|AG Opinion||Opinion of the Advocate General Wathelet dated 19 September 2017 in Case C-284/16, Slowakische Republik v Achmea BV|
|Answer and Request forDismissal||Respondent's Answer to Claimants' RfA, together with a Request for Dismissal under Article 10 SCC Rules dated 31 October 2016|
|BITs||Bilateral Investment Treaties|
|Campania||A 20.41 MW plant located in the Municipality of Gugliano (Province of Naples) acquired by First Claimant|
|C-CS||Claimants' Costs Submission dated 1 March 2019|
|Claimants||First Claimant, Second Claimant and Third Claimant (collectively)|
|Constitutional CourtDecision||Italian Constitutional Court's Decision No. 16/2017 dated 24 January 2017|
|C-PHB||Claimants' Post-Hearing Brief dated 25 January 2019|
|C-RPHB||Claimants' Reply Post-Hearing Brief dated 1 March 2019|
|C-SoRj||Claimants' Rejoinder on Jurisdiction dated 3 August 2018|
|Decision No. 10/2015||Italian Constitutional Court's Decision No. 10/2015 dated 11 February 2015|
|Destinazione Italia||Legislative Decree No. 145/2013 dated 23 December 2013|
|EC Communication||EC Communication to the Parliament and the Council, bearing number COM(2018) 547/2, dated 19 July 2018|
|EC InterventionApplication||EC's Application for leave to intervene as a non-disputing party in this arbitration dated 27 January 2017|
|EC NDP Submission||EC's Amicus Curiae Brief dated 9 May 2018|
|ECJ||Court of Justice of the European Union|
|ECJ Judgment||ECJ's Judgment dated 6 March 2018 in Case C-284/16, Slowakische Republik v Achmea BV|
|ECT||Energy Charter Treaty 1994|
|EIA||Economic Integration Agreement|
|EU Treaties||Treaty of the European Union and Treaty of the Functioning of the European Union (collectively)|
|FET||Fair and Equitable Treatment|
|Fifth Conto Energia||Decree dated 5 July 2012 enacted by the Ministry for Economic Development in consultation with the Ministry for Environment|
|First Claimant||SunReserve Luxco Holdings S.À.R.L|
|First Conto Energia||Decree dated 28 July 2005 enacted by the Ministry for Productive Activities in consultation with the Ministry for Environment|
|First Reserve||First Reserve Energy Infrastructure Fund, LP|
|Fiumicino||A 2.97 MW plant located in the Municipality of Fiumicino, Lazio Region acquired by Third Claimant|
|Florian First WitnessStatement||First Witness Statement of Mr. Mark Florian dated 28 July 2017|
|Fourth Conto Energia||Decree dated 5 May 2011 enacted by the Ministry for Economic Development in consultation with the Ministry for Environment|
|FR Holdings||FREI Sun Holdings (Cayman) Ltd|
|Framework Agreement||Framework Agreement by And among Sun Edison LLC, FREI Sun Holdings (Cayman) Ltd., FREI Sun Holdings (US) LLC, SunEdison Reserve US, L.P., and SunEdison Reserve Internaitonal, L.P.|
|GRTN||Gestore della rete di transmission nazionale Spa|
|GSE||Gestore dei Servizi Energetici|
|Hearing||Hearing conducted from 26 to 29 November 2018 in Paris, France|
|IMU Charge||A municipal charge on buildings|
|January 2019 Declarations||Declarations of the Representatives of the Governments of the European Union Member States dated 15-16 January 2019|
|Lenare||A 997.92 kW plant located in the Municipality of Lequile acquired by First Claimant|
|Milana||A 1.66 MW plant located in Sicily acquired by First Claimant|
|Monaci||A 998.13 kW plant located in the Municipality of Lequile acquired by First Claimant|
|OECD||Organisation for Economic Co-operation and Development|
|Parties||Claimants and Respondent (collectively)|
|PHOM||Pre-Hearing Organizational Meeting conducted on 8 November 2018|
|PO 1||Procedural Order No. 1 (By Consent) issued on 16 March 2017|
|PO 2||Procedural Order No. 2 issued on 3 August 2018|
|PO 3||Procedural Order No. 3 (By Consent) issued on 22 November 2018|
|PO 4||Procedural Order No. 4 issued on 7 February 2019|
|PO 5||Procedural Order No. 5 issued on 4 July 2019|
|PTC||Preparatory Telephone Conference conducted on 22 February 2017|
|R-CS||Respondent's Costs Submission dated 8 March 2019|
|REIO||Regional Economic Integration Organisations|
|Request for Suspension||Respondent's Request for Suspension dated 18 July 2019|
|Request for Termination||Respondent's Request for Termination dated 25 January 2019|
|Resolution 111/06||Resolution dated 9 June 2006 issued by the Italian Electrical Energy Authority|
|Resolution 281||Resolution 281/2012/R/EFR dated 5 July 2012 issued by the Italian Electrical Energy Authority|
|Resolution 493||Resolution 493/2012/R/EFR dated 22 November 2012 issued by the Italian Electrical Energy Authority|
|Resolution 522`||Resolution 522/2014/R/EEL dated 23 October 2014 issued by the Italian Electrical Energy Authority|
|Resolution 618||Resolution No. 618/2013/R/EFR dated 19 December 2013 issued by the Italian Electrical Energy Authority|
|Respondent/Italy||The Italian Republic|
|RfA||Request for Arbitration dated 26 August 2016|
|Romani Decree||Legislative Decree No. 28/2011 dated 3 March 2011|
|Rovigo||A 70.5 MW plant located in the Municipality of San Bellino, Veneto Region acquired by Second Claimant|
|R-PHB||Respondent's Post-Hearing Brief dated 25 January 2019|
|R-RPHB||Respondent's Reply Post-Hearing Brief dated 1 March 2019|
|R-SoRj||Respondent's Rejoinder on the Merits and Reply on Jurisdiction dated 6 July 2018|
|Rustico||A 1.8 MW plant located in Sicily acquired by First Claimant|
|San Marco||A 985.71 kW plant located in the Municipality of Lequile acquired by First Claimant|
|Santoro||A 968.31 kW plant located in the Municipality of Soleto acquired by First Claimant|
|SCC||Arbitration Institute of the Stockholm Chamber of Commerce|
|SCC Board||SCC's Board of Directors|
|SCC Rules||Arbitration Rules of the SCC 2010|
|Second Claimant||SunReserve Luxco Holdings II S.À.R.L|
|Second Conto Energia||Decree dated 19 February 2007 enacted by the Ministry for Economic Development in consultation with the Ministry for Environment|
|Shockley Witness Statement||Witness Statement of Mr. Ryan Shockley dated 28 July 2017|
|SoC||Claimants' Statement of Claim dated 28 July 2017|
|SoD||Respondent's Statement of Defence dated 22 December 2017|
|SoRy||Claimants' Reply Memorial on the Merits and Counter-Memorial on Jurisdiction dated 30 March 2018|
|Spalma-incentivi Decree||Legislative Decree No. 91/2014 dated 24 June 2014 converted into Law No. 116/2014 dated 11 August 2014|
|SPV||Special Purpose Vehicle|
|Swedish Arbitration Act||Swedish Arbitration Act (SFS 1999:116)|
|TASI Charge||A charge on municipal services such as road maintenance and public lighting|
|TEU||Treaty of the European Union|
|TFEU||Treaty of the Functioning of the European Union|
|Third Claimant||SunReserve Luxco Holdings III S.À.R.L|
|Third Conto Energia||Decree dated 6 August 2010 enacted by the Ministry for Economic Development in consultation with the Ministry for Environment|
|Vattenfall Decision||Vattenfall et al. v. Federal Republic of Germany, ICSID Case No. ARB/12/12, Decision on the Achmea Issue|
|VCLT||Vienna Convention on the Law of Treaties 1969|
(i) Claimants' Reply Memorial on the Merits and Counter-Memorial on Jurisdiction to be filed on 30 March 2018 (previously 27 March 2018);
(ii) Respondent's comments on the implications of the ECJ Judgement to be filed on 6 April 2018 (previously 3 April 2018);
(iii) Respondent's Rejoinder on the Merits and Reply on Jurisdiction to be filed on 5 July 2018 (previously 2 July 2018).
(i) Mr. Mark Florian (Claimants' fact witness);
(ii) Mr. Ryan Shockley (Claimants' fact witness);
(iii) Mr. Adi Blum (Claimants' fact witness);
(iv) Mr. Robert Hanna (Claimants' fact witness);
(v) Mr. Daniele Bacchiocchi (Respondent's fact witness);
(vi) Mr. Luca Miraglia (Respondent's fact witness);
(vii) Prof. Antonio D'Atena (Claimants' legal expert on Italian law);
(viii) Prof. Anna Romano (Respondent's legal expert on Italian law);
(ix) Dr. Boaz Moselle and Dr. Dora Grunwald (Claimants' regulatory experts);
(x) Mr. Richard Edwards (Claimants' quantum expert); and
(xi) Prof. Cesare Pozzi, Prof. Giuseppe Melis, Prof. Umberto Monarca and Prof. Ernesto Cassetta (Respondent's quantum experts).
(i) the Dissenting Opinions of Prof. Kaj Hobér in Stadtwerke München GmbH v. Spain and of Prof. Horacio Grigera Naón in BayWa R.E. v. Spain ;
(ii) RREEF Infra. (G.P.) Ltd. & RREEF Pan-European Infra. Two Lux S.à.r.l. v. Kingdom of Spain (ICSID Case No. ARB/13/30), Decision on Responsibility and Principles of Quantum and Dissenting Opinion;
(iii) Cube Infra. Fund SICAV et al. v. Kingdom of Spain (ICSID Case No. ARB/15/20), Award;
(iv) NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Kingdom of Spain (ICSID Case No. ARB/14/11), Decision on Jurisdiction, Liability and Quantum Principles;
(v) NextEra Energy Global Holdings B.V. and NextEra Energy Spain Holdings B.V. v. Kingdom of Spain (ICSID Case No. ARB/14/11), Final Award;
(vi) SolEs Badajoz GmbH v. Kingdom of Spain (ICSID Case No. ARB/15/38), Award;
(vii) InfraRed Environmental Infrastructure GP Ltd et al. v. Spain (ICSID Case No. ARB/14/12), Award and Dissenting Opinion (not public, see Tom Jones, Spain Liable Again in Solar Cases, Global Arbitration Review, Aug. 5, 2019); and
(viii) OperaFund Eco-Invest SICAV PLC and Schwab Holding AG v. Kingdom of Spain (ICSID Case No. ARB/15/36), Award and Dissenting Opinion.
At this time in fact, the cost of electric energy from photovoltaic plants connected to the network is comprised between 500 and 1000 L/kWh, and the margins for further reductions seem limited if we take into account only scale economies. Therefore, for the time being, it is not appropriate to build other large plants with public intervention.33
Photovoltaic is, in principle, the most attractive renewable energy.
Considering its own characteristics and the great potential, even in the absence of sure prospects on cost reduction, we believe that photovoltaic must be developed to the highest levels possible, if anything so as to pre-establish a "reserve" option, in order to face undesirable environmental and energetic emergencies, always possible for the decades to come.34
The Community recognises the need to promote renewable energy sources as a priority measure given that their exploitation contributes to environmental protection and sustainable development.
Member States operate different mechanisms of support for renewable energy sources at the national level, including green certificates, investment aid, tax exemptions or reductions, tax refunds and direct price support schemes. One important means to achieve the aim of this Directive is to guarantee the proper functioning of these mechanisms, until a Community framework is put into operation, in order to maintain investor confidence.
It is too early to decide on a Community-wide framework regarding support schemes, in view of the limited experience with national schemes and the current relatively low share of price supported electricity produced from renewable energy sources in the Community all Member States should be required to set national indicative targets for the consumption of electricity produced from renewable sources.42
Experience in implementing [EC Directive 96/92/EC] shows the benefits that may result from the internal market in electricity, in terms of efficiency gains, price reductions, higher standards of service and increased competitiveness. However, important shortcomings and possibilities for improving the functioning of the market remain, notably concrete provisions are needed to ensure a level playing field in generation and to reduce the risks of market dominance and predatory behaviour, ensuring non-discriminatory transmission and distribution tariffs, through access to the network on the basis of tariffs published prior to their entry into force, and ensuring that the rights of small and vulnerable customers are protected and that information on energy sources for electricity generation is disclosed, as well as reference to sources, where available, giving information on their environmental impact.50
The Commission communication of 10 January 2007 entitled 'Renewable Energy Roadmap – Renewable energies in the 21st century: building a more sustainable future' demonstrated that a 20% target for the overall share of energy from renewable sources and a 10% target for energy from renewable sources in transport would be appropriate and achievable objectives, and that a framework that includes mandatory targets should provide the business community with the long-term stability it needs to make rational, sustainable investments in the renewable energy sector which are capable of reducing dependence on imported fossil fuels and boosting the use of new energy technologies. Those targets exist in the context of the 20 % improvement in energy efficiency by 2020.
For the proper functioning of national support schemes it is vital that Member States can control the effect and costs of their national support schemes according to their different potentials. One important means to achieve the aim of this Directive is to guarantee the proper functioning of national support schemes, as under Directive 2001/77/EC, in order to maintain investor confidence and allow Member States to design effective national measures for target compliance.104
The current incentive systems... represent consolidated instruments of the national energy system, which one can also take into consideration, with the necessary adjustments, for the upcoming period as an important element of continuity for the achievement of the new EU objectives.110
Compared with the current situation, the introduction is envisaged of certain corrections to the existing framework, in a logic aimed at increasing energy production, but making the support tools more efficient, in order to avoid a parallel growth of production and of burden of the incentives.111
The feed-in tariff [Conto Energia] is a support scheme which guarantees constant remuneration at current currency values for the electricity produced by plants for a set period of time... Moreover, the scheme is subject to regular adjustments which take into account the trends in the prices of energy products and components for photovoltaic plants..., with the intention of limiting the medium- and long-term costs to the community. In any case, the incentive tariff paid when the plant becomes operation[al] remains fixed for the whole entitlement period.112
Article 24 Incentive mechanisms
(1) The production of electricity from plants using renewable sources that enter into operation after December 31, 2012, will be promoted through the instruments and according to the general criteria set out in paragraph 2 and the specific criteria set out in paragraphs 3 and 4. The safeguard of non-incentivized plants is ensured through the mechanisms under art. 8 hereof.
(2) The production of electricity by the plants referred to in paragraph 1 is supported on the basis of the following general criteria:
a) the incentive has the purpose of ensuring a fair remuneration of the investment and operating costs;
b) the period one is entitled to receive the incentive all through is equal to the average conventional lifecycle of specific kind of plant, and starts from the date of entry into operation thereof;
c) the incentive remains constant throughout the support period to which one is entitled under the law and may take into consideration the economic value of energy produced;
[B]y 31 December 2012, on the basis of the Ministry of Economic Development's guidelines, the [Italian Electrical Energy Authority] defines the minimum guaranteed prices, that is the integration of the revenues deriving from the participation to the electric market, in relation to the production of renewable energy systems which continue to be operated without incentives and for which... the production's safeguard is not ensured by the participation to the market.172
39.2. In the event in which the actual imbalance for a dispatching point in a relevant period were to be negative, the dispatching user pays... an actual imbalance compensation for the electric energy purchased within the ambit of the dispatching service.
40.4. The imbalance compensation for the measurement of the negative actual imbalances of which in paragraph 40.1, letter b), is equal:
(a) in each relevant period in which the aggregate imbalance by zone is positive, to the assessment price of the sales offers accepted in the market on the day before the relevant period in the zone in which the dispatching point is located;
(b) in each relevant period in which the aggregate imbalance by zone is negative, to the maximum value of the following:
(i) the highest price among those of the sales offers accepted in the market for the dispatching service for the purposes of balancing in real time in that relevant period, in the zone in which the dispatch point is located, and
ii) the measurement price of the sales offers accepted in the market on the preceding day in the relevant period, in the same zone.176
40.6. For the dispatching points by production unit powered by non-programmable renewable energy sources, as well as for the import or export dispatching points relating to electric frontiers belonging to a connection network for which there is no implemented verification of the programmed exchanges, the imbalance compensation is equal to the assessment price of the sales offers of electric energy accepted in the market on the day before the relevant period and in the zone in which the dispatch point is located.177 (emphasis added)
Discussions between the two companies took place over many months and resulted in the execution of a Framework Agreement in May 2010. For its part, First Reserve agreed to commit US $150 million to renewable energy projects in the targeted countries. SunEdison would propose specific renewable energy projects to be included in the joint venture i.e., that SunEdison would construct and that a joint venture company would then purchase and, by the time the framework agreement was concluded, SunEdison had developed an impressive list of potential projects.186
|S. No.||PV Plant||Regime(s)||Tariff(EUR/kWh)|
|1||San Marco||Second Conto Energia + Off-Take Regime||0,346|
|2||Santoro||Second Conto Energia + Off-Take Regime||0,346|
|3||Lenare||Second Conto Energia + Off-Take Regime||0,346|
|4||Campania||Second Conto Energia||0,346|
|5||Monaci||Second Conto Energia + Off-Take Regime||0,346|
|6||Rustico||Third Conto Energia||0,313|
|7||Milana||Third Conto Energia||0,313|
|8||Rovigo||Second Conto Energia||0,346|
|9||Fiumicino||Second Conto Energia||0,443|
IT BEING HELD that, due to the high level of charges accrued and the state of and prospects for technologies, it is sufficient to commit a further 700 million €/year approximately in incentive costs, for the purpose of accompanying [photovoltaic] energy in its progress towards competitiveness, outside the scope of support schemes. This amount will cover charges for plants on the register, those which access tariffs freely and plants which become operational during transitional periods …229
To cover GSE management costs, and the cost of checks and controls by GSE, the plant operators that access incentive tariffs under this decree and decrees issued in implementation of article 7 of legislative decree no. 387, 2003 [Off-Take Regime] and article 25 (10) of legislative decree no. 28, 2011 [Romani Decree], are under an obligation, commencing from 1 January 2013, to pay GSE a contribution of 0.05 euro cents for each kWh of subsidised energy, also by means of offset with incentives owed.231
Article 25(1): Charges incurred by the GSE for the conduct of management, audit and control activities, related to the incentive and support mechanisms, are to be borne by the beneficiaries of the same activities....
Article 25(2)(3): Within 60 days from the date of entry into force of this Legislative Decree, and every three years thereafter, the GSE proposes to the Minister of economic development the size of tariffs for the activities referred to in paragraph 1 to be applied as from 1 January 2015 and valid for three years. Rates are set by the GSE on the basis of costs, of planning and of development forecasts of the same activities. The proposal includes the methods of payment of the fees.234
The Legislative Decree, instead, provides for the minimum guaranteed prices to be always equal to the energy market prices, thus basically neutralizing the goals for which [the minimum guaranteed prices] had been introduced in the first place. These measures would require deep analysis of costs. Additionally, this measure might compromise the economic balance of those plants only partially benefiting from support regimes (as for example in case of repowering or revamping) which would be excluded from the application of minimum guaranteed prices in relation to the entire quantity of energy generated. In conclusion, in light of the foregoing considerations, we ask to restore the framework existing before the issue of the Legislative Decree.250
Non-programmable sources of electricity production are characterized by the fact that, while it is not objectively impossible to predict the [amount of] energy produced and fed into the grid, this prediction cannot reach the same level of precision as for programmable sources, by reason of the type of source and the variables that condition its operation... the first judge... has affirmed that the imposition of such costs must take account of the specificity of the source.259
The foregoing does not mean that the imbalance costs caused by these production units should, as it was the case in the previous regime, be socialized. This mechanism would lend itself to similar criticisms, as would achieve discrimination between operators to the benefit, not so clearly justifiable, of those who produce programmable energy.
The economic and technical regulatory power by the Authority must, therefore, be exercised in a manner that permits to reach a solution that, on the one hand, could protect the market in its entirety by imposing imbalance costs also to the production units in question [nonprogrammable sources], and, on the other, could introduce calibrated mechanisms, based on the specificity of the source, that could take into account the methods of electricity production and the resulting difficulties in making a prediction as to input into the grid, which could achieve the same degree of reliability that the programmable energy production units must guarantee.260
The production units fed by non-programmable renewable sources must be subject to regulation of imbalances... the burdens deriving from the imbalances imputable to nonprogrammable renewable sources must not be socialized in order to avoid unjustifiable discrimination, and in order not to continue to allocate burdens on the community... it is appropriate to review the guidelines on imbalances for non-programmable renewable sources on the basis of the second option presented in the document...262
Under Article 53 of the Constitution, the capacity to contribute ("capacità contributiva") represents the precondition and the limit to the taxation powers of the State and, at the same time, the duty of the taxpayer to take its share of the public expenditure, having to interpret this principle as a sectoral specification of the broader principle of equality under Article 3 of the Constitution... It is true that this Court has repeatedly stressed that "the Constitution does not impose a uniform taxation, with absolutely identical criteria and proportional for all types of tax"; rather it demands "an unfailing link with the ability to contribute, in a system framework informed to criteria of progression, as a further articulation, in the specific field of taxation, of the principle of equality, connected to the duty to remove the economic and social obstacles factually limiting the freedom and equality of citizens-human beings, in a spirit of political, economic and social solidarity (arts. 2 and 3 of the Constitution)... [A]ny diversification of the tax system, for economic areas or by type of taxpayers, must be supported by adequate justification, without which the differentiation might become arbitrary discrimination.279
The role entrusted to the Court as the guardian of the Constitution in its entirety requires avoiding constitutional declarations of illegality that determine, paradoxically, "effects even more incompatible with the Constitution"... of those that have led to declare unconstitutional the provision at stake. To avoid this, it is the duty of the Court to modulate its own decisions, even in terms of time, so as to avoid that the affirmation of a constitutional principle determines the sacrifice of another.281
(i) The first option provided under the Spalma-incentivi spread out reduced incentive tariffs over a period of 24 years starting from the entry into operation of a photovoltaic plant, instead of the original 20 year period. The incentive tariffs would be reduced pursuant to a percentage of reduction set out in the following table:310
|Residual Incentivizing Period(Years)||Percentage of Reduction of theIncentive|
(ii) The second option maintained the original 20 year period of incentive tariffs, but prescribed a remodulation of the incentive tariffs by dividing the tariffs between "a first period in which a reduced incentive tariff is disbursed", i.e. between 2015-2019; and "a second period in which the incentive tariffs [shall be] equally incremented".311 Under this option, the remodulation percentages were to be established by the Ministry for Economic Development by 1 October 2014, "with the aim of allowing a yearly saving, with respect to the current disbursements and on the assumption of the adhesion of all the producers to this option, of at least [EUR] 600 [m]illion for the period 2015-2019".312
These remodulation percentages were prescribed in the Decree of the Ministry for Economic Development dated 17 October 2014.313 On 27 October 2014, the GSE's website published the "Tables containing the values of the coefficients of remodulation (1-Xi) to be multiplied with the previous incentives... in the event of selection of option b) identified in Article 26, paragraph 3, Law No. 116 of August 11, 2014".314 Based on these Tables, for the years 2015-2019, the remodulation percentages range from 68.61% of the original tariff under the Conto Energia tariff regime, for photovoltaic plants having 11 years out of the 20 year incentive period remaining, to 90.30% for photovoltaic plants having 19 years or more remaining. Correspondingly, during the last five years of the 20 year incentive period, the remodulation percentages range from 131.39% of the original tariff under the Conto Energia tariff regime, for photovoltaic plants having 11 years of these 20 years remaining, to 109.70% of the original tariff for photovoltaic plants having 19 years or more remaining.315
(iii) The third option also maintained the original 20 year incentive period, but prescribed for a progressive reduction of incentive tariffs for the residual incentive period based on the capacity of a photovoltaic plant. This progressive reduction was stipulated in the following terms:
(a) 6% for photovoltaic plants having a capacity between 200 and 500 kW;
(b) 7% for photovoltaic plants having a capacity between 500 and 900 kW; and
(c) 8% for photovoltaic plants having a capacity higher than 900 kW.316
The recipients of the incentive tariffs mentioned in paragraphs 3 and 4 may access to bank loans amounting up to the difference between the expected incentive tariff as of 31 December 2014 and the remodulated incentive tariff pursuant to paragraphs 3 and 4. Such loans can benefit, cumulatively or alternatively, on the basis of agreements with the banking system, of funding or guarantees by Cassa depositi e prestiti S.p.A...320
Should it be necessary in relation to the remodulated duration of the disbursement of the incentive tariffs, the Regions and the local entities adapt, each in relation to their competences, the duration of the permits, however named, issued for the construction and operation of the [photovoltaic] plants falling within the scope of application of this Article 26.321
The recipients of long-term incentive tariffs, however named, for the production of renewable energy, can sell up to 80% of such incentives to a buyer selected amongst the "primary European financial players".322
(a) 2.20 EUR/kW for photovoltaic plants having a capacity between 3 and 6 kW;
(b) 2 EUR/kW for photovoltaic plants having a capacity between 6 and 20 kW;
(c) 1.80 EUR/kW for photovoltaic plants having a capacity between 20 and 200 kW;
(d) 1.40 EUR/kW for photovoltaic plants having a capacity between 200 and 1000 kW; and
(e) 1.20 EUR/kW for photovoltaic plants having a capacity above 1 MW.325
Intervention on the photovoltaic, by changing the terms of the agreements between the State and individuals, implies less credibility and worst international reputation... in the eyes of investors, then we cannot forget that many disputes are predictable both internal and in international fora. Indeed, such a mechanism... seems to conflict with the protection of investment forecasts contained in the European Energy Charter Treaty.333
As a matter of principle, the reliance of citizens in legal certainty is "a fundamental and indispensable element of the rule of law... However – as the firm case-law of this Court, in coherence also with that of the ECtHR, has clarified – protection of reliance does not entail, in our legal system, that the legislature may not enact provisions which change unfavorably the regulation of long-term relationships, and this even if their object are perfect legal rights... The only exception is, in matters of criminal law, that of the prohibition of retroactive norms, set by article 25, second para., of the Constitution". It remains firm that such provisions, "as any other legal norm, must not result in an irrational regulation, arbitrarily effecting substantial rights created by the previous law, frustrating in such way also the reliance of citizens in legal certainty"...
The analysis of the ratio of the contested norm excludes that it has unreasonably and unforeseeably affected the long-term relations, arising from the agreements reached by the percipients of the incentives with GSE, therefore violating the principle of legal certainty.
In fact, the legislature in 2014 has intervened in a general context in which, on the one hand, the remuneration of incentivizing fees for energy produced through photovoltaic apparatus was gradually increasing, taking into account both the costs of production as a result of the considerable technological development of the sector, and the overall European framework. But on the other hand, and correlatively, one registered the growing economic burden of such incentives on the final users of electric energy, especially on SMEs which are the fabric of national industry.338
[T]he guarantee of stability of the incentive for all the due period does not imply, however, as a necessary consequence, that the measure should remain unchanged for 20 years, unchanged and unaffected by the variations which are common to long-term contracts.
This is even truer if one considers that the agreements reached with GSE cannot be qualified as contracts meant to determine the exclusive profit of the operator, with terms and conditions blocked at the initial conditions, for twenty years, even if technological conditions may change profoundly. They are instead regulatory instruments, aimed at reaching the objective of incentivizing certain sources of energy in equilibrium with other sources of renewable energy, and with the minimum sacrifice for the users who ultimately bear the economic burden.339
Indeed, prior to Italy's retroactive amendment of the tariff regime, we had been distributing dividends to our investors, as expected when we made the original investment. The tariff reduction eliminated our ability to pay any substantive dividends and made it difficult, without a restructuring, to pay the debt service payments on the PV plants. This change eliminated any substantive return to our investors on the investment, and put the ability to even return the capital invested in the PV plants at substantial risk.341
(a) a declaration that the Tribunal has jurisdiction over this dispute;
(b) a declaration that Italy has violated the Energy Charter Treaty and international law with respect to Claimants' investments;
(c) 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;
(d) 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 SCC;
(e) 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
(f) any other relief the Tribunal deems just and proper.345
• a declaration that the Tribunal has jurisdiction under the ECT for all of Claimants' claims, thereby rejecting Respondent's jurisdictional objections in full;
• a declaration that Italy has violated Part III of the ECT and international law with respect to Claimants' investments;
• compensation to Claimants for all damages they have suffered as set forth in their Statement of Claim and in their Reply Memorial on the Merits and as may be further developed and quantified during 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 SCC;
• pre- 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.346
(a) Decline jurisdiction to decide, as the ECT does not cover intra-EU disputes.
(b) Alternatively, decline jurisdiction over the totality of claims, since:
- Some of the attacked measures are exempted under Article 21 ECT;
- No amicable solution has been attempted for some further measures; and
- The exclusivity forum choice contained in the GSE Agreements bans this Tribunal from judging under the Umbrella Clause.
(c) In a further alternative, decline admissibility of protection of the Claimants' alleged interests since these are barred from seeking relief, as they did not seek amicable solution for a number of claims.
(d) Should the Tribunal consider to have jurisdiction over the case and that claims are either totally or partially admissible, 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.
- The Respondent did not violate Article 10(1) ECT, fourth sentence, either, since it always adopted reasonable and non-discriminatory measures to affect Claimants' investment.
- 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.
(e) In the unfortunate event that the Tribunal were to recognize legitimacy to one of the Claimants' griefs:
- 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.
- Order the Claimant[s] to pay all relevant expenses and disbursements by the Respondent because of these proceedings in accordance with [SCC] Arbitration Rules.347
"Contracting Party" means a state or Regional Economic Integration Organisation which has consented to be bound by this Treaty and for which the Treaty is in force.
"Regional Economic Integration Organisation" means an organisation constituted by states to which they have transferred competence over certain matters a number of which are governed by this Treaty, including the authority to take decisions binding on them in respect of those matters.
"Area" means with respect to a state that is a Contracting Party:
(a) the territory under its sovereignty, it being understood that territory includes land, internal waters and the territorial sea; and
(b) subject to and in accordance with the international law of the sea: the sea, sea-bed and its subsoil with regard to which that Contracting Party exercises sovereign rights and jurisdiction.
With respect to a Regional Economic Integration Organisation which is a Contracting Party, Area means the Areas of the member states of such Organisation, under the provisions contained in the agreement establishing that Organisation.
Article 16: Relation to Other Agreements
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.
Article 25: Economic Integration Agreements
(1) 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.
(2) For the purposes of paragraph (1), "EIA" means an agreement substantially liberalising, inter alia, trade and investment, by providing for the absence or elimination of substantially all discrimination between or among parties thereto through the elimination of existing discriminatory measures and/or the prohibition of new or more discriminatory measures, either at the entry into force of that agreement or on the basis of a reasonable time frame.
(3) This Article shall not affect the application of the WTO Agreement according to Article 29.
Article 26: Settlement of Disputes between an Investor and a Contracting Party
(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.
(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:
(i) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States opened for signature at Washington, 18 March 1965 (hereinafter referred to as the "ICSID Convention"), if the Contracting Party of the Investor and the Contracting Party party to the dispute are both parties to the ICSID Convention; or
(ii) The International Centre for Settlement of Investment Disputes, established pursuant to the Convention referred to in subparagraph (a)(i), under the rules governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre (hereinafter referred to as the "Additional Facility Rules"), if the Contracting Party of the Investor or the Contracting Party party to the dispute, but not both, is a party to the ICSID Convention;
(b) a sole arbitrator or ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (hereinafter referred to as "UNCITRAL"); or
(c) an arbitral proceeding under the Arbitration Institute of the Stockholm Chamber of Commerce.
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.
Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein.
The rights and obligations 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 the Treaties.
To the extent that such agreements are not compatible with the Treaties, 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.
Article 30. Application of Successive Treaties Relating to the Same Subject-Matter
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.
Article 31. General Rule of Interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) Any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) Any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) Any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) Any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) Any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32. Supplementary Means of Interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) Leaves the meaning ambiguous or obscure; or
(b) Leads to a result which is manifestly absurd or unreasonable.
Article 41. Agreements to Modify Multilateral Treaties between Certain of the Parties Only
1. Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if:
(a) The possibility of such a modification is provided for by the treaty;
(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.
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. (emphasis added)