IRS Taxation of Employment Termination Compensation Under Article 2(4) CIRS – CAAD Case 177/2018-T

ARBITRAL DECISION (consult full version in PDF)

The arbitrators Fernanda Maçãs (presiding arbitrator), Dr. Nina Aguiar and Dr. Miguel Luís Cortês Pinto de Melo (members), appointed by the Deontological Council of the Administrative Arbitration Centre to form the Arbitral Tribunal, agree as follows:

REPORT

A..., with tax identification number ... and B..., with tax identification number ..., requested an arbitral opinion, pursuant to article 2(1)(a) and article 10(1)(a), both of Decree-Law No. 10/2011, of 20 January, and articles 102(1) and (2) of the Code of Tax Procedure and Process ("CPPT"), for the purpose of reviewing the legality of the additional tax assessment notice for Personal Income Tax ("IRS") No. 2017..., dated 4 December 2017, and respective compensatory interest, relating to the year 2013, in the amount of €127,601.00.

The Claimants presented the request for arbitral opinion with a view to annulling the assessments, with the further legal consequences.

The request for constitution of the arbitral tribunal was accepted by the President of CAAD and automatically notified to the Tax and Customs Authority.

The Claimants did not proceed with the appointment of an arbitrator, whereby, pursuant to article 6(2)(a) and article 11(1)(b) of the Legal Regime of Tax Arbitration ("RJAT"), the President of the Deontological Council appointed the signatories as arbitrators of the collective arbitral tribunal, who communicated their acceptance of the appointment within the deadline.

The Parties were notified of the appointment of the arbitrators and did not raise any objection.

In accordance with article 11(c) of the RJAT, the collective arbitral tribunal was constituted on 18 June 2018.

In these terms, the Arbitral Tribunal is properly constituted to review and decide on the subject matter of the case.

Grounds for the Request for Arbitral Opinion

To substantiate the request for arbitral opinion, the Claimants allege, in summary, the following:

• The decisions of the Board of Directors ("BA") of B... ("B...") were taken by the managing directors in office (all resident in Spanish territory, except the Claimant) and implemented by the Claimant;

• There existed an employment relationship and legal subordination, with the Claimant being subject to orders and direction of the Spanish Group, whereby he acted under the control and superintendence of the Spanish Group D...;

• Despite being a dependent worker, he assumed functions as delegated administrator of C... in order to implement the decisions of the BA;

• The Claimant's monthly remuneration was decided by D... ("D..."), which determined how to distribute the cost to the Spanish company, with the remainder being paid by C... (cf. Annex 6);

• After 17 years, the Claimant reaches an agreement with the employer entity (D...), having been paid compensation in the amount of €236,013.74 (cf. Annex 4);

• As for C..., since he resigned from the position, no compensation was paid;

• An IRS declaration for 2013 was submitted (Annex J) indicating that the Claimant had received from a foreign source the amount of €121,344.62;

• The income obtained results from the execution of a contract with the Spanish company (cf. Annex 5);

• In Portugal, no compensation was received since the contract was terminated unilaterally;

• The Claimant considers that, as the compensation was paid by D..., in which he exercised management functions, article 2(4)(b) shall apply, excluding from taxation the part that does not exceed the value corresponding to the average value of regular remuneration received in the last 12 months, multiplied by the number of years of seniority or service with the paying entity (cf. Annex 7);

• The indemnification contract between D..., C... and the Claimant in which it is mentioned that the Spanish company pays the sum of €236,013.74;

• From this it results that:

  • As the indemnification corresponded to €236,013.74, it is below the threshold mentioned above and therefore exempt from taxation;

  • Alternatively, he advances the possibility that if only the income obtained in Spain is considered for the purpose of calculating the exemption, the amount subject to taxation would be €37,727.62.

Response of the Tax and Customs Authority

The Tax and Customs Authority ("AT") presented its response and filed the administrative file, invoking, in summary, the following:

• The Claimant is a passive subject of IRS, which applies to all income obtained (article 13 of the General Tax Law ("LGT") and article 15(1) of the CIRS);

• In the termination contract, reference is made to payment by D... of the amount of €236,013.76 as compensation for the termination of the employment contract in 2013, which the AT states it verified in the salary receipt issued by that company and in the bank statement of the transfer made by it (Annex 8);

• The Spanish AT communicates to the Portuguese AT that the Claimant received dependent work income in the amount of €352,026, which, in accordance with articles 15 and 16 of the CIRS, are taxed in Portugal;

• The company C... declared income received by the Claimant in 2013 in the amount of €108,358.53;

• The Claimant filed the IRS declaration for the year 2013 with the value in Annex A of €108,358.53 (equal to that declared by C...) and in Annex J of €121,344.62 (part of the income declared by D...);

• The Claimant was a member of the board of directors of C..., S.A. during the preceding years;

• The Claimant receives monthly remuneration relating to the category of delegated administrator of C... (AT states it appears in the receipts) and of company D... relating to the category of director;

• Not all income was declared in accordance with article 2(3)(e), 2(4)(a) and 15(1) of the CIRS;

• The AT considers that part of the indemnification relates to the termination of the employment relationship that the Claimant held with all companies in the group and should be allocated, in its proportionate share, to C..., which will be taxed in its entirety, since the Claimant was administrator of the company (cf. Annex 2);

• The allocation to be considered is as follows:

  • Thus, in accordance with article 2(4)(a), the proportionate share of the indemnification relating to C... should be taxed in its entirety, since the position held was that of administrator, corresponding to €100,538.21;

  • In accordance with article 2(4)(b), the proportionate share of the indemnification relating to D... is exempt from taxation since the position held was that of director and the value of €135,475.52 is below the exemption threshold calculated under that article.

For no reason justifying it, the tribunal waived the holding of the first meeting provided for in article 18 of the RJAT, which it did pursuant to the principles of tribunal autonomy in the conduct of the case. The Tribunal set 18 December as the date for the pronouncement of the award.

The Claimants and the Respondent presented arguments reiterating the arguments presented in the previous procedural documents.

PRELIMINARY RULINGS

6.1. The parties have legal personality and capacity, show themselves to be legitimate and are properly represented (articles 4 and 10(2) of the RJAT and article 1 of Ordinance No. 112-A/2011, of 22 March).

6.2. The tribunal is competent and properly constituted.

6.3. The case does not suffer from nullities.

6.4. No exceptions were raised.

6.5. There are no other circumstances that impede knowledge of the merits of the case.

MERITS

III.1. Matter of Fact

Proven Facts

With relevance to the examination and decision of the issues raised, preliminary and substantive, the following facts are established and proven:

• On 1 May 1997, an employment contract was entered into between A... and D..., S.A., with headquarters in Spain, with the Claimant being assigned the category of "Director";

• The Claimant exercised functions in other companies of the E... Group;

• Effective from 1 July 1977, the Claimant also began to exercise functions as Delegated Administrator of C..., SA., a position he held until August 2013;

• Effective 1 July 2001, the Claimant is incorporated into the company of the F... Group, S.A. with headquarters in Spain, where he maintained the contractual conditions initially entered into with D..., S.A.;

• Despite the mergers within the E... Group, the Claimant maintained his employment relationship with the Spanish group for a period corresponding to 17 years;

• From the RIT it appears that in the account statement No. ..., there is the transfer from D..., in the amount of €286,436.25;

• And that the company "C..., SA" proceeded with the delivery of Monthly Remuneration Statements (DMR) during the year 2013, from which the dependent work income earned by the Claimant in the amount of €108,358.53 and respective withholdings in the total amount of €42,977.00, of mandatory contributions to social protection schemes in the total amount of €5,170.18 and withholding of surcharge in the amount of €1,743.25;

• The Claimants, resident in Portuguese territory, as provided for in article 16 of the CIRS, completed Annex A of the IRS Form 3 declaration with values equal to those declared by entity C..., SA and Annex J with the value of €121,344.62 (part of the income earned by D..., SA);

• On 30 August 2013, the Claimant ceased functions by mutual agreement with D..., S.A., receiving compensation of €236,013.74, to be paid by it, highlighting from the termination agreement (cf Annex 4), in essence:

"On one hand, D..., S.A. (hereinafter, "D...") (...) On the other hand, C..., S.A. (hereinafter "C..."), (...) And on the other hand, D. A... (...) hereby manifest and agree (...)"

"D... and Mr. A... have agreed to the definitive resolution by mutual agreement of the employment relationship existing between them, effective as of 30 August 2013, pursuant to article 49.1.a) of the Workers' Statute. As compensation for the termination of his employment relationship, D... shall pay to Mr. A... the amount of €236,013.74 gross. Likewise, D... shall pay to Mr. A... the amount of €14,873.17 gross as settlement, balance and final payment, in accordance with the breakdown included in the annex to this Agreement."

"The payment of the amounts mentioned in the first and second paragraphs shall be made before 30 September 2013 by bank transfer to the account in which Mr. A... had been receiving his remuneration. Mr. A... declares that with receipt of the amounts mentioned in this Agreement, he gives the employment relationship that bound him to D... as extinct, settled and finalized to his entire satisfaction, having nothing to ask or claim from D... or any other company in the E... Group - with the exception of the settlement, balance and final payment to be made by C... for no other concept, whether salary or extra-salary, of an indemnitary nature or of any other type, including, by way of mere enumeration, any right or amount that might correspond to him as a consequence of retirement, benefits or any other compensation, such as those corresponding to overtime, vacation, economate, bonuses for achievement of objectives, variable remuneration, long-term incentives, arrears of agreement, expenses, advanced payments, contributions to pension plans, or any voluntary improvements."

"Mr. A... presents on this date his resignation as a member of the board of directors of C... effective 30 August 2013, for which he shall carry out all procedures, communications and any other formality required of him by C..., in addition to delivering signed the letter that constitutes an annex to this Agreement."

"Likewise, he undertakes to submit his resignation from all professional associations or other entities in which he acts on behalf of C... or the E... Group, with the same effective date."

"Mr. A... expressly declares to give as extinct the letter of guarantee entered into with G..., S.A.U. (G...) dated 30 June 2001, which becomes null and void from the date of signature of this Agreement. Consequently, the employment relationship of Mr. A... with G... has ceased to be suspended and is now completely extinct, and he acknowledges, without reservation of action, that he has no pending claim or demand against G... or the remaining companies of the E... Group in which he has provided services." (cf. Annex 4, which is given as fully reproduced);

• The Claimant resigned from the position of delegated administrator of C... on 30 August 2013;

• In 2017, the Claimant was subject to an internal tax inspection procedure, which was initiated with Service Order OI 2017..., notified to the Claimant, and ended on 23 November 2017;

• Notified of the correction draft, resulting from the inspection procedure, the Claimant exercised the right to be heard;

• The Claimant was notified of the additional assessment, which results in (cf. Annex 2):

  • Claimant's net income in 2013 corrected to €413,052.18 (as against €312,513.97 declared)

  • Arithmetic correction of €100,538.21

  • Notice of additional IRS assessment for the year 2013 in the amount of €127,601.11 (cf. Annex 1)

• Notwithstanding their disagreement, the Claimants proceeded with payment of the additional IRS assessment.

Facts Given as Not Proven

There are no other facts with relevance to the examination of the merits of the case that have not been proven.

Grounds for the Matter of Fact

The proven facts were based on the position of the parties freely assessed by the Tribunal and, as well, the documents attached to the file including the administrative process.

III.2. Matter of Law

III.2.1. Of the Illegality of the Challenged Additional Assessment

The question that arises in the present case is whether the amount received by the Claimant as compensation for termination of the employment contract entered into with D..., SA, where he exercised the functions of "Director", is excluded from taxation, under article 2(1)(a) and 2(4)(b) of the CIRS, as the Claimant contends in the first place, or whether, on the contrary, in the Respondent's thesis, it is not excluded from taxation, in the part of the remuneration attributed to him by C..., SA., under article 2(4)(a) of the CIRS.

The relevant provisions of the Personal Income Tax Code ("CIRS") that are relevant to the question at hand have the following wording since 2011.

Article 2 - Category A Income

1 - Dependent work income comprises all remuneration paid or made available to its holder arising from:

a) Work performed on behalf of another under an individual employment contract or other contract legally equivalent to it;

(...)

1. The following are also considered dependent work income:

e) Any indemnification resulting from the establishment, termination or modification of legal relationship that gives rise to dependent work income, including those relating to breach of contractual conditions or due to change of work location, without prejudice to the provisions of the following number and paragraph f) of article 1(1) of the following article;

(...)

1. When, in any form, the contracts underlying the situations referred to in paragraphs a), b) and c) of section 1 cease, but without prejudice to the provision of paragraph d) of the same section, regarding benefits that continue to be due even if the employment contract does not subsist, or there is cessation of the functions of public manager, administrator or manager of a legal entity, as well as representative of permanent establishment of a non-resident entity, the amounts earned, in any capacity, are always subject to taxation:

a) In their entirety, in the part that corresponds to the exercise of functions of public manager, administrator or manager of a legal entity, as well as representative of permanent establishment of a non-resident entity;

b) In the part that exceeds the value corresponding to the average value of regular remuneration with the character of compensation subject to tax, earned in the last 12 months, multiplied by the number of years or fraction of seniority or exercise of functions with the paying entity, in the other cases, except when in the following 24 months a new professional or business relationship is created, regardless of its nature, with the same entity, in which case the amounts shall be taxed in their entirety.

10 - Employer entity is considered to be any entity that pays or makes available remuneration that, under this article, constitutes dependent work income, being equated to it any other entity that has with it a relationship of group, control or simple participation, regardless of its geographical location.

Article 9 - Category G Income

1 - Non-pecuniary increments constitute, provided they are not considered income of other categories:

b) Indemnifications intended to repair non-pecuniary damage, except those determined by judicial or arbitral decision or resulting from agreement homologated judicially, of unproven emerging losses and lost profits, being considered in the latter case as such only those intended to compensate for the net benefits not obtained as a consequence of the injury;

Article 13 - Passive Subject

1 - Persons who reside in Portuguese territory and those who, not residing therein, obtain income therein, are subject to IRS.

Article 15 - Scope of Subjection

1 - With persons resident in Portuguese territory, IRS applies to all their income, including that obtained outside that territory.

Let us examine.

As results from the facts given as proven, the Claimant entered into an employment contract on 1 May 1997 with G..., S.A., with headquarters in Spain, having been assigned the category of "Director".

It equally results as proven that it was on the basis of and from that employment contract that the Claimant exercised functions in other companies of the "E... Group".

G..., S.A. always paid the claimant, while he exercised management functions in the Portuguese company C..., S.A., remuneration qualified as dependent work income, which only justifies itself by the exercise of "Director" functions by the Claimant and outside Portuguese territory.

The Portuguese Commercial Companies Code, in its article 398, would prohibit the Claimant, during the period for which he had been appointed administrator of the Portuguese company, the exercise, in the company or in companies that it is in a relationship of control or group, of any temporary or permanent functions under an employment contract, subordinate or autonomous.

This does not appear to be the case in Spain, where the Ley de Sociedades de Capital, whose consolidated text was approved by Royal Decree-Law No. 1/2010, of 2 July, does not contain a similar provision, nor was it invoked by the Respondent.

Moreover, from the termination agreement it is clear that the functions exercised by the Claimant were within the E... Group, which is not disputed by the Respondent.

Indeed, the Respondent states in the Response "Thus, there is no doubt that through the deed dated 2013/08/30, the Claimant ceases functions with the Spanish group D..., which means that the value of the compensation of €236,073.73 refers to the termination of employment that he held in the dominated companies (D..., SA and C..., SA) and that belonged to the Spanish group D..." (point 22).

"Even, because, as the RIT correctly points out, if this were not the case (which is inconceivable), for the purpose of calculating the value of the compensation, the Claimant had not added the value paid by the company "C... SA" - in which he held the position of delegated administrator - (as he did and is referred to in article 22 of the right to be heard application)" (point 23).

The Respondent concludes that there will be a part of the compensation, which corresponds to the remuneration of C... (€100,538.21), which should be taxed, pursuant to article 2(4)(a) of the CIRS, since the position held there was that of delegated administrator.

It relies on reaching this conclusion on the monthly remuneration statements delivered by C..., SA., during the year 2013 and the declaration of income of the Claimant.

However, for the Respondent to tax the income paid to the Claimant by C... under article 2(4)(a) of the CIRS, it would have the burden of demonstrating that such remuneration actually corresponds to the exercise of the position of delegated administrator and that in that capacity it was integrated in the overall amount of compensation received by the Claimant.

Or further to demonstrate that, considering only the remuneration earned in Spain for the purpose of calculation required by the negative rule of incidence, there would be an excess subject to taxation in the face of the total amount of compensation, which it did not do.

Such is not evident from the case file nor does it result from the termination agreement whose content is not disputed by the Respondent.

The Respondent further argues that if the value of the compensation related only to "Director" functions, as the Claimant seeks to demonstrate, functions that he exercised in company D..., SA, nothing prevented him, when he ceased the employment contract with this company, from continuing to hold the position of delegated administrator in the dominated company "C..., SA" and being paid for the position he held therein.

However, this argument can be understood precisely in the opposite sense.

From the termination agreement, it actually results that the termination of the employment relationship with D..., SA., materialized in the work termination contract, had as its consequence the resignation from the position of administrator in C..., SA..

It is thus verified that the functions of administrator that bound the Claimant to C..., SA., were merely instrumental or functional and strictly dependent on the employment contract entered into with D..., SA., and would necessarily have to cease with the termination agreement entered into with this company. In other words, the resignation from the position of administrator in Portugal was a necessary consequence of the termination of the employment contract that the Claimant had entered into with D..., SA..

But from this, no argument follows in favor of the Respondent's thesis.

Indeed, nothing prevents the remuneration received by the Claimant and paid by C..., SA., from not corresponding to autonomous remuneration received for the exercise of the position of administrator.

But rather it results from mere distribution of costs decided by D..., SA., or within the group, as an act of management that is proper to them.

In fact, under article 399(1) of the Commercial Companies Code, it is the responsibility of the general shareholders' meeting or a committee appointed by it to fix the remuneration of each of the administrators, taking into account the functions performed and the economic situation of the company.

The Respondent had available the obtaining, from C..., S. A., of the minutes of the general shareholders' meeting or the resolution of the committee appointed by it that had fixed the remuneration of administrator.

In the context in which the Claimant was paid, it is manifestly insufficient, to sustain the proof sought, to invoke the remuneration receipt issued by C..., S. A., as if it evidenced "the" remuneration owed to him for the exercise of administrative functions.

And it also appears manifestly insufficient, even if that were the remuneration for exercise of administrative functions, to conclude that the amount fixed for compensation for termination of the employment contract, and only for that termination in accordance with the respective agreement, took it into account, since the Claimant had an equal or greater component of remuneration for the exercise of "Director" functions, these unquestionably eligible for determining the amount excluded from taxation.

On the other hand, since the Claimant is resident in Portugal, income earned in Portugal would always have to be taxed, this argument being equally irrelevant.

In sum, the position sustained by the Respondent is based on the presumption that part of the compensation also relates to the termination of the position of administrator in C..., SA.

However, such presumption lacks legal basis, which invalidates the assessment.

It results from article 74(1) of the LGT that "the burden of proof of facts constitutive of the rights of the tax administration or of taxpayers falls on whoever invokes them".

Thus, the burden of proof of the "requisites of the facts constitutive of the rights it intends to exercise in the procedure" falls on the Respondent, whereas passive subjects shall bear the burden of proving the facts that may serve to support the realization of those rights" (DIOGO LEITE CAMPOS and Others, Lei Geral Tributária, Anotada e Comentada, 4th ed., 2012, p.654 et seq.

The Authors point out that the AT, under article 58 of the LGT, should not only "seek to carry into the procedure proofs of facts that advantage its position, for on that matter, the duty derived from the inquisitorial principle to carry out all necessary steps to discover the truth is maintained."

Now, to tax income declared in Portugal under article 2(4)(a) of the CIRS, the Respondent would have to demonstrate, it is repeated, that such income was associated with the exercise of the functions of delegated administrator in Portugal and that in that capacity it was integrated in the value of compensation received by the Claimant, which is not the case.

Furthermore, both the facts given as proven and the rules of experience, considering the framework in which the worker exercised functions, within a business group and having as reference an employment contract with a dominant company of that group, point in the direction of what is defended by the Claimants, albeit with different grounds.

In these terms, for the reasons set out, the Claimants are correct, and the application should be judged favorably, with the consequent annulment of the additional assessment now challenged.

III.2.2. Regarding the Request for Indemnificatory Interest

Finally, the Claimants request condemnation of the Respondent to pay indemnificatory interest due to overpayment of the amount corresponding to €60,412.37, under the terms and for the purposes of article 43(1) of the LGT.

In accordance with article 24(1)(b) of the RJAT, "An arbitral award on the merits of a claim that is not subject to appeal or challenge binds the tax administration from the end of the period set for appeal or challenge, and it must, in the exact terms of the success of the arbitral award in favor of the passive subject and until the end of the period set for spontaneous execution of the judgments of the tax courts, alternatively or cumulatively, as the case may be:

(...)

b) Restore the situation that would exist if the tax act subject to the arbitral decision had not been carried out, adopting the acts and operations necessary for that purpose. (...)".

In the same sense, article 100 of the LGT provides that "The Administration is obliged, in case of total or partial success of complaints or administrative appeals, or of judicial proceedings in favor of the passive subject, to the immediate and full restoration of the situation that would exist if the illegality had not been committed, comprising the payment of interest, under the terms and conditions provided for by law".

Doctrine and jurisprudence have argued that within the scope of the competences of arbitral tribunals is the determination of the effects of their decisions, in the same terms as provided for judicial challenge, specifically, regarding condemnation to indemnificatory interest or condemnation for damages due to unlawful guarantee (cfr. Carla Castelo Trindade (2016), Regime Jurídico da Arbitragem Tributária Anotado, p. 121, and Jorge Lopes de Sousa (2013), Comentário ao Regime Jurídico da Arbitragem Tributária, p. 116).

Indeed, in the legislative authorization granted to the Government for approval of the RJAT, contained in article 124 of Law No. 3-B/2010, of 28 April, it is proclaimed, undoubtedly, the intention of a true alternative between the judicial process and the tax arbitration process, where it is stated that "the tax arbitration process should constitute an alternative procedural means to the judicial challenge process and to the action for the recognition of a right or legitimate interest in tax matters".

Thus, despite article 2(1)(a) and (b) of the RJAT using the expression "declaration of illegality" to define the competence of tax arbitral tribunals, not making express reference to constitutive (annulling) decisions and condemnatory decisions, it should be understood, in accordance with the legislative authorization transcribed above and, as well, with the effects attributed to arbitral decisions provided for in article 24 of the RJAT, that the competences of tax arbitral tribunals include the powers that, in judicial challenge proceedings, are attributed to tax courts in relation to acts whose examination of (il)legality falls within their competences.

In this way, if despite the judicial challenge proceeding being essentially a mere annulment proceeding – as provided for in articles 99 and 124 of the CPPT – condemnation of the tax administration to payment of indemnificatory interest and damages due to unlawful guarantee may be pronounced therein, identical conclusion should result in the scope of the tax arbitration proceeding.

As regards indemnificatory interest, article 43(1) of the LGT provides that "indemnificatory interest is due when it is determined, in gracious complaint or judicial challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount exceeding the legally due".

In the case sub judice, as has been stated, the application of the Claimants is judged entirely successful, being that, following the illegality of the challenged additional assessment, reimbursement of the tax improperly paid is due, pursuant to article 24(1)(b) of the RJAT and article 100 of the LGT, for this is essential to "restore the situation that would exist if the tax act subject to the arbitral decision had not been carried out".

The Claimants are also entitled to payment of indemnificatory interest, under article 43(1) of the LGT, regarding the value of the tax and interest improperly paid, counted from the date on which such amounts were improperly paid until the date of processing of the respective credit note.

DECISION

In these terms, this Tribunal agrees on:

• Judging the application for arbitral opinion on the illegality of the tax act of additional IRS assessment No. 2017... of 4 December 2017, relating to the year 2013, to be favorably founded;

• Annulling the said additional assessment;

• Condemning the Respondent to the restitution of the tax improperly paid, with corresponding indemnificatory interest, from the date on which the Claimants made payment of the tax in question in these proceedings until the complete reimbursement of the amount improperly paid.

Value of the Case

In accordance with article 306(2) and 297(2) of the C.P.C., article 97-A(1)(a) of the C.P.P.T. and article 3(2) of the Fees Regulation in Tax Arbitration Proceedings, the case is valued at €127,601.11.

Costs

In accordance with the provisions of article 22(4) and 12(2) of the Legal Regime of Arbitration, article 2, article 3(1) and articles 4(1) to (4) of the Regulation of Fees in Tax Arbitration Proceedings, as well as Table I attached to this regulation, the total value of costs is fixed at €3,060.00, at the expense of the Respondent.

Let notification be made.

Lisbon, 17 December 2018.

The arbitrators,

Fernanda Maçãs (President)

Nina Aguiar (Member)

Miguel Luís Cortês Pinto de Melo (Member)