CAAD Decision 234/2018-T: Stamp Tax Under Verba 17.1.14 TGIS – Arbitral Ruling on Legality of Assessment

ARBITRAL AWARD (consult the complete version in the PDF)

The arbitrator Judge José Poças Falcão (President), the arbitrator Dr. Rita Guerra Alves and the arbitrator Dr. Jorge Carita (arbitrators-members), designated by the Deontological Council of the Centre for Administrative Arbitration (CAAD) to form the Arbitral Tribunal, constituted on 18 July 2018, agree as follows:

I - REPORT

A – IDENTIFICATION OF THE PARTIES

Claimant: A..., S.A., with registered office at ..., no. ..., in Lisbon, bearing the tax identification number for legal entities (NIPC) ..., hereinafter also referred to as A..., Claimant, plaintiff or taxable person.

Respondent: TAX AND CUSTOMS AUTHORITY, hereinafter referred to as Respondent or AT.

The Claimant filed the request for constitution of an Arbitral Tribunal in tax matters and request for arbitral decision, pursuant to the provisions of paragraph a) of article 2, paragraph 1, and paragraph a) of article 10, paragraph 1, both of Decree-Law no. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter abbreviated as RJAT).

The Claimant did not proceed with the nomination of an arbitrator, whereby, pursuant to the provisions of article 6, paragraph 1, and paragraph b) of article 11, paragraph 1, of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Deontological Council designated as arbitrators the signatories of this award, whose nomination was accepted in accordance with the provisions of law.

On 2018-06-28, the parties were duly notified and did not express any intention to refuse the designation of the arbitrators, in accordance with article 11, paragraph 1, paragraphs a) and b), of the RJAT and Articles 6 and 7 of the Deontological Code.

In accordance with the provisions of paragraph c) of article 11, paragraph 1, of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the Collective Arbitral Tribunal was duly constituted on 2018-07-18, to examine and decide the subject matter of the present dispute, and the Tax and Customs Authority was automatically notified on 2018-07-18, as recorded in the respective minutes.

Thus, the arbitral tribunal is duly constituted and is materially competent, in accordance with articles 2, paragraph 1, paragraph a), and 30, paragraph 1, of Decree-Law no. 10/2011, of 20 January.

Both parties agreed to the waiver of the meeting provided for in article 18 of the RJAT, and written submissions were presented by both parties.

The parties have legal personality and legal capacity, are legitimate, and are duly represented (articles 4 and 10, paragraph 2, of the same legislation and article 1 of Ordinance no. 112-A/2011, of 22 March).

The proceedings do not suffer from defects that would invalidate it.

B – CLAIM

1. The present Claimant seeks a declaration of illegality of the tax assessment act in Stamp Duty with no. 2017..., referring to the year 2015, which set a tax amount of €3,491,443.91, as well as the assessments of associated compensatory interest of €329,419.65, which totals the amount of €3,820,863.56 (three million eight hundred twenty thousand eight hundred sixty-three euros and fifty-six cents). To substantiate its request for arbitral decision, the Claimant alleged, with a view to the declaration of illegality of the tax assessment acts in Stamp Duty, the following:

2. The Claimant is a company holding shareholdings.

3. The Claimant at the date of the facts was held 43.16% by B... SGPS, S.A. (hereinafter "B..."), 29.33% by C..., SGPS, S.A. and 27.51% by D... SGPS, S.A. (hereinafter "D...").

4. The Claimant sustains that in order to meet the financing needs (which were expected to be short-term) of B... and D... SGPS, S.A., the present Claimant granted them loans on an occasional basis.

5. The Claimant granted short-term loans to B... and D..., which amounted, on 01.09.2009, to the amounts of €641,040,527.86, in the case of B..., and €380,000.00, in the case of D....

6. On 01.09.2009, the Claimant, B... and D... entered into a contract designated "Financial Agreement."

7. It is provided in the Agreement that the Claimant grants to B... and D... a financing line up to the maximum amount (which includes credit amounts financed prior to the Agreement) of €1,000,000,000.

8. In that Agreement, it was stipulated that the financing line would be made available when (on one or more occasions) and to the extent (amount) that was being requested by B... and D..., without prejudice to establishing that such requests had to occur mandatorily by the end of 2017.

9. It was further contractually stated that the amounts utilized by B... and D... – including sums that had been made available prior to the Agreement – were granted until 31.12.2019, the date on which they had necessarily to be fully and completely repaid.

10. Further provided in the Agreement that B... and D... could, at a time prior to the deadline provided for in clause 1.5 (i.e., 31.12.2019), proceed with partial or full repayment of the amount of credit utilized, with the proviso that any capital repaid could not be subject to future reuse (see clauses 3.2 and 3.3 of the Agreement).

11. After the execution of the Agreement, B... and D... utilized, pursuant to said Agreement, credit granted by the Claimant, in the following amounts:

1. B... and D... also proceeded with some repayments of the credit granted, in accordance with clauses 3.2 and 3.3 of the Agreement.

2. It states that, upon the realization of the successive disbursements of funds on behalf of B... and D... mentioned above, the Claimant did not assess Stamp Duty on the amounts of credit granted to them, under item 17.1.3, because it (erroneously) considered that these intra-group financings were exempt from this tax.

3. Regarding the application of item 17.1.4 of the TGIS, the Claimant alleges: what is contractually provided in the Agreement, in particular in its clauses 1.5 and 3.4, it is believed that there will be no doubt that the Claimant, B... and D... established a certain (or determined) deadline, in the form of a concrete and objective calendar date – 31.12.2019 – for the repayment of the borrowed amounts to necessarily occur.

4. And in that sense the most certain contractual fact (when compared with other circumstances, such as the perfect performance of the obligations assumed therein) that expressly follows from the Agreement is, precisely, the occurrence of the final repayment deadline provided for in clauses 1.5 and 3.4.

5. The Claimant argues that the parties executing the Agreement (Claimant, B... and D...), regardless of whether they had agreed on a certain deadline for repayment to occur, also stipulated a supplementary and accessory clause that enables (the use of the verb "may" refers to the existence of a faculty and not an obligation) the borrowing entities to carry out early repayments (i.e., at a time prior to 31.12.2019) in order to amortize the debt over the life of the Agreement.

6. It alleges that the circumstance of admitting early repayment does not mean that the deadline granted for the use of the credit suddenly transforms into uncertain, indeterminate and indeterminable.

7. Further argues, regarding item 17.1.4 of the TGIS, and its non-applicability to the case at hand, that the criterion to which item 17.1.4 of the TGIS is subject is that of indeterminacy, present or future, as to the actual utilization of the credit.

8. This is contributed to, moreover, by arguments of a systematic nature present in the item in question, in particular expressions such as "credit utilized" or "period of use."

9. Thus, the cases to which item 17.1.4 of the TGIS applies are all those in which the duration of credit utilization is totally unknown, that is, in which the respective beneficiary is permitted indefinite and unrestricted temporal use of the credit granted to it.

10. The Claimant concludes by arguing that the Stamp Duty assessments now contested should be annulled, since they suffer from defects of unconstitutionality and illegality.

D - RESPONSE OF THE RESPONDENT

1. The Respondent, duly notified for that purpose, timely submitted its response in which, in brief summary, alleged the following:

2. On 2009-09-01, the Claimant (then E..., S.A.) entered into a contract with two of its shareholders, B... and D... SGPS, S.A. (hereinafter also referred to as D...), denominated "Financial Agreement," through which it granted them a financing line up to the maximum amount of one billion euros.

3. Given the corporate relationships of the contracting parties, in light of article 486, paragraph 1 of the Commercial Companies Code, it is verified that B... is the dominant company of the Group and D... and the Claimant are said to be dependent (or dominated) companies, with B... holding complete dominance (100%) over them.

4. Regarding the Financial Agreement executed, the Respondent alleges that it does not have any exemption annotation in Stamp Duty and, having the Claimant, when questioned during the inspection procedure in this regard, indicated that the financial operations in question were not taxed under Stamp Duty, without, however, specifying under which rule.

5. It sustains that the Claimant was subject to inspection action for the year 2014, determined by Service Order no. OI2016..., issued on 2016-04-14.

6. And, following that inspection action, that is, more than 7 years later, on 14-12-2016, a First Amendment was added to the Financial Agreement, allegedly for the purpose of clarifying "the parties' intention regarding the deadline for granting the credit."

7. Moreover, it sustains that, contrary to what the Claimant attempts to assert, whether (i) from the respective supporting documents of the loans granted, or (ii) from the notes annexed to the financial statements, it follows that the parties did not stipulate in concrete any date for the repayment of the borrowed sum, and the said amendment or attempt to correct alleged oversight in the accounting should not be considered, drawn up much later than the facts at issue here (and already during inspection actions).

8. Regarding the supporting documents of the loans granted - Operations carried out with B..., it sustains:

a. that the operations carried out within the scope of the Financial Agreement with B... were recorded in the Claimant's accounts in the account "26611536 – Financings granted – parent company – short-term – B... SGPS, SA."

b. The first entry, dated 2009-09-01, is in accordance with point 1.6 of the Financial Agreement and, subsequently, between 2009-09-02 and 2015-12-31, the account recorded various movements in debit and credit (75 and 28, respectively).

c. Although the loans granted under the Financial Agreement had a time limit for their repayment (and not a date stipulated therein), an attempt was made to verify whether the Parties stipulated for each specific operation a date for its repayment.

d. From the documentation supporting the loan granted it is noted that the Parties did not stipulate in concrete, in this operation, any date for the repayment of the borrowed sum.

e. The supporting documents to the entries selected by sampling allow the conclusion that at the date of the operations, the Parties (B.../E...) did not stipulate any specific date for their repayment.

f. And the operations carried out with C... under the Financial Agreement were recorded in the Claimant's accounts in the account "266110002 – Financings granted – parent company – short-term – D... SGPS, SA," with the first entry, dated 2009-09-01, in accordance with point 1.6 of the Financial Agreement.

1. Regarding the Financial Statements of E... SGPS, S.A., the Respondent argues:

a. Financial statements for 2015 that the accounts of E... SGPS were prepared in accordance with NCRF, the claimant presented current and non-current assets, and current and non-current liabilities, as separate classifications on the face of the balance sheet, and this in respect for the provisions of paragraph 10 of NCRF 1.

b. The financial operations carried out under the Financial Agreement were recorded in E... SGPS in a sub-account of the SNC account "26 Shareholders/partners," more precisely in the SNC account "2661 – Financings granted – parent company – short-term," which presented, on 2015-12-31, a debit balance of €717,260,839.30.

c. For the purpose of presentation of the accounts, that debit balance was classified on the face of the balance sheet as belonging to current assets, and was also presented in the explanatory note to the financial statements as an integral part of current assets.

d. It argues that the financings granted under the Financial Agreement were entered in the lender's accounts in an account intended for the recording of credits granted in the short-term, that is in the SNC account "2661 – Financings granted – parent company – short-term";

e. That the financings granted under the Financial Agreement were classified on the face of the balance sheet as elements belonging to the current assets of the lender;

f. And for the purposes of Statutory Audit, the Statutory Auditor concluded that the financial statements present, in all materially relevant respects, a true and fair view of the financial position of E... SGPS on 2015-12-31.

g. The Respondent argues that the interpretation advocated in the Amendment according to which "Any and all credit utilized under the Agreement was granted for a certain and determined period... [which] ends on 31-12-2019," does not reflect the reality that can be observed through the accounting documents.

h. Moreover, it argues that the interpretation conveyed in the Amendment, according to which the credit was granted for a period ending on 2019-12-31, is incompatible not only with the recording of the credit granted in a short-term item, as well as with its classification in current assets, that is with a settlement period of up to twelve months after the balance sheet date.

1. Regarding the Financial Statements of B..., the Respondent argues:

a. Similarly to the accounts of E... SGPS, SA, the financial statements of B... were also prepared in accordance with NCRF, with no derogations, thus presenting current and non-current assets, and current and non-current liabilities, as separate classifications on the face of the balance sheet, and this in respect for the provisions of paragraph 10 of NCRF 1.

b. Now, the financial operations carried out under the Financial Agreement were recorded in B... in a sub-account of the SNC account "25 Financings obtained," more precisely in the SNC account "254110023 – E... SGPS, SA," which presented, on 2015-12-31, a credit balance of €714,453,003.30.

c. For the purpose of presentation of the accounts, the above-mentioned credit balance was classified on the face of B...'s balance sheet as belonging to current liabilities. Whereby, once again it was concluded in the RIT that the interpretation advocated in the Amendment, already cited above, does not reflect the reality that can be observed through B...'s accounting documents.

d. It argues that the interpretation conveyed in the Amendment according to which the credit was granted for a period ending on 2019-12-31 is incompatible not only with the recording of the credit granted in a short-term item, as well as with its classification in current liabilities, that is with a settlement period of up to twelve months after the balance sheet date.

1. Regarding the Financial Statements of D..., the Respondent sustains:

a. That just as it occurred with the accounts of E... SGPS, SA and B..., the accounts of D... were also prepared in accordance with NCRF, without derogations (as expressed in note 2 to the financial statements for 2015), thus presenting current and non-current assets, and current and non-current liabilities, as separate classifications on the face of the balance sheet, and this in respect for the provisions of paragraph 10 of NCRF 1.

b. The financial operations carried out under the Financial Agreement were recorded in D... in a sub-account of the SNC account "25 Financings obtained," specifically in the SNC account "254120023 – E... SGPS, SA," which presented, on 2015-12-31, a credit balance of €2,807,836.00.

c. It argues that the interpretation advocated in the Amendment does not reflect the reality that can be observed through the accounting documents of B....

1. The Respondent, as to the facts, defends itself in the following sense:

a. The amounts owed and credited arising from the implementation of the Financial Agreement were classified on the face of the balance sheet as follows: by the entity that granted the opening of the credit line, as relating to current assets, and by the companies that benefited from it as relating to current liabilities.

b. The classification of the amounts owed and credited arising from the implementation of the Financial Agreement in current or non-current assets or liabilities had the assent of the Statutory Auditors in the context of Statutory Audit work.

c. The interpretation conveyed in the Amendment according to which the credit was granted for a certain and determined period ending on 2019-12-31 is incompatible not only with the recording effected by the contracting parties in short-term items, as well as with its classification on the face of the balance sheet in current assets and liabilities – settlement date up to twelve months after the balance sheet date.

d. Whereby, contrary to what the Claimant attempts to make believe, from the multiple documents of its responsibility, as well as from third parties, it is evident that the interpretation conveyed in the Amendment, according to which the credit was granted for a certain and determined period ending on 2019-12-31 is incompatible not only with the recording effected by the contracting parties in short-term items, as well as with its classification on the face of the balance sheet in current assets and liabilities – settlement date up to twelve months after the balance sheet date.

e. And it is not credible that there is any oversight, as the Claimant comes to invoke.

f. Because note that when the multiple documents referred to were drawn up (theirs or from third parties), at no time was such oversight detected.

g. Nor even when examined by an external entity, which expressed no reservation or emphasis regarding the financings obtained.

h. That is, as explained in the substantive law section, to which reference is made, it is scarcely likely to be an oversight, coming the Claimant, once again, to draw up posterior documents.

i. Finally, as results from consultation of the minutes of the Board meetings held between 2007-10-26 and 2011-03-21, there is not a single resolution dealing with the granting of a credit line up to the maximum amount of one billion euros.

1. Moreover, it alleges that under the Financial Agreement, the Parties could carry out (and did carry out) various financing operations, without stipulating in concrete, operation by operation, a specific date for the repayment of the borrowed sums, being able the balances of the amounts owed to be repaid at any time (as they were, in many situations, from 2009 to 2015), without prior authorization of the creditor and in accordance with the needs of the beneficiaries, reason for which creditor and beneficiaries classified the operations carried out as "current" components of the balance sheet, therefore, with a settlement period foreseeable of less than one year.

2. In this way, and even after resorting to other complementary analysis elements, one can only conclude that the practical implementation of the parties involved in the Financial Agreement is consistent with its respective contractual clauses, pointing unequivocally to the non-determination of the deadline for repayment of the credit granted and utilized.

3. It is therefore not possible to conclude that ab initio the period or time-limit for utilization of the credit granted is determined or determinable, all the more so since one cannot establish an identification between repaid funds and funds received, whereby the solution of considering that the period of credit utilization should be determined taking into account the term of the contract has no support in law, all the more because it leads to admitting periods of utilization merely theoretical.

4. This situation occurs in the case at hand, since the parties did not define a specific date for the provision of funds and for the repayments – which can be partial or total – of the credit granted, only two deadline dates were stipulated, for utilization and for full repayment, the rest being left to the availability of the borrowing entities, which leads to the conclusion that it falls within item 17.1.4 of the TGIS, with the tax obligation arising (paragraph g) of paragraph 1 of article 5 of the CIS) on the last day of each month and the tax being calculated by applying the rate of 0.04% to the monthly average obtained through the sum of the balances owed calculated daily, during the month, divided by 30. And thus, since the operations in question do not fall within the concepts of current account or bank overdraft, they fall within item 17.1.4 covered by the qualification of credit utilized under "any other form in which the period of utilization is not determined or determinable."

5. The Respondent concludes by arguing that in light of all the above, no criticism is deserved by the correction promoted in inspection action, and the arbitral petition should be judged unfounded.

E - FACTUAL FINDINGS

1. For the examination of the issues sub judice, it is necessary to describe the relevant factual matter, based on the critical analysis of the documentary evidence submitted by the parties to the case and considering the non-contestation of the tax administrative procedure of which a copy was attached by the AT.

2. It should be noted that the judge or arbitrator does not have the duty to pronounce on all the alleged matter, but rather has the duty to select only that which is relevant for the decision, taking into account the cause (or causes) of action that substantiates the claim formulated by the plaintiff (cf. articles 596, paragraph 1 and 607, paragraphs 2 to 4, of the CPC and to record whether it considers it proven and/or not proven (cf. article 123, paragraph 2, of the C.P.P. Tributário).

Proven Facts

1. Thus, regarding relevant factual matters, this tribunal considers the following facts as established:

2. The Claimant is a company holding shareholdings.

3. B... is the dominant company of the Group and D... and the Claimant are companies held 100% by it.

4. The Claimant at the date of the facts was held 43.16% by B... SGPS, S.A., 29.33% by C..., SGPS, S.A. and 27.51% by D... SGPS, S.A.

5. The Claimant granted short-term loans to B... and D..., which amounted, on 01.09.2009, to the amounts of €641,040,527.86, in the case of B..., and €380,000.00, in the case of D....

6. On 01.09.2009, the Claimant, B... and D... entered into a contract designated "Financial Agreement," whereby it granted these two entities a credit line up to the maximum amount of €1,000,000, which would be made available, as needed, until 31 December 2017, and whose amounts that were to be utilized would be fully repaid by 31 December 2019.

7. It is provided in the Agreement that the Claimant grants to B... and D... a financing line up to the maximum amount of €1,000,000,000, which includes credit amounts financed prior to the Agreement.

8. It also provides that the entities benefiting from credit utilization could repay, partially or fully, the amounts of credit utilized at any time prior to the deadline limit of 31 December 2019, provided for in clause 3.2.

9. Being that the capital repaid in accordance with clause 3.2 cannot be subtracted from the amount of credit already utilized, that is it cannot be reused.

10. At the date of execution of the agreement, the Claimant was already holder of a credit against B..., in the amount of €641,040,527.86, and a credit against D..., in the amount of €380,000.00, which became considered as utilization of credit made available on that date, for purposes of the agreement.

11. After the execution of the Agreement, B... and D... utilized, pursuant to said Agreement, credit granted by the Claimant, in the following amounts:

1. The benefiting entities proceeded with various early repayments of the funds utilized.

2. The Claimant, during the validity of the "Financial Agreement," did not grant the benefiting entities credit exceeding the established maximum limit of €1,000,000.00€.

3. The Claimant did not assess or classify the Financial Agreement under any of the items of Stamp Duty.

4. The Claimant was subject to tax inspection action for the year 2014, determined by Service Order no. OI2016..., issued on 2016-04-14.

5. As a result of this inspection action, the financial operations carried out under the cited "Financial Agreement" were subjected to taxation in Stamp Duty at the rate provided in Item 17.1.4 of the Annex Schedule to the CIS,

6. With unpaid tax being assessed and subsequently assessed, relating to the fiscal year 2014, in the amount of €3,498,821.22, in accordance with the calculations thus summarized:

7. On 14-12-2016, while the aforementioned inspection action was ongoing, a First Amendment was added to the Financial Agreement – See Doc. no. 9, submitted by the Claimant.

8. An interpretative amendment, whose objective was to clarify the meaning of the clauses of the "Financing Agreement" numbers 1.5 and 3.4, referring to the deadline, so as to understand that any and all credit utilized under that agreement was granted for a certain and determined period that begins on the date of the credit made available and ends on 31 December 2019.

9. With a view to coercive payment of the Stamp Duty and compensatory interest assessments that are the subject of these proceedings, the AT instituted an enforcement proceeding number ...2018... and...

10. ... to guarantee the amount subject to enforcement and further charges up to the limit of €4,827,308.99, the plaintiff constituted in favor of the State an irrevocable pledge over 480,000 ordinary shares, registered and nominative with a nominal value of €5.00 each, held by it and representing approximately 48% of its capital stock...

11. ...pledge which was registered in the Commercial Registry Office of Lisbon on 2-3-2018.

F - UNPROVEN FACTS

1. There are no other facts for the subject matter of the dispute, proven or unproven, essential to the subject matter of the dispute.

G - ISSUES TO BE DECIDED

Given the position of the parties, adopted in the arguments presented by each, although without binding the Tribunal to its examination [the Courts do not have to examine all the arguments formulated by the parties – this has been repeatedly stated for a long time by the Courts (See, inter alia, Award of the Plenary of the 2nd Section of the STA, of 7 June 95, rec 5239, in DR – Appendix of 31 March 97, pages 36-40 and Award STA – 2nd Sec – of 23 Apr 97, DR/AP of 9 Oct 97, p. 1094)], the central issue constitutes the following, which must therefore be examined and decided:

A) Regarding the declaration of illegality of the tax assessment act in Stamp Duty with no. 2017..., referring to the year 2015, which set a tax amount of €3,491,443.91, as well as the assessments of associated compensatory interest of €329,419.65, which total the amount of €3,820,863.56 (three million eight hundred twenty thousand eight hundred sixty-three euros and fifty-six cents).

B) Regarding payment of the corresponding indemnification for improper provision of security.

H – SUBSTANTIVE LAW

1. Considering the position assumed by the parties in the submitted pleadings, the central issue to be resolved by this Arbitral Tribunal will consist in deciding whether the act of assessment of Stamp Duty, no. 2017..., relating to the year 2015, which set an amount of tax payable of €3,491,443.91, was based on the erroneous interpretation and application of item 17.1.4 of the TGIS.

2. For this purpose, given the factual matter established as proven, we will then determine the applicable law, giving priority, in compliance with the provisions of paragraph a) of paragraph 2 of article 124 of the CPPT, to the analysis of the defects of the assessment act, for more stable and effective protection of the Claimant's interests.

3. We will thus proceed to analyze the defects by error regarding the assumptions of the right to assess, regarding the issue of taxation of the present credit granting, in light of the principles and rules in accordance with the provisions of the Stamp Duty Code and item 17.1.4 of the TGIS.

4. Now, from the analysis of the evidence in these proceedings, it follows that we are before a credit granting for the maximum amount of €1,000,000,000, executed through a contract (hereinafter referred to as Financial Agreement).

5. From the Financial Agreement, a credit arises for €641,040,527.86€.

6. We will proceed to analyze the legislation applicable to the case sub judice.

7. Table 17.1 of the TGIS, as amended by Law no. 12-A/2010 of 30 June, applies to operations resulting from the utilization of credit, in the form of funds, merchandise and other values, by virtue of the granting of credit in any capacity except in the cases referred to in item 17.2, including the transfer of credits, factoring and treasury operations when involving any type of financing to the assignee, participant or debtor, always being considered as new granting of credit the extension of the contract period – on the respective value, depending on the period.

8. Thus item 17.1.4 applies a rate of 0.04% to credit utilized in the form of current account, bank overdraft or any other form in which the period of use is not determined or determinable, on the monthly average obtained through the sum of the balances owed calculated daily, during the month, divided by 30.

9. We must also give special attention to the constitution of the tax obligation, that is, the birth of the tax obligation in credit operations, enshrined in article 5, paragraph 1, paragraph g) of the CIS, which provides: in credit operations, at the moment they are carried out or, if the credit is utilized in the form of current account, bank overdraft or any other means in which the period is not determined nor determinable, on the last day of each month.

10. In this way and as enshrined in article 5, paragraph 1, paragraph g) of the CIS, the tax in contracts with determined periods is instantaneous, occurring at the moment the credit is actually utilized and applies to the value of each utilization.

11. Regarding the incidence of Stamp Duty in credit grants, it has long been understood, both in case law and in doctrine, that Stamp Duty applies to the actual utilization of credit and not to the contract underlying it.

12. In this regard, see the Award of the STA case 0800/17 of 14-03-2018, which decided:

"The granting of credit is subject to stamp tax, whatever its nature and form, however, for this purpose, the actual utilization of the credit is relevant. The tax-triggering fact elected for taxation in Stamp Duty is, always, the granting of credit – provision of monetary values from one party to another obliging the latter to return that amount (in simple form or with accrued value), in the future. The mere execution of the contract for granting credit does not always generate the tax-triggering fact. When the utilization of credit is immediate, the tax-triggering fact emerges on the date of utilization which coincides with the date of execution of the contract for granting credit. (…) When the utilization of credit is not immediate, the tax-triggering fact emerges on the date of utilization which does not coincide with the date of execution of the contract for granting credit."

1. In this regard, an illustrative excerpt from the work of J. SILVÉRIO MATEUS and L. CORVELO DE FREITAS:

2. Under the heading "financial operations," the scope of the incidence of stamp tax includes the granting of credit, whatever the nature of the granting entity and the user, together with a set of financial operations, from which interest and commissions result, which are only subject to stamp tax if carried out by credit institutions, financial companies, other entities legally equivalent to them and any other financial institutions.

3. In accordance with paragraph 1, the granting of credit is subject to stamp tax, whatever its nature and form, however, for this purpose, the actual utilization of the credit granted is relevant and not the contract underlying it. Thus, a contract for the granting of credit can be executed without this translating into a tax-triggering fact of this tax, which will occur whenever credit utilization is not immediate or if there is no actual use of that contract. (…)

It is emphasized, however, that the tax-triggering fact typified in this item is the granting of credit, that is, the utilization of credit based on a legal transaction of granting credit, whose essential elements are translated in the provision of a present good against the promise of future return. It is not, therefore, comprehended by the incidence of the tax any and every financing but only that which, meeting the referred characteristics, can be qualified as granting credit. Thus excluded from taxation, for example, the so-called consumer credit, whenever the financing consists of mere deferment in time of the payment of goods or services acquired granted by the respective seller or service provider" – cf. the authors cited "The Taxes on Real Property, The Stamp Tax, Annotated and Commented," 1st Edition, 2005, Lisbon, Engifisco, pp. 732 and 733.

1. Also refers JOSÉ MARIA FERNANDES PIRES: "It is in the field of financial operations, particularly in credit, that the most relevant innovations of the new Stamp Duty Code operated in the reform of the year 2000. As we will see later, when we address the taxation of credit utilized through a credit line opening contract, the new Code introduces two fundamental innovations relative to the previous one. On the one hand, the tax now applies to the utilizations of credit and not to the execution of the contracts that give rise to them (…). On the other hand, the time duration of the credit relationship becomes determinant for the determination of the tax to be paid (…). Credit operations are taxed in accordance with item no. 17.1 of the General Schedule. The law enumerates some types of contracts for granting credit, such as the transfer of credits, factoring, treasury operations, current account credit openings and bank overdraft. However, this enumeration is merely exemplificative, since the law taxes the granting of credit independently of the contractual form underlying it ("the granting of credit in any capacity," as determined by the said item of the General Schedule). More than the form of the contract that is at the basis of the credit relationship, what is subject to tax is the actual utilization of credit by the beneficiary." - cf. "Lessons on Taxes on Property and Stamp Tax," 2nd Edition, 2013, Lisbon, Almedina, pp. 443 and 444.

2. Also, as J. Silvério Mateus and L. Corvelo de Freitas emphasize, "The Taxes on Property. The Stamp Tax: Annotated and Commented," Lisbon, Engifisco, 2005, p. 734, "The generating fact of the tax obligation is, in accordance with paragraph g) of article 5, the utilization of credit, with credit line openings not being especially taxed as long as such utilization does not occur."

3. Having reached this point, it is time to address, in particular, the issue raised, whether the granting of credit falls under item 17.1.4 of the TGIS, because its period of use is not determined or determinable.

4. Recall that the tax-generating fact arises from the consideration by the AT that the financings granted by E... to companies B... and D... under the AF, fulfilling the concept of credit for purposes of taxation under the CIS and TGIS, that taxation should be specifically processed, as it was, under Item 17.1.4 and not under Items 17.1.1 to 17.1.3 of the TGIS.

5. Recall also that in the context of litigation regarding legality or annulment, it is only in light of the reasoning put forth by the AT at the time of the assessment that such legality can be reviewed by the Court (See, for example, Award of the STA of 23.9.2015, Case no. 01034/11).

6. The AF is the instrument that constitutes the basis of the Stamp Duty assessment made by the AT. It was this that formed the basis considered by the AT for the assessment of stamp tax and not, for example, any other instruments or credit granting agreements on which the AT might have possibly based the additional assessment, namely considering that there were credits renewed or reused in violation or in disharmony with the prohibition established in the AF (cf 3.3, of the AF).

7. The AF has two distinct parts:

a. One relating to credit granted (€641,420,527.86) until 1.9.2009 (date of the AF), which is recognized as having been granted until then by E... to companies B... and D..., and

b. another relating to credits opened (€358,579,472.14) or credit line or financing lines, to companies B... and D....

1. In either case – credits granted and financings under the opened credit line – they clearly had a certain maturity date: 31-12-2019.

2. It is therefore important to determine whether or not the act of taxation under Item 17.1.4 of the credits granted by E... is unlawful in light of the AF.

3. That is: if, as the AT considered, this is about indeterminate or indeterminable credits to the extent that these are the ones that should be taxed in light of Item 17.1.4 of the TGIS.

Let us see then.

1. In contracts in which the period of utilization is not determined or determinable, the tax-generating fact has a continuous nature, and for these cases, article 5, paragraph 1, paragraph g) of the CIS, for item 17.1.4, provides a different criterion, in which the tax is due on the last day of each month, on the monthly average obtained through the sum of the balances owed calculated daily, during the month, divided by 30, applying a rate of 0.04% to that average.

2. In such situations, the tax applies to the balances determined in each month, being only in that sense that relevance can be attributed to the temporal factor.

3. From the analysis of the evidence, it follows that in the Financial Agreement (as provided in clause 1.5), the utilization of the credit was granted for a contractually determined period, fixed at 31 December 2019, the moment when the amounts that have been made available must be fully returned (maturity date).

4. The AF is a contract [typified or unnamed?, although such qualification is not particularly relevant, considering, in particular, the comprehensive wording of Item 17.1.4 of the TGIS], with certain initial and final term, whereby credit of one billion euros is or was granted, with approximately 2/3 utilized at the date of the AF and the remainder to be used until 31-12-2017, with maturity or mandatory repayment until 31-12-2019.

5. There is thus no reason to fundedly consider the period of use indeterminate or indeterminable.

6. Certainly the aforementioned Financial Agreement also contemplates a clause that permits early repayment of the credit, in partial or total form.

7. Such, however, does not prejudice the structure of the obligation which is of certain or determined period.

8. The possibility or potestative right, if one so wishes, of early performance, has the nature of a conditional contractual stipulation with evident effects in the contractual relationship but not within the scope of the incidence of stamp tax [See article 5-g) of the CIS – first part].

9. That is: the taxation of the operation in Stamp Duty should have occurred in light of Item 17.1.3 and not, as it did, in light of Item 17.1.4, both of the TGIS.

10. And for such conclusion to be reached, the "interpretation" of the AF effected by the Amendment of 14-12-2016 (Doc 9, with the PPA) becomes absolutely unnecessary or useless.

11. Still regarding the early repayment clause in credit operations, whose granting agreement has contractually stipulated a period, as is the case in the present proceedings, case law has already pronounced, in particular in the arbitral award of the CAAD, Case no. 544/2017 of 6 April 2018, submitted by the plaintiff with the petition (Doc 5), with the same parties and having as its object the assessment of stamp tax and compensatory interest, by reference to the year 2014, based on the same essential facts of the present proceedings.

There it is stated:

"6. Addressing the issue, one must start by saying that the early repayment clause inscribed in the financing agreement is an accessory clause with the nature of a conditional stipulation, which confers on the debtors a mere faculty of early repayment – which might not even have been triggered – and which, at the outset, reflects itself in the contractual relationship established between the parties and not within the scope of tax incidence.

As was noted, the rule of tax incidence is limited to taxing the credit operation, it being at the moment it is carried out that the tax obligation is considered constituted and effectiveness is conferred on the tax-triggering fact, both for purposes of tax exigibility and for counting the period of the right to assessment (article 5, paragraph g), of the CIS).

As a rule, the applicable rate should correspond to the period that elapses between the moment of withdrawal of the made available funds and the moment when, in accordance with the contract, the repayment should occur. However, this rule can only be validly implemented, in direct application of the rule of objective incidence, when it is possible to determine in advance, with precision, the actual period of use and it is possible to correspond the financial movements representing the disbursement and the respective repayment (in this sense, LUIS MAGALHÃES, 'The New Stamp Duty Code. Principal effects on credit,' in Fisco, no. 88-89, May-June 2008, Year XI, p. 22).

Persisting a practical difficulty in determining the actual duration of credit utilization, naturally the period to be considered will be that which follows between the disbursement and the period fixed contractually.

It is borne in mind that what is relevant for tax incidence is the actual utilization of the funds and not the contract for granting credit underlying it (cf. award of the arbitral tribunal of 5 November 2014, Case no. 24/2014-T). The fact is that the parties, in the situation of the case, executed a contract that provides for the full repayment of the amounts that have been utilized in a determined period that coincides with the period of cessation of validity of the contract. The possibility of early repayment, which is contained in the clause, constitutes a mere eventuality which cannot have the capacity to transform the certain period contractually provided for into an indeterminate or indeterminable period.

Moreover, the early repayment clause, when triggered, could not have the effect of making the period of credit utilization indeterminable, but rather the reduction of the contractually established period, whereby the solution to adopt, in the tax sphere, would be to correct the initial assessment through application of the rate corresponding to the shorter period that was actually applied.

It is evident, in light of all the above, that the rate provided for in item 17.1.4 has its field of application limited to those other situations in which, by the very terms of the contract, it is not possible to determine a certain moment when repayment will necessarily occur, only thus justifying that the tax, in such cases, be assessed by application of an average rate calculated monthly. The type of rate provided for in item 17.1.4 thus applies when the period of credit utilization is not previously defined and it is not possible to tax by any of the rules established in items 17.1.1 to 17.1.3, which manifestly was not the case sub judice."

1. Indeed, we adopt, in essence, the position of that arbitral award and in that sense it is understood, as, moreover, has already been previously noted, that the clause stipulating early repayment is an accessory clause with the nature of a conditional stipulation, which confers on the debtors a mere faculty of early repayment. It constitutes a mere eventuality which cannot have the capacity to transform the certain period contractually provided for into an indeterminate or indeterminable period.

2. As previously explained, the Financial Agreement provides for the maximum amount of credit, in the amount of €1,000,000,000, to be utilized during the validity of the Agreement, and the possibility of partial or total repayment before the deadline for full return occurring on 31.12.2019; however, the value of early repayments could not be reused given the credit maximum.

3. The aforementioned repayment clause, being of an accessory nature, does not obligate any of the parties to partial early repayment of one of the credits.

4. The fact of permitting early repayment, and that various repayments were effected, by itself does not render the deadline uncertain or indeterminate.

5. Thus, in light of all the above, the rate provided in item 17.1.4 applies to the actual utilization of credit, restricting itself to situations in which, by the very terms of the contract, it is not possible to determine the period or the exact moment when repayment should occur, only thus justifying that the tax, in such cases, be assessed by application of a monthly average rate.

6. Specifying further: the rate provided for in item 17.1.4 thus applies when the period of credit utilization is not contractually or previously defined and does not fall within the other items of item 17.1 of the TGIS, which, in light of the evidence in these proceedings, legislation, case law and doctrine previously cited, is concluded as to its non-application or applicability in the case sub judicio. For, as was seen, the granting of credit here under analysis has a contractually defined period, whereby it is not covered by item 17.1.4 of the TGIS.

7. Nor should it be argued with the manner in which the Claimant's and the financed companies' accounting treated the financings.

8. For in this matter, it is not accounting that defines the nature, interpretation or qualification of contracts but rather it is accounting that must conform or harmonize with them.

9. En passant and in this regard it will be said that it is not inadmissible or unacceptable the thesis of the Claimant, the continuation of the entries by the manner in which they were made before the 2009 Financial Agreement: the financings were until then short-term [cf. a), of the AF] and, as such, recorded by the involved entities in short-term items [See, for example, Balance Sheet of 31-12-2008 – Doc 10, with the PPA]; after the AF they continued, wrongly, to be recorded in the same item until the inspection carried out by the AT for the year 2015, only then being corrected that oversight (cf. Annual Report and Accounts – Doc 11, submitted with the PPA), so as to align the accounting records with the substantive characteristics of the financings. As would be normal.

10. In light of the above, this Tribunal will grant the Claimant's petition in this regard and consequently will judge well-founded the declaration of illegality of the tax assessment act in Stamp Duty no. 2017..., relating to the year 2015, on the grounds of defect in law and error in factual and legal assumptions.

11. The Arbitral Tribunal, in accordance with articles 608, paragraph 2, 663, paragraph 2 and 679 of the Code of Civil Procedure by application of article 29 of the RJAMT, is not required to examine all the arguments alleged by the Claimant or by the Respondent, namely, when the decision becomes prejudiced by the solution already rendered, as is the case in these proceedings, for which reason the examination of the remaining questions submitted for arbitral decision is rendered moot, without prejudice to the following petition.

PETITION FOR INDEMNIFICATION FOR IMPROPER PROVISION OF SECURITY

1. In accordance with the provisions of paragraph b) of article 24 of the RJAT, the arbitral decision on the merits of the claim regarding which there is no appeal or challenge binds the tax authority from the end of the period provided for appeal or challenge, the latter having to, in the exact terms of the success of the arbitral decision in favor of the taxable person and until the end of the period provided for voluntary enforcement of the sentences of the tax courts, "restore the situation that would exist if the tax act that is the subject of the arbitral decision had not been performed, by adopting the acts and operations necessary for the effect."

2. In the legislative authorization upon which the Government based itself for approving the RJAT, granted by article 124 of Law no. 3-B/2010, of 28 April, it is proclaimed, as a cardinal guideline of the institution of arbitration as an alternative form of jurisdictional resolution of conflicts in tax matters, that "the tax arbitration process must constitute an alternative procedural means to the process for challenging court decisions and the action for recognition of a right or legitimate interest in tax matters."

3. Although article 2, paragraph 1, paragraphs a) and b), of the RJAT uses the expression "declaration of illegality" to define the competence of the arbitral tribunals that function in the CAAD and makes no reference to constitutive (annulling) and condemnatory decisions, it should be understood, in harmony with the referred legislative authorization, that its competencies include the powers that in court challenge proceedings are attributed to tax courts in relation to acts whose examination of legality falls within their competencies.

4. Although the court challenge process is essentially a process of mere annulment (articles 99 and 124 of the CPPT), a condemnation of the tax authority in the payment of indemnificatory interest and indemnification for improper security can be rendered therein.

5. In fact, although there is no express rule in that sense, it has been uniformly understood in tax courts, since the entry into force of the codes of the fiscal reform of 1958-1965, that a petition for condemnation in the payment of indemnificatory interest can be combined in a court challenge process with the petition for annulment or declaration of nullity or non-existence of the act, for in those codes it is stated that the right to indemnificatory interest arises when, in a gracious claim or judicial proceeding, the administration is convinced that there was error of fact attributable to the services. This regime was subsequently generalized in the Code of Tax Procedure, which established in paragraph 1 of its article 24 that "there shall be a right to indemnificatory interest in favor of the taxpayer when, in a gracious claim or judicial proceeding, it is determined that there was error attributable to the services" and, afterwards, in the LGT, in whose article 43, paragraph 1, it is established that "indemnificatory interest is due when determined, in a gracious claim or court challenge, that there was error attributable to the services resulting in payment of the tax debt in an amount higher than legally due" and, finally, in the CPPT in which it was established, in paragraph 2 of article 61 (to which corresponds paragraph 4 in the version given by Law no. 55-A/2010, of 31 December), that "if the decision recognizing the right to indemnificatory interest is a court decision, the period for payment is counted from the beginning of the period for its voluntary enforcement."

6. Regarding the petition for condemnation in the payment of indemnification for improper provision of security, article 171 of the CPPT establishes that "indemnification in the case of improper bank guarantee or equivalent provided shall be requested in the proceeding in which the legality of the debt subject to enforcement is contested" and that "indemnification must be requested in the claim, challenge or appeal or in the case that its basis is subsequent within 30 days of its occurrence."

7. Equivalent to bank guarantee for this purpose will be all forms of guarantee that imply for the interested party bearing an expense whose amount increases according to the period of time during which it is maintained (such will be the case, for example, of surety insurance in favor of the State, with regime provided for in articles 6 and 7 of DL no. 183/88, as amended by DL no. 31/2007) – See Jorge Lopes de Sousa, Code of Tax Procedure and Process, 6th Edition, Áreas Editora, p. 242.

8. Which means that the constitution of other forms of guarantee, such as pledge or mortgage, are not comprehended in the concept of equivalence to bank guarantee and, consequently, any possible right to indemnification for improper constitution as guarantee of a fiscal debt in enforcement cannot be exercised or requested in the proceeding in which the legality of the debt subject to enforcement is contested.

Since this is the case in the present proceedings, since the security was provided through pledge of shares, this means the inadmissibility of the respective indemnification petition formulated.

J – DECISION

Whereby the arbitrators of this Tribunal agree to:

– Judge well-founded the petition for declaration of illegality of the Stamp Duty assessment no. 2017... and respective compensatory interest, subject of the present request for arbitral decision, in the total amount of €3,820,863.56, and

– Judge unfounded the petition for recognition of the Claimant's right to indemnification, in the terms set forth above, for improper security provided through the constitution of a pledge of shares.

Value of the case: In accordance with the provisions of article 306, paragraph 2 of the CPC and article 97-A, paragraph 1, paragraph a), of the CPPT and article 3, paragraph 2, of the Regulation of Costs in Tax Arbitration Proceedings, the case is valued at €3,820,683.56, in accordance with a subsequent correction by the plaintiff regarding the initial value indicated, in accordance with the order rendered on 25-9-2018.

Costs: In accordance with article 22, paragraph 4, of the RJAT, the amount of costs is set at €48,348.00, in accordance with Table I annexed to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

• Let it be notified.

Lisbon, 27 November 2018

The Collective Arbitral Tribunal

José Poças Falcão

(Arbitrator President)

Rita Guerra Alves

(Arbitrator Member)

Jorge Carita

(Arbitrator Member)

With the dissenting opinion that follows.

Dissenting Opinion

Although accompanying the Tribunal in the final decision to annul the assessment that is the subject of the present request for arbitral decision, the undersigned understands that the Tribunal could have gone further given the need to execute and comply with the principle of discovery of material truth, as it is understood, saving due respect, that the Tribunal also did not properly assess some facts given as proven, as it should have done.

From the elements submitted to the case, it clearly results that the Financial Agreement in question of 1 September 2009, in which, in accordance with Recital d), the parties intended to contractually regulate the financing relationship existing at the date of its execution, by opening, in accordance with Clauses 1.1, 1.2 and 1.3, in favor of two contractors a credit line in the amount of 1,000,000,000.00, constituting a credit line opening, conferring on the debtors a potestative right of utilization of the credit.

Such credit line opening is not based as a have-owe regime, of reciprocal credits and debits, lasting until the maturity of the account, with the consequent taxation in accordance with item 17.1.4 of the General Schedule.

However, such characterization is incompatible, in fact, with Clauses 3.2, 3.3 and 3.4 of the referenced Agreement.

Such Clause 3.2 permits to the two debtors, designated there as 2nd and 3rd contractors, to repay partially or entirely, in any amount prior to the date provided in Clause 1.5, the amount of credit utilized, without need of consent of the creditor, the 1st contractor.

However, according to Clause 3.3, the capital that comes to be repaid in accordance with the preceding Clause, cannot be reused in accordance with the Agreement, and the repaid amounts cannot in particular be subtracted from the amount of credit already utilized in the calculation of future utilizations of the credit, for purposes of the maximum amount provided in Clause 1.1.

Confirming this discipline, Clause 3.4 establishes that all amounts utilized by the 2nd and 3rd contractors under the Agreement must be fully amortized on the date of maturity of the agreement, 31 December 2019.

Thus, it can be concluded that, in accordance with the aforementioned contract, the capital repaid cannot be reused. – which in reality we do not know if happened, a situation which, due to its importance for finding the final verdict, the Tribunal could and should have ascertained.

Without such investigation, it is evident that this contract constitutes a typical simple credit line opening, in which the credit granted can be utilized only once, although through successive partial withdrawals.

In accordance with Point II, 26, of Circular no. 15/2000, of 5 July, of the Directorate-General for Taxation (DGCI), in the case of credit line openings, simple or in the current account regime, in which the repayment period of the respective utilizations is determined or determinable, in accordance with the respective contract, taxation is conducted in accordance with points 17.1.1 to 17.1.3 of the General Schedule.

Note that, for this purpose, in accordance with Point II), 26, of this Circular, the period in question is that which elapses between each utilization and repayment, in accordance with what is contracted.

Now, in accordance with Clause 1.5 of the Agreement here under analysis, any and all credit granted under it is granted until the end of the calendar year 2019, the date on which the amount must be returned in accordance with the identified Clause 3.

Could the AT have demonstrated that the sum of the utilizations effected by the debtors exceeded the amount of the credit line granted, with the consequent violation of the contractual prohibition of Clause 3.3?

Yes, but it did not.

Nor was this referenced by the Claimant.

But it was precisely this that it was important for the Tribunal to ascertain, which was not done.

Had the utilizations effected by the debtors not exceeded the amount of the credit line granted – that is one billion euros, thus complying with the provision of clause 3.3 of the Agreement, the contested assessment could not be maintained.

Otherwise, the assessment would be properly made.

That is, in the case that the utilizations effected by the debtors exceeded the amount of the credit line granted, in violation of the provision of clause 3.3 of the Agreement, a situation in which one would move to be faced with credit granted in a "revolving" regime, which, as already referred, occurs when the creditor has the possibility of reconstitution of the right of withdrawal through payments effected throughout the contract.

Faced with this situation and the difficulty that might be felt in analyzing the movements effected, to debit and to credit of the respective current account, I expressed my opinion that the Tribunal, given the priority that should be given to the practical application of the principle of discovery of material truth, should additionally ascertain this simple fact:

Did the Claimant debtor utilize more than the value of the credit fixed in the contract, in violation of clause 3.3 of the Agreement?

Which, however, was not done.

Observe, that in article 22 of the Statement of Facts, the Claimant stated that the debtor companies "... also proceeded with some repayments of the credit granted, in accordance with clauses 3.2 and 3.3 of the Agreement," making it important to know whether the repaid amounts came to be reused.

It is important to emphasize that the Claimant itself recognizes not having "(erroneously)" assessed stamp tax under item 17.1.3 (See article 23 of the Statement of Facts).

It is also important to mention the amendment to the Agreement of 14 December 2016.

It is true that this amendment considers the period in question to be certain and determined, but it cannot supersede the economic effects of the contract already produced in accordance with paragraph 1 of article 38 of the General Tax Law (LGT). However, such amendment brings nothing new relative to the original wording.

On the other hand, I am of the opinion that the Tribunal did not properly assess the reality that follows.

In fact, the parties of the credit granting contract, creditor and debtors, recorded these operations in current assets or current liabilities, which correspond respectively to short-term credits and debts, when, from the factual characterization effected in the request for arbitral decision, defending that the maturity period of the credit utilizations be 31 December 2019, would logically lead to the qualification of assets and liabilities associated with these operations as non-current.

And this practice was followed by the Claimant from the beginning of execution of the "Financial Agreement."

In these circumstances, such accounting classification certainly contradicts the characterization effected by the Claimant of the Agreement of the financing operation in question, and could, ultimately, justify the application of item 17.1.4 of the General Schedule, which presupposes the indeterminability of the period of credit granting.

And it constitutes an indication that this would not have been the vision that "ab initio" the parties had of the contract, hence also felt the need for the aforementioned amendment.

And this seems to me an important issue, because the accounting treatment adopted by the parties is not as irrelevant as it may seem. The treatment given to the issue over the years, the understanding that accountants, administrators and auditors had over the years regarding this issue, is far from the vision that the Claimant now defends, after an inspection action which led, as is known, to the production of supplementary Agreements, as if they were an interpretative rule.

The Arbitrator

Jorge Carita