Veolia Propreté SAS v. Italian Republic
ICSID · Investment (ICSID and treaty) · Italy · 26 Sep 2025
Why it matters
This award is significant as it is one of the few ICSID awards on intra-EU disputes post-Achmea, confirming that the ECT's umbrella clause can protect contractual commitments even in an intra-EU context. It also clarifies the scope of FET in relation to frustrating investment projects and sets a precedent for calculating damages in long-term concession agreements where the state fails to meet its obligations.
Summary
Veolia Propreté SAS, a French company, invested in Italy through its subsidiary TMT, which held two long-term concessions for waste management: the TEC Concession in Calabria (15 years) and the TEV Concession in Tuscany (19 years). Veolia acquired TMT in 2007. The concessions required the Italian authorities (Commissari) to pay gate fees, update them periodically, guarantee minimum waste quantities, and pay a public contribution (Contributo). Italy failed to timely pay and adjust gate fees, did not pay the Contributo, and did not meet guaranteed waste quantities. Additionally, Italy frustrated the completion of two plants (TEC2 and Sambatello 2). Veolia's subsidiary became insolvent. Veolia initiated ICSID arbitration under the ECT. Italy raised jurisdictional objections, including that the dispute was intra-EU and that the fork-in-the-road clause barred the claim. The Tribunal dismissed all jurisdictional objections, finding it had jurisdiction ratione personae and materiae. On the merits, the Tribunal found Italy breached the umbrella clause (Article 10(1) last sentence) by failing to observe contractual obligations regarding gate fees, Contributo, and waste quantities. It also breached the FET standard by frustrating the completion of the two plants. However, the Tribunal rejected claims regarding waste quantity distribution and failure to secure landfills. On damages, the Tribunal awarded €85,832,011 for historical losses (pre-2012) but denied prospective losses due to insufficient proof. The Tribunal ordered Italy to pay pre- and post-award interest at EURIBOR + 2%, compounded annually. Each party bore its own legal costs, and Italy was ordered to reimburse Veolia USD 580,958.1 for arbitration costs.
The detail
Parties: Veolia Propreté SAS v. Italian Republic
Case number: ICSID Case No. ARB/18/20
Outcome: Italy breached the ECT (umbrella clause and FET) and was ordered to pay €85,832,011 plus interest; each party bears its own legal costs; Italy to reimburse Claimant USD 580,958.1 for arbitration costs.
Quantum: €85,832,011
Applicable law: Energy Charter Treaty (ECT), ICSID Convention, Italian law (concession agreements)
Issues in play: The case involved the interaction between Italy's contractual obligations under waste management concessions and the ECT's umbrella clause and fair and equitable treatment standard, particularly regarding Italy's failure to pay gate fees, update tariffs, and meet guaranteed waste quantities.
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