'The Arbitral Tribunal, composed of … has rendered the following Final Award in the proceedings started by [the Claimant] versus [the Respondent]

………

Expositions of the facts and of the development of the arbitration

1. By deed dated September 16, 2008 - received by the Secretary General of the International Chamber of Commerce - ICC (hereinafter, for shortness' sake, referred to as "ICC") on September 18, 2008 and notified by the latter to [the Respondent] on September 26, 2008 - [the Claimant] filed a request for arbitration according to the arbitration clause provided for in section 20 of the "hotel business leasing agreement" dated July 12, 2001, and at the same time appointed as arbitrator [Arbitrator 1].

2. The arbitration clause is quoted in full in the reasons of this award.

3. In support of the request, [the Claimant] alleged that it entered into a financial leasing agreement with [Company A] on December 22, 2000, concerning a hotel located in [a city in Europe] (named [Hotel X]). [The Claimant] also stated that, on July 12, 2001, it leased to [Company B] a hotel business operating in the above mentioned hotel, for a global term of 15 years (subsequently extended for additional 3 years) and that on October 25, 2006, the leasing agreement was assigned by [Company B] to [the Respondent] (owned by the assignor, [Company B], which, in turn, is controlled by [the Respondent's parent company established in another European country]).

4. That being stated, [the Claimant] claimed that [the Respondent] failed to pay the rentals of July 2008 and August 2008, amounting to [amount] and [amount] respectively, and requested the Arbitral Tribunal:

i) to ascertain and declare that [the Respondent] is obliged to fulfill its obligations under the Agreement and, in particular, to pay the Rent to [the Claimant];

ii) to condemn [the Respondent] to pay to [the Claimant] the amount of [amount], corresponding to the Rent of July 2008 and August 2008, including VAT, and any other amount, if any, due for Rent until the date of the award, as well as extra costs and damages to be quantified during the arbitration proceedings, plus currency appreciation and legal interests on all the above amounts until the date of actual payment;

iii) in any case

- to declare that the [the Respondent] only is responsible for the full costs of the present arbitration and that, consequently, [the Claimant] is entitled to be reimbursed by [the Respondent] for the part of said costs advanced, including legal fees;

- to condemn [the Respondent] to bear the full costs of the present arbitration and to order [the Respondent] to reimburse and indemnify [the Claimant] for any amount advanced and/or paid in relation to this arbitration, including legal fees.

5. By letter dated October 23, 2008, addressed to the Secretary General of the ICC, [the Respondent] appointed [Arbitrator 2] as arbitrator and at the same time asked for a 30-day extension for filing an answer brief. The petition was accepted by the Secretariat, which … granted the term of November 25, 2008, to submit the answer brief.

6. Subsequently … the Secretary General confirmed as arbitrators [Arbitrators 1 and 2] and by a subsequent measure … confirmed [Arbitrator 3] as Chairman upon the co-arbitrators' joint nomination.

7. By the defence filed before the Secretary of ICC on November 25, 2008, [the Respondent] challenged the grounds of the adversary requests and filed various counterclaims. Precisely, the Respondent requested the Arbitral Tribunal to:

(i) reject any and all claims submitted by [the Claimant], for all the reasons mentioned above;

(ii) in first instance, declare the termination of the Lease due to [the Claimant]'s breaches, for all the above reasons, and/or to annul the Lease for [the Claimant]'s fraud, and condemn [the Claimant] to pay [the Respondent] compensation for damages to be quantified in an amount not lower than [amount];

(iii) in second instance, declare the termination of the Lease due to the lack of the assumption concerning the circular way exit, and condemn [the Claimant] to pay [the Respondent] compensation for damages to be quantified in an amount not lower than [amount];

(iv) in further instance, declare [the Respondent]'s right to withdraw from the Lease for all the above reasons;

(v) in any case: (a) convict [the Claimant] to pay [the Respondent] compensation for the damages suffered as a consequence of the [neighbour] issue for an amount not lower than [amount]; (b) convict [the Claimant] to pay the invoices … and …, for the amount of [amount], plus interest and currency appreciation starting from the date of the issuance of the invoices until the effective date of the payment;

(vi) furthermore and in any case: (a) convict [the Claimant] to pay/reimburse all arbitrators costs and fees and to pay/reimburse any costs and/or fee required by the ICC; (b) convict [the Claimant] to reimburse [the Respondent] all the legal costs, fees and expenses related to this proceeding.

8. It must be specified that the factual and defence argumentations alleged by both Parties during the proceedings to support their respective claims and objections are set forth and examined in the reasons of this award here below.

9. [The Claimant], in its reply dated January 26, 2009, modified its conclusions, requesting the Arbitral Tribunal to:

i) Reject the counterclaims filed by the counterparty as groundless on a factual basis, erroneous from a legal standpoint, and, in any case, not proven;

ii) Ascertain and declare that [the Respondent] has failed to fulfil its obligation under the Agreement and, in particular, to pay the monthly rental instalments that are due and payable and still outstanding, to [the Claimant] under the lease Agreement entered into on 12th July 2001;

iii. Ascertain and declare the termination of the Agreement entered into on 12th July 2001, due to [the Respondent]'s breach, to pay the monthly rental instalments that are due, as ascertained over the course of the proceeding, on the basis of the claim set out under paragraph ii. above;

iv. Secondarily and on a subordinated basis, with respect to the claims set out under paragraph iii. above, ascertain the serious [Respondent]'s breach to fulfil its contractual obligations and, accordingly, declare the termination of the Agreement pursuant to article 1453 of the Italian Civil Code;

v. Condemn [the Respondent] to pay compensation for all damages caused, of any nature whatsoever, to [the Claimant] as a direct and/or indirect consequence of the above-mentioned [Respondent]'s breach to fulfil its obligations to pay the rental instalments, and of the subsequent termination of the Agreement, which damages to be quantified in an amount not lower than [amount], or, in any case, in the amount to be ascertained over the course of the proceeding by this Arbitral Tribunal including on an equitable basis; the foregoing amount is, in any case, subject to increase for monetary appreciation and legal interest through the payment in full of the amounts due;

vi. in any case, condemn [the Respondent] to pay/reimburse all costs in connection with this arbitration proceeding and to pay/reimburse [the Claimant] any and all expenses, including fees, anticipated by it and/or paid in connection with the above-mentioned proceeding.

10. In the hearing held on March 17, 2009, [the Respondent] requested the Arbitral Tribunal to grant a term to reply to Claimant's claims as amended in the reply brief dated January 26, 2009. By the procedural order rendered at the end of that hearing, the Arbitral Tribunal granted:

- [the Respondent] a term until April 3, 2009, for the filing of a brief solely aimed at replying to [the Claimant]'s brief dated January 26, 2009;

- to [the Claimant] a term until April 24, 2009, for the filing of a brief solely aimed at replying to the brief filed by the counterparty.

11. By brief filed on April 3, 2009, [the Respondent] challenged the legal and factual argumentations of counterparty and requested the Arbitral Tribunal to:

(i) reject all the claims submitted by [the Claimant], as specified by means of its brief dated January 26, 2009 for all the reasons mentioned;

(ii) as counterclaim, declare the termination of the Lease due to [the Claimant]'s breaches, for all the reasons already exposed in the brief filed on November 25, 2008, and in this brief, and condemn [the Claimant] to pay [the Respondent] compensation for damages to be quantified in an amount not lower than [amount], or in the different amount which will be quantified in the course of the proceeding, even on an equitable basis;

(iii) in second instance, declare the termination of the Lease due to the lack of the assumption concerning the circular way exit, and condemn [the Claimant] to pay [the Respondent] compensation for damages to be quantified in an amount not lower than [amount], or in the different amount which will be quantified in the course of the proceeding, even on an equitable basis;

(iv) in further instance, declare [the Respondent]'s right to withdraw from the Lease for all the reasons already exposed in the brief filed on November 25, 2008, and in this brief;

(v) in any case: (a) convict [the Claimant] to pay [the Respondent] compensation for the damages suffered as a consequence of the [neighbour] issue for an amount not lower than [amount], or for the different amount which will be quantified in the course of the proceeding, even on an equitable basis; (b) convict [the Claimant] to pay the invoices … and … (pre-opening costs), for the amount of [amount], plus interest and currency appreciation starting from the date of the issuance of the invoices and until the effective date of the payment;

(vi) furthermore and in any case: (a) convict [the Claimant] to pay/reimburse all arbitrators costs and fees and to pay/reimburse any costs and/or fees required by the ICC; (b) convict [the Claimant] to reimburse [the Respondent] all the legal costs, fees and expenses related to this proceeding.

12. By brief filed on April 22, 2009, [the Claimant] replied to the adversary brief and requested the Arbitral Tribunal to:

i. Reject all the counterclaims proposed by the counterparty in the defensive briefs filed by it, considering that these said counterclaims are groundless on a factual basis, erroneous from a legal standpoint and are, in any case, not proven;

ii. Ascertain and declare that [the Respondent] has failed to fulfil its obligation under the lease agreement and, in particular, to pay the monthly rental instalments that are due and payable and still outstanding to [the Claimant] under the lease agreement entered into on 12th July, 2001;

iii. Ascertain and declare the termination of the lease agreement entered into on 12th July, 2001, pursuant to article 1456 of the Italian Civil Code, as a consequence of [the Respondent]'s breach to pay the monthly rental instalments that are due, as ascertained over the course of the proceeding, on the basis of the claim set out under paragraph ii. above;

iv. Secondarily and on a subordinated basis, with respect to the claims set out under paragraph iii. above, ascertain the serious [Respondent]'s breach to fulfil its contractual obligations, and, accordingly, declare the termination of the lease agreement pursuant to article 1453 of the Italian Civil Code;

v. Condemn [the Respondent] to pay compensation for all damages caused, of any nature whatsoever, to [the Claimant] as a direct and/or indirect consequence of the above mentioned [Respondent]'s breach to fulfil its obligations to pay the rental instalments, and of the subsequent termination of the agreement, which damages to be quantified in an amount not lower than [amount], and, in any case, in the amount to be ascertained over the course of the proceeding by the Arbitral Tribunal including on an equitable basis; the foregoing amount is, in any case, subject to increase for monetary appreciation and legal interests through the payment in full of the amount due;

vi. in any case, condemn [the Respondent] to pay/reimburse any and all costs in connection with this arbitration proceeding and to pay/reimburse [the Claimant] any and all expenses, including fees, anticipated by it and/or paid by it in connection with the above-mentioned proceeding.

13. On October 26, 2009, the Arbitral Tribunal, the Parties and their Counsels, in pursuance of Article 18 of the ICC Rules, signed the Terms of Reference drawn up in Italian and English. By the subsequent procedural order issued on November 10, 2009, the Arbitral Tribunal specified that in case of difference between the English text and the Italian one, the English version shall prevail. The Counsels of the Parties, upon request of the Arbitral Tribunal, declared expressly and in writing to agree on the decision of the Arbitrators on the prevalence of the English version.

14. Subsequently the Arbitral Tribunal, considering the observations of the Counsels of the Parties on the first provisional schedule proposed by procedural order dated on November 18, 2009, by the following measure dated November 24, 2009, established the following timetable, which was approved in writing by the Counsels of the Parties:

• The Panel intends to grant, in favor of both Parties:

- a first term for filing a brief aimed to define the requests of evidence, in light of the claims and objections filed, and to produce new documents;

- a second term for filing a brief aimed to reply to the adversary evidence instances and to request the rebuttal evidences, as well as to produce those documents whose exhibition is made necessary by the adversary instances and documents.

•The above mentioned terms will be established by a subsequent procedural order.

• Within 15 days from the filing of the reply briefs, the Panel will decide by a procedural order upon the evidence instances of the Parties and will fix the hearings for the examination of the evidence.

• The Panel intends to conclude the examination of the evidence within 60 days from the procedural order mentioned at the previous point.

• Once the examination of the evidence is concluded, the Arbitral Tribunal intends to fix a hearing at the end of which the Panel will grant a further term for the filing of final briefs and reply briefs, and will fix a hearing to discuss the legal and factual issues, if requested by at least one of the Parties.

• The Panel will finally render the award.

15. Afterwards, by procedural order issued on December 2, 2009, the Arbitral Tribunal granted both Parties the following terms:

a term up to January 12th, 2010, for filing a brief aimed to define the requests of evidence, in light of the claims and objections filed, and to produce new documents;

a term up to February 2nd, 2010, for filing a brief aimed to reply to the adversary evidence instances and to request the rebuttal evidences, as well as to produce those documents whose exhibition is made necessary by the adversary instances and documents;

the Arbitral Tribunal also specified that the production and the exchange of the above mentioned briefs and documents had to be carried out "in accordance with the procedure already laid down by the previous procedural order dated April 2, 2009". Besides, upon request of the Counsels of either Party, the Arbitral Tribunal, by procedural order issued on January 11, 2010, regarding the ways to file and exchange briefs and documents, clarified that:

1) the briefs and documents can be sent to the Arbitrators, in compliance with the terms already established by the Tribunal, not only by email, but also - alternatively - by courier;

2) (...) the exchange of the briefs and documents between the Counsels of the Parties, can be carried out, in compliance with the terms already established by the Tribunal, not only by email, but also - alternatively - by courier.

16. The Counsels of the Parties, by briefs filed on January 12, 2010, requested the admission of the evidence instances filed in the respective briefs and produced new documents; besides, by the next reply briefs filed on February 2, 2010, the Counsels of the Parties filed additional new documents and asked for the rejection of the adversary evidence instances.

17. By procedural order issued on March 17, 2010, the Arbitral Tribunal, "whereas some questions of law submitted by the parties are preliminary and potentially absorbing in respect of the findings requested" and considering that "it seems opportune, also for sake of rapidity and of procedural economy, to examine - and if possible to decide - immediately the questions of merits submitted by the parties, reserving to admit the evidence instances only in case they result [recte: prove] really helpful and relevant in light of the resolution of the questions of merits", stated as follows:

18. 1. Orders the parties to define their conclusions, by producing and exchanging -within [recte: by] March 29th, 2010 - a paper containing the specification of the conclusions concerning the merits and the evidence instances;

2. Grants in favor of both parties a term up to April 29th, 2010, for the filing and exchange of the conclusive briefs;

3. Grants in favor of both parties a term up to May 20th, 2010, for the filing and exchange of the reply briefs;

4. Reserves to fix a hearing if requested by one of the parties with an instance that must be filed and exchanged within 3 days subsequent to the filing of the reply brief;

5. Reserves the decision on any definitive or non-definitive order, concerning the merits and/or the evidence instances.

6. Establishes that the production and the exchange of the all briefs mentioned at points 1/4 shall be executed in accordance with the procedure already laid down with the previous procedural order dated April 2nd, 2009, as supplemented by the procedural order dated January 11th, 2010.

19. By paper filed on March 29, 2010 [the Claimant] specified its conclusion as follows:

(A) On the merits [the Claimant] hereby requests the honourable Arbitral Tribunal, having rejected any objection, deduction or demand filed by the Respondent, to:

i) ascertain and declare the termination by law of the lease agreement entered into by [the Claimant] and [the Respondent] on 12th July, 2001 (the "Lease Agreement"), pursuant to article 19, paragraph 1, No. 1, of the Lease Agreement and article 1456 of the Italian Civil Code or, on subordinated basis, declare the termination of the Lease Agreement pursuant article 1453 of the Italian Civil Code, as a consequence of the serious failure on the part of [the Respondent] to fulfil its contractual obligations thereof; and, accordingly, in any case, condemn [the Respondent] to return the leased hotel to [the Claimant];

ii) ascertain and declare: a) that, pursuant to the terms of the Lease Agreement, the amount due by [the Respondent] to [the Claimant] as rental instalments still due and outstanding for the period starting from July up to the termination of the Lease Agreement is equal to [amount], VAT included; b) that the amount due by [the Respondent] to [the Claimant] as compensation for all damages caused to the latter is equal to [amount];and, accordingly, to condemn [the Respondent], by means of its legal representative, to pay [the Claimant]:

- [amount], VAT included, as rental instalments still due and outstanding by [the Respondent] for the period starting from July 2008 up to the termination of the Lease Agreement (January 26, 2009);

- [amount] as compensation for all damages caused by [the Respondent] to [the Claimant];

or to pay different amounts, higher or lower, which may be ascertained over the course of the proceedings by this Arbitral Tribunal including on an equitable basis; the foregoing amount is, in any case, subject to increase for monetary appreciation and legal interests up to the payment in full of the amount due;

iii. reject all the counterclaims filed by [the Respondent] in its defensive briefs considering that these said counterclaims are groundless on a factual basis, erroneous from a legal standpoint and, are, in any case, not proven;

iv. in any case,condemn [the Respondent] to pay/reimburse any and all the costs in connection with this arbitration proceeding and to pay/reimburse [the Claimant] any and all expenses, including fees, anticipated by it and/or paid by it in connection with the above-mentioned proceeding.

(B) On an evidentiary basis, [the Claimant] hereby requests the honourable Arbitral Tribunal to:

1. admit the evidence instances (witness evidence) filed by [the Claimant] in the brief dated January 12, 2010;

2. reject any and all the evidence instances (technical consultant's appointment and witness evidences) filed by [the Respondent] in its own briefs dated January 12, 2010 and February 2, 2010;

3. on a subordinated basis with respect to the demand filed under paragraph 2 above, should this honourable Arbitral Tribunal decide to admit the evidence requests filed by [the Respondent], admit [the Claimant] to give rebuttal evidence in relation to the circumstances indicated by the counterparty as object of witness evidence, which should be admitted, as requested by [the Claimant] in its brief dated February 2, 2010.

20. XIII. In its turn, [the Respondent], by paper filed on March 29, 2010, specified its conclusion as follows:

May this honourable Arbitral Panel to:

On the merits:

(i) reject all the claims submitted by [the Claimant] being groundless in fact, in law and, in any case, not proven, for all the reasons mentioned;

(ii) as counterclaim, ascertain and declare the termination of the Lease due to [the Claimant]'s breaches, for all the reasons already exposed in the briefs filed, and condemn [the Claimant] to pay [the Respondent] compensation for damages, patrimonial and non-patrimonial, to be quantified in an amount not lower than [amount], as specified in the briefs filed, or in the different amount which will be quantified in the course of the proceeding, even on an equitable basis;

(iii) in second instance, ascertain and declare the termination of the Lease due to the lack of the assumption concerning the circular way exit, and condemn [the Claimant] to pay to [the Respondent] compensation for damages, patrimonial and non-patrimonial, to be quantified in an amount not lower than [amount], as specified in the briefs filed, or in the different amount which will be quantified in the course of the proceeding, even on an equitable basis;

(iv) in further instance, declare [the Respondent]'s right to withdraw from the Lease for all the reasons already exposed in the briefs filed;

(v) in any case: (a) convict [the Claimant] to pay to [the Respondent] compensation for the damages, patrimonial and non-patrimonial, suffered as a consequence of the [neighbour] issue for an amount not lower than [amount], as specified in the briefs filed, or for the different amount which will be quantified in the course of the proceeding, even on an equitable basis; (b) convict [the Claimant] to pay to [the Respondent] the invoices … and … (pre-opening costs), for the amount of [amount], plus interest and currency appreciation starting from the date of the issuance of the invoices and until the effective date of the payment;

(vi) furthermore and in any case: (a) convict [the Claimant] to pay/reimburse all arbitrators costs and fees and to pay/reimburse any costs and/or fee required by the ICC; (b) convict [the Claimant] to reimburse [the Respondent] all the legal costs, fees and expenses related to this proceeding.

On the evidence:

(i) appoint an expert witness in order (a) to confirm the outcome of the noise assessment carried out by the company [S] from November 2008 until December 2009; and/or (b) to ascertain that the immissions [recte: emissions] of noise produced in the Hotel (side [neighbouring factory]) and in particular all the even numbers from room number 200 to room number 800 by the activity carried out by [the neighbouring business] exceeds the tolerability limits provided by law and in any case renders the mentioned rooms not usable by the clients of the Hotel [X];

(ii) appoint an expert witness in order to or, in any case, (a) inspect the premises in which the Hotel is located, also in order to ascertain its difficult location, (b) examine and/or inspect any financial document of the Hotel and/or of [the Respondent] - located in the Hotel and/or in the registered seat of [the Respondent] - among which (without any limitation) the invoices issued by [the Respondent] with reference to the Hotel in year 2007, 2008 and 2009, the relevant registers of invoices and, on the basis of the above and of the documents filed, (c) quantify the loss of profits suffered by [the Respondent] - and the costs borne by the same - as a consequence of the non-use of no. 100 rooms of the Hotel since October 7, 2008 to date;

(iii) hear witnesses on the following circumstances:

1) "is it true that from October 7, 2008 to date no. 100 rooms of the Hotel, and precisely all the even number rooms from no. 200 to no. 800, located in the west side of the Hotel (so-called [neighbouring business] side) have not been used";

2) "is it true that from May 2008 until October 2008 every day the clients who occupied the rooms located in the so-called [neighbouring business] side of the Hotel, complained of the incessant noise which prevented them from sleeping";

3) "is it true that you are domiciled in the Hotel and live in the room no. 416 which is located in the so-called [neighbouring business] side";

4) "is it true that from May, 2008 the incessant nocturnal noise produced by the activity of loading and discharging carried out in the west side of the Hotel does not allow a normal rest";

5) "it is true that the results of the noise assessment carried out by [company S] in the rooms of the hotel [X] no. 214, 314, 316 and 318 confirm that the immissions [recte: emissions] of noise coming from [the neighbouring] business are higher than the limits provided by law";

6) "it is true that the results of the noise assessment carried out by you until June 9, 2009, as expert witness appointed by the [local court], in the rooms of the hotel [X] no. 402, 414, 416, 318, 320 and 322 confirm that the immissions [recte: emissions] of noise coming from [the neighbouring] business are higher than the limits provided by law";

7) "is it true that, as a consequence of the noise coming from [neighbouring business], the business activity of the Hotel with tour operators and/or travel agencies decreased".

8) "is it true that during the negotiations for the execution of the lease agreement of July 12, 2001, Mr [M] always represented as certain to Mr [E] the realization of an easier access to hotel [X] in order to allow a higher influx of clients"; 9) "is it true that Mr [E] always represented to Mr [M] the need to provide hotel [X] with an easier access in order to allow a higher influx of clients";

10) "is it true that Mr [M], also after the execution of the lease agreement of July 12, 2001, represented to Mr [E] the possibility to provide the hotel [X] with an easier access in order to allow a higher influx of clients";

11) "is it true that the execution of the preliminary agreement for the opening of the hotel located [in another country] was part of the wider project aimed at opening one hotel in [each of several cities]";

12) "it is true that the execution of the lease agreement of July 12, 2001, was part of the wider project aimed at opening one hotel in [each of several cities]";

13) "is it true that from the realization of hotel [X] (i.e., 1990) and until the date of execution of the lease agreement of July 12, 2001, [the Claimant] has not been able to find on the market a tenant available to rent hotel [X]";

14) "is it true that from the date of realization of hotel [X] (i.e., 1990) the only subject identified by [the Claimant] available to execute a lease agreement concerning hotel [X] was [Company B], after Mr [M] represented to Mr [E] the realization of an easier access to said hotel in order to allow a higher influx of clients and the development of a small hotel chain which included the opening of the hotels in [several cities]";

15) "is it true that the amount of the monthly rent of the no. 203 rooms of hotel [X] has been quantified taking into account that hotel [X] would have been provided with an easier access in order to allow a higher influx of clients";

16) "is it true that the amount of the costs borne by [Company B] for the opening of hotel [X], equal to [amount] and due by [the Claimant] according to Article 7 of the lease agreement executed on July 12, 2001 was approved by [the Claimant] during a meeting held on March 19,2001";

17) "is it true that the reduction of the rent agreed by the addendum dated March 3, 2003 was necessary following the acknowledgment by [the Claimant] of the onerousness of said rent with respect to the real possibility of hotel [X] to make adequate revenues in order to allow the payment of the rent as quantified in the lease agreement executed on July 12, 2001";

18) "is it true that from the end of 2006, [the Respondent] and [the Claimant] agreed to find a solution in order to reduce the amount of the rent of the lease agreement executed on July 12, 2001, as amended by the addendum dated March 3, 2003, and/or to find another lessee of the hotel [X]";

19) "is it true that during the meeting held … on April 16, 2008 … Mr [M] and Mr [D] were informed by … [of] the problems of the hotel [X] caused by the noise coming from [the neighbouring business]";

specifying the following witnesses:

- on the above circumstances no. 1) and 2), …;

- on the above circumstances 2), 4) and 7), …;

- on the above circumstances 3) and 4), …;

- on the above circumstance 5), …;

- on the above circumstance 6), …;

- on the above circumstances nn. 8), 9), 10), 11), 12), 13), 14), 15), 16), 17) and 18), …;

- on the above circumstance no. 19), …;

(iv) should the circumstances indicated by [the Claimant] be admitted by this honourable Arbitral Panel, admit [the Respondent] to rebuttal evidence with the following witnesses: …

(v) whether this honourable Arbitral Panel deems it appropriate and/or necessary, requests the appointment of a translator in order to proceed to the translation into English language (and/or into Italian language) of the documents enclosed by [the Respondent] to this brief and to the previous briefs and drafted in a language different than Italian and/or English language.

21. The Counsels of the Parties, by final statements filed on April 29, 2010, reiterated the legal and factual argumentations already filed in the previous briefs, and insisted on granting the conclusions already submitted. Moreover, by briefs filed on May 20, 2010, the Counsels replied to the adverse final briefs.

22. Then the Tribunal, upon request filed by [the Respondent] on May 24, 2010, by procedural order issued on June 16, 2010, fixed the hearing for the verbal discussion on June 30, 2010, subsequently deferred, by the Counsels' agreement, on July 14, 2010 (procedural order issued on June 24, 2010).

23. At the said hearing, the Counsels of the Parties illustrated the positions of their respective clients, and insisted on all the objections and claims already filed, concerning the merits and the evidence instances, and ultimately referring to the contents of the previously submitted briefs.

24. At the end of this hearing, the Arbitral Tribunal closed the proceedings (under art. 22 of the Rules of Arbitration) and reserved its decision.

25. It must be remarked that the time limit for rendering the award has been repeatedly extended by the ICC International Court of Arbitration. …

26. After the hearing held on July 14, 2010, the Arbitral Tribunal met in chambers … and rendered this award, based on the following reasons.

27. Subsequently … after the Arbitral Tribunal had sent … the first draft of the Final Award to the ICC for the scrutiny of the Court in pursuance of art. 27 of the ICC Rules of Arbitration, the Counsels of [the Respondent] filed an instance requesting the Tribunal to authorize the production of "the expert witness report filed on February 26, 2011, before the [local court] by the expert witness appointed in relation to the proceedings started by [the Respondent] against the [neighbouring companies]". The Counsels of [the Respondent] alleged to their instance a copy of the mentioned expert evidence concerning the noise emissions produced by the industrial premises of [the neighbouring business]. The Tribunal met … in order to examine the new instance of the Counsels of [the Respondent] and rejected it for the reasons set forth in Chapter 6.2.

28. The Arbitral Tribunal examined and decided all the issues, all the requests (concerning the merits and the evidence instances) and all the objections submitted by the Parties. Particularly, the Arbitral Tribunal examined and decided the issues concerning the failure to develop a hotel chain (in relation to the request for termination of the agreement by default; the non-occurrence of "presupposizione"; the termination and the right of withdrawal invoked by [the Respondent]); the failure to build a new road junction to access the Hotel (in relation to the request for termination of the agreement by default; the non-occurrence of "presupposizione"; the termination and the right of withdrawal invoked by [the Respondent]); the relevance of noise emissions complained by [the Respondent] (from the point of view of legal regulation and from the point of view of contractual regulation); the withdrawal from the agreement; the obligation to renegotiate; the payment of the so-called preopening invoices; the consequences of the failure to pay the rentals due by [the Respondent] (with reference to the petitions for termination of the agreement, return of the company, settlement of overdue rentals, refund of the damage); the quantification of damages due to [the Claimant] as a consequence of [the Respondent]'s default; the payment of the costs of arbitration. The positions of the Parties on all the above mentioned issues are summarized and examined in the following paragraphs.

Reasons

1. The arbitration clause

29. The Arbitral Tribunal remarks, first of all, that this arbitration is based on the arbitration clause contained in article 20 of the "Leasing agreement of a hotel business" undersigned by [Company B] and [the Claimant] on July 12, 2001. After the transfer of the said leasing agreement from [Company B] to [the Respondent] - which took place on October 25, 2006 - the arbitration clause now binds the Parties to this arbitration, since both of them have subjected to such clause.

30. The above-mentioned arbitration clause reads as follows:

20.1 The parties agree that all controversial issues or any litigation about the existence, validity, construction, subject, content, execution, suspension or termination of this Agreement shall be only settled in a final way based on the settlement and arbitration procedure established in this clause.

20.2 The parties agree that all issues submitted to arbitration shall be finally settled according to the Regulations of the International Chamber of Commerce of Paris. The arbitration shall be entrusted with a panel of three arbitrators; each Party shall appoint one arbitrator, and both appointed arbitrators shall appoint the President of the Arbitral Tribunal.

20.3 The arbitration shall take place in Paris, in the English language, and the Arbitral Tribunal shall issue its award in obedience to the current Italian laws.

20.4 The parties acknowledge that the arbitration award shall be final and cannot be appealed and commit to accept and abide by such award.

20.5 The award must be issued within maximum six (6) months, unless the Regulations provide for a longer minimum term.

31. As for the procedural rules of this arbitration, the arbitration clause refers to the Regulations of the International Chamber of Commerce of Paris; while, on the substantial plan, controversial issues must be settled according to the Italian laws. In fact, the arbitration clause explicitly establishes that the award be issued "in obedience to the current Italian laws"; moreover, [there are several factors connecting the agreement to Italy].

2. On the opportuneness of examining preliminarily the claims and objections of [the Respondent]

32. Turning to the substance of the controversial issues, and also with the purpose of establishing an order in their examination, the Arbitral Tribunal preliminarily remarks that both Parties sent to each other, in first instance, a request for termination of the leasing agreement because of the other Party's default.

33. In short, the request for termination by default formulated by [the Claimant] is based on [the Respondent]'s failure to pay the contractually established rentals from July 2008.

34. The opposing request for termination by default formulated by [the Respondent], instead, is based on a series of facts (which will be examined in detail here below) that, at the same time - according to [the Respondent] - would call for the failure to pay the rentals (exception of breach of contract) and would be the grounds for the request for termination because of [the Claimant]'s default.

35. After stating the above, the Arbitral Tribunal remarks that the facts the request for termination proposed by [the Claimant] is based on is undebatable as a historical fact, but its importance is discussed here. In fact, [the Respondent] admits it has not paid the rentals since July 2008; however, it claims that the failure to pay would be called for by [the Claimant]'s alleged defaults.

36. Therefore, the Arbitral Tribunal holds it is suitable to examine [the Respondent]'s objections right away to verify whether they are grounded and, consequently, are the reason for the failure to pay the rentals as claimed by [the Claimant]. This examination will also be the basis on which a decision is taken on the request for termination by default proposed by [the Respondent].

37. As pointed out, [the Respondent] has presented some circumstances that not only would call for its failure to pay the rentals, but would cause the termination of the agreement because of [the Claimant]'s default or, alternatively, would lead to the termination of the agreement because of the non-occurrence of the assumed event ("presupposizione"), or would imply [the Respondent]'s right to withdraw from the agreement.

38. It is a good idea to examine such circumstances one by one, and then verify, from time to time, whether the relevant petitions and objections formulated by [the Respondent] are grounded.

3. About the failure to develop a hotel chain

39. First of all, the objection stands out about the failure to implement a hotel chain that would have to be developed by opening hotels in [several cities]. This circumstance is presented by [the Respondent] by way of [the Claimant]'s default, which, after committing itself to open the hotel chain, would then fail to fulfill its obligation (from this point of view, refer, for instance, to the final brief, page 16 and subsequent ones); and by way of "presupposizione", in that the non-occurrence of this essential precondition (that is the development of the hotel chain) would imply the termination of the leasing agreement or the lessee's rights to withdraw from such agreement (from this various points of view, refer again to the same final brief as indicated above, page 18).

3.1. From the point of view of the failure to fulfill an alleged obligation

40. From a first point of view, [the Respondent] presents that the failure to develop of the said hotel chain would be the result of the failure to comply with an obligation taken by [the Claimant]. According to [the Respondent], this obligation should be clearly acknowledged as having a causal importance.

41. In the Tribunal's opinion, this case must be held groundless.

42. It is easy to see that the contractual agreements entered by the Parties do not include any explicit mentions (nor any traces) of this hypothetical obligation to develop a hotel chain by opening hotels in [several cities].

43. This obligation is found neither in the leasing agreement dated July 12, 2001, nor in the previous or subsequent contractual documents (the preliminary leasing agreement, the conditioned deed of contractual amendment dated March 3, 2003, or the subsequent deed of contractual amendment).

44. Focusing on the leasing agreement dated July 12, 2001, it is easy to remark that such an agreement not only does not explicitly include [the Claimant]'s obligation to develop a hotel chain, but does not contain any reference, although just implied or indirect, to such alleged obligation, not even in the many "premises" of the agreement. In this connection, it is significant to remark that the agreement dated July 12, 2001, contains several premises about the relations between the Parties before the execution of the leasing agreement, but none of them refers to the development of a hotel chain and the future opening of additional hotels in [other cities].

45. On the other hand, article 21.11 of the agreement establishes that: "This Agreement and the relevant Annexes will bypass and make ineffective any previous agreements, relations, covenants, commitments or intentions between the Parties, whether written or verbal, in connection with the leasing of the Company." This provision clearly points out the parties' common will to only subject their relationship to the regulation of the contractual text undersigned at that time, denying any importance to any previous covenants.

46. In short, [the Claimant]'s alleged obligation to develop a hotel chain cannot be based on the agreement dated July 12, 2001, which limits its effects to the leasing regulations of the [X] Hotel ...

47. Nor can such an alleged obligation be taken from other previous covenants, whether simultaneous or subsequent to the stipulation of the leasing agreement dated July 12, 2001, since none of the documents produced provides the evidence of any external agreements that in any way expand the content of such an agreement, creating the obligation for the lesser to develop a hotel chain. On the other hand, as it will be illustrated more profusely here below, such an obligation - if, in case, taken after the conclusion of the agreement dated July 12, 2001 - should have necessarily taken the written form according to article 21.8 of the Agreement. However, the said obligation does not appear in any documents.

48. So, the Arbitral Tribunal must exclude that the failure to develop a hotel chain (and the opening of other hotels in [other cities]) implies [the Claimant]'s default to the obligations arising from the business leasing agreement.

49. Likewise, the Arbitral Tribunal must exclude that such an obligation arises from a hypothetical juristic link among the agreement dated July 12, 2001, and other agreements having the leasing of other hotels as their subject. According to [the Respondent], between the leasing agreement dated July 12, 2001, on the one hand, and the "preliminary agreements for the opening of hotels in [two other cities]", on the other hand, there would be a "clear link, including from the functional point of view, which interconnects them through a clear instrumental link, which becomes important for the settlement by default" (Reply brief dated May 20, 2010, page 16). Such a link, again from [the Respondent]'s point of view, would result from that [the Respondent] "is claimed to have given its assent to the execution of the leasing agreement for the Hotel within the framework of a larger project, whose fulfillment was promised by [the Claimant] and Mister [M]" (Brief dated February 2, 2010, page 2).

50. It should be pointed out right away that there is no objective and functional interconnection among such agreements, so that the validity or effectiveness of any one of them objectively conditions the others' validity or effectiveness.

51. The subject of each agreement is an independent and separate hotel business; and none of such agreements contains a reference to the others, nor includes forms of management coordination of the different hotels. Consequently, from the functional and objective point of view, the various agreements are fully autonomous and separate from one another.

52. The only link one might abstractly think would then be of a subjective nature, arising from the parties' hypothetical will to mutually condition the validity or effectiveness of the several leasing agreements.

53. Not even such type of connection can be found in this case.

54. First of all, the parties to the leasing agreement covered in this case are not the same of the other agreements, because the agreement on [one of the other hotels] is undersigned by [the Respondent] and a third company ...

55. Moreover, none of such agreements includes a clause, whether implicit or just set out in the premises, that shows the contracting parties' intention to subject the validity or effectiveness of an agreement to other relations or the implementation of a larger project. No reference is made to a systematic business operation, a global project in which the several agreements would be included organically. This absence becomes particularly important in case of the agreements at issue, which, since their subject is the leasing of fixed assets for a term exceeding nine years, are subject to the burden of the written form according to article 1350, number 8 of the Italian civil code. As commonly known, in case of transactions subject to the solemn ad substantiam form, the contracting parties' common intention cannot be looked for out of the transaction statements; based on time-tested case law regulation, the parties' purposes must be verified in the contractual document, since it is forbidden to investigate such purposes out of the text (see Court of Cassation, section II, number 14444 dated June 22, 2006; Court of Cassation, section II, number 18361 dated September 13, 2004; Court of Cassation, section II, number 2216 dated February 5, 2004; Court of Cassation, section III, number 6201 dated June 2, 1995).

56. In light of this recurring stance, it is not allowed to acknowledge any intention of the parties to establish a link between the agreements at issue, since no text of such agreements mentions any traces of such purpose, nor could such a trace be identified out of the written statements.

57. On the other hand, it is important to remark that the same parties have given importance to the written form as the precondition of the validity of any subsequent covenants that amends the agreement. Article 21.8 establishes that: "No changes or waivers to any provisions of this Agreement shall be valid and binding unless they are approved in writing by the Party against which such amendment or waiver is claimed." Considering the importance of the written form, according to the parties' common will, as it can be inferred from article 21.8, it is impossible to verify the existence of a transaction link among the leasing agreement dated July 12, 2001, and other agreements in default of an explicit written covenant.

58. On the other hand, it would be quite surprising if such a voluntary and subjective link had been established by the parties out of the contractual text, if one only considers the remarkable business relevance of the transaction, the quality of the contracting parties (both of them are joint stock companies with a considerable experience on the market) and the painstaking regulation of the leasing relationship set out by them in the agreement dated July 12, 2001. In addition to a rich directory regulation, this transaction, in fact, comes with five annexes, including the agreement dated December 22, 2000, entered by [Company A] and [the Claimant] (annex B) having the financial leasing of the [X] Hotel for the benefit of [the Claimant] as its subject. The contracting parties have explicitly mentioned in the premises this financial leasing agreement, which can be considered objectively linked to the leasing agreement, pointing out that "this Financial Leasing is consistent with this agreement and contains [Company A]'s explicit consent to [the Claimant] to lease the Company to [Company B]" (page 1). In light of this, it would seem quite strange if the contracting parties, while explicitly mentioning a (leasing) agreement linked to the leasing agreement in the text dated July 12, 2001, have fully covered up other agreements which - according to [the Respondent]'s claim - had to be considered linked to and essential for the stipulation of the leasing agreement of the [X] Hotel, so that the latter would be not entered in default of the former ones.

3.3. From the point of view of the "presupposizione", with consequent termination or right of withdrawal

59. As already mentioned, [the Respondent] has presented that the failure to implement the hotel chain would be important also from the point of view of the "presupposizione", since this implies the termination and ineffectiveness of the agreement or its right of withdrawal.

60. From this point of view, it should be remarked that in [the Respondent]'s deed of clarification of conclusions (dated March 29, 2010) the request based on the "presupposizione" was no longer explicitly referred to the failure to develop the hotel chain; therefore, the request, from this point of view, should be considered as waived. However, the Arbitral Tribunal, for the completeness' sake of this award, holds it suitable to also deal with this issue.

61. After stating the above, in the Tribunal's opinion, also this claim is groundless, since it should be excluded that the hypothetical development of the hotel chain creates such an event assumed in the agreement dated July 12, 2010, that its absence results in the termination of the agreement (by lack of the assumption) or [the Respondent]'s rights to withdraw from the relationship.

62. It is good to state here that [the Respondent]'s statements on this issue are rather uncertain and contradicting and lead to deny that the hypothetical development of the hotel chain is deemed as a "presupposition" of the business leasing agreement dated July 12, 2001.

63. As everybody knows, the "presupposizione" issue has always been very controversial; and somebody has even claimed it is not important at all in our regulatory system.

64. However, in the large review of case law and doctrine on the "presupposizione", a stable and fully accepted fact can be identified. According to the universal opinion, the "presupposizione" necessarily regards an event external to the agreement in that such an event, on the one hand, is fully independent from the parties' will and, on the other hand, is not the subject of either one's obligation (with different stresses, although in the same meaning illustrated above, see among the others Court of Cassation, section II, no. 20245 dated September 18, 2009; Court of Cassation, section III, no. 6631 dated March 24, 2006; Court of Cassation, no. 17534 dated December 9, 2002; Court of Cassation, section II, no. 3083 dated March 25, 1998; Court of Cassation, section I, no. 7197 dated August 5, 1997; Court of Cassation, section III, no. 8689 dated August 8, 1995; Court of Cassation, section II, no. 12921 dated December 3, 1991; Court of Cassation, section II, no. 4554 dated October 31, 1989; Court of Cassation, labor section, no. 4487 dated May 15, 1987; Court of Cassation, no. 5168 dated September 22, 1981; in doctrine, C.M. Bianca, Il contratto, in Diritto Civile, 3, Milano, 2000 (II ed.), page 465 ).

65. This essential element of the "presupposizione" is incompatible not only with [the Respondent]'s statements in this case, where several times the failure to implement the hotel chain is attributed to [the Claimant]'s action (see above, for the objection to this claim; in [the Respondent]'s defence documents, see brief dated February 2, 2010, page 2; final brief dated April 29, 2010, pages 16-17; reply brief dated May 20, 2010, page 16); however, it is also compatible with [the Respondent]'s statements formulated out of trial, in which the failure to implement the project of the ... hotel [in another country] is claimed as Mister [M]'s failure to comply with the obligations undertaken with [the Respondent] (see letter of [the Respondent]'s legal representative ... annexed ... to the documents filed by [the Respondent]). In other words, if the failure to implement the hotel chain were the failure to fulfill [the Claimant]'s obligation (all the more if it were Mister [M]'s obligation) - as repeatedly claimed by [the Respondent] - by the same reason it could be not called assumption.

66. This remark, which would be already final, must be considered in the light of two additional remarks, which also lead to deny the existence of "presupposizione" in this case.

67. In the construction that prevailing case law and doctrine have given to this institution, the "presupposizione" is a circumstance that, although not expressed as a condition and out of transaction obligations, can be inferred from the content of the agreement in any way (Court of Cassation section II, no. 20245 dated September 18, 2009; Court of Cassation section III, no. 6631 dated March 24, 2006; Court of Cassation section III, no. 1952 dated February 10, 2003; Court of Cassation section I, no. 14629 dated November 21, 2001; Court of Cassation section II, no. 9304 dated November 9, 1994; in doctrine A. Cataudella, I contratti. Parte generale, Torino, 2000 (II ed.), pages 131-132; C.M. Bianca, Il contratto, mentioned above, page 466).

68. Also this assumption is absent in this case, since no clauses, premises or documents annexed to the leasing agreement, nor any letters or other statements previously exchanged between the parties leads to infer any connections, although implicit and postulated, between the persistent effectiveness of the transaction and the implementation of a larger project (see above, in Chapters 3.1. and 3.2.).

69. Here too, on the other hand, the remark applies that the considerable business importance of the transaction, the quality of the parties and the painstaking regulations of the leasing relationship lead to believe that, if the development of a larger project had been an essential presupposition to the consent, the contracting parties would likely set forth this "presupposizione" even just in the transaction premises or through the annexes to the agreement dated July 12, 2001.

70. The absence in the text of the agreement and in the larger context of such an agreement of any references to the development of the a hotel chain leads to exclude that such a hypothetical circumstance includes a "presupposizione", in the light of the essential elements of this institution according to the largely prevailing case law and doctrine.

71. Finally, in this case, also the third essential element of the "presupposizione" is missing, that is the occurrence of the assumed event is stated as certain in the parties' statement (Court of Cassation section I, no. 3579 dated February 22, 2005; Court of Cassation section II, no. 3083 dated March 24, 1998; Court of Cassation no. 191 dated January 5, 1995; Court of Cassation section II, no. 4554 dated October 31, 1989; in doctrine, A. Cataudella, I contratti, mentioned above, page 131).

72. No documentary elements support the statement that the Parties considered the development of a hotel chain certain; nor how, when and where the said hotel chain would be developed.

73. On the other hand, [the Claimant] has stated that, on the stipulation of the leasing agreement of the [X] Hotel, the project to open the ... hotel [in another country] had already come to grief through lack of funds; and this objection has been not contested (see documents 4 and 5 annexed to the Answer).

74. This implies that one aspect of the hypothetical global project conceived by the parties, far from being existing, was instead blocked or highly uncertain. This way, the parties' hypothetical representation of the opening of the larger hotel chain could be not considered certain at all, since such precondition, at least in connection with the leasing of the ... hotel [in another country], seemed unrealistic or highly impracticable already at the time of the leasing of the [X] Hotel.

75. The Arbitral Tribunal does not intend to deny that the hypothesis of the implementation of a hotel chain might have been considered and discussed during negotiations; however, the Arbitral Tribunal - because of the reasons expressed above - does not hold that such a hypothesis has ever turned into an obligation of the parties, nor has it ever taken the character of a certain and essential "presupposizione" for the stipulation of the leasing agreement dated July 12, 2001.

76. Finally, all three of the typical elements of the "presupposizione" are missing in this case; consequently, the claimed development of the hotel chain cannot be considered as precondition to which the ongoing effectiveness of the agreement dated July 12, 2001 was subject.

3.4. Conclusions on the issue concerning the failure to develop a hotel chain

77. After excluding the importance - from all points of view presented by [the Respondent] - of the failure to implement a hotel chain, as a necessary consequence, the evidence sections d) and e) formulated by [the Respondent] through the brief dated January 12, 2009, must be rejected. These evidence sections regard the requests (formulated by [the Respondent]) for termination of the agreement by default, ineffectiveness of the agreement by "presupposizione", withdrawal from the agreement, as a consequence of the failure to develop a hotel chain. In fact, the measures of inquiry required by [the Respondent], in the light of the considerations above, must be considered irrelevant and, before that, inadmissible according to article 2722 of the Italian civil code, since they aim at demonstrating additional pacts or contrary pacts to the content of the leasing agreement dated July 12, 2001.

78. Based on all considerations above, all requests, whether on the merit and procedural, and objections of [the Respondent] that are based on the failure to implement a hotel chain must be consequently rejected: from the point of view of termination by default; from the point of view of the termination (or ineffectiveness) by lack of the essential "presupposizione"; from the point of view of withdrawal (which, apart from any consideration on its nonexistence, certainly could be not based on any contractually irrelevant circumstance).

79. And, from these points of view, the instances under ii), iii) and iv) proposed by [the Respondent] (page 2 of the paper of clarification of conclusions dated March 29, 2010) must be rejected.

4. On the failure to build the access road junction

80. [The Respondent] also claims the failure to build a new and better direct access road junction between the [X] Hotel and the [nearby] motorway or the ... ring road.

81. Also here, the failure to build the access road junction is considered by [the Respondent] from several points of view; and also here this circumstance is set as the ground for several petitions: the lack of the junction is attributed to [the Claimant] by way of failure to fulfill the contractual obligations (see brief dated February 2, 2010, page 5); and it is also claimed also by way of "presupposizione", so that the failure to build the new road junction would result in the termination of the agreement or the right to withdraw from the relationship (see in the clarification of conclusions, under iii); and also final brief dated April 29, 2010, page 18 and subsequent ones).

82. The Arbitral Tribunal, for the reasons that will be illustrated here below, holds that this matter is groundless from all points of view presented by [the Respondent].

4.1. From the point of view of the non-fulfillment of an alleged obligation

83. In connection with the point of view of the default, the Arbitral Tribunal remarks that no clause in the hotel business leasing agreement dated July 12, 2001 explicitly provides for [the Claimant]'s obligation to build the mentioned junction; nor is such an obligation provided for (or even just mentioned) in other contractual documents, whether previous or subsequent to the leasing agreement, that is the preliminary leasing agreement, the conditioned deed of contractual amendment ..., and the subsequent deed of contractual amendment.

84. Therefore, the Arbitral Tribunal can make the same considerations on this aspect that have been already made on the failure to implement a hotel chain: also in this case, any explicit and documented contractual provision is missing.

85. The absence in the contractual text of any reference, although just implicit or stated in the premises, to the alleged obligation to build an additional access road junction to the [X] Hotel leads to certainly exclude that the leasing relationship includes the obligation claimed by [the Respondent].

86. As already pointed out above, the absence of any explicit references to the execution of the said junction in both the premises and the contractual provisions is even more significant if one considers, on the one hand, the economic engagement required by the provision of such an alleged obligation; and, on the other hand, the details of the agreement dated July 12, 2001, which contains as many as 12 long premises and explicitly governs also minor economic aspects of the relationship (like furnishing specifications, equipment, supplies).

87. If the Parties had wanted to agree on the construction of a new road junction to access the hotel on behalf and at the expense of the lessee, they would have certainly regulated this obligation in an explicit fashion, including projects, technical characteristics, schedules, execution methods; all the more so that everybody knows that the construction of a road junction implies authorizations and concessions, contracts, inspections, etc.

88. So, if such an obligation had been stipulated, then it would have been certainly regulated, like, for instance, it happened for the "completion obligations" regarding the works and the missing supplies "necessary to complete furnishing, equipment and systems..." (article 6). It would be quite odd if the Parties had regulated such (probably less expensive) obligations in detail and had forgotten even to mention in the premises the alleged obligation to build a new access road.

89. The following additional remark - already made in Chapter 3.1 above - also applies: such an alleged obligation to build a new road access cannot be inferred from other previous, simultaneous or subsequent covenants to the stipulation of the leasing agreement dated July 12, 2001, since none of the documents produced provide the evidence of a pact that in any way expands the content of such an agreement, creating the obligation for the lesser to build a better access to the main road.

90. On the other hand, also from this point of view, the Arbitral Tribunal must repeat the above observations in connection with article 21.11 of the Agreement (which reads "This Agreement and the relevant Annexes would bypass and make ineffective any previous agreements, relations, covenants, commitments or intentions between the Parties, whether written or verbal, in connection with the leasing of the Company") and article 21.8 (which reads "No amendment or waiver to any provisions of this Agreement shall be valid and binding unless it is approved in writing by the Party against which such amendment or waiver is claimed"). Consequently, the alleged provision of [the Claimant]'s obligation to build a new road access to the hotel can be implied from neither a covenant previous to the Agreement dated July 12, 2010, nor from a subsequent covenant not in the written form. And there is no written evidence of an alleged obligation for [the Claimant] to build a new road junction that may have been undertaken after July 12, 2001.

91. Finally, when analyzing the parties' common will based on their global behaviour, also after the conclusion of the agreement, it appears very significant that [the Respondent] has formally raised the default of this alleged obligation after as many as seven years after underwriting the leasing agreement dated July 12, 2001. If the construction of a new road junction had been established as one of [the Claimant]'s obligations, [the Respondent], also considering the time required to fulfill this obligation, would have not waited so long before demanding its formal fulfillment.

92. So, the existence of [the Claimant]'s obligation to build a new road junction to access the hotel must be excluded; and, therefore, also the default claimed by [the Respondent] must be excluded. Consequently, the corresponding objections and petitions (exception of breach of contract and termination by default) formulated by [the Respondent] must be rejected.

4.2. From the point of view of "presupposizione", with consequent termination or right of withdrawal

93. As mentioned, [the Respondent] has claimed that the failure to build the said road junction is important also from the point of view of the "presupposizione", since it would imply the termination and ineffectiveness of the agreement or [the Respondent]'s right of withdrawal.

94. Also from this point of view, in the Tribunal's opinion, [the Respondent]'s objections and requests are groundless. In fact, the failure to build the road junction cannot be considered as an assumed event that calls for the termination of the agreement or [the Respondent]'s right of withdrawal.

95. The essential requirements of "presupposizione" have been indicated in the above paragraphs (reference is made to them). Well, none of the above requirements exist in this case, in connection with the execution of a new road junction.

96. In particular, in [the Respondent]'s statements, the failure to build the road junction is attributed to [the Claimant]'s failure to fulfill its commitments. This, for example, is found on page 5-6 of the brief dated February 2, 2010, which states that "the hotel leasing agreement would have never been signed by the plaintiff in default of guarantees and, specifically, the obligation undertaken by [the Claimant] and Mister [M] … in connection with the construction of a better access to the Hotel from the ring road that facilitated the arrival of guests"; again, on page 17 of the final brief, which reads that "in connection with the execution of the junction from the ring road, the plaintiff has produced the evidence of the relevant obligation undertaken by [the Claimant]".

97. In [the Respondent]'s representation, the hypothetical assumed event does not seem to be neutral from the counterparty's will, yet it is rather linked to the counterparty's action and initiative. A confirmation of this also appears in the exchange of letters between the parties and, more exactly, in the letter ... sent to Mister [M] by the [the Respondent]'s legal representative (and filed by [the Respondent] as document 15), in which the failure to build the direct access from the main road is attributed to Mister [M]'s failure to fulfill the engagements undertaken with this agent.

98. So, a clear contradiction is found in [the Respondent]'s case: if the construction of the road junction were [the Claimant]'s obligation (but the Arbitral Tribunal has already examined and excluded this hypothesis), then the alternative hypothesis of "presupposizione" would not occur.

99. Moreover, in order to exclude the existence of the "presupposizione", the Arbitral Tribunal remarks that the agreement dated July 12, 2001, shows in no place whatsoever any connection between the execution of the road junction and the persistent effectiveness of the leasing agreement of the [X] Hotel. As pointed out above, another unfailing element of the "presupposizione" is that the assumption must be deducted from the content of the agreement, regardless whether it is in the preamble or in the premises. So, the existence of the matter in question must be denied in this case, since no provisions, premises or documents annexed to the leasing agreement, nor any letters or other statements previously exchanged between the parties, suggest any connection, although implicit and postulated, between the persistent effectiveness of the transaction and the construction of the new road junction.

100. Once again, the Arbitral Tribunal must remark that the considerable business importance of this transaction, the quality of the parties and the painstaking contractual regulation of the leasing agreement lead to believe that, should the construction of the road junction be an essential presupposition of the agreement, the contracting parties would presumably include this "presupposizione", whether just in the premises or in the annexes to the agreement dated July 12, 2001.

101. The absence in the content of the agreement and in its larger context of any references to the construction of the road junction, the technical and administrative methods, the schedules and costs of such alleged works, then, forces us to exclude that this hypothetical circumstance includes a "presupposizione".

102. Finally, an additional remark against the existence of the "presupposizione" in this case is given by the circumstance that the assumed event is neither certain nor defined in the parties' statements. Just think that the location and the technical and logistic features of the road junction do not appear clearly from the allegations formulated in trial or the out-of-trial statements exchanged between the contracting parties. In the parties' statements, the road it was planned to link to is ambiguous, whether the ... motorway or the ... ring road ... The extremely general features by which the parties have represented the hypothetical assumed event also shows their intrinsic uncertainty, since one cannot consider certain the execution of a road whose exact location is unclear and of which no information about its construction features exists. The uncertainty of the hypothetical assumed event is also suggested by the remark that the construction of an access road, from either the motorway or the highway, is an activity, among the other things, subject to administrative authorizations. It does not seem realistic, then, that the parties, according to an ordinary diligent behaviour, have considered certain the occurrence of an event subject to a third party's action.

103. Also from this point of view, the Arbitral Tribunal does not intend to deny that the hypothesis of the construction of a new access road junction to the Hotel may have been considered and discussed during the negotiations; however, the Arbitral Tribunal - for the reasons expressed above - does not hold that such a hypothesis has ever turned into an obligation for the parties, nor has it ever taken the character of a certain and essential presupposition for the stipulation of the leasing agreement dated July 12, 2001.

104. From every point of view, it must be excluded that the execution of the road junction implies a "presupposizione": consequently, all relevant evidence sections (particularly sections a), b), c), f), g), h), formulated by [the Respondent] in its brief dated January 12, 2009) must be rejected. In the light of the above considerations, the measures of inquiry required by [the Respondent] must be held irrelevant and, before that, inadmissible according to articles 2722 and 2723 of the Italian civil code, since aim at demonstrating additional or contrary or subsequent covenants to the content of the leasing agreement dated July 12, 2001, and because they have been formulated in very general terms. These evidence sections regard the requests (filed by [the Respondent]) for termination of the agreement by default, ineffectiveness of the agreement by "presupposizione", withdrawal from the agreement, as a consequence of the failure to build a new road junction to access the hotel.

105. After stating the above, all of [the Respondent]'s requests (and objections) to terminate the agreement and/or requests for agreement's ineffectiveness, or to verify the right of withdrawal, linked to the construction of a new access road junction to the Hotel, must be rejected. And, from these points of view, instances under ii), iii) and iv) proposed by [the Respondent] (page 2 of the paper of clarification of conclusions dated March 29, 2010) must be rejected.

5. On the waiver of the petition for cancellation

106. Before tackling the problem of noise emissions claimed by [the Respondent], the Arbitral Tribunal - for the award completeness' sake - remarks that [the Respondent], in the conclusions of the defence filed on November 25, 2008, also asked for the cancellation of the leasing agreement because of [the Claimant]'s fraud. This petition was objected on the merit by [the Claimant], which also raised the plea of the prescription of the cancellation action.

107. The Arbitral Tribunal - apart from remarking that the five-year term provided for in article 1442 of the Italian civil code has clearly elapsed - holds it must examine neither the petition for cancellation by fraud proposed by [the Respondent], nor the objections raised by [the Claimant].

108. In fact, the petition for cancellation formulated by [the Respondent] in its defence filed on November 25, 2008, has been not repeated - perhaps also considering the prescription term had elapsed - in the subsequent brief dated April 3, 2009; and, above all, it has not been repeated in the conclusion clarification brief filed by [the Respondent] on March 29, 2010. Consequently, this issue must be held to be abandoned.

6. On the noise emissions (so-called [neighbour] question)

109. [The Respondent] also complains about the "noise emissions from the industrial premises of [the neighbouring business], which had a devastating impact on the opportunities to run the hotel business covered in the Agreement (and on the profit opportunities of such a company), forcing [the Respondent] to close all rooms located on the Hotel side bordering the [neighbour's] industrial premises" (final brief dated April 29, 2010, page 15).

110. It is good to remark that in the clarification brief of the conclusions formulated by [the Respondent] (paper of clarification of conclusions dated March 29, 2010), the issue of noise emissions (the so-called [neighbour] question) is not claimed as the ground for the request (or the objection) for termination by default of the leasing agreement, but just as the precondition to the petition for the refund of damages [see petition under v)]. Consequently, from the point of view of the effectiveness and the termination of the leasing agreement, this issue should be held to be waived or irrelevant. However, the Arbitral Tribunal, for the award completeness' sake, holds it suitable to also examine the so-called [neighbour] question from the point of view of a hypothetical breach of contract.

111. From [the Respondent]'s point of view, the damage resulting from such noise emissions should be attributed to [the Claimant], because [the Claimant] should have guaranteed the lessee from such emissions, according to the provisions of article 1575, number 3, of the Italian civil code, or according to the standard provisions of article 9 of the leasing agreement dated July 12, 2001 (see, for example, reply brief dated May 20, 2010, page 14).

6.1. Examination of the issue from the point of view of legal regulation

112. In order to verify [the Claimant]'s alleged default, it is necessary to start from the legal regulation of the relationship.

113. According to the Arbitral Tribunal, the legal regulation of this case must be identified in article 1585 of the Italian civil code, which is located in the general provisions (Section I) of Chapter VI about leasing (which also includes Section III about renting).

114. As everybody knows, article 1585, clause 1, of the Italian civil code, provides for the lessor's obligation to guarantee the lessee against any inconveniences that might reduce the enjoyment of the asset and that come from any third parties that claim rights on such an asset. They are the so-called inconveniences by right, carried out through judicial or out-of-court claims, which the lesser is obliged to guarantee because of the legal provisions.

115. It is also known that such guarantee - according to the most widespread and convincing opinion - does not cover the so-called factual inconveniences, that is the material activities carried out by third parties, which directly affect the relationship between the lessee and the asset, damaging the full enjoyment of the asset. Pursuant to article 1585, clause 2, of the Italian civil code, the lessor's responsibility does not include guaranteeing the lessee against factual inconveniences, since the lessee may act directly against the bothering third party.

116. The distinction between factual inconveniences and inconveniences by right, as well as the limitation of the lessor's guarantee in case of inconveniences by right, is clear:

Article 1585 of the Italian civil code, when regulating the guarantee given by the lesser for the full and standard use of the leased asset, contains a double provision covering potential inconveniences that may be caused by third parties to the peaceful development of the leasing; if the third parties claim rights conflicting with the lessee's rights, either objecting the lessor's power of disposal or claiming a real or personal right that reduces or makes invalid the lessee's right, inconveniences by right appear for which the lesser is obliged to guarantee the lessee according to the above-mentioned article, clause 1; if, instead, the third parties do not propose any legal claims, yet cause prejudice to the lessee's enjoyment by raising tangible obstacles to material activities, which can be considered unlawful actions in a broad sense, factual inconveniences appear for which the lessor's guarantee is not due and the lessee is allowed to act directly against the third parties according to the article 1585, clause 2, of the Italian civil code. (Court of Cassation no. 7609 dated October 14, 1987; consistent with Court of Cassation section III, no. 11514 dated May 9, 2008; Court of Cassation section II, no. 4463 dated May 20, 1997.)

117. In light of these considerations, which are largely widespread in case law and doctrine and, anyway, shared by the Arbitral Tribunal, the Arbitral Tribunal must state that, in this case, [the Claimant] is not liable according to article 1585 of the Italian civil code. The inconveniences claimed in trial can be easily classified as so-called factual inconveniences, against which the lesser does not hold any guarantee, while the lessee has the power to act directly against the bothering third party.

118. In connection with the qualification of noise emissions and the alleged guarantee due by the lesser, [the Respondent] has claimed, on one hand, that the emissions from the adjacent premises should be considered as inconveniences by right; on the other hand, that the lessee, anyway, would have no power to take action in this case (consequently, the lesser would be obliged to guarantee the lessee), since the suppression of emissions would require a change in the structure where they come from (see final brief dated April 29, 2010, page 23 and subsequent ones).

119. In the Tribunal's opinion, both objections must be held to be groundless.

120. First of all, it is evident that the facts complained about in trial by [the Respondent] are not settled by judicial or out-of-court claims promoted by third parties, which claim rights against the lessee's right and may reduce this right's content. [The Respondent], in fact, complains about noise emissions from the adjacent factory, which, in its opinion, has caused 100 rooms of the hotel to become unusable because of persisting and unbearable noise. So, it complains about a fact, not somebody else's objection, demand or claim.

121. The lessee, then, does not allege third parties' hypothetical demands that claim the existence of legal situations incompatible with, or anyway suitable to prejudice, the content of its right. It complains, instead, about purely material and - in its opinion - unlawful activities that, far from implying objections on the lessee's right to enjoy the asset, directly affect the relationship between the lessee and the asset, diminishing its enjoyment of the asset right away. It is also good to recall the orientation expressed by the Supreme Court in other resolutions:

The inconvenience by right, against which the lessor's guarantee obligation is established, occurs when a third party, claiming real or personal rights on the leased asset conflicting with the positions granted to the lessee, exercises the relevant demand that implies the loss or reduction of the lessee's enjoyment. (Court of Cassation section III, no. 2531 dated February 7, 2006.)

while:

A factual inconvenience - against which the lesser is not obliged to guarantee the lessee, pursuant to article 1585 of the Italian civil code, clause 2 - appears when the lessee's prejudice arises from the third party's unlawful action exceeding the agreement, without questioning, neither directly nor indirectly, the lessee's right to enjoy the leased asset. (Court of Cassation section II, no. 939 dated January 26, 1995.)

122. Since it is unquestionable that the facts complained about by [the Respondent] only are material and unlawful activities, against which no legal claim is made by the third party, this case only presents factual inconveniences, and consequently - in the Tribunal's opinion - no liabilities can be attributed to [the Claimant].

123. On the other hand, the documents acquired in trial, however, indicate that such noises depend, more than on structural reasons, on the behaviour of the staff while working in the company. This appears from Mister [T]'s statements in the ... report ..., which reads as follows "the main activity of the above-mentioned company ... is carried out at night time, that is from about 10 p.m. to 6 a.m., Sunday through Friday of every week, in the outdoor area surrounding the industrial shed, with noises caused by the trips of vehicles like forklifts (with repeated alarms of their maneuvers), the docking and undocking of articulated vehicles, the loading and unloading of goods, the excessive use of truck horns, and also the shouting of the workers" (document 28 annexed to the Answer; for the annoying use of horns, also see the e-mail sent by Mister [T] to [the neighbour's] agents ... annexed as document 29).

6.2. Examination of the issue from the point of view of contractual regulation

124. Excluding [the Claimant]'s responsibility according to the legal regulations, it is necessary to see whether this hypothetical responsibility can be found from the point of view of contractual regulation.

125. According to [the Respondent], the leasing agreement dated July 12, 2001, provides for [the Claimant]'s obligation to guarantee the lessee against factual inconveniences.

126. Article 9, clause 1, of the agreement dated July 12, 2001, states what follows:

[The Claimant] shall be obliged, for as long as the leasing agreement lasts, to carry out any required action to guarantee the continued and undisturbed possession of the Hotel and relevant furnishings, equipment, and systems by [the Respondent] without any breaks or interferences.

127. This clause - at a first examination - may trigger some construction doubts, since it seems general and misleading, since it does not clarify the effects in connection with which [the Claimant] is "obliged ... to carry out any required action to guarantee the continued and undisturbed possession of the Hotel". In particular, when this provision is taken out of its context, it is not suitable to clarify whether such facts are limited to third parties' demands or rights in connection with the Hotel and its appurtenances, or such facts also include the third parties' material and unlawful activities.

128. [The Respondent] claims the second construction option, proposing a broad construction of the text of the agreement and including in the application area of this clause (article 9, clause 1) also third parties' material and unlawful activities that may disturb the lessee. In fact, according to the lessee,

the wide scope of this contractual provision is clearly justified by the subject of the agreement, which is a hotel business, whose quiet enjoyment plays a key role for the successful management of such a company. Just for this reason, therefore, the parties wanted to include a general obligation for [the Claimant] in article 9 of the agreement: such an obligation exists in any case when, after the occurrence of a stop or an interference, the quiet and undisturbed possession of the Hotel is affected. (See final brief, pages 27-28.)

129. The general nature of this clause forces the Arbitral Tribunal to proceed with the application of the hermeneutical principles provided for in the Italian civil code, according to the so-called "principio del gradualismo". In light of this principle, according to the long-time orientation in case law and doctrine, the interpreter first of all must look for the common intention behind the contractual provisions, resolving the meaning of the general or polysemic clause based on the other clauses in the agreement (Court of Cassation section I, no. 4176 dated February 22, 2007; Court of Cassation section III, no. 18180 dated August 28, 2007; Court of Cassation labor section, no. 10636 dated May 9, 2006; Court of Cassation section I, no. 28479 dated December 22, 2005; Court of Cassation section II, no. 16022 dated November 14, 2002). So, article 1363 of the Italian civil code stands out, which establishes that "every clause should be read by means of the others". According to the dominating orientation the Arbitral Tribunal has just illustrated, the systematic construction of the agreement is the priority principle to accept the common intention of the agreement and to resolve the ambiguity of each clause.

130. Looking for the Parties' common intention in the light of the global reading of the clauses, [the Respondent]'s construction must be certainly rejected. In fact, when reading clause 1 of article 9 in combination with the other clauses of the same article, the parties' intention to limit [the Claimant]'s guarantee only in connection with third parties' demands and rights stands out.

131. Clause 2 of article 9, whose function is undoubtedly that of specifying the content of clause 1 is very important in this connection. In fact, the clause starts with the expression "in particular" and continues with the provision for [the Claimant] of the obligation to pay "any amount due that may affect the Hotel or the Company, arising from any fact or event occurred previously to the Execution date". Also the third clause follows the same line and reads "[the Claimant]'s debts or financial obligations will be not allowed to damage or modify the Company's standard operation"; and finally the latest clause of article 9, which provides for, on certain conditions, [the Respondent]'s power to pay off "any debt not refunded by [the Claimant]".

132. All of the above-mentioned clauses provide for [the Claimant]'s guarantee obligation for debts or previous obligations that may affect the full enjoyment of the hotel by [the Respondent]. Such clauses do not refer to the parties' material and unlawful actions, but to legal demands put forward by third parties, third parties' claims based on breach of contract or [the Claimant]'s other actions resulting in money demands.

133. Also the hermeneutical principle provided for in clause 2 of article 1362 of the Italian civil code (which forces the interpreter to infer the parties' mutual intention from "their overall behaviour also after the execution of the agreement") leads to exclude the lessor's guarantee against the so-called factual inconveniences. [The Respondent]'s behaviour is extremely significant from this point of view, because it has acted individually and directly against the annoying third party, thus giving the impression that [the Claimant] had undertaken no obligations in this connection.

134. In conclusion, the Arbitral Tribunal holds that the lesser is not obliged to guarantee [the Respondent] from the noise emissions from the nearby [neighbouring] premises; and that, consequently, the lesser is not responsible for the damages claimed by [the Respondent]. In fact, after denying the existence of the lessor's guarantee or default in connection with the said noise emissions, all obligations upon the lesser to refund the damages must be excluded.

135. Excluding in law [the Claimant]'s responsibility for the noise emissions complained about by [the Respondent] and excluding the responsibility of the relevant alleged damages, all measures of inquiry deployed in this connection are absolutely irrelevant. Therefore, all evidence instances formulated in this connection (including the claim requesting a court-appointed expert opinion) must be rejected.

136. As already reported, on March 10, 2011, after the Arbitral Tribunal had sent, on January 2011, the first draft of the Final Award to the ICC for the scrutiny of the Court in pursuance of art. 27 of the ICC Rules of Arbitration, the Counsels of [the Respondent] filed an instance requesting the Tribunal to authorize the production of "the expert witness report filed [in a local court] by the expert witness appointed in relation to the proceedings started by [the Respondent] against the [neighbouring companies]". The Counsels of [the Respondent] alleged to their instance a copy of the mentioned expert evidence concerning the noise emissions produced by the industrial premises of [the neighbour].

137. The Arbitral Tribunal remarks preliminarily that this instance was filed after the specification of the conclusions, after the Tribunal had met in chambers to examine and decide the controversial matters and after the Tribunal had sent, on January 2011, a first draft of the Final Award to the ICC for the scrutiny of the Court.

138. Anyway, the Arbitral Tribunal, regardless of the fact that this instance filed on March 10, 2011 is untimely, holds that the expert evidence alleged to the instance is irrelevant to the decision.

139. In fact, as it has been widely illustrated in this Chapter and in the previous Chapter, the Tribunal holds that the lesser is not obliged to guarantee the lessee against the noise emissions and, more generally, against the factual inconveniences, from the point of view of legal regulation as well as from the point of the view of contractual regulation.

140. Consequently, the expert evidence which the Counsels of [the Respondent] requested to produce is absolutely irrelevant to the decision, since it is not necessary to determine the measure of the noise emissions complained by the lessee. Therefore, the Tribunal rejects the mentioned instance dated March 10, 2011.

141. After these premises, the Arbitral Tribunal rejects all requests and objections formulated, from all points of view, by [the Respondent] in connection with the said noise emissions, particularly with reference to the instances under ii), iv) and v) (a) (pages 2 and 3 of the paper of clarification of conclusions dated March 29, 2010). The Arbitrator appointed by [the Respondent] dissents to the majority decision taken by the Arbitral Tribunal on this issue.

7. On the withdrawal from the agreement according to article 18.

142. In the above Chapters [the Respondent]'s petition aimed at verifying its right to withdraw from the agreement because of the failure to implement a hotel chain (see Chapters 3.3 and 3.4) or a new access road to the [X] Hotel (see Chapters 4.2) has been already examined and rejected. On the other hand, [the Respondent], in order to support its withdrawal right, also invokes article 18 of the agreement dated July 12, 2001, whose clause 2 provides for a case of withdrawal.

143. This clause states what follows:

144. If the Company is not managed for a period exceeding 30 (thirty) running days, and this situation cannot be attributed to any party, either Party will have the right to withdraw from this Agreement. On the other hand, if the Company is not managed for a period exceeding 30 (thirty) running days, and this situation can be attributed to one Party, the Party that has not caused this situation will have the right to terminate this Business leasing agreement. (article 18, clause 2)

145. This clause includes two different cases of dissolution of the contractual relationship: a case of withdrawal when "the Company is not managed for a period exceeding 30 (thirty) running days, and this situation cannot be attributed to any party"; and a case of termination when "the Company is not managed for a period exceeding 30 (thirty) running days, and this situation can be attributed to one Party".

146. The two cases are different because the former (withdrawal case) is based on a fact that cannot be attributed to neither [recte: either of the] contracting parties, while the latter (termination case) is based on a fact that can be attributed to one of them; but both cases start from the same and necessary assumption, that is "the Company is not managed for a period exceeding 30 (thirty) running days".

147. Using not very strict terms, article 18, clause 2, of the agreement refers to a stop to the running of the company for a period exceeding 30 days. By these terms - in the Tribunal's opinion - the parties intended to refer to the case when the running of the hotel is fully stopped, that is when the hotel is closed for a longer period than 30 running days. In the Tribunal's opinion, this is the most logical meaning in which article 18, clause 2, of the agreement must be constructed. This opinion is also supported by a literal issue, because the heading of article 18 of the agreement is "Temporary closing".

148. After stating the above, it is evident that article 18, clause 2 - regardless of the fact that no breach by [the Claimant] has emerged - is not applicable in this case, because the actual precondition that has been just mentioned, that is the full stop of the hotel operation and the hotel closing for over 30 running days, is missing.

149. In connection with this point of view, the lessee remarks that:

In this case, it is clear that the production purpose that [the Respondent] wanted to achieve by entering the agreement covering the leasing of a hotel with 203 rooms has fully vanished after closing 100 rooms of the hotel because of noise emissions. Therefore, currently, [the Respondent] holds an asset that is thoroughly different from the original it has leased. Therefore, since [the Claimant] has not guaranteed the quiet enjoyment, [the Respondent] has lost the possibility to run the hotel business and, consequently, the Agreement must be considered terminated according to article 18.2 (final brief, page 31)

150. [The Respondent]'s opinion is groundless and cannot be shared.

151. In fact, even if a direct causal relationship between the noise emissions and the closing of 100 rooms of the hotel were demonstrated, the fact would remain that such closing has caused neither the impossibility to run the company nor an actual stop of the hotel operation (not even for a period shorter than 30 running days as provided for in article 18 of the agreement).

152. On the other hand, [the Respondent] itself has never stated that the hotel has stopped running for longer than 30 days (just a reduction in the number of available rooms has been claimed); therefore, it has never stated that the actual precondition that - according to article 18, clause 2 - enables a party to withdraw from the agreement has ever occurred.

153. Nor can it be claimed that "the production purpose that [the Respondent] wanted to achieve ... has fully vanished after closing 100 rooms of the hotel", because the production activity has never stopped and [the Respondent] has always continued to run the hotel business without stops, in spite of its decision to close 100 rooms of the Hotel. Therefore, no impossibility to run the company for a longer period than 30 days can be found, neither abstractly nor tangibly.

154. Consequently, [the Respondent] has no right to withdraw from the agreement, not even pursuant to article 18 of the leasing agreement dated July 12, 2001.

155. Therefore, all requests and objections formulated by [the Respondent] in connection with its alleged right to withdraw must be rejected, particularly with reference to request under iv) (page 3 of the paper of clarification of conclusions dated March 29, 2010).

8. On the alleged obligation to renegotiate

156. [The Respondent] has complained about [the Claimant]'s failure to comply with the obligation to renegotiate the economic terms of the leasing, as provided for in the agreement.

157. In particular, the lessee has claimed that "in an already penalizing situation for [the Respondent], due to the failure to implement the desired projects and the ever-postponed solution to the issue of the difficult access to the Hotel, [the Claimant] (in clear breach of its contractual obligation) refused to even renegotiate the economic terms of the Agreement to be applied to the period after July 2006" (see final brief, page 13).

158. As a matter of fact, in the requests on the merit listed in the deed of clarification of conclusions dated March 29, 2010, no explicit reference is made to the alleged breach of the renegotiation obligation; however, the Arbitral Tribunal, for the award completeness' sake, holds it suitable to examine also this aspect.

159. The renegotiation issue must be examined based on the clauses contained in the deed of contractual amendment annexed as document 10 to the reply brief to counterclaims. This deed has amended and replaced the previous conditioned deed of contractual amendment dated March 3, 2006, and has become the exclusive source of the regulation of renegotiation.

160. The clause number 4 contained in the regulatory section of the deed of contractual amendment provides that:

The parties shall monitor the trend of the contractual relationship and, should results not improve considerably within 24 months, the parties may renegotiate, searching for the best balance between them, new terms to be applied to the period after August 2006. (number 4).

161. It is clear that such a clause does not establish the obligation, yet the faculty to renegotiate the economic terms of the agreement only; additionally, nor does it establish the exact renegotiation principles, and only limits to the indication, which is actually quite general and possibly a stylistic expression only, that the "best balance" is to be searched for.

162. From this point of view, [the Claimant]'s default and consequent responsibility are not conceivable at all: the agreement gives the initiative of the renegotiation to the parties' free and potential decision ("the partiesmay renegotiate") in connection with which neither obligations nor default can be claimed.

163. On the other hand, the same clause number 4 adds that "the above-mentioned new terms may only apply after [Company A]'s explicit acceptance; failing that, the economic and contractual terms will remain those established in the agreement until its expiration, as extended in this agreement". This provision subjects the effectiveness of the renegotiation of economic terms (renegotiation which is uncertain and optional as such) to [Company A]'s approval.

164. In this connection, [the Respondent] has claimed that [the Claimant] has not demonstrated that "it has taken no proactive steps - nor has it made anything necessary - with [Company A] for the purpose of obtaining its approval to renegotiate the rental of the agreement" (page 15). However, this objection cannot be shared.

165. Even leaving aside the obvious remark that, since the failure to comply with the (nonexisting) obligation to renegotiate cannot exist, as a necessary consequence, the failure to comply with the hypothetical obligations linked to the effectiveness of the renegotiation cannot exist either, the Arbitral Tribunal must remark that the evidence acquired in trial stands against [the Respondent]'s statement that has been set forth here above. The financial company's letter ... (annexed ... to the reply brief to counterclaims) clearly indicates, per tabulas, that [the Claimant] has sent that company the request to renegotiate the financial rental by letter ... The financial company's refusal to renegotiate the installment of the financial leasing certainly affects the hypothetical renegotiation agreement between [the Claimant] and [the Respondent], and forms an essential precondition at least from the economic point of view. In fact, it is evident that the renegotiation agreement between the parties did not require the financial company's approval, but the latter's intention to accept a correlative amendment to the terms and installments of the financial leasing. This is the meaning of clause number 4 contained in the operative section of the deed of contractual amendment, where it subjects the effectiveness of the renegotiation agreement to "[Company A]'s explicit acceptance".

166. After getting the evidence that [the Claimant] has asked [Company A] to renegotiate the content of the financial leasing agreement, and considering that the financial company has not accepted such renegotiation, the Arbitral Tribunal thinks that [the Claimant] has acted properly according to the provisions in the deed of contractual amendment. And the Arbitral Tribunal also concludes that the economic terms of the lease could be not renegotiated in default of an economically essential and contractually relevant precondition.

167. On the other hand, the Arbitral Tribunal can reasonably assume that [Company A] would not approve any amendments to the economic terms of the leasing, if such an amendment could affect the economic terms of the financial leasing, at least because a reduction in the rentals would mean a lower income and therefore a lower financial capacity for [the Claimant] (obliged to pay the rentals to [Company A]).

168. After these premises, the Arbitral Tribunal does not see [the Claimant]'s breach of the alleged obligation to renegotiate the economic terms of the leasing. As a necessary consequence, the Arbitral Tribunal must reject evidence chapters j) and k) formulated by [the Respondent] in its statement dated January 12, 2009, which, in the light of the considerations set forth here above, must be held irrelevant. These evidence sections regard the alleged default of [the Claimant] to perform the alleged obligation to renegotiate the agreement.

169. In conclusions, all objections and requests, on the merit and procedural, formulated by [the Respondent] in connection with the alleged failure to comply with the obligation to renegotiate, must be rejected.

9. On the so-called pre-opening invoices

170. As said above, [the Respondent], already in its answer brief dated November 25, 2008, has requested, among the other things, for [the Claimant] to be ordered "to pay invoices ... and ..., for the total amount of [amount], plus interest and money revaluation starting from the date of issue of the invoices until the date of the actual payment". This request has been formulated in connection with the so-called "pre-opening" costs, which - according to article 7 of the preliminary agreement December 19, 2000 - were anticipated by [the Respondent's parent company] against [the Claimant]'s obligation to refund them. The request has been repeated also in the deed of clarification of conclusions, under (v) (b).

171. In the opinion of the Arbitral Tribunal, this request can be neither examined, nor settled here, since it goes beyond the limits of the arbitration clause claimed by the parties. This issue must be raised by the Tribunal of its own motion (ex officio), since it regards the potestas iudicandi of the Arbitrators in relation to the petition.

172. It must be pointed out, in fact, that the regulation of the so-called pre-opening costs has been only included in the preliminary agreement December 19, 2000 (which, on the other hand, was binding on other parties than the parties to this arbitration) and not also in the final leasing agreement dated July 12, 2001. And the preliminary agreement dated December 19, 2000 (entered by [the Respondent's parent company] and not by [Company B] or [the Respondent]) included its own arbitration clause (article 21) which covered any litigation arising from that agreement.

173. Now, this arbitration has been based on the arbitration clause contained in article 20 of the Leasing agreement of hotel business dated July 12, 2001. Both parties have only invoked the latest arbitration clause provided in the final leasing agreement. Consequently, the Arbitral Tribunal cannot go beyond the limits of effectiveness of this arbitration clause, nor can it examine nor take decisions on any litigation arising from the execution of a different agreement.

174. To conclude, the Arbitral Tribunal raises incidentally the lack of cause of action ("legittimazione attiva") of [the Respondent] (which was not a contracting party of the agreement dated December 19, 2000), as well as the Tribunal considers itself devoid of potestas iudicandi in relation to this request filed by [the Respondent], since the petition goes beyond the limits of the arbitration clause on which this arbitral proceedings is based.

175. The petition, therefore, must be declared inadmissible. This, of course, does not exclude that this matter may be re-proposed by the authorized subject somewhere else.

10. On [the Claimant]'s petitions (termination of the agreement, return of the company, settlement of overdue rentals and refund of the damage)

176. After rejecting [the Respondent]'s objections and requests, the Arbitral Tribunal must examine the petitions put forward by [the Claimant], which (in short) has asked for the termination of the leasing agreement by the lessee's breach of contract and for the lessee's to be ordered to return the company, settle overdue rentals and refund the damage.

10.1. Relevance of the failure to pay the rentals. Termination of the contract for [the Respondent]'s default.

177. Both requests for termination of the agreement by breach of contract and refund of the damage formulated by [the Claimant] are based on [the Respondent]'s failure to pay rentals; more exactly, [the Claimant] complains that [the Respondent] has stopped paying the rentals starting from July 2008. From this default, [the Claimant] draws, on the one hand, the right to terminate the agreement, to be returned the company and to be settled the overdue and unpaid rentals for the total amount of [amount], and, on the other hand, the right to be refunded the damage, which equals all installments [the Claimant] would have collected until the natural expiration of the agreement, that is [amount].

178. As already remarked above (Chapter 2), the fact on which [the Claimant]'s requests are based is not controversial as a historical fact, but their relevance is discussed here. In fact, [the Respondent] admits it has not paid the rentals starting from July 2008; but it claims that the failure to pay would be called for by the [the Claimant]'s alleged breaches. Excluding, in the light of the considerations set forth in the above paragraphs, that [the Claimant] could be charged with any breaches of contract, the Arbitral Tribunal must exclude, as a necessary consequence, that [the Respondent]'s failure to pay the rentals is called for by a breach of contract, suitable to freeze the opponent's lawful request.

179. After denying the applicability of article 1460 of the Italian civil code, the Arbitral Tribunal must necessarily conclude that the failure to pay the rentals is a serious breach to one of the lessee's main obligations arising from the leasing agreement. This breach can only be attributed to [the Respondent] and is certainly suitable to cause the termination of the leasing agreement.

180. The assumptions of the termination by [the Respondent]'s breach are then important from a double point of view.

181. First of all, article 19 of the agreement dated July 12, 2001, includes an option of standard termination by right, according to which "the failure to make any payments provided for in this agreement" determines the termination by right of the relationship 30 days after the non-defaulting party has officially warned the other party, without the latter party has provided a remedy. The request for arbitration and the previous written requests formulated by [the Claimant] (see documents 2 and 3 annexed to the Request for Arbitration) to pay the overdue rentals can be held as suitable to support the transaction assumption and lead to the termination according to article 19 of the agreement.

182. In this connection, the Arbitral Tribunal points out that [the Claimant] has invoked article 1456 of the Italian civil code, clearly identifying an explicit determination clause in article 19 of the agreement. This construction, however, cannot be accepted since - as said above - article 19 does not establish the termination of the agreement as the automatic consequence of a simple statement by the party "that intends to take advantage of the termination clause". On the contrary, instead, it provides that, in the hypotheses mentioned therein, the non-defaulting party warns the other party to comply within the term of 30 days; and only in case of its failure to comply within this term, it establishes the termination of the leasing agreement. The standard regulations, therefore, seem to be better framed in the warning to fulfill (see article 1454 of the Italian civil code) than in the explicit determination clause (see article 1456 of the Italian civil code).

183. Anyway, even when setting aside the termination by right provided for in the contractual regulations, [the Respondent]'s breach (of the lessee's main obligation, which has a causal importance and a consideration value) is undoubtedly serious, having regard to the other party's interest, pursuant to article 1455 of the Italian civil code. Therefore, it certainly implies the termination of the agreement pursuant to article 1453 of the Italian civil code.

184. In this connection, it is good to recall the quiet case law orientation, in that, in matters of leasing, the failure to pay the rentals is a serious breach by itself, pursuant to article 1455 of the Italian civil code, since it is one of the primary and essential obligations arising from the agreement (see Court of Cassation section III, no. 24460 dated November 18, 2005).

185. Therefore, accepting the request formulated by [the Claimant], the Arbitral Tribunal declares the leasing agreement terminated by [the Respondent]'s default.

186. The termination of the agreement necessarily implies that [the Respondent] is ordered to return [to the Claimant] the hotel business covered by the leasing agreement.

10.2. Compensation for damages owed by [the Respondent]

187. [The Respondent]'s breach will cause the termination of the agreement and [the Claimant]'s rights to be refunded of the damage.

188. In this case, it is not very important to establish whether the award on the termination of the agreement has a declaratory or constitutive nature, considering the retroactive effect of the termination by default (which, on the other hand, for the agreements with a continued or periodical execution, does not cover the services already performed) and the provision of article 1591 of the Italian civil code stating that:

The lessee that is late in returning the asset must give the lesser the consideration agreed until the actual date of return, subject to the obligation to pay the right to damage.

This rule provides a base for the determination of the damage applicable to this case, including from an equitable point of view.

189. Therefore, in the Tribunal's opinion, [the Claimant] is entitled to receive as damages all rentals accrued since July 2008 until the time of this award and all installments that will accrue until the actual return of the company.

190. Interest at the legal rate shall be calculated on the overdue rentals until the date of this award. Interests must be calculated at the legal rate provided for by Italian laws (and precisely: art. 1284 of the Italian Civil Code: Law n. 662 of December 23, 1996; Ministerial Decree of December 12, 2007; Ministerial Decree of December 4, 2009; Ministerial Decree of December 15, 2010).

191. Interests must be calculated on all the rentals accrued since July 2008, starting from the expiration date provided for by art. 3 of the agreement for the payment of each monthly rental (and therefore interests shall be calculated starting from the eleventh day subsequent to the last day of each month). Interests must be calculated until the full payment.

192. The Arbitral Tribunal holds that no money revaluation should be calculated on the expired installments, considering that, in the examined period, the legal interest rate has been higher than the legal devaluation rate; so, the Arbitral Tribunal holds that the payment of legal interest suitably refunds the creditor for the non-availability of the amounts owed to it.

10.3. Compensation for further damages owed by [the Respondent]

193. [The Claimant] has requested, by way of damages, the payment of all rentals due until the expiration of the agreement. This request for refund of missed profit is certainly called for as far as the "if" is concerned, since the defaulting lessee is obliged to refund the lesser for any missed profit; but its amount cannot be accepted. In fact, the Arbitral Tribunal, after stating that a considerable portion of the amount required by way of missed profit has been already settled through the order to pay, by way of damages, all rentals accrued until the time of this award, holds that the amount demanded by [the Claimant] is clearly excessive.

194. In this connection, it must be considered that, after the return of the company, [the Claimant] will be in the position to use it productively, by either running it directly or leasing it to a new lessee. The principle must be also remembered that the damaged party is obliged to limit damages, by taking diligent actions to usefully use the assets already destined to the execution of the terminated agreement (cfr. Bianca, Diritto civile, 5, La responsabilità, Milano, 1994, page 299). In application of this principle, [the Claimant] is obliged to diligently and promptly strive to give the company business a new production use in the shortest possible time.

195. In this connection, it must be pointed out that, after the statement dated November 25, 2008, by which [the Respondent] has taken action through this arbitration requiring, among the other things, the termination by default of the leasing agreement of hotel business dated July 12, 2001, also [the Claimant], with its reply brief dated January 26, 2009, has required, in its turn, the termination of the said agreement.

196. Consequently, starting from January 2009, both parties, although on different and opposing grounds, have required for the termination of the agreement. So, it had been clear and easily foreseeable for quite a long time that, in any case, this arbitration would end with the dissolution of the contractual link and the release of the company. Consequently, [the Claimant] could have long foreseen the sure release of the company and the need to give it a different destination. Therefore, the Arbitral Tribunal holds it equitable that [the Respondent] has to refund [the Claimant] for missed profit for a span of time not exceeding nine months after the date of the actual release of the hotel business.

197. After stating the above, balancing the position of the parties and reducing the amount of damages based on the above considerations, the Arbitral Tribunal holds it equitable that the damage due to [the Claimant] (in addition to the payment of all rentals accrued since July 2008 until the time of release and due by way of damages) may be determined as an additional amount of [amount], calculated as of the date of this award, plus the legal interest effective from the date of this award and until the actual full settlement.

11. Costs

198. Defence costs (liquidated in the amount of [amount], plus accessory legal costs) and the costs of this arbitration (including the payment of the arbitrators' fees) - as fixed in accordance with art. 31 of the Rules of Arbitration - follow the loss in the lawsuit and, therefore, are charged to [the Respondent].

199. Establishes that the total fees for the Arbitrators are subdivided as follows: 40 percent for the President; 30 percent to each Arbitrator.

For these reasons

200. The Arbitral Tribunal, composed as above, deciding on all of the Parties' requests and objections, concerning the merit and the evidence, after rejecting any other instances on the merit and the evidence, orders what follows:

201. 1) establishes the termination of the "leasing agreement of hotel business" (covering the hotel located in [city]) dated July 12, 2001, by default of the lessee [the Respondent];

202. 2) orders [the Respondent] to release the hotel business covered in the said leasing agreement for the benefit of [the Claimant];

203. 3) orders [the Respondent] to pay [the Claimant], by way of damages, all rentals accrued since July 2008 until the date of this award, plus any interest at legal rates, effective since each expiration date and until their full settlement.; as well as the payment of any additional rentals that will accrue until the actual return of the company.

204. Interests must be calculated at the legal rate provided for by Italian laws (and precisely: art. 1284 of the Italian Civil Code: Law n. 662 of December 23, 1996; Ministerial Decree of December 12, 2007; Ministerial Decree of December 4, 2009; Ministerial Decree of December 15, 2010).

205. Interests must be calculated on all the rentals accrued since July 2008, starting from the expiration date provided for by art. 3 of the agreement for the payment of each monthly rental (and therefore interests shall be calculated starting from the eleventh day subsequent to the last day of each month). Interests must be calculated until the full payment.

206. 4) orders [the Respondent] to pay [the Claimant], by way of additional damages, the amount of [amount] in addition to legal interest from the date of this award and until the full settlement;

207. 5) declares inadmissible [the Respondent]'s request aimed at having [the Claimant] be ordered to pay invoices ... and ... (so-called pre-opening costs);

208. 6) all other claims and objections of the Parties are rejected;

209. 7) orders [the Respondent] to pay [the Claimant] the defence costs, liquidated in the amount of [amount], plus taxes and accessory legal costs;

210. 8) orders [the Respondent] to pay the ICC costs of arbitration in the total amount of [amount] [including: administrative expenses = [amount]; Chairman's fees = [amount]; Co-arbitrators fees = [amount]; arbitration expenses = [amount]).

211. The above decision has been taken by the arbitrators during a personal meeting in chambers on [dates].'

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