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INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

In the arbitration proceeding between

MAINSTREAM RENEWABLE POWER LTD, INTERNATIONAL MAINSTREAM
RENEWABLE POWER LIMITED, MAINSTREAM RENEWABLE POWER GROUP
FINANCE LTD, HORIZONT I DEVELOPMENT GMBH, HORIZONT II
RENEWABLE GMBH, AND HORIZONT III POWER GMBH

Claimants

and

FEDERAL REPUBLIC OF GERMANY

Respondent

ICSID Case No. ARB/21/26

AWARD

Members of the Tribunal
Ms. Wendy Miles KC, President of the Tribunal
Mr. Antolín Fernández Antuña, FCIArb, Arbitrator
Dr. Charles Poncet, M.C.L., Arbitrator

Secretary of the Tribunal
Mr. Govert Coppens

Date of dispatch to the Parties:

13 May 2026

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TABLE OF CONTENTS

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GLOSSARY OF SELECTED KEY TERMS

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I. INTRODUCTION

A. THE PARTIES

1. This arbitration was commenced by six entities in the Mainstream group of companies including:

a. Mainstream Renewable Power Limited (“Mainstream” or the “First Claimant”), a private company limited by shares and incorporated in Ireland in February 2008;

b. International Mainstream Renewable Power Limited (“Mainstream International” or the “Second Claimant”), a private company limited by shares and incorporated in Ireland in August 2008;

c. Mainstream Renewable Power Group Finance Ltd (“Mainstream Finance” or the “Third Claimant”), a private company limited by shares and incorporated in Ireland in January 2009;

d. Horizont I Development GmbH (“Horizont I” or the “Fourth Claimant”), a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated in Germany in October 2012;

e. Horizont II Renewable GmbH (“Horizont II” or the “Fifth Claimant”), a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated in Germany in June 2009; and

f. Horizont III Power GmbH (“Horizont III” or the “Sixth Claimant”), a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated in Germany in October 2012,

(jointly, the “Claimants”).

2. The First Claimant is a developer of wind and solar energy projects. It is the direct parent company of the Second and Third Claimants (owning 94% of the Second Claimant (the remaining 6% is owned by the Third Claimant) and 100% of the Third Claimant). The

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Second Claimant is the direct and sole parent company of the Fourth, Fifth and Sixth Claimants.

3. The Claimants are represented in the arbitration by:

Mr. Frode Strømø, Chief Transformation and Legal Officer
Mainstream Renewable Power Limited;

and

Dr. Markus Burgstaller, Partner
Mr. Scott Macpherson, Counsel
Ms. Iris Sauvagnac, Senior Associate
Ms. Bethany Pedder, Associate
Hogan Lovells International LLP
Atlantic House
Holborn Viaduct
London EC1A 2FG
United Kingdom.

4. The Respondent in the arbitration is the Federal Republic of Germany (“Germany”, the “Respondent" or the “Government”). The Respondent is represented in the arbitration by:

Dr. Anke Meier
Dr. Barbara Maucher
Noerr PartG mbB
Börsenstr. 1
60313 Frankfurt am Main
Federal Republic of Germany;

and

Ms. Annette Tiemann
Federal Ministry for Economic Affairs and Energy
Scharnhorststraße 34-37
10115 Berlin
Federal Republic of Germany.

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B. THE TRIBUNAL AND SECRETARY

5. The Tribunal in the arbitration is comprised of:

Ms. Wendy Miles KC, President of the Tribunal;
Mr. Antolín Fernández Antuña, FCIArb, Arbitrator; and
Dr. Charles Poncet, M.C.L., Arbitrator.

6. The Tribunal Secretary was Ms. Martina Polasek, (then) ICSID Deputy Secretary-General, from commencement of the proceedings to July 2023 and thereafter Mr. Govert Coppens, Legal Counsel, ICSID.

C. THE DISPUTE

7. The dispute has arisen out of the German government's climate change-related measures. These measures concerned its offshore wind regulatory and administrative framework, which existed within its broader renewable energy strategy and policy to scale up renewable electricity generation in accordance with climate change mitigation.¹ The dispute arises out of the German government's initial establishment of a framework, against which the Claimants took their investment decision, which was subsequently adjusted in a manner that, ultimately, deprived the Claimants of almost any value in their initial investment. Another ECT award arose out of the same changes to the German offshore wind regulatory and administrative framework, Strabag SE, Erste Nordsee-Offshore Holding GmbH and Zweite Nordsee-Offshore Holding GmbH v. Federal Republic of Germany (ICSID Case No. ARB/19/29), which found the host State to have been in breach of ECT investment protections.

8. The alleged investment comprises the Claimants' three offshore wind farms on the offshore sites, Horizont, Horizont Ost and Horizont West (subsequently renamed Horizont I, Horizont II and Horizont III), in the German North Sea (collectively the “Horizont Projects” or “Projects”). The planned total maximum capacity for the Horizont Projects was around 1.13 GW in 2008 (approximately 226 wind turbines) with potential to increase

¹ Resp. Rej, para. 362: “Increasing the legally binding expansion targets to at least 30 GW in 2030 follows from the fact that Respondent is now aligning its entire climate, energy and economic policy with the 1.5-degree climate protection path to which the EU has committed itself under the Paris Agreement”. ↩

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to over 1.6 GW by installing larger turbines. The First Claimant applied for consent to develop these in June and July 2008 (the “Consent Applications”).

9. The alleged host State measures arise out of the Respondent's changes to its offshore wind regulatory framework following the Claimants' investment. In particular, at the date of the Consent Applications, Germany's Federal Government's 2002 Strategy for Using Offshore Wind Energy (Strategie der Bundesregierung zur Windenergienutzung auf See) (the “2002 Offshore Wind Strategy”) enacted various statutory or regulatory instruments applicable to offshore wind in Germany, including:

a. the 2004 Renewable Energy Sources Act (Erneuerbare Energien-Gesetz) (the “2004 EEG”);

b. the 2004 Federal Spatial Planning Act (Raumordnungsgesetz) (the “ROG”);

c. the 2006 Offshore Installations Ordinance (Seeanlagenverordnung) (the “2006 SeeAnIV"); and

d. the 2006 Energy Industry Act (Energiewirtschaftsgesetz) (the “2006 EnWG”);

and published additional guidance and draft statutory or regulatory instruments, variously addressing offshore wind strategy and renewable permitting, grid connection and feed-in tariff regimes.

10. Subsequent to the Consent Applications: (i) the Respondent's 2012 amendments to the SeeAnlV indefinitely delayed the grant of consent/approval; and (ii) the Respondent's 2017 Offshore Wind Energy Act (Gesetz zur Entwicklung und Förderung der Windenergie auf See) (“WindSeeG”) cancelled any rights arising out of the Consent Applications, replacing the existing consent system with a new tender for offshore wind areas in the German North Sea with limited grandfathering benefits. The Claimants argue that the 2012 and 2017 legislation breached the Respondent's Energy Charter Treaty 1998 (“ECT”) obligation to provide fair and equitable treatment to qualifying investors (Article 10(1)), and the 2017 legislation breached its obligation not to expropriate qualifying investments without fair market value compensation (Article 13).

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11. The Respondent disputes the Tribunal's jurisdiction to hear the dispute on three bases:

a. it denies consent to arbitration in intra-European Union (“EU”) investment disputes, including pursuant to the ECT (ratione voluntatis);

b. it denies that the Claimants are qualifying investors within the meaning of the ECT (ratione personae); and

c. it denies that the Consent Applications for the Horizont Projects are qualifying investments within the meaning of the ECT (ratione materiae).

12. The Respondent further denies that it breached any substantive obligations pursuant to Article 10(1) and Article 13 of the ECT.

D. REQUESTS FOR RELIEF

13. In their Reply, the Claimants make the following request for relief:²

(i) the Tribunal's declaration that the dispute is within the jurisdiction and competence of ICSID and the Tribunal;

(ii) The Tribunal's declaration that all of the Claimants have standing to bring these claims;

(iii) The Tribunal's declaration that the Respondent has violated its international legal obligations under the ECT with respect to Mainstream's investments;

(iv) An award directing the Respondent to pay damages equivalent to the financial loss and damage incurred by Mainstream as a result of the Respondent's violations of its international legal obligations and pre-award interest thereon in the amount of at least EUR 353 million and post-award interest at the rate of six-month EURIBOR plus 4% compounded monthly until the date of the Respondent's full and effective payment;

(v) An award directing the Respondent to pay all costs and fees incurred in connection with these arbitration proceedings, including but not limited to the costs of the Tribunal and ICSID, legal costs, expert fees, consultant fees, and interest on such costs and fees; and

² Cl. Reply, para. 542. See also Cl. PHB, para. 115 (repeating the request for relief in the Claimants’ Reply subject to adjustment for compensation received under Sections 10a and 10b of the WindSeeG). ↩

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(vi) Any other relief the Tribunal deems just and proper.

14. In its Rejoinder, the Respondent requests the Tribunal to:³

1. Dismiss all Claimants’ claims for lack of jurisdiction, in event, dismiss all, or any remaining of, Claimants’ claims due to the lack of jurisdiction or for the lack of merit; and

2. Order Claimants to reimburse Respondent all its costs of the proceedings, with interest.

II. PROCEDURAL HISTORY

A. COMMENCEMENT OF THE PROCEEDINGS AND CONSTITUTION OF THE TRIBUNAL

15. On 30 April 2021, ICSID received a request for arbitration dated 30 April 2021 from Mainstream Renewable Power Ltd, International Mainstream Renewable Power Limited, Mainstream Renewable Power Group Finance Ltd, Horizont I Development GmbH, Horizont II Renewable GmbH and Horizont III Power GmbH against the Federal Republic of Germany (the “Request”), together with Exhibits C-0001 through C-0033 and Legal Authorities CL-0001 and CL-0002.

16. On 13 May 2021, the ICSID Secretary-General registered the Request in accordance with Article 36(3) of the ICSID Convention and notified the Parties of the registration. In the Notice of Registration, the Secretary-General invited the Parties to proceed to constitute an arbitral tribunal as soon as possible in accordance with Rule 7(d) of ICSID’s Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings.

17. The Parties agreed to constitute the Tribunal in accordance with Article 37(2)(a) of the ICSID Convention as follows: the Tribunal would consist of three arbitrators, one to be appointed by each Party and the third, presiding arbitrator to be appointed by agreement of the Parties.

18. On 5 June 2021, the Claimants appointed Dr. Charles Poncet, M.C.L., a national of the Swiss Confederation, as arbitrator; Dr. Poncet subsequently accepted his appointment. On

³ Resp. Rej., para. 912. ↩

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12 July 2021, the Respondent appointed Mr. Antolín Fernández Antuña, FCIArb, a national of the Kingdom of Spain, as arbitrator; Mr. Fernández Antuña subsequently accepted his appointment.

19. On 11 August 2021, the Claimants requested that the Chair of the ICSID Administrative Council (the “Chair”) appoint the arbitrator not yet appointed and designate him or her to be the President of the Tribunal in this case, pursuant to Article 38 of the ICSID Convention and ICSID Arbitration Rule 4. Later that same date, the ICSID Secretariat wrote to the Parties acknowledging the Claimants' request and inquiring whether the Parties would be amenable to ICSID conducting a ballot procedure to assist the Parties in the appointment of a mutually acceptable candidate; the Parties agreed to a ballot procedure by separate letters of 13 August 2021.

20. Following a successful ballot procedure, on 10 September 2021, the Parties appointed Ms. Wendy Miles KC, a national of New Zealand, as President of the Tribunal.

21. On 14 September 2021, the ICSID Secretary-General, in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings 2006 (the “ICSID Arbitration Rules”), notified the Parties that all three arbitrators had accepted their appointments and that the Tribunal was therefore deemed to have been constituted on that date. Ms. Martina Polasek, ICSID Deputy Secretary-General, was designated to serve as Secretary of the Tribunal; Ms. Polasek was subsequently replaced on 12 September 2023 by Mr. Govert Coppens, ICSID Legal Counsel.

B. THE WRITTEN PHASE AND PRE-HEARING STEPS

22. On 12 October 2021, the Respondent filed an application under Rule 41(5) of the ICSID Arbitration Rules (the “Rule 41(5) Application”), together with Legal Authorities RL-0001 through RL-0010.

23. On 15 October 2021, the Tribunal invited the Parties to consult and revert by 19 October 2021 with joint or separate proposals concerning the briefing schedule for the Rule 41(5) Application. The Tribunal also reminded the Parties that, as provided by ICSID Arbitration Rule 41(5), the Tribunal must notify its decision on the Application at the first session or

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promptly thereafter; therefore, given the imminent timing of the first session, the Tribunal invited the Parties to consider either a postponement of the first session or an extension of the time limit for the Tribunal's decision on the Rule 41(5) Application.

24. By emails of 19 October 2021, the Parties informed the Tribunal that they had agreed to the following: (i) the Claimants would file their observations on the Rule 41(5) Application on 22 October 2021; (ii) during the first session, the Parties would discuss with the Tribunal whether it requires further written or oral submissions on the Rule 41(5) Application; and (iii) the Tribunal would notify the Parties of its decision on the Rule 41(5) Application as soon as reasonably practicable following the first session, with a reasoned decision to follow at a later date. The Parties' agreement was subsequently approved by the Tribunal on 20 October 2021.

25. Pursuant to the Parties' agreement, on 22 October 2021, the Claimants filed a response to the Rule 41(5) Application (the “Response on Rule 41(5)”), together with Exhibits C-0034 through C-0039 and Legal Authorities CL-0003 through CL-0023.

26. In accordance with ICSID Arbitration Rule 13(1), the Tribunal held a first session with the Parties on 26 October 2021 (by video conference). During the first session, the Tribunal determined that each Party would file a second round of submissions on the Rule 41(5) Application. Pursuant to those instructions, on 5 November 2021, the Respondent submitted a reply to the Claimants' Response on Rule 41(5) (the “Reply on Rule 41(5)”), together with Legal Authorities RL-0011 through RL-0013 and, on 15 November 2021, the Claimants submitted observations thereon (the “Rejoinder on Rule 41(5)”), together with Exhibits C-0040 through C-0042 and Legal Authorities CL-0024 and CL-0025.

27. On 22 November 2021, the Tribunal issued Procedural Order No. 1 (“PO1”) recording the agreement of the Parties on procedural matters. PO1 provides, inter alia, that the applicable ICSID Arbitration Rules would be those in effect from 10 April 2006, that the procedural language would be English, and that the place of proceeding would be Washington, D.C., United States of America. Annex C to PO1 also set forth the agreed procedural calendar in the event that the Tribunal dismissed the Rule 41(5) Application, with a scenario involving a request for bifurcation of the proceeding.

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28. On 20 December 2021, the Tribunal informed the Parties that the Respondent's Rule 41(5) Application was denied and that a reasoned decision would follow as soon as possible. The Tribunal's reasoned decision was subsequently issued to the Parties on 18 January 2022 (the “Rule 41(5) Decision").

29. Following exchanges between the Parties and the Tribunal, on 26 January 2022, the Tribunal amended the procedural calendar contained in Annex C to PO1.

30. Pursuant to the amended procedural calendar, on 11 February 2022, the Claimants filed a memorial on the merits (the “Claimants’ Memorial on the Merits”), together with the Witness Statement of Dr. Ursula Prall dated 11 February 2022 (“Prall Witness Statement"); the Witness Statement of Mr. Tilman Schwencke dated 11 February 2022 (“Schwencke Witness Statement”), with Exhibits TS-0001 through TS-0004; the Witness Statement of Mr. Cameron Smith dated 11 February 2022 (“Smith Witness Statement"), with Exhibits CS-0001 and CS-0002; the Expert Report of Prof. Dr. Ekkehard Hofmann dated 11 February 2022 (“Hofmann Expert Report”), with Exhibits EH-0001 through EH-0041; the Expert Report of Mr. Richard Caldwell and Dr. Serena Hesmondhalgh of The Brattle Group dated 11 February 2022 (“Brattle Expert Report”), with Exhibits BR-0001 through BR-0102; Exhibits C-0043 through C-0163; and Legal Authorities CL-0026 through CL-0136.

31. On 25 March 2022, the Respondent filed a memorial on jurisdiction (the “Respondent's Memorial on Jurisdiction”), which included a request to bifurcate the proceeding (the “Respondent's Bifurcation Request”), together with Legal Authorities RL-0014 through RL-0076.

32. On 6 May 2022, the Claimants filed a memorial on jurisdiction (the “Claimants' Memorial on Jurisdiction”) wherein they responded to the Respondent's Bifurcation Request, together with Exhibits C-0164 through C-0177 and Legal Authorities CL-0137 through CL-0213. In their Memorial on Jurisdiction, the Claimants referred, inter alia, to a 28 April 2022 decision of the Higher Regional Court of Berlin regarding the Respondent's application under Section 1032(2) of the German Code of Civil Procedure

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to rule on the admissibility of the arbitral proceedings (the “April 2022 Berlin Court Decision").

33. On 23 May 2022, the Respondent informed the Tribunal that it intended to appeal the April 2022 Berlin Court Decision and requesting that the Tribunal stay the current proceeding until the German Federal Court of Justice (Bundesgerichtshof) (the “BGH”) had decided on the Respondent's appeal (the “Respondent's Application for Stay”).

34. Upon invitation from the Tribunal, on 25 May 2022, the Claimants provided comments on the Respondent's Application for Stay, arguing that it be dismissed. The Claimants also requested that the Tribunal order the Respondent to “pay all legal fees, costs and expenses incurred by the Claimants with regard to the request to stay this arbitration”. On 30 May 2022, the Respondent objected to the Claimants' request for the Tribunal to make a decision on costs.

35. Also on 30 May 2022, the Claimants clarified that the Respondent had already filed its appeal against the April 2022 Berlin Court Decision on 20 May 2022, and copied the appeal document to the Tribunal.

36. On 1 June 2022, the Tribunal issued Procedural Order No. 2 (“PO2”) rejecting the Respondent's Application for Stay.

37. On 7 June 2022, the Tribunal issued Procedural Order No. 3 (“PO3”) wherein it, by majority, denied the Respondent's Bifurcation Request; Mr. Fernández Antuña attached a dissenting opinion.

38. By email of 1 July 2022, the Respondent requested that the ICSID Secretariat “inquire about the current particulars” of the Claimants; the Respondent informed that the Claimants were using “different addresses than those which are currently on ICSID's records” and there had also been “certain changes in [the] Claimants' management”. Upon invitation from the Tribunal, the Claimants responded by email of 7 July 2022 and attached Exhibits C-0178 through C-0186. The Claimants commented further on this issue by email of 13 July 2022 and attached Exhibit C-0187.

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39. On 26 August 2022, the Respondent filed a counter-memorial on the merits (the “Respondent's Counter-Memorial”), together with the Witness Statement of Dr. Nico Nolte dated 25 August 2022, with Exhibits NN-0001 through NN-0016; the Witness Statement of Ms. Martina Nemitz dated 26 August 2022, with Exhibits MN-0001 through MN-0011; the Expert Report of Mr. Till Neupert and Mr. Petja Stöver of Umlaut Energy dated 26 August 2022 (“Umlaut Expert Report"), with Exhibits UM-0001 through UM-0031; the Expert Report of Mr. Alexander Demuth of Alvarez & Marsal dated 26 August 2022, with Exhibits AD-0001 through AD-0092; the Expert Report of Mr. Richard Slark of Alvarez & Marsal dated 26 August 2022 (“Slark Expert Report”), with Exhibits RS-0001 through RS-0074; the Expert Report of Prof. Dr. Thomas Schomerus, Prof. Dr. Jelena Bäumler and Prof. Dr. Jörg Terhechte dated 26 August 2022 (“SBT Expert Report”), with Exhibits SBT-0001 through SBT-0189; Exhibits R-0001 through R-0047; and Legal Authorities RL-0077 through RL-0277.

40. By letter of 6 September 2022, the Respondent requested that the 9 September 2022 deadline set for the Parties' exchange of document production requests, as well as “all subsequent filing deadlines [be] postponed by four months” due to the Russian invasion in Ukraine and the resulting burden on the resources of the German Federal Ministry for Economic Affairs and Energy. On 9 September 2022, the Tribunal invited the Claimants' comments and provisionally moved the deadline for the exchange of the Parties' document production requests to 14 September 2022. The Claimants made their comments by later email of 9 September 2022.

41. On 13 September 2022, the Tribunal transmitted to the Parties an amended procedural calendar with the deadline for the Parties' exchange of document production requests moved to 7 October 2022 and corresponding extensions of the subsequent procedural deadlines. On 14 September 2022, the Tribunal issued an amended Annex C to PO1.

42. On 6 October 2022, the European Commission (the “European Commission”) filed an application for leave to intervene as a non-disputing party (the “European Commission Application"). In accordance with ICSID Arbitration Rule 37(2), on 11 October 2022, the Tribunal invited the Parties to submit their observations on the European Commission

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Application. Each Party submitted its respective observations on 25 October 2022; the Claimants also filed Exhibits C-0188 through C-0192 and Legal Authorities CL-0214 through CL-0223, and the Respondent also filed Legal Authorities RL-0228 through RL-0237.

43. Following previous exchanges between the Parties, by the Respondent's email of 10 October 2022 and the Claimants' email of 12 October 2022, the Parties agreed that the place of the hearing would be London, United Kingdom.

44. By email of 2 November 2022, “[i]n the interest of transparency, and in order that the Tribunal remains informed about the progress of the proceedings before the BGH”, the Claimants provided a copy of their response to the Respondent's appeal of the April 2022 Berlin Court Decision (see above paragraphs 32 and 35).

45. Pursuant to the amended procedural calendar, on 11 November 2022, the Parties exchanged responses and objections on document production; the Respondent also filed Legal Authorities RL-0238 through RL-0246. The Parties' submissions were transmitted to the Tribunal on 14 November 2022.

46. On 2 December 2022, the Parties exchanged replies on document production in the form of completed Stern Schedules; the Respondent also filed Legal Authorities RL-0247 and RL-0248. The Parties' submissions were transmitted to the Tribunal later that same date.

47. On 9 January 2023, the Tribunal issued Procedural order No. 4 (“PO4”) concerning document production.

48. By letter of 30 January 2023, the Respondent wrote to the Tribunal alleging that the Claimants had not complied with the Tribunal's orders in PO4; upon invitation from the Tribunal, the Claimants responded by letter of 2 February 2023, wherein they argued that the Respondent's document production was “defective”.

49. On 1 February 2023, the Tribunal issued Procedural Order No. 5 (“PO5”) concerning the European Commission Application. The Tribunal directed the European Commission to

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file a brief written submission, limited in scope, by 30 March 2023; all other requests were denied.

50. On 3 February 2023, the Tribunal invited further comments from the Respondent on the Claimants' compliance with PO4; the Respondent responded by letter of 7 February 2023.

51. By email of 10 February 2023, the Claimants informed the Tribunal that they had completed their production of documents to the Respondent as ordered in PO4 and reserved their rights to respond to the Respondent's 7 February letter.

52. On 6 March 2023, the Tribunal issued Procedural Order No. 6 (“PO6") concerning production of documents. In PO6, the Tribunal, inter alia, “ma[de] no orders against the Claimants on the basis that document production was finally completed by 10 February 2023”.

53. On 10 March 2023, the Respondent filed what it referred to as a “Protest against PO 6”, together with Legal Authorities RL-0249 through RL-0252. Therein, the Respondent, inter alia, protested “against the retention of certain documents by [the] Claimants on the grounds of legal privilege”, including the Claimants' internal communications with their witness, Dr. Ursula Prall (the “Dr. Prall communications"); the Respondent argued that by calling Dr. Prall as a witness, the Claimants “waived any legal privilege attached to the legal advice" given by Dr. Prall and are therefore “estopped from claiming legal privilege”. Upon invitation from the Tribunal, the Claimants responded by letter of 16 March 2023 and argued that the Respondent's “Protest against PO 6" should be rejected. The Respondent made further comments by letter of 24 March 2023 and filed Legal Authorities RL-0253 and RL-0254.

54. Pursuant to PO5, on 30 March 2023, the European Commission filed a non-disputing party submission (the “European Commission Submission”).

55. On 5 May 2023, the Claimants filed a reply on the merits and counter-memorial on jurisdiction (the “Claimants' Reply"), together with the Second Witness Statement of Mr. Tilman Schwencke dated 5 May 2023 (“Schwencke Second Witness Statement"), with Exhibits TS-0005 through TS-0007; the Second Witness Statement of Dr. Ursula Prall

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dated 5 May 2023, with Exhibits UP-0001 through UP-0012; the Expert Report of Mr. Arjen Schampers and Mr. Thomas Hellmund of Merkur dated 5 May 2023 (“Schampers/Hellmund Expert Report”), with Exhibits MK-0001 through MK-0082; the Second Expert Report of Mr. Richard Caldwell and Dr. Serena Hesmondhalgh of The Brattle Group dated 5 May 2023, with Exhibits BG-0103 through BG-0176; the Second Expert Report of Prof. Dr. Ekkehard Hofmann dated 5 May 2023 (“Hofmann Second Expert Report”), with Exhibits EH-0042 through EH-0058; Exhibits C-0193 through C-0283; and Legal Authorities CL-0228 through CL-0280.

56. Also by letter of 5 May 2023, the Claimants informed the Tribunal that their witness, Mr. Cameron Smith, would be unable to continue to participate in the arbitration (including giving evidence at the hearing) due to a medical condition. Upon invitation from the Tribunal, the Respondent provided its comments by letter of 17 May 2023 and filed Legal Authorities RL-0255 and RL-0256. The Respondent requested, inter alia, that the Tribunal strike Mr. Smith's Witness Statement from the record and “[e]ntirely disregard” the Statement in its eventual award.

57. On 26 May 2023, the Tribunal confirmed to the Parties that Mr. Cameron Smith's Witness Statement currently remained admissible and that it would consider what, if any, weight to accord the Statement in its eventual award. The Tribunal also directed that, in the event that the Respondent notified its intention to cross-examine Mr. Smith at the hearing, the Claimants were to submit an update concerning Mr. Cameron Smith's health at that time.

58. On 30 May 2023, the Tribunal issued Procedural Order No. 7 (“PO7”) concerning the Respondent's 10 March “Protest against PO 6”. In PO7, the Tribunal, inter alia, invited the Parties to comment on the appointment of a third-party neutral reviewer to review privilege in respect of certain documents in the Claimants' Privilege Log, and invited the Parties to provide any additional submissions as to the law applicable to privilege and waiver of the Dr. Prall communications and the scope of waiver; the Parties' responses were requested by 2 June 2023. Following a request from the Respondent, the deadline was subsequently extended to 16 June 2023.

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59. On 31 May 2023, the Claimants filed an application for provisional measures (the “Claimants' Provisional Measures Application”), together with the Witness Statement of Dr. Markus Burgstaller dated 30 May 2023; Exhibits C-0284 through C-0303; and Legal Authorities CL-0281 through CL-0306. In the Provisional Measures Application, the Claimants requested the Tribunal to issue recommendations that, inter alia, the Respondent withdraw its appeal of the April 2022 Berlin Court Decision before the BGH and that the Respondent “refrain[ ] from initiating any further applications or proceedings against any of the Claimants or related entities before any national court that have the purpose of preventing the Claimants or related entities from continuing the Arbitration”. Later that same date, the Tribunal invited the Respondent's observations on the Provisional Measures Application by 9 June 2023.

60. Further to the Tribunal's invitation in PO7, by letter of 1 June 2023, the Claimants, inter alia, informed the Tribunal that they were willing to produce to the Respondent the documents proposed to be submitted to a third-party neutral reviewer, subject to certain conditions.

61. On 9 June 2023, the Respondent submitted observations on the Claimants' Provisional Measures Application, together with the Witness Statement of Dr. Matthias Koch dated 7 June 2023; the Second Witness Statement of Dr. Nico Nolte dated 8 June 2023; Exhibit R-0048; and Legal Authorities RL-0257 through RL-0274.

62. On 16 June 2023, the Respondent responded to the Tribunal's directives in PO7 and confirmed that, further to the Claimants' 1 June letter, a neutral third-party reviewer of the Claimants' Privilege Log was “no longer required”.

63. On 14 July 2023, the Claimants wrote to the Tribunal asking it to indicate when it intended to issue its decision on the Provisional Measures Application.

64. On 17 July 2023, the Tribunal issued Procedural Order No. 8 (“PO8”) concerning the Claimants' Provisional Measures Application. The Tribunal denied the Claimants' Application; however, it did “require that the Respondent [...] refrains from initiating any further applications or proceedings against any of the Claimants or related entities before

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any national court that have the purpose of preventing [them] from continuing the Arbitration [...] or, at minimum, notifies the Claimants and the Tribunal well in advance of any further filing before any national court with a connection to the Arbitration".

65. On 21 July 2023, the Tribunal wrote to the Parties regarding logistics for the upcoming hearing, including inquiring whether either Party objected to public access at the hearing; the Claimants informed the Tribunal of their objection on 26 July 2023. By letter of 28 July 2023, the Respondent stated its preference that the hearing be open to the public. On 4 August 2023, the Tribunal took note of the Parties' positions and informed them that the hearing would be closed to the public pursuant to ICSID Arbitration Rule 32(2).

66. On 4 August 2023, the Respondent filed a rejoinder on the merits and a reply on jurisdiction (the “Respondent's Rejoinder"), together with the Witness Statement of Dr. Guido Wustlich dated 5 July 2023 (“Wustlich Witness Statement"), with Exhibits GW-0001 through GW-0011; the Witness Statement of Mr. Thorsten Falk dated 12 July 2023 (“Falk Witness Statement”), with Exhibits TF-0001 through TF-0026; the Witness Statement of Mr. Dirk Wendel dated 3 August 2023, with Exhibits DW-0001 through DW-0008; the Second Witness Statement of Ms. Martina Nemitz dated 13 July 2023 (“Nemitz Second Witness Statement"), with Exhibits MN-0012 through MN-0015; the Third Witness Statement of Dr. Nico Nolte dated 10 July 2023 (“Nolte Third Witness Statement"), with Exhibits NN-0017 through NN-0021; the Second Expert Report of Mr. Till Neupert and Mr. Petja Stöver of Umlaut Energy dated 3 August 2023, with Exhibits UM-0032 through UM-0070; the Second Expert Report of Mr. Richard Slark of Alvarez & Marsal dated 4 August 2023 (“Slark Second Expert Report”), with Exhibits RS-0075 through RS-0087; the Second Expert Report of Prof. Dr. Thomas Schomerus, Prof. Dr. Jelena Bäumler and Prof. Dr. Jörg Terhechte dated 4 August 2023, with Exhibits SBT-0190 through SBT-0245; the Second Expert Report of Mr. Alexander Demuth of Secretariat Advisors dated 4 August 2023, with Exhibits SE-0093 through SE-0152; Exhibits R-0049 through R-0092; and Legal Authorities RL-0275 through RL-0328.

67. By separate letters of 7 August 2023, each Party informed the Tribunal of the witnesses and experts that it wished to examine during the hearing. In its letter, the Respondent called

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the Claimants' witness, Mr. Cameron Smith, with the request that the Claimants submit a “proper medical certificate” concerning his inability to appear and testify as a witness at the hearing; the Respondent also upheld its request that, if the Claimants did not present Mr. Cameron Smith for cross-examination, his Witness Statement must be disregarded by the Tribunal and struck from the record (see above paragraphs 56–57). In their letter, the Claimants stated that Mr. Cameron Smith remained “unable to testify at the final hearing” and they offered to provide an updated medical certificate as confirmation.

68. On 10 August 2023, the Respondent requested that the Tribunal's decision concerning public access to the hearing be issued as a Procedural Order, which would then be published on the ICSID website in accordance with the publication provisions of PO1.

69. Also on 10 August 2023, the Tribunal invited the Claimants to provide an update on Mr. Cameron Smith's health status by 14 August 2023; the Claimants did so, stating that Mr. Smith's health “remains the same as in the Claimants' letters of 5 May 2023 and 7 August 2023. He [...] remains unable to testify at the final hearing, whether in person or remotely". The Claimants stated that they would provide an updated medical certificate as soon as it was available. Finally, the Claimants argued that Mr. Cameron Smith's evidence “has important corroborative value and sufficient weight should be accorded to it as a result".

70. Later on 14 August 2023, the Claimants wrote to the Tribunal concerning the Witness Statements of Dr. Guido Wustlich, Mr. Thorsten Falk and Mr. Dirk Wendel submitted with the Respondent's Rejoinder (the “New Witness Evidence”), asserting that this evidence “was submitted belatedly with the Rejoinder in circumstances where it could and should have been submitted with the Respondent's Counter-Memorial”. The Claimants requested that the Tribunal order: (i) that “the New Witness Evidence shall not form part of the record in the Arbitration”, and (ii) that the Respondent “re-submit its Rejoinder without reference to the New Witness Evidence by no later than 31 August 2023” (the “New Evidence Application"). Upon invitation from the Tribunal, by letter of 15 August 2023, the Respondent provided brief observations on the New Evidence Application and argued that it should be rejected by the Tribunal.

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71. On 16 August 2023, the Tribunal held a pre-hearing organizational conference with the Parties by video conference (“PHC”). During the PHC, the Parties, inter alia, made further oral submissions concerning the New Evidence Application.

72. On 17 August 2023, the Tribunal issued Procedural Order No. 9 (“PO9”) concerning the organization of the upcoming hearing. Further to the Respondent's 10 August request, Section (II)K(1) of PO9 indicates that the hearing would be closed to the public (see above paragraphs 65 and 68).

73. Also in PO9, the Tribunal dismissed the New Evidence Application, with reasoning to follow in a separate Order; the Tribunal invited the Claimants to introduce new evidence that is “strictly responsive” to the New Witness Evidence by 13 September 2023.

74. On 24 August 2023, the Tribunal issued Procedural Order No. 10 (“PO10”) containing the reasoning for its decision on the New Evidence Application.

75. On 1 September 2023, the Claimants requested leave from the Tribunal to introduce new evidence into the record. Upon invitation from the Tribunal, the Respondent provided observations on the request on 14 September 2023.

76. Also on 1 September 2023, the Claimants provided an updated medical certificate for Mr. Cameron Smith (see above paragraph 69).

77. On 11 September 2023 and further to a request from the Tribunal, the Parties submitted a joint “Agreed Chronology” relating to this arbitration.

78. On 13 September 2023, pursuant to the Tribunal's invitation in PO9, the Claimants filed Exhibits C-0304 through C-0310 in response to the New Witness Evidence.

79. On 15 September 2023, the Tribunal informed the Parties that the Claimants' 1 September request to introduce new evidence was granted, “with the Tribunal's reasoning to follow as part of the Tribunal's eventual ruling in this arbitration”; the Claimants therefore filed Exhibits C-0311 through C-0337 and EH-0024 on 15 September 2023.

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C. SUBSTANTIVE ORAL HEARING

80. A hearing on jurisdiction and the merits was held at the International Centre for Dispute Resolution in London, United Kingdom, from 18 to 28 September 2023 (the “Hearing”). The following persons were present at the Hearing:⁴

Tribunal:

ICSID Secretariat:

For the Claimants:

Counsel:

Parties:

⁴ The “*” symbol denotes a remote participant (i.e., appearing by video conference only) and the “+” symbol denotes a hybrid participant (i.e., appearing in-person and by video conference). ↩

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Witnesses:

Dr. Ursula Prall
Mr. Tilman Schwencke

Experts (with technical support):

For the Respondent:

Counsel:

Parties:

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Witnesses:

Experts (with technical support):

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Court Reporter:

Interpreters:

Technical Support:

81. During the Hearing, the following persons were examined:

On behalf of the Claimants:

Witnesses:

Dr. Ursula Prall
Mr. Tilman Schwencke

Experts:

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On behalf of the Respondent:

Witnesses:

Experts:

D. POST-HEARING STEPS

82. As noted at paragraph 79 above, on 15 September 2023, the Tribunal informed the Parties that the 13 new documents that the Claimants had requested be introduced in their application of 1 September 2023 would be allowed onto the record, with the Tribunal's reasoning to follow as part of the Award. Those reasons are as follows:

a. in PO9, paragraph 48, the Tribunal had accepted the existence of special circumstances for any new documents that were strictly responsive evidence to the Respondent's three new witness statements, but none of the 13 new documents was within that category;

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b. PO1, paragraph 16.4, permits the admission out of time of new documents in the event of “special circumstances based on a reasoned request", having provided a reasonable opportunity for the other side to respond;

c. the PO1, paragraphs 16.4.1 and 16.4.2 requirements for the Claimants' full application and the Respondent's opportunity to respond were complied with;

d. two of the 13 new documents satisfied the special circumstances requirement because both post-dated the last filing, namely:

i. declarations of acceptance by Germany regarding the transfer of rights for “reusable data” for the Projects (“Declarations of Acceptance"); and

ii. documents relating to the recent auctions held over sites overlapping with the Project sites (“Auction Documents");

e. three of the 13 new documents in the form of native files, legal authorities and translations, satisfied the special circumstances requirement because these related to documents that were already part of the evidential record and, in the Tribunal's view, potentially would assist it to determine the dispute between the Parties, namely:

i. native version of Exhibit SE-0117, in order that its metadata may be reviewed in addition to screenshots of that metadata (“Native SE-0117”);

ii. additional legal authorities arising out of the Respondent's submissions in the Rejoinder on the intra-EU Objection (“Intra-EU Authorities”);

iii. additional English translations of partially translated documents filed with the Parties' submissions;

f. at least one of the 13 new documents appeared already to be in the evidential record, namely:

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i. minutes of a meeting held at the Federal Maritime and Hydrographic Agency (“Bundesamt für Seeschifffahrt und Hydrographie” or “BSH"), the agency responsible for the approval procedure/consenting process for construction and operation of offshore wind farms on 2 November 2009 (“BSH Minutes"); and

g. the remaining seven of the 13 new documents did not post-date the last filing and were not in the same 'pragmatic' usefulness category of native files, legal authorities and translations, but nevertheless satisfied the special circumstances requirement because they: (i) directly responded to a point or challenge raised in the Rejoinder, (ii) potentially may be relevant to the facts in issue in the dispute (as crystalised following the Rejoinder), (iii) potentially had value to the Tribunal in its determination, (iv) were not claimed to cause prejudice by their late inclusion, (v) were submitted in good time following the Rejoinder and prior to the Hearing, (vi) were limited in number and length, and (vii) at least some were already available to the Respondent, namely:

i. presentation delivered by Dr. Nico Nolte dated 29 May 2008 (“Nolte Presentation");

ii. email from Mr. Tilman Schwencke to Ms. Martina Nemitz and [Redacted] dated 6 March 2013 (“Schwencke Email");

iii. email from [Redacted] to Mr. Tilman Schwencke dated 6 June 2010 (“[Redacted] Email");

iv. permit applications for Horizont II and Horizont III as amended on 28 August 2009 and submitted on 22 December 2009 (“Permit Applications");

v. BSH Offshore Flyer dated 2018 (“BSH Flyer");

vi. four screenshots of Mainstream's website accrediting Mainstream's experience in developing offshore wind farms beyond consent, including

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two screenshots of Mainstream's webpages mentioned in footnotes 224 and 225 of the Schampers/Hellmund Expert Report; and

vii. press release by Mainstream dated 18 December 2010 relating to the Shady Oaks Wind Farm (“Shady Oaks Press Release”).

83. Upon invitation from the Tribunal made during the Hearing, on 6 October 2023, the Respondent provided a “list of the intra-EU issues regarding jurisdiction on which it requests a ruling from the Tribunal”.

84. Also during the Hearing, the Tribunal had directed that the Parties should ensure that the “entirety of prior awards are included on the record”. In accordance with these directions, on 9 October 2023, the Claimants filed Exhibits C-0338 and C-0339 (updated English translations as agreed by the Parties) and on 10 October 2023, the Claimants filed Legal Authorities CL-0309 through CL-0364; and on 24 November 2023, the Respondent filed Legal Authorities RL-0329 through RL-0375.

85. On 20 October 2023, the Tribunal subsequently directed the Parties to provide further details and explanations regarding certain quantum calculations, together with their post-Hearing briefs, by 24 November 2023.

86. On 21 November 2023, the Claimants requested leave from the Tribunal to file additional legal authorities into the record with their post-Hearing brief. Upon invitation from the Tribunal, the Respondent submitted its observations on the request on 1 December 2023. On 4 December 2024, the Tribunal communicated to the Parties its decision to grant the Claimants' request, and confirmed that it would consider any request from the Respondent to file a responsive authority should it wish to do so.

87. On 24 November 2023, the Parties filed simultaneous post-Hearing briefs (the “Claimants' Post-Hearing Brief" and the “Respondent's Post-Hearing Brief); the Claimants also filed Exhibits C-0340 through C-0359, and the Respondent filed Legal Authorities RL-0376 through RL-0378. Also on 24 November 2023, the Parties provided their further explanations on quantum pursuant to the Tribunal's 20 October 2023 directions.

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88. Following exchanges between the Parties, the transcript of the Hearing was finalised on 2 December 2023.

89. On 15 December 2023, the Parties filed simultaneous reply post-Hearing briefs (the “Claimants' Reply Post-Hearing Brief” and the “Respondent's Reply Post-Hearing Brief"); the Claimants also filed Exhibit C-0360 and Legal Authorities CL-0365 through CL-0367.

90. Following a request from the Respondent and the subsequent agreement of the Claimants, on 18 December 2023, the Tribunal extended the deadline for the Parties to file their costs submissions to 16 February 2024.

91. On 16 February 2024, the Parties filed simultaneous costs submissions (the “Claimants’ Costs Submission” and the “Respondent's Costs Submission”); the Claimants also filed Exhibits C-0361 through C-0407, and the Respondent filed Legal Authority RL-0379.

92. On 21 February 2024, the Parties informed the Tribunal of their agreement to submit reply costs submissions by 7 March 2024; the Tribunal confirmed the Parties' agreement on 22 February 2024.

93. On 7 March 2024, the Parties filed simultaneous reply costs submissions (the “Claimants' Reply Costs Submission” and the “Respondent's Reply Costs Submission"); the Claimants also filed Exhibits C-0408 through C-0411 and Legal Authorities CL-0368 through CL-0372.

E. POST-HEARING ADDITIONAL DOCUMENTS

94. On 4 July 2024, the Claimants requested leave from the Tribunal pursuant to PO1 to file additional documents into the record, “on account of the special circumstances that exist following the hearing and post-hearing submissions in this Arbitration”. Upon invitation from the Tribunal, the Respondent submitted its observations on the request on 10 July 2024.

95. On 30 September 2024, the Respondent requested leave from the Tribunal pursuant to PO1 to file into the record two recent decisions of the German Federal Constitutional Court

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(Bundesverfassungsgericht). Upon invitation from the Tribunal, the Claimants submitted their observations on the request on 11 October 2024, noting that they did not oppose the request so long as they be provided the opportunity to comment on those documents. The Claimants also reminded the Tribunal of their 4 July 2024 request to introduce new documents which had not yet been determined.

96. On 30 October 2024, the Claimants wrote to the Tribunal, inter alia, concerning compensation received by certain Claimants from a sale of assets, reducing the total amount claimed. Upon invitation from the Tribunal, the Respondent provided observations on the Claimants' updated damages calculation on 11 November 2024.

97. On 13 November 2024, the Tribunal informed the Parties that it granted the Claimants' 4 July 2024 application to introduce new documents and granted the Respondent's 30 September 2024 application to introduce new documents. The Tribunal also requested that the Parties submit into the record three prior awards dealing with the intra-EU jurisdictional objection. The Tribunal ordered the Parties to submit all new documents by 14 November 2024 and make any observations thereon by 28 November 2024.

98. Pursuant to the Tribunal's directions of the previous date, on 14 November 2024, the Claimants filed Exhibits C-0412 through C-0414 and Legal Authority C-0373, and the Respondent filed Legal Authorities RL-0380 through RL-0386. The Parties subsequently filed their observations on the new documents on 28 November 2024.

99. Subsequently on 28 November 2024, the Claimants wrote to the Tribunal stating that the Respondent “ha[d] made observations on its own documents added to the record” and requested leave from the Tribunal to submit observations on Exhibits C-0412 through C-0414. The Tribunal granted the Claimants' request on 3 December 2024, and the Claimants made their observations on 4 December 2024.

(1) The Strabag v. Germany Award of 18 December 2024

100. On 13 March 2025, the Claimants further requested that the Tribunal order the Respondent to produce the award rendered on 18 December 2024 in the case Strabag SE, Erste Nordsee-Offshore Holding GmbH and Zweite Nordsee-Offshore Holding GmbH v. Federal

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Republic of Germany (ICSID Case No. ARB/19/29) (the “Strabag Award”) pursuant to PO1 and ICSID Arbitration Rule 34(2)(a). Upon invitation from the Tribunal, on 4 April 2025, the Respondent commented on the Claimants' request and argued that it should be denied.

101. On 7 April 2025, the Claimants requested leave from the Tribunal to add the Strabag Award into the record in light of the fact that the Award had entered the public domain on 4 April 2025. Upon invitation from the Tribunal, on 25 April 2025, the Respondent commented on the Claimants' request and argued that it should be denied.

102. On 5 May 2025, the Tribunal informed the Parties that it granted the Claimants' request to submit the Strabag Award into the record and invited the Claimants to circulate the Award at their earliest convenience. The Tribunal also requested that the Respondent introduce into the record at its earliest convenience the accompanying decision on rectification issued on 30 April 2025 in Strabag SE, Erste Nordsee-Offshore Holding GmbH and Zweite Nordsee-Offshore Holding GmbH v. Federal Republic of Germany (ICSID Case No. ARB/19/29) (the “Strabag Rectification Decision”). In its message, the Tribunal stated that it did “not wish to receive written observations on these rulings”.

103. Subsequently on 5 May 2025, the Claimants submitted the Strabag Award into the record as Legal Authority CL-0374.

104. On 9 May 2025, the Respondent filed what it termed a “protest” against the Tribunal's decision of 5 May 2025. Therein, the Respondent, inter alia, requested the “opportunity to comment on the [Strabag] Award in writing". The Respondent also stated that as the Strabag Rectification Decision had not entered the public domain, the Decision “remains confidential" and the Respondent is “not in a position to submit this Decision as a legal exhibit in these proceedings”. On 11 May 2025, the Claimants commented on the Respondent's request stating, inter alia, that they did not object to the Respondent being granted leave to comment on the Strabag Award so long as the Claimants were granted the opportunity to respond.

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105. On 13 May 2025, the Tribunal directed the Parties to (i) submit their respective observations on the Strabag Award by 27 May 2025; and (ii) submit updated statements of costs by 17 June 2025.

106. On 27 May 2025, each Party filed its observations on the Strabag Award (the “Claimants' Observations on Strabag” and the “Respondent's Observations on Strabag”).

107. On 5 June 2025, the Secretary of the Tribunal transmitted to the Parties a further disclosure by Dr. Poncet.

108. On 17 June 2025, each Party filed its updated costs submission (the “Claimants' Update on Costs" and the “Respondent's Update on Costs”). In its cover email, the Respondent requested leave to comment on the Claimants' Update. On 23 June 2025, the Tribunal granted each Party leave to respond to the other's Update on Costs by 30 June 2025.

109. On 25 June 2025, the Respondent submitted a list of questions to Dr. Poncet in light of his 5 June further disclosure. On 30 June 2025, Dr. Poncet made an additional disclosure to the Parties.

110. On 30 June 2025, each Party commented on the other's Update on Costs (the “Claimants' Reply Update on Costs” and the “Respondent's Reply Update on Costs”).

(2) The International Court of Justice Advisory Opinion of 23 July 2025

111. On 31 July 2025, the Claimants requested leave from the Tribunal to submit into the record the International Court of Justice Advisory Opinion of 23 July 2025 on the Obligations of States in Respect of Climate Change (the “ICJ Advisory Opinion”).

112. Upon invitation from the Tribunal, on 6 August 2025, the Respondent commented on the Claimants' request, stating its objection thereto on the alleged bases that:

a. the ICJ Advisory Opinion “is of no relevance to these arbitration proceedings";

b. the Claimants' case relies on an alleged violation of the ECT, not any violation of the UNFCCC “on which the ICJ rendered its ICJ Opinion”; and

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c. the Claimants “(correctly) do and did not claim damages on the basis of an alleged violation of the ECT's preamble ... [nor] on the basis that, allegedly, Respondent would not fulfill its obligations under the Climate Change Convention”, and “[h]ence, the ICJ Opinion does not contribute anything to the solution of the current dispute and should not be added to the record".

113. On 2 September 2025, the Tribunal rejected the Respondent's objections and admitted the ICJ Advisory Opinion into the record. Subsequently, later that same date, the Claimants filed the Opinion as Legal Authority CL-0375.

(3) The German Federal Constitutional Court Decision of 18 September 2025

114. On 24 September 2025, the Respondent requested leave from the Tribunal to submit into the record a further decision of the German Federal Constitutional Court dated 18 September 2025, in response to Claimants' constitutional complaint (Case No. 2 BvR 1277/23) regarding the decision by the German Federal Court of Justice of 27 July 2023 about the inadmissibility of intra-EU arbitration (the “2025 German Federal Constitutional Court Decision").

115. On 1 October 2025, the Claimants confirmed that they did not oppose admission of the Decision on the condition that they were granted leave to file observations thereon.

116. On 2 October 2025, the Tribunal admitted the Decision into the record and invited each Party to submit its observations by 10 October 2025; on that date, both Parties submitted observations and the Respondent filed the Decision as Legal Authority RL-0387.

117. The proceeding was closed on 6 May 2026.

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III. FACTUAL BACKGROUND

118. The facts set out below are largely uncontentious. They outline the development of the German offshore wind farm regulatory framework from 1997, the Claimants' 2008 Consent Applications thereunder, and further developments that followed.

A. REGULATORY FRAMEWORK AND EVENTS LEADING UP TO THE 2008 APPLICATIONS

119. Although the Parties disagree as to the maturity and certainty of the German renewable energy framework prior to 2008, in particular for offshore wind farms, a number of important regulatory elements were in place in the decade leading up to the commencement of the Claimants' activity in Germany. The renewable energy regulatory framework, where relevant, governed: (i) site control; (ii) permitting; (iii) offtake (or revenue); and (iv) grid connection. The laws falling within the relevant German offshore wind regulatory framework were introduced from 1997 to 2008.

120. In the period prior to the 2002 Offshore Wind Strategy, the following German regulatory framework governed offshore wind farms:

a. as to site control and permitting, on 23 January 1997, the first German Offshore Installations Ordinance (the Seeanlagenverordnung or “1997 SeeAnlV”) was enacted and it entered into force on 1 February 1997; it was designed to streamline and improve the regulatory approval and planning process for offshore wind farm development in the exclusive economic zone (“EEZ”), pursuant to which:⁵

i. developers were required to obtain approval from the BSH to build and operate offshore wind energy projects;

ii. the BSH administrative procedure required developers to file an initial application, participate in public participation, conduct a public stakeholder conference and participate in a public hearing; and

⁵ SBT-0013, Ordinance on Installations Seaward of the Boundary of the German Territorial Sea (Seeanlagenverordnung - SeeAnlV) 1 February 1997, as amended (“1997 SeeAnlV"). ↩

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iii. the BSH would approve an application once each step was successfully completed, and all administrative requirements complied with, granting an exclusive right to develop a particular area in the EEZ;

b. as to grid connection, on 29 April 1998, the German Energy Industry Act (the Energiewirtschaftsgesetz or “1998 EnWG”) entered into force; it was designed to reform and liberalize German electricity (and gas) markets to align with EU directives and complementing the 1997 SeeAnlV by regulating grid connection issues and general supply for offshore projects; and

c. as to offtake revenue, on 29 March 2000, the Renewable Energy Sources Act (the “2000 EEG”) entered into force, which provided for the following for renewable energy generated in Germany at that time:⁶

i. feed-in tariff (“FiT”) for renewables producers for 20 years from date of commissioning the renewable energy installation;

ii. feed-in premium (“FiP”), paid for every kWh from wind energy sold on the electricity market; and

iii. transmission system operators (“TSOs”) requirement to “purchase all electricity offered from [offshore wind farms] as a priority".⁷

121. On 3 February 2001, the European Commission Official Journal (2001/C 37/03) published Community guidelines on State aid for environmental protection.⁸

122. On 13 March 2001, the Court of Justice of the European Union (“CJEU”) issued the judgment in the PreussenElektra case, which ruled that the predecessor to the EEG (the

⁶ C-0076, Renewable Energy Sources Act (Erneuerbare Energien-Gesetz), 29 March 2000 (“2000 EEG"). ↩

⁷ C-0076, 2000 EEG, Sec. 3(1). ↩

⁸ SBT-0233, Community guidelines on State aid for environmental protection (2001/C 37/03), Official Journal of the European Communities (C 37/3), 3 February 2001. ↩

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Stromeinspeisungsgesetz 1998 (Electricity Feed-in Act 1998), which aimed to promote electricity generation from renewable sources) was not to be categorised as State aid.⁹

123. In September 2001, the EU issued Directive 2001/77/EC on the promotion of electricity produced from renewable sources.

124. In January 2002, the Federal Government published its 2002 Offshore Wind Strategy, which was a political strategy setting targets for offshore wind expansion and led to the enactment of various statutory or regulatory instruments applicable to offshore wind in Germany.¹⁰

125. Following the publication of the 2002 Offshore Wind Strategy, the following events occurred:

a. in April 2002, the Federal Government published its further “Sustainability Strategy";¹¹

b. on 4 April 2002, the SeeAnlV first amendment entered into force (the “2002 SeeAnlV"), expanding on special suitability areas for offshore wind farms and introducing (among other provisions) Section 3a, which empowered the Federal Ministry for Transport, Building and Housing to designate special suitability areas for offshore wind farms in the German EEZ;¹²

c. on 18 December 2002, the BSH approved the Butendiek offshore wind farm, developed by wpd AG (a German developer);¹³ and

⁹ RL-0310, PreussenElektra AG v. Schleswag AG, CJEU Case C-379/98, Judgment, 13 March 2001. ↩

¹⁰ R-0009, Federal Government, Strategy for using Offshore Wind Energy (Strategie der Bundesregierung zur Windenergienutzung auf See), January 2002 ("2002 Offshore Wind Strategy"). ↩

¹¹ EH-0011, Federal Government, Perspectives for Germany: Our Strategy for Sustainable Development ("Sustainability Strategy"), April 2002. ↩

¹² RL-0115, Amendment to 1997 SeeAnlV, 4 April 2002 ("2002 SeeAnlV"). ↩

¹³ R-0013, Approval for OWF Butendiek, 18 December 2002. ↩

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d. on 30 March 2004, the German Government responded to questions raised in the German Federal Parliament (“Bundestag”) regarding the 2002 Offshore Wind Strategy.¹⁴

126. On 24 June 2004, the Federal Spatial Planning Act (the Raumordnungsgesetz or “ROG”), first enacted in 1965 as the central legal framework governing the organisation of land and resources in Germany, was amended to include:

a. Section 18a (now Section 17), extending scope to Germany's EEZ in the North and Baltic Seas, authorising the Federal Government to establish maritime spatial plans and requiring those plans to balance economic and scientific uses with the safety of maritime traffic and the protection of the marine environment; and

b. Section 7(4) “General Provisions on Spatial Development Plans”, which included a power for BSH to designate areas “which are designated for specific, spatially significant functions or uses and exclude other spatially significant uses in this area insofar as these are not compatible with the priority functions, uses or objectives of spatial planning (priority areas)”, and provided that “special weight is to be given to certain spatially significant functions or uses when weighing them against competing spatially significant uses (reserved areas)”.¹⁵

127. On 21 July 2004, the 2004 Renewable Energy Sources Act (the “2004 EEG”) replaced the 2000 EEG.¹⁶ The 2004 EEG:

a. introduced targets for German renewable electricity supply of 12.5% by 2010 and 20% by 2020;¹⁷

b. extended the higher initial feed-in tariff remuneration period to 12 years and confirmed minimum remuneration to be paid for 20 years from the start of operations;

¹⁴ C-0208, Bundestag Document 15/2809, 30 March 2004. ↩

¹⁵ RL-0117, Federal Spatial Planning Act (Raumordnungsgesetz), 20 July 2004. ↩

¹⁶ C-0077 / SBT-0052, Amendment to 2000 EEG, 21 July 2004 (“2004 EEG"). ↩

¹⁷ C-0077 / SBT-0052, 2004 EEG, Section 1(2). ↩

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c. amended the tariff degression start date provisions; and

d. for offshore wind farms, increased the initial higher feed-in tariff period and postponed the tariff degression start date for projects located further from the coastline.¹⁸

128. Following the 2004 EEG, the German government and agencies took several further steps relating to or affecting offshore wind farm development in Germany, including:

a. in 2005, the German Energy Agency (“Deutsche Energie-Agentur” or “DENA”) published the first grid study on onshore and offshore grid integration to 2020;¹⁹

b. on 22 November 2005, Dr. Angela Merkel of the Christian Democrats (“CDU”) was elected Chancellor, governing in coalition government with the Social Democrats (“SPD”);

с. on 16 December 2005, BSH published the designation of first suitability areas for offshore wind energy in the German EEZ pursuant to the 2002 SeeAnlV Section 3a;²⁰

d. on 22 March 2006, the then-Minister for Environment, Nature Conservation and Nuclear Safety (responsible for offshore wind), Minister Sigmar Gabriel, characterised Germany's renewable energy policy in the press as being “ambitious" and “sensibly designed”;²¹ and

e. on 25 October 2006, the Bundestag produced Document 16/3158 on the German grid connection regime.²²

¹⁸ C-0077 / SBT-0052, 2004 EEG, Section 10(3). ↩

¹⁹ See R-0011, DENA, Grid Study II – Integration of Renewable Energy Sources in the German Power Supply System from 2015-2020 with an Outlook to 2025, November 2010, p. 2. ↩

²⁰ SBT-0097, BSH, Designation of the Special Suitability Zone for Wind Turbines in Nördlich Borkum, 16 December 2005. ↩

²¹ C-0044, BMUV, Press Release, “Renewable energies create jobs", 22 March 2006. ↩

²² C-0218 / RL-0126, Bundestag Document 16/3158, 25 October 2006. ↩

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129. Two further legislative or regulatory changes were enacted at the end of 2006 and a third in June 2007 as follows:

a. on 31 October 2006, the 2006 Offshore Installations Ordinance (the “2006 SeeAnIV") entered into force, which established at Section 3 the legal requirements for approval (or consent) for an offshore wind farm (the “Permit Procedure");²³

b. on 17 December 2006, the EnWG was amended to add Section 17(2a) (the “2006 EnWG”), which obliged TSOs to construct and operate grid connection lines from the offshore substation to the technically and economically most favourable connection point of the next transmission or distribution grid on land, and expressly applied to offshore wind farms under construction by 31 December 2011;²⁴ and

c. on 12 June 2007, the BSH published the “Standard Konstruktive Ausführung von Offshore Windenergieanlagen" (the "BSH 2007 Construction Standard").²⁵

130. Following those late 2006 and mid-2007 amendments, the German government and agencies took several further steps relating to or affecting offshore wind farm development in Germany, including:

a. in January 2007, the Federal Agency for Nature Conservation (together with the German Offshore Wind Energy Foundation) issued a publication entitled Offshore wind power deployment in Germany” (“BMU Paper”) which:²⁶

i. “described section 17 (2a) as a ‘substantial improvement’";

ii. “revealed that Germany exaggerated the extent to which the practical problems with the grid connection regime were known prior to the BNetzA Position Paper”;

²³ C-0073, Further Amendment to 1997 SeeAnlV, 31 October 2006 ("2006 SeeAnIV"). ↩

²⁴ RL-0125, Energy Industry Act (Energiewirtschaftsgesetz) as amended, 17 December 2006 ("2006 EnWG"). ↩

²⁵ MK-0026, BSH, “Standard: Structural design of offshore wind turbines", 12 June 2007, p. 36, Table 2. ↩

²⁶ Cl. PHB, paras. 28(ii)(b)(3)-(4); C-0306, German Offshore Wind Energy Foundation and the Federal Agency for Nature Conservation, Offshore wind power deployment in Germany, January 2007 (“BMU Paper”), pp. 6, 11. ↩

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iii. “posited that only a ‘moderate upgrade' of the network would be required"; and

iv. “sought to incentivise investors with this messaging";

b. on 18 September 2007, Minister Gabriel spoke of the German Government's plans to “strengthen incentives” for offshore wind in order that Germany could achieve its renewable energy targets²⁷ (by 2007, Germany was ranked by Ernst & Young as best "near term" and second best "long term" worldwide for offshore wind);²⁸

c. on 10 October 2007, BSH published an Explanatory Memorandum to new draft provisions for the 2004 EEG, which specified that the legal, regulatory and political framework was to take into account “the protected confidence of investors”, among other things;²⁹

d. on 17 October 2007, the BSH extended the deadline for the start date for the Butendiek offshore wind farm construction to 31 December 2011;³⁰

e. on 9 November 2007, the 2007 EEG Progress Report was published,³¹ and regular publicly available EEG Progress Reports notified further changes;³²

f. in December 2007, the German Government articulated its “Integrated Energy and Climate Programme”,³³ which stated that:

i. it had “elaborated a historic energy and climate programme which is without precedent both in the history of German climate policy and

²⁷ C-0046, BMUV, Press Release, “Federal Environment Minister Sigmar Gabriel opens the HUSUMwind wind energy fair", 18 September 2007. ↩

²⁸ C-0045, Mainstream, “Business Plan for Offshore Wind in Germany", May 2008 (“Business Plan"), p. 1. ↩

²⁹ C-0080, BSH, “Explanatory Memorandum on the individual provisions regarding Article 1 of the Renewable Energy Sources Act", 10 October 2007, p. 78. ↩

³⁰ R-0014, Letter from BSH to OSB Offshore-Bürger-Windpark Butendiek, 17 October 2007. ↩

³¹ SBT-0019, Bundestag Document 16/7119, 9 November 2007. ↩

³² SBT Expert Report, paras. 45, 58. ↩

³³ C-0081, BMUV, “The Integrated Energy and Climate Programme of the German Government”, December 2007. ↩

[Page 40]

internationally. No other comparable industrialised country has an equally ambitious and concrete programme!";

ii. it sought to give the energy industry “reliable and competitive framework conditions for their investments” through legislative proposals to define targets until 2020; and

iii. “supporting these with concrete measures” would “promote[ ] Germany as an industrial and investment location";

g. on 4 January 2008, the Federal Government published an Explanatory Memorandum to a draft 2009 EEG;³⁴ and

h. on 6 March 2008, the Federal Network Agency (“Bundesnetzagentur” or “BNetzA") presented on the grid connection regime.³⁵

131. Against the developing regulatory and policy environment, as it existed by March 2008, the First Claimant (having been incorporated in Ireland on 8 February 2008),³⁶ published its “Business Plan for Offshore Wind in Germany" in May 2008.³⁷ Mainstream's executives took part in a series of fact-finding meetings in Hamburg and Husum, meeting various German offshore developers and advisors regarding the Mainstream Projects.³⁸

132. On 6 June 2008, the Bundestag adopted the extension of the application of Section 17(2a) of the EnWG to projects that started construction by 31 December 2015 (the “2008 EnWG Extension").³⁹

133. In summary therefore, by late June/early July 2008, the German renewable energy framework provided for:

³⁴ EH-0024, Federal Government, "Draft of a law to revise the law on renewable energies in the electricity sector and to amend related provisions", 4 January 2008 (“Explanatory Memorandum to 2009 Draft EEG"). ↩

³⁵ C-0217, BNetzA, “Grid Connection OWP", 6 March 2009. ↩

³⁶ C-0002, Extract from the Irish Companies Registration Office for Mainstream Renewable Power Limited, 20 April 2021. ↩

³⁷ C-0045, Business Plan. ↩

³⁸ Schwencke Witness Statement, para. 35. ↩

³⁹ C-0215, Bundestag Plenary Minutes 16/167, 6 June 2008; C-0216, Bundestag Document 16/9477, 4 June 2008. ↩

[Page 41]

a. site control and offshore permitting by application of the 2004 Federal Spatial Planning Act (ROG) and 2008 SeeAnlV;

b. revenue regime (offtake) by application of the 2004 EEG, providing specifically for offshore wind farms;

c. grid access by application of the 2006 EnWG, including the 2008 EnWG Extension;⁴⁰ and

d. building permitting by application of the BSH 2007 Construction Standard.

B. THE CLAIMANTS' JUNE/JULY 2008 APPLICATIONS

134. On 27 June 2008, Mainstream Renewable Power (UK) Ltd, a UK subsidiary of the First Claimant, submitted its Consent Application for the Horizont I Project.⁴¹

135. On 30 June 2008, the Federal Government published the Draft Ordinance on Special Planning in the German Exclusive Economic Zone in the North Sea (Entwurf der Verordnung über die Raumordnung in der deutschen ausschließlichen Wirtschaftszone in der Nordsee) (“Draft Spatial Planning Ordinance").⁴² This included Section 3.5.1, which confirmed priority areas for Offshore Wind Farm development and stated that Offshore Wind Farm “installations are not permissible outside the designated priority areas", with some grandfathering for “[a]lready approved PWFs”.⁴³

136. On 9 July 2008, Dr. Ursula Prall, the Claimants' legal counsel, had written to Mr. Tilman Schwencke, Mainstream's German Offshore Project Manager regarding the Draft Spatial Planning Ordinance.⁴⁴

⁴⁰ RL-0125, Energy Industry Act (Energiewirtschaftsgesetz) as amended, 17 December 2006 ("2006 EnWG"). ↩

⁴¹ C-0092, Application for the Construction and Operation of the Horizont (subsequently renamed Horizont I) Offshore Wind Farm, 27 June 2008 (“Horizont I Application"). ↩

⁴² RL-0122, Draft Ordinance on Special Planning in the German Exclusive Economic Zone in the North Sea (Entwurf der Verordnung über die Raumordnung in der deutschen ausschließlichen Wirtschaftszone in der Nordsee), 30 June 2008 (“Draft Spatial Planning Ordinance"). ↩

⁴³ RL-0122, Draft Spatial Planning Ordinance, Sec. 3.5.1. ↩

⁴⁴ C-0153, Letter from Dr. Ursula Prall to Mr. Tilman Schwencke, 9 July 2008. ↩

[Page 42]

137. On 11 July 2008, Mainstream Renewable Power (UK) Ltd submitted two further Consent Applications for Horizont Ost and Horizont West.⁴⁵

C. CHANGES TO THE REGULATORY FRAMEWORK FOLLOWING THE 2008 APPLICATIONS

138. On 26 July 2008, a further amended SeeAnlV (Offshore Installations Ordinance), which had streamlined the regulatory approval process for the development of offshore wind farms, entered into force (the “2008 SeeAnlV”).⁴⁶ The 2008 SeeAnlV included:

a. at Section 3, legal requirements for approval (or consent) for offshore wind farms;

b. new grounds for refusal of approval or consent, including incompatibility with spatial planning as well as other overriding public interests; and

c. at Section 16a, applicability to all projects applied for prior to 26 July 2008 (provided that the public notification of the project pursuant to Section 73(5) of the Administrative Procedure Act, in conjunction with Section 9(1) of the Environmental Impact Assessment Act and Section 2a of the 2008 SeeAnlV, had taken place prior).

139. On 18 August 2008, the Second Claimant was incorporated in Ireland.⁴⁷ In September 2008, the First Claimant finalised its Offshore Wind Strategy,⁴⁸ and on 4 September 2008, issued a Board Report entitled “German Offshore, Green field development ('Horizont')".⁴⁹

140. Further in September 2008, in response to the 30 June 2008 Draft Spatial Planning Ordinance:

⁴⁵ C-0093, Application for the Construction and Operation of the Horizont Ost (subsequently renamed Horizont II) Offshore Wind Farm, 11 July 2008 (“Horizont II Application"); C-0094, Application for the Construction and Operation of the Horizont West (subsequently renamed Horizont III) Offshore Wind Farm, 11 July 2008 (“Horizont III Application"). ↩

⁴⁶ EH-0003 / RL-0114, Further Amendment to 1997 SeeAnlV, 26 July 2008 (“2008 SeeAnIV"). ↩

⁴⁷ C-0003, Extract from the Irish Companies Registration Office for International Mainstream Renewable Power Limited, 20 April 2021. ↩

⁴⁸ C-0082, Mainstream Board Report, "Offshore Wind Strategy", September 2008. ↩

⁴⁹ C-0096, Mainstream Board Report, "German Offshore, Green field development ('Horizont')", 4 September 2008 ("September 2008 Mainstream Board Report"). ↩

[Page 43]

a. on 12 September 2008, a number of offshore wind industry organisations published an industry position paper;⁵⁰

b. on 15 September 2008, the Government of the Free State of Bremen set out its concerns in correspondence to the Federal Ministry of Transport, Building and Urban Affairs;⁵¹ and

c. on 13 October 2008, the Federal Ministry of Transport, Building and Urban Affairs produced an internal note.⁵²

141. On 16 September 2008, the Claimants' Consent Applications were sent to relevant public stakeholders.⁵³

142. Subsequently, in the period from late 2008 to early 2009:

a. on 25 October 2008, the 2009 EEG was published (entering into force on 1 January 2009);⁵⁴

b. on 6 January 2009, Mr. Jörg Kuhbier, the then-chairman of the Offshore Wind Energy Forum (Offshore Forum Windenergie) and the German Offshore Wind Energy Foundation, wrote to the Federal Ministry for Economic Affairs and Technology regarding grid connection issues under the 2006 EnWG Section 17(2a);⁵⁵ and

c. on 2 February 2009, the Bundestag published Document 16/11835, a “Report on the Development and Future Prospects of the Maritime Industry in Germany”.⁵⁶

⁵⁰ C-0219, Offshore Wind Industry Alliance, "Statement on the Draft Ordinance on Spatial Planning in the German Exclusive Economic Zone", 12 September 2008 (“Offshore Wind Industry Alliance 2008 Position Paper"). ↩

⁵¹ C-0221, Letter from the Government of the Free State of Bremen to the federal Ministry of Transport, Building and Urban Affairs, 15 September 2008. ↩

⁵² C-0222, Ministry of Transport, Building and Urban Affairs, Draft Note, 13 October 2008 (discussing the Draft Spatial Planning Ordinance) ("Ministry of Transport, 2008 Internal Note"). ↩

⁵³ C-0001, Minutes of the Public Hearing for the Applications for Planning Approval for the Projects, 5 March 2013 ("2013 Stakeholder Conference Minutes"), p. 1. ↩

⁵⁴ C-0078, Further Amendment to 2000 EEG, 1 January 2009 ("2009 EEG"). ↩

⁵⁵ R-0016, Letter from Mr. Jörg Kuhbier to Federal Ministry for Economic Affairs and Technology, 6 January 2008. ↩

⁵⁶ UP-0002, Bundestag Document 16/11835, 2 February 2009, p. 20. ↩

[Page 44]

143. In early 2009, the Claimants continued to take steps to organise their companies and strategy for German offshore wind. For example:

a. on 12 January 2009, the Third Claimant was incorporated in Ireland;⁵⁷

b. in February/March 2009, the Claimants produced an internal document entitled “The paper needs to justify compelling reasons for investing this heavily in the early years against with this in mind”,⁵⁸ stating that:

We came late into the process in terms of German offshore. Our site is therefore second to third tier in terms of attractiveness (very far offshore and deep water). We have known this from the beginning, but we should be careful of comparing it to valuations for Butendiek and Gabbard, both tier one sites and therefore far more attractive.

с. in February/March 2009, the Claimants also produced a further Board Report entitled “German Offshore, Green field development (‘Horizont')";⁵⁹ and

d. on 4 March 2009, Dr. Prall wrote further to the Federal Ministry for Economics and Technology regarding grid connections for offshore wind farms.⁶⁰

144. In April 2009, the Federal Ministry for Economic Affairs published the Coordinate Report for the Sixth Maritime Conference in Rostock on 29 and 30 March 2009.⁶¹

145. On 30 April 2009, the Claimants' Consent Applications Conference (Antragskonferenz) took place regarding the approval procedure for the construction and operation of the wind turbines in the EEZ of Germany in the North Sea at BSH Gauss Saal for Horizont, Horizont Ost and Horizont West.⁶²

⁵⁷ C-0005, Extract from the Irish Companies Registration Office for Mainstream Renewable Power Group Finance Limited, 26 April 2021. ↩

⁵⁸ R-0049, Mainstream Internal Document, “The paper needs to justify compelling reasons for investing this heavily in the early years against with this in mind" (undated). ↩

⁵⁹ C-0098, Mainstream Board Report, "German Offshore, Green field development (‘Horizont')”, dated February/March 2009 ("February/March 2009 Mainstream Board Report"). ↩

⁶⁰ R-0060, Letter from Dr. Ursula Prall to Federal Ministry for Economic Affairs and Technology, 4 March 2009. ↩

⁶¹ R-0004, Federal Ministry for Economic Affairs, “Coordinate Report for the Sixth Maritime Conference in Rostock on 29/30 March 2009". ↩

⁶² C-0097, Minutes of the Application Conference held on 30 April 2009, 7 September 2009 ("Minutes of April 2009 Application Conference"). ↩

[Page 45]

146. On 19 May 2009, BSH produced a form letter template to be distributed to “approval holders, applicants for offshore wind farms as well as approval holders and transmission operator applicants for export power systems of offshore wind farms in the EEZ”, regarding Standard Directive No. 23 (“condition[s] subsequent for the latest date for start of construction").⁶³

147. In June 2009, the Claimants proceeded to take the following further steps:

a. the First Claimant issued a Board Paper entitled, “German Offshore, Green Field Development (‘Horizont')";⁶⁴

b. on 8 June 2009, the Fifth Claimant was incorporated in Germany;⁶⁵ and

c. on 17 June 2009, the Fifth Claimant reached a settlement with competitors surveying sites overlapping with the Project sites, leading to a change in the layout of the Horizont Project sites.⁶⁶

148. On 19 June 2009, a draft 2009 SeeAnlV (“Draft 2009 SeeAnlV”) was published.⁶⁷

149. Following the publication of the Draft 2009 SeeAnlV, the Claimants proceeded to take the following further steps:

a. on 30 June 2009, Mr. Tilman Schwencke corresponded with the BSH regarding the Draft 2009 SeeAnlV;⁶⁸

b. on 9 July 2009, the Claimants met regarding the future of the Horizont Projects in Dublin;⁶⁹

⁶³ R-0006, BSH Form Letter Template, May 2009 (regarding the amendment of standard ancillary provision no. 23 and the introduction of milestone requirements). ↩

⁶⁴ C-0090, Mainstream Board Report, "German Offshore, Green Field Development ('Horizont')", June 2009 ("June 2009 Mainstream Board Report"). ↩

⁶⁵ C-0009, Extract from the German Commercial Register for Horizont II Renewable GmbH, 15 April 2021. ↩

⁶⁶ C-0089, Cooperation Agreement between Northern Energy Holding GmbH, Germany Mainstream Renewable Power Developments GmbH and others, 2009; C-0090, June 2009 Mainstream Board Report. ↩

⁶⁷ RL-0124, Proposed Further Amendment to 1997 SeeAnlV, 19 June 2009 ("Draft 2009 SeeAnIV"). ↩

⁶⁸ R-0035, Email from Mr. Tilman Schwencke to BSH, 30 June 2009. ↩

⁶⁹ R-0063, Document presented at meeting on the future of the Horizont Projects, 9 July 2009. ↩

[Page 46]

c. on 13 July 2009, Mainstream Renewable Power (UK) Ltd transferred the three Consent Applications to the Fifth Claimant;⁷⁰

d. on 28 July 2009, the First Claimant presented a paper at the Board of Directors meeting regarding the status and the geotechnical campaign of the Horizont Projects;⁷¹

e. on 30 July 2009, the Offshore Wind Energy Forum (Offshore Forum Windenergie), of which the Claimants were members, responded to the consultation on the Draft 2009 SeeAnlV, which related to the Horizont Projects, among others;⁷²

f. in July 2009, Fugro Consult GmbH commenced geotechnical surveys of the Horizont Project sites;⁷³ and

g. on 28 August 2009, the Horizont and Horizont Ost Consent Applications were partially withdrawn and amended as a result of an amendment to the layout of the Project sites (leading also to a change of name of the Projects to Horizont I, Horizont II and Horizont III), and the application for Horizont West was withdrawn in full.⁷⁴

150. On 25 September 2009, the Spatial Planning Ordinance (first published on 30 June 2008) entered into force.⁷⁵

151. In the course of October 2009, the Claimants proceeded to take the following further steps:

⁷⁰ C-0095, Letter from Mainstream to BSH, 13 July 2009. ↩

⁷¹ C-0223, Paper presented at Mainstream Board of Directors meeting, 28 July 2009. ↩

⁷² C-0224, Offshore Wind Energy Forum, "Statement on the draft of an ordinance amending the regulations on offshore installations", 29 June 2009. ↩

⁷³ C-0167, Fugro Geotechnical Report No. 6409058 (2), 27 July 2009. ↩

⁷⁴ C-0051, Letter from Mainstream to BSH (partial application withdrawal for Horizont (subsequently renamed Horizont I)), 28 August 2009, C-0052, Letter from Mainstream to BSH (partial application withdrawal for Horizont Ost (subsequently renamed Horizont II)), 28 August 2009; C-0053, Letter from Mainstream to BSH (application withdrawal for Horizont West (subsequently renamed Horizont III)), 28 August 2009; C-0054, Letter from Mainstream to BSH (application for amendment for Horizont (subsequently renamed Horizont I)), 28 August 2009; C-0055, Letter from Mainstream to BSH (application for amendment for Horizont Ost (subsequently renamed Horizont II)), 28 August 2009; C-0056, Letter from Mainstream to BSH (application for amendment for Horizont West (subsequently renamed Horizont III)), 28 August 2009. ↩

⁷⁵ RL-0123, Ordinance on Spatial Planning in the German Exclusive Economic Zone in the North Sea, 25 September 2009; C-0220, Federal Law Gazette, Part I, No. 61, 25 September 2009, Annex. ↩

[Page 47]

a. on 14 October 2009, the Claimants conducted preliminary soil investigations for the Projects;⁷⁶ and

b. on 28 October 2009, the First Claimant presented a paper at the Board of Directors Meeting.⁷⁷

152. Also in October 2009, the German authorities governing offshore wind took additional steps including:

a. in October 2009, the BNetzA published a Position Paper on the grid connection obligation pursuant to the 2006 EnWG Section 17(2a) (“BNetzA Position Paper");⁷⁸ and

b. on 9 October 2009, the BSH confirmed that changes to the Applications for the Horizont and Horizont Ost Projects (to Horizont I, Horizont II and Horizont III) did not require a new application conference or new applications because the changes were not sufficiently substantial.⁷⁹

153. On 28 October 2009, Chancellor Merkel was re-elected and formed a coalition government with the Free Democratic Party (“FDP”).

154. On 2 November 2009, the BSH conducted a meeting regarding the Draft 2009 SeeAnlV.⁸⁰

155. On 15 December 2009, the First Claimant presented a paper at the Board of Directors Meeting,⁸¹ and on 22 December 2009, the Fifth Claimant submitted results of surveys and studies to the BSH.⁸²

⁷⁶ MK-0024, Preliminary Soil Investigation Report for the Horizont Projects, 14 October 2009. ↩

⁷⁷ C-0099, Paper presented at Mainstream Board of Directors meeting, 28 October 2009. ↩

⁷⁸ R-0008, BNetzA, “Position paper on the grid connection obligation pursuant to Section 17(2a) EnWG”, October 2009. ↩

⁷⁹ C-0234, BSH, Internal note, 9 October 2009. ↩

⁸⁰ R-0059, Federal Ministry of Transport, Building, and Urban Affairs, Minutes of meeting held on 4 November 2009. ↩

⁸¹ C-0091, Paper presented at Mainstream Board of Directors meeting, 15 December 2009 (“15 December 2009 Board Paper"). ↩

⁸² C-0001, 2013 Stakeholder Conference Minutes, pp. 1-2. ↩

[Page 48]

156. In early 2010, the German authorities proceeded to take additional steps in relation to its offshore wind as follows:

a. on 22 March 2010, BSH produced an internal note on the submitted documents required to receive the first BSH clearance;⁸³

b. on 31 March 2010, the Bundestag responded to tabled questions on the grid connection regime;⁸⁴ and

c. in April 2010, the first offshore wind farm in the German EEZ, the test project Alpha Ventus, was commissioned.⁸⁵

157. Thereafter, in mid-2010, the Claimants took the following further steps concerning the Projects:

a. on 20 May 2010, the First Claimant presented to HSH Nordbank regarding funding;⁸⁶

b. on 1 June 2010, the First Claimant presented a paper at the Board of Directors Meeting;⁸⁷ and

c. on 9 July 2010, the Fifth Claimant sent the Application documentation submitted on 22 December 2009 to the relevant specialist authorities and public agencies, associations, and relevant companies for comment.⁸⁸

158. In the final quarter of 2010, the German offshore wind farm industry continued to develop:

a. on 4 August 2010, seven offshore wind energy organisations published a position paper on strategic grid infrastructure;⁸⁹

⁸³ C-0235, BSH, Note re “Application for the construction and operation of the Horizont II' offshore wind farm”, 22 March 2010. ↩

⁸⁴ C-0226, Bundestag Document 17/920, 31 March 2010. ↩

⁸⁵ R-0001, Alpha Ventus, "Fact-Sheet", April 2020. ↩

⁸⁶ C-0087, Mainstream, Presentation for HSH Nordbank, "Offshore Wind Projects Mainstream Renewable Power”, 20 May 2010. ↩

⁸⁷ C-0100, Paper presented at Mainstream Board of Directors meeting, 1 June 2010. ↩

⁸⁸ C-0001, 2013 Stakeholder Conference Minutes, p. 2. ↩

⁸⁹ R-0020, German Offshore Wind Energy Foundation, Position paper, 4 August 2010. ↩

[Page 49]

b. on 28 September 2010, the German Federal Government published the Energy Concept (Energiekonzept);⁹⁰ and

c. in 2010, the first high voltage direct current (“HVDC”) grid connection “BorWin1” was commissioned in the EEZ.⁹¹

159. As to the continuing progress of the Claimants' Projects, in December 2010 and January 2011, Mainstream took the following steps:

a. in December 2010, Mainstream's Mr. Schwencke became an Offshore Wind Energy Forum board member,⁹²

b. on 22 December 2010, the Fifth Claimant received a letter from the BSH regarding the determination of scope for Mainstream's environmental investigations;⁹³ and

c. on 26 January 2011, Mr. Schwencke met with N-ERGIE, a German energy company.⁹⁴

160. The German authorities continued to develop the German offshore wind farm regulatory framework, taking the following additional steps in early 2011:

a. in January 2011, BNetzA updated its Position Paper;⁹⁵

b. on 17 February 2011, BSH further extended the deadline for start of construction works of OWP Butendiek to 31 December 2014;⁹⁶ and

c. on 13 April 2011, the Federal Government published the Second Report on the Development and Future Prospects of the Maritime Industry in Germany.⁹⁷

⁹⁰ R-0007, Bundestag Document 17/3049, 28 September 2010. ↩

⁹¹ R-0054, TenneT, “BorWin1: About the project". ↩

⁹² R-0055, Email from Mr. Tilman Schwencke to Mr. Eddie O'Connor, 8 October 2010. ↩

⁹³ C-0171, Letter from BSH to Fifth Claimant, 22 December 2010. ↩

⁹⁴ R-0064, Summary of meeting between N-ERGIE and Mr. Tilman Schwencke held on 26 January 2011. ↩

⁹⁵ SBT-0048, BNetzA, “Annex to the position paper on the grid connection obligation pursuant to Section 17(2a) EnWG”, January 2011. ↩

⁹⁶ R-0015, Letter from BSH to OSB Offshore-Bürger-Windpark Butendiek, 17 February 2011. ↩

⁹⁷ R-0043, Bundestag Document 17/5572, 13 April 2011. ↩

[Page 50]

161. On 20 April 2011, the Claimants produced the Mainstream Presentation entitled “German Offshore & Horizont” for the “Mainstream SMT” (likely Senior Management Team).⁹⁸

162. On 6 May 2011, the Federal Government published the Draft Federal Maritime Responsibilities Act (Draft of First Act for the amendment of shipping regulations), Bundesrat Document 255/11.⁹⁹

163. On 24 May 2011, Mainstream's Mr. Schwencke presented on the Mainstream Projects at the Ecosummit 2011.¹⁰⁰

164. From June to November 2011, the German authorities and national electricity transmission system operator (again, “TSO”), TenneT, took the following further steps:

a. on 6 June 2011, Parliamentary groups of the CDU/CSU and FDP published the Draft Act on Measures to Accelerate the Expansion of Electricity Grids, Bundestag Document 17/6073;¹⁰¹

b. on 4 August 2011, TenneT sent a letter to offshore wind developers regarding its obligations to provide an individualised grid connection;¹⁰²

c. on 7 November 2011, TenneT sent a letter to the Federal Chancellery regarding the grid connection regime;¹⁰³ and

d. on 10 November 2011, the BSH sent a letter to Mainstream regarding documents submitted to obtain the first BSH clearance.¹⁰⁴

165. On 31 January 2012, the 2008 SeeAnlV was amended (the “2012 SeeAnlV”) to streamline administrative procedures regarding site control for existing offshore wind farm projects

⁹⁸ R-0062, Mainstream, Presentation for Mainstream SMT, “German Offshore & Horizont", 20 April 2011. See Resp. Rej., fn. 438. ↩

⁹⁹ RL-0284, Bundesrat Document 255/11, 6 May 2011. ↩

¹⁰⁰ R-0066, Ecosummit TV Episode, Video of a presentation by Mr. Tilman Schwencke at Ecosummit 2011; R-0067, Mr. Tilman Schwencke, Presentation at Ecosummit 2011. ↩

¹⁰¹ RL-0133, Bundestag Document 17/6073, 6 June 2011. ↩

¹⁰² R-0025, Letter from TenneT to OWF developers (regarding current timelines for grid connections), 4 August 2011. ↩

¹⁰³ R-0024, Letter from TenneT to Federal Chancellery, 7 November 2011. ↩

¹⁰⁴ MN-0012, Letter from BSH to Mainstream, 10 November 2011. ↩

[Page 51]

and applications, providing a legal framework for approval of installations and structures to be administered by the BSH.¹⁰⁵ According to the Claimants, the 2012 SeeAnlV indefinitely delayed the granting of approvals for their Consent Applications in breach of the ECT fair and equitable treatment standard of protection.

166. Despite this, the Claimants took additional steps in relation to the Mainstream Projects through the end of 2012 as follows:

a. on 6 March 2012, the First Claimant presented a paper at its Mainstream Board of Directors Meeting following the change in law impacting site control;¹⁰⁶

b. on 15 March 2012, the Fifth Claimant submitted revised Consent Applications reflecting the new “planning approval procedure” impacting site control;¹⁰⁷ and

c. on 22 March 2012, the German Offshore Wind Energy Foundation Working Group (of which the Claimants were members) “Acceleration of Offshore Grid Connections" published proposals on grid connections.¹⁰⁸

167. From June 2012, the German agencies took a number of additional steps in connection with the German offshore wind industry, impacting the Mainstream Projects, as follows:

a. on 12 June 2012, the BSH notified the Fifth Claimant that the Projects would continue in accord with the planning approval procedure regarding site control;¹⁰⁹

b. on 15 June 2012, pursuant to the 2012 SeeAnlV Section 10, according to the Claimants' internal meeting minutes, a “development freeze was enacted";¹¹⁰ and

¹⁰⁵ RL-0119, Further Amendment to 1997 SeeAnlV, 31 January 2012 ("2012 SeeAnlV"). ↩

¹⁰⁶ C-0103, Paper presented at Mainstream Board of Directors meeting, 6 March 2012. ↩

¹⁰⁷ R-0037, Mainstream, Application for Planning Approval Procedure for Horizont II, 15 March 2012; R-0038, Mainstream, Application for Planning Approval Procedure for Horizont I, 15 March 2012; R-0039, Mainstream, Application for Planning Approval Procedure for Horizont III, 15 March 2012. ↩

¹⁰⁸ R-0022, German Offshore Wind Energy Foundation, “Suggested solutions for connecting offshore wind farms to the grid", 22 March 2012. ↩

¹⁰⁹ C-0102, Letter from BSH to Fifth Claimant, 12 June 2012. ↩

¹¹⁰ C-0001, 2013 Stakeholder Conference Minutes, p. 4. See also CL-0347, Strabag SE, Erste Nordsee-Offshore Holding GmbH and Zweite Nordsee-Offshore Holding GmbH v. Federal Republic of Germany, ICSID Case No. ARB/19/29, Award, 18 December 2024 ("Strabag v. Germany"), para. 105 and fn. 50: “In 2011, in connection with the 2011 Energy Act, the BSH had been tasked ↩

[Page 52]

c. on 20 June 2012, the BSH sent the first draft of the offshore grid plan (later renamed the Federal Spatial Offshore Grid Plan) to stakeholders for consultation.¹¹¹

168. On 27 July 2012, the German Offshore Wind Energy Foundation published a paper entitled "Key Points of a System Change in the Grid Connection of Offshore Wind Farms".¹¹²

169. On 28 August 2012, the Fifth Claimant submitted the updated Consent Application documents for Horizont I.¹¹³

170. In September 2012, the European Commission informed Germany of its intention to launch an investigation regarding the EEG status as State aid under EU law.¹¹⁴

171. On 24 September 2012, the Federal Government published the Draft Third Act on the Revision of Energy Industry Regulations, Bundestag Document 17/10754, proposing the system change for offshore wind farm grid connections.¹¹⁵

172. In addition, in September and October 2012, specifically in relation to the Mainstream Projects Consent Applications:

a. in September 2012, the BSH wrote to the Fifth Claimant regarding its Horizont I-III Addendum requesting public interpretation and request for an adjustment of the change ban;¹¹⁶

to develop a federal spatial offshore grid plan (Bundesfachplan Offshore or the 'BFO'); under the 2012 Offshore Installations Ordinance, the BSH was given the competence to reserve a specific area in the EEZ for grid connection facilities by issuing a development freeze", referring to the 2012 SeeAnlV Section 10(1), Sentence 1, noting that "At the time, the plan was called 'offshore netplan' ('Offshore-Netzplan'); the term 'BFO' was introduced by the Energy Act, 28 December 2012 (‘2012 Energy Act')".

¹¹¹ NN-0010 / RL-0146, Federal Spatial Offshore Grid Plan for the North Sea (Bundesfachplan Offshore), 22 February 2013 ("BFO"). ↩

¹¹² R-0076, German Offshore Wind Energy Foundation, “Position Paper: Key Points of a System Change in the Grid Connection of Offshore Wind Farms", 27 July 2012 (“GOWEF, 2012 Position Paper"). ↩

¹¹³ C-0108, Mainstream, Updated Application for Planning Approval Procedure for Horizont I, 28 August 2012. ↩

¹¹⁴ Wustlich Witness Statement, para. 52. ↩

¹¹⁵ RL-0145, Bundestag Document 17/10754, 24 September 2012. ↩

¹¹⁶ C-0236, BSH, “Horizont I-III, Addendum to the application documents with the request for public interpretation and request for an adjustment of the change ban", September 2012. ↩

[Page 53]

b. on 16 October 2012, the Fourth and Sixth Claimants were incorporated in Germany;¹¹⁷

c. on 29 October 2012, the Claimants produced an internal document entitled “Horizont Update”;¹¹⁸

d. on 29 November 2012, the BSH confirmed to the Claimants that, on their face, the submitted documents were suitable for discussion at a stakeholder conference;¹¹⁹

e. on 5 December 2012, the Fifth Claimant submitted supplementary documentation for the Projects;¹²⁰ and

f. on 18 December 2012, the Claimants presented a paper at the Board of Directors Meeting.¹²¹

173. On 28 December 2012, the 2012 EnWG entered into force, which:

a. replaced individual entitlement to a grid connection with non-discriminatory allocation of available capacities; and

b. required construction of offshore grid connection lines to be carried out by TSOs:

i. on the basis of an offshore grid development plan (Offshore-Netzentwicklungsplan) (“O-NEP”) to be confirmed by the BNetzA; and

ii. a Federal Spatial Offshore Grid Plan for the North Sea (Bundesfachplan Offshore) (“BFO”) to be published by the BSH.¹²²

174. The 2012 EnWG changed the offshore wind farm grid connection regime that had been in place at the time the Consent Applications were submitted. According to the Claimants,

¹¹⁷ C-0007, Extract from the German Commercial Register for Horizont I Development GmbH, 15 April 2021; C-0012, Extract from the German Commercial Register for Horizont III Power GmbH, 15 April 2021. ↩

¹¹⁸ R-0069, Horizont Update, 29 October 2012. ↩

¹¹⁹ NN-0012, Letter from BSH to Mr. Tilman Schwencke, 29 November 2012. ↩

¹²⁰ C-0001, 2013 Stakeholder Conference Minutes, p. 2. ↩

¹²¹ C-0057, Paper presented at Mainstream Board of Directors meeting, 18 December 2012 (“18 December 2012 Board Paper”). ↩

¹²² C-0105, Amendment to 2006 EnWG, 20 December 2012 ("2012 EnWG"). ↩

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this, coupled with the ultimate O-NEP entering into force in 2014, terminated the Claimants' alleged entitlement to grid connection, resulting in further breach of the fair and equitable treatment standard.

175. Subsequently and between 4 January 2013 and 4 February 2013, the Claimants nevertheless proceeded to submit the entirety of their Consent Applications documentation to the BSH. To the extent that the documentation did not include business or trade secrets, it was also displayed in the BSH in Hamburg and Rostock for public inspection.¹²³

176. On 30 January 2013, Mainstream's Mr. Schwencke emailed Mr. Paolo Sammaritano and Mr. Davide Di Federico.¹²⁴

177. On 22 February 2013, the BSH published the Federal Spatial Offshore Grid Plan for the North Sea (BFO),¹²⁵ and on 2 March 2013, the TSOs published the First Draft O-NEP 2013.¹²⁶

178. On 4 March 2013, the Fifth Claimant transferred:

a. the Consent Application for Horizont I to the Fourth Claimant; and

b. the Consent Application for Horizont III to the Sixth Claimant,

whereas the Fifth Claimant remained the Applicant for Horizont II (but was renamed).¹²⁷

179. On 5 March 2013, the Claimants' Consent Applications “Stakeholder Conference” (Erörterungstermin) took place in Germany.¹²⁸ Following the Stakeholder Conference, a number of follow-up steps took place:

¹²³ C-0001, 2013 Stakeholder Conference Minutes, pp. 2-3. ↩

¹²⁴ C-0279, Email from Mr. Tilman Schwencke to Messrs. Paolo Sammartino and Davide Di Federico, 30 January 2013. ↩

¹²⁵ NN-0010, BFO. ↩

¹²⁶ C-0107, "Offshore Network Development Plan 2013: First Draft of TSOs", 2 March 2013 ("First Draft O-NEP 2013"). ↩

¹²⁷ C-0172, Email from Mr. Tilman Schwencke to Ms. Martina Nemitz, 4 March 2013. ↩

¹²⁸ C-0001, 2013 Stakeholder Conference Minutes; C-0109, Mainstream, Presentations for Stakeholder Conference, 5 March 2013. ↩

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a. on 20 March 2013, Mr. Schwencke asked Dr. Ursula Prall to draft a memorandum on the status of the Horizont Projects,¹²⁹ (and on 16 April 2013, Dr. Prall emailed Mr. Schwencke regarding the memorandum);¹³⁰

b. on 16 May 2013, the BSH, the Claimants and neighbouring developers met regarding the route of the export cable connecting the Projects, one of the follow-up pieces of work following the Stakeholder Conference;¹³¹

c. on 21 May 2013, the First Claimant presented April 2013 Board papers at the Board of Directors Meeting;¹³² and

d. on 12 June 2013, the GOWEF produced a presentation on the German offshore grid connection regime.¹³³

180. On 24 June 2013, the TSOs published the Second Draft O-NEP 2013.¹³⁴ Following that draft, the Claimants, the industry groups and others took a number of steps:

a. on 2 July 2013, the First Claimant presented June 2012 Board papers at the Board of Directors Meeting;¹³⁵

b. on 20 September 2013, Mr. Schwencke sent an email to Mr. Chris Hill;¹³⁶ and

c. in September 2013, Dr. Ursula Prall, produced the Draft Memorandum on the status of the Horizont Projects;¹³⁷

181. On 22 September 2013, the 2013 German Federal Election took place and the CDU/CSU led by Chancellor Merkel won (its coalition partner the FDP did not get enough votes to

¹²⁹ R-0070, Dr. Ursula Prall, Memorandum on the status of the Horizont Projects. ↩

¹³⁰ R-0071, Email from Dr. Ursula Prall to Mr. Tilman Schwencke, 16 April 2013. ↩

¹³¹ C-0116, Minutes of meeting between the Claimants, TenneT and BSH, 16 May 2013. ↩

¹³² C-0110, Paper presented at Mainstream Board of Directors meeting, 21 May 2013 ("21 May 2013 Board Paper"). ↩

¹³³ C-0227, renewableUK, Presentation, “The New Grid Connection Regime – Perspectives for Offshore Wind Farms in Germany", 12 June 2013. ↩

¹³⁴ R-0042, 50Hertz Transmission GmbH/Amprion GmbH/TenneT/TransnetBW GmbH, Second Draft O-NEP 2013. ↩

¹³⁵ C-0117, Paper presented at Mainstream Board of Directors meeting, 2 July 2013. ↩

¹³⁶ R-0057, Email from Mr. Tilman Schwencke to Mr. Chris Hill, 20 September 2013. ↩

¹³⁷ R-0072, Dr. Ursula Prall, Draft Memorandum on the status of the Horizont Projects. ↩

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enter the Bundestag). On 14 December 2013, the CDU/CSU and SDP entered into a coalition agreement to form the new government.¹³⁸

182. On 18 December 2013, the European Commission launched an investigation regarding the qualification of the EEG as State aid under EU Law (State aid SA.33995 (2013/C).¹³⁹

183. Also on 18 December 2013, the Board paper was presented at the Mainstream First Claimant's Board of Directors Meeting.¹⁴⁰

184. On 19 December 2013, the BNetzA confirmed the O-NEP 2013.¹⁴¹

185. Thereafter in early 2014, several steps were taken following the O-NEP 2013, including some specifically concerning the Mainstream Projects, as follows:

a. on 20 February 2014, wpd AG, a German wind farm developer and operator, published its presentation on the status of the German grid connection regime;¹⁴²

b. on 25 February 2014, Mainstream's Mr. Schwencke sent an email to his colleague Mr. Smith concerning developments;¹⁴³

с. on 26 February 2014, the Claimants submitted an expert report on the flight corridor for the helicopter landing deck to the BSH, one of the follow-up pieces of work following the Stakeholder Conference;¹⁴⁴

d. also on 26 February 2014, the Federal Agency for Nature Conversation (“BfN”) commented on the environmental impact of the service operation vessel planned

¹³⁸ BR-0057, Coalition Agreement 2013, 14 December 2013. ↩

¹³⁹ GW-0009. ↩

¹⁴⁰ C-0118, Paper presented at Mainstream Board of Directors meeting, 18 December 2013 (“18 December 2013 Board Paper"). ↩

¹⁴¹ C-0106 BNetzA, “Confirmation of Offshore Network Development Plan 2013”, 19 December 2013. ↩

¹⁴² C-0228, wpd AG, Presentation, “Wind – Offshore Grid Connection", 20 February 2014. ↩

¹⁴³ C-0119, Email from Mr. Tilman Schwencke to Mr. Cameron Smith, 25 February 2014. ↩

¹⁴⁴ MN-0005, supplemental statement of position regarding the expert report 12.017 in connection with the construction of a helicopter landing deck (helideck) at the offshore wind farm “Horizont I", 16 February 2014. ↩

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for the Projects, after Mainstream submits documents following a request at the Stakeholder Conference;¹⁴⁵

e. on 4 March 2014, the German Offshore Wind Energy Forum provided an opinion on a draft bill by the Federal Ministry for Economic Affairs and Energy for the amendment of the EEG (EEG 2014);¹⁴⁶ and

f. also on 4 March 2014, the Ministry of Lower Saxony for Environment, Energy and Climate Protection submitted a letter to the Federal Ministry for Economic Affairs and Energy.¹⁴⁷

186. In April and May 2014, the German government published two additional regulatory instruments impacting offshore wind farms, as follows:

a. on 16 April 2014, the TSOs published the first Draft Offshore Grid Development Plan 2014 (“O-NEP 2014”);¹⁴⁸ and

b. on 5 May 2014, the Federal Government published the Draft Act on the Fundamental Reform of the Renewable Energy Sources Act and on the Amendment of further Provisions of the Energy Industry Bundestag Document 18/1304 (“Draft EEG 2014").¹⁴⁹

187. Subsequently, on 26 May 2014, the Claimants received the BSH's reply to their expert report on the flight corridor for the helicopter landing deck.¹⁵⁰

¹⁴⁵ NN-0007, Statement of Position from the Federal Agency for Nature Conservation (Stellungnahme des Bundesamtes für Naturschutz), 26 February 2014. ↩

¹⁴⁶ C-0248, Statement by Offshore Wind Energy Forum, 4 March 2014. ↩

¹⁴⁷ C-0246, Ministry of Lower Saxony for Environment, Energy and Climate Protection, letter relating to the draft of a law on the fundamental amendment of the Renewable Energy Act (EEG 2014), 4 March 2014. ↩

¹⁴⁸ R-0073, 50Hertz Transmission GmbH/Amprion GmbH/TenneT/TransnetBW GmbH, First Draft O-NEP 2014. ↩

¹⁴⁹ R-0028, Bundestag Document 18/13045, May 2014. ↩

¹⁵⁰ MN-0006 Letter from BSH to Horizont I, Horizont II, and Horizont III, 4 July 2014. ↩

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188. On 28 June 2014, the European Commission published the Guidelines on State aid for environmental protection and energy 2014-2020, 28 June 2014 in the Official Journal (2014/C 200/01).¹⁵¹

189. On 1 August 2014, the EEG 2014 entered into force, introducing legally binding targets of 6.5 GW for 2020 and 15 GW for 2030 for installed offshore wind capacity.¹⁵²

190. On 29 September 2014, the BSH met with the Claimants.¹⁵³

191. On 4 November 2014, the TSOs published the Second Draft O-NEP 2014.¹⁵⁴

192. On 10 November 2014, Mr. Schwencke sent the legal opinion prepared by Dr. Prall to the BSH raising issues with the changes.¹⁵⁵

193. On 4 February 2015, the Federal Ministry for Economic Affairs and Energy published the Market Analysis of Offshore Wind Energy (“Marktanalyse Windenergie auf See").¹⁵⁶

194. On 6 March 2015, the BSH wrote to all projects developers located in Zones 3, 4 and 5 informing them that “until further notice” the projects located there would not receive planning approval because such approval was not currently justified.¹⁵⁷

195. On 7 July 2015, Dr. Prall produced a presentation on grid planning in the North and Baltic Sea.¹⁵⁸

¹⁵¹ RL-0148, European Commission, Guidelines on State aid for environmental protection and energy 2014-2020, 28 June 2014, (2014/C 200/01). ↩

¹⁵² C-0079, EEG 2014 of 21 July 2014 (BGBl. I p. 1066), dated 21 July 2014. ↩

¹⁵³ C-0124, Email from Mr. Tilman Schwencke to Dr. Nico Nolte, 10 November 2014. ↩

¹⁵⁴ EH-0035, Offshore Network Development Plan 2014: Second Draft of TSOs 4 November 2014. ↩

¹⁵⁵ C-0123, Legal opinion by Dr. Ursula Prall, 10 November 2014, C-0124, Email from Mr. Tilman Schwencke to Dr. Nico Nolte, 10 November 2014. ↩

¹⁵⁶ R-0029, Federal Ministry for Economic Affairs and Energy, Market Analysis Offshore Wind Energy dated 4 February 2015. ↩

¹⁵⁷ C-0020, Letter from BSH to the Claimants, 6 March 2015. ↩

¹⁵⁸ R-0019, Presentation of Dr. Ursula Prall on grid planning in the North and Baltic Sea, 7 July 2015. ↩

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196. On 24 March 2015, the BSH wrote to the Fourth, Fifth and Sixth Claimants, informing them that planning approval for the Projects was “not currently justified” and that no planning approval decision would be taken “for the moment".¹⁵⁹

197. On 21 June 2016, CDU/CSU and SPD Parliamentary groups published the Draft Act on the Introduction of Tendering for Electricity from Renewable Energies and on further Amendments to the Law on Renewable Energies, Bundestag Document 18/8860.¹⁶⁰

198. On 1 January 2017, the WindSeeG entered into force, ending the regulatory approvals process for the Projects and introducing a new tender-based system. The Projects did not qualify for the transitional provisions contained in the WindSeeG.¹⁶¹

199. On 28 July 2017, 17 companies (including the Claimants) challenged the WindSeeG Section 46(3), as being unconstitutional before the BVerfG.¹⁶²

200. The WindSeeG, which permitted the removal of the Horizont Projects from the transition provisions for offshore wind in Germany, was a further change in the offshore wind farm permitting framework in place in June 2008, the date of the Claimants' Consent Applications. According to the Claimants, the WindSeeG and removal of the Projects pursuant to it constitutes a further breach of fair and equitable treatment pursuant to the ECT and, in addition, amounts to an expropriation without proper compensation.

201. In summary, the Claimants rely on individual and cumulative changes to the German offshore wind farm regulatory framework from 2012 to 2017 as constituting breach of the fair and equitable treatment standard pursuant to the ECT and, ultimately, expropriation, based on:

a. the effect of the 2012 SeeAnlV and O-NEP 2014 on the Claimants' alleged legitimate expectations in relation to the grid connection;

¹⁵⁹ C-0125, Letter from BSH to Fourth, Fifth and Sixth Claimants, 24 March 2015. ↩

¹⁶⁰ RL-0149, Bundestag Document 18/8860, 21 June 2016. ↩

¹⁶¹ C-0126, Offshore Wind Energy Act (Gesetz zur Entwicklung und Förderung der Windenergie auf See), 13 October 2016 ("WindSeeG"). ↩

¹⁶² C-0126, WindSeeG; EH-0002, Constitutional complaint against Section 46(3) WindSeeG, 28 July 2017, Annex B12. ↩

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b. the effect of the 2014 EEG on the Claimants' alleged legitimate expectations in relation to the offtake entitlement;

c. the 2017 WindSeeG on the Claimants' alleged legitimate expectation changes to continue to participate in the approval process at all and the alleged expropriation of their Projects having lost the ability to do so; and

d. the cumulative loss allegedly arising out of those breaches.

IV. JURISDICTIONAL OBJECTIONS

202. The Tribunal must determine three separate jurisdictional arguments that it lacks jurisdiction to decide this dispute between the Claimants and the Respondent, namely:

a. lack of jurisdiction ratione voluntatis (i.e., the “intra-EU objection");

b. lack of jurisdiction ratione materiae; and

c. for the Fourth, Fifth and Sixth Claimants, lack of jurisdiction ratione personae.

203. On 30 March 2023, the European Commission submitted its intervenor submission in support of lack of jurisdiction ratione voluntatis. The Tribunal takes each of the three jurisdictional objections in turn, including the arguments put forward by the European Commission, starting with jurisdiction ratione voluntatis (i.e., the “intra-EU objection”).

A. JURISDICTION RATIONE VOLUNTATIS (THE INTRA-EU OBJECTION)

204. The Respondent submits that the Tribunal lacks jurisdiction ratione voluntatis because there is no valid arbitration agreement between the Parties providing consent in accordance with the ICSID Convention, Article 25(1), which requires written consent of both Parties.¹⁶³

¹⁶³ Resp. Mem. on Juris., paras. 26 et seq. ↩

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205. Ultimately, the Respondent raises three primary arguments: (i) there is no valid arbitration agreement, as determined by the German Federal Court of Justice;¹⁶⁴ (ii) the Respondent did not consent to jurisdiction on the basis of EU law;¹⁶⁵ and (iii) the Tribunal has no jurisdiction based on proper interpretation of ECT Article 26, pursuant to international law.¹⁶⁶ These arguments engage German law, EU law and other international law principles.

206. In support of (i), the Respondent relies on the German Federal Court of Justice's Decision in Germany v. Mainstream and others dated 27 July 2023.¹⁶⁷

207. In support of (ii), the Respondent relies on:

a. EU measures reaffirming the inadmissibility of intra-EU arbitration;¹⁶⁸

b. jurisprudence of the Court of Justice of the European Union (“CJEU”) as to its interpretation of ECT Article 26(3), namely:

i. the applicability of Slowakische Republik v. Achmea BV, Case C-284/16, Judgment dated 6 March 2018 (the “Achmea Judgment") to intra-EU arbitration under the ECT in (i) Republic of Moldova v. Komstroy LLC, Case C-741/19, Judgment dated 2 September 2021 (the “Komstroy Judgment”) and (ii) Republic of Poland v. PL Holdings S.à r.l. Case C-109/20, Judgment dated 26 October 2021 (the “PL Holdings Judgment”); and

ii. the applicability of the Achmea Judgment to ICSID arbitration in European Commission v. European Food SA and others, Case C-638/19 P, Judgment dated 25 January 2022 (the “European Food Judgment");¹⁶⁹

¹⁶⁴ Resp. Rej., paras. 39-45. ↩

¹⁶⁵ Resp. Mem. on Juris., paras. 30 et seq. ↩

¹⁶⁶ Resp. Mem. on Juris., paras. 91 et seq. ↩

¹⁶⁷ RL-0275, Federal Republic of Germany v. Mainstream Renewable Power Limited and others, German Federal Court of Justice, Case No. I ZB 43/22, Decision, 27 July 2023 (“27 July 2023 BGH Decision"). ↩

¹⁶⁸ Resp. Mem. on Juris., paras. 33-42. ↩

¹⁶⁹ Resp. Mem. on Juris., paras. 43-56; RL-0004, Slovak Republic v. Achmea B.V., CJEU Case C-284/16, Judgment, 6 March 2018 ("Achmea Judgment"); RL-0007, Republic of Moldova v. Komstroy LLC, CJEU Case C-741/19, Judgment, 2 September 2021 ↩

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c. developments in other EU Member State courts and tribunals, including the Lithuania Supreme Court, Svea Court of Appeal, the German Federal Court of Justice and the Kammergericht Berlin;¹⁷⁰ and

d. alleged absence of loss of rights for EU-based investors.¹⁷¹

208. In support of (iii), the Respondent relies on international law to support four propositions as follows:

a. there is no jurisdiction for intra-EU disputes under the ECT based on interpretation of the ECT wording, context, object and purpose, including based on supplementary means of interpretation (the Vienna Convention on the Law of Treaties (“VCLT”), Articles 30, 31 and 32);¹⁷²

b. there is no jurisdiction for intra-EU disputes under the ECT based on the primacy of EU law over general international law pursuant to VCLT Article 5;¹⁷³

с. there is no jurisdiction based on other international agreements, which show that ECT Article 26(4) is inapplicable intra-EU;¹⁷⁴ and

d. there is no jurisdiction for intra-EU disputes under the ECT based on an arbitration agreement pursuant to private law.¹⁷⁵

209. The Tribunal sets out below a key events timeline regarding the intra-EU objection, the key treaty provisions engaged and brief summaries of the positions of the Parties and the

("Komstroy Judgment”); RL-0014 / CL-0220, Republic of Poland v. PL Holdings S.à r.l., CJEU Case C-109/20, Judgment, 26 October 2021 ("PL Holdings Judgment"); RL-0019, European Commission v. European Food SA and others, CJEU Case C-638/19 P, Decision, 25 January 2022 (“European Food Judgment").

¹⁷⁰ Resp. Mem. on Juris., paras. 57-81; RL-0015, Veolia Environnement S.A. and others v. Republic of Lithuania, Supreme Court of Lithuania, Case No. e3K-3-121-916/2022, Decision, 18 January 2022 ("Veolia v. Lithuania"); RL-0026, Italian Republic v. Greentech Energy Systems A/S and others, Svea Court of Appeal, Case No. T 3229-19, Decision, 11 February 2021 (“Italy v. Greentech"); RL-0028, German Federal Court of Justice, Case No. I ZB 16/21, Decision, 17 November 2021 ("17 November 2021 BGH Decision"); RL-0029, Letter from Kammergericht Berlin to Noerr (re Germany v. Mainstream), 1 February 2022 ("1 February 2022 Kammergericht Berlin Letter"). ↩

¹⁷¹ Resp. Mem. on Juris., paras. 82-90. ↩

¹⁷² Resp. Mem. on Juris., paras. 95-139. ↩

¹⁷³ Resp. Mem. on Juris., paras. 140-148. ↩

¹⁷⁴ Resp. Mem. on Juris., paras. 149-155. ↩

¹⁷⁵ Resp. Mem. on Juris., paras. 156-159. ↩

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European Commission as a non-disputing third party, followed by the Tribunal's reasoning, analysis and decision regarding the Respondent's intra-EU jurisdiction objection.

(1) Event Timeline for the Intra-EU Objection

210. The Tribunal has included a chronology above, setting out key regulatory and policy events and steps taken by the Claimants in relation to their Mainstream Projects Consent Applications. However, given that the Respondent's arguments based on the VCLT are impacted by the timing of events, the Tribunal includes an additional timetable of events relating specifically to this objection below.

[Page 64]

[Page 65]

(2) Key Treaty Provisions

211. The key treaty provisions relevant to the Respondent's intra-EU objection are as follows.

212. The key provisions in the Treaty on the Functioning of the European Union (the “TFEU”) are Articles 267 and 344, which provide as follows:¹⁷⁶

Article 267

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 a judgement, 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.

Article 344

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.

¹⁷⁶ CL-0009, Treaty on the Functioning of the European Union, 26 October 2012 (“TFEU”), Arts. 267, 344. ↩

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213. The key provisions in the Treaty on European Union (the “TEU”) are Articles 4(3) and 19(1), which provide as follows:¹⁷⁷

Article 4

...

3. Pursuant to the principle of sincere cooperation, the Union and the Member States shall, in full mutual respect, assist each other in carrying out tasks which flow from the Treaties.

The Member States shall take any appropriate measure, general or particular, to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the institutions of the Union.

The Member States shall facilitate the achievement of the Union's tasks and refrain from any measure which could jeopardise the attainment of the Union's objectives.

...

Article 19

1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.

Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.

...

214. The key provisions in the Declaration of the Representatives of the Governments of the Member States of 15 January 2019 on the Legal Consequences of the Judgment of the Court of Justice in Achmea and on Investment Protection in the European Union (the “MS Declaration" or the “Declaration”) are the Preamble and paragraphs 1 to 5, which provide as follows:¹⁷⁸

[Preamble]

...

¹⁷⁷ Treaty on European Union, 26 October 2012 (available at: https://eur-lex.europa.eu/resource.html?uri=cellar:2bf140bf-a3f8-4ab2-b506-fd71826e6da6.0023.02/DOC_1&format=PDF) ("TEU"), Arts. 4(3), 19(1). ↩

¹⁷⁸ RL-0006, Declaration of the Representatives of the Government of the Member States, 15 January 2019 ("2019 Declaration"), Preamble, paras. 1-5. ↩

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Union law takes precedence over bilateral investment treaties concluded between Member States.[*] As a consequence, all investor-State arbitration clauses contained in bilateral investment treaties concluded between Member States are contrary to Union law and thus inapplicable. They do not produce effects including as regards provisions that provide for extended protection of investments made prior to termination for a further period of time (so-called sunset or grandfathering clauses). An arbitral tribunal established on the basis of investor-State arbitration clauses lacks jurisdiction, due to a lack of a valid offer to arbitrate by the Member State party to the underlying bilateral investment Treaty.

[*] With regard to agreements concluded between Member States, see judgments in Matteuci, 235/87, EU:C:1988:460, paragraph 21; and Budějovicky Budar, EU:C:2009:521, C-478/07, paragraphs 98 and 99 and Declaration 17 to the Treaty of Lisbon on primacy of Union law. The same result follows also under general public international law, in particular from the relevant provisions of the Vienna Convention on the Law of the [sic] Treaties and customary international law (lex posterior).

...

[Declaration]

Taking into account the foregoing, Member States declare that they will undertake the following actions without undue delay:

1. By the present declaration, Member States inform investment arbitration tribunals about the legal consequences of the Achmea judgment, as set out in this declaration, in particular all pending intra-EU investment arbitration proceedings brought either under bilateral investment treaties concluded between Member States or under the Energy Charter Treaty.
2. In cooperation with a defending Member State, the Member State, in which an investor that has brought such an action is established, will take the necessary measures to inform the investment arbitration tribunals concerned of those consequences. Similarly, defending Member States will request the courts, including in any third country, which are to decide in proceedings relating to an intra-EU investment arbitration award, to set these awards aside or not to enforce them due to a lack of valid consent.
3. By the present declaration, Member States inform the investor community that no new intra-EU investment arbitration proceedings should be initiated.
4. Member States which control undertakings that have brought investment arbitration cases against another Member State will take steps under their national laws governing such undertakings, in compliance with Union law, so that those undertakings withdraw pending investment arbitration cases.

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

...

215. The key provision in the ICSID Convention is Article 25(1), which provides as follows:

Article 25

(1) The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State ... and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.

216. The key treaty provisions in the ECT are Articles 1, 16, 25, 26, 27 and 36, which provide in relevant part as follows:¹⁷⁹

Article 1 - Definitions

[UNDERSTANDINGS

...

2. With respect to Article 1(5)

...

(b) The following activities are illustrative of economic activity in the energy sector:

...

(ii) construction and operation of power generation facilities, including those powered by wind and other renewable energy sources;

...

(vii) research, consulting, planning, management and design activities related to the activities mentioned above, including those aimed at improving energy efficiency.]

¹⁷⁹ CL-0001 / RL-0084, Energy Charter Treaty, 17 December 1994 (“ECT”), Arts. 1, 16, 25-27, 36. ↩

[Page 69]

...

(2) “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.

(3) “Regional Economic Integration Organization” means an organization 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.

...

(10) “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 Organization, under the provisions contained in the agreement establishing that Organization.

...

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

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(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 liberalizing, 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 GATT and Related Instruments 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.

...

(5)(a) The consent given in paragraph (3) together with the written consent of the Investor given pursuant to paragraph (4) shall be considered to satisfy the requirement for:

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(i) written consent of the parties to a dispute for purposes of Chapter II of the ICSID Convention and for purposes of the Additional Facility Rules;

(ii) an “agreement in writing" for purposes of article II of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958 (hereinafter referred to as the "New York Convention"); and

(iii) "the parties to a contract [to] have agreed in writing” for the purposes of article 1 of the UNCITRAL Arbitration Rules.

(b) Any arbitration under this Article shall at the request of any party to the dispute be held in a state that is a party to the New York. Convention. Claims submitted to arbitration hereunder shall be considered to arise out of a commercial relationship or transaction for the purposes of article I of that Convention.

(6) A tribunal established under paragraph (4) shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law.

...

Article 36 - Voting

...

(7) A Regional Economic Integration Organization shall, when voting, have a number of votes equal to the number of its member states which are Contracting Parties to this Treaty; provided that such an Organization shall not exercise its right to vote if its member states exercise theirs, and vice versa.

217. The key treaty provisions in the VCLT, which entered into force between Ireland and Germany in 2006, after the entry into force between the Parties of the ECT in 1999, but which both Parties rely on in the arbitration and treat as applicable are Articles 5, 7, 26, 27, 28, 30, 31, 32, 37 and 41 as follows:¹⁸⁰

Article 5
Treaties constituting international organizations and treaties adopted within an international organization

¹⁸⁰ CL-0017, Vienna Convention on the Law of Treaties, 23 May 1969 (“VCLT"), Arts. 5, 7, 26-28, 30-32, 37, 41. ↩

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The present Convention applies to any treaty which is the constituent instrument of an international organization and to any treaty adopted within an international organization without prejudice to any relevant rules of the organization.

...

Article 7
Full powers

...

2. In virtue of their functions and without having to produce full powers, the following are considered as representing their State:

(a) Heads of State, Heads of Government and Ministers for Foreign Affairs, for the purpose of performing all acts relating to the conclusion of a treaty;

(b) heads of diplomatic missions, for the purpose of adopting the text of a treaty between the accrediting State and the State to which they are accredited;

(c) representatives accredited by States to an international conference or to an international organization or one of its organs, for the purpose of adopting the text of a treaty in that conference, organization or organ.

...

Article 26
"Pacta sunt servanda"

Every treaty in force is binding upon the parties to it and must be performed by them in good faith.

Article 27
Internal law and observance of treaties

A party may not invoke the provisions of its internal law as justification for its failure to perform a treaty. This rule is without prejudice to article 46.

Article 28
Non-retroactivity of treaties

Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of the entry into force of the treaty with respect to that party.

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...

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.

...

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 connection with the conclusion of 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.

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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 37
Revocation or modification of obligations or rights of third States

1. When an obligation has arisen for a third State in conformity with article 35, the obligation may be revoked or modified only with the consent of the parties to the treaty and of the third State, unless it is established that they had otherwise agreed.

2. When a right has arisen for a third State in conformity with article 36, the right may not be revoked or modified by the parties if it is established that the right was intended not to be revocable or subject to modification without the consent of the third State.

...

Article 41
Agreements to modify multilateral treaties between certain of the parties only

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

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

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

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

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

2. Unless in a case falling under paragraph 1 (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.

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218. Certain other treaty provisions are included in the discussion below.

(3) Submissions of the Parties

a. The Respondent's Position

219. The Respondent argues that the Tribunal has no jurisdiction on the basis that the Claimants cannot avail themselves of the arbitration offer in ECT Article 26, because it is inapplicable to intra-EU disputes following the judgments of the CJEU in Achmea and Komstroy, and the subsequent judgments in PL Holdings and European Food.¹⁸¹

220. There were shifts in the Respondent's position between its Rule 41(5) Application (12 October 2021) and its Memorial on Jurisdiction (25 March 2022). Ultimately the Respondent led with a German law argument, followed by EU law and finally its international law interpretation pursuant to the VCLT, introducing a new VCLT Article 5 argument towards the end of the proceeding. In order to avoid any question that it has not fully tracked the entirety of the Respondent's case over the course of submissions, the Tribunal requested that the Respondent summarise its full list of issues to be addressed regarding the “interim EU Objection” on jurisdiction. The Respondent provided this full list on 6 October 2023 (see above paragraph 83).

221. The Respondent's full and final list of issues dealing with this objection is set out below (footnotes omitted):

a. based on the July 2023 German Federal Court Decision:

[1.1] In its decision dated 27 July 2023, the German Federal Court of Justice found that Art. 26 ECT does not provide the basis for a valid arbitration agreement in the present ICSID proceedings. The decision is binding on all Parties to this Arbitration.

b. based on its EU Law interpretation:

2. Art. 26(2)(c) ECT does not apply in intra-EU investor-State relationships pursuant to and in accordance with Art. 19(1) TEU and Arts. 267 and 344 TFEU, as confirmed by the CJEU in the Achmea, Komstroy, PL Holdings and

¹⁸¹ Resp. Rule 41(5) Application, paras. 3-6; Resp. Mem. on Juris., paras. 4-8. ↩

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European Food Judgment as well as the Romatsa Decision and Opinion 1/20. There is no loss of rights for EU based investors.

2.1 This legal situation had become public knowledge long before Claimants filed their Request for Arbitration on 30 April 2021 by ways of the European Commission's Communication “Protection of intra- EU investment” of July 2018, the Council of the European Union's Decision regarding Negotiations on the Modernization of the ECT dated 2 July 2019 and the EU's May 2020 EU Proposal regarding the ECT Modernization as well as the EU Member States' May 2020 Termination Agreement.

2.2 The European Commission is likely to initiate proceedings for infringement of the TFEU and the TEU against any EU Member State that complies or intends to comply with an intra-EU investor-state award, one of the reasons for such an investigation being that the arbitral award constitutes State aid.

c. based on its international law interpretation:

3. There is no valid arbitration agreement pursuant to Art. 26 under public international law:

3.1 EU law (i.e. the TFEU and the TEU) forms part of international law and is applicable to jurisdictional issues. The ECT does not enjoy primacy vis-à-vis EU law.

3.2 Pursuant to Art. 5 VCLT, this Tribunal lacks jurisdiction due to the primacy of EU Primary Law over general international law.

3.3 Even the interpretation of the ECT in accordance with Arts. 31 and 32 VCLT confirms this Tribunal's lack of jurisdiction:

(a) No jurisdiction by interpretation of the wording of the ECT as an interpretation of the term “Contracting Party" in Art. 1(2) ECT in the light of Arts. 1(3) and 1(10) ECT shows that Claimants and Respondent form part of the same “Contracting Party".

(b) No jurisdiction by interpretation of the context, object and purpose of the ECT as the preparatory work of the ECT, in particular the European Communities' 1997 Statement, and the circumstances of its conclusion confirm the inapplicability in intra-EU Investor-State relationships.

(c) No jurisdiction by supplementary means of interpretation as EU law as the "relevant rules of international law applicable in the relations between the parties" pursuant to Art. 31 (3)(c) VCLT

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leads to the interpretation that there is no valid offer to arbitrate. In particular, pursuant to Art. 351 TFEU, EU law prevails.

3.4 Art. 26 ECT is based on the concept of bilateral relationships, as opposed to a multilateral obligation. The EU parties to the ECT all agree on the understanding of Art. 26 ECT. Such understanding does not cause a loss of rights for other parties to the ECT or their nationals.

3.5 Pursuant to Art. 30(4)(a) VCLT, the relations between the Republic of Ireland and Respondent are governed by the most recent treaties, which are the TEU and the TFEU and not the ECT.

3.6 Pursuant to Art. 41 (1)(b) ECT^[182] [sic], the EU Member States effectively modified the ECT by adhering to the Lisbon Treaty.

3.7 Pursuant to Art. 30(3) VCLT, the later treaty, here the TEU and the TFEU, prevail. This is in particular confirmed by Art. 351 TFEU. The primacy of EU law in the relations between EU Member States is a matter of lex superior, as found by the tribunal in Green Power Partners K/S and SCE Solar Don Benito APS v. Kingdom of Spain. This submission is filed electronically only.

222. The Respondent's three arguments are concurrent, not in the alternative, giving rise to some internal inconsistency (as discussed below). The Tribunal sets out in more detail below the Respondent's position in relation to each of its three jurisdictional ratione voluntatis arguments, followed by the Claimants' responses, then the European Commission's intervention points, and thereafter sets out its reasoning and decision on this first objection to jurisdiction. Before doing so, the Tribunal sets out the factual basis upon which the Respondent relies.

i. Intra-EU Objection: Factual Basis

223. The Respondent relies primarily on the following facts:¹⁸³

a. the adoption of the Lisbon Treaty in 2009 (i.e., that it “marked an important milestone in the elaboration of international investment treaty provisions within (and outside) the EU",¹⁸⁴ and "[b]y virtue of Art. 207 TFEU, foreign direct

¹⁸² The Tribunal notes that this should read "Art. 41 (1)(b) VCLT". ↩
¹⁸³ Resp. Rule 41(5) Application, paras. 25 et seq.; Resp. Mem. on Juris., paras. 33-81. ↩
¹⁸⁴ Resp. Rule 41(5) Application, para. 25. ↩

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investment became an exclusive EU competence as part of the EU's common commercial policy",¹⁸⁵ including transferring the power to conclude bilateral and multilateral investment treaties from the EU Member States to the EU), referring also to TEU Article 19(1) second sentence, TFEU Articles 26.7 and 344 and Declaration 17 annexed to the Lisbon Treaty;¹⁸⁶

b. the June 2015 European Commission press release on infringement proceedings against EU Member States;¹⁸⁷

c. the April 2016 non-paper from Germany et al. concerning “Intra-EU Investment Treaties";¹⁸⁸

d. the March 2018 Achmea Judgment;¹⁸⁹

e. EU Member State court decisions relating to intra-EU arbitration following the Achmea Judgment including, in particular:¹⁹⁰

i. the 18 January 2022 Decision of the Lithuania Supreme Court;¹⁹¹

ii. the 11 February 2021 Svea Court of Appeal request for preliminary ruling;¹⁹²

iii. the 17 November 2021 Decision of the German Federal Court of Justice;¹⁹³

iv. the 1 February 2022 Kammergericht interim letter;¹⁹⁴

¹⁸⁵ Resp. Rule 41(5) Application, para. 25. ↩
¹⁸⁶ Resp. Rule 41(5) Application, paras. 25-33; Resp. Mem. on Juris., paras. 34-42. ↩
¹⁸⁷ Resp. Rule 41(5) Application, paras. 34-35, referring to RL-0095, European Commission Press Release, “Commission asks Members States to terminate their intra-EU bilateral investment treaties", 18 June 2015. ↩
¹⁸⁸ Resp. Rule 41(5) Application, paras. 36-37, referring to Non-paper of Austria, Finland, France, Germany and the Netherlands, "Intra-EU Investment Treaties", 7 April 2016 (available at: https://www.bmwk.de/Redaktion/EN/Downloads/intra-eu-investment- treaties.pdf? blob=publicationFile&v=2). ↩
¹⁸⁹ Resp. Rule 41(5) Application, paras. 38-46. ↩
¹⁹⁰ Resp. Rule 41(5) Application, paras. 47-50; Resp. Mem. on Juris., paras. 57-65. ↩
¹⁹¹ Resp. Mem. on Juris., paras. 66-69; RL-0015, Veolia v. Lithuania. ↩
¹⁹² Resp. Mem. on Juris., paras. 70-74; RL-0026, Italy v. Greentech. ↩
¹⁹³ Resp. Mem. on Juris., paras. 75, 77-80; RL-0028, 17 November 2021 BGH Decision. ↩
¹⁹⁴ Resp. Mem. on Juris., para. 81; RL-0029, 1 February 2022 Kammergericht Berlin Letter. ↩

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v. the 27 July 2023 Decision of the German Federal Court of Justice;¹⁹⁵

vi. the 6 November 2023 Decision of the Higher Regional Court Berlin;¹⁹⁶

vii. the 27 March 2024 Decision of the Svea Court;¹⁹⁷

viii. the 28 June 2024 Decision of the Svea Court;¹⁹⁸

ix. the 23 July 2024 Decisions of the German Federal Constitutional Court;¹⁹⁹

x. the 13 September 2024 Decision of the Bavarian Supreme Court;²⁰⁰ and

xi. the 31 July 2025 Decision of the German Federal Constitutional Court;²⁰¹

f. the July 2018 European Commission communication on the “Protection of intra- EU investment" (the "July 2018 Communication");²⁰²

g. the January 2019 Declaration by the EU Member States on the “Legal Consequences of the Judgment of the Court of Justice in Achmea and on Investment Protection in the European Union”;²⁰³

h. the Council of the European Union's July 2019 decision regarding negotiations on the modernization of the ECT;²⁰⁴

¹⁹⁵ Resp. Rej., para. 39; RL-0275, 27 July 2023 BGH Decision. ↩
¹⁹⁶ RL-0383, L. Riedner, German Arbitration Digest, No. 7, 2024 (report on Kammergericht Berlin, Case No. 12 SchH 9/22, Decision, 6 November 2023). ↩
¹⁹⁷ RL-0384, Kingdom of Spain v. TRIODOS SICAV II, Svea Court of Appeal, Case No. T 15200-22, Decision, 27 March 2024. ↩
¹⁹⁸ RL-0385, Kingdom of Spain v. Foresight Luxembourg Solar 1 S.à.r.l. and others, Svea Court of Appeal, Case No. T 1626-19, Decision, 28 June 2024. ↩
¹⁹⁹ Letter from the Respondent to the Tribunal, 14 November 2024; RL-0380, German Federal Constitutional Court, Case No. 2 BvR 557/19, Decision, 23 July 2024 ("BVerfG Decision 557/19"); RL-0381, German Federal Constitutional Court, Case No. 2 BvR 141/22, Decision, 23 July 2024 (“BVerfG Decision 141/22"). ↩
²⁰⁰ RL-0382, Bavarian Supreme Court, Case No. 101 Sch 146/23e, Decision, 13 September 2024. ↩
²⁰¹ RL-0387, German Federal Constitutional Court, Case No. 2 BvR 1277/23, Decision, 31 July 2025 ("BVerfG Decision 1277/23"). ↩
²⁰² Resp. Rule 41(5) Application, paras. 51-55; RL-0005, Communication from the Commission to the European Parliament and Council, "Protection of intra-EU investment", COM(2018) 547, 19 July 2018 ("July 2018 European Commission Communication"). ↩
²⁰³ Resp. Rule 41(5) Application, paras. 56-63; RL-0006, 2019 Declaration. ↩
²⁰⁴ Resp. Rule 41(5) Application, paras. 64-70; CL-0016, Council of the European Union, "Negotiating Directives for the Modernisation of the Energy Charter Treaty", Doc. 10745/19 ADD 1, 2 July 2019 (“EU Negotiating Directives"). ↩

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i. the May 2020 EU proposal regarding the ECT modernization;²⁰⁵

j. the May 2020 EU Member States' Termination Agreement regarding intra-EU BITs;²⁰⁶ and

k. subsequent CJEU judgments including:

i. the September 2021 Komstroy Judgment;²⁰⁷

ii. the October 2021 PL Holdings Judgment;²⁰⁸ and

iii. the January 2022 European Food Judgment.²⁰⁹

224. The occurrence of each event (including rendering of decisions or judgments) is undisputed, as is the Respondent's broad factual characterisation of them, as generally echoed by the European Commission in its intervention. The legal effect of these events, if any, on the jurisdiction of this Tribunal lies at the heart of the dispute between the Respondent (and European Commission) and the Claimants.

225. Having set out that brief summary of the Respondent's factual bases for its intra-EU objection, to be read together with the table at paragraph 210 above, the Tribunal now turns to the first of the Respondent's legal arguments.

ii. Application of the German Federal Court of Justice Decision

226. First, based on the Respondent's 6 October 2023 list of issues, it appears that it independently relies on the German Federal Court of Justice's decision dated 27 July 2023, which declared that three intra-EU ICSID arbitrations (including these arbitration proceedings) are “inadmissible on the grounds that Art. 26 (2)(c) ECT violates EU law and

²⁰⁵ Resp. Rule 41(5) Application, paras. 71-73. ↩
²⁰⁶ Resp. Rule 41(5) Application, paras. 74-80. ↩
²⁰⁷ Resp. Rule 41(5) Application, paras. 81-92; Resp. Mem. on Juris., paras. 43-47; RL-0007, Komstroy Judgment. ↩
²⁰⁸ Resp. Mem. on Juris., paras. 48-49; RL-0014, PL Holdings Judgment. ↩
²⁰⁹ Resp. Mem. on Juris., paras. 50-56; RL-0019, European Food Judgment. ↩

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thus does not provide for a valid offer for an arbitration agreement for intra-EU investor- State arbitration".²¹⁰

227. According to the Respondent, the German Federal Court of Justice:

a. “overruled the decision of the Higher Regional Court Berlin dated 28 April 2022";²¹¹

b. “confirmed two decisions obtained by the Kingdom of the Netherlands before the Higher Regional Court Cologne, similarly finding that two ICSID arbitrations initiated by German investors against the Kingdom of the Netherlands are inadmissible”;²¹²

c. determined that:

i. “the Parties did not conclude an effective arbitration agreement because the arbitration clause in Art. 26 (2)(c) ECT is not applicable to intra-EU investor-State disputes";²¹³ and

ii. “[r]elying on Art. 26 (2)(c) ECT in an intra-EU context violates the principles of autonomy of EU law, mutual trust and the necessity of a uniform interpretation of EU law, as enshrined in Art. 267, 344 TFEU”;²¹⁴

d. held that:²¹⁵

According to these principles, in intra-EU investor-State-arbitration such as the present matter, the dispute resolution mechanism in Art. 26 para. 2 lit. c ECT violates EU law. Due to its incompatibility in particular with Articles

²¹⁰ Resp. Rej., para. 39, referring to RL-0275, 27 July 2023 BGH Decision. ↩
²¹¹ Resp. Rej., para. 40, referring to C-0166 / RL-0090, Federal Republic of Germany v. Mainstream Renewable Power Limited and others, Higher Regional Court Berlin, Case No. 12 SchH 6/21, Decision, 28 April 2022 (“Kammergericht Berlin Decision"). ↩
²¹² Resp. Rej., para. 40, referring to RL-0260, Uniper SE and others v. Kingdom of the Netherlands, Higher Regional Court Cologne, Case No. 19 SchH 14/21, Decision, 1 September 2022; RL-0261, RWE AG and RWE Eemshaven Holding II BV v. Kingdom of the Netherlands, Higher Regional Court Cologne, Case No. 19 SchH 15/21, Decision, 1 September 2022. ↩
²¹³ Resp. Rej., para. 41; RL-0275, 27 July 2023 BGH Decision, para. 100. ↩
²¹⁴ Resp. Rej., para. 41; RL-0275, 27 July 2023 BGH Decision, paras. 98 et seq. ↩
²¹⁵ Resp. Rej., para. 41; RL-0275, 27 July 2023 BGH Decision, para. 100. ↩

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267 and 344 TFEU, there is a lack of effective consent, and thus of an offer by the applicant EU Member States to conclude an arbitration agreement.

e. “referred to the interpretation of Art. 267, 344 TFEU given by the CJEU”,²¹⁶ considering CJEU jurisprudence to be “an acte clair, which does not require any further application for a preliminary ruling by the CJEU”;²¹⁷

f. “expects this decision to have a signaling [sic] effect for domestic courts of both other EU Member States as well as non-EU Member States, such as U.S. courts, deciding on recognition and enforcement of ICSID awards”;²¹⁸

g. “considers the doctrine of comity as basis for the non-applicability of Art. 53, 54 ICSID Convention and reason to deny recognition and enforcement of an intra-EU ICSID award”;²¹⁹

h. “considered the independence of the ICSID Convention” and “noted that the CJEU found in European Commission v. European Food SA and Others and DA vs Romanian Air Traffic Services Administration (Romatsa) et al. and FC et al. vs Romanian Air Traffic Services Administration (Romatsa) et al.”,²²⁰ that the ICSID Convention:

i. “does not exclude the competence of the CJEU to render decisions in this context";²²¹ and that

ii. “domestic courts have to consider this despite Art. 41 ICSID”;²²² and

²¹⁶ Resp. Rej., para. 42; RL-0275, 27 July 2023 BGH Decision, paras. 97-98, 101 et seq. ↩
²¹⁷ Resp. Rej., para. 42; RL-0275, 27 July 2023 BGH Decision, para. 111. ↩
²¹⁸ Resp. Rej., para. 43; RL-0275, 27 July 2023 BGH Decision, para. 91. ↩
²¹⁹ Resp. Rej., para. 43; RL-0275, 27 July 2023 BGH Decision, para. 91. ↩
²²⁰ Resp. Rej., para. 44; RL-0019, European Food Judgment; RL-0257, DA v. Romanian Air Traffic Services Administration (Romatsa) and others and FC and others. v. Romanian Air Traffic Services Administration (Romatsa) and others, CJEU Case C-33/19, Judgment, 21 September 2022. ↩
²²¹ Resp. Rej., para. 44; RL-0275, 27 July 2023 BGH Decision, para. 73. ↩
²²² Resp. Rej., para. 44. ↩

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i. “referred to the arbitral award rendered in Green Power Partners K/S and SCE Solar Don Benito APS v. Kingdom of Spain as an example that arbitral tribunals are willing to accept the invalidity of arbitration agreements under EU law":²²³

It cannot be argued that there could not be a de facto, indirect impact on intra-EU-investor-State-arbitration because arbitral tribunals were per se opposed to finding invalidity of arbitration agreements based on EU law. In the arbitration Green Power Partners vs. Spain a tribunal constituted under the arbitration rules of the arbitration institute of the Stockholm Chamber of Commerce (SCC) unanimously considered the consent of a Member State to the arbitration agreement under Art. 26 ECT in an intra-EU-dispute as invalid because of the violation of EU law and, therefore, denied its jurisdiction.

228. Therefore, according to the Respondent, the German Federal Court of Justice “did not only confirm the established jurisprudence of the CJEU but also the position of the European Commission set forth in the EU Amicus Curie and, last but not least, [its own] objection that Claimants cannot rely on a valid arbitration agreement".²²⁴

229. Although the German Federal Court of Justice, as well as the German Federal Constitutional Court in its Decisions dated 23 July 2024, considered the issue of jurisdiction in relation to the current arbitration (finding the ECT Article 26 agreement to arbitrate to be incompatible with TFEU Articles 267 and 344 and therefore a lack of effective consent by Germany to offer to conclude an arbitration agreement under the ECT), they made that determination on the basis of an application and interpretation of EU law. Accordingly, that determination is directly relevant to the Respondent's EU law interpretation, as discussed below, but is not a stand-alone ground for its ratione voluntatis objection. Therefore, the German Federal Courts' decisions are dealt with in Section 3) below.

²²³ Resp. Rej., para. 44; RL-0275, 27 July 2023 BGH Decision, para. 94. ↩
²²⁴ Resp. Rej., para. 45. ↩

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iii. EU Law Interpretation

230. The Respondent approaches EU law interpretation based on: (i) European Commission and Member State measures; (ii) the CJEU judgments; (iii) decisions by other EU Member State courts and tribunals; and (iv) alleged lack of loss of rights by EU based investors.

231. According to the Respondent, based on EU law, the Tribunal “must ex officio take account of the inapplicability ECT arbitration clause and dismiss the claims because it has no jurisdiction to hear the case”, and its “lack of jurisdiction is obvious since the Tribunal cannot have any higher confirmation as from the CJEU”.²²⁵

1) EU Measures

232. The Respondent first argues that the lack of jurisdiction of this Tribunal is affirmed by recent developments of EU law and subsequent EU Member State practice.²²⁶ In this regard it assumes the primacy of EU law as an essential principle under EU law.²²⁷

233. In its Rule 41(5) Application, the Respondent maintains that “expansion of EU law to new EU Member States and the progressive enlargement of the EU, the EU as well as the European Commission” have “developed and confirmed the position that intra-EU BITs as well as comparable instruments were incompatible with EU law”, which was “a constant issue raised" even before the Achmea Judgment.²²⁸

234. The Respondent's position on EU measures in its Memorial on Jurisdiction centres on the TEU and TFEU, including the Lisbon Treaty and Declaration 17 annexed thereto.²²⁹ In order to ensure that it captures all of the Respondent's submissions, the Tribunal follows

²²⁵ Resp. Rule 41(5) Application, para. 93. ↩
²²⁶ Resp. Mem. on Juris., paras. 33-42. ↩
²²⁷ Resp. Mem. on Juris., para. 33. ↩
²²⁸ Resp. Rule 41(5) Application, para. 144; CL-0263, Eastern Sugar B.V. v. Czech Republic, SCC Case No. 088/2004, Partial Award, 27 March 2007 (“Eastern Sugar v. Czech Republic"); Rupert Joseph Binder v. Czech Republic, UNCITRAL, Final Award, 15 July 2011 (available at: https://www.italaw.com/sites/default/files/case-documents/italaw4179.pdf) (“Binder v. Czech Republic"); RL-0188, Jan Oostergetel and Theodora Laurentius v. Slovak Republic, UNCITRAL, Award, 23 April 2012; European American Investment Bank AG v. Slovak Republic, PCA Case. No. 2010-17 (available at: https://www.italaw.com/cases/1706); U.S. Steel Global Holdings I B.V. v. Slovak Republic, UNCITRAL/PCA Case No. 2013-6, (available at https://www.italaw.com/cases/1903). ↩
²²⁹ Resp. Mem. on Juris., paras. 33-42. ↩

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the 6 October 2023 list of issues, as well as the EU law arguments from the Rule 41(5) Application and Memorial on Jurisdiction, as set out below. These are that:²³⁰

a. the TEU and TFEU (together the “EU Treaties”) establish the principles upon which EU law is based, and the 2009 Lisbon Treaty was “significant for the development in EU law in this regard";²³¹

b. the EU Treaties have a “dual nature” in international law, as (i) the basis for EU law under international law and (ii) the international treaties between the EU Member States underpinning the establishment under international law of the supranational union, meaning the substance agreed in the Lisbon Treaty includes the judicial system;²³²

c. “categorization of EU law solely as domestic law does not adequately reflect the dual nature of EU law” because it ignores:

i. its status as international law under VCLT Article 2(1)(a); and

ii. its status as national law because “once implemented in the national legal orders of the EU Member States, it is part of their internal legal order”,

hence its “dual character" (as a treaty according to VCLT Article 2(1)(a) and national law);²³³

d. under the Lisbon Treaty, “matters of direct foreign investment were added to the exclusive competence of the EU”, so EU Member States “cannot undertake inter se agreements in those matters which only EU law can regulate", giving the EU “exclusive competence to conclude agreements on foreign direct investment and EU law comprehensively governs and protects all steps of such investment”;²³⁴

²³⁰ Resp. Rule 41(5) Application, paras. 142-171; Resp. Mem. on Juris., paras. 33-42. ↩
²³¹ Resp. Rule 41(5) Application, para. 143. ↩
²³² Resp. Rule 41(5) Application, para. 149. See CL-0009, TFEU, Art. 344; TEU, Art. 19(1), second sentence. ↩
²³³ Resp. Rule 41(5) Application, para. 155. ↩
²³⁴ Resp. Rule 41(5) Application, para. 145. ↩

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e. the Lisbon Treaty gave the EU full legal personality in TEU Article 47 and reinforced the CJEU role and legal understanding of the EU in TEU Article 19;²³⁵

f. one of the key elements of the renewed EU judicial system was dialogue between the CJEU and Member State national courts under TFEU Article 344, safeguarding the autonomy of EU legal order;²³⁶

g. TFEU Article 344 and TEU Article 19(1) (second sentence) “establish an exclusive obligation of EU Member States to submit disputes concerning the interpretation or application of the EU Treaties to the judicial system of the EU”;²³⁷

h. Declaration 17 annexed to the Lisbon Treaty establishes that “the Treaties and the law adopted by the Union on the basis of the Treaties have primacy over the law of Member States, under the conditions laid down by the said case law",²³⁸ and the Opinion of the Council Legal Service “results from the case-law of the Court of Justice that primacy of EC law is a cornerstone principle of Community law” and “inherent to the specific nature of the European Community";²³⁹

i. the EU judicial system includes European courts and domestic courts and tribunals of EU Member States, which is “of a final and binding nature within the EU” and “binding on EU Member States and, by extension, on companies that are based within the EU”, as confirmed by TFEU Article 351(2);²⁴⁰

²³⁵ Resp. Mem. on Juris., para. 34, citing RL-0001, B. Wegener, “Titel III. Bestimmungen fiber die organe” in C. Callies and M. Ruffert, EUV/AEUV: Das Verfassungsrecht der Europäischen Union mit Europäischer Grundrechtecharta, Kommentar, 2016 (excerpt). ↩
²³⁶ Resp. Rule 41(5) Application, paras. 29 et seq.; Resp. Mem. on Juris., para. 35. ↩
²³⁷ Resp. Rule 41(5) Application, para. 156. ↩
²³⁸ Resp. Mem. on Juris., para. 36, quoting RL-0018, Declarations annexed to the Final Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, 13 December 2007, Declaration 17. ↩
²³⁹ Resp. Mem. on Juris., para. 37, quoting RL-0018, Declarations annexed to the Final Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, 13 December 2007, Declaration 17. ↩
²⁴⁰ Resp. Rule 41(5) Application, paras. 149-151. See CL-0009, TFEU, Art. 351, which reads: 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. ↩

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j. "[t]his applies a fortiori in cases where agreements concluded between EU Member States are incompatible with EU law”, with the EU able to launch “infringement proceedings to ensure that both parties to the relevant treaty are in conformity with EU law";²⁴¹

k. “development of EU law supports Respondent's position that Art. 26 ECT is not applicable" (pursuant to EU law), both “based on the changes to EU law following the adoption of the Lisbon Treaty” and because “there is no reason why the ECT should take precedence over EU law";²⁴² and

l. therefore, “the necessary adjustment has to be made by ensuring that Art. 26 ECT is interpreted in a restrictive way where intra-EU disputes are concerned".²⁴³

235. As to its position that the TFEU prevails over any inconsistency between the ECT and EU law, the Respondent's EU law argument proceeds on the basis that EU law conflicts rules prevail and that:

a. in relation to the scope of application of the conflict rule in TFEU Article 351(1):²⁴⁴

i. only where an EU Member State (before accession to the EU) enters into an agreement with one or more non-members, “such agreements shall not be affected by EU law”;²⁴⁵

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. In applying the agreements referred to in the first paragraph, Member States shall take into account the fact that the advantages accorded under the Treaties by each Member State form an integral part of the establishment of the Union and are thereby inseparably linked with the creation of common institutions, the conferring of powers upon them and the granting of the same advantages by all the other Member States.
²⁴¹ Resp. Rule 41(5) Application, para. 152. ↩
²⁴² Resp. Rule 41(5) Application, para. 146. ↩
²⁴³ Resp. Rule 41(5) Application, para. 152. ↩
²⁴⁴ Resp. Rule 41(5) Application, paras. 166 et seq. ↩
²⁴⁵ Resp. Rule 41(5) Application, para. 167. Tribunal note: or before the establishment of the EU. ↩

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ii. if two Member States are both parties to a pre-accession treaty and the EU Treaties, in the case of incompatibility then the later applies (in accordance with VCLT Article 30(3));²⁴⁶

b. applying that to the relationship between EU law and the ECT:

i. the ECT prevails between EU Member States and third countries;

ii. EU law prevails between two EU Member States, and any conflicting rules in the ECT, including ECT Article 16(2) (the ECT conflicts rule) remain inapplicable;²⁴⁷

c. primacy of EU law over the ECT also applies between an investor of one EU Member State and another EU Member State “because the rights of individual investors are necessarily linked to the rights of their home [EU] states”;²⁴⁸ and

d. the ECT Article 16 conflicts rule is inapplicable because “intra-EU disputes are not within its scope of application” (but even if applicable “would not lead to a precedence of the ECT over EU law” because “the EU Treaties represent a more favorable developed legal system which offers more forms of protection than the ECT", within the terms of ECT Article 16(2)).²⁴⁹

236. Based on the aforementioned EU law principles centring on primacy of EU law within and between Member States, the Respondent proceeds to set out its interpretation of EU law on the matter of consent to intra-EU arbitration.

²⁴⁶ Resp. Rule 41(5) Application, para. 167, citing CL-0151, Electrabel S.A. v. Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012 (“Electrabel v. Hungary, Jurisdiction"), para. 4.182. The Respondent notes, "This (implied) meaning of Art. 351 TFEU (and its predecessor Art. 307 EC) has been settled case-law of the CJEU since 1962, Commission of the European Economic Community v. Government of the Italian Republic". ↩
²⁴⁷ Resp. Rule 41(5) Application, para. 168, citing CL-0151, Electrabel v. Hungary, Jurisdiction, para. 4.189 (“Subject to the several assumptions above [...] the Tribunal concludes that Article 307 EC [now Article 351 TFEU] precludes inconsistent pre- existing treaty rights of EU Member States and their own nationals against other EU Member States; and it follows [...] that EU law would prevail over the ECT's substantive protections and that the ECT could not apply inconsistently with EU law to such a national's claim against an EU Member State"). ↩
²⁴⁸ Resp. Rule 41(5) Application, para. 169, citing CL-0151, Electrabel v. Hungary, Jurisdiction, para. 4.188. ↩
²⁴⁹ Resp. Rule 41(5) Application, para. 170. ↩

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2) CJEU Judgments

237. The Respondent relies on four primary CJEU judgments to support its position that EU law has been definitively interpreted by the sole arbiter of EU law – the CJEU – and that it has finally determined that there is no consent by EU Member States to any intra-EU arbitration pursuant to bilateral investment treaties, the ECT and/or the ICSID Convention.

(i) Achmea Judgment

238. The first CJEU decision is the 2008 Achmea Judgment. According to the Respondent, this was the CJEU's “first opportunity to rule on the compatibility of an intra-EU investor- State arbitration clause with EU law and to establish arbitration clauses in BITs are indeed incompatible with EU law”.²⁵⁰

239. The Respondent submits that “[t]he legal analysis of the CJEU in the Achmea Judgment could not have been any clearer”, and sets out its finding as follows:²⁵¹

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 [applicable] BIT, 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 taken to accept.

(ii) Komstroy Judgment

240. The second CJEU decision is the 2021 Komstroy Judgment, which the Respondent states confirms the applicability of the Achmea Judgment to intra-EU arbitration specifically under the ECT.²⁵²

241. According to the Respondent, the Komstroy Judgment and Achmea Judgment “sealed the debate that ECT arbitration is not available for an EU investor to sue a host EU Member

²⁵⁰ Resp. Mem. on Juris., para. 38; RL-0004, Achmea Judgment. ↩
²⁵¹ Resp. Mem. on Juris., para. 39, quoting RL-0004, Achmea Judgment, para. 60. ↩
²⁵² Resp. Rule 41(5) Application, paras. 172-177; RL-0007, Komstroy Judgment. ↩

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State", as the Tribunal “is not part of the judicial system of either EU Member State” and the arbitration "is contrary to EU law”.²⁵³ In particular, the Respondent submits that:

a. prior to the Achmea Judgment, the German Federal Constitutional Court had said:²⁵⁴

From an international-law point of view, the specific feature of the arbitration of disputes before the International Centre for Settlement of Investment Disputes is that private individuals are able to complain as claimants of the violation of an international agreement concluded between states. In terms of content, therefore, the violation of an obligation is complained, which is owed not directly to the private applicant, but to his or her home state, although the protective purpose of the agreement targets the interests of private investors.

b. the Achmea Judgment confirmed that mandatory EU law, which “may not be bypassed bilaterally by the EU Member States, prevents the application of arbitration agreements concluded between EU Member States in an investment treaty",²⁵⁵ and

c. the Komstroy Judgment confirmed that the “principles set out by the CJEU in the Achmea Judgment are applicable to arbitrations under the ECT” and the “arbitral mechanisms under Art. 26 ECT are inapplicable between Member States”.²⁵⁶

242. On the basis of both the Achmea and Komstroy Judgments, the Respondent submits that:²⁵⁷

As EU law takes precedence over the EU Member States' legal order, all EU institutions and EU Member States as well as all EU law subjects must now comply with the legal principle established in the Achmea Judgment and Komstroy Judgment by leaving any provisions of national law unapplied that would otherwise contradict this principle. In this way, the Achmea Judgment and the Komstroy Judgment are binding on all EU Member States and other EU law subjects. This means that the CJEU, in its preliminary ruling, has prescribed a binding interpretation of EU law

²⁵³ Resp. Mem. on Juris., para. 43; Resp. Rule 41(5) Application, para. 172. ↩
²⁵⁴ Resp. Rule 41(5) Application, para. 174, quoting German Federal Constitutional Court, Case No. 2 BvM 1-5/03, Judgment, 8 May 2007, para. 51 (available at: https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2007/05/ms20070508_2bvm000103.html). ↩
²⁵⁵ Resp. Rule 41(5) Application, para. 173. ↩
²⁵⁶ Resp. Rule 41(5) Application, para. 176, citing RL-0007, Komstroy Judgment, para. 66. ↩
²⁵⁷ Resp. Rule 41(5) Application, para. 175. ↩

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and that this binding interpretation applies to all EU Member States and their national courts, as well as to Respondent as EU Member State.

243. The Respondent further summarises its position on the Komstroy Judgment in its Memorial on Jurisdiction by emphasising that the Komstroy Judgment:

a. follows the reasoning in the Achmea Judgment;²⁵⁸

b. recalls “the autonomy of the EU legal system and the necessity to preserve it, notably by putting in place a judicial system to ensure consistency and uniformity in the interpretation of EU law";²⁵⁹

c. states that the ECT is an act of EU law;²⁶⁰

d. puts emphasis on the risk that any ECT Article 26 (investor-State arbitration) tribunal could be required to interpret EU law (“[i]t follows that an arbitral tribunal such as that referred to in Article 26(6) ECT is required to interpret, and even apply, EU law");²⁶¹ and

e. concludes that "because of this risk”.²⁶²

it must be ascertained, as the CJEU states in para. 51 of the Komstroy Judgment, that such arbitral tribunal is situated within the judicial system of the EU and subject to mechanisms capable of ensuring the full effectiveness of the rules of the EU.

244. The Respondent submits that for intra-EU arbitration proceedings based on the ECT, as the Tribunal is "not part of the judicial system of any EU Member State”, the Komstroy Judgment "confirmed that EU law may not be bypassed by the EU Member States by resorting to arbitration under the ECT”.²⁶³

²⁵⁸ Resp. Mem. on Juris., para. 44. ↩
²⁵⁹ Resp. Mem. on Juris., para. 44. ↩
²⁶⁰ Resp. Mem. on Juris., para. 45, citing RL-0007, Komstroy Judgment, para. 49. ↩
²⁶¹ Resp. Mem. on Juris., para. 46, citing RL-0007, Komstroy Judgment, para. 50. ↩
²⁶² Resp. Mem. on Juris., para. 47. ↩
²⁶³ Resp. Mem. on Juris., para. 47. ↩

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245. On that basis, the Respondent posits that the development of CJEU judgments further supports its argument that the Tribunal cannot base its jurisdiction on ECT Article 26 (investor-State arbitration).

(iii) PL Holdings Judgment

246. The third CJEU decision is the 2021 PL Holdings Judgment, which the Respondent relies on further to confirm that the Achmea Judgment applies to intra-EU arbitration.²⁶⁴

247. According to the Respondent, “[a]s was to be expected in view of the fact that Art. 344 TFEU and Art. 267 TEU are mandatory for all EU law subjects”, the conclusion in the Komstroy Judgment “was upheld again by the CJEU in the PL Holdings Judgment”, where the CJEU “again fully upheld its reasoning set out in the Achmea Judgment and the Komstroy Judgment, extending the reasoning explicitly to ad hoc arbitration as well” finding that the relevant arbitration clause:²⁶⁵

is, therefore, incompatible with the principle of sincere cooperation set out in the first subparagraph of Article 4(3) TEU and has an adverse effect on the autonomy of EU law enshrined, inter alia, in Article 344 TFEU.

248. The Respondent submits that PL Holdings “illustrates once more the importance to ensure consistency and uniformity in the interpretation of EU law, rendering all intra-EU investor- State arbitration outside the EU legal system inadmissible”.²⁶⁶

(iv) European Food Judgment

249. The fourth CJEU decision on is the 2022 European Food Judgment, which the Respondent states confirms that the Achmea Judgment applies to the ICSID Convention.²⁶⁷

²⁶⁴ Resp. Mem. on Juris., para. 48; RL-0014, PL Holdings Judgment. ↩
²⁶⁵ Resp. Mem. on Juris., para. 48, citing RL-0014, PL Holdings Judgment, para. 46. ↩
²⁶⁶ Resp. Mem. on Juris., para. 48. ↩
²⁶⁷ Resp. Mem. on Juris., paras. 50-56; RL-0019, European Food Judgment. ↩

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250. The decision involved enforcement proceedings arising out of a 2013 ICSID award that found Romania to be liable for breach of the Romania-Sweden bilateral investment treaty for revoking a number of investment incentives, where:²⁶⁸

a. the European Commission “enjoined Romania from complying with the award, invoking its incompatibility with EU state aid rules and ordered Romania to recover any compensation that had already been paid by the state under the award";

b. the EU General Court “annulled that European Commission's decision, holding that the underlying dispute predated Romania's accession to the EU and therefore did not involve the broader intra-EU and state aid issues"; and

c. the European Commission appealed to the CJEU.

251. On appeal, the CJEU held that the General Court “erred in law in finding the Achmea Judgment to be irrelevant to the present case".²⁶⁹ According to the Respondent, "[i]t was undisputed between the parties that the arbitral tribunal did not form part of the EU's judicial system, the creation of which is required by Art. 19 (1) second subparagraph of the TEU of the Member States in the areas covered by EU law”.²⁷⁰ The Respondent relies on the CJEU finding that:²⁷¹

It is common ground that the arbitral tribunal before which that dispute was brought does not form part of the EU judicial system which the second subparagraph of Article 19(1) TEU requires the Member States to establish in fields covered by EU law which, with effect from Romania's accession to the European Union, replaced the mechanism for resolving disputes that might concern the interpretation or application of EU law.

First, that arbitral tribunal is not a 'court or tribunal of a Member State' within the meaning of Article 267 TFEU and, second, the arbitral award delivered by that court is not subject, in accordance with Articles 53 and 54 of the ICSID Convention, to any review by a court of a Member State as to its compliance with EU law.

²⁶⁸ Resp. Mem. on Juris., paras. 50-52. ↩
²⁶⁹ Resp. Mem. on Juris., para. 53. ↩
²⁷⁰ Resp. Mem. on Juris., para. 53. ↩
²⁷¹ Resp. Mem. on Juris., para. 54, quoting RL-0019, European Food Judgment, paras. 141-142. ↩

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252. The Respondent further submits that:

a. Romania's "accession to the European Union, the system of judicial remedies provided for by the EU and the EU Treaties replaced the arbitration procedure of the BIT, and that the consent given to that effect by Romania lacked any force from the time of accession”;²⁷²

b. this “more explicitly confirmed the principles established in the Achmea Judgment and affirmed again in the Komstroy as well as PL Holdings Judgments";²⁷³ and

c. in the European Food Judgment, together with the Komstroy Judgment, “the CJEU made it clear that an intra-EU investor-State dispute may not be resolved pursuant to the provisions of the ECT together with the provisions of the ICSID Convention”.

253. According to the Respondent, the CJEU European Food Judgment finally settled the issue of consent to intra-EU arbitration under ICSID proceedings (as the Komstroy Judgment had done for ECT proceedings).

3) EU Member State Court and Tribunal Decisions

254. The Respondent further relies on developments in EU Member State courts and tribunals to support its reliance on the Achmea, Komstroy, PL Holdings and European Food Judgments in ECT arbitration, as well as annulment and stay decisions by non-EU Member State national courts and tribunals.²⁷⁴ This is where the German Federal Courts' decisions referred to above are also relevant (see paragraphs 256.c(c) and (e)–(f) below).

255. The Respondent submits that the response by EU Member State courts “has been unanimous” and that:²⁷⁵

All EU Member States' courts dealing with questions of intra-EU Investor-State arbitration confirmed that intra-EU arbitration clauses are incompatible with EU law

²⁷² Resp. Mem. on Juris., para. 55; RL-0019, European Food Judgment, para. 143. ↩
²⁷³ Resp. Mem. on Juris., para. 56. ↩
²⁷⁴ See Resp. Mem. on Juris., paras. 57-63 and the cases cited therein. ↩
²⁷⁵ Resp. Mem. on Juris., para. 64. ↩

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and hence invalid or inapplicable to Intra-EU investor-State disputes, accepting the CJEU's jurisprudence in this matter as acte clair.

256. The Respondent ultimately focuses on six EU Member State national court decisions, in particular:

a. the Lithuanian Supreme Court Decision dated 18 January 2022, which held that pending intra-EU investor-State arbitration before an ICSID arbitration tribunal did not bar national court proceedings on the same subject-matter as the underlying arbitration clause was invalid, based on the following sequence:²⁷⁶

i. a French investor initiated ICSID arbitration against Lithuania pursuant to the France-Lithuania BIT, arising out of investment in heating supply lease contracts in 2016, in which proceedings Lithuania filed a counterclaim;²⁷⁷

ii. following the Achmea Judgment, Lithuania also brought its counterclaim before the Lithuanian courts, which the Regional Court of Vilnius found to be inadmissible due to the pending ICSID arbitration;

iii. the Lithuanian Appeal Court overturned the Regional Court of Vilnius decision in March 2021; and

iv. on 18 January 2022, the Lithuanian Supreme Court held that the Lithuanian court proceedings were valid because the arbitration clause was invalid, i.e., the arbitration agreement “had been executed in 1992 and entered into force in 1995, had become invalid with Lithuania's accession to the EU in May 2004 and the ensuing mandatory application of EU law, as interpreted by the CJEU”, following the reasoning of the CJEU in the Achmea Judgment;

b. the Svea Court of Appeal decision dated 11 February 2021, which, in the Respondent's view, determined “that there was no longer a need for a preliminary ruling regarding the question whether Arts. 19 and 4 (3) TEU and Arts. 267 and

²⁷⁶ RL-0015, Veolia v. Lithuania. ↩
²⁷⁷ Resp. Mem. on Juris., paras. 65-69; RL-0015, Veolia v. Lithuania, para. 42. ↩

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344 TFEU have to be interpreted as precluding the arbitration clause in Art. 26 ECT in intra-EU disputes",²⁷⁸ as follows:²⁷⁹

i. the Svea Court of Appeal granted Italy's request to seek a preliminary ruling from the CJEU in the enforcement proceedings regarding the SCC Greentech v. Italy arbitration on the grounds that the tribunal had denied Italy's intra-EU objection and wrongly concluded that the Achmea Judgment was irrelevant for ECT arbitrations;²⁸⁰

ii. the Svea Court of Appeal stayed the enforcement of the award but found referral to the CJEU necessary, requesting a preliminary ruling on the question “whether the ECT which is part of the EU legal system, must be understood in such a way that Art. 26 also covers a dispute between an EU member state on the one hand and an investor from another EU member state on the other hand, provided that the latter has made an investment in the territory of the former";²⁸¹ and

iii. the CJEU did not decide this request, as the Svea Court of Appeal withdrew it following the Komstroy Judgment;²⁸²

c. the German Federal Court of Justice decision dated 17 November 2021, which upheld the principles in the Achmea and Komstroy Judgments, implementing CJEU jurisprudence as follows:²⁸³

i. the decision was pursuant to Sec. 1032(2) German Code of Civil Procedure based on the Austria-Croatia BIT concerning a claim by two Austrian banks against Croatia;

²⁷⁸ Resp. Mem. on Juris., para. 65; RL-0026, Italy v. Greentech. ↩
²⁷⁹ Resp. Mem. on Juris., paras. 70-74. ↩
²⁸⁰ Resp. Mem. on Juris., para. 70; RL-0026, Italy v. Greentech; RL-0020 / CL-0091, Greentech Energy Systems A/S, NovEnergia II Energy & Environment (SCA) SICAR and NovEnergia II Italian Portfolio SA v. Italian Republic, SCC Case No. 2015/095, Final Award, 23 December 2018 ("Greentech v. Italy"). ↩
²⁸¹ Resp. Mem. on Juris., para. 72, citing RL-0026, Italy v. Greentech, p. 4. ↩
²⁸² Resp. Mem. on Juris., paras. 73-74. ↩
²⁸³ Resp. Mem. on Juris., paras. 75-80. ↩

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ii. on 11 February 2021, the Frankfurt Appeal Court had found that the referral of investment disputes to an arbitral tribunal under a bilateral investment treaty violated EU law and that arbitration was inadmissible, confirming that the Achmea Judgment is a “landmark decision”, applicable to all arbitration clauses contained in BITs, and emphasising the “autonomy of EU law";²⁸⁴

iii. in this 17 November 2021 decision, the German Federal Court of Justice confirmed the Frankfurt Appeal Court decision:²⁸⁵

1. upholding the “principle that an arbitration clause in an international treaty between Members States referring intra-EU investor-State disputes to arbitration was incompatible with Articles 267 and 344 TFEU",

2. referring to CJEU reasoning that “an international agreement may affect neither the jurisdiction of EU Member States courts or of the CJEU nor the autonomy of EU law as set forth in the EU Treaties",²⁸⁶

3. confirming "that the EU Treaties established a judicial system, in which pursuant to Art. 19 TEU, the national courts and the CJEU shall ensure the full application of EU law”, to “ensure the uniform application of EU law by introducing a dialogue between the CJEU and the courts of the EU Member States”;²⁸⁷ and

iv. the German Federal Court of Justice referred to the Achmea, Komstroy and PL Holdings Judgments in that “an arbitration clause in an international investment agreement between Member States must be considered invalid if it is apt to remove disputes involving the application and interpretation

²⁸⁴ RL-0027, Appeal Court Frankfurt am Main, Case No. 26 SchH 2/20, Decision, 11 February 2021. ↩
²⁸⁵ Resp. Mem. on Juris., paras. 78-79; RL-0028, 17 November 2021 BGH Decision, paras. 10, 20-21. ↩
²⁸⁶ Resp. Mem. on Juris., para. 78; RL-0028, 17 November 2021 BGH Decision, para. 20. ↩
²⁸⁷ Resp. Mem. on Juris., para. 79; RL-0028, 17 November 2021 BGH Decision, para. 10. ↩

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of EU law from the Member States' courts in a way that does not guarantee the full force of EU law”;²⁸⁸

d. the “Kammergericht Berlin” (Appeal Court for the Land of Berlin, i.e., the highest state court for the Land of Berlin) has also referenced CJEU jurisprudence:²⁸⁹

i. previously, the Respondent filed an application pursuant to Sec. 1032 (2) German Code of Civil Procedure with the Kammergericht Berlin to determine the admissibility of these arbitration proceedings;

ii. by letter dated 1 February 2022, the Kammergericht Berlin informed the Parties that it will decide at the end of April 2022;

iii. ultimately, on 28 April 2022, the Kammergericht Berlin rejected Germany's request and found that Section 1032(2) of the ZPO does not apply to ICSID arbitration proceedings (stating that “[i]t follows from these rules that the procedural rules of the Convention are a closed legal system alongside which no other procedural rules can validly apply; rather, an arbitral tribunal constituted under the ICSID Convention itself conclusively decides on its own jurisdiction and the validity of an arbitration agreement”);

e. on 23 July 2024, the German Federal Constitutional Court issued its decisions in Case Nos. 2 BvR 557/19 and 2 BvR 141/22, which the Respondent submits:²⁹⁰

i. “confirm that the Tribunal does not have jurisdiction ratione voluntatis”;

ii. found that "the German Federal Court of Justice's decision which set aside the Achmea award did not violate the German constitution since it was bound by EU law as interpreted by the [CJEU]”, and

²⁸⁸ Resp. Mem. on Juris., para. 80; RL-0028, 17 November 2021 BGH Decision, para. 21. ↩
²⁸⁹ Resp. Mem. on Juris., para. 81; RL-0029, 1 February 2022 Kammergericht Berlin Letter; C-0166 / RL-0090, Kammergericht Berlin Decision, p. 8. ↩
²⁹⁰ Letter from the Respondent to the Tribunal, 14 November 2024; RL-0380, BVerfG Decision 557/19; RL-0381, BVerfG Decision 141/22. ↩

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iii. further found that Germany's ratification of the EU Termination Agreement of 5 May 2020 “does not violate the fundamental rights of Achmea B.V.”; and

f. on 31 July 2025, the German Federal Constitutional Court issued its decision in Case No. 2 BvR 1277/23, which the Respondent submits:²⁹¹

i. found that "the Federal Court of Justice's Decision of 23 July 2023, declaring this arbitration inadmissible on the grounds that Art. 26 (2)(c) ECT is inapplicable to intra-EU investor-State disputes and thus does not provide for a valid offer for an arbitration agreement”; and

ii. therefore, the 23 July 2023 Decision “does not violate the German Constitution” as the Claimants “failed to substantiate” their claims that there was:

1. “a violation of the constitutional rights”, as the Federal Court of Justice had not “violated the principle of respect for international law as well as acted ultra vires particularly by taking into account the CJEU's Achmea jurisprudence, resulting in a violation of their fundamental right under Art. 2 (1) in conjunction with Art. 20 (3) Basic Law"; or

2. “a need for constitutional protection”, as the Constitutional Court “refused to accept Claimants' constitutional complaint for decision because Claimants had failed to explain how they were burdened by the decision of the Federal Court of Justice”, as the “Federal Court of Justice's decision did not affect the ongoing arbitration proceedings", (albeit voicing an “expectation that other courts and tribunals will draw appropriate conclusions from its judgment"); and

²⁹¹ Letter from the Respondent to the Tribunal, 10 October 2025; RL-0387, BVerfG Decision 1277/23. ↩

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iii. the Constitutional Court, therefore, confirms the lack of jurisdiction ratione voluntatis and poor chances of recognition and enforcement of ICSID awards, and reaffirms its previous jurisprudence.

257. In its Rule 41(5) Application, the Respondent expressly relies on various additional political developments since 2018.²⁹² It maintains that "[a]lready after the Achmea Judgment, EU Member States are obligated not to start or to abandon any actions that have been declared to be in contradiction to EU law”, which “prohibit[s] EU Member States from perpetuating situations that are contrary to EU law by continuing intra-EU investor-State arbitration proceedings” as it “would violate the principle of mutual trust between the EU Member States in the functioning of their respective judicial systems and have adverse effects on the autonomy of the EU legal order”.²⁹³ The Respondent refers to the following non-judicial subsequent developments:

a. the 15 January 2019 Declaration signed by 22 Member States (including Germany and Ireland), providing that:²⁹⁴

For the Energy Charter Treaty, its systemic interpretation in conformity with the Treaties precludes intra-EU Investor-State arbitration.

b. the Respondent describes the 2019 Declaration as “confirmation by Respondent" and Ireland "that there is no standing offer to arbitrate under Art. 26 ECT”,²⁹⁵ and “a binding instrument originating from sovereign States", which:²⁹⁶

i. contains "explicit statements as to the nature of the ECT and its systemic interpretation precluding intra-EU investor-State arbitration”;

ii. confirms “reciprocally [Ireland and Germany's] interpretation of the ECT's dispute settlement clause";

²⁹² Resp. Rule 41(5) Application, paras. 178-182. ↩
²⁹³ Resp. Rule 41(5) Application, para. 178. ↩
²⁹⁴ Resp. Mem. on Juris., paras. 40-42, citing RL-0006, 2019 Declaration, fn. 2. ↩
²⁹⁵ Resp. Mem. on Juris., para. 42. ↩
²⁹⁶ Resp. Rule 41(5) Application, para. 179. ↩

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iii. “demonstrates the shared understanding of the signatories regarding the interpretation of the ECT”; and

iv. “also confirms that the ECT should have always been interpreted according to this understanding”; and

c. the May 2020 Termination Agreement, a further communication by the EU Member States and the European Commission “confirming their wish to end intra- EU arbitration and to advance this development",²⁹⁷ which:

i. confirms "that all intra-EU arbitration clauses contained in intra-EU BITs are inapplicable for non-compliance with EU law".²⁹⁸

The Contracting Parties hereby confirm that Arbitration Clauses are contrary to the EU Treaties and thus inapplicable. As a result of this incompatibility between Arbitration Clauses and the EU Treaties, as of the date on which the last of the parties to a Bilateral Investment Treaty became a Member State of the European Union, the Arbitration Clause in such a Bilateral Investment Treaty cannot serve as legal basis for Arbitration Proceedings.

ii. establishes rules for claims made under the BITs, providing for different rules regarding terminated, pending and new arbitration proceedings to deal with the consequences of such declaration of inapplicability;²⁹⁹

iii. according to which, “new arbitration proceedings are those initiated after 6 March 2018, the day of the Achmea Judgment”;³⁰⁰

iv. Article 7 of the Termination Agreement “obliges the parties to a new arbitration agreement to inform the tribunal about the consequences of the Achmea Judgment”;³⁰¹ and

²⁹⁷ Resp. Rule 41(5) Application, para. 180. ↩
²⁹⁸ Resp. Rule 41(5) Application, para. 78, quoting Termination Treaty, Art. 4(1). ↩
²⁹⁹ Resp. Rule 41(5) Application, para. 79. ↩
³⁰⁰ Resp. Rule 41(5) Application, para. 79. ↩
³⁰¹ Resp. Rule 41(5) Application, para. 79. ↩

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v. “currently is subject to ratification and will enter into force for each signatory EU Member State 30 days after it delivers its instrument of ratification to the secretary-general of the Council of the European Union".³⁰²

258. The Respondent submits that the effect of the Declaration and Termination Agreement instruments is as follows:³⁰³

According to the May 2020 Termination Agreement, new arbitration proceedings are those initiated after 6 March 2018, the day of the Achmea Judgment. The present arbitration would therefore qualify as a new arbitration within the meaning of the May 2020 Termination Agreement. It was registered with ICSID on 13 May 2021. Art. 7 May 2020 Termination Agreement obliges the parties to a new arbitration agreement to inform the Tribunal about the consequences of the Achmea Judgment.

259. On the basis of those instruments, the Respondent posits that “it is no longer a discussion on how to interpret the Achmea Judgment but rather a duty of this Tribunal to acknowledge that the EU Member States’ joint interpretation ECT [sic] must result in prohibiting any pending or future arbitration proceeding under the ECT”, as confirmed by the Komstroy Judgment,³⁰⁴ which the Respondent further submits supports its argument that the Tribunal cannot base its jurisdiction on ECT Article 26.

260. The Respondent notes in its Rule 41(5) Application that this approach accords with VCLT Article 27, where "[a] party may not invoke the provisions of its internal law as justification for its failure to perform".³⁰⁵

³⁰² Resp. Rule 41(5) Application, para. 80. The Federal Republic of Germany delivered its instrument of ratification to the Secretary-General on 10 May 2021. Accordingly, the May 2020 Termination Agreement entered into force for the Federal Republic of Germany on 9 June 2021: see https://www.consilium.europa.eu/en/documents/treaties-agreements/agreement/?id=2019049&DocLanguage=en. ↩
³⁰³ Resp. Rule 41(5) Application, para. 181. ↩
³⁰⁴ Resp. Rule 41(5) Application, para. 182. ↩
³⁰⁵ Resp. Rule 41(5) Application, para. 154. The Tribunal notes that this legal basis was not relied on in any of the EU law CJEU decisions, Member State Court decisions or additional instruments. The sources of EU law instead relied solely on EU law arguments. ↩

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4) No Loss of Rights

261. Further, the Respondent submits that there is no loss of rights for EU-based investors.³⁰⁶ In this regard, it states:³⁰⁷

As EU Member States and the citizens of the EU, including companies incorporated in the EU, are the only ones concerned by this interpretation under EU law, there is no loss of rights for any other contracting state to the ECT: Pacta tertiis nec nocent nec prosunt.

262. The Respondent elaborates that there is no loss of rights because “no such right was conferred to [citizens of the EU] in the first place, due to the mandatory character of EU law, with which they have to comply", and that as the Claimants “made use of rights conferred to them under EU law, they also must accept the limitations under the same legal order". It states further that:³⁰⁸

Citizens of EU Member States, including corporations, cannot invoke public international law treaties to prevent the application of EU law.

263. According to the Respondent, a decision by the Tribunal otherwise, “would amount to perpetuating a breach of EU law by Claimants”, and that the Tribunal “should bear in mind the very real practical consequences of any award under the ECT that would require Respondent to take further steps, including a request for annulment”.³⁰⁹

iv. International Law Interpretation

264. The Respondent firmly maintains that the question of jurisdiction ratione voluntatis in intra-EU arbitrations is governed by EU law. Nevertheless, it separately submits that the Tribunal also lacks jurisdiction ratione voluntatis on the application of general rules of international law. It argues that there is also no jurisdiction based on a proper interpretation of ECT Article 26 pursuant to international law based on:³¹⁰

³⁰⁶ Resp. Mem. on Juris., paras. 82-85. ↩
³⁰⁷ Resp. Mem. on Juris., para. 83. ↩
³⁰⁸ Resp. Mem. on Juris., para. 84, citing RL-0030, José Crujeiras Tome and Anton Yurrita v. Procurer de la République, CJEU Cases 180/80 and 266/80, Judgment, 8 December 1981, para. 20. ↩
³⁰⁹ Resp. Mem. on Juris., para. 85. ↩
³¹⁰ Resp. Rule 41(5) Application, paras. 147 et seq.; Resp. Mem. on Juris., paras. 91 et seq. ↩

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a. modification by the Lisbon Treaty as a subsequent treaty of the same subject-matter pursuant to VCLT Article 30;

b. the wording of the ECT, pursuant to VCLT Article 31;

c. the context, object and purpose of the ECT, pursuant to VCLT Article 31;

d. supplementary means of interpretation, pursuant to VCLT Article 32;

e. primacy of EU law, including pursuant to VCLT Article 5; and

f. other international agreements showing that ECT Article 26(4) is inapplicable intra- EU.

265. Given their basis in international law, these arguments all involve the application of the VCLT, which expressly deals with applicable law and interpretation of treaties. Germany was an EU Member State at the time it ratified the ECT. Based on international law, the extent of its commitment to arbitration under Article 26 ECT when signing the ECT, would be determined by an interpretation of the ECT in accordance with VCLT Articles 30, 31 and 32.

1) Successive Treaties (VCLT Article 30)

266. The VCLT, Article 30, applies to successive treaties relating to the same subject matter. Over the course of its submissions, the Respondent appears to raise arguments pursuant to Articles 30, Article 41(1)(b) and 59, respectively.

267. First, the Respondent submits that Article 30 applies to the TEU and TFEU and ECT on the basis that:³¹¹

³¹¹ Resp. Rule 41(5) Application, paras. 161-162. ↩

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a. the International Law Commission has concluded that VCLT Article 30 “applies to all situations where there is a conflict between the earlier and the later treaty”;³¹²

b. the ECT and the EU Treaties relate to the same subject matter;³¹³

c. “the primacy of EU law in the relations between EU Member States [...] is not a matter of lex specialis or of lex posterior, but one of lex superior”, as found by the tribunal in Green Power v. Spain;³¹⁴ and

d. the ECT “only applies to the extent that its provisions are compatible with those of the later treaties", and that the dispute settlement provisions in Article 26 ECT, “when applied between two EU Member States, are not compatible with EU law as it results from those later treaties”.³¹⁵

268. Secondly, pursuant to VCLT Article 30(2), according to the Respondent, EU Member States "effectively modified the ECT by adhering to the Lisbon Treaty".³¹⁶ As to the existence of express provisions in the EU Treaties and/or ECT specifying that one was subject to the other as required by Article 30(2), the Respondent submits that:

a. Article 351 TFEU “means that between EU Member States and third countries, the ECT prevails";³¹⁷

b. Article 351 TFEU is a “special conflict rule”, which “has been recognized by the international legal community, for instance in the report of Martti Koskenniemi for the International Law Commission on fragmentation, where it is stated: ‘The EC

³¹² Resp. Rule 41(5) Application, para. 163, referring to International Law Commission, Conclusions of the work of the Study Group on the Fragmentation of International Law: Difficulties arising from the Diversification and Expansion of International Law, 2006 (available at: https://legal.un.org/ilc/texts/instruments/english/draft_articles/1_9_2006.pdf), p. 181, paras. 24 et seq. ↩
³¹³ Resp. Rule 41(5) Application, para. 163. ↩
³¹⁴ Resp. C-Mem., para. 72, quoting RL-0077, Green Power Partners K/S and SCE Solar Don Benito APS v. Kingdom of Spain, SCC Case No. 2016/135, Award, 16 June 2022 (“Green Power v. Spain"), para. 469. ↩
³¹⁵ Resp. Rule 41(5) Application, para. 164. ↩
³¹⁶ Resp. Rule 41(5) Application, para. 158. ↩
³¹⁷ Resp. Rule 41(5) Application, para. 168. ↩

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Treaty takes absolute precedence over agreements that Member States have concluded””;³¹⁸

c. consequently, “between two EU Member States, ... EU law prevails and any conflicting rules in the ECT, including Art. 16 (2) ECT, must remain inapplicable";³¹⁹ and

d. the conflict rule in Article 16 ECT “is not applicable since intra-EU disputes are not within its scope of application”, but “even if it were to be applied, it would not lead to a precedence of the ECT over EU law since the EU Treaties represent a more favorable developed legal system which offers more forms of protection than the ECT does".³²⁰

269. Thirdly, pursuant to the VCLT Article 30(4)(a), “[t]he relations between the Republic of Ireland and Respondent, which are both parties to the ECT and to the EU Treaties, are governed by the more recent treaties”.³²¹ The Respondent submits in this regard that:

a. Article 30(4)(a) VCLT applies rather than the ECT because, “[e]ven though, the EU provisions on internal market technically do not address promotion and protection of investments, they share the same efforts of integration":³²²

b. “EU Member States effectively modified the ECT by adhering to the Lisbon Treaty”, as “supported by Art. 30 (2) VCLT";³²³ and

c. “[t]he inter se obligations between EU Member States such as Respondent and the Republic of Ireland would have been superseded on the basis of either Arts. 41 (1)(b) VCLT or 30 (4)(a) VCLT”.³²⁴

³¹⁸ Resp. Rule 41(5) Application, para. 153, referring to M. Koskenniemi, Fragmentation of International Law: Difficulties arising from the Diversification and Expansion of International Law: Report of the Study Group of the International Law Commission, 2006 (available at: https://documents.un.org/doc/undoc/ltd/g06/610/77/pdf/g0661077.pdf), para. 283. ↩
³¹⁹ Resp. Rule 41(5) Application, para. 168. ↩
³²⁰ Resp. Rule 41(5) Application, para. 170. ↩
³²¹ Resp. Rule 41(5) Application, para. 148. ↩
³²² Resp. Rule 41(5) Application, para. 157. ↩
³²³ Resp. Rule 41(5) Application, para. 158. ↩
³²⁴ Resp. Rule 41(5) Application, para. 158. ↩

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270. Fourthly, in relation to VCLT Article 41(1)(b), the Respondent submits that the EU Member States “effectively modified the ECT by adhering to the Lisbon Treaty”.³²⁵ In particular, the Respondent argues:

a. VCLT Article 41(1)(b) concerns amendment by later treaty only between parties;³²⁶

b. the VCLT Article 41(1)(b) requirements are met because “the possibility of investor-State arbitration between investors from non-EU Member States and either the EU or EU Member States remains untouched”;³²⁷ and

c. EU investment protection rules, and principles concerning the competences and system of judicial protection, including the general principle of autonomy of EU law (TEU Articles 4(3) and 19, TFEU Articles 267 and 344), were re-affirmed by the Respondent and Ireland subsequent to ECT ratification, which “should be interpreted as a valid amendment pursuant to Art. 41 (1)(b) VCLT”.³²⁸

271. Fifthly, pursuant to VCLT Article 30(3), according to the Respondent this applies “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 Art. 59 VCLT”, and the earlier treaty “applies only to the extent that its provisions are compatible with those of the later treaty".³²⁹ Pursuant to Article 30(2), according to the Respondent, EU Member States "effectively modified the ECT by adhering to the Lisbon Treaty".³³⁰

2) General Interpretation (VCLT Article 31(1))

272. The Respondent's position on the ordinary meaning of the text of the ECT and its instruments, interpreted in line with VCLT Article 31(1), is as follows:

³²⁵ Resp. Rule 41(5) Application, paras. 158 et seq. ↩
³²⁶ Resp. Rule 41(5) Application, para. 159. ↩
³²⁷ Resp. Rule 41(5) Application, para. 160. ↩
³²⁸ Resp. Rule 41(5) Application, para. 161. ↩
³²⁹ Resp. Rule 41(5) Application, para. 162. ↩
³³⁰ Resp. Rule 41(5) Application, para. 158. ↩

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a. ECT Articles 26(1) and 26(3) only include consent to arbitrate disputes with investors of “another ECT Contracting Party”, and as the EU is a Contracting Party and Germany and Ireland “are part of the greater unit of the EU”, they are “treated in the ECT as a single territory, the one of the EU”;³³¹

b. ECT Article 1(2) defines “Contracting Party” as a “State or Regional Economic Integration Organization which has consented to be bound by the ECT and for which that treaty is in force”, which the Respondent says “caters for the possibility that a Contracting Party is bound only for parts of the ECT, namely for the parts for which it enjoys international competence";³³²

c. ECT Article 1(3) defines “Regional Economic Integration Organization" ("REIO") as an “organization constituted by states to which they have transferred competence over certain matters a number of which are governed by the ECT, including the authority to take decisions binding on them in respect of those matters”, and REIO competencies are dealt with in Article 36(7);³³³

d. ECT Article 36(7) provides that “[a] Regional Economic Integration Organization shall, when voting, have a number of votes equal to the number of its member states which are Contracting Parties to this Treaty; provided that such an Organization shall not exercise its right to vote if its member states exercise theirs, and vice versa", which the Respondent says “reflects the division of competences and foresees that the EU votes on matters falling in its competence, and the EU Member States on matters falling in their competence, and that the EU, when voting, shall have a number of votes equal to the number of its Member States”;³³⁴

e. the UN Handbook defines the term REIO and specifically refers to the EU;³³⁵

³³¹ Resp. Mem. on Juris., paras. 100-101. ↩
³³² Resp. Rule 41(5) Application, paras. 102-103; Resp. Mem. on Juris., para. 102. ↩
³³³ Resp. Rule 41(5) Application, paras. 104-105; Resp. Mem. on Juris., para. 103. ↩
³³⁴ Resp. Rule 41(5) Application, para. 105. ↩
³³⁵ Resp. Mem. on Juris., paras. 104-105, referring to RL-0031, United Nations, Handbook on Final Clauses of Multilateral Treaties, 2003, p. 22. ↩

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1. the Convention for the Unification of Certain Rules for International Carriage by Air 1999 also considers the EU as a REIO;³³⁶
2. on 2 May 2019, the European Communities submitted a statement to the Energy Charter Secretariat pursuant to ECT Article 26(3)(b)(ii) to replace the statement of 17 November 1997, declaring the European Communities to be a REIO (“The European Union and Euratom are regional economic integration organisations within the meaning of the Energy Charter Treaty”);³³⁷
3. ECT Article 1(10) defines “Area” to include “[w]ith respect to a Regional Economic Integration Organization which is a Contracting Party” as meaning “the Areas of the member states of such Organization, under the provisions contained in the agreement establishing that Organization”;³³⁸ and
4. ECT Article 10 provides that each Contracting Party guarantees favourable treatment to investors of other Contracting Parties, but as the EU “itself is a Contracting Party, ‘other contracting parties' can only be third countries”.³³⁹

273. Based on the language of those provisions, the Respondent interprets the ECT as follows:

1. it recognises that “EU Member States have transferred competence over matters governed by the ECT to the EU, including the authority to take binding decisions for the EU Member States in respect of those matters”;³⁴⁰
2. its signatories “acknowledge that the competence for concluding the ECT is shared between the EU and the EU Member States”, and recognise that:³⁴¹

³³⁶ Resp. Mem. on Juris., para. 106, referring to RL-0032, Convention for the Unification of Certain Rules for International Carriage by Air, 28 May 1999. ↩
³³⁷ Resp. Mem. on Juris., para. 107, referring to RL-0033, Statement submitted to the ECT Secretariat pursuant to Article 26(3)(b)(ii) of the ECT replacing statement made on 17 November 1997 on behalf of the European Communities, 2 May 2019. ↩
³³⁸ Resp. Rule 41(5) Application, para. 107; Resp. Mem. on Juris., paras. 109-110. ↩
³³⁹ Resp. Rule 41(5) Application, para. 97; Resp. Mem. on Juris., paras. 111-112. ↩
³⁴⁰ Resp. Rule 41(5) Application, para. 106. ↩
³⁴¹ Resp. Rule 41(5) Application, para. 106. ↩

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1. the EU “corresponds to its parts (because it has a number of votes equal to its parts)”,
2. each part “acts only in the matters falling under its competence”; and
3. “[f]or the EU, EU Member States and the EU are therefore not bound for the entirety ECT, but each for its respective competences”;

3. the ECT's express references to the agreement establishing the REIO “recognizes that the relationships between the Contracting Parties that are members of the REIO are governed by the provisions contained in the agreement establishing the REIO”;³⁴²
4. accordingly, “the agreement establishing the EU, i.e. the EU Treaties, confer the competence for the common commercial policy, including investment protection, on the EU”;³⁴³
5. as the “Area” of the EU in fact “comprises the entirety of the areas of the EU Member States”,³⁴⁴ an intra-EU investment “is not an investment in the area of another Contracting Party, but in the area of the same Contracting Party”, (the EU “being a single investment area for its Member States”);³⁴⁵
6. accordingly, the EU offer to arbitrate is “only made to investors from Contracting Parties that are not EU Member States”;³⁴⁶
7. this conclusion is evident from Advocate General Bot's statement on the Comprehensive Economic Trade Agreement between Canada and the EU (“CETA”), that “[a]s the German Government rightly observed at the hearing, the situation of Canadian investors who invest in the European Union is not

³⁴² Resp. Rule 41(5) Application, para. 108. ↩
³⁴³ Resp. Rule 41(5) Application, para. 108. ↩
³⁴⁴ Resp. Rule 41(5) Application, para. 109, citing TEU, Art. 52; CL-0009, TFEU, Art. 355. ↩
³⁴⁵ Resp. Rule 41(5) Application, para. 109; Resp. Mem. on Juris., paras. 110-111. ↩
³⁴⁶ Resp. Rule 41(5) Application, para. 109; Resp. Mem. on Juris., para. 112. ↩

[Page 111]

comparable with the situation of European investors who invest in their own economic area”;³⁴⁷

8. any other interpretation “Area” would lead to “absurd results”;³⁴⁸
9. by way of example, the ECT Article 7(10)(a) reference to “transit” can “only apply to the EU”, being (i) the entity having “substantive competence under the TFEU” and (ii) a “fully-fledged customs union as a whole”, and cannot apply “to transportation between the EU Member States”;³⁴⁹
10. the chapter application of ECT Articles 1(3) and 1(10) is not relevant,³⁵⁰ as Article 1(3) and 1(10) are not limited to certain chapters and “[a]n explicit disconnection clause is simply not necessary and superfluous due to the use of the REIO clause in Art 1 (3) and (10) ECT”, as “confirmed by literature”;³⁵¹
11. ECT Article 25 recognises certain trade and investment liberalization between Contracting States by virtue of the Economic Integration Agreement (“EIA”), and provides that most favoured nation treatment of the IEA shall not extent to non-EIA Contracting States of the ECT (i.e., EIA members “are not required by the ECT to extend the same benefits to non-EIA States”);³⁵² and
12. nothing in ECT Part III, “Investment Promotion and Protection”, or Part V, “Dispute Settlement”, “may be understood to derogate from provisions of the EU Treaties as for investment promotion and protection or from any right to dispute resolution” under the EU Treaties.³⁵³

³⁴⁷ Resp. Mem. on Juris., para. 113, citing RL-0035, Opinion of Advocate General Bot, Opinion 1/17, 29 January 2019 (“Opinion 1/17”), para. 207. ↩
³⁴⁸ Resp. Rule 41(5) Application, para. 111. ↩
³⁴⁹ Resp. Rule 41(5) Application, para. 111, referring to CL-0009, TFEU, Arts. 28 et seq. ↩
³⁵⁰ Resp. Rule 41(5) Application, para. 110; Resp. Mem. on Juris., para. 115. ↩
³⁵¹ Resp. Mem. on Juris., para. 115; RL-0036, M. Smrkoli, The Use of the “Disconnection Clause” in International Treaties: What does it tell us about the EC/EU as an Actor in the Sphere of Public International Law?, 14 May 2008 (unpublished paper). ↩
³⁵² Resp. Rule 41(5) Application, para. 112. ↩
³⁵³ Resp. Rule 41(5) Application, para. 113; Resp. Mem. on Juris., para. 116. ↩

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274. According to the Respondent, “[a]ll of these provisions lead to the conclusion that the Contracting Parties to the ECT signed the ECT in the mutual understanding that it would not apply to an intra-EU situation”.³⁵⁴

3) Context, Object and Purpose (VCLT Article 31(1), (2))

275. The Respondent also argues that the same conclusion is reached by interpretation of the context, object and purpose of the ECT,³⁵⁵ in accordance with VCLT Articles 31(1) and 31(2). In this regard, the Respondent relies on:

1. complementary responsibilities in the case of “mixed agreements”, as confirmed by the CJEU in a 1978 ruling regarding the Draft Convention of the International Atomic Agency on the Physical Protection of Nuclear Materials, Facilities and Transports (the CJEU stated that relevant provisions “will form an integral part of Community law”, and “[f]or the rest, it will be for the Member States to adopt the appropriate implementing provisions”);³⁵⁶
2. the preparatory work of the ECT and circumstances of its conclusion, which the Respondent submits “confirm the goal of integrating the energy sectors of the former Soviet Union and Eastern Europe with those of the 'Western world', including the USA, Canada and Norway” and that goal was “not to regulate the EU internal market for energy”;³⁵⁷
3. “[t]he reading of the ECT by the EU itself” as having “always been consistent in not extending investor-State arbitration to a pure intra-EU situation”;³⁵⁸
4. it being “the EU's legal order that determines the latter's behavior and actions” when the EU and the EU Member States both become parties to multilateral

³⁵⁴ Resp. Rule 41(5) Application, para. 114. ↩
³⁵⁵ Resp. Rule 41(5) Application, para. 115; Resp. Mem. on Juris., para. 119, citing RL-0008, E. Neframi, "The Duty of Loyalty: Rethinking its Scope through its Application in the Field of EU External Relations" in 47 Common Market Law Review, 2010 (“Neframi, Duty of Loyalty”), p. 325. ↩
³⁵⁶ Resp. Mem. on Juris., para. 120, citing RL-0037, CJEU, Ruling 1/78, 14 November 1978, para. 36. ↩
³⁵⁷ Resp. Rule 41(5) Application, para. 116; Resp. Mem. on Juris., para. 121. ↩
³⁵⁸ Resp. Rule 41(5) Application, para. 116. ↩

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agreements, and the ECT Contracting Parties “were fully aware of the EU's legal order, its particularities, and of the fact that EU law would be subject to constant political and legal change”, as evidenced by:³⁵⁹

1. “specific references to the transfer of competences to the REIO and the agreement establishing the REIO in Arts. 1 (3) and 1 (10) ECT”; and
2. the ECT having been “initiated by the EU, and that the Charter of Paris and the European Energy Charter, which are incorporated through the preamble of the ECT into the Treaty, refer to the special role and status of the EU”;

5. the fact that, when negotiating and concluding multilateral agreements, “the EU and the EU Member States are bound by the general principle of EU law of unity in the international representation of the EU”;³⁶⁰ and
6. the fact that, while in theory EU Member States have capacity to enter into inter se obligations in multilateral agreements “for those areas of the agreement for which they retain competence”, “they, in practice, never do”.³⁶¹

276. As to the ECT negotiating history, the Respondent posits that:

1. throughout negotiations, the EU and the EU Member States “acted ... as one single block and with one voice”;³⁶²

³⁵⁹ Resp. Rule 41(5) Application, para. 117. ↩
³⁶⁰ Resp. Rule 41(5) Application, para. 118, citing European Commission v. Kingdom of Sweden, CJEU Case C-246/07, Judgment, 20 April 2010 (available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62007CJ0246) (“European Commission v. Sweden”), para. 73; RL-0008, Neframi, Duty of Loyalty, p. 335, fn. 45 (“the European group (EU and Member States) appears as a single contracting party”). ↩
³⁶¹ Rule 41(5) Application, para. 119, citing P. Kuijper, “The Conclusion and Implementation of the Uruguay Round Results by the European Community” in 6(1) European Journal of International Law, 1995 (available at: http://ejil.org/pdfs/6/1/1292.pdf) (“Kuijper, Conclusion and Implementation”), pp. 228 et seq. (“It is clear as a matter of international law that a mixed Community agreement, concluded simultaneously between the Community, its Member States and third States, is in principle capable of creating rights and obligations between all the parties and hence also between the Member States inter se. It is most of the time equally obvious, as a matter of practical intention, that it is the objective of the Community negotiators to create rights and obligations only between the Community and its Member States on the one hand and one or more third States on the other”). ↩
³⁶² Resp. Rule 41(5) Application, para. 120. ↩

[Page 114]

2. the ECT “was perceived as part of the European Communities' external energy policy”, never intended to “influence their internal energy policy”, and “the creation of the European Communities' internal energy market was well under way when the ECT was negotiated”, as “explicitly mentioned and recognized in the European Energy Charter and hence ... known to all Contracting Parties of the ECT”;³⁶³
3. “it was necessary for EU Member States to also become Contracting Parties, since it was considered at the time that they retained competence over certain matters covered by the ECT”;³⁶⁴ and
4. at the Energy Charter Conference, a decision was made to permit “non-EIA investors to obtain EIA benefits by virtue of certain links to EIA territory”, which “defined the requirements under which legal entities from non-EU Member States could benefit of the rules internal to the EU”,³⁶⁵ regarding which the Respondent submits that:
   1. “[t]o avoid double protection for identical situations, the intent must have been that these investors could solely pursue remedies available under EU law with no additional opportunity to resort to the dispute resolution mechanism in Art. 26 ECT”;
   2. “[i]t would be fully redundant to regulate the access to EU law protections in this manner if the ECT's dispute resolution mechanism was equally available to both EU investors and non-EU investors”; and

³⁶³ Resp. Rule 41(5) Application, para. 120. ↩
³⁶⁴ Resp. Rule 41(5) Application, para. 121. ↩
³⁶⁵ Resp. Rule 41(5) Application, para. 122. ↩

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3. “EU law already contemplates sufficient protection for entities established in the EU”.³⁶⁶

277. The Respondent further relies on the July 2018 Communication for content, object and purpose, stating that the EU “emphasized that EU law protects investors against unjustified restrictions and summarized the legal grounds on which discrimination of investors' rights are in principle prohibited”, and “the offer to arbitrate in Art. 26 (3) ECT must be interpreted in light of Art. 26 (6) ECT”, the ECT governing law clause providing for the ECT “and applicable rules and principles of international law” as the applicable law.³⁶⁷ The Respondent develops this as follows:³⁶⁸

1. ECT Article 26(6) “applies equally to matters of jurisdiction as to matters of merits”;³⁶⁹
2. “EU law forms part of international law”;
3. “[a]pplicable rules and principles of international law in this context include those that affect all EU Member States, such as the TFEU and TEU as international treaties”;

³⁶⁶ Resp. Rule 41(5) Application, para. 122, referring to RL-0005, July 2018 European Commission Communication, p. 5: In particular, EU law covers and protects investments implying capital movements and establishment. These terms refer to:

• the acts of investing in, acquiring and setting up companies;
• the right to acquire, use or dispose of immovable property;
• the repurchase of shares and bonds dealt in and quoted on a stock exchange;
• the receipt of dividends and interest;
• the commercial grant of credits (including consumer credits);
• the acquisition of units of an investment fund; mortgages, legacies and loans, etc. and
• the acquisition of patents, trademarks and other intellectual property rights.

[Page 116]

4. “[t]hese treaties contain specific rules governing the relations between EU Member States”;
5. currently, “these rules as principles of international law and EU law prevent EU Member States from undertaking the obligation to arbitrate claims that could have repercussions on EU law issues”;
6. therefore, “when assessing its jurisdiction considering Art. 26 (6) ECT, this Tribunal must find that the offer to arbitrate investment disputes has always been inapplicable to intra-EU disputes”; and
7. the fact that EU law is not mandatory for all signatory states to the ECT “does not hinder its applicability in an intra-EU setting, where it is mandatory for the EU Member States and the EU law subjects involved”.³⁷⁰

278. The Respondent further relies on the Contracting Parties' intentions, arguing that:³⁷¹

1. “incompatibility with EU law is also in line with the signatories' intention”;
2. neither Germany nor Ireland “ever meant to enable investors from EU Member States to sue the EU for an EU measure before an arbitral tribunal established on the basis of Art. 26 ECT”;
3. otherwise, “an investor from an EU Member State could, in the first instance, bring an action against an European Commission decision before the CJEU and the European Court” and if defeated “have the option to initiate arbitration proceedings on the basis of Art. 26 ECT against both the European Commission's decision and the judgment of the Court of First Instance and, if necessary, the CJEU, claiming that the EU, including the CJEU, had violated its obligations under Art. 10 ECT”; and

³⁷⁰ Resp. Mem. on Juris., para. 129, citing RL-0039, Sørensen and Rasmussen v. Denmark, ECHR, Application Nos. 52562/99 and 52620/99, Judgment, 11 January 2006; RL-0040, Silidian v. France, ECHR, Application No. 73316/01, Judgment, 26 October 2005. ↩
³⁷¹ Resp. Rule 41(5) Application, para. 125. ↩

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4. such approach would permit the arbitral tribunal to “have the opportunity to interpret Art. 10 ECT, an integral part of EU law, and to apply it to the delegated regulation of the European Commission as derived EU law”, which “would be contrary to the CJEU's established case-law on the autonomy of EU law and was clearly not the intention of the Contracting Parties to the ECT”.

279. For all of these reasons, the Respondent concludes that the ECT's context, object and purpose, “as established by reference to prior international agreements referenced in its preamble and the circumstances of its conclusion”, show that “it was understood by all Contracting Parties that the EU Member States did not intend to create inter se obligations between them” based on VCLT Articles 31(1) and (2).³⁷²

4) Supplementary Means (VCLT Articles 31(3) and 32)

280. The Respondent further relies on subsequent agreements and/or supplementary means of interpretation, based on EU law as the “relevant rules of international law applicable in the relations between the parties” pursuant to VCLT Article 31(3)(c) and/or Article 32.³⁷³ In this regard, it relies on a prior investor-State arbitration decision, commentary, and ICJ and CJEU judgments.

281. First, the Respondent relies on the prior decision on jurisdiction in Electrabel v. Hungary, where the tribunal discussed the relationship between the ECT and EU law as follows:³⁷⁴

1. as EU law is part of international law, it must be applied on the basis of ECT Article 26 as a matter of law, both to the validity of the arbitration agreement and the merits;
2. this follows from the reference in Article 26 to international law as the law applicable to the dispute, as EU law constitutes international law that applies

³⁷² Resp. Rule 41(5) Application, para. 126. ↩
³⁷³ Resp. Rule 41(5) Application, para. 127; Resp. Mem. on Juris., paras. 133-139. ↩
³⁷⁴ Resp. Rule 41(5) Application, paras. 128-130; Resp. Mem. on Juris., paras. 134-135; CL-0151, Electrabel v. Hungary, Jurisdiction, paras. 4.111-4.199. ↩

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between the host State and the home State of the investor in the case of an intra-EU dispute;³⁷⁵

3. given its historic genesis and its text, the ECT should be interpreted in harmony with EU law;³⁷⁶
4. if harmonious interpretation proves impossible, EU law prevails on the basis of TFEU Article 351, which is the customary rule of international law codified in VCLT Article 30;³⁷⁷ and
5. the Electrabel tribunal thus refuted all arguments to the contrary and relied on the relevant case-law of the CJEU.³⁷⁸

282. Secondly, the Respondent relies on commentaries by Thomas Eilmansberger and Hervé Ascencio stating as follows:³⁷⁹

1. “public international law, which governs the law applicable to the arbitration, ‘requires arbitral tribunals to interpret intra-EU BITs in the light of other international law obligations applicable to the facts at hand, i.e. in the light of relevant EC law’”;³⁸⁰
2. such obligation follows from VCLT Article 31 (3)(c), “which requires that in the interpretation of a treaty, ‘any relevant rules of international law applicable in the relations between the parties” be taken into account as context;³⁸¹

³⁷⁵ Resp. Rule 41(5) Application, para. 129; CL-0151, Electrabel v. Hungary, Jurisdiction, paras. 4.119-4.126. ↩
³⁷⁶ Resp. Rule 41(5) Application, para. 129; CL-0151, Electrabel v. Hungary, Jurisdiction, paras. 4.130-4.142. ↩
³⁷⁷ Resp. Rule 41(5) Application, para. 130; CL-0151, Electrabel v. Hungary, Jurisdiction, paras. 4.178-4.191. ↩
³⁷⁸ Resp. Rule 41(5) Application, para. 131; CL-0151, Electrabel v. Hungary of Hungary, Jurisdiction, paras. 4.178-4.189 (“Article 307 EC [now Art. 351 TFEU] precludes inconsistent pre-existing treaty rights of Member States and their own nationals against other Member States; and it follows, if the ECT and EU law remained incompatible notwithstanding all efforts at harmonisation, that EU law would prevail over the ECT's substantive protections and that the ECT could not apply inconsistently with EU law to such a national's claim against an EU Member State”). ↩
³⁷⁹ Resp. Rule 41(5) Application, paras. 132-134. ↩
³⁸⁰ Resp. Rule 41(5) Application, para. 132, quoting RL-0009, T. Eilmansberger, “Bilateral Investment Treaties and EU Law” in 46 Common Market Law Review, 2009 (“Eilmansberger, BITs and EU Law”), p. 421. ↩
³⁸¹ Resp. Rule 41(5) Application, para. 133, quoting RL-0009, Eilmansberger, BITs and EU Law, p. 421. ↩

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3. “the intentions of the parties are expressed in the most authoritative way by conflict rules included in the later treaty, and the EC Treaty (being the later Treaty in this case) does indeed contain such a conflict rule, namely the already mentioned Article 307 EC”;³⁸² and
4. EU law “must be taken into account as an element extrinsic” to the ECT, which “means that these elements are part of the circumstances also mentioned in Article 32 [VCLT], together with the preparatory works, but put in Article 31 in order to avoid relegation as a secondary means of interpretation”.³⁸³

283. Thirdly, the Respondent relies on two ICJ judgments “by way of analogy” to demonstrate that a contrary conclusion “would mean that the ECT is to be understood to operate wholly independently from EU law so as to be capable of being successfully invoked even if it were to clearly contradict the former”, which “has never been the understanding of the EU Member States when they signed the ECT, particularly since nothing indicates that the ECT is intended to apply as a lex specialis to EU law”.³⁸⁴ In particular, the Respondent refers to the ICJ cases:³⁸⁵

1. Oil Platforms (Iran v. United States); and
2. Continental Shelf (Tunisia v. Libya);

to support its argument that “it cannot be lightly presumed that Respondent and Claimants, or their home EU Member State Ireland, would conclude a treaty, such as the ECT, that would impose obligations on them that would place them in breach of obligations owed to the EU and other EU Member States under the EU Treaties”.³⁸⁶

³⁸² Resp. Rule 41(5) Application, para. 133; RL-0009, Eilmansberger, BITs and EU Law, p. 425. ↩
³⁸³ Resp. Rule 41(5) Application, para. 134; RL-0010, H. Ascencio, “Article 31 of the Vienna Conventions on the Law of Treaties and International Investment Law” in 31(2) ICSID Review, 2016, p. 371. ↩
³⁸⁴ Resp. Rule 41(5) Application, para. 135. ↩
³⁸⁵ Resp. Rule 41(5) Application, para. 135; Case Concerning Oil Platforms (Islamic Republic of Iran v. United States of America), International Court of Justice, Judgment, 6 November 2003 (available at: https://www.icj-cij.org/public/files/case-related/90/090-20031106-JUD-01-00-EN.pdf) (“Oil Platforms”), para. 41; Case Concerning the Continental Shelf (Tunisia v. Libyan Arab Jamahiriya), International Court of Justice, Revision and Interpretation - Judgment, 10 December 1985 (available at: https://www.icj-cij.org/public/files/case-related/71/071-19851210-JUD-01-00-EN.pdf) (“Continental Shelf”), para. 43. ↩
³⁸⁶ Resp. Rule 41(5) Application, para. 135. ↩

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284. In its Memorial on Jurisdiction, the Respondent refers also to Advocate General Maciej Szpunar's Opinion of 3 March 2021, as confirming that “the ECT, despite being a multilateral agreement, consists of a series of bilateral relationships between the contracting parties”,³⁸⁷ an argument that the European Commission also raised in its intervention.³⁸⁸ The Respondent submits that the ECT obligations “apply only bilaterally between these two contracting parties”, and “must be interpreted in a way that respects the bilateral nature of the relationship between two EU law subjects”.³⁸⁹

285. As to the ICJ judgment in Barcelona Traction, referred to and relied on by Advocate General Szpunar,³⁹⁰ the Respondent submits that this confirmed the distinction “between bilateral legal relations and multilateral legal relations under multilateral treaties”, as reflected in VCLT Article 41.³⁹¹ The Respondent cites from Barcelona Traction as follows:³⁹²

In particular, an essential distinction should be drawn between the obligations of a State towards the international community as a whole, and those arising vis-à-vis another State in the field of diplomatic protection.

286. According to the Respondent, the interpretation of bilateral obligations under ECT Article 26 “must include all further acts of the parties that are relevant for the interpretation of the ECT, such as, inter alia, the 15 January 2019 Declaration”.³⁹³

287. In conclusion on subsequent agreements and/or supplementary means of interpretation, the Respondent submits that:

³⁸⁷ Resp. Mem. on Juris., para. 136; RL-0042, Republic of Moldova v. Komstroy LLC, CJEU Case C-741/19, Opinion of Advocate General Szpunar, 3 March 2021 (“Szpunar Opinion”), para. 41. ↩
³⁸⁸ See paragraphs 342 to 365 below. ↩
³⁸⁹ Resp. Mem. on Juris., para. 136. ↩
³⁹⁰ RL-0042, Szpunar Opinion, para. 41, fn. 22. ↩
³⁹¹ Resp. Mem. on Juris., para. 137 (this argument was added following the European Commission Submission); RL-0043, G. Fitzmaurice, "Second Report on the Law of Treaties" in 2 Yearbook of the International Law Commission, UN Doc. A/CN.4/SER.A/1957/Add.1, 1957, p. 54. ↩
³⁹² Resp. Mem. on Juris., para. 137, citing RL-0045, Case Concerning the Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), International Court of Justice, Judgment (Second Phase), 5 February 1970 (“Barcelona Traction”), para. 33. ↩
³⁹³ Resp. Mem. on Juris., para. 138. ↩

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1. as between EU Member States, “EU law should be viewed under Art. 31 (3)(c) VCLT as forming an integral part of the task of interpretation ECT by the Tribunal so as to avoid results that diverge from” EU law;³⁹⁴
2. the importance of VCLT Article 31(3)(c) for the interpretation of ECT Article 26 “in conformity with the general principle of autonomy of EU law, is also underlined in the case-law of the CJEU”;³⁹⁵
3. “it is crucial to recall that in the hierarchy of norms of EU law, international agreements concluded by the EU are above rules of secondary EU law, but below general principles of EU law and the EU Treaties”, as “the CJEU's exclusive jurisdiction to render a final interpretation of EU Treaties is also not a novelty of the Achmea Judgment”;³⁹⁶
4. to apply the principle of interpretation in conformity, “the ECT has to be interpreted so as to comply with primary EU law, and not the other way around”;³⁹⁷ and
5. therefore, “any interpretation of the ECT in accordance with the VCLT leads to the conclusion that there is no valid offer to arbitrate from Respondent to Claimants”.³⁹⁸

288. In its Memorial on Jurisdiction, the Respondent reiterates these points,³⁹⁹ emphasising that its interpretation arguments are made pursuant to public international law.⁴⁰⁰ It concludes that, “applying the principles of interpretation of the VCLT, the ECT must be interpreted

³⁹⁴ Resp. Rule 41(5) Application, para. 136. ↩
³⁹⁵ Resp. Rule 41(5) Application, para. 137; Council of the European Union v. Front Polisario, CJEU Case C-104/16 P, Judgment, 21 December 2016 (available at: http://curia.europa.eu/juris/document/docu-ment.jsf?text=&docid=186489&doclang=EN), para. 86 ↩
³⁹⁶ Resp. Rule 41(5) Application, paras. 137-138; Commission of the European Communities v. United Kingdom of Great Britain and Northern Ireland, CJEU Case C-459/03, Judgment, 30 May 2006 (available at: https://curia.europa.eu/juris/showPdf.jsf?text=&docid=57551&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=7868936), para. 132; RL-0046, CJEU Opinion 2/13, 18 December 2014 (“CJEU Opinion 2/13”), paras. 201, 210 (where, according to the Respondent, the CJEU “confirmed that international agreements cannot affect the exclusive jurisdiction of the CJEU in accordance with Art. 344 TFEU”). ↩
³⁹⁷ Resp. Rule 41(5) Application, para. 139. ↩
³⁹⁸ Resp. Rule 41(5) Application, para. 139. ↩
³⁹⁹ Resp. Mem. on Juris., paras. 91-139. ↩
⁴⁰⁰ Resp. Mem. on Juris., para. 91. ↩

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to comply with primary EU law”, and that “[a]ny interpretation of Art. 26 ECT must, therefore, lead to the result that there is no valid offer from Respondent to Claimants to arbitrate intra-EU disputes”.⁴⁰¹

5) EU Law Primacy (VCLT Article 5)

289. By way of new and additional argument in its Memorial on Jurisdiction, the Respondent reiterates that ECT Article 26(3) “is inapplicable in an intra-EU setting because it is clear to all EU Member States and EU Institutions that the consent expressed in Art. 26 (3) ECT is limited to disputes where one party is not an EU law subject”,⁴⁰² but submits further that even if that were not the case, ECT Article 26 would still be “inapplicable by virtue of yet another conflict rule under public international law that specifically relates to rules of an international organization such as the European Union, i.e. Art. 5 VCLT”.⁴⁰³

290. In this regard, the Respondent argues as follows:

1. VCLT Article 5 provides that relevant rules of the organization take precedence over any general rule of public international law relating to the same subject matter;⁴⁰⁴
2. VCLT Article 5 applies “[i]f and to the extent one of the conflicting international agreements is the constituent treaty of an international organization”;⁴⁰⁵

⁴⁰¹ Resp. Mem. on Juris., para. 139. ↩
⁴⁰² Resp. Mem. on Juris., para. 140. ↩
⁴⁰³ Resp. Mem. on Juris., para. 141. ↩
⁴⁰⁴ Resp. Mem. on Juris., para. 142; RL-0011 M. E. Villiger, “Article 5” in Commentary on the 1969 Vienna Convention on the Law of Treaties, 2009, para. 7, RL-0012; K. Schmalenbach, “Article 5” in O. Dörr and K. Schmalenbach (eds.), Vienna Convention on the Law of Treaties: A Commentary, 2018 (“Schmalenbach, Article 5”), para. 15. ↩
⁴⁰⁵ Resp. Mem. on Juris., para. 142. See CL-0017, VCLT, Art. 5, which provides: “The present Convention applies to any treaty which is the constituent instrument of an international organization and to any treaty adopted within an international organization without prejudice to any relevant rules of the organization”. ↩

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3. “rules of the organization” includes written rules and rules emanating from established organizational practice,⁴⁰⁶ as well as “any rules of conflict that the constituent instrument of an international organization might contain itself”;⁴⁰⁷
4. as the EU is an international organization pursuant to VCLT Article 2(1)(i), the EU Treaties are “constituent instruments of an international organization”;⁴⁰⁸
5. the EU's status as a supranational organization and REIO does not change the analysis as “neither the VCLT nor other relevant instruments of general international law distinguish between different types of international organizations”;⁴⁰⁹ and
6. neither the VCLT nor any other relevant instrument of general public international law contain specific rules for “supranational organizations” or “regional economic integration organizations”.⁴¹⁰

291. The Respondent suggests that EU law primacy is also a conflict rule, according to which “the EU treaties supersede international treaties concluded by the EU or the Member States”, as embodied TFEU Article 218(11) and the Declaration of Primacy annexed to the Final Act of the Lisbon Conference.⁴¹¹ According to the Respondent, the effect of EU law primacy:⁴¹²

1. “differs from the effect of other general rules of conflict, such as Art. 30 VCLT which deals with the interpretation and application of successive treaties relating to the same subject matter”;

⁴⁰⁶ Resp. Mem. on Juris., para. 143; RL-0012, Schmalenbach, Article 5, para. 15; RL-0013, United Nations Conference on the Law of Treaties, Official Records, UN Doc. A/CONF.39/11, 1969, p. 44, para. 31 and p. 57, para. 40. ↩
⁴⁰⁷ Resp. Mem. on Juris., para. 143; RL-0012, Schmalenbach, Article 5, para. 16. ↩
⁴⁰⁸ Resp. Mem. on Juris., para. 144. ↩
⁴⁰⁹ Resp. Mem. on Juris., para. 144. ↩
⁴¹⁰ Resp. Mem. on Juris., para. 144. ↩
⁴¹¹ Resp. Mem. on Juris., para. 145. ↩
⁴¹² Resp. Mem. on Juris., para. 146. ↩

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2. “enjoys a higher rank in the overall hierarchy of norms, i.e. qualifying as lex superior”; and
3. applies irrespective of “whether the other conflicting treaty was concluded before or after the EU treaties” or “the other treaty contains any conflict clause of its own”.

292. Consequently, according to the Respondent, pursuant to VCLT Article 5, “the primacy of EU primary law must be respected by any conflicting international agreement relating to the same subject matter”, and “takes precedence over the ECT irrespective of when the latter entered into force” and “irrespective” of ECT Article 16.⁴¹³ This is achieved, it submits, by VCLT Article 5 “translat[ing] the pertinent primacy rule of EU primary law to the international level and endow[ing] it with lex specialis status vis-à-vis other rules of conflict”, such as VCLT Article 30, making it “erroneous to assume applicability of Art. 26 (3) ECT by relying on an alleged structural dichotomy between EU primary law and international law”.⁴¹⁴

293. On that basis, the Respondent concludes that international law and “in particular the application of its conflict of law rule in Art. 5 VCLT, leads to the inapplicability of Art. 26 ECT in an intra-EU context, including in the present case”.⁴¹⁵

6) Other International Agreements

294. Finally on the topic of international law interpretation, the Respondent also argues in its Memorial on Jurisdiction that incompatibility between ECT Article 26(4) and TFEU Article 344 is evident from the reasoning of the CJEU in its Opinion 2/13 dated 18 December 2014 (“Opinion 2/13”) concerning the European Convention on Human Rights (“ECHR”), which the Respondent submits applies mutatis mutandis to the question

⁴¹³ Resp. Mem. on Juris., para. 147. ↩
⁴¹⁴ Resp. Mem. on Juris., para. 147. ↩
⁴¹⁵ Resp. Mem. on Juris., para. 148. ↩

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of the applicability of ECT Article 26(4) in an intra-EU relationship for the following reasons:⁴¹⁶

1. the CJEU issued Opinion 2/13 regarding EU accession to the ECHR;
2. the CJEU denied the possibility of accession to the ECHR, “invoking the principle of mutual trust”, notwithstanding that TEU Article 6(2) envisaged such accession;⁴¹⁷
3. the CJEU “took issue with the fact that there was a separate dispute resolution mechanism for matters of the ECHR contained in Art. 33 ECHR”, finding that “the very existence of the possibility that the dispute resolution mechanism of Art. 33 ECHR could apply to intra-EU disputes, or to disputes between EU Member States and the EU, in circumstances where EU law will be in issue undermines Art. 344 TFEU”;⁴¹⁸
4. the CJEU confirmed the “unconditional applicability of Art. 344 TFEU in intra-EU relationships”, so it “must be observed under all circumstances, by all EU Member States”;⁴¹⁹ and
5. the CJEU confirmed that “any international agreement that has been concluded by the EU and the EU Member States becomes an integral part of EU law”.⁴²⁰

295. According to the Respondent, CJEU Opinion 2/13, “clarifies the underlying idea that any international agreement, to which the EU is a party, is an integral part of EU law”, including the ECT, which means that “any dispute resolution mechanism that avoids the

⁴¹⁶ Resp. Mem. on Juris., paras. 149 et seq.; RL-0046, CJEU Opinion 2/13. ↩
⁴¹⁷ Resp. Mem. on Juris., para. 150; RL-0046, CJEU Opinion 2/13, para. 194 (“In so far as the ECHR would, in requiring the EU and the Member States to be considered Contracting Parties not only in their relations with Contracting Parties which are not Member States of the EU but also in their relations with each other, including where such relations are governed by EU law, require a Member State to check that another Member State has observed fundamental rights, even though EU law imposes an obligation of mutual trust between those Member States, accession is liable to upset the underlying balance of the EU and undermine the autonomy of EU law”). ↩
⁴¹⁸ Resp. Mem. on Juris., para. 151; RL-0046, CJEU Opinion 2/13, paras. 205 et seq. ↩
⁴¹⁹ Resp. Mem. on Juris., para. 151. ↩
⁴²⁰ Resp. Mem. on Juris., para. 152; RL-0046, CJEU Opinion 2/13, para. 180 (“By contrast, as a result of the EU's accession the ECHR, like any other international agreement concluded by the EU, would, by virtue of Article 216(2) TFEU, be binding upon the institutions of the EU and on its Member States, and would therefore form an integral part of EU law”). ↩

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possibility of the CJEU getting involved, as Art. 26 (4) ECT does if held applicable in an intra-EU relationship, violates EU law”.⁴²¹ The Respondent argues that the same reasoning applies to the ECT because “both the EU and the EU Member States are parties” and it “contains State-State as well as investor-State clauses for resolving any disputes concerning violations of its provisions”, which means “[t]here is a possibility that EU law will be at stake when deciding an intra-EU dispute”.⁴²²

296. Therefore, the Respondent submits, “[t]he principle of mutual trust is of utmost importance here as well and bars any dispute resolution mechanism outside the EU for intra-EU relationships”.⁴²³ In the Respondent's view, CJEU Opinion 2/13 “confirms that in intra-EU scenarios Art. 26 ECT is incompatible with Art. 344 TFEU, the autonomy of EU law, and the principle of sincere cooperation as set out in Art. 4 (3) TEU”.⁴²⁴

v. The Private Law Argument

297. Finally, in relation to jurisdiction ratione voluntatis, the Respondent argues that the Parties have not consented to arbitrate on the basis of private law. In particular, it argues that there are no grounds to assume that the Respondent accepted the Tribunal's jurisdiction by not objecting to it in a timely manner, unlike as was found in prior awards such as PL Holdings v. Poland.⁴²⁵

298. The Respondent submits that, in PL Holdings v. Poland, the Svea Court of Appeal found that the arbitration clause included in the Poland-Belgium/Luxembourg BIT was valid because “Poland's alleged omission to raise the jurisdictional objection in a timely manner had resulted in it having entered into a new, tacit arbitration agreement with the investor”.⁴²⁶

⁴²¹ Resp. Mem. on Juris., para. 153. ↩
⁴²² Resp. Mem. on Juris., para. 154. ↩
⁴²³ Resp. Mem. on Juris., para. 154. ↩
⁴²⁴ Resp. Mem. on Juris., para. 155; RL-0047, A. Stanic, “Does the Advocate General's Opinion Provide Clarity on the Validity of Intra-EU Investor-State Arbitral Awards?”, Kluwer Arbitration Blog, 11 December 2020. ↩
⁴²⁵ Resp. Rule 41(5) Application, para. 184. ↩
⁴²⁶ Resp. Rule 41(5) Application, para. 184. ↩

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299. By contrast, in the current case the Respondent submits that:

1. it “already raised its concerns as to the Tribunal's jurisdiction in its very first submission dated 7 June 2021”;⁴²⁷
2. at no point has it “acknowledged this Tribunal's jurisdiction or failed to raise necessary objections”;⁴²⁸
3. in its Rule 41(5) Application, it “substantiat[ed] its jurisdictional objection at the earliest possible point in the proceedings”;⁴²⁹ and
4. the Tribunal therefore cannot “base its jurisdiction on the common will of the Parties to this dispute expressed in an arbitration agreement concluded inter se”.⁴³⁰

300. In its Memorial on Jurisdiction, the Respondent reiterates these points.⁴³¹ It posits that in the current arbitration there is no agreement to arbitrate based on private law, and that the Tribunal cannot base its jurisdiction on ECT Article 26 on that basis.⁴³²

301. The Respondent further submits that it “has made it unambiguously clear from the beginning of this dispute that it does not accept this Tribunal's jurisdiction under any circumstances”, that as an EU Member State it “cannot consent to arbitrate intra-EU disputes”, and that the “jurisdictional objections, illustrated by the Achmea Judgment, are not waivable”.⁴³³ It submits that this was the basis for its Rule 41(5) Application, as the first opportunity to object, and that “it is clear that Respondent has never and will never waive its objections and consent to arbitrate this intra-EU dispute”.⁴³⁴ Consequently,

⁴²⁷ Resp. Rule 41(5) Application, para. 185. ↩
⁴²⁸ Resp. Rule 41(5) Application, para. 185. ↩
⁴²⁹ Resp. Rule 41(5) Application, para. 185. ↩
⁴³⁰ Resp. Rule 41(5) Application, para. 186. ↩
⁴³¹ Resp. Mem. on Juris., paras. 156-159. ↩
⁴³² Resp. Rule 41(5) Application, para. 186; Resp. Mem. on Juris., para. 158. ↩
⁴³³ Resp. Mem. on Juris., para. 156. ↩
⁴³⁴ Resp. Mem. on Juris., para. 157. ↩

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according to the Respondent, “there is no common will of the Parties on which the Tribunal could base its jurisdiction neither in Art. 26 ECT nor elsewhere”.⁴³⁵

b. The Claimants' Position

302. The Claimants submit that the Tribunal has jurisdiction on the following grounds:

1. ECT Article 26 and ICSID Convention Article 25 are determinative of the Tribunal's jurisdiction, not EU law because:
   1. EU law is not the applicable law pursuant to ECT Article 26(6) to determine jurisdiction;
   2. there are no rules between the ECT Parties within the meaning of VCLT Article 31(3)(c) to deprive the Tribunal of jurisdiction;
   3. the ECT, including ECT Article 26, has not been superseded by the EU Treaties pursuant to VCLT Article 30(4)(a);
   4. there has been no modification of the ECT within the meaning of VCLT Article 41(1) that could deprive the tribunal of its jurisdiction;
   5. TFEU Article 351 does not apply and in any event, cannot deprive the Tribunal of its jurisdiction; and
2. interpretation of ECT Article 26 in accordance with the VCLT establishes that the Tribunal has jurisdiction.

303. The Claimants rebut the Respondent's characterisation of the factual basis for its intra-EU objection to jurisdiction, set out their arguments as to why lack of consent based on EU law is irrelevant, and analyse the ECT Article 26 in accordance with international law. The Tribunal briefly summarises their position in relation to each below.

⁴³⁵ Resp. Mem. on Juris., para. 158. ↩

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i. Intra-EU Objection: Factual Basis

304. First, in response to the Respondent's position on the intra-EU objection, the Claimants submit that the factual basis of the Respondent's position “contains a number of inaccuracies”, including as follows:⁴³⁶

1. the adoption of the Lisbon Treaty has no bearing on the Tribunal's jurisdiction (the Claimants state that it is correct but irrelevant that “[b]y virtue of Art. 207 TFEU, foreign direct investment became an exclusive EU competence as part of the EU's common commercial policy”, “because the EU's common commercial policy relates to the EU's external competence, i.e. its relations with third States (rather than intra-EU relations)”, as is “obvious from the text of Article 207(1) TFEU alone”, and the adoption of the Lisbon Treaty, including Article 207 TFEU, “has no bearing on the Tribunal's jurisdiction and cannot support” the objection);⁴³⁷
2. the June 2015 European Commission infringement proceedings against EU Member States have no bearing on the Tribunal's jurisdiction (the “European Commission did not even follow up with their threat, as they did not even commence proceedings before the CJEU, and consequentially the CJEU could not even rule on the issue – and that is not even mentioning that the present arbitration is based on the ECT under the ICSID Convention rather than a BIT”);⁴³⁸
3. the April 2016 Non-Paper from Germany et al. has no bearing on the Tribunal's jurisdiction (it is “at best a policy paper as opposed to a legally binding document”);⁴³⁹

⁴³⁶ Cl. Response on Rule 41(5), paras. 12-31. ↩
⁴³⁷ Cl. Response on Rule 41(5), para. 13, quoting Resp. Rule 41(5) Application, para. 25. ↩
⁴³⁸ Cl. Response on Rule 41(5), para. 14. ↩
⁴³⁹ Cl. Response on Rule 41(5), para. 15. ↩

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4. the Achmea Judgment was not followed in more than 50 prior awards and tribunals uniformly and consistently confirmed jurisdiction over respondent States' objections based on the Achmea Judgment;⁴⁴⁰
5. the July 2018 European Commission's Communication “Protection of intra-EU investment” has no bearing on the Tribunal's jurisdiction (“Germany does not even attempt to explain why a policy paper by the European Commission would deprive the Tribunal of its jurisdiction” as “[i]t does not and cannot”);⁴⁴¹
6. the January 2019 Declaration by the EU Member States on the legal consequences of the Achmea Judgment and on investment protection in the EU has no bearing on the Tribunal's jurisdiction (it “is not a legally binding document”, and “mainly paves the way for the intra-EU BIT Termination Agreement”, with EU Member States undertaking that they “will discuss [...] whether any additional steps are necessary to draw all the consequences from the Achmea judgment in relation to the intra-EU application of the Energy Charter Treaty”);⁴⁴²
7. the Council of the European Union's July 2019 Decision regarding negotiations on the modernisation of the ECT has no bearing on the Tribunal's jurisdiction and, in any event, supports the Claimants' case (“[w]hile the EU ECT Negotiating Directives are aspirational, it is not without irony that the Respondent would highlight their content, in particular as far as sustainable investments in the energy

⁴⁴⁰ Cl. Response on Rule 41(5), paras. 16-19. See (for intra-EU BIT ICSID cases) CL-0010, United Utilities (Tallinn) B.V. and Aktsiaselts Tallinna Vesi v. Republic of Estonia, ICISD Case No. ARB/14/24, Award, 21 June 2019 (“Tallinn v. Estonia”), para. 540; CL-0011, B3 Croatian Courier Coöperatief U.A. v. Republic of Croatia, ICSID Case No. ARB/15/5, Award, 5 April 2019 (excerpt) (“B3 v. Croatia”), para. 543; CL-0012, UP and C.D. Holding Internationale v. Hungary, ICSID Case No. ARB/13/35, Award, 9 October 2018 (“UP v. Hungary”), para. 258. See further (for intra-EU ECT ICSID Cases) CL-0013, Landesbank Baden-Württemberg and others v. Kingdom of Spain, ICSID Case No. ARB/15/45, Decision on the Intra-EU Jurisdictional Objection, 25 February 2019 (“Landesbank v. Spain”), paras. 102, 105; CL-0014, Eskosol S.p.A. in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50, Decision on Termination Request and Intra-EU Objection, 7 May 2019 (“Eskosol v. Italy”), para. 186; CL-0015, 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, 12 March 2019 (“NextEra v. Spain”), para. 357. ↩
⁴⁴¹ Cl. Response on Rule 41(5), para. 20; RL-0005, July 2018 European Commission Communication. ↩
⁴⁴² Cl. Response on Rule 41(5), paras. 21-23; RL-0006, 2019 Declaration, para. 9; CL-0014, Eskosol v. Italy, para. 217. ↩

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sector, legal certainty, and a high level of investment protection are concerned”);⁴⁴³

8. the EU Member States' May 2020 Termination Agreement regarding intra-EU BITs has no bearing on the Tribunal's jurisdiction (“Germany itself has to admit that the BIT Termination Agreement ‘does not cover intra-EU proceedings on the basis of Article 26 of the Energy Charter Treaty'”, making it unclear “why Germany would dedicate more than two pages of submissions on that Agreement in its Application in relation to this arbitration, which has been commenced on the basis of Article 26 ECT”);⁴⁴⁴ and
9. the Komstroy Judgment cannot deprive the Tribunal of its jurisdiction⁴⁴⁵ (“the CJEU made this finding in a case in which the underlying dispute concerned an investor from Ukraine (a non-EU Member State) against the Republic of Moldova (a non-EU Member State)”,⁴⁴⁶ which “does not add to [the Komstroy Judgment's] legitimacy”,⁴⁴⁷ as the CJEU's reasoning “effectively simply repeated its reasoning in the Achmea Judgment”,⁴⁴⁸ and “not one single international arbitral tribunal (out of more than 50 international arbitral tribunals), and not one single ICSID tribunal, has followed the Achmea Judgment”,⁴⁴⁹ and “neither the courts of EU

⁴⁴³ Cl. Response on Rule 41(5), paras. 24-26. See CL-0016, EU Negotiating Directives, pp. 3, 5, stating: The objective of the Modernised ECT should be to facilitate investment in the energy sector in a sustainable way between the ECT Contracting Parties by creating a coherent and up-to-date legally binding framework that provides for legal certainty and ensures a high level of investment protection. ... The Investment Protection standards under the Modernised ECT should continue to aim at a high level of investment protection, with provisions affording legal certainty for investors and investments of Parties in each other's market. ... The Modernised ECT should include provisions on sustainable development, including on climate change and clean energy transition in line with the Paris Agreement and recently concluded EU agreements and EU positions in ongoing negotiations. ↩
⁴⁴⁴ Cl. Response on Rule 41(5), para. 27. ↩
⁴⁴⁵ Cl. Response on Rule 41(5), paras. 28-31. ↩
⁴⁴⁶ Cl. Response on Rule 41(5), para. 28. ↩
⁴⁴⁷ Cl. Response on Rule 41(5), para. 29. ↩
⁴⁴⁸ Cl. Response on Rule 41(5), para. 29. ↩
⁴⁴⁹ Cl. Response on Rule 41(5), para. 29. ↩

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Member States”,⁴⁵⁰ “nor the CJEU itself, appear to follow the Komstroy Judgment”.⁴⁵¹

305. The Tribunal notes that therefore, although the Parties (and European Commission) agree that the aforementioned events occurred, they differ as to their legal effect, which inform their respective legal arguments.

ii. German Federal Court of Justice Decision

306. The Claimants do not separately address the Respondent's German Federal Court of Justice Decision, and instead deal with it within their arguments regarding EU Law interpretation.

iii. EU Law Interpretation

307. The Claimants submit in relation to the Komstroy Judgment that the CJEU's conclusions regarding the EU legal order:⁴⁵²

1. are addressed to EU Member States and EU institutions, which “may have no choice but to take steps consistent with the CJEU's ruling, including submitting arguments to international tribunals based on the EU legal order”;
2. “do not alter this Tribunal's mandate to proceed under the legal order on which its jurisdiction is founded, namely the ECT and the ICSID Convention”; and
3. do not bind “this Tribunal constituted under the ECT and the ICSID Convention ... just as the CJEU is not bound by decisions taken by ECT tribunals”.

⁴⁵⁰ Cl. Response on Rule 41(5), para. 30. See also Cl. Response on Rule 41(5), fn. 42 (“courts of EU Member States are principally obliged, as a matter of EU law, to follow Judgments issued by the CJEU in preliminary rulings proceedings in accordance with Article 267 TFEU”). ↩
⁴⁵¹ Cl. Response on Rule 41(5), para. 30. ↩
⁴⁵² Cl. Response on Rule 41(5), para. 68; CL-0014, Eskosol v. Italy, paras. 184, 186; CL-0022 / CL-0041, Eiser Infrastructure Limited and Energia Solar Luxembourg S.à r.l., v. Kingdom of Spain, ICSID Case No. ARB/13/36, Award, 4 May 2017 (“Eiser v. Spain”), para. 199; CL-0018, Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12, Decision on the Achmea Issue, 31 August 2018 (“Vattenfall v. Germany”), para. 131; CL-0023, RREEF Infrastructure (G.P.) Limited and RREEF Pan-European Infrastructure Two Lux S.à r.l. v. Kingdom of Spain, ICSID Case No. ARB/13/30, Decision on Jurisdiction, 6 June 2016 (“RREEF v. Spain, Jurisdiction”), para. 87. ↩

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308. The Claimants further suggest that the Respondent's objection “even runs counter to its own conduct in the light of the settlement in the Vattenfall case (venire contra factum proprium)”; however, they do not develop this argument.⁴⁵³

309. In their Memorial on Jurisdiction, the Claimants submit that there are “at least two fundamental problems with the Respondent's – main – argument” that there is “no consent based on EU law”,⁴⁵⁴ as follows:

1. jurisdiction is based on ECT Article 26 and ICSID Convention Article 25 rather than EU law; and
2. EU law “is not applicable to determine the Tribunal's jurisdiction”.⁴⁵⁵

310. The Claimants further respond to the EU law arguments as follows:

1. the 15 January 2019 Declaration “is not a legally binding document”,⁴⁵⁶ it “mainly paves the way” for the BIT Termination Agreement, and, regarding the ECT, in undertaking no. 9 the Member States state that they “will discuss [...] whether any additional steps are necessary to draw all the consequences from the Achmea judgment in relation to the intra-EU application of the Energy Charter Treaty”;⁴⁵⁷
2. “future tense suggests that the signatories do not consider that their intra-EU BITs have already been terminated for invalidity of the underlying consent, much less that an equivalent result already has been accomplished with respect to the intra-EU application of the ECT”;⁴⁵⁸

⁴⁵³ Cl. Response on Rule 41(5), para. 69. ↩
⁴⁵⁴ Cl. Mem. on Juris., para. 18, referring to Resp. Mem. on Juris., paras. 30 et seq. ↩
⁴⁵⁵ Cl. Response on Rule 41(5), Sec. IV.B.1; Cl. Rej. on Rule 41(5), para. 8; Cl. Mem. on Juris., Sec. II.C. ↩
⁴⁵⁶ Cl. Response on Rule 41(5), para. 21; Cl. Mem. on Juris., para. 20. See also Cl. Response on Rule 41(5), fn. 29, where the Claimants state: Contrary to para. 179 of the 41(5) Application, where Germany alleges, without any argument or proof: “The January 2019 Declaration is a binding instrument originating from sovereign States”. Since this sentence is contained in a section titled “The Tribunal Must Deny its Jurisdiction Based on the Political Developments since 2018” (sic! Germany really argues that “Political Developments since 2018” deprive the Tribunal of its jurisdiction), it may be that Germany wants to say that the January 2019 Declaration is somewhat “politically binding” - clearly, a legally irrelevant assertion. ↩
⁴⁵⁷ Cl. Mem. on Juris., para. 20; RL-0006, 2019, para. 9. ↩
⁴⁵⁸ Cl. Mem. on Juris., para. 21; CL-0014, Eskosol v. Italy, para. 217. ↩

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3. the VCLT “provides specific procedures in this regard, yet there is no assertion in the January 2019 Declaration that these procedures have been commenced, much less completed”;⁴⁵⁹
4. the judgments of the CJEU, including the Achmea Judgment,⁴⁶⁰ Komstroy Judgment,⁴⁶¹ and PL Holdings Judgment,⁴⁶² do not address the Claimants' arguments and “at heart suffer from the same fundamental problem: EU law is not applicable law to determine the Tribunal's jurisdiction”;⁴⁶³
5. the same applies to the CJEU decisions European Food and Opinion 2/13, in that:
   1. the European Food Judgment adds nothing to the analysis, as the Claimants explain that it simply states that “the arbitral award delivered by that court [by 'that court' the CJEU appears to refer to an ICSID tribunal] is not subject, in accordance with Articles 53 and 54 of the ICSID Convention, to any review by a court of a Member State as to its compliance with EU law”, and it cannot deprive the Tribunal as an international tribunal of its jurisdiction under the ECT and the ICSID Convention;⁴⁶⁴ and
   2. CJEU Opinion 2/13⁴⁶⁵ stated that accession of the EU to the ECHR would violate EU law and said that as result of the EU's accession to the ECHR the ECHR would form an integral part of EU law, which does not deprive the Tribunal of its jurisdiction, given that the EU and EU Member States are Contracting States to the ECT and “[w]hether or not, as a matter of EU law, the ECT is part of EU law has no bearing on the Tribunal's jurisdiction

⁴⁵⁹ Cl. Mem. on Juris., para. 22. ↩
⁴⁶⁰ RL-0004, Achmea Judgment, as cited in Resp. Mem. on Juris., para. 39. ↩
⁴⁶¹ RL-0007, Komstroy Judgment, as cited in Resp. Mem. on Juris., paras. 43-47. ↩
⁴⁶² RL-0014, PL Holdings Judgment, as cited in Resp. Mem. on Juris., para. 48. ↩
⁴⁶³ Cl. Mem. on Juris., para. 23. ↩
⁴⁶⁴ Cl. Mem. on Juris., para. 24(i), citing RL-0019, European Food Judgment, para. 142. ↩
⁴⁶⁵ RL-0046, CJEU Opinion 2/13, as cited in Resp. Mem. on Juris., paras. 149-152. ↩

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whose jurisdiction is based on Article 26 of the ECT and Article 25 of the ICSID Convention”;⁴⁶⁶ and

6. the Respondent's “recent developments” concerning EU Member States are “unavailing for the purpose of the Tribunal's jurisdiction”,⁴⁶⁷ including:
   1. staying of enforcement of certain non-ICSID awards issued against Spain before the US courts;⁴⁶⁸
   2. the position of the European Commission in another set of enforcement proceedings before the US courts;⁴⁶⁹
   3. Italy's annulment proceedings and request to continue stay of enforcement;⁴⁷⁰
   4. the Lithuanian Supreme Court decision finding that a pending intra-EU investor-State arbitration before an ICSID tribunal did not bar national proceedings on the same subject matter;⁴⁷¹
   5. the Svea Court of Appeal decision finding that “there was no longer a need for a preliminary ruling from the CJEU in accordance with Article 267 TFEU regarding the question whether Articles 19 and 4(3) TFEU and Articles 267 and 344 TFEU have to be interpreted as precluding the arbitration clause in Article 26 ECT”;⁴⁷² and
   6. the decisions by the German Federal Court of Justice and the German Federal Constitutional Court upholding the intra-EU Objection.⁴⁷³

⁴⁶⁶ Cl. Mem. on Juris., para. 24(ii). ↩
⁴⁶⁷ Cl. Mem. on Juris., para. 25. ↩
⁴⁶⁸ Cl. Mem. on Juris., para. 25(i), referring to Resp. Mem. on Juris., paras. 57-59. ↩
⁴⁶⁹ Cl. Mem. on Juris., para. 25(ii), referring to Resp. Mem. on Juris., paras. 60-61. ↩
⁴⁷⁰ Cl. Mem. on Juris., para. 25(iii), referring to Resp. Mem. on Juris., para. 62. ↩
⁴⁷¹ Cl. Mem. on Juris., para. 25(iv), referring to Resp. Mem. on Juris., paras. 66-69. ↩
⁴⁷² Cl. Mem. on Juris., para. 25(v), referring to Resp. Mem. on Juris., paras. 70-74. ↩
⁴⁷³ Cl. Mem. on Juris., para. 25(vi), Resp. Mem. on Juris., paras. 75-80. ↩

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311. The Claimants point out that the Respondent “bemoans” that the intra-EU jurisdiction objection had been rejected by more than 60 international arbitral tribunals, but the Respondent does not argue their impact on this Tribunal's jurisdiction.⁴⁷⁴ The Claimants maintain that the Tribunal is not bound by decisions by other international arbitral tribunals, but that as noted in the prior decision in Saipem v. Bangladesh:⁴⁷⁵

[The Tribunal] is of the opinion that it must pay due consideration to earlier decisions of international tribunals. It believes that, subject to compelling contrary grounds, it has a duty to adopt solutions established in a series of consistent cases. It also believes that, subject to the specifics of a given treaty and of the circumstances of the actual case, it has a duty to seek to contribute to the harmonious development of investment law and thereby to meet the legitimate expectations of the community of States and investors towards certainty of the rule of law.

vi. International Law Interpretation

312. The Claimants argue that the Tribunal's jurisdiction is properly based on ECT Article 26 and ICSID Convention Article 25, in particular ECT Articles 26(1) and Article 26(3)(a), providing that:⁴⁷⁶

(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. ... (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.

1) Applicable Law (ECT Article 26(6))

313. As to the law determinative of the Tribunal's jurisdiction, the Claimants identify and rebut five primary arguments put forward by the Respondent seeking to use EU law to deprive

⁴⁷⁴ Cl. Mem. on Juris., para. 26, referring to Resp. Mem. on Juris., para. 9. ↩
⁴⁷⁵ Cl. Mem. on Juris., para. 26; CL-0140, Saipem S.p.A. v. People's Republic of Bangladesh, ICSID Case No. ARB/05/07, Decision on Jurisdiction, 21 March 2007 (“Saipem v. Bangladesh”), para. 67. See also CL-0024, Duke Energy Electroquil Partners and Electroquil S.A. v. Republic of Ecuador, ICSID Case No. ARB/04/19, Award, 18 August 2008 (“Duke Energy v. Ecuador”), para. 117; CL-0013, Landesbank v. Spain, para. 106. ↩
⁴⁷⁶ Cl. Response on Rule 41(5), para. 32; CL-0001 / RL-0084, ECT, Arts. 26(1), 26(3)(a). ↩

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the Tribunal of its jurisdiction, including arguments regarding:⁴⁷⁷ (i) the applicable law clause in Article 26(6) of the ECT; (ii) the rule of treaty interpretation in Article 31(3)(c) VCLT; (iii) the lex posterior rule in Article 30(4)(a) VCLT; (iv) the treaty modification rule in Article 41(1)(b) VCLT; and (v) Article 351 TFEU.

314. The Claimants argue that the Respondent is incorrect that:

1. Article 26(3) ECT consent to arbitrate “must be interpreted in light of Art. 26(6) ECT which states” that “[a] tribunal established under paragraph 4 shall decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law”;⁴⁷⁸ and
2. “EU law is part of international law, and therefore has to be applied by a tribunal established on the basis of Art. 26 ECT as a matter of law, both with regard to the validity of the arbitration agreement and the merits”.⁴⁷⁹

315. They submit that, in order to understand the meaning of “issues in dispute”, one should consider ECT Article 26(1), which provides insight into a “dispute” under the ECT:⁴⁸⁰

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.

316. The Claimants argue that references to “dispute” in ECT Article 26(1) and “issues in dispute” in Article 26(6) concern Part III of the ECT, which “sets out the substantive standards of treatment and protection to which investments are entitled” and “does not include the provisions on dispute settlement, which appear in Part V of the ECT”.⁴⁸¹ Therefore, they submit, “the provision concerning the applicable law set out in Article 26(6) is not relevant to issues concerning the dispute settlement clause in Article 26

⁴⁷⁷ Cl. Response on Rule 41(5), para. 46. ↩
⁴⁷⁸ Cl. Response on Rule 41(5), para. 48, referring to Resp. Rule 41(5) Application, para. 123; CL-0001 / RL-0084, ECT, Art. 26(6) (emphasis added by the Claimants). ↩
⁴⁷⁹ CL. Response on Rule 41(5), para. 49, referring to Resp. Rule 41(5) Application, para. 129. ↩
⁴⁸⁰ CL. Response on Rule 41(5), para. 50; CL-0001 / RL-0084, ECT, Art. 26(1). See also Cl. Mem. on Juris., para. 38. ↩
⁴⁸¹ Cl. Response on Rule 41(5), para. 51. ↩

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ECT”; it only applies to the merits of a dispute and not to issues or questions relating to jurisdiction.⁴⁸²

317. In their Memorial on Jurisdiction, the Claimants further refer to the prior decision in Landesbank v. Spain, where the tribunal found that:⁴⁸³

The “issues in dispute” to which Article 26(6) refers are those issues which are in dispute on the merits of the case; the provision becomes applicable only once the jurisdiction of the Tribunal has been established over a “dispute” falling within the provisions of Article 26(1) to (5). The Tribunal does not accept that the difference in wording between this provision and Article 27(3)(g) of the ECT – which directs a tribunal in an inter-State case to “decide the dispute in accordance with this Treaty and applicable rules and principles of international law” – indicates a broader scope of application for Article 26(6). The Respondent has not directed the Tribunal to any materials - whether in the travaux préparatoires, subsequent practice, case-law or commentary - which would support the inference which it seeks to draw from the slight difference in wording between the two provisions.
Moreover, even if it were applicable, Article 26(6) would not have the effect for which the Respondent contends. That provision does not require the Tribunal to accord primacy to EU law even in an inter-State case. When applicable, Article 26(6) directs a tribunal to “decide the issues in dispute in accordance with this Treaty and applicable rules and principles of international law.” It thus requires a tribunal to begin with the provisions of the ECT; it does not direct it to adopt an interpretation of the ECT which goes against the ordinary meaning of the words used on the basis that a rule of international law, applicable only between some of the Contracting Parties to the ECT, may run counter to that ordinary meaning.

318. They submit further that even if Article 26(6) did apply to jurisdiction, “the effect would not be to incorporate EU law as part of the applicable law”, based on both “natural and ordinary meaning” of Article 26(6) and “context” in relation to other ECT provisions.⁴⁸⁴

⁴⁸² Cl. Response on Rule 41(5), para. 51, citing CL-0018, Vattenfall v. Germany, para. 121. ↩
⁴⁸³ Cl. Mem. on Juris., para. 39; CL-0013, Landesbank v. Spain, paras. 159-160. See also CL-0018, Vattenfall v. Germany, para. 121; CL-0139, Sevilla Beheer B.V. and others v. Kingdom of Spain, ICSID Case No. ARB/16/27, Decision on Jurisdiction, Liability and the Principles of Quantum, 11 February 2022 (“Sevilla Beheer v. Spain”), para. 620; CL-0141, Cavalum SGPS, S.A. v. Kingdom of Spain, ICSID Case No. ARB/15/34; Decision on Jurisdiction, Liability and Directions on Quantum, 31 August 2020 (“Cavalum v. Spain”), para. 370; CL-0142, Infracapital F1 S.à r.l. and Infracapital Solar B.V. v. Kingdom of Spain, ICSID Case No. ARB/16/18, Decision on Jurisdiction, Liability and Directions on Quantum, 13 September 2021 (“Infracapital v. Spain”), para. 293. ↩
⁴⁸⁴ Cl. Response on Rule 41(5), para. 52; Cl. Mem. on Juris., para. 31. ↩

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2) Successive Treaties (VCLT Article 30)

319. The Claimants set out their observations on VCLT Article 30 (and its interrelationship with VCLT Articles 41(1) and 16), as set out below.

320. As to VCLT Article 30(4)(a), the Claimants argue that the Respondent is wrong that the EU Treaties are the later treaties as compared to the ECT,⁴⁸⁵ because the “change to the EU's - external – common commercial policy (now enshrined in Article 207 TFEU) is entirely irrelevant for the purposes of determining the Tribunal's jurisdiction”, as demonstrated by the Respondent's (and the CJEU's in the Achmea Judgment) reliance on TFEU Article 267 in its predecessor forms (Treaty of Rome Article 177 and EC Treaty Article 234), as well as TFEU Article 344 (Treaty of Rome Article 219 and ECT Treaty Article 292), in force since 1 January 1958.⁴⁸⁶

321. Further, even if the Tribunal considered the EU Treaties to be the later, they do not relate “to the same subject matter” within the meaning of VCLT Article 30(1) which is necessary in order for the Respondent's argument to succeed.⁴⁸⁷ The Claimants note that:

1. the ILC Report on Fragmentation of International Law explains that “the notion of a 'regime' points to the institutional arrangements that may have been established to link sets of treaties to each other”, which allows more reasonable inferences in regulating potential overlaps or conflicts;⁴⁸⁸
2. the Report also explains that the “identification of such ‘treaty regimes' aids in application of principles of lex posterior or lex specialis, since ‘the argument from [such principles] seems clearly more powerful between treaties within a regime than between treaties in different regimes'”;⁴⁸⁹ and

⁴⁸⁵ Cl. Response on Rule 41(5), para. 58, referring to Resp. Rule 41(5) Application, para. 145. ↩
⁴⁸⁶ Cl. Response on Rule 41(5), paras. 57-58; CL-0018, Vattenfall v. Germany, para. 218. ↩
⁴⁸⁷ Cl. Response on Rule 41(5), para. 59; CL-0017, VCLT, Art. 30(1). ↩
⁴⁸⁸ Cl. Response on Rule 41(5), para. 60; C-0039, International Law Commission, Fragmentation of International Law, UN Doc. A/CN.4/L.682, 13 April 2006 (“ILC, Fragmentation Report”), para. 256. ↩
⁴⁸⁹ Cl. Response on Rule 41(5), para. 60; C-0039, ILC, Fragmentation Report, para. 255. ↩

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3. the ECT and the EU Treaties cannot be considered part of the same “treaty regime”,⁴⁹⁰ because the ECT Preamble reflects that:
   1. its signatories “undertook to pursue the objectives and principles” of an EU document, the European Energy Charter, and “broaden their cooperation” multilaterally in support of various specifically stated goals;
   2. such goals included “the effective implementation of full national treatment and most favoured nation treatment”, the “progressive liberalization of international trade and [...] avoidance of discrimination in international trade” in the energy sector and steps towards “the most efficient exploration, production, conversion, storage, transport, distribution and use of energy”;
   3. its signatories “agreed to detailed rules for ‘Investment Promotion and Protection' set out in Part III, and to equally detailed rules for ‘Dispute Settlement' set out in Part V, to apply on a broad multilateral basis”;
   4. the objective of Part III is “to provide for specific guarantees, defined in terms of international law rather than domestic law principles, in order to encourage international flows of investment into the energy sectors of at least certain ECT Contracting Parties”;
   5. the objective of Part V is “to provide specific mechanisms, again at an international level and removed from domestic law, for resolving disputes about whether the Part III guarantees had been observed”; and
   6. numerous ICSID tribunals have confirmed the view that this means they were not the same subject matter as the EU Treaties.⁴⁹¹

322. Further in relation to VCLT Article 30(1), the Claimants submit that it is moot because ECT Article 16 includes specific provisions dealing with its relationship to other treaties

⁴⁹⁰ Cl. Response on Rule 41(5), para. 61 and fn. 81. ↩
⁴⁹¹ Cl. Response on Rule 41(5), para. 61, citing CL-0014, Eskosol v. Italy, para. 145; CL-0018, Vattenfall v. Germany, paras. 217-218. ↩

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(i.e., its own conflicts rule),⁴⁹² making the general rule of lex posterior in VCLT Article 30 a subsidiary one, because lex specialis prevails.⁴⁹³ Therefore, even if the EU Treaties and ECT did relate to the same subject matter, Article 16 “is necessarily applicable”.⁴⁹⁴

323. As to the Respondent's argument that “the relevant provisions of EU law must be deemed to be a modification inter se by the EU Member States of the provisions of the ECT”, according to the Claimants, it too must fail because:

1. it is contrary to ECT Article 16;
2. “it is completely unclear what modification of the ECT is deemed to have taken place”; and
3. “there has been no notice to the other Contracting Parties” pursuant to VCLT Article 41(2).⁴⁹⁵

324. The Claimants further submit that, nothing in the Lisbon Treaty:

1. “even purported to be an exercise of powers to ‘conclude an agreement to modify' the ECT as among EU Member States” (the starting point for VCLT Article 41(1));
2. “refers to the ECT, much less expresses an intent to modify the ECT's reach or application”; or
3. suggests that the EU followed VCLT Article 41(2) procedures “for advance notification of other ECT Contracting Parties of their intention to conclude an

⁴⁹² Cl. Response on Rule 41(5), para. 62. CL-0001 / RL-0084, ECT, Art. 16 states: 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. ↩
⁴⁹³ Cl. Response on Rule 41(5) Application, para. 62; CL-0018, Vattenfall v. Germany, para. 217. ↩
⁴⁹⁴ Cl. Response on Rule 41(5) Application, para. 62; CL-0013, Landesbank v. Spain, para. 183. ↩
⁴⁹⁵ Cl. Response on Rule 41(5) Application, para. 63; CL-0013, Landesbank v. Spain, para. 186; CL-0018, Vattenfall v. Germany, para. 221. See also Cl. Mem. on Juris., para. 45. ↩

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agreement which henceforth would legally modify ECT obligations among EU Member States”, and it would be inconsistent “with that process for States to make no reference in an inter se agreement to any intention to formally modify or withdraw from prior commitments made through a multilateral instrument, and then subsequently claim that the inter se agreement modified the multilateral treaty without any prior notice to the other Contracting Parties”.⁴⁹⁶

325. As to the Respondent's arguments regarding the conflicts rules in the TFEU and ECT, the Claimants submit that TFEU Article 351 does not apply and, in any event, cannot deprive the Tribunal of its jurisdiction. In particular, they argue that:

1. on a plain reading TFEU Article 351 relates to agreements between EU Member States and “third states” (non-EU Member States);
2. the Respondent's argument that ECT Article 16(2) “must remain inapplicable”,⁴⁹⁷ “is not understood”;
3. ECT Article 16 is lex specialis, its application “confirms the effectiveness of Article 26 ECT and the Claimants' right to dispute resolution, notwithstanding any less favourable terms under the EU Treaties”;
4. if the Parties intended a different result “it would have been necessary to include explicit wording to that effect in the ECT”;⁴⁹⁸ and
5. in this regard the prior decision in Vattenfall v. Germany found that “Article 16 poses an insurmountable obstacle to Respondent's argument that EU law prevails over the ECT”.⁴⁹⁹

⁴⁹⁶ Cl. Response on Rule 41(5), para. 64; CL-0014, Eskosol v. Italy, para. 150. ↩
⁴⁹⁷ Cl. Response on Rule 41(5), para. 65, referring to Resp. Rule 41(5) Application, para. 168. ↩
⁴⁹⁸ Cl. Response on Rule 41(5), para. 66; Cl. Mem. on Juris., paras. 27-34. ↩
⁴⁹⁹ Cl. Response on Rule 41(5), para. 66. Cl. Mem. on Juris., para. 28; CL-0018, Vattenfall v. Germany, para. 229. See also CL-0013, Landesbank v. Spain, para. 193. ↩

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3) General Interpretation (VCLT Article 31(1))

326. According to the Claimants, the Tribunal's jurisdiction is based on Article 26 of the ECT and Article 25 of the ICSID Convention,⁵⁰⁰ and ECT Article 26 “as the primary basis for the Tribunal's jurisdiction, has to be interpreted in accordance with Article 31 VCLT in the first instance”.⁵⁰¹ They submit that the Respondent's argument that:⁵⁰²

[t]he wording of the ECT clearly confirms that it is not meant to be applied to intra-EU disputes' depends on reading the provision in the context of the other provisions of the ECT to see if an intent to exclude intra-EU disputes can be located there and imported back into Article 26 of the ECT, as a significant implied constraint on the otherwise ‘unconditional consent' to arbitration contained in Article 26(3)(a) ECT.

327. Regarding the ordinary meaning of ECT Article 26, the Claimants rely on the following points:

1. the opening words of ECT Article 26(1) (“Disputes between a Contracting Party and an Investor of another Contracting Party”) include Ireland and Germany as Contracting Parties “at the times relevant to this dispute”;⁵⁰³ and
2. nothing in the text of ECT Article 26 “suggests that its scope was intended to be restricted to disputes involving either an investor or a Contracting Party outside of the EU”.⁵⁰⁴

328. Regarding the ordinary meaning of ECT Articles 1(2) and 1(10) – definitions that a Contracting Party may be either an individual State or a REIO, the “Area” of an individual State in terms of the physical “territory under its sovereignty” and the “Area” of a REIO as the collective “Areas of the member states of such Organization, under the provisions contained in the agreement establishing that Organization” – the Claimants argue that this language does not support the Respondent's propositions. The Claimants highlight the

⁵⁰⁰ Cl. Response on Rule 41(5), para. 32. ↩
⁵⁰¹ Cl. Response on Rule 41(5), para. 33. ↩
⁵⁰² Cl. Response on Rule 41(5), para. 35, quoting Resp. Rule 41(5) Application, para. 101. ↩
⁵⁰³ Cl. Response on Rule 41(5), para. 34; CL-0001 / RL-0084, ECT, Art. 26(1). ↩
⁵⁰⁴ Cl. Response on Rule 41(5), para. 35. ↩

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following arguments from the Respondent, which they submit “have been tried and tested in many arbitrations” and “have always failed”,⁵⁰⁵ namely that:

1. “by using these terms in Article 26, the ECT Contracting Parties demonstrated an intent to eliminate any possibility of an intra-EU claim, or at least any possibility of such a claim relating to a ‘matter' for which Member States had ‘transferred competence' to the EU”, and
2. “an EU national's investment in Germany is not a foreign investment as such, i.e., ‘not an investment in the area of another Contracting Party, but in the area of the same Contracting Party'”.⁵⁰⁶

329. As to the Respondent's authorities, the Claimants argue that these do not assist because:⁵⁰⁷

1. the commentary by Geraets and Reins supports “the uncontroversial point that Article 1(10) of the ECT contains definitions of ‘Area' with respect to a State that is a Contracting Party and with respect to a REIO that is a Contracting Party”, whereas the Claimants argue that “it is not only the EU that is a Contracting Party to the ECT but also, individually and separately, each of Ireland and Germany”;⁵⁰⁸
2. the Advocate General Bot Opinion, which states that the position of Canadian investors investing in the EU is “not comparable” with European investors investing in their own economic area, is irrelevant because:
   1. the Opinion is non-binding even under EU law;
   2. EU law “is not applicable to determine the Tribunal's jurisdiction”; and

⁵⁰⁵ Cl. Response on Rule 41(5), para. 37, referring to CL-0018, Vattenfall v. Germany, paras. 182-183. ↩
⁵⁰⁶ Cl. Response on Rule 41(5), para. 36, referring to Resp. Rule 41(5) Application, paras. 101 et seq. ↩
⁵⁰⁷ Cl. Mem. on Juris., para. 28. See Resp. Mem. on Juris., paras. 110-118 and the sources cited therein. ↩
⁵⁰⁸ Cl. Mem. on Juris., para. 28(i); RL-0034, D. Geraets and L. Reins, “Article 1: Definitions” in R. Leal-Arcas (ed.), Commentary on the Energy Charter Treaty, 2018 (excerpt), p. 43. ↩

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3. the Opinion does not “say that an intra-EU ECT ICSID tribunal would, as a matter of EU law, not have jurisdiction”;⁵⁰⁹ and

3. the article by Maja Smrkolj is unavailing because, although the Respondent says it confirms its view that “[a]n explicit disconnection clause is simply not necessary and superfluous due to the use of the REIO clause in Art 1(3) and (10) ECT”, it “does not even refer to the ECT, much less to the REIO clause in Article 1(3) and (10) of the ECT”.⁵¹⁰

330. The Claimants refer to the prior decision in Vattenfall v. Germany, where the tribunal held:⁵¹¹

1. “[i]f it was intended by Articles 1(2), 1(3) and 1(10) ECT that the offer to arbitrate in Article 26 ECT was only made to Investors from non-EU Member States, it would have been necessary to include explicit language to that effect in the Treaty, which is not there”; and
2. “[w]ithout such language, in accordance with these provisions, an EU Member State which is a Contracting Party to the ECT may be a respondent State under Article 26 with respect to an Investment in its Area. Equally, the EU as an REIO under the ECT may be a respondent in a dispute regarding an Investment in its Area”.

⁵⁰⁹ Cl. Mem. on Juris., para. 28(ii); RL-0035, Opinion 1/17, para. 207. ↩
⁵¹⁰ Cl. Mem. on Juris., para. 28(iii); RL-0036, M. Smrkolj, The Use of the “Disconnection Clause” in International Treaties: What does it tell us about the EC/EU as an Actor in the Sphere of Public International Law, 14 May 2008 (unpublished paper). ↩
⁵¹¹ Response to Rule 41(5) Application, para. 37; CL-0018, Vattenfall v. Germany, para. 182. See also Cl. Response on Rule 41(5), fn. 54, where the Claimants state: As the Vattenfall tribunal added at para. 183: “This interpretation is consistent with the conclusions reached by other arbitral tribunals. In Eiser v. Spain, the tribunal rejected the view that an Investor from one EU Member State has made its Investment in the same ‘Area' as a respondent State which is another EU Member State. In Charanne v. Spain, the tribunal held that Investments made in the territory' of an EU Member State refers to both 'the territory of a national State as well as the territory of the EU'. In Novenergia v. Spain, the tribunal found that 'even though the EU itself is a Contracting Party of the ECT, this does not eliminate the EU Member States' individual standing as respondents under the ECT.” Needless to say, there were many other decisions following the decision in Vattenfall v. Germany, which have adopted exactly the same position. ↩

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331. For natural and ordinary meaning, the Claimants further rely on the prior decision in Eskosol v. Italy:⁵¹²

[T]he phrase “rules and principles in international law” cannot be interpreted as encompassing EU law, which is a regional and not a worldwide system of law. This was well understood by the Eiser tribunal, when it rejected the argument that “the treaties creating the EEC and the EU [...] constitute 'applicable rules and principles of international law' for purposes of Article 26(6).” The Vattenfall tribunal likewise concluded that 'EU law does not constitute principles of international law which may be used to derive meaning from Article 26 ECT, since it is not general law applicable as such to the interpretation and application of the arbitration clause in another treaty such as the ECT.' This Tribunal reaches the same conclusion with respect to Article 26(6), based on the “natural and ordinary meaning” of its terms, as they are understood within the broader field of public international law.

4) Context, Object and Purpose (VCLT Article 31(1), (2))

332. In response to the Respondent's additional context, object and purpose arguments pursuant to VCLT Article 31, the Claimants submit that:

1. ECT Article 25 is not relevant to the analysis (i.e., that the ECT “‘shall not be so construed as to oblige a Contracting Party which is party to an Economic Integration Agreement [...] to extend, by means of most favoured nation treatment', any equivalent ‘preferential treatment' to other States that are not members of the same Economic Integration Agreement”), and, if anything, “demonstrates that the EU had the ability ... to incorporate provisions specific to its circumstances, in order to delineate precisely any desired limitations to the reach of particular ECT provisions, such as the MFN provision addressed in Article 25”, but did not do so for Article 26;⁵¹³
2. the ECT negotiating history and “central role that the EU allegedly played in the creation of the ECT”, does not mean that the object and purpose “was confined in the way suggested by the Respondent”, and instead the “best guide to the object and

⁵¹² Cl. Response on Rule 41(5), para. 53; CL-0014, Eskosol v. Italy, para. 121 (citing, in turn, CL-0022 / CL-0041, Eiser v. Spain, paras. 197-198; CL-0018, Vattenfall v. Germany, para. 133). See also Cl. Mem. on Juris., para. 41. ↩
⁵¹³ Cl. Response on Rule 41(5), para. 39; CL-0014, Eskosol v. Italy, para. 95. ↩

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purpose” is Article 2 entitled “Purpose of the Treaty”,⁵¹⁴ which does not support that its provisions “were intended to apply only to Western investment in Eastern Europe, as Germany would appear to suggest”;⁵¹⁵

3. the ECT Article 2 reference to “Charter” is to the European Energy Charter, a non-binding document adopted by the Hague Conference on the European Energy Charter on 17 December 1991, which refers to the importance of the energy sector in former Communist States, “but there is nothing in the Charter which suggests that it was intended to apply exclusively to investment in those States” and instead Title III “refers to the possibility of special transitional arrangements for those States, implying that other States would be subject to obligations which would not be phased in in this fashion”;⁵¹⁶
4. if the ECT drafters intended to give Article 26 the meaning the Respondent suggests, “such that it would not allow for intra-EU investment arbitration, they had a simple tool at their hands: to insert a disconnection clause”, which “would operate as a carve-out to ensure that the provisions of this mixed agreement would not apply between EU Member States”;⁵¹⁷
5. the ECT travaux préparatoires shows the EU “proposed the insertion of a disconnection clause”,⁵¹⁸ but it “was ultimately dropped from the draft treaty”,⁵¹⁹ and

⁵¹⁴ Cl. Response on Rule 41(5), para. 40. CL-0001 / RL-0084, ECT, Art. 2 states: “This Treaty establishes a legal framework in order to promote long-term co-operation in the energy field, based on complementarities and mutual benefits, in accordance with the objectives and principles of the Charter”. ↩
⁵¹⁵ Cl. Response on Rule 41(5), para. 41, referring to Resp. Rule 41(5) Application, para. 116. ↩
⁵¹⁶ Cl. Response on Rule 41(5), para. 42; CL-0001 / RL-0084, ECT, Art. 1(1); CL-0019, The International Energy Charter Consolidated Energy Charter with Related Documents, 15 January 2016, “European Energy Charter” (“European Energy Charter”), Title III, pp. 34-35; CL-0013, Landesbank v. Spain, para. 120. ↩
⁵¹⁷ Cl. Response on Rule 41(5), paras. 43-44. ↩
⁵¹⁸ Cl. Response on Rule 41(5), para. 44; CL-0020, European Energy Charter Conference Secretariat, Draft Basic Agreement for the European Energy Charter, BA-15, 12 August 1992, p. 84, Item 27.18. ↩
⁵¹⁹ Cl. Response on Rule 41(5), para. 44; CL-0021, Ministerial Declaration to the Energy Charter Treaty (attached to the draft Energy Charter Treaty), 17 March 1994, Version 7, p. 6. ↩

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6. “absence of such a clause confirms that the ECT was intended to create obligations between EU Member States, including in respect of potential investor-State dispute settlement”.⁵²⁰

5) Supplementary Means (VCLT Articles 31(3) and 32)

333. As to rules between the Contracting Parties of the ECT within the meaning of VCLT Article 31(3)(c), according to the Claimants the body of practice relied upon by the Respondent “comes nowhere near establishing such rules”.⁵²¹ The Claimants argue that the Respondent's position – that “in a situation between two EU Member States, EU law should be viewed under Art. 31(3)(c) VCLT as forming an integral part of the task of interpretation ECT (sic) by the Tribunal so as to avoid results that diverge from the former”⁵²² – is not supported by:

1. the practice of ECT Contracting Parties which are not Members of the EU;⁵²³
2. their reaction to the positions taken by Germany or the European Commission;⁵²⁴
3. steps by EU Member States regarding the ECT, including the Declarations and Termination Agreement, neither of which “can be said to establish rules between the parties to the ECT regarding its interpretation”:⁵²⁵
   1. the Declarations show there is no consensus among EU Member States (Hungary expressly rejected the part of the Declaration regarding the ECT and five other States considered that no position on the interpretation of the ECT should be taken);⁵²⁶

⁵²⁰ Cl. Response on Rule 41(5), para. 44; CL-0018, Vattenfall v. Germany, para. 206; CL-0013, Landesbank v. Spain, para. 123. ↩
⁵²¹ Cl. Response on Rule 41(5), paras. 55-56. ↩
⁵²² Cl. Response on Rule 41(5), para. 55, referring to Resp. Rule 41(5) Application, para. 136. ↩
⁵²³ Cl. Response on Rule 41(5), para. 56. ↩
⁵²⁴ Cl. Response on Rule 41(5), para. 56. ↩
⁵²⁵ Cl. Response on Rule 41(5), para. 56. ↩
⁵²⁶ Cl. Response on Rule 41(5), para. 57; C-0037, Declaration of the Representative of the Government of Hungary, of 16 January 2019 on the Legal Consequences of the Judgment of the Court of Justice in Achmea and on Investment Protection in the European Union; C-0038, Declaration of the Representatives of the Governments of the Member States, of 16 January on the Enforcement of the Judgment of the Court of Justice in Achmea and on Investment Protection in the European Union (signed by five EU Member States: Finland, Luxembourg, Malta, Slovenia and Sweden). ↩

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1. the Respondent shows no practice by ECT Contracting Parties outside the EU to support its view;⁵²⁷ and

2. the practice the Respondent relies on “cannot be the foundation on which to construct an agreement between the ECT Contracting Parties that Article 26 means something radically different from what it appears to say".⁵²⁸

334. For context, the Claimants rely on ECT Article 16 dealing with “Relation to other Agreements”, which they submit regulates the impact of potentially overlapping treaties and an overbroad reading of Article 26(6) would render Article 16 superfluous and contrary to the accepted notion of effet utile (i.e., words of a treaty should be interpreted so as not to deprive them of all independent meaning and effect).⁵²⁹

335. As to the Respondent's reliance on the decision in Electrabel v. Hungary to support its submission that ECT Article 16 “would ... be inapplicable because the conflict rule of the later treaty would apply, namely Article 307 EC”,⁵³⁰ the Claimants make two points:

1. EC Article 307 EC (now TFEU Article 351) “on its face does not even apply in intra-EU relations but explicitly in relations between EU Member States and non- EU Member States only”;⁵³¹ and

2. as explained by the tribunal in the prior decision in Landesbank v. Spain:⁵³²

   The Tribunal's view that Article 16 of the ECT is applicable is confirmed by the disconnection provision proposed by the EU during the negotiation of the ECT ... That provision would have added to the ECT a statement that "[i]n their mutual relations, Contracting Parties which are Members of the