Rockhopper Italia S.p.A., Rockhopper Mediterranean Ltd, and Rockhopper Exploration Plc v. Italian Republic

Case summary

At a glance

Parties: Rockhopper Italia S.p.A. (Italy), Rockhopper Mediterranean Ltd and Rockhopper Exploration Plc (United Kingdom) v. the Italian Republic
Case no.: ICSID Case No. ARB/17/14 (and annulment proceeding)
Forum and rules: ICSID Convention arbitration; ICSID Arbitration Rules 2006
Treaty: Energy Charter Treaty
Tribunal: Klaus Reichert (President), Charles Poncet, Pierre-Marie Dupuy
Committee: ad hoc Committee: Michael Nolan (President), Eva Kalnina, Carita Wallgren-Lindholm
Sector: Oil and gas; offshore exploration and production
Outcome: The Tribunal rejected Italy's intra-EU objection (26 June 2019) and found an unlawful expropriation in its Award of 23 August 2022. The ad hoc Committee annulled the Award in its entirety on 2 June 2025 because the Tribunal was not properly constituted (Article 52(1)(a)).
Amount: Award (annulled): EUR 184,000,000 (pre-tax) plus EUR 6,675,391 decommissioning costs (EUR 190,675,391 in total), with interest at EURIBOR +4% compounded annually, GBP 3,500,000 in costs and USD 301,284.18 of ICSID advances. Annulment: costs of USD 719,985.44 split equally; Rockhopper to reimburse Italy USD 359,992.72; each side bears its own legal fees.

The dispute

Rockhopper acquired in August 2014, for about EUR 36 million, the companies holding an exploration permit and a pending 2008 application for a production concession for the Ombrina Mare oil and gas field in the Adriatic off Abruzzo. Italy banned drilling within 12 miles of the coast in 2010 and created an exception for pending applications in 2012. Law No. 208 of 2015 revoked that exception, and on 29 January 2016 the Ministry of Economic Development rejected the application. Rockhopper claimed breaches of fair and equitable treatment (Article 10(1) ECT) and unlawful expropriation (Article 13 ECT). Italy objected that the ECT does not apply to intra-EU disputes, relying on Achmea and the Member States' Declaration of 15 January 2019, and contested liability. After the Award, Italy sought annulment, mainly because the claimant-appointed arbitrator, Charles Poncet, had not disclosed his criminal prosecution in Italy in the 1990s.

Key holdings

Intra-EU objection rejected. Adopting the reasoning in Blusun, the Tribunal held that nothing in the ECT carves out intra-EU disputes. It also held that no later EU law, including the Lisbon Treaty, supersedes the ECT as regards Italy. Decision on the Intra-EU Jurisdictional Objection ¶¶ 146–149
The Achmea judgment is confined to Article 8 of the Netherlands–Slovakia BIT, whose applicable-law clause required the tribunal to apply EU law. It has no application to Article 26 ECT, under which the Tribunal applies the ECT and international law. Decision on the Intra-EU Jurisdictional Objection ¶¶ 171–175
The Declaration of 15 January 2019 is not an EU legal instrument and not a collective interpretation of the ECT. Read as Italy proposed, it would amount to an amendment or a reservation, which the ECT forbids. None of Italy's objections nullified its offer to arbitrate as of the Request for Arbitration. Italy's request to suspend the proceedings pending CJEU cases was denied. Decision on the Intra-EU Jurisdictional Objection ¶¶ 179–197, 210–211
As recorded by the Committee, the Award found a direct expropriation in breach of Article 13 ECT. Under Decree 484/1994, the Environment Ministry's decree of 7 August 2015 gave Rockhopper a right under Italian law to be granted the concession, and the rejection of 29 January 2016 took that right away. Damages were assessed by DCF at the 29 January 2016 valuation date. Pierre-Marie Dupuy wrote that a fair and equitable treatment claim based on legitimate expectations would have failed. Decision on Annulment ¶¶ 105–107, 128–134
ICSID Arbitration Rule 6(2) required Dr. Poncet to disclose his criminal prosecution in Italy, even though the convictions were later annulled on limitation grounds and the facts were in the public domain. His omission was a deliberate choice, not an inadvertent oversight. A tribunal is not properly constituted when defective disclosure deprives a party of its right to challenge an arbitrator. Decision on Annulment ¶¶ 333–350
An objective observer knowing all the facts could reasonably doubt Dr. Poncet's reliability for independent judgment in a case against the State that prosecuted and convicted him. The Committee rejected Italy's separate argument that he lacks high moral character, citing the presumption of innocence after the annulment of his convictions. Decision on Annulment ¶¶ 356, 370, 382–383
Italy had not waived its objection: it acted promptly given Dr. Poncet's disclosure and had no duty to investigate him. The Award was annulled in its entirety under Article 52(1)(a), and no exceptional circumstances weighed against annulment. The Article 52(1)(d) ground was not established, and the remaining grounds were not examined. Each side bears half the annulment costs and its own legal fees. Decision on Annulment ¶¶ 402, 406, 410, 416, 432–435

Procedural history

14 April 2017Request for Arbitration filed with ICSID; registered on 19 May 2017.
26 September 2017Tribunal constituted.
4–8 February 2019Hearing on jurisdiction, merits and quantum in Paris.
26 June 2019Decision on the Intra-EU Jurisdictional Objection: objection and request for suspension denied.
20 December 2021Decision denying Italy's request to reconsider jurisdiction in light of the CJEU's Komstroy judgment.
23 August 2022Award: unlawful expropriation under Article 13 ECT; EUR 190,675,391 in damages, with an Individual Opinion by Pierre-Marie Dupuy.
20 October 2022Italy files its Request for Annulment with a stay request; ICSID registers it and provisionally stays enforcement on 31 October 2022.
10 July 2023Procedural Order No. 2: the stay terminates once Rockhopper puts escrow arrangements in place.
11–12 April 2024Hearing on annulment in Madrid. On 1 October 2024 the Committee denies the European Commission's application to intervene.
2 June 2025Decision on Annulment: the Award is annulled in its entirety under Article 52(1)(a).

Tribunal, counsel and experts

Decided by: Klaus Reichert President — chosen by the co-arbitrators
Charles Poncet Co-arbitrator — appointed by the claimant (Award annulled for improper constitution owing to his non-disclosure of Italian criminal proceedings)
Pierre-Marie Dupuy Co-arbitrator — appointed by the respondent (individual opinion on the Award)
Michael D. Nolan Committee president — appointed by the institution
Eva Kalnina Committee member — appointed by the institution
Carita Wallgren-Lindholm Committee member — appointed by the institution
For the claimant: King & Spalding LLP
For the respondent: Avvocatura Generale dello Stato · Ministry of Foreign Affairs (external counsel) · Di Pietro Arbitration · Ludovica Chiussi Curzi
Experts: David Wilson (claimant) · Eugenio Picozza (respondent)