration Law |
2020 Target | The Czech Republic's Target for the contribution of electricity produced from RES by 2020 |
Tax Holiday | Exemption of RES producers from corporate income tax for the year in which the respective facility was put into operation and the following five calendar years pursuant to the Act on Income Tax |
Technical Regulation | ERO Regulation No. 475/2005 Coll. |
TFEU | Treaty on the Functioning of the European Union |
Tomsan | Tomsan s.r.o. |
UNCITRAL Rules | Arbitration Rules of the United Nations Commission on International Trade Law of 1976 |
WACC | Weighted average cost of capital |
1995 White Paper | White Paper on the "Energy Policy for the European Union" of December 1995 |
DRAMATIS PERSONAE | |
Ms. Kelyn Bacon QC | Respondent's expert witness on EU State aid issues, barrister at Brick Court Chambers. |
Mr. David Borkovec | Claimant's expert witness on the issue of whether the Solar Levy is a tax under Czech law, Lead Tax Partner at PricewaterhouseCoopers Česká republika, s.r.o. |
Mr. Josef Fiřt | Respondent's fact witness, Chairman of the Czech Republic's ERO from September 2004 to July 2011. |
Mr. Libor Frýzek | Claimant's expert witness on the issue of whether the Solar Levy is a tax under Czech law, Head of Tax, Ernst & Young, s.r.o. |
Dr. Antón García | Claimant's expert witness on the EU RES support framework and issues pertaining to industry economic regulation, Vice President in Compass Lexecon's European energy practice. |
Mr. Radek Halíček | Respondent's expert witness on the issue of whether the Solar Levy is a tax under Czech law, Senior Tax Partner, KPMG, who withdrew from engagement with the Respondent, and did not participate in the hearing. |
Mr. Wynne Jones | Respondent's expert witness on the EU RES support framework and issues pertaining to industry economic regulation, Director of Frontier Economics. |
Mr. Richard Knopf | Claimant's fact witness, managing director and beneficial owner of Photovoltaik Knopf Betriebs-GmbH. |
Dr. Petr Kotáb | Respondent's expert witness on the issue of whether the Solar Levy is a tax under Czech law, Assistant Professor at the Charles University Law School, and practicing attorney at Dentons. |
Mr. Ladislav Minčič | Respondent's fact witness, First Deputy Minister of Finance of the Czech Republic from 2010 to 2014. |
Mr. Michael Peer | Respondent's expert witness on the calculation of damages, accountant and partner at KPMG. |
Mr. Conor Quigley QC | Claimant's expert witness on EU State aid issues, barrister at Serle Court. |
Mr. Geoffrey Senogles | Claimant's expert witness on the calculation of damages, chartered accountant and Vice President at Charles River Associates. |
Dr. Pablo T. Spiller | Claimant's expert witness on the EU RES support framework and issues pertaining to industry economic regulation, Senior Consultant at Compass Lexecon. |
"Either Party may publicly disclose submissions made in these proceedings unless there has been a decision by the Tribunal to the contrary. Requests for confidential treatment of any item communicated in these proceedings may be submitted by either Party to the Tribunal for a decision, in which case no item which is the subject of such request may be publicly disclosed unless and until the Tribunal has decided upon such application."
"cannot be disclosed publicly and can neither be referred to and/or be submitted in proceedings other than the [present] four arbitration proceedings […] unless such reference and/or submission is authorized by the proper authorities in those other proceedings, by the law or by common agreement of the Parties involved in those other proceedings."
Tribunal:
Prof. Dr. Hans van Houtte (presiding)
Mr. Gary Born
Mr. Toby Landau, QC
The Claimant:
Prof. Luca G. Radicati di Brozolo
Mr. Michele Sabatini
Mr. Flavio Ponzano
Mr. Emilio Bettoni
Ms. Vanessa Zanetti
(ArbLit – Radicati di Brozolo Sabatini)
Mr. Nico Leslie
(Fountain Court Chambers)
Mr. Michal Hrabovský
(Bpv Braun Partners)
Fact Witnesses:
Mr. Richard Knopf
Expert Witnesses:
Mr. Libor Frýzek
(Ernst & Young (CZ))
Mr. Geoffrey Senogles
Mr. Trevor Slack (not testifying)
(Charles River Associates)
Mr. Pablo T. Spiller
Mr. Antόn García
Mr. Daniel George (not testifying)
(Compass Lexecon)
The Respondent:
Ms. Anna Bilanová
Mr. Martin Pospíšil
(Ministry of Finance of the Czech Republic)
Mr. Paolo Di Rosa
Mr. Dmitri Evseev
Ms. Mallory Silberman
Mr. Peter Nikitin
Mr. John Muse-Fisher
Mr. Bart Wasiak
Ms. Aimee Kneiss
Mr. Eugenio Cruz Araujo
(Arnold & Porter Kaye Scholer (UK) LLP)
Ms. Karolína Horáková
Mr. Libor Morávek
Mr. Pavel Kinnert
(Weil, Gotshal & Manges s.r.o. Advokátní Kancelář)
Fact Witnesses:
Mr. Josef Fiřt
Mr. Ladislav Minčič
Expert Witnesses:
Mr. Wynne Jones
(Frontier Economics Ltd.)
Mr. Petr Kotáb
(Dentons Europe CS LLP)
Mr. Michael Peer
Mr. Jiří Urban (not testifying)
(KMPG Česká republika, s.r.o.)
Permanent Court of Arbitration:
Mr. Levent Sabanogullari
Ms. Maria Kiskachi
Mr. Shigeki Obi
Ms. Camille Dadure
Court Reporter:
Mr. Trevor McGowan
Interpreters:
Ms. Simona Sternova
Dr. Dominika Winterová
Ms. Manuela Degenkolb
Ms. Birte Priebe
1. Whether the Achmea judgment is dependent on the specific wording of the BIT that was at issue in the case before the ECJ and how it relates to the BITs at issue in the present proceedings;
2. Whether and how the Achmea judgment applies in arbitrations where the arbitral seat is outside of the EU, including in particular the impact, if any, of Article 344 TFEU on the validity of an intra-EU BIT jurisdiction clause for an arbitral tribunal sitting outside of the EU;
3. Whether and how the Achmea judgment applies to the Energy Charter Treaty;
4. Whether and how the Achmea judgment actually impacts upon the jurisdiction of an arbitral tribunal sitting outside of the EU, as distinct from the enforceability of awards within the EU;
5. How the Achmea judgment fits in, if at all, with Articles 59 and 30 of the Vienna Convention on the Law of Treaties;
6. The relevance of Articles 27 and 46 of the Vienna Convention on the Law of Treaties for the present arbitrations;
7. How Swiss courts and Swiss scholarship have considered the position of EU law in a legal universe consisting of international law and domestic law;
8. The impact, if any, of Article 177(2) of the Swiss Federal Code on Private International Law; and
9. The role of waiver / estoppel, including in light of Article 186(2) of the Swiss Federal Code on Private International Law, in this context.9
I am writing to inform you that, due to recent, unforeseen developments in another proceeding, I have concluded that it is prudent for me to resign as co-arbitrator in the captioned matters. Regrettably, obligations of confidentiality prevent me from providing further details.
Given the advanced stage that these proceedings have already reached, the Parties are invited to provide, by Wednesday, 18 July 2018, their comments on the possibility that the Presiding Arbitrator and Mr. Landau complete these arbitrations as a two-person tribunal, assuming that they are able to agree on all matters in dispute, it being understood that, failing agreement on any matter in dispute, the Presiding Arbitrator and Mr. Landau would invite the Claimants to make a substitute appointment.
(a) Declare that the Respondent's actions:
(i) constitute unfair and inequitable treatment and violate the obligation to provide full protection and security in breach of the ECT and the Germany BIT;
(ii) were implemented through unreasonable and arbitrary measures which impaired the maintenance, use, enjoyment and disposal of the Claimant's investment in violation of the ECT and the Germany BIT;
(b) Order the Czech Republic to:
(i) compensate the Claimant for all losses caused to it by the Czech Republic's breaches, in an amount of not less than CZK 39.2 million (inclusive of pre-award interest);
(ii) pay to the Claimant post-award interest on any amount of damages awarded, from the date of the final award until its full payment; and
(iii) reimburse the Claimant for all costs and expenses of this arbitration, including legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and all other costs of the arbitration, including any expenses arising from the participation of third parties.11
(a) Dismiss the jurisdictional objections raised by the Respondent;
(b) Declare that the Respondent's actions:
(i) constitute unfair and inequitable treatment and violate the obligation to provide full protection and security in breach of the ECT and the Germany BIT;
(ii) were implemented through unreasonable and arbitrary measures which impaired the maintenance, use, enjoyment and disposal of the Claimant's investment in violation of the ECT and the Germany BIT;
(c) Order the Czech Republic to:
(i) compensate the Claimant for all losses caused to it by the Czech Republic's breaches, in an amount of not less than CZK 62.6 million (inclusive of pre-award interest and tax gross-up);
(ii) pay to the Claimant post-award interest on any amount of damages awarded, from the date of the final award until its full payment; and
(iii) reimburse the Claimant for all costs and expenses of this arbitration, including legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and all other costs of the arbitration, including any expenses arising from the participation of third parties.12
(a) Dismiss the jurisdictional objections raised by the Respondent;
(b) Declare that the Respondent's actions:
(i) constitute unfair and inequitable treatment and violate the obligation to provide full protection and security in breach of the ECT and the Germany BIT;
(ii) were implemented through unreasonable and arbitrary measures which impaired the maintenance, use, enjoyment and disposal of the Claimant's investment in violation of the ECT and the Germany BIT;
(c) Order the Czech Republic to:
(i) compensate the Claimant for all losses caused to it by the Czech Republic's breaches, in an amount of not less than CZK 61.3 million (inclusive of pre-award interest and tax gross-up);
(ii) pay to the Claimant post-award interest on any amount of damages awarded, from the date of the final award until its full payment; and
(iii) reimburse the Claimant for all costs and expenses of this arbitration, including legal and expert fees, the fees and expenses of any experts appointed by the Tribunal, the fees and expenses of the Tribunal, and all other costs of the arbitration, including any expenses arising from the participation of third parties.13
(a) Declare Photovoltaik's ECT claims barred for lack of jurisdiction;
(b) With respect to any claims over which the Tribunal concludes that it has jurisdiction, declare that the Czech Republic did not breach any of its obligations under either the ECT or the Germany BIT;
(c) In the event that it exercises jurisdiction over any of Photovoltaik's claims and finds the Czech Republic liable, declare that Photovoltaik is not entitled to any damages;
(d) Order Photovoltaik to pay all costs of the arbitration, including the totality of the Czech Republic's legal and expert fees and expenses and the fees and expenses of the Tribunal, as well as the costs charged by the PCA; and
(e) Award to the Czech Republic any such additional relief as it may consider just and appropriate.14
(a) Declare all of Photovoltaik's claims barred for lack of jurisdiction;
(b) With respect to any claims over which the Tribunal concludes that it has jurisdiction, declare that the Czech Republic did not breach any of its obligations under either the ECT or the Germany BIT;
(c) In the event it exercises jurisdiction over any of Photovoltaik's claims, declare and find that the Czech Republic did not breach any of its obligations under either the ECT or the Germany BIT;
(d) In the event that it exercises jurisdiction over any of Photovoltaik's claims and finds the Czech Republic liable, declare that Photovoltaik is not entitled to any damages;
(e) Order Photovoltaik to pay all costs of the arbitration, including the totality of the Czech Republic's legal and expert fees and expenses and the fees and expenses of the Tribunal, as well as the costs charged by the PCA; and
(f) Award to the Czech Republic any such additional relief as it may consider just and appropriate.15
Section 1
Subject Matter of Regulation
[…]
(2) The aim of this Act is to, in the interest of climate protection and environmental protection,
a) promote the exploitation of renewable energy sources ("Renewable Sources"),
b) ensure that the share of Renewable Sources in the consumption of primary energy sources continually increases,
c) contribute to conservation in the exploitation of natural resources and to the sustainable development of society,
d) put in place the conditions for achieving the indicative target so that the share of electricity produced from Renewable Sources accounts for 8% of gross electricity consumption in the Czech Republic in 2010 and to put in place the conditions for further increasing such share after 2010.
Section 6
Amounts of Prices for Electricity from Renewable Sources and
Amounts of Green Bonuses
(1) The Office sets, one calendar year in advance, the purchasing prices for electricity from Renewable Sources (the "Purchasing Prices"), separately for individual kinds of Renewable Sources, and sets green bonuses, so that
a) the conditions are created for the achievement of the indicative target so that the share of electricity produced from Renewable Sources accounts for 8% of gross electricity consumption in 2010 and
b) for facilities commissioned
1. after the effective date of this Act, there is attained, with the Support consisting of the Purchasing Prices, a fifteen year payback period on capital expenditures, provided technical and economic parameters are met, such parameters consisting of, in particular, cost per unit of installed capacity, exploitation efficiency of the primary energy content in the Renewable Source, and the period of use of the facility, such parameters being stipulated in an implementing legal regulation,
2. after the effective date of this Act, the amount of revenues per unit of electricity from Renewable Sources, assuming Support in the form of Purchasing Prices, is maintained as the minimum [amount of revenues], for a period of 15 years from the commissioning year of the facility, taking into account the industrial producer price index; the commissioning of a facility is also deemed to include cases involving the completion of a rebuild of the technological part of existing equipment, a change of fuel, or the completion of modernization that raises the technical and ecological standard of an existing facility,
3. prior to the effective date of this Act, there is maintained for a period of 15 years the minimum amount of Purchasing Prices set for the year 2005 in accordance with the legal regulations to date and taking into account the industrial producer price index.
(2) When setting the amounts of green bonuses, the Office also takes into account a heightened degree of risk associated with off-taking electricity from Renewable Sources in the electricity market.
(3) When setting Purchasing Prices and green bonuses, the Office proceeds on the basis of differing costs for the acquisition, connection and operation of individual types of facilities, including the development thereof [the development of such costs] over time.
(4) Purchasing Prices set by the Office for the following calendar year shall not be less than 95% of the Purchasing Prices in effect in the year for which the setting decision is made. The provision of the first sentence shall not be used for setting the Purchasing Prices for the following calendar year for those types of Renewable Sources where the payback period on capital expenditures is shorter than 11 years in the calendar year in which the Office decides on the setting of the new Purchase Prices; When setting Purchase Prices, the Office proceeds in accordance with subsections 1 through 3.
In order for the 15-year pay-back period to be assured through the support by Purchase Prices [FiT] 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.40
Feed-in tariffs and Green bonuses stipulated by the Act on Promotion are applied throughout the estimated lifetime of plants determined by the regulation implementing some provisions of the Act on Promotion. The Feed-in tariffs increase annually throughout the lifetime of the plant classified in the respective category depending on the type of the renewable resource used and the date of launch into operation with respect to the industrial producers' price index by a minimum of 2% and maximum of 4%, with the exception of biomass and bio gas burning plants.45
a) application to a regional grid operator for connection to the grid;
b) issuance by the grid operator of a binding statement contained in a preliminary contract, confirming that the grid could sustain a given electricity input and that a grid connection agreement would be concluded within 180 days;
c) entry into a grid connection agreement with the grid operator;
d) application to the ERO for the energy production license; and
e) entry into a power purchase agreement with the grid operator.62
a) Act No. 330/2010 Coll. amended Article 3(5) of the Act on Promotion and abolished any incentives for photovoltaic plants with installed output exceeding 30 kWp that were commissioned after 1 March 2011.109 This Act is not one of the measures challenged in this arbitration as it did not affect the installations put into operation before March 2011;
b) Act No. 346/2010 Coll. repealed the Tax Holiday and the accelerated depreciation period guaranteed by the Act on Income Tax;110
c) Act No. 402/2010 Coll. introduced the levy on "electricity produced from solar radiation during the period from 1 January 2011 to 31 December 2013 in facilities commissioned during the period from 1 January 2009 to 31 December 2010" ("Solar Levy").111 The Solar Levy was imposed on RES producers. However, transmission grid operators or regional distribution system operators were responsible for making the payment of the Solar Levy.112 The rate of the Solar Levy was set at 26% and 28% for payments to solar energy producers respectively under the FiT system and under the Green Bonuses system respectively.113
[…] a new testing mechanism. For bigger power plants, where the volume of the promotion exceeds the amount of EUR 200,000 in 3 years, after a certain time period we will examine whether the beneficiaries of the promotion make unreasonable profit or not, which would have an adverse effect on the market.121
received very significant assurances from state authorities that they could expect […] revenues from the production of energy under the framework of the regime stipulated by such Act, and such Act did not stipulate that certain of such producers would face a levy obligation […] Such expectations constituted legitimate expectations.129
a case of arbitrariness on the part of lawmakers, since they could have opted for a vacatio legis period long enough to give the relevant taxpayer that began their entrepreneurial activities at any time during the period when the previously existing legal regulation was in effect the ability to use the tax exemption on an equal footing and for the same period of time.130
The 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.133
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.134
Producers potentially affected by the individual effect of the solar levy found by the Constitutional Court to be "strangling" have been and are able to at least mitigate, if not fully eliminate, its impact using standard tools [e.g. tax deferral or payment in instalments] under the Tax Administration Law.138
The Commission regrets that the Czech Republic put the aid measure in question into effect in breach of Article 108(3) of the Treaty on the Functioning of the European Union.
However, it has decided, on the basis of the foregoing assessment, not to raise objections to the aid on the grounds that it is compatible with the internal market pursuant to Article 107(3)(c) of the Treaty on the Functioning of the European Union.143
(a) 23 September 2010 Emergency Coordination Committee: "More stringent measures that would put the support of RES, and especially PVPP to an end" gave rise to a "risk of arbitration"; Committee charged with deciding "whether legal analysis of potential arbitrations with the assessment of risks and costs for the state budget if the proposal for more stringent measures is passed, e.g., by adopting the change in the feed-in tariff for RES."265
(b) 15 October 2010 Emergency Coordination Committee: "Deputy Environmental Minister Bízková stated that it is necessary to find a formally correct mechanism for reduction of the support of RES from photovoltaic power plants, such that it cannot be legally contested."266
(c) 2 November 2010 Economic Committee of the Chamber of Deputies: "The issue of arbitrations in general is absolutely erratic [sic]. […] I declare that it will reduce the amount of intended support to make it bearable for the Czech Republic and for electricity consumers in the Czech Republic. This method – through the withholding tax – is not just a retroactive correction of support. One may argue as to whether or not this is retroactive. Nonetheless, it is a similar situation as if you changed the conditions for investors by increasing the income tax. From the arbitration perspective, they will strive to advocate the principle on which the support for RES has been based, i.e., their 15-year payback period […] the rest is the question of tax regimes – this is the responsibility of each country, and changes in tax rates should not be challenged in arbitrations."267
(d) 29 November 2010 Senate Session: "I would like to say that, explicitly, when it comes to the relation of taxes in contracts, in agreement on the protection and support of investments respectively, there is usually the clause explicitly exempting the tax issues from the contracted subjects."268
(e) Ministry of Finance opinion to Czech Constitutional Court: "The state uses the [Solar Levy] measures […] to regulate prices"269 and "Introduction of the levy […] is aimed to decrease the economic feed-in tariffs."270
(f) Chairman of ERO: "it would be appropriate to reduce the FiT for photovoltaic power plants […] much more but ERO was not allowed to do so."271
Articles 267 and 344 TFEU must be interpreted as precluding a provision in an international agreement concluded between Member States, such as Article 8 of the Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Czech and Slovak Federative Republic, under which an investor from one of those Member States may, in the event of a dispute concerning investments in the other Member State, bring proceedings against the latter Member State before an arbitral tribunal whose jurisdiction that Member State has undertaken to accept.274
The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:
(a) the interpretation of the Treaties;
(b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union;
Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.
Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court.
If such a question is raised in a case pending before a court or tribunal of a Member State with regard to a person in custody, the Court of Justice of the European Union shall act with the minimum of delay.
1. Whether the Achmea judgment is dependent on the specific wording of the BIT that was at issue in the case before the ECJ and how it relates to the BITs at issue in the present proceedings;
2. Whether and how the Achmea judgment applies in arbitrations where the arbitral seat is outside of the EU, including in particular the impact, if any, of Article 344 TFEU on the validity of an intra-EU BIT jurisdiction clause for an arbitral tribunal sitting outside of the EU;
3. Whether and how the Achmea judgment applies to the Energy Charter Treaty;
4. Whether and how the Achmea judgment actually impacts upon the jurisdiction of an arbitral tribunal sitting outside of the EU, as distinct from the enforceability of awards within the EU;
5. How the Achmea judgment fits in, if at all, with Articles 59 and 30 of the Vienna Convention on the Law of Treaties;
6. The relevance of Articles 27 and 46 of the Vienna Convention on the Law of Treaties for the present arbitrations;
7. How Swiss courts and Swiss scholarship have considered the position of EU law in a legal universe consisting of international law and domestic law;
8. The impact, if any, of Article 177(2) of the Swiss Federal Code on Private International Law; and
9. The role of waiver / estoppel, including in light of Article 186(2) of the Swiss Federal Code on Private International Law, in this context.