Investor-State Law Guide

Disputes Document Library Hydro S.r.l. and others v. Republic of Albania (ICSID Case No. ARB/15/28) Hydro S.r.l. and others v. Republic of Albania, ICSID Case No. ARB/15/28, Award, 24 April 2019

Citation copy citation

Hydro S.r.l. and others v. Republic of Albania, ICSID Case No. ARB/15/28, Award, 24 April 2019

Type
Final Awards on Jurisdiction, Merits or Damages

Language
English

Applicable rules
ICSID Arbitration Rules (2006)

Applicable Instrument(s)
Albania - Italy BIT (1991) [Italian]


Keyword Search

Keyword appearances:

INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES

In the arbitration proceeding between

HYDRO S.R.L.

COSTRUZIONI S.R.L.

FRANCESCO BECCHETTI

MAURO DE RENZIS

STEFANIA GRIGOLON

LILIANA CONDOMITTI

Claimants

and

REPUBLIC OF ALBANIA

Respondent

ICSID Case No. ARB/15/28


AWARD


Members of the Tribunal
Dr. Michael C. Pryles, President
Mr. Ian Glick QC, Arbitrator
Dr. Charles Poncet, Arbitrator

Secretary of the Tribunal
Mr. Francisco Abriani

Assistant to the Tribunal
Mr. Timothy Maxwell


Date of dispatch to the Parties: 24 April 2019

 

REPRESENTATION OF THE PARTIES

Representing Hydro S.r.l. and others:

Mr. Philippe Pinsolle
Mr. Alexander G. Leventhal
Quinn Emanuel Urquhart & Sullivan UK LLP
6, rue Lamennais
75008 Paris, France
and
Dr. Tai-Heng Cheng
Quinn Emanuel Urquhart & Sullivan LLP
51 Madison Avenue, 22nd Floor
New York, NY 10010, U.S.A.
and
Mr. Alexandre de Fontmichel
Avocat à la Cour
2, rue Lord Byron
75008 Paris, France
and
Prof. Andrea Saccucci
Saccucci Fares & Partners Studio Legale
Internazionale
Via Lisbona, 9
I-00198 Rome, Italy
and
Mr. David Rivkin
Ms. Catherine Amirfar
Mr. Christopher K. Tahbaz
Ms. Ina C. Popova
Mr. Romain Zamour
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022, U.S.A.

Representing Republic of Albania:

Mr. Artur Metani - State Advocate General
Ms. Brunilda Lilo - Head of Arbitration Office
State Advocate General
State Advocacy Office
Ministry of Justice
Blv Zogu I
Tirana, Albania
and
Mr. Michael Darowski
Ms. Karen O’Connell
Ms. Anna Packwood
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
United Kingdom
and
Mr. Siddharth Dhar
Mr. Peter Webster
Mr. Felix Wardle
Essex Court Chambers
24 Lincoln's Inn Fields
London WC2A 3EG
United Kingdom

 

TABLE OF CONTENTS

IV. FACTUAL BACKGROUND 30
VI. JURISDICTION 116
VII. MERITS 178
VIII. QUANTUM 221

 

FREQUENTLY USED ABBREVIATIONS AND DEFINED TERMS

1st ICC Arbitration Deutsche Bank AG v. BEG S.p.A, ICC Case No.17496/JHN/GFG commenced by a Request for Arbitration dated 27 October 2010
1st ICC Award Award rendered in the 1st ICC Arbitration, dated 18 April 2013 (R-033)
2nd ICC Arbitration Hydro S.R.L. (Italy) v. The Republic of Albania, ICC Case No. 20564/EMT/GR commenced by a Request for Arbitration dated 16 October 2014 (R-042)
2nd ICC Award Partial award rendered in the 2nd ICC Arbitration dated 8 January 2018 (Document attached to the Claimants’ letter dated 16 January 2018)
1st Rome Arbitration Hydro S.r.L v. Deutsche Bank AG commenced by application dated 15 July 2010
1st Rome Award Award rendered in the 1st Rome Arbitration dated 17 November 2011 (R-032)
2nd Rome Arbitration Hydro S.r.L v. Deutsche Bank AG commenced by petition dated 10 October 2010
2nd Rome Award Award rendered in the 2nd Rome Arbitration dated 7 August 2013 (R-035)
1998 Broadcasting Law Law No. 8410 on the Public and Private Radio and Television in the Republic of the Albania, 30 September 1998 (CL-033)
2007 Broadcasting Law Law No. 9742 on Digital Broadcasting in the Republic of Albania, 28 May 2007, Article 15 (CL-057)
2013 Media Law Law No. 97/2013 on Audiovisual Media in the Republic of Albania, 4 March 2013 (CL-084)
400 KV 400 KV Sh.p.k.
Agonset Agonset Sh.p.k
Agonset.it Agonset.it S.r.l.
Agonset.uk Agonset.uk Ltd
AKBN National Agency of Natural Resources
Albania / Respondent Republic of Albania
Albaniabeg Albaniabeg Ambient Sh.p.k
ASB Authorised State Body
Arbitration Rules ICSID Rules of Procedure for Arbitration Proceedings in effect from 10 April 2006
BEG Becchetti Energy Group Spa
BIT Agreement between the Government of the Republic of Italy and the Government of the Republic of Albania on the Promotion and Protection of Investment, which was signed on 12 September 1991, and entered into force on 29 January 1996
C-[#] Claimants’ Exhibit
CL-[#] Claimants’ Legal Authority
Cable System Cable System Sh.p.k.
Claimants Hydro, Costruzioni, Mr. Becchetti, Mr. De Renzis, Ms. Grigolon and Ms. Condomitti
Cogeco Cogeco S.r.l.
Concession Agreement Original Concession Agreement between BEG S.p.A and Ministry of Public Works, Land Planning, Tourism and Ministry of Mining and Energy Resources dated 24 May 1997 (C-014)

Including the First Addendum to the Concession Agreement dated 2 November 2000 (C-191)

Including the Second Addendum to the Concession Agreement dated 8 May 2007 (C-015)

As of 8 May 2007, the Consolidated Concession Agreement (C-199)
Costruzioni / Second Claimant Costruzioni S.r.l.
Counter-Memorial Respondent’s Counter-Memorial dated 23 January 2017
Deutsche Bank Deutsche Bank AG
DigitAlb DigitAlb Sh.a.
Enel Enel SpA
Energji Energji Sh.p.k.
GE06 Agreement ITU International Symposium on the Digital Switchover Regional Agreement GE06 of 16 June 2006 (CL-051)
Hearing 1 Hearing on Jurisdiction held on 28 to 30 March 2017
Hearing Hearing on Jurisdiction and the Merits on 4 to 14 September 2017
Hearing Transcript, Day [#], [page:line] Transcript of the Hearing
Hydro / First Claimant Hydro S.r.l.
ICC International Chamber of Commerce
ICSID International Centre for Settlement of Investment Disputes
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965
ILA International Law Association
Investime Investime te Rinovueshme Sh.p.k.
JVA Joint Venture Agreement between BEG and Deutsche Bank dated 16 January 2007 (R-0101)
Kalivaç Project / Project The construction and operation of the Kalivaç hydroelectric power plant
KESH Korporata Elektroenergjitike Shqiptare
KGE Kalivaç Green Energy Sh.p.k.
Memorial on the Merits Claimants’ Memorial on the Merits dated 13 May 2016
METE Ministry of Economy, Trade and Energy
Mr. Becchetti / Third Claimant Mr. Francesco Becchetti
Mr. de Renzis / Fourth Claimant Mr. Mauro De Renzis
Ms. Condomitti / Sixth Claimant Ms. Liliana Condomitti
Ms. Grigolon / Fifth Claimant Ms. Stefania Grigolon
NCRT The National Council of Radio and Television created by the 1998 Broadcasting Law.
R-[#] Respondent’s Exhibit
RL-[#] Respondent’s Legal Authority
Rejoinder Claimants’ Rejoinder on Jurisdiction dated 20 February 2017
Reply Respondent’s Reply on Jurisdiction dated 20 January 2017
RTSH Radiotelevizioni Shqiptar
Switchover Strategy Decision of the Council of Ministers No. 292 on a Strategy of Switchover from Analogue to Digital Broadcasting, 2 May 2012 (CL-080)
Top Channel Top Channel Sh.a.
Tribunal Arbitral tribunal constituted on 19 November 2015
Tring Tring TV Sh.a.
Waste Management Concession Waste management concession agreement between Albaniabeg and Albania dated 26 May 2005

I.

INTRODUCTION

1.
This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes (“ICSID” or the “Centre”) on the basis of the Agreement between the Government of the Republic of Italy and the Government of the Republic of Albania on the Promotion and Protection of Investment, which was signed on 12 September 1991, and entered into force on 29 January 1996 (the “BIT”), and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on 14 October 1966 (the “ICSID Convention”).
2.
The Claimants are Hydro S.r.l. (“Hydro”), a company incorporated under the laws of Italy, Costruzioni S.r.l. (“Costruzioni”), a company incorporated under the laws of Italy, Mr. Francesco Becchetti, a natural person having the nationality of the Italian Republic, Mr. Mauro De Renzis, a natural person having the nationality of the Italian Republic, Ms. Stefania Grigolon, a natural person having the nationality of the Italian Republic, and Ms. Liliana Condomitti, a natural person having the nationality of the Italian Republic (together, the “Claimants”).
3.
The Respondent is the Republic of Albania (“Albania” or the “Respondent”).
4.
The Claimants and the Respondent are collectively referred to as the “parties.” The parties’ representatives and their addresses are listed above on page (i).
5.
This dispute relates to the Claimants’ alleged investments in Albania’s hydroelectric energy, wind energy and media industries. The Claimants claim that Albania expropriated certain of the Claimants’ investments, and that Albania failed to accord fair and equitable treatment to the Claimants’ investments in Albania. The Claimants further argue that all of Albania’s actions against the Claimants form part of Albania’s, and in particular Prime Minister Rama’s, campaign against Mr. Becchetti, his companies, and associates.
6.
The parties’ specific requests for relief are set forth in Section V below, and a fuller summary of their positions is also contained below. In its analysis, the Tribunal has considered not only the positions of the parties as summarised in this Award, but the numerous detailed arguments made in the parties’ written and oral pleadings not referred to in this Award as well. To the extent that these arguments are not referred to expressly, they should be deemed to be subsumed into the Tribunal’s analysis.

II.

THE PARTIES

A.

THE CLAIMANTS

7.
The Claimants in this arbitration have been helpfully summarised in a flow chart showing the shareholders and related companies:1
[IMAGE UNAVAILABLE - SEE ORIGINAL PDF]

(1)

Hydro S.r.l.

8.
The first Claimant, Hydro, is a company incorporated under the laws of Italy. Hydro is registered under No. 09563901009 at the Register of Companies of Rome and is headquartered at Piazza di Spagna, 66, 00187 Rome, Italy.2



  1 Claimants’ Closing Presentation, slide 9.
  2 Hydro S.r.l.’s excerpt from the Rome Registry of Companies, 22 December 2014 (C-002).
9.
Hydro was created by the Becchetti Energy Group Spa (“BEG”) and Deutsche Bank AG (“Deutsche Bank”) to build and operate the Kalivaç Plant (the “Kalivaç Project” or the “Project”), for which BEG obtained a concession from the Government of Albania in 1997.3 For that purpose, Hydro acquired 100% of the shares of Kalivaç Green Energy Sh.p.k. (“KGE”), a company incorporated under the laws of Albania, in July 2007. Since 2013, Hydro has been wholly owned by BEG, which in turn is owned by members of the Becchetti family, including the Claimants Francesco Becchetti and Liliana Condomitti. Stefania Grigolon (also a Claimant) also holds a 10% share.
10.
Hydro is also the sole claimant in an ICC arbitration against Albania arising out of the concession agreement for the Kalivaç Project (“2nd ICC Arbitration”).4 Hydro also owns a 5% share in Agonset.it S.r.l. (“Agonset.it”), an Italian television company and subsidiary of Agonset Sh.p.k.5

(2)

Costruzioni S.r.l.

11.
Costruzioni is a company incorporated under the laws of Italy. Costruzioni is registered under No. 07070201004 at the Register of Companies of Rome and is headquartered at Vicolo del Bottino, 10, 00187 Rome, Italy.6 Liliana Condomitti holds 99.5% of the shares in Costruzioni.7
12.
Costruzioni owns 80% of the shares of Energji Sh.p.k. (“Energji”, a company incorporated under the laws of Albania), the project contractor on the Kalivaç Project.8
13.
Costruzioni also holds 80% of the shares of Cable System Sh.p.k. (“Cable System”), a company created to develop a submarine cable between Albania and Italy.9 Cable System holds a minority share (23%) in Albaniabeg Ambient Sh.p.k. (“Albaniabeg”),10 a company that was originally created as the concessionary company on the Kalivaç Project and from which KGE was later spun off.11 Albaniabeg also signed a concession agreement to construct and operate a waste management facility on 26 May 2005 (the “Waste Management Concession”).12



  3 First Becchetti Statement, para. 35.
  4 Hydro S.R.L. (Italy) v. The Republic of Albania, ICC Case No. 20564/EMT/GR (“2nd ICC Arbitration”); See 2nd ICC Arbitration Request for Arbitration, 16 October 2015 (R-042).
  5 See para. 16 below and Second Becchetti Statement, Annex A.
  6 Costruzioni's S r.l.’s excerpt from the Rome Registry of Companies, 16 May 2002 (C-003).
  7 Second Becchetti Statement, Annex A; Petrit Malaj Expert Report, para. 2.11.
  8 Energji Sh.p k.’s excerpt from the Tirana Registry of Companies, 10 September 2014 (C-313); First Becchetti Statement, para. 61.
  9 First Becchetti Statement, para. 62.
  10 Albaniabeg Ambient Sh.p k.’s excerpt from the Tirana Registry of Companies, 26 May 2014 (C-297).
  11 First Becchetti Statement, para. 52, and see further paras. 183 and 197 below.
  12 First Becchetti Statement, para. 51.
14.
Both Costruzioni and Albaniabeg are companies incorporated under the laws of Albania, and both are claimants in a separate ICSID arbitration13 in which they allege Albania breached the Energy Charter Treaty with respect to the Waste Management Concession
15.
Costruzioni also owns 80% of 400 KV Sh.p.k. (“400 KV”), which it purchased from Cable System on 15 May 2013.14 400 KV, a company created to sell energy generated in Albania to Italy, in turn owns 90% of Rener Sh.p.k., which submitted a proposal to build and operate a large wind farm in southern Albania along with Energji.15 Again, both 400 KV and Rener Sh.p.k. are companies incorporated under the laws of Albania.
16.
Costruzioni is also registered as a 40% shareholder of Agonset Sh.p.k. (“Agonset”),16 an Albanian television company that produced television programs that it broadcast in Albania on Agon Channel Albania,17 and that Agonset’s Italian subsidiary, Agonset.it., broadcast in Italy on Agon Channel Italy. Agonset owns 75% of the shares in Agonset.it. In March 2015, Costruzioni sold its 40% share in Agonset to Agonset.uk Ltd (“Agonset.uk”).18 However, due to Albania’s seizure of Agonset, this transfer of shares was never recorded in the Tirana Corporate Register.19



  13 ICSID Case No. ARB/14/26; see Request for Arbitration, Albaniabeg Ambient Sh.p.k., M. Angelo Novelli, Costruzioni S.r.l. v. The Republic of Albania 20 October 2014 (R-003).
  14 First Becchetti Statement, para. 62
  15 Ibid.
  16 Rener Sh.p.k. excerpt from the Tirana Registry of Companies, 26 April 2016 (C-420)
  17 First Becchetti Statement, paras. 99-112.
  18 Ibid, para. 91.
  19 The parties agree that this transfer of shares was never recorded on the Tirana Corporate Register, see Memorial, para. 22 and Counter-Memorial, para. 91(d).

(3)

Francesco Becchetti

17.
The third Claimant is Francesco Becchetti, an Italian national. In the Request for Arbitration, which was filed two days after Albania issued a warrant for his arrest, Mr. Becchetti’s residential address was listed as Piazza Rondinini 48, 00186 Rome, Italy. However, because of the arrest warrants and the subsequent extradition requests issued against him, Mr. Becchetti is not able to leave the United Kingdom. His address at the time of the final hearing was 1 Waverton Street, London, W1J 5QN, UK.
18.
Mr. Becchetti holds just over 25% of the shares of the Italian company BEG, which wholly owns Hydro (and therefore KGE, through Hydro).20 Mr. Becchetti founded BEG in 1995 to carry out renewable energy projects.21 Before founding BEG, Mr. Becchetti was a shareholder in, and Executive Vice President of, the Italian construction company Cogeco S.r.l. (“Cogeco”), which was also part of the Becchetti family’s group of companies.22
19.
Mr. Becchetti holds 100% of the shares of Agonset.uk, which has owned 40% of Agonset since March 2015. Agonset.uk also holds a 20% interest in Agonset.it.23

(4)

Mauro De Renzis

20.
Mauro De Renzis is an Italian national. In the Request for Arbitration, his residence was listed as Viale della Repubblica, 258, 00047 Marino (Rome), Italy. Due to the criminal proceedings and extradition requests issued against him by Albania, however, Mr. De Renzis is not able to leave the United Kingdom. His address at the time of the final hearing was 23 Brook Mews N, London W2 3BW, UK.



  20 First Becchetti Statement, paras. 52 and 75.
  21 Ibid, para. 10.
  22 Ibid, para. 9.
  23 Ibid, FN 39 at para. 106.
21.
Mr. De Renzis is the Administrator of Energji and, until December 2015, was the Administrator of Agonset. He currently holds 80% of the Albanian company Investime te Rinovueshme Sh.p.k. (“Investime”), which owns 40% of Agonset. The other 20% of Agonset’s shares are held by Fuqi Sh.p.k.24, a company owned by members of Mr. Becchetti’s partner’s family.25
22.
By order dated 9 June 2015, Albania seized Mr. De Renzis’ indirect shareholding in Agonset.26 Mr. De Renzis’ mandate as Administrator of Agonset lapsed on 27 December 2015. Agonset is currently without an Administrator.27 Mr. De Renzis is Ms. Grigolon’s husband.28

(5)

Stefania Grigolon

23.
Stefania Grigolon is an Italian national whose residential address is Viale della Repubblica, 258, 00047 Marino (Rome), Italy. She is the only individual Claimant against whom Albania has not brought criminal charges. While she remains an Italian resident, she spends a significant amount of time in London because Mr. Becchetti and Mr. De Renzis are not able to leave the United Kingdom.
24.
Ms. Grigolon currently holds 20% of the shares of Investime, which owns 40% of Agonset. She also holds a 10% share in BEG. She is Mr. De Renzis’ wife.29

(6)

Liliana Condomitti

25.
Liliana Condomitti is Francesco Becchetti’s mother and an Italian national whose residential address is 1 Waverton Street, London, W1J 5QN, UK. Ms. Condomitti has relocated to London from Italy due to the criminal charges brought by Albania against her and her son.
26.
Ms. Condomitti acquired a 99.5% share of Costruzioni on 9 May 2002. Through Costruzioni, Ms. Condomitti owns majority interests in Energji, 400 KV, and Cable System, and until March 2015, held 40% of the shares in Agonset. Ms. Condomitti also owns over 25% of BEG, which fully owns Hydro, which, in turn, fully owns KGE.
27.
By order dated 9 June 2015, Albania seized Ms. Condomitti’s direct and indirect shareholdings in Energji, 400 KV, Cable System, and Agonset.30



  24 Agonset Sh.p k.’s excerpt from the Albanian Registry of Companies, 29 February 2016, p. 1 (C-409).
  25 First Becchetti Statement, para. 91.
  26 Decision No. 768 on Preventive Sequestration of Properties, 5 June 2015 and Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute the Decision on Determining the Security Measures, 9 June 2015 (C-110).
  27 Agonset Sh.p k.’s excerpt from the Albanian Registry of Companies, 29 February 2016, p. 1 (C-409).
  28 Hearing, Day 2, T7.22-T7.24.
  29 Hearing, Day 2, T7.22-T7.24.
  30 Decision No. 768 on Preventive Sequestration of Properties, 5 June 2015 and Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute the Decision on Determining the Security Measures, 9 June 2015 (C-110).

B.

THE RESPONDENT

28.
The Respondent is the Republic of Albania. Its President at the time of the final hearing was Mr. Bujar Nishani. He was elected by the Parliament of the Republic of Albania on 11 June 2012 and took office on 24 July 2012 for a five-year term. The head of Government is the Chairman of the Council of Ministers (Prime Minister). The Prime Minister at the time of the final hearing was Mr. Edi Rama. He was appointed by the President on 10 September 2013 and took office five days later, replacing Prime Minister Sali Berisha, who had been Prime Minister of Albania since 11 September 2005.

III.

PROCEDURAL HISTORY

29.
On 11 June 2015, ICSID received a request for arbitration dated 10 June 2015 from Hydro, Construzioni, Mr. Becchetti, Mr. De Renzis, Ms. Grigolon and Ms. Condomitti against the Republic of Albania (the “Request”), together with Exhibits C-001 through C-078.
30.
On 29 June 2015, the Secretary-General of ICSID registered the Request in accordance with Article 36(3) of the ICSID Convention and notified the parties of the registration. In the Notice of Registration, the Secretary-General invited the parties to proceed to constitute an arbitral tribunal as soon as possible in accordance with Articles 37 to 40 of the ICSID Convention.
31.
After letters spanning 1 July 2015 through 6 October 2015, the parties confirmed their agreement that the Tribunal should consist of three arbitrators, one arbitrator appointed by each party, and the co-arbitrators jointly appointing the President, in consultation with the parties.
32.
By letter of 4 September 2015, the Claimants appointed Dr. Charles Poncet, a national of Switzerland, as arbitrator in this case.
33.
By letter of 25 September 2015, the Respondent appointed Mr. Ian Glick, a national of the United Kingdom, as arbitrator in this case.
34.
On 20 November 2015, the co-arbitrators, after consulting with the parties, agreed to appoint Dr. Michael Pryles, a national of Australia, as President of the Tribunal.
35.
On 23 November 2015, the Acting Secretary-General, in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings (the “Arbitration Rules”), notified the parties that all three arbitrators had accepted their appointments and that the Tribunal was therefore deemed to have been constituted on that date. Ms. Aurélia Antonietti, ICSID Senior Legal Adviser, was designated to serve as Secretary of the Tribunal. On 7 December 2015, the Secretary-General informed the parties that Mr. Francisco Abriani, ICSID Legal Counsel, would replace Ms. Antonietti as Secretary of the Tribunal.
36.
On 5 December 2015, the Claimants filed their Request for Provisional Measures (“Request for Provisional Measures”), together with Exhibits C-079 through C-135 and Legal Authorities CL-001 through CL-010.
37.
On 20 January 2016, the Respondent filed its Response to the Claimants’ Request for Provisional Measures (“Response on Provisional Measures”), together with Exhibits R-001 through R-009 and Legal Authorities RL-001 through RL-024.
38.
On 22 January 2016, in accordance with ICSID Arbitration Rule 13(1), the Tribunal held a first session with the parties by teleconference.
39.
On 27 January 2016, the Tribunal issued Procedural Order No. 1 (“PO 1”) recording the agreement of the parties on procedural matters. PO 1 provided, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006, that the Tribunal was properly constituted, that the procedural language would be English, that the place of the proceeding would be Paris, France, and that Dr. Albert Dinelli was to act as Assistant to the Tribunal. As the Respondent indicated its intention to file a Request for Bifurcation, no procedural calendar was finalised, and the Tribunal invited the parties to confer and produce an agreed-upon schedule.
40.
On 28 January 2016, the Claimants filed their Reply on Provisional Measures (“Reply on Provisional Measures”), together with Exhibits C-136 through C-171 and Legal Authorities CL-011 through CL-018.
41.
On 5 February 2016, the Respondent filed its Rejoinder on Provisional Measures (“Rejoinder on Provisional Measures”).
42.
On 10 February 2016, the Tribunal held a hearing on the Request for Provisional Measures by teleconference.
43.
On 22 February 2016, the Tribunal ordered that:
a.
the Claimants file their Memorial by 6 May 2016,
b.
the Respondent file its Request for Bifurcation by 3 June 2016 (later amended to 13 May 2016 and 10 June 2016, respectively).
44.
On 3 March 2016, the Tribunal issued its Provisional Measures Order, in which it recommended that Albania:
a.
suspend the proceedings identified as Criminal Proceeding No. 1564 until the issuance of a Final Award in this proceeding; and
b.
take all actions necessary to suspend the extradition proceedings currently pending as Case Numbers 1502751601 (for Mr. Becchetti) and 1502752144 (for Mr. De Renzis), until the issuance of a Final Award in this proceeding, and
invited the Respondent to confer with the Claimants and seek to agree appropriate measures to be taken by the Republic of Albania to preserve:
c.
the seized assets and the contents of the frozen bank accounts of Energji, KGE, 400 KV, Cable System, and Agonset;
d.
the current shareholdings in those companies.
The Order also provided that, should the Respondent fail to comply within 60 days, the Claimants could apply to the Tribunal for further provisional measures.
45.
On 21 March 2016, the Claimants informed the Tribunal that the Respondent was not in compliance with the Provisional Measures Order and requested a telephone conference to discuss enforcement. The Respondent replied by letter of the same date.
46.
On 22 March 2016, the Tribunal noted that no formal application had been made by the Claimants and therefore declined their request to hold a telephone conference.
47.
On 25 March 2016, the Claimants requested that the Tribunal issue a Partial Award or order the Respondent to comply with the Provisional Measures Order (“Application for Further Measures”), together with Legal Authorities CL-019 through CL-023.
48.
On 5 April 2016, the Respondent filed its response to the Application for Further Measures (“Response on Further Measures”), along with an Application to Revoke or Modify the Order on Provisional Measures (“Application for Measures Revocation”).
49.
On 18 April 2016, the Claimants filed their response to the Application for Measures Revocation (“Response on Measures Revocation”) and their reply comments to the Response on Further Measures, together with Exhibits C-172 through C-176 and Legal Authorities CL-024 through CL-027.
50.
On 19 April 2016, the Tribunal asked the Respondent to provide its reply comments on the Response on Measures Revocation, by no later than 27 April 2016. This deadline was extended until 9 May 2016, pursuant to Tribunal orders of 27 April 2016, 3 May 2016, 5 May 2016 and 7 May 2016 due to the Respondent’s requests of 24 April 2016, 3 May 2016, 4 May 2016 and 6 May 2016 and with regard to the Claimants’ objections on 26 April 2016 and 5 May 2016.
51.
On 10 May 2016, the Claimants requested the Tribunal to decide the Applications for Further Measures and Measures Revocation based on the submissions already made.
52.
That same day, the Respondent submitted its reply comments to the Response on Measures Revocation, together with Exhibits R-010 through R-016 and Legal Authorities RL-0025 through RL-0030.
53.
On 13 May 2016, the Claimants submitted their Memorial on the Merits (“Claimants’ Memorial”), together with Exhibits C-177 through C-553, Legal Authorities CL-028 through CL-106, and two expert reports:
a.
First Expert Report of Paul Rathbone dated 13 May 2016; and
b.
Expert Report of Brent Kaczmarek and Kiran Sequeira dated 13 May 2016.
54.
On 1 June 2016, after considering the parties’ comments of 23 May 2016 through 31 May 2016, the Tribunal confirmed that it would hold a hearing on the Applications for Further Measures and Measures Revocation on 15 June 2016 in London.
55.
On 1, 2 and 10 June 2016, the Claimants updated the Tribunal on the status of the extradition proceedings pending in the United Kingdom, and submitted Exhibits C-554 through C-558.
56.
On 10 June 2016, the Respondent submitted its Request for Bifurcation (“Request for Bifurcation”), together with Exhibits R-017 through R-018 and Legal Authorities RL-031 through RL-043.
57.
On 12 June 2016, the Tribunal invited: the Respondent to provide its comments on the Exhibits submitted by the Claimants with their 10 June 2016 letter by 17 June 2016 and the Claimants to submit their reply to the Request for Bifurcation by 20 June 2016.
58.
On 14 June 2016, the Respondent requested that Exhibits C-557 through C-558 be excluded from the record.
59.
On 14 June 2016, the Claimants requested an extension until 24 June 2016 to submit their reply on the Request for Bifurcation. On 15 June 2016, the Tribunal granted the requested extension.
60.
A hearing on the Applications for Further Measures and Measures Revocation was held in London on 15 June 2016. The following persons were present at the Hearing:

Tribunal:

Dr. Michael Pryles
Dr. Charles Poncet, M.C.L.
Mr. Ian Glick, Q.C.

President (By Video Conference)
Co-Arbitrator
Co-Arbitrator

ICSID Secretariat:

Mr. Francisco Abriani

Secretary of the Tribunal

Assistant to the Tribunal:

Dr. Albert Dinelli

Assistant to the Tribunal (By Video Conference)

For the Claimants:

Mr. Philippe Pinsolle
Dr. Tai-Heng Cheng
Mr. Alexander Leventhal
Mr. Marco Garofalo
Mr. Christopher J. Tahbaz
Mr. Shaun Palmer
Mr. Karel Daele
Mr. Julian B. Knowles, QC
Mr. Francesco Becchetti

Quinn Emanuel Urquhart & Sullivan UK LLP
Quinn Emanuel Urquhart & Sullivan LLP
Quinn Emanuel Urquhart & Sullivan UK LLP
Quinn Emanuel Urquhart & Sullivan UK LLP
Debevoise & Plimpton LLP
Debevoise & Plimpton LLP
Mishcon de Reya LLP
Matrix Chambers
Claimant

For the Respondent:

Mr. Toby Landau, QC
Mr. Siddharth Dhar
Mr. Peter Webster
Mr. Ben Brandon
Mr. David Breslin
Ms. Karen O'Connell
Ms. Alma Hicka
Ms. Brunilda Lilo

Essex Court Chambers
Essex Court Chambers
Essex Court Chambers
Three Raymond Buildings
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
State Advocate General, State Advocacy Office (Albania)
State Advocate, State Advocacy Office (Albania)

Court Reporter:

Ms. Claire Hill

English-Language Court Reporter

61.
On 16 June 2016, the Tribunal: (i) invited the Respondent to provide any undertakings it was willing to assume by 27 June 2016, and the Claimants to respond by 6 July 2016; (ii) decided not to admit the Claimants’ exhibits C-557 and C-558 into the record; (iii) asked the Respondent to confirm the current status of the Interpol “Red Notice” in respect to the relevant Claimants; and (iv) ordered the parties to provide the judgment of the English court on the application to stay the extradition proceedings for an abuse of process to be handed down on 8 July 2016. The deadlines for (i) and (ii) were respectively extended until 29 June 2016 and 8 July 2016, pursuant to Tribunal orders of 27 and 28 June 2016, due to the Respondent’s requests of the same dates.
62.
On 24 June 2016, the Claimants submitted their Objections to the Request for Bifurcation (“Objections to Bifurcation”), together with Exhibits C-557 and C-558 and Legal Authorities CL-107 through CL-115.
63.
On 27 June 2016, the Tribunal invited the Respondent to file its reply, if any, to the Objections to Bifurcation by 1 July 2016.
64.
On 29 June 2016, the Respondent laid out the details of its undertakings.
65.
On 1 July 2016, the Respondent submitted its Reply to the Claimants’ Objections to Bifurcation (“Reply on Bifurcation”), together with Exhibits R-017 through R-018 and Legal Authorities RL-0044 through RL-0048.
66.
On 3 July 2016, the Tribunal invited the Claimants to submit a rejoinder on Bifurcation by 8 July 2016.
67.
On 8 July 2016, pursuant to the Tribunal’s order of 16 June 2016, the Claimants provided the UK Magistrates Court’s decision granting the Claimants’ application to stay extradition proceedings on the ground of abuse of process, submitted as Exhibit C-560.
68.
That same day, the Claimants provided their comments on the Respondent’s 29 June 2016 letter, and submitted Legal Authorities CL-116 and CL-122.
69.
Further, the Claimants filed their Rejoinder on the Request for Bifurcation (“Rejoinder on Bifurcation”), together with Legal Authorities CL-118 through CL-121 and CL-123.
70.
On 11 July 2016, the Tribunal invited the parties to provide their comments, if any, on the relevance of Exhibit C-560 to these proceedings by 18 July 2016.
71.
On 18 July 2016, the Claimants informed the Tribunal that Albania would not appeal the decision submitted as Exhibit C-560, and submitted the notification of same as Exhibit C-561.
72.
That same day, the Claimants submitted their comments on Exhibit C-560.
73.
On 18 July 2016, in light of the decision submitted as Exhibit C-561, the Respondent requested an extension until 22 July 2016 to submit its comments. The Tribunal granted this extension. On 19 July 2016, the Claimants noted that the Respondent’s request implied that they required additional time in order to respond to Exhibit C-561, not Exhibit C-560. Consequently, the Claimants reserved their rights to make comments on Exhibit C-561.
74.
On 21 July 2016, the Claimants submitted the Notices of Discharge issued by the Westminster Magistrates’ Court as Exhibits C-562 and C-563.
75.
On 22 July 2016, the Respondent made its comments on Exhibits C-560 and C-561.That same day, the Tribunal requested that the Respondent provide an explanation for the delay as its submission included issues it was meant to address by 18 July 2016.
76.
On 23 July 2016, the Respondent explained that it was confused regarding the deadlines and requested that the Tribunal admit the contents of the 22 July 2016 submission. On 24 July 2016, the Tribunal decided to allow the contents of the Respondent’s 22 July 2016 letter in their entirety.
77.
On 19 August 2016 (dated 19 July 2016), the Claimants provided the Tribunal with an update on the status of the Interpol Red Notices against Messrs. Becchetti and De Renzis. On 22 August 2016, the Tribunal invited the Respondent to provide any comments on the Claimants’ letter by 24 August 2016. On 24 August 2016, the Respondent noted to the Tribunal that it had no comments on this letter.
78.
On 1 September 2016, the Tribunal issued its Decision on the Applications for Further Measures and Measures Revocation (“Decision on Further Measures and Revocation”). In this Decision, the Tribunal decided that “[its] Provisional Measures Order of 3 March 2016 is revoked and, in lieu thereof, the Tribunal recommends that the Respondent (a) take no steps in the proceedings identified as Criminal Proceeding No. 1564 to recommence extradition proceedings in the United Kingdom against Messrs. Becchetti and De Renzis until the issuance of a Final Award in the proceeding; and (b) take all actions necessary to maintain the suspension of the extradition proceedings (Case Numbers 1502751601 (for Mr. Becchetti) and 1502752144 (for Mr. De Renzis)) currently stayed, and not to take any steps to resume those proceedings, until the issuance of a Final Award in this proceeding.” The Tribunal also decided that the Applications were otherwise dismissed.
79.
On 1 September 2016, the Tribunal informed the parties that it had decided not to bifurcate the proceedings and a reasoned decision would be issued in due course. This was duly issued on 7 December 2016 (“Decision on Bifurcation”). The Tribunal invited the parties to confer on a procedural calendar and to submit their joint proposal by 9 September 2016. On 10 September 2016, the parties requested an extension until 13 September 2016 to produce a calendar. That same day, the Tribunal granted the extension.
80.
On 13 September 2016, the parties informed the Tribunal that they were unable to agree on a schedule for the proceedings.
81.
On 19 September 2016, the Tribunal issued Procedural Order No. 2 (“PO 2”) fixing the timetable for the remainder of the proceedings. On 23 September 2016, the Respondent requested that the date for its Counter-Memorial be pushed back by one week, with the deadlines for the Claimants’ submissions being adjusted accordingly. On 26 September 2016, the Tribunal issued an updated procedural calendar accounting for the Respondent’s requested date change.
82.
On 28 November 2016, the Claimants informed the Tribunal of a civil claim brought in Albanian courts against Mr. Becchetti, Mr. De Renzis, and Ms. Condomitti (notice of which was submitted as Exhibit C-564) and reserved their rights to update quantum damages claimed in this arbitration and to request further provisional measures. The Tribunal invited the Respondent to reply to the Claimants’ letter by 12 December 2016. As the Respondent did not reply by this date, the Tribunal noted the contents of the Claimants’ letter, but did not propose taking any action at that time.
83.
On 24 December 2016, the Respondent requested an extension until 20 January 2017 to submit its Counter-Memorial. On 30 December 2016, the Claimants asked the Tribunal to reject the Respondent’s request.
84.
On 1 January 2017, the Tribunal issued Procedural Order No. 3 (“PO 3”) amending the procedural calendar in line with the Respondent’s 24 December 2016 request.
85.
On 20 January 2017, the Respondent requested until 23 January 2017 to file its Counter-Memorial. The Tribunal granted the request. On 2 February 2017, the Tribunal stated that the Claimants’ deadline for filing their Reply was likewise extended until 25 May 2017.
86.
On 23 January 2017, the Respondent submitted its Counter-Memorial (“Respondent’s Counter-Memorial”) together with Exhibits R-019 through R-098, Legal Authorities RL-0049 through RL-0101 and two expert reports:
a.
First Expert Report of Gervase MacGregor dated 20 January 2017; and
b.
First Expert Report of Petrit Malaj dated 20 January 2017.
87.
On 10 February 2017, the Claimants requested confirmation that the Respondent’s counsel, Gowling WLG, had been “validly retained pursuant to Albanian law.”
88.
On 14 February 2017, the Respondent submitted the transcripts from the 2nd ICC Arbitration as Exhibits R-099 and R-100. By email of 16 February 2017, the Tribunal invited the Claimants to submit any comments on the Respondent’s submission by 22 February 2017. On 24 February 2017, the Tribunal noted that it had not received any comments from the Claimants and informed the parties of its decision to enter the transcripts into the record.
89.
On 23 March 2017, the Respondent noted continued disagreements between the parties in the matter of document production and asked the Tribunal to decide on the issue.
90.
On 4 April 2017, the Tribunal issued Procedural Order No. 4 (“PO 4”) on the production of documents.
91.
On 6 April 2017, the Claimants requested from the Respondent “a written assurance from the Minister of Justice of Albania that external counsel were retained with the necessary approvals of the Minister of Justice as provided by the law and to receive the relevant copies of such approvals made at that time.” On 19 April 2017, the Respondent stated that it had already addressed this issue and provided a copy of a letter from the State Advocate General dated 23 March 2017 confirming the retention of Gowling WLG UK LLP as counsel for Albania.
92.
On 25 April 2017, the parties were informed that Dr. Dinelli had resigned as Assistant to the Tribunal and that the Tribunal proposed to replace him with Mr. Timothy Maxwell, unless the parties objected. In the absence of objection, on 13 May 2017, Mr. Maxwell was appointed as Assistant to the Tribunal.
93.
On 2 and 11 May 2017, the Claimants stated that the Respondent’s delay in complying with the document production ordered in PO 4 had prejudiced their ability to prepare their Reply and requested an extension until 8 June 2017. On 10 and 11 May 2017, the Respondent objected to the Claimants’ requests and asked that the procedural calendar be preserved and asked that, if the Tribunal were nevertheless minded to grant it, the Respondent be given a commensurate two-week extension to file its Rejoinder. On 11 May 2017, the Tribunal ordered the parties to comply with PO 4 by no later than 19 May 2017, and granted the Claimants an extension until 2 June 2017 to file their Reply.
94.
On 16 May 2017, the Respondent confirmed that Albania had retained Gowling WLG UK LLP and provided a signed power of attorney
95.
On 22 May 2017, the Tribunal asked the parties: (i) to submit a joint list of abbreviations by 31 May 2017; (ii) to submit an agreed dramatis personae, a list of issues to be decided by the Tribunal, and a chronology by 21 August 2017; and (iii) to confirm by 25 May 2017 their availability for a pre-hearing conference call.
96.
On 30 May 2017, the parties informed the Tribunal that they would submit their joint list of abbreviations by 7 June 2017. The Tribunal agreed to the revised deadline. The parties submitted the list of abbreviations on 6 June 2017.
97.
On 31 May 2017, the Tribunal asked the Claimants to provide a detailed table of companies and shareholders included in Annex A to their Memorial and any concerned investments that are the subject of the current arbitration. This was provided on 12 June 2017.
98.
On 2 June 2017, the Claimants filed their Reply on the Merits and Counter-Memorial on Jurisdiction (“Reply on the Merits”), together with Exhibits C-575 through C-661, Legal Authorities CL-133 through CL-229 and the following expert reports:
a.
Second Expert Report of Paul Rathbone dated 2 June 2017;
b.
Third Expert Report of Paul Rathbone dated 2 June 2017;
c.
Second Expert Report of Brent Kaczmarek and Kiran Sequeira dated 2 June 2017;
d.
Consultant’s Report of Enyal Shuke dated 2 June 2017;
e.
Expert Report of Alberto Pasquale dated 2 June 2017;
f.
Expert Report of Arben Qeleshi dated 2 June 2017; and
g.
Expert Report of Sergio Garribba dated 2 June 2017.
99.
On 6 June 2017, the Respondent requested permission to make an application to the Tribunal in response to Claimants’ Reply on the Merits. On 7 June 2017, the Tribunal asked the Respondent to explain why this could not be addressed in its forthcoming Rejoinder.
100.
On 13 June 2017, the Claimants, referring to their letters of 10 February and 6 April 2017, sought the Tribunal’s permission to apply for the removal of the Respondent’s external counsel. On 14 June 2017, the Tribunal asked the Respondent to reply to the Claimants’ request.
101.
On 15 June 2017, in reference to their request of 6 June 2017, the Respondent further elaborated on its request, asking for permission to submit an application for the exclusion of evidence presented by the Claimants. On 16 June 2017, the Tribunal informed the parties that the Respondent’s application would be allowed.
102.
On 16 June 2017, the Respondent submitted its application for the exclusion of the three expert reports submitted with the Claimants’ Reply on the Merits, namely the reports of Mr. Pasquale, Professor Garribba, and Mr. Qeleshi. Alternatively, should the Tribunal decide not to exclude the reports, the Respondent requested an extension until 4 August 2017 to file its Rejoinder (“Application to Exclude Reports”). On 19 June 2017, the Tribunal invited the Claimants to reply to the Application to Exclude Reports by 20 June 2017.
103.
On 20 June 2017, the Claimants requested that the Application to Exclude Reports be rejected in its entirety, including the proposed modification of the procedural calendar and filed Legal Authorities CL-230 through CL-236 (“Response to Exclude Reports”).
104.
That same day, the Claimants separately, inter alia, requested permission to address substantive points made in the Respondent’s 16 June 2017 letter regarding their application to disqualify the Respondent’s counsel, and requested that the upcoming hearing be moved from Paris to London.
105.
On 20 June 2017, in the absence of a response on the issue from the Respondent, the Tribunal granted the Claimants permission to submit their application for the removal of the Respondent’s external counsel.
106.
On 21 June 2017, the Respondent sought permission to reply to the Response to Exclude Reports.
107.
On 21 June 2017, the Tribunal asked the parties to confirm by 27 June 2017 if they were in agreement on moving the hearing from Paris to London, and stated its intention to make its decision upon receipt of the confirmation.
108.
On 22 June 2017, the Tribunal granted the Respondent’s request to reply to the Response to Exclude Reports, giving it until 23 June 2017 to do so. The Claimants were invited to provide any further comments on the issue by 27 June 2017.
109.
On 23 June 2017, the Respondent maintained its Application to Exclude Reports.
110.
On 27 June 2017, the Claimants applied to the Tribunal to submit an additional document onto the record.
111.
That same day, the Claimants separately reiterated their position stated in the Response to Exclude Reports.
112.
On 27 June 2017, the Tribunal issued Procedural Order No. 5 (“PO 5”) stating that the expert reports of Mr. Pasquale, Professor Garribba and Mr. Qeleshi would remain on the record, while the reports of Mr. Nesho and Mr. Taylor were to be excluded. In PO 5, the Tribunal modified the procedural calendar, requiring the Respondent to submit its Reply on Jurisdiction by 7 July 2017, the Respondent to submit its Rejoinder on the Merits by 4 August 2017, and the Claimants to submit their Rejoinder on Jurisdiction by 4 August 2017.
113.
On 28 June 2017, the Claimants informed the Tribunal that the Respondent did not agree to their request to move the hearing to London. The Claimants asked that no further arrangements regarding the hearing in Paris be confirmed before they could submit an explanation as to why holding the hearing in Paris would cause them undue hardship. The Claimants explained later that same day that Messrs. Becchetti and De Renzis were unable to travel outside of the United Kingdom in light of the Interpol Red Notices placed on them due to the criminal proceedings in Albania that were addressed in the Provisional Measures phase of this arbitration. As such, the Claimants reaffirmed their request that the hearing be moved from Paris to London.
114.
On 28 June 2017, the Claimants submitted an application that the Tribunal, inter alia, declare that Gowling WLG and members of Essex Court Chambers were never valid representatives of the Respondent and that all evidence submitted by such counsel be excluded from the record (“Application to Remove Counsel”), together with Exhibits C-662 through C-671 and Legal Authorities CL-237 through CL-239.
115.
On 28 June 2017, the Tribunal asked the Respondent to respond to the Claimants’ application to move the hearing by 4 July 2017, and to respond to the Application to Remove Counsel by 5 July 2017.
116.
On 30 June 2017, the Respondent requested an extension until 12 July 2017 to file its response the Application to Remove Counsel. On 3 July 2017, the Tribunal granted the Respondent until 10 July 2017. On 4 July 2017, the Respondent requested a short extension to submit its comments on the hearing venue. The Tribunal granted the extension.
117.
On 5 July 2017, the Claimants submitted Exhibits C-672 through C-675 in support of the Application to Remove Counsel.
118.
On 5 July 2017, the Respondent asked the Tribunal to reject the Claimants’ application to change the venue of the hearing.
119.
On 7 July 2017, the Respondent submitted its Reply on Jurisdiction (“Reply on Jurisdiction”) together with Exhibits R-099 through R-113 and Legal Authorities RL-102 through RL-131.
120.
On 9 July 2017, the Tribunal issued Procedural Order No. 6 (“PO 6”) in which it requested that the Respondent confirm by 14 July 2017 that it would not seek the arrests of Messrs. Becchetti and De Renzis should they travel to Paris to attend the hearing.
121.
On 10 July 2017, the Respondent requested an extension until 12 July 2017 to file its comments on the Application to Remove Counsel. The Tribunal granted the requested extension. On 12 July 2017, the Respondent requested a further one-day extension. On 13 July 2017, the Tribunal informed the parties that it expected a response from the Respondent that week.
122.
On 14 July 2017, the Respondent submitted its response to the Application for Removal of Counsel (“Response on Removal of Counsel”), together with Exhibits R-114 through R-117.
123.
That same day, the Respondent separately noted that, as previously confirmed, there were no outstanding Interpol Red Notices against Messrs. Becchetti and De Renzis; however, for the sake of efficiency, it had decided to agree to a change of venue from Paris to London.
124.
On 14 July 2017, the Claimants requested leave to submit reply comments on the Response on Removal of Counsel. On 15 July 2017, the Tribunal granted the Claimants leave to submit their comments by 18 July 2017.
125.
On 18 July 2017, the Tribunal: (i) confirmed the hearing venue would be moved to London; and (ii) admitted Claimants’ Exhibit C-662 into the record.
126.
On 18 July 2017, the Claimants submitted further comments regarding the disqualification of the Respondent’s counsel (“Reply on Removal of Counsel”).
127.
On 19 July 2017, the Tribunal invited the Respondent to submit any response to the Reply on Removal of Counsel by 25 July 2017. On 25 July 2017, the Respondent requested a one-day extension to make its submission. That same day, the Tribunal granted the requested extension.
128.
On 26 July 2017, the Respondent submitted comments on the Reply on Removal of Counsel.
129.
On 1 August 2017, the Tribunal issued Procedural Order No. 7 (“PO 7”), dismissing the Application to Remove Counsel.
130.
On 4 August 2017, the Respondent requested an extension to file its Rejoinder on the Merits, due that day, until 6 August 2017. The Tribunal granted the extension.
131.
On 4 August 2017, the Claimants asked the Tribunal to consider that the Respondent’s repeated delays in the filing of the Rejoinder on the Merits highly prejudiced the Claimants, and reserved their rights to raise the issue in an application for costs.
132.
On 4 August 2017, the Claimants filed their Rejoinder on Jurisdiction (“Rejoinder on Jurisdiction”), together with Exhibits C-682 through C-687 and Legal Authorities CL-240 through CL-263.
133.
On 6 August 2017, the Respondent requested a further one-day extension to file its Rejoinder on Jurisdiction. That same day, the Tribunal allowed the extension.
134.
On 7 August 2017, the Respondent filed its Rejoinder on the Merits (“Rejoinder on the Merits”) together with Exhibits R-118 through R-220, Legal Authorities RL-132 through RL-138, and the following expert reports:
a.
Second Expert Report of Gervase MacGregor dated 4 August 2017;
b.
Second Expert Report of Petrit Malaj dated 4 August 2017;
c.
Expert Report of Paolo Marino dated 4 August 2017; and
d.
Expert Report of Luis Borrell dated 4 August 2017.
135.
On 8 August 2017, the Tribunal held a pre-hearing telephone conference with the parties.
136.
On 8 August 2017, the Claimants requested leave from the Tribunal to submit new evidence into the record. That same day, the Tribunal asked the Respondent to submit any objections to this request by 14 August 2017.
137.
On 12 August 2017, the Claimants: (i) stated that the Respondent’s expert report of Mr. Paolo Marino should not be submitted into the record due to a conflict of interest; and (ii) requested that references in the Rejoinder on the Merits to the Rejoinder on Jurisdiction be struck from the Respondent’s submission, as the two Rejoinders were scheduled to be submitted simultaneously. On 14 August 2017, the Tribunal invited the Respondent to respond by 17 August 2017.
138.
On 14 August 2017, the Respondent objected to the Claimants’ 8 August 2017 request to submit new evidence into the record.
139.
On 15 August 2017, the Tribunal admitted the Claimants’ documents of 8 August 2017 into the record without prejudice to the Respondent’s right to raise further objections.
140.
On 15 August 2017, the Respondent submitted the Expert Report of Arben Rakipi dated 15 August 2017 in support of the Rejoinder on the Merits.
141.
On 16 August 2017, the Claimants made an application to submit new evidence into the record and asked the Tribunal to compel the Respondent to produce documents relied on by their experts, including translations where necessary, and submitted Legal Authority CL-264. On 17 August 2017, the Tribunal invited the Respondent to comment on the Claimants’ application by 21 August 2017.
142.
On 17 August 2017, the Respondent requested a one-day extension to respond to the Claimants’ 12 August 2017 letter. The Tribunal granted the extension. On 18 August 2017, the Respondent asked the Tribunal to reject both of the Claimants’ 12 August 2017 requests.
143.
On 21 August 2017, the Tribunal issued Procedural Order No. 8 (“PO 8”), concerning the organisation of the hearing, and Procedural Order No. 9 (“PO 9”), addressing the Claimants’ 12 August requests. In PO 9, the Tribunal decided: (i) to provisionally admit Mr. Paolo Marino’s expert report, while inviting the Claimants’ to make a brief argument at the hearing on why it should be excluded; and (ii) to strike references to the Rejoinder on Jurisdiction from the Rejoinder on the Merits. The Respondent submitted a new version of the Rejoinder on the Merits on 28 August 2017.
144.
On 21 August 2017, the Respondent asked the Tribunal to dismiss the Claimants’ 16 August 2017 application.
145.
On 22 August 2017, the Tribunal issued Procedural Order No. 10 (“PO 10”), denying the Claimants’ 16 August 2017 application to submit new documents.
146.
On 23 August 2017, the Claimants commented on the Respondent’s document production. That same day, the Tribunal stated that it “expect[ed] the Respondent to produce the documents it has undertaken to provide,” with outstanding matters to be addressed at the hearing.
147.
On 25 August 2017, the Claimants applied to the Tribunal for an extension to submit the points of disagreement of Professor Garribba. On 26 August 2017, the Tribunal granted an extension until 5 September 2017. On 5 September 2017, this was submitted.
148.
On 1 September 2017, the Claimants submitted their points of disagreement, excluding those of Professor Garribba.
149.
A hearing on jurisdiction and the merits was held in London from 4 through 14 September 2017 (the “Hearing”). During the Hearing, the parties submitted Exhibits C-688 through C-693, CH-001 through CH-002, CL-265 and R-221. The following persons were present at the Hearing:

Tribunal:

Dr. Michael Pryles, AO PBM
Dr. Charles Poncet
Mr. Ian Glick, QC

President
Arbitrator
Arbitrator


ICSID Secretariat:

Mr. Francisco Abriani

Secretary of the Tribunal


Assistant of the Tribunal

Mr. Tim Maxwell

Assistant of the Tribunal



For the Claimants:

Counsel :
Mr. Philippe Pinsolle
Dr. Tai-Heng Cheng
Mr. Alexander Leventhal
Mr. Marc Reifsnyder
Mr. Marco Garofalo
Mr. David W. Rivkin
Ms. Catherine Amirfar
Mr. Romain Zamour
Mr. Shaun A. Palmer
Mr. Alexandre de Fontmichel
Prof. Andrea Saccucci
Support Personnel :
Ms. Mali Torres
Parties :
Mr. Francesco Becchetti
Mr. Tim Fritz
Ms. Marzia Amiconi


Quinn Emanuel Urquhart & Sullivan LLP
Quinn Emanuel Urquhart & Sullivan LLP
Quinn Emanuel Urquhart & Sullivan LLP
Quinn Emanuel Urquhart & Sullivan LLP
Quinn Emanuel Urquhart & Sullivan LLP
Debevoise & Plimpton LLP
Debevoise & Plimpton LLP
Debevoise & Plimpton LLP
Debevoise & Plimpton LLP

Saccucci & Partners

Debevoise & Plimpton LLP

Claimant 3
Costruzioni S.r.l.
Costruzioni S.r.l.

For the Respondent:

Counsel :
Mr. David Breslin
Mr. Michael Darowski
Ms. Karen O'Connell
Ms. Anna Packwood
Mr. Bertie Rooke
Mr. Myles Wallbank
Mr. Jonathan Zane
Ms. Ellie Ismaili
Mr. Siddarth Dhar
Mr. Felix Wardle
Mr. Peter Webster
Mr. Artan Hajdari
Parties :
Ms. Alma Hicka
Ms. Brunilda Lilo


Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Gowling WLG (UK) LLP
Essex Court Chambers
Essex Court Chambers
Essex Court Chambers
Haxhia & Hajdari Attorneys at Law

State Advocates Office, Republic of Albania
State Advocates Office, Republic of Albania

Court Reporter:

Mr. Trevor McGowan

English-language court reporter

Interpreters:

Mr. Genc Lemani
Mr. Ragip Luta
Ms. Elvana Moore
Ms. Delfina Genchi
Ms. Daniela Ascoli
Ms. Monica Robiglio

English-Albanian interpretation
English-Albanian interpretation
English-Albanian interpretation
English-Italian interpretation
English-Italian interpretation
English-Italian interpretation

Silent Observer

Ms. Caitlin Moustaka

Michael Pryles Law Firm

150.
On 4 September 2017, the Tribunal reminded the parties that they were asked to produce a list of dramatis personae and a chronology, and invited them to produce these lists as soon as possible. The parties submitted them that day.
151.
During the Hearing, the following persons were examined:

On behalf of the Claimants:

Witnesses :
Mr. Shpëtim Arbana
Mr. Francesco Becchetti
Ms. Endirë Bushati
Ms. Sonila Meço
Experts :
Prof. Sergio Garribba
Mr. Brent C. Kaczmarek
Mr. Alberto Pasquale
Mr. Arben Qeleshi
Mr. Paul Rathbone
Mr. Kiran P. Sequeira
Ms. Enyal Shuke








Navigant


CEG

Shuke Law



On behalf of the Respondent:

Experts :
Mr. Lluís Borrell
Mr. Paolo Marino
Mr. Gervase MacGregor
Mr. Petrit Malaj
Mr. Andrew Maclay
Mr. Matthew McDevitt
Mr. Jason Macdoombe
Prof. Arben Rapiki


Analysys Mason Limited
Pöyry Management Consulting
BDO LLP
BDO LLP
BDO LLP
BDO LLP
BDO LLP
Albanian School of Magistrates, Tirana, Albania

152.
On 11 October 2017, the Claimants requested an extension until 20 October 2017 to file their cost submissions. The Tribunal granted the extension.
153.
The parties filed their submissions on costs on 20 October 2017 (respectively, “Claimants’ Costs Submissions” and “Respondent’s Costs Submissions”).
154.
On 31 October 2017, the Respondent submitted an amended statement of costs (“Respondent’s Amended Costs Submissions”).
155.
On 17 November 2017, the Claimants informed the Tribunal of certain developments on the Kalivaç Project. On 19 November 2017, the Tribunal invited the Respondent to reply by 27 November 2017 and reminded the parties that they were not to make submissions without having been granted leave of the Tribunal. On 27 November 2017, the Respondent confirmed it had no comments on the Claimants’ letter.
156.
On 7 December 2018, pursuant to the parties’ agreement at the Hearing that the Tribunal could consult the experts directly, the Tribunal sent a letter to the parties’ quantum experts, Mr. Rathbone and Mr. MacGregor, requesting them to calculate damages for the Claimants based on numerous valuations of Agonset.
157.
On 8 December 2018, the parties were notified of the Tribunal’s correspondence with the experts and advised that they would be invited to comment on the experts’ responses. However, such responses would be confined to the experts’ calculations and the parties were not to comment on the question of valuation already fully addressed by the parties at the Hearing.
158.
On 18 December 2018, the Tribunal wrote to the parties notifying the Respondent that, pursuant to ICSID Arbitration Rule 47, the Award would need to contain the decision on costs. The Respondent was invited to make an application for permission to make a further submission on costs as, in the Respondent’s Cost Submission, the Respondent had purported to reserve its position to make further submissions on costs depending on the precise reasoning of the Award.
159.
On 21 December 2018, the Respondent wrote to the Tribunal expressing concern with the fact that the Tribunal had not engaged in further discussion with the experts regarding the valuation of Agonset.it and Agonset Albania before requesting a calculation of damages.
160.
On 27 December 2018, the Tribunal wrote to the parties advising that the valuation of Agonset formed part of the parties’ submissions and had been fully articulated at the Hearing and in voluminous expert evidence and if the Tribunal decided to discuss valuation assumptions further with the experts the parties would be notified. Until and unless that happened, the Tribunal directed that the parties not make unsolicited submissions.
161.
On 31 December 2018, the Respondent applied for leave to make further submissions on costs (“Application for Further Costs Submissions”). On 3 January 2019, the Tribunal wrote to the parties inviting the Claimants to confirm whether they consented to the Application for Further Costs Submissions by 9 January 2019.
162.
On 3 January 2019, the parties’ quantum experts respectively submitted their views on the calculation of damages as requested by the Tribunal.
163.
On 4 January 2019, the Tribunal wrote to the parties asking them to make any comments on the calculations submitted by the quantum experts by 11 January 2019. The parties were reminded that they were only permitted to comment on the calculations and not on the underlying assumptions which were fully debated at the Hearing and in the parties’ memorials.
164.
On 9 January 2019, the Claimants objected to the Application for Further Costs Submissions on the basis that the Respondent had already been given the opportunity to make its costs submission in accordance with Article 6.1 of PO 8.
165.
On 11 January 2019, the Tribunal ordered that the Respondent could make a further submission on costs by 17 January 2019 and the Claimants could make a reply submission by 23 January 2019.
166.
On 11 January 2019, the Respondent confirmed it had no comments on the experts’ calculations but reiterated its concerns regarding the valuation assumptions and reserved its rights with respect to same.
167.
That same day, the Claimants confirmed they had no comments on the experts’ calculations but asked that the Award reflect the date of its issuance with respect to damages.
168.
On 17 January 2019, the Respondents filed its further submissions on costs (“Respondent’s Further Costs Submissions”).
169.
On 23 January 2019, the Claimants filed their reply on the Respondent’s Further Costs Submissions (“Claimants’ Reply on Further Costs Submissions”).
170.
The proceeding was closed on 25 March 2019.

IV.

FACTUAL BACKGROUND

A.

THE KALIVAÇ CONCESSION AGREEMENT

171.
In 1992, the Albanian communist party lost national elections and left power.31 In 1993 and 1994, Francesco Becchetti met with various Albanian officials, including the Prime Minister and Foreign Minister at the time and administrators of the state electrical company, Korporata Elektroenergjitike Shqiptare (“KESH”) to discuss the possibility of building hydroelectric plants in Albania with foreign investment.32
172.
In order to attract foreign investment in infrastructure, in 1995 the Parliament passed a law permitting the government to grant concessions to private companies.33 In the same year, Francesco Becchetti created BEG to carry out and operate large energy projects.34
173.
On 16 May 1995, BEG and KESH signed a cooperation agreement35 allowing BEG to conduct studies along the Vjosa River and gain access to the technical data prepared by the Albanian Government.36 Those studies and data indicated that a site in Kalivaç, in Krahes, would be optimal for a hydroelectric power plant.37 A number of other sites on the river were identified as being suitable for such power plants to be built.38



  31 First Becchetti Statement, para. 15.
  32 Ibid, paras. 24 to 27.
  33 First Becchetti Statement, para. 15; Law No. 7973 on Concession and Participation of Private Companies in Public Service and Infrastructure, 26 July 1995 (CL-32).
  34 First Becchetti Statement, para. 10.
  35 Cooperation Agreement between BEG and KESH, 16 May 1995 (C-178).
  36 First Becchetti Statement, para. 29.
  37 Ibid, para. 29.
  38 Ibid, para. 29.
174.
On 28 September 1995, BEG submitted its prefeasibility study to the Authorised State Body (“ASB”),39 and in November and December began conducting feasibility studies on site at Kalivaç.40
175.
On 27 February 1996, BEG submitted its concession request to build a hydroelectric power plant at Kalivaç,41 and on 8 April 1996, KESH provided a favourable recommendation to the Ministry of Minerals and Energy Resources.42 On 3 June 1996, the Council of Ministers approved the request and invited BEG to commence negotiations.43 The Claimants also assert that during these discussions the Albanian Government and KESH offered BEG a right of first negotiation concerning other hydroelectric projects on the Vjosa River.44

(1)

Terms of the original Concession Agreement

176.
On 24 May 1997, after nearly a year of negotiations, BEG and the ASB signed the Concession Agreement, “for the financing, engineering, construction, management and [transfer] at the Concession expiring date, of a Hydro-Power Plant in Albania according to a B.O.T. (Build Operate and Transfer) basis.”45 It contained the following key terms.
177.
The Concession Period would run for 30 years from the beginning of the works,46 subject to any extension for force majeure events,47 or delay in the ASB performing its obligations and duties where it is at fault.48 During this period, starting from the Plant start up, BEG would pay to Albania a concession fee of 10% of the Kalivaç Plant’s annual production.49 Otherwise, BEG was to be free to sell the plant’s electricity on the open market (including the export market), and so during that 30-year period make a return on its investment.50 At the end of the 30-year period BEG was obliged to turn the Plant over to Albania fully operational, with sufficient spare parts for a further 5 years of operation.51



  39 Prefeasibility Study, Plan for the Hydroelectric Development for the Auction of the Vjosa River, August 1995 (C-179). The ASB is constituted by two Ministries, originally the ministry of Public Works, Land Planning and Tourism and the Ministry of Mining and Energy Resources, and subsequently the Ministry of Public Works, Transportation and Telecommunications and the Ministry of Economy, Trade and Energy: Counter-Memorial and Objections to Jurisdiction, para. 150, footnote 88.
  40 First Becchetti Statement, para. 30.
  41 BEG, “BOT” Concession Request for the Kalivaç Hydroelectric Plant on the Vjosa River, 26 February 1996 (C-180).
  42 First Becchetti Statement, paras. 31 to 32.
  43 Invitation from the Authorized State Body to BEG for negotiation of the Concession Agreement, 3 June 1996 (C-182).
  44 First Becchetti Statement, para. 31; Memorial, paras. 55, 67, 85.
  45 Concession Agreement, p. 2 (C-014).
  46 Ibid, Article 8. Works were recorded as commencing on 30 November 2003, meaning the concession period was scheduled to finish on 30 November 2033, as discussed further in para. 203 below.
  47 Ibid, Article 29.
  48 Ibid, Article 9.
  49 Ibid, Article 9.
  50 Ibid, Article 21, and see Memorial, para. 75; Counter-Memorial, paras. 157 to 158.
  51 Ibid, Article 8.
178.
The Concession Agreement imposed the following key obligations on BEG.
a.
BEG warranted that it had the necessary technical, financial and managerial capabilities to perform the contract to international standards.52
b.
BEG undertook to arrange all necessary financing and do everything necessary to build and manage the plant according to the specifications set out in the Concession Agreement53 and to manage the plant when completed.54
c.
BEG undertook to begin the works within 10 months of Parliamentary ratification; to complete design within 12 months of the yard opening; and to complete the plant within 48 months of the beginning of the works55 (subject to extensions for delay in the ASB performing its obligations and duties under the Concession Agreement where the ASB is at fault56 and force majeure, discussed further below).



  52 Ibid, Preamble.
  53 Ibid, Articles 5 and 7.
  54 Ibid, Article 20.
  55 Ibid, Article 12.
  56 Ibid, Article 9.
179.
The Concession Agreement provided that BEG was entitled to:
a.
seek a “penalty equal to 80% of the Plant turnkey investment ready for the start up,” fixed at USD 100,000,000, if Albanian authorities were to expropriate or confiscate the plant;57
b.
seek to have privately held land necessary for the construction of the plant expropriated under the Albanian law on expropriation in force as at the signing of the Concession Agreement with the ASB’s assistance and at BEG’s expense;58
c.
export all of the energy to which it was entitled under the Concession Agreement;59 and
d.
transfer its profits freely.60
180.
The ASB provided the following exemptions and guarantees under the Concession Agreement.61
a.
Exemption from customs duties on BEG’s import and export of goods, a provision which would remain in force even if Albanian law changed.
b.
Exemption from tax on profits for the first two years of operation (subject to extension for delay in the ASB performing its obligations and duties under the Concession Agreement where the ASB is at fault62), following which the tax rate would be frozen at 15%.
c.
Exemption from VAT.
d.
A guarantee that VAT would be refunded within 30 days of BEG’s request for the refund.



  57 Ibid, Article 30.
  58 Ibid, Article 10.
  59 Ibid, Article 21.
  60 Ibid, Article 26.
  61 Ibid, Article 25.
  62 Ibid, Article 9.
181.
The ASB also:
a.
granted “stabilisation”, i.e. that subsequent laws “will not modify, in any way, the duties accepted by the parties, as well as the content of the present Concession Agreement”;63
b.
agreed to provide any necessary assistance with any organisation and Albanian authority to allow BEG to undertake the project;64 and
c.
agreed to declare the plant a priority structure, letting it take precedence in the utilisation of infrastructure and retrieving materials necessary for works.65
182.
The Concession Agreement also provided for adjustments to the schedule for completion of the plant in the event of force majeure, described as follows.66
To make an example, not limitative, are considered as Force Majeure events as natural catastrophes such as floods and earthquakes, exceptional political events such as wars and revolutions, and third Parties’ interventions having a law force.

In case that during the realization of the duties Force Majeure events occur, the Parties will have no right to ask each other refunds for possible delays or non-fulfilment in due time.

As far as the scheduled time is concerned according to previ[ou]s art. 12, will be consequently modified in accordance to the needs deriving from the stop due to the Force Majeure event.

The stop period and the postponing of the foreseen dates for mutual duties’ fulfilment will have to be confirmed by integrative minute books to the present Concession Agreement agreed by the Parties.



  63 Ibid, Article 24.
  64 Ibid, Article 6.
  65 Ibid, Article 6.
  66 Ibid, Article 29.
183.
The Concession Agreement envisaged that an “Operating Company” would be established as a local subsidiary of the Concessionaire through which it would perform the Concession. The Concession Agreement promised that that Operating Company would, upon the appropriate legislation being executed, itself enjoy various tax exemptions under Albanian law.67 As noted, KGE was used by BEG as the Operating Company for the purposes of the project. Originally, however, Albaniabeg was the Operating Company. The legislation necessary to confer those exemptions on the Operating Company was passed in 2000.68 It provided the Operating Company with statutory rights enforceable under Albanian law.
184.
Article 14 of the Concession Agreement provided for termination of the agreement in the following terms.
The Authorized State Organ, according to art. 31, will have the right to start an annulment procedure of the Concession - through a previous warning to remove, by an adequate time, the irregularities that came out and in case the Concessionaire do not conform - beside a serious non-fulfilment of the duties established by the present Concession Agreement, also when the Concessionaire, due to neglicence [sic] and inexperience, compromises - in any phase - the running, the execution and the good results of the works themselves.

Should the situations mentioned in the previous comma occur, the Authorized State Organ will previously ask the Concessionaire to show within 30 days its justifications, and, in case it decides not to accept them, it will be entitled to start the procedure for the rescission, informing the Concessionaire. If for any reason imputable to the Concessionaire, after 15 months from the signing of the present concession Agreement, the Concessionaire do not begin the works, the Authorized State Organ can declare annulled the Concession.

Should the Authorized State Organ be late in the fulfilment of its duties, the Concessionaire may ask to annul the contract by adequate petition, and should it be accepted, the Concessionaire has right to the refund of the expenses supported; should the petition not be accepted, but being the Authorized State Organ still late, the Concessionaire is allowed to ask according to art. 31, for the annulment of the contract and the damage refund, by a previous petition containing the act of the Authorized State Organ being put in arrears.

Should the Authorized State Organ behave in a deeply non-fulfilling way, the Concessionaire has the right to ask for the annulment of the contract and for the damage refund, by a previous petition containing the act of the Authorized State Organ being put in arrears.



  67 Ibid, Article 25.
  68 Law No. 8708 on Some Exemptions and Granting Incentives for the Construction of Kalivaç Hydropower Plant on “BOT” Concession, 1 December 2000 (C-192).

(2)

Implementation of the Concession Agreement and further Vjosa River projects

185.
On 24 May 1997, on the day that BEG and the ASB executed the Concession Agreement, the Council of Ministers approved the agreement with Decision No. 222.69 That decision also decided:
4.
To authorize B.E.G. SpA to study, at its own expense, the possibility of building hydropower plants on the lower part of the River Vjosa, after the Kalivaç hydropower plant.

If the study supports the construction of another hydropower plant with BOT concession, and if the Government grants its approval, B.E.G. SpA has the right to become the first negotiator.
186.
Decision No. 222 brought the Concession Agreement into force;70 however, the provisions in the agreement concerning the duration of the concession period,71 facilitation of expropriations,72 stabilisation,73 customs and fiscal exemptions,74 and expropriation of the plant75 required Parliamentary approval.76 If Parliament failed to approve these provisions within 60 days of the signing of the Concession Agreement, BEG could either rescind the Concession Agreement or pursue the Concession Agreement without these provisions.77



  69 Decision No. 222 on the Approval of the Agreement for the Kalivaç Hydropower Plant with BOT Concession (C-183).
  70 Concession Agreement, Article 34 (C-014).
  71 Ibid, Article 8.
  72 Ibid, Article 10.
  73 Ibid, Article 24.
  74 Ibid, Article 25.
  75 Ibid, Article 30.
  76 Ibid, Article 34.
  77 Ibid.
187.
The Parliament did not approve the relevant provisions until 2000, three years later.78 The delay was due to political turmoil in Albania.79 BEG did not exercise its right to rescind, nor its right to continue with the Concession Agreement absent the provisions that required parliamentary approval. It decided to wait, on the basis of assurances received from Albanian officials that parliamentary approval would be provided once the political situation was calmer.80
188.
Towards the end of this period, in September 1999, BEG submitted concession requests for three other projects along the Vjosa River, at Dragot, Kaludh, and Karbunare.81 In January 2000, the Albanian Institute of Hydrotechnical Studies and Planning carried out an analysis of the studies BEG had submitted on these proposed projects,82 which recommended the concessions be approved.
189.
When the political situation in Albania stabilised, in 2000, BEG and the then-relevant Albanian ministries83 signed the First Addendum to the Concession Agreement.84 This addendum removed the requirement that parliamentary approval occur within 60 days from the signing of the Concession Agreement and amended Article 13 of the Concession Agreement to allow BEG to build and operate the plant through a subsidiary company. The Parliament then approved the relevant provisions of the Concession Agreement in December of 2000.85



  78 Law No. 8708 on Some Exemptions and Granting Incentives for the Construction of Kalivaç Hydropower Plant on “BOT” Concession, 1 December 2000 (C-192).
  79 First Becchetti Statement, para. 42.
  80 First Becchetti Statement, para. 43.
  81 “BOT” Concession Application for the Dragot Hydro Power Plant on the River, 6 September 1999 (C-184); “BOT” Concession Application for the Karbunare Hydro Power Plant on the River, 6 September 1999 (C-185); “BOT” Concession Application for the Kaludh Hydro Power Plant on the River, 6 September 1999 (C-186).
  82 Albanian Ministry of Public Works, Institute of Hydrotechnical Studies and Planning, Analysis of Studies on the Dragot, Kaludh, and Karbunara Hydro Plants, January 2000 (C-189).
  83 The Ministry of Public Economy and Privatization and the Ministry of Public Works, which also became the ASB by the addendum.
  84 Which addendum entered into force as a decision of the Council of Ministers to supplement Decision 222 with Decision No. 590 (C-191).
  85 Law No. 8708 on Some Exemptions and Granting Incentives for the Construction of Kalivaç Hydropower Plant on “BOT” Concession, 1 December 2000 (C-192).
190.
BEG had applied for the three further concessions on the Vjosa River with its then-partner Enel SpA (“Enel”), the Italian state energy company. BEG and Enel signed a “Preliminary Cooperation Agreement” dated 12 March 1999 and a “Final Cooperation Agreement” dated 2 February 2000.86 Under those agreements, BEG was to contribute the Concession to a to-be-formed joint venture company that would develop the further projects.87
191.
Enel decided not to fund the project, however, and this led to two disputes, one between BEG and Enel, and another dispute between Albaniabeg (the BEG subsidiary that was the then Operating Company under the Concession Agreement) and Enel. Both disputes were arbitrated. BEG was unsuccessful,88 but Albaniabeg obtained an award for €25,188,500 in respect of lost revenue in 2004 and damages pursuant to a formula to compensate Albaniabeg for lost revenues that would have arisen from the sale of electricity in respect of 2005 to 2011.89 Albaniabeg is seeking to enforce that judgment on the basis that it is worth €433,091,870.90 In that arbitration, Albaniabeg asserted that but for Enel’s wrongs the Kalivaç Project would have been completed in 2003.91
192.
Construction started on the plant at Kalivaç on 30 November 2003.92 The works were carried out by Albaniabeg until 2007, when a new entity was formed under the joint venture agreement between BEG and its new partner, Deutsche Bank, discussed in section C below.



  86 First Becchetti Statement, para. 47; Letter from BEG and Enelpower to the Albanian Ministry of the Public Economy and Privatizations, 2 February 2000 (C-190); BEG SpA v. Enelpower SpA (arbitral award), 25 November 2002, p. 5 (R-030).
  87 Memorial, paras. 92 and 96; Counter-Memorial, para. 184.
  88 BEG SpA v. Enelpower SpA (arbitral award), 25 November 2002 (R-030).
  89 Albaniabeg Ambient Sh.p.k. v. ENEL S.p.A. & Anor (Decision No. 2251 of the Tirana District Court), 24 March 2009 (R-031). The formula is at p. 23.
  90 ABA Sh.p.k v. ENEL S.p.A and Enelpower S.p.A [2016] IEHC 139 (Ireland High Court judgment), 8 March 2016 (R-040); ABA Sh.p.k v. ENEL S.p.A and Enelpower S.p.A (New York Supreme Court judgment), 15 October 2014 (R-036); ABA Sh.p.k v. ENEL S.p.A and Enelpower S.p.A (New York judgment), 10 March 2016 (R-041).
  91 Albaniabeg Ambient Sh.p.k. v. ENEL S.p.A. & Anor (Decision No. 2251 of the Tirana District Court), 24 March 2009, p. 20 (R-031).
  92 As acknowledged and agreed by the parties in the Second Addendum to the Concession Agreement, discussed further below.

B.

ALBANIABEG’S WASTE MANAGEMENT CONCESSION

193.
On 26 May 2005, Albaniabeg signed a concession agreement for the construction and operation of a Waste Management Concession in Albania.93 Albaniabeg had been chosen despite a request made for the same concession by Koço Kokëdhima, an Albanian businessman who became a member of Parliament in 2013 and who, the Claimants assert, has ties to then Tirana Mayor (and later Prime Minister) Edi Rama.94
194.
Shortly after this concession agreement was signed, Shekulli, a newspaper owned by Mr. Kokëdhima, purported to publish details of the concession agreement.95 The Claimants assert that this report was false.96 Mr. Kokëdhima also made public statements against Albaniabeg and disparaged the Italian nationality of the company’s shareholders, statements which Albanian and Italian courts ultimately found to be defamatory.97
195.
Erion Veliaj, the leader of a reform movement, became involved and organized protests against the project, along with other politicians, including Edi Rama.98 These protests were in part also directed against the Prime Minister at the time, Fatos Nano. Prime Minister Nano was later succeeded as the leader of the Socialist Party by Edi Rama. The Claimant also asserts that Mr. Veliaj is considered Prime Minister Rama’s protégé. At the time of the final hearing, Mr. Veliaj was Mayor of Tirana.99
196.
Successive Albanian Governments postponed, but did not cancel, the concession agreement for the waste management project because of the protests. When Prime Minister Rama came to power he passed a ban on waste imports, at which point the Claimants assert that the project became impossible.100



  93 First Becchetti Statement, para. 51.
  94 First Becchetti Statement, para. 51; Memorial, para. 107.
  95 First Becchetti Statement, para. 51.
  96 First Becchetti Statement, para. 51; Memorial, para. 106.
  97 Decision of the First Civil Chamber of Rome, 31 May 2012 (C-257); Decision of the Supreme Court of Albania, 1 March 2012 (C-255).
  98 First Becchetti Statement, para. 51; Memorial, paras. 106 to 108.
  99 Ibid.
  100 First Becchetti Statement, para. 51.

C.

DEUTSCHE BANK JOINT VENTURE AND THE SECOND ADDENDUM

197.
On 16 January 2007, BEG and Deutsche Bank AG signed a joint venture agreement for the Kalivaç Project (“JVA”).101 By the JVA, BEG undertook to incorporate a joint venture company to which it was to transfer the Concession,102 and Hydro was formed for this purpose.103 Because Deutsche Bank would only be involved in the Kalivaç Project and not the waste management facility, a new joint venture company, KGE, was ultimately created from Albaniabeg to construct and operate the Project.104 KGE was and is 100% owned by Hydro. Under the JVA, BEG would own a 55% share in Hydro, and Deutsche Bank would own a 45% share.105
198.
Also under the JVA, Deutsche Bank undertook to:106
a.
make a capital contribution to Hydro and to provide a shareholders’ loan; and
b.
use its best efforts to find in the market project finance lenders and also use its commercial best efforts to find a suitable purchaser of energy produced by the Project, if that was a requirement of finance.
199.
Finally, BEG undertook to continue performing or procuring other companies to perform the construction works of the Project until “Financial Close” and to use its commercial best efforts to identify an Engineering, Procurement and Construction Contractor (“EPC Contractor”) in respect of the Project.107



  101 Ibid, para. 50; Deutsche Bank AG v. BEG S.p.A (ICC Case No.17496/JHN/GFG), 18 April 2013, para. 25 (“1st ICC Award”) (R-033); Redacted Joint Venture Agreement between BEG S.p.A. and Deutsche Bank AG, 16 January 2007 (R-0101).
  102 1st ICC Award, para. 25 (R-033).
  103 Hydro was formed in 27 June 2007 (C-002).
  104 First Becchetti Statement, para. 52.
  105 Ibid.
  106 1st ICC Award, para. 26 (R-033).
  107 1st ICC Award, para. 27 (R-033).
200.
Partly to facilitate the JVA between BEG and Deutsche Bank, a Second Addendum to the Concession Agreement was then agreed between BEG and the ASB108 on 8 May 2007.109 That addendum made the following key changes to the Concession Agreement.

(1)

Terms of the Second Addendum

201.
Article 13 (Concession Limit) had originally provided that the Concessionaire, BEG, was not entitled to transfer all or part of the Concession. Under the amended provision, by Article 13.1, BEG undertook to procure within 180 days of approval of the Second Addendum that the Concession would be held by a company (“Newco”) controlled by BEG and in which Deutsche Bank would have at least 45% share capital. Newco was to have a minimum corporate capital of €15 million. Article 13.2 provided that once that transaction was completed, the Concessionaire was not to transfer the Concession Agreement to any third party. Activities relating to the construction and management of the Plant were to be carried out by the Concessionaire through the Operating Company. Article 13.3 provided that, before the Commercial Operation Date, Deutsche Bank’s or BEG’s equity interest should not be transferred to any third party without prior written consent of the ASB, which was not to be unreasonably withheld.
202.
The Second Addendum added to Article 5 (Concessionaire Obligations) an obligation on the Concessionaire to provide the ASB, within 180 days of the date of effectiveness of the Second Addendum, with evidence of “the availability of the financial coverage for the Implementation of the Project, it being understood and agreed between the parties that non-fulfilment of this obligation will be considered as a serious breach of the Concession Agreement.”
203.
Article 8 (Concession Period) was amended to record that works had begun on 30 November 2003, and so, as noted, the concession period would come to an end110 on 30 November 2033. The contractual deadline for completion became 16 July 2011 (i.e. 36 months from the granting of the construction license, rather than the 48 months from the start of works as provided in the original Concession Agreement). Article 14 (Concession Termination) was amended to include provisions for penalties if that date was not met and Article 15 was amended to oblige the Concessionaire to establish a cash deposit up to a total of €4 million in respect of its potential liabilities under those penalties.



  108 Then constituted by the Ministry of Public Works, Transportation and Telecommunications and the Ministry of Economy, Trade and Energy.
  109 Second Addendum to the Concession Agreement, 8 May 2007 (C-015); Memorial, paras. 110 to 111; Counter-Memorial, para. 128.
  110 Absent any extension under Articles 9 or 29, as mentioned in paras. 177, 180 and 182 above.
204.
Article 9 (Concession Fee) was amended to increase the fee payable, from a flat 10% of production for the concession period to 10.5% in the first three years, starting from the Commercial Operation Date of the Plant, reverting to 10% in the balance of the concession period. The ASB had the option of either taking the electricity to which it was entitled or selling that electricity. If the ASB exercised the second option, the Concessionaire was to advance the present value of the expected production to the ASB.
205.
Article 14 (Concession Termination) was amended, inter alia, to provide as follows.
In the event that the Concessionaire does not complete the construction works by the date falling 36 months from the date of obtainment of the construction license:

(i) if the delay is attributable to the Concessionaire, the latter shall pay to the Authorised State Body penalties, both in cash and in kind, up to a maximum amount equal to 10% of the Estimated Project Costs; or

(ii) if the delay is attributable to the Authorised State Body, the latter shall pay to the Concessionaire penalties, both in cash and in kind, up to a maximum amount equal to 10% of the Estimated Project Costs.
206.
That Article was also amended to provide for how the envisaged penalties were to be calculated.
207.
Article 21 (Energy Transmission) was amended to provide that the Concessionaire was entitled to sell its share of the electricity generated “with the aim of obtaining Green Certificates or any equivalent incentives relating to renewable energy production.” This change reflected changes in Italian and Albanian law since the Concession Agreement had been signed. In 1999, Italy passed a decree111 allowing producers of renewable energy, such as hydroelectric power, to obtain Green Certificates, a financial incentive, for the production of such energy. Albania created a similar incentive in 2000.112
208.
In 2002, the countries’ respective regulators signed a bilateral agreement to allow energy produced in Albania to be eligible for Green Certificates if transported to Italy.113 In 2006, Italy and Albania signed a second agreement.114 These agreements allowed energy produced in Albania and imported to Italy to qualify for Green Certificates. The Claimants assert that the availability of Green Certificates would allow the Project to obtain a significant mark-up on any energy it generated and sold.115
209.
By the new Article 26 (Referring Laws), the Concession Agreement was made subject to Albanian law, save that Article 26 preserved the operation of Law 8708, which provided that “No legal act may infringe the agreement once the concession agreement enters into force.”116
210.
Finally, Annex D to the Second Addendum set out the works performed to date under the Concession Agreement, including detailed schedules of the costs of those works.117 On the basis of those figures, a value of at least €16,617,000 was ascribed to the completed works in that annex.



  111 Legislative Decree No. 79 (Bersani Decree), 16 March 1999 (CL-034).
  112 Law No. 8679 on Amendments to Law No. 7962, 2 November 2000 (CL-037).
  113 Agreement between Gestore della Rete di Trasmissione Nazionale SpA and the Albanian Electricity Regulatory Authority, 14 January 2002 (CL-043).
  114 Gazzetta Ufficiale no. 177, “Accordo tra il Ministero delle attivita’ produttive e il Ministero dell’ambiente e della tutela del territorio della Repubblica italiana e il Ministero dell’economia, del commercio e del-l’energia della Repubblica di Albania,” Ministerio dello Sviluppo Economico, Comunicato, 1 August 2006 (CL-053).
  115 See discussion Day 2, T14-T28, Albaniabeg Day 1, pp. 36-37 (Annex A to the Claimants’ Application to Exclude Counsel, 28 Jun 2017), Navigant Report 1 (Brent Kaczmarek and Kiran Sequira) Section IX on the value of Green Certificates.
  116 Law No. 8708 on Some Exemptions and Granting Incentives for the Construction of Kalivaç Hydropower Plant on “BOT” Concession, 1 December 2000 (C-192).
  117 Annex D to the Second Addendum (C-017).

(2)

Decision No. 363 Approving the Second Addendum

211.
On 6 June 2007, the Council of Ministers approved the Second Addendum with Decision No. 363.118 Decision No. 363 also stated that “Points 2, 4, and 5 of decision No. 222 of May 24th, 1997, of the Council of Ministers, ‘On the approval of the “BOT” type concession agreement for the Kalivac hydroelectric power plant’, are invalidated.” As set out in paragraph 185 above, point 4 had provided for BEG to have a right of first negotiation in certain circumstances.

(3)

Expressions of interest in developing other plants

212.
Despite this, before and after Decision No. 363 was made, BEG and Deutsche Bank expressed interest in developing further power plants. On 30 May 2007,119 they wrote to the relevant Albanian officials expressing interest in developing three further plants on the Vjosa River. On 30 July 2007, they wrote to the same officials, reiterating that interest.120 On 6 August 2007, BEG and Deutsche Bank submitted joint concession requests for three other hydroelectric power plant projects in three further locations.121
213.
On 17 September 2007, the Minister of Economy, Trade and Energy replied to the 30 May letter sent by BEG and Deutsche Bank, informing them that the Albanian Government was considering the possibility of conducting a complete study of Vjosa River and would respond at the conclusion of that study.122



  118 Decision No. 363 on the Approval of the Changes to the Concession Agreement of BOT Form for the Kalivaç Hydropower Plant between the Authorized State Organ, the Minister of Economy Trade and Energy, and the Minister of Public Works, Transports and Telecommunications and the Concessionaire BEG S.p.A., 6 June 2007 (C-016).
  119 Letter from BEG and Deutsche Bank to the Albanian Minister of Economy, Trade and Energy and the Albanian Minister of Public Works, Transportation and Telecommunications, with copy to the Prime Minister and the General Director of KESH, 30 May 2007 (C-201).
  120 Letter from BEG and Deutsche Bank to the Albanian Minister of Economy, Trade and Energy and the Albanian Minister of Public Works, Transportation and Telecommunications, with copy to the Prime Minister and the General Director of KESH, 30 July 2007 (C-202).
  121 Deutsche Bank presentation, “7 Hydro Power Projects in Albania: 450 MW – 1,787,000,000 KWh/y on the Vjosa river,” October 2007, p. 4 (C-206).
  122 Letter from the Minister of Economy, Trade and Energy to BEG, 17 September 2007 (C-204).
214.
In October 2007, Deutsche Bank representatives made a presentation to a number of Albanian officials, including then President Sali Berisha, to develop all six of the plants.123

D.

THE KALIVAÇ PROJECT FROM 2007 TO 2013

(1)

Work on the Project

215.
Between 2007 and 2013, KGE signed a number of agreements with Energji, the contractor on the Project, to facilitate construction of the plant.124 Before work ceased on the Project, no later than March 2013,125 the following works were undertaken:
a.
the left and right embankments were prepared to install the dam;
b.
excavations were completed, totalling 2,500,000 cubic metres;
c.
the aprons were prepared, narrowing the river passage to install the dam; and
d.
materials to construct the dam were selected and transported on site.126
216.
In 2009, a dispute arose between KGE and Energji over payment for works.127 As a result of this dispute, from November 2009 until May 2012, very little work was undertaken on the project.128 Work resumed in 2012, and then stopped in March 2013.129 In June 2014, Hydro decided to cease work on the project permanently.130



  123 Deutsche Bank presentation, “7 Hydro Power Projects in Albania: 450 MW – 1,787,000,000 KWh/y on the Vjosa river”, October 2007 (C-206); First Becchetti Statement, para. 58.
  124 Spillway Agreement by and between KGE and Energji, 3 April 2013 (C-270); Bridge CA Agreement by and between KGE and Energji, 20 August 2012 (C-261); Bridge Guado Agreement by and between KGE and Energji, 3 September 2007 (C-203); Tunnel Agreement by and between KGE and Energji, 14 October 2012 (C-263); Right Bank Escarpment Agreement by and between KGE and Energji, 3 September 2012 (C-262); First Becchetti Statement, para. 76.
  125 As accepted by both parties and discussed further below. See 2nd ICC Arbitration, Hearing Transcript, T256 (C598).
  126 First Becchetti Statement, para. 60.
  127 Becchetti cross-examination, Hearing Day 2, T14.15-T14.20.
  128 Ibid, T14.21-T15.10; T27.20-T28.21 referring to 2nd ICC Arbitration, Hearing Transcript, T183-T184 (C-598).
  129 2nd ICC Arbitration, Hearing Transcript, Day 1, T256:7-11 (R-064).
  130 2nd ICC Award, 8 January 2018, paras. 326, 339 and 374, in which the tribunal relates that “the Claimant acknowledged in the present proceedings to have permanently abandoned the project in June 2014”.

(2)

Application for permission to build a submarine cable

217.
In order to ensure that energy produced could be transmitted to Italy, BEG was to build a transmission cable between Albania and Italy.131 Such a cable was an important element of the Claimants’ ability to obtain financing for the Project.132 To this end, Energji commissioned a study from the Italian company Consult.ing SNC, a technical engineering firm, in 2008.133 On 24 April 2009, Energji submitted a request for approval to the Minister of Economy, Trade and Energy.134 Energji never received a response.135
218.
Around the same time, permission was given to three of Energji’s competitors to build transmission cables for other projects. In early 2008, Albania approved a transmission cable for Moncada Energy Group.136 In November 2008, it approved an underwater cable to be built by Enel, which was constructing a coal plant.137 In 2009, Italy’s Marseglia Group obtained approval to build a transmission cable for its renewable energy power plants.138 None of these companies ultimately carried out their projects.139

(3)

Funding for the Project and disputes with Deutsche Bank

a.
Shareholder loan and political insurance
219.
Under the JVA with BEG, Deutsche Bank was obliged to provide a capital contribution to Hydro and to make a shareholder’s loan to Hydro.140 It provided approximately €33 million to the Project, constituted by €13.5 million of equity paid into Hydro (on 2 August 2007),141 a “Development Premium” of €5 million (also on 2 August 2007)142 and shareholder loan funding of approximately €14.5 million (from June 2008).143



  131 First Becchetti Statement, para. 67.
  132 Ibid.
  133 Ibid, para. 68. The study was completed in December 2008: Consulting SNC Pre-feasibility study for Italy-Albania Transmission Cable, 18 December 2008 (C-219)
  134 Energji Request to Build Italy-Albania Transmission Cable, 24 April 2009, Prot. No. 24/09 (C-227).
  135 First Becchetti Statement, para. 68.
  136 “Albania,” Moncada Energy Group Website, retrieved on 28 April 2016 (C-421).
  137 “Government Plans Huge Infrastructure Investment in Porto Romano,” Balkan Insight, 14 July 2014 (C-301).
  138 “Marseglia firm from Italy wins project,” New Europe, 31 January 2010 (C-238).
  139 First Becchetti Statement, para. 67.
  140 As discussed in paragraphs 197-198 above.
  141 2nd ICC Award, 8 January 2018, paras. 24, 3628. and 41.
  142 Ibid.
  143 Ibid, paras. 50 to 56. See also Becchetti cross-examination, Hearing Day 2, 34:20-35:2.
220.
Under the JVA, Deutsche Bank was also obliged to use its best endeavours to secure third party financing for the Project, in which it was never successful. This lack of success led to a series of disputes, which are described further below.
221.
In 2007, the parties agreed that political risk insurance should be obtained for the Project144 and negotiations began with the Italian export credit agency, SACE. In August and September 2008, and again in July 2009, SACE indicated that in order to provide cover it would need certain conditions to be satisfied.145 SACE took the view that these were not satisfied and ultimately refused to provide cover. On 7 March 2011, SACE ended its review of the Project file after having received a threat of legal action from Hydro on 28 January 2011.146
b.
Disputes with Deutsche Bank
222.
In 2008, the relationship between the joint venture parties deteriorated. BEG had taken the view that Deutsche Bank was trying to avoid releasing funds under the shareholder loan, and on 10 October 2008, Hydro obtained a decision from the Court of First Instance of Rome, instructing Deutsche Bank to pay an amount of money corresponding to Hydro's request for a draw down on the loan.147
223.
In 2010, Hydro brought an arbitration claim under Hydro’s articles of association seeking a declaration that Deutsche Bank had assumed an obligation to provide funding to carry out the Kalivaç Project (“1st Rome Arbitration”). It sought specific performance of the alleged funding obligation and damages caused by the breach of that alleged obligation. On 17 November 2011, the Tribunal awarded Hydro €28.9 million, which was said to represent lost profits from at least three years’ delay in the Plant becoming operational.148 That sum was paid by Deutsche Bank.149 No alternative financing had been obtained by this stage.



  144 Ibid, para. 420.
  145 Ibid, para. 69 and 71. See also Letter from Deutsche Bank to METE copied to KGE, 14 December 2011 (C-581), in which Deutsche Bank states it had invested more than €34 million in the Project to that date.
  146 Ibid, para. 558.
  147 Ibid, para. 54.
  148 Hydro S.r.L v. Deutsche Bank AG, Award, 17 November 2011 (“1st Rome Award”), p. 58 (R-032).
  149 Expert Report of Greig Taylor in Albania v. Becchetti and De Renzis, 7 April 2016, para. 4.6 (C-595).
224.
In response to that claim, Deutsche Bank brought an ICC claim against BEG (“1st ICC Arbitration”). Deutsche Bank’s claim “expressed concern that BEG and Mr. Becchetti prevented the successful completion of the required activities to bring the Project to Financial Close”.150 Deutsche Bank alleged that “the relationship with SACE had become very difficult and asserted that this was in part due to Mr. Becchetti’s interactions with SACE’s representatives”.151 Deutsche Bank sought declarations that:
a.
Deutsche Bank’s obligation was limited to using its best efforts to find project finance lenders;
b.
Deutsche Bank had complied with certain obligations under the JVA and a Shareholders’ Agreement; and
c.
BEG had breached its general duty under Italian law to act in good faith in the performance of its obligations under the Shareholders’ Agreement.
225.
In response, BEG alleged that Deutsche Bank had undertaken to finance the Project itself and that BEG had fully complied with its obligations. In a counterclaim, BEG claimed damages for losses said to have been caused by Deutsche Bank’s failure to fund the Project. BEG maintained that:
the plant would already be in operation or operating within a few months. Had Deutsche Bank procured financing, the Project would have, without any doubt, progressed to the stage of revenue generation. Furthermore, the plant would have been connected to the grid by 31 December 2012.152



  150 Deutsche Bank AG v. BEG S.p.A, ICC Case No.17496/JHN/GFG, 18 April 2013 (“1st ICC Award”), para. 87 (R-033).
  151 Ibid.
  152 Ibid, para. 176.
226.
On 18 April 2013, in the 1st ICC Arbitration, the tribunal held that Deutsche Bank’s obligations under the Shareholders’ Agreement were limited to using commercial best efforts to find lenders in the market.153 It also held that Deutsche Bank had fulfilled those obligations, and so dismissed BEG’s counterclaim. Further, it held that BEG had breached a provision of the Shareholders’ Agreement relating to authority for execution of documents and had also breached its general duty under Italian law to act in good faith in the performance of its obligations under the SHA, given the manner in which it conducted itself regarding the relationship between Deutsche Bank and SACE during the application process before SACE.
227.
Although BEG was unsuccessful in its allegations concerning Deutsche Bank’s obligations under the Shareholders’ Agreement, this does not change the fact that on BEG’s case, any delay in the Project between the end of 2009 and 2012 was attributable to lack of finance, and was not caused by any acts or omissions of Albania. Mr. Becchetti’s evidence on cross-examination in the 2nd ICC Arbitration was to a similar effect.154 He accepted that work ceased on 2 November 2009, due to a lack of finance, and did not recommence until May 2012.155 It being pointed out that, in another related proceeding, the delays in construction of the Kalivaç Project between November 2009 and May 2012 were not attributed to Albania,156 Mr. Becchetti responded as follows.157
That is right but there was no reason to say so because it is not Albania that is responsible, it is the financial crisis and especially the financial crisis that Albania was living through and in the international context of the crisis.
228.
In cross-examination in the present proceedings, Mr. Becchetti suggested that Albania contributed to the delay during this period because the difficulties in obtaining finance were exacerbated by Albania’s refusal to grant a permit to construct the transmission cable.158 Mr. Becchetti asserted that, even if there were some delays in the construction of the cable, with the permit the project would have been “bankable”.159 This is because, after a delay of one to three years in construction (during which time energy could have been sold into Italy through Greece on the spot market), a financier could rely on 12 to 13 following years of profits from transmission into Italy via the submarine cable. These matters are addressed further in paragraphs 646 to 653 below.



  153 Ibid, para. 688.
  154 2nd ICC Arbitration, Final Hearing, Day 1, 19 December 2016, T188.6-T188.15; T191 (C-598)
  155 2nd ICC Arbitration, Final Hearing, Day 1, 19 December 2016, T186.18-T191.18 (C-598).
  156 2nd ICC Arbitration, Final Hearing, Day 1, 19 December 2016, T191.9-T191.12 (C-598).
  157 2nd ICC Arbitration, Final Hearing, Day 1, 19 December 2016, T191.13-T191.18 (C-598).
  158 Hearing, Day 2, T33.15-T33.20; T38.21-T39.9.
  159 Hearing, Day 2, T40.1-T41.4.
229.
In 2013, Hydro brought a further arbitration against Deutsche Bank (“2nd Rome Arbitration”), alleging inter alia that Deutsche Bank had breached its obligation to fund the Kalivaç Project and that this had caused Hydro significant losses. Hydro’s largest claim concerned its alleged lost opportunity to exploit the Green Certificates regime.160 Hydro alleged that Deutsche Bank’s failure to provide financing meant the Project had not been completed by the cut-off date under the relevant Italian regime, 31 December 2012.
230.
Deutsche Bank accepted that the Plant could no longer benefit from Green Certificates, because it had missed the cut-off, but denied that it caused that loss by not providing financing.
231.
On 7 August 2013, in the 2nd Rome Arbitration, the tribunal held that that the Project would have been operational by the end of 2012 but for what it held was Deutsche Bank’s breach. It ordered Deutsche Bank to pay approximately €396 million, comprised of the following sums (which excluded the amount already awarded in the 1st Rome Arbitration for three years’ delay in the plant becoming operational161).
a.
€329,292,000 plus interest for “income flows” that Hydro would otherwise have enjoyed relating to the Green Certificates, “calculated until the end of 2008 and then carried forward to 31 December 2012”, by reference to the Project’s business plan.
b.
€15,992,000 in respect of “an additional cash flow” and damage from lost profits calculated by reference to the business plan, and with additional compensation for delay in receipt. The sum awarded was after having given credit for the €28.9 million awarded in respect of this in the First Rome Award.
c.
€10,753,000 in respect of the loss of “an additional profit flow that is no longer attainable”. This was compensation for delay in the generation of remaining cash flows in respect of the Project.
d.
€40,000,000 for damage to Hydro’s reputation.162



  160 As described in paragraphs 439 to 440.
  161 2nd Rome Award, LVII-LIX (R-035).
  162 Hydro S.r.L v. Deutsche Bank AG, Award, 7 August 2013 (“2nd Rome Award”), pp. LXV-LXVII (R-035)
232.
In June 2013, Deutsche Bank commenced an ICC Arbitration seeking recovery of any sums which it paid under either the 1st or 2nd Rome Arbitration
233.
In October 2013, the parties reached a settlement under which Deutsche Bank:
a.
paid €135 million to Hydro and €10 million to KGE; and
b.
transferred its 45% interest in Hydro to BEG, making BEG the sole owner of Hydro.163
234.
Hydro received its payment on 30 October 2013.164



  163 Expert Report of Greig Taylor in Albania v. Becchetti and De Renzis, 7 April 2016, para. 4.7 (C-595); Hearing Transcript, Day 2, T10:02.
  164 Unicredit Luxembourg S.A. Summary Statement for Hydro, 19 June 2015, Entry 1(C-105).
c.
Albania’s communications regarding funding obligations
235.
On 22 April of 2009 (after the financial reporting obligations under the Second Addendum to the Concession Agreement had come into effect165), the METE wrote to Hydro and stated that:166
Following to our letter dated 20th of March, 2009, and our last inspections too, we hereby confirm that, no breach of the concession of any sort was carried out by the Concessionaire also with respect to any construction permits, environmental, financing process of the project and EPC Contractor.
236.
However, on 12 December 2011, in the course of various documents being submitted to the METE under the Concession Agreement, the METE raised the following concern with KGE:167
The Company has not submitted the document that proves that the Contract is fully financially covered, the disbursement of funds according to the obligation foreseen by Deut[s]che Bank AG, referring to the letter dated 17.01.2007.
237.
The METE asked KGE to submit the requested documents within 15 days.
238.
On 14 December 2011, Deutsche Bank responded to the METE, asking it to “grant KGE a period of 90 days during which time you would refrain from taking any steps to cancel the concession, while we work with KGE and our Italian partner in the project to present to you a financing plan”.168



  165 Article 5 of the Concession Agreement provides that “the Concessionaire undertakes: to provide the Authorized State Body, within one year from the expiry of the term established in article 13.1 hereunder, with the evidence of the availability of the financial coverage for the Implementation of the Project.” Article 13.1 provides that “the Concessionaire undertakes to procure within 180 days from the date of effectiveness of this Addendum, the Concession will be held by a company (‘Newco’).” The Second Addendum came into effect on 6 June 2007 (C-016). Thus, the delay has to be calculated as 180 1 year from 6 June 2007, ending on 6 December 2008
  166 Letter from METE to Hydro, 22 April 2009, Prot. No. 3692 (C-578).
  167 Letter from METE to KGE, 12 December 2011, Prot. No. 4181/9 (C-580).
  168 Letter from Deutsche Bank to METE with KGE in copy, 14 December 2011 (C-581).
239.
On 23 December 2011, the METE wrote to Deutsche Bank, copying Hydro, requesting “full compliance to your financial obligation and disbursement as soon as possible, not later than January 31st 2012.”169
240.
On 6 February 2013, the METE wrote to KGE, setting out what the METE considered to be a number of failures of KGE to meet its obligations under the Concession Agreement, including the financial reporting obligations the subject of the correspondence with Deutsche Bank.170 On 14 February 2013, KGE responded, disputing a number of these allegations, stating that any delay in meeting any obligation was not its fault, and further stating that the METE (as provider of the concession as part of the ASB) was in breach of a number of its obligations.171

(4)

Communications with the Albanian authorities about other aspects of the Project

241.
During this period from 2007 to 2013, there was a series of communications with, and between, the Albanian authorities for the purposes of the Project.
a.
Environmental permit
242.
In 2008, KGE raised concerns with the METE regarding the time it was taking the relevant authorities to issue an environmental permit. On 21 April 2008, METE wrote to those authorities, expressing its concern regarding those delays and asking that the permit be issued immediately.172 The permit was then issued on 5 May 2008.173
b.
Expropriation
243.
Also beginning in 2008, KGE corresponded with the METE concerning the expropriation of private lands necessary for the Project. On 13 June 2008, KGE wrote to the METE requesting the METE to activate the expropriation process under Article 10 of the Law No. 8561 dated 22 December 1999,174 and attaching certain documentation to that end.175 On 8 July 2008, the METE responded, stating that certain documents required by the statute had not been included, and that when the missing documents were included the file should be presented again to the METE for another review in 15 days.176 On 14 July 2008, however, the METE wrote to the Minister of Public Works, Transport, and Telecommunication and stated that “Concessionary Company Kalivac Green Energy Ltd has lodged with the METE the needed and necessary documentation as required by law No. 8561, dated 22.12.1999”.177



  169 Letter from METE to Deutsche Bank with KGE in copy, 23 December 2011, Prot. No. 9489 (C-582).
  170 Letter from METE to KGE, 6 February 2013, Prot. No. 1283 (C-584).
  171 Letter from KGE to METE, 14 February 2013, Prot. No. 08/13 (C-585).
  172 Letter from METE to the Ministry of Environment, Forests, and Water Administration, 21 April 2008 (C-208).
  173 Environmental Permit, 5 May 2008 (C-209).
  174 Law No. 8561 on Expropriations and Temporary Takings of Private Property for a Public Interest, 22 December 1999 (CL-035).
  175 Letter from KGE to METE, 13 June 2008, Prot. No. 14/08 (C-211).
  176 Letter from METE to KGE, 8 July 2008, Prot. No. 5652/4 (C-214).
  177 Letter from METE to the Ministry of Public Works and Telecommunication, 14 July 2008, Prot. No. 5652/5 (C-215).
244.
On 21 July 2008178 and again in late 2008179 KGE requested more time to provide the requested documents. Ultimately, the METE gave KGE until the end of April 2009.180 On 28 January 2009, KGE informed the METE that the delay was due to a different government department failing to respond to KGE’s request for some of the necessary documentation.181 On 11 August 2009, KGE and the METE executed an agreement on expropriation.182 On 26 August 2009, KGE complained that
the Authorized State Body has not verified the reasons for the delay in expropriation procedures which are exclusively due to the fault of the Authorized State Body itself, which make for us impossible to begin cementing the curtain under the quota of 87m, for which we were and are prepared an in waiting with all the damage that this situation has caused us and will cause us, and we will be forced to seek immediate restitution.183
245.
Nevertheless, in the same letter, KGE stated that works were ahead of schedule.



  178 See Letter from METE to KGE, 7 August 2008, Prot. No. 5652/10 (R-060).
  179 See Letter from METE to KGE, 23 January 2009, Prot. No. 224/1 (R-061).
  180 Ibid.
  181 Letter from KGE to METE, 28 January 2009 (C-221).
  182 Agreement on Expropriation Proceedings for Public Interest by and between METE and KGE, 11 August 2009 (C-230).
  183 Letter from KGE to METE, August 26, 2009, Prot. No. 51/09 (C-231).
246.
On 20 May 2010, the METE sent KGE complaints raised by residents whose land was being expropriated.184
c.
Flooding
247.
On 26 August 2009, KGE informed the METE of at least 18 floods, stating:185
It should be noted that the time advantage in connection to the schedule has been performed during the excavations in an extreme season for excavations extremely regarding meteorological phenomena, which have provoked at least 18 floods, which under Article 28 of the Contract of the concession entitle us for the significant extension period, which we have the right to document and do not relate to significant delays, as you are claiming.
248.
On 7 June 2010, KGE wrote to National Agency of Natural Resources (“AKBN”), informing it of difficulties encountered on the Project due to heavy rainfall and inclement weather, including landslides, erosion and obstructions to works.186 KGE attached six protocols to the letter regarding those difficulties. On 12 August 2010, KGE reiterated the matters it set out in its 7 June letter.187
249.
On 8 September 2010, KGE again wrote to AKBN, and complained that:188
[...] if seasonal events are encountered, the work schedule will be modified. In the last two years there have been many of these events, which were not verified in the last 20 years, and yet, even to this day, we are not granted postponement. This is another flaw in cooperation on the part of the Concession Granter and it is continuing to cause great damage to the project, and consequently to us.
250.
On 3 March 2011, KGE reiterated its concerns in this regard, this time in a letter to the METE.189



  184 Letter from the METE to KGE, 20 May 2010, Prot. No. 480/2 (C-241).
  185 Letter from KGE to METE, 26 August 2009, Prot. No. 51/09 (C-231).
  186 Letter from KGE to AKBN, 7 June 2010, Prot. No. 158/10 (C-242).
  187 Letter from KGE to AKBN, 12 August 2010, Prot. No. 167/10 (C-245).
  188 Letter from KGE to AKBN, 8 September 2010, Prot. No. 169/10 (C-246).
  189 Letter from KGE to the METE, 3 March 2011, Prot. No. 06/11 (C-247).
251.
On 8 November 2012, the Inspection Directorate of the Regional Taxation Directorate wrote to the General Taxation Directorate to inquire what should be the tax treatment of a provisional bridge and two supports on the left and right side of the dam, which no longer existed because they were “flooded and destroyed as a result of force majeure.”190

E.

APPLICATION TO DEVELOP A WIND FARM

252.
On 3 April 2009, Energji submitted a proposal to build a wind energy plant, or wind farm, not far from Kalivaç.191 The proposal was to be carried out through a joint venture with Rener. Albania did not respond to Energji’s proposal.
253.
Albania had approved seven other wind farm projects in the previous year, including a project proposed by the Italian company Moncada Energy Group.192

F.

THE END OF THE KALIVAÇ PROJECT

254.
Construction work on the Kalivaç Project ceased in March 2013 and never resumed.193 In June 2014, Hydro decided to cease work on the Project permanently.194
255.
On 19 June 2014, KGE wrote to the Prime Minister, the Ministry of Energy and Industry and the Ministry of Transportation and Infrastructure.195 In that letter, KGE sought confirmation that the Albanian Government continued to support the Kalivaç Project.196 No reply was received.



  190 Final Audit Report, 13 May 2015, Prot. No. 8159/14, p. 97 (C-353).
  191 Joint venture agreement between Energji Sh.p.k. and Rener Sh.p.k., 2 April 2009 (C-225).
  192 “Albania: Moncada plans 500 MW Wind Farm in Valona Region,” Wind Power Intelligence, 10 November 2011 (C-252); “Renewable Energies Albania,” Greening the Energy Community, 30 April 2009, p. 8 (C-229); First Becchetti Statement, para. 69.
  193 2nd ICC Arbitration, Hearing Transcript, Day 1, 19 December 2017, p. 256 (C-598).
  194 2nd ICC Award, 8 January 2018, paras. 326, 339 and 374, in which the tribunal states that “[Hydro] acknowledged in the present proceedings to have permanently abandoned the [Kalivaç Project] in June 2014”.
  195 Letter from Aldo Ceccobelli to Prime Minister, the Ministry of Energy and Industry and the Ministry of Transportation and Infrastructure, 19 June 2014 (C-018).
  196 Ibid, p. 3.
256.
The Claimants assert that this failure to respond, being immediately followed by orders to seize documents from KGE in the criminal proceedings discussed in section IV.J(11) below,197 constitutes expropriation of the Kalivaç Project.198
257.
In October 2014, Hydro started the 2nd ICC arbitration under Article 30 of the Concession Agreement, seeking declaratory relief and damages in relation to its treatment by the Albanian tax authorities.199 In its Statement of Defence and Counterclaim, dated 14 April 2016, Albania sought, inter alia, a declaration that Hydro had breached the Concession Agreement, an Award terminating the agreement and damages.200
258.
On 5 May 2017, the Ministry of Energy and Industry ordered that:201
a.
a commission be established to take on consignment the assets on the project’s site;
b.
the commission prepare an inventory of those assets, the works carried out on the site and a report for the Chairman of the Ministry;
c.
the inventory and documentation be transferred for custody and administration to KESH “until the conclusion of the new procedures for granting in concession”; and
d.
KESH undertake measures for the custody and security of these assets.
259.
On 29 May 2017, the Public Procurement Agency announced that it was opening the Kalivaç Project up to public tender.202
260.
In October 2017, the Kalivaç Project was apparently awarded by Albania to a consortium formed by a Turkish company, Ayen Enerji, and an Albanian company, Fusha.203



  197 See, in particular, Prosecutor’s Office at the First Instance Court of Tirana, Judgment on the Invoice Seizure for KGE, Case. No. 1564, Tirana, 23 June 2014 (C-096).
  198 Claimants’ Closing presentation, slides 37-38.
  199 2nd ICC Award, 8 January 2018, para. 216. This arbitration is referred to in paragraph 10 above.
  200 Ibid, para. 225.
  201 Order No. 180, 5 May 2017 (C-682).
  202 Public Announcement Bulletin No. 21 from the Public Procurement Agency, 29 May 2017 (C-638).
  203 Translations of various Albanian news reports provided by the Claimants on 17 November 2017.
261.
On 8 January 2018, in the 2nd ICC Arbitration, the tribunal found that Hydro had “permanently abandoned the project in June 2014”204 and had breached the Concession Agreement by:205
a.
failing to fulfil its obligations to finance and complete the project by the deadlines provided in the Concession Agreement;
b.
abandoning the project; and
c.
failing to fulfil its obligation to provide a financial guarantee, as required by Article 15.3 of the Concession Agreement.
262.
That tribunal also found that Albania had validly requested termination of the Concession Agreement in its Statement of Defence and Counterclaim and that termination was justified by Hydro’s breaches. It declared the Concession Agreement terminated as at the date of the 2nd ICC Award,206 being 8 January 2018.
263.
It further found that Albania’s actions taken to re-let the concession in 2017 (described in paragraphs 257-260 above) were legitimate steps taken to mitigate Albania’s losses due to Hydro’s breaches of the Concession Agreement.207

G.

COMMENCEMENT OF DIGITAL BROADCASTING AND THE CREATION OF AGONSET

(1)

The historical Albanian television market and broadcasting regulation

a.
The development of a commercial market
264.
Under the communist regime, Albania had a highly controlled media landscape.208 There was a single television station and a single radio channel, both controlled by the Government operator, Radiotelevizioni Shqiptar (“RTSH”). The content offered by RTSH consisted largely of Government-sponsored announcements and political propaganda. As a result, for decades, many Albanians watched Italian television channels in secret, via signal relay devices that carried the broadcasts from Italy.209



  204 2nd ICC Award, 8 January 2018, para. 374.
  205 Ibid, para. 345.
  206 Ibid, para. 353.
  207 Ibid, para. 391.
  208 I Londo, Albania, in S. Hrvatin & B. Petkoviç (Eds.), Media Integrity Matters - Reclaiming Public Service Values In Media and Journalism, Ljubljana, 2014, p. 52 (C-062).
  209 Meço Statement, para. 20; First Bushati Statement, para. 10.
265.
After the communist regime ended in 1992, RTSH continued to dominate broadcasting in Albania for much of the 1990s.210 By the late 1990s, private television companies began to broadcast in Albania.211 In late 1998, Albania passed the first “Law on Public and Private Radio and Television” (“1998 Broadcasting Law”).212 The 1998 Broadcasting Law created the National Council of Radio and Television (“NCRT”), a State regulatory authority whose members were elected by Albania’s Parliament. The NCRT was charged with regulating the Albanian media sector, awarding licenses to broadcasters and implementing legislation enacted by Albania’s Parliament.213
266.
After the 1998 Broadcasting Law was passed, private media conglomerates emerged, controlled by a small group of high-profile businessmen.214 One of these companies, Top Channel Sh.a. (“Top Channel”) became one of the largest and most influential broadcasters in the country.215 Around 2004, the owners of Top Channel launched DigitAlb Sh.a. (“DigitAlb”), the first company in Albania to start broadcasting on digital frequencies. Top Channel and DigitAlb are now part of the Top Media Group, which also holds interests in the radio, online and print media sectors in Albania.
267.
DigitAlb broadcast from a satellite-based digital network, rather than a network based on broadcasting digital signals from terrestrial equipment. At the time DigitAlb was launched, Albania had no law covering digital broadcasting, meaning that DigitAlb operated without any license or regulation.216 DigitAlb became the most successful of the digital broadcasters in Albania.217 Two other digital channels began operating during this period, Tring TV Sh.a. (“Tring”) and Supersport.218



  210 First Bushati Statement, paras. 10-11.
  211 Ibid.
  212 Law No. 8410 on the Public and Private Radio and Television in the Republic of the Albania, 30 September 1998 (CL-033).
  213 Ibid, Article 6.
  214 First Bushati Statement, para. 13.
  215 Ibid, paras. 13 and 14.
  216 Ibid, para. 14.
  217 I Londo, Albania, in S. Hrvatin & B. Petkoviç (Eds.), Media Integrity Matters - Reclaiming Public Service Values In Media and Journalism, Ljubljana, 2014, p. 73 (C-062)
  218 I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 8 (R-070).
b.
The start of the change to digital broadcasting
268.
On 12 June 2006, Albania signed the European Union Stabilization and Association Agreement and officially became a candidate country for European Union Membership.219 Albania also ratified the ITU International Symposium on the Digital Switchover Regional Agreement GE06 of 16 June 2006 (the “GE06 Agreement”),220 which was implemented by Law No. 9851 of 26 December 2007. The GE06 Agreement required moving to an “all-digital” broadcast network by 17 June 2015.221
269.
In order to provide a regulatory framework for the introduction of digital broadcasting, in 2007 Albania promulgated the first “Law on Digital Broadcasting” (the “2007 Broadcasting Law”), which provided (among other things) that the digital switchover in Albania should be completed by 31 December 2012.222
270.
The 2007 Broadcasting Law, however, was never implemented.223 The NCRT attempted to organize bidding processes in 2008 and 2009 to award digital licenses under the 2007 Broadcasting Law, but no broadcast operators submitted applications.224 The NCRT issued ad hoc licenses to DigitAlb and Tring.225 These ad hoc licenses were not envisaged or regulated under the 2007 Broadcasting Law.



  219 Albania-EU Stabilization and Association Agreement, 12 June 2006 (C-194).
  220 ITU International Symposium on the Digital Switchover Regional Agreement GE06 of 16 June 2006 (CL-051).
  221 Law No. 9851 on Ratifying the Final Acts of the Regional Radiocommunications Conference, 26 December 2007 (CL-061).
  222 Law No. 9742 on Digital Broadcasting in the Republic of Albania, 28 May 2007, Article 15 (CL-057).
  223 I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 10 (R-070).
  224 First Bushati Statement, para. 18.
  225 Ibid.
271.
Albania then began to develop a new legal and regulatory framework for audio-visual media.226 In May 2012, the Council of Ministers issued Decision No. 292 announcing a “Strategy of Switchover from Analogue to Digital Broadcasting” (the “Switchover Strategy”).227 The Switchover Strategy outlined a series of political and technical measures for achieving a transition from analogue to digital broadcasting in Albania,228 and how the digital frequencies to which Albania was entitled under the GE06 Agreement would be allocated.
272.
Under the strategy, two multiplex licenses would be reserved for Albania’s national broadcaster and five would be allotted to private national broadcasters.229 The strategy stated that the appropriate way to award digital licenses was by way of a closed “beauty contest” to which “national historic operators” and operators with experience in digital broadcasting would be invited by the media regulator.230 Such an approach was considered preferable to an open competition, in recognition of the significant investments that the established operators of digital stations had made.231

(2)

Establishment of Agonset

273.
In 2006, Mr. Becchetti launched AgonFree, a free daily newspaper that was published until 2013.232 AgonFree printed and distributed approximately 20,000 copies per day on average to meet demand, with circulation occasionally reaching 100,000 copies. Mr. Becchetti started AgonFree in order to get a foothold in, and assess, the Albanian media landscape.233
274.
A few years after launching AgonFree, Mr. Becchetti began planning to launch a television station in Albania. In 2009, he and his colleague, Shpëtim Arbana, met with the then-head of the NCRT, Mesila Doda, to discuss the media market in Albania and the legal requirements for broadcasters.234



  226 Ibid, para. 19.
  227 Decision of the Council of Ministers No. 292 on a Strategy of Switchover from Analogue to Digital Broadcasting, 2 May 2012 (CL-080).
  228 Ibid, p. 3031.
  229 First Bushati Statement, para. 20.
  230 Decision of the Council of Ministers No. 292 on a Strategy of Switchover from Analogue to Digital Broadcasting, 2 May 2012, pp. 3041-3043 (CL-080).
  231 Ibid, p. 3042.
  232 First Becchetti Statement, para. 87.
  233 Ibid.
  234 Ibid, para. 90.
275.
Mr. Becchetti’s strategy for the television channel was twofold. First, it would broadcast independent content in Albania. Second, it would produce programs in Albania for broadcast in Italy, taking advantage of the low production costs in Albania and the high advertising revenues in Italy. Mr. Becchetti expected the acceptance of such programs in Italy to be facilitated by the close geographic and cultural ties between the two countries.235
276.
In 2011 and 2012, Mr. Becchetti consulted with various advisors about the Italian and Albanian media markets, including the costs of the broadcast and editing equipment. He made some rough internal calculations about how Agonset might perform.236 After an initial start-up period, he set a target of achieving a 1% share of the Italian market within two years of operation, increasing to a 4% share over the following four years, on the basis of various assumptions about costs.237 On Mr. Becchetti’s analysis, each percentage point of the Italian market was worth approximately €30 million.238 Although Mr. Becchetti did not consider this analysis to be a detailed valuation of the intended business, he believed that the delocalized production model had the potential to make significant profits.239
277.
During 2012 and 2013, Mr. Becchetti took the necessary steps to create Agonset and begin broadcasting in Albania. Agonset was incorporated on 3 May 2012.240 Mr. Becchetti was Agonset’s Artistic Owner and served as Chairman of the Administration Board which oversaw the organization.241 Mr. De Renzis became Agonset’s Administrator in December 2012 and oversaw the company’s day-to-day operations, reporting directly to Mr. Becchetti.242 Mr. Becchetti, Mr. De Renzis, and Ms. Grigolon together indirectly own 80% of the shareholding in Agonset.243



  235 Ibid, para. 92; Becchetti cross-examination, Hearing Day 2, T137.8-T137.12.
  236 Ibid, para. 93.
  237 Ibid.
  238 Ibid, para. 92; Becchetti cross-examination, Hearing Day 2, T136.7-T136.13.
  239 Ibid, para. 93; Becchetti cross-examination, Hearing Day 2, T136.7-T136.13.
  240 Agonset Sh.p k.’s excerpt from the Albanian Registry of Companies, 29 February 2016, p. 1 (C-409).
  241 Agonset Sh.p k. Management Structure (C-426).
  242 Agonset Sh.p k.’s excerpt from the Albanian Registry of Companies, 29 February 2016, p. 2 (C-409).
  243 Ibid; First Becchetti Statement, paras. 5-6.
278.
In the course of developing Agonset, in late 2012, Mr. Becchetti spoke with Endirë Bushati, who was then President of the NCRT, to discuss the requirements under the existing broadcasting regime to launch a television channel in Albania on a digital platform. Ms. Bushati stated that digital transmissions were unregulated and that the licensing procedure would be resolved under the new Law No. 97/2013 on Audiovisual Media in the Republic of Albania of 4 March 2013 (the “2013 Media Law”).244 She later confirmed this advice in writing to Agonset’s lawyers.
279.
Beginning in 2012, Agonset leased office and production facilities of almost 20,000 sq ft in central Tirana and it invested over €6.2 million in technical equipment.245 The premises were refitted as fully-equipped studios. As of April 2014, Agonset’s Albanian production facilities were assessed by an independent real estate appraiser as being worth over €2.1 million for the studio alone.246
280.
Agonset also hired several prominent and experienced professionals, including Sonila Meço (a leading news anchor in Albania), Andeta Radi (the former Editor-in-Chief of Top Channel), Alessio Vinci (a longtime CNN anchor and bureau chief who led a major TV program in Italy for several years), Adi Krasta, Samir Kodra, and Gentian Zenelaj (leading Albanian journalists), and network director Maurizio Palladino (an experienced Italian creative director).247

(3)

The 2013 Media Law

281.
On 4 March 2013, Albania promulgated the current 2013 Media Law, which came into force on 5 April 2013.248 The 2013 Media Law changed the deadline for the digital switchover from 31 December 2012 (the deadline under the 2007 Broadcasting Law) to 17 June 2015 (the deadline under the GE06 Agreement) and set out the procedure for the allocation of digital licenses.



  244 First Becchetti Statement, para. 96; First Busheti Statement, para. 22.
  245 Agonset Sh.p k. List of Inventory (C-425).
  246 Agonset Studio Value Assessment Report, April 2014 (C-295).
  247 First Becchetti Statement, para. 101; Witness Statement of S. Meço, para. 18.
  248 Law No. 97/2013 on Audiovisual Media in the Republic of Albania, 4 March 2013 (CL-084) (“2013 Media Law”).
282.
The 2013 Media Law also replaced the NCRT with a new body, the AMA, initially composed of the members of the NCRT. Ms. Bushati remained as President of the AMA until November 2014. The AMA was to be responsible for, inter alia, issuing digital broadcasting licenses and authorizations, preparing instructions and regulations on usage of public broadcaster infrastructure, and the mediation of disagreements between operators.249 Like the decisions of the NCRT, the earlier regulator, the AMA’s decisions are subject to judicial review and the oversight of the Albanian courts.250
283.
As outlined in the Switchover Strategy, the Albanian Government’s intention was to effect a complete transition from analogue to digital broadcasting.251 Analogue licenses could no longer be issued after the entry into force of the 2013 Media Law, and existing licenses for television broadcasting would be replaced by digital “audiovisual” licenses under the 2013 Media Law within six months of its entry into force.252 Any operators who occupied digital frequencies without a license had to stop broadcasting within 30 days from the end of the transitional licensing procedure, and at the latest within six months from the entry into force of the 2013 Media Law, that is by 5 October 2013.253 The 2013 Media Law required the AMA to seize the equipment of any operator broadcasting unlawfully after this date.254



  249 I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 13 (R-070); 2013 Media Law, Articles 19 and 23(1) (CL-84).
  250 See for example 2013 Media Law, Articles 53(15), 63(7), 80(3) and 133(12) (CL-084).
  251 Decision of the Council of Ministers No. 292 on a Strategy of Switchover from Analogue to Digital Broadcasting, 2 May 2012, pp. 3040 (CL-080).
  252 2013 Media Law, Articles 136(3) and 138 (CL-84).
  253 Ibid, Article 140(1).
  254 Ibid, Articles 80 and 140(2).
284.
The 2013 Media Law envisaged that commercial digital licenses would be awarded in two stages.
a.
First, during the transitional period (which was to end on 17 June 2015), licenses could be awarded by way of a closed “beauty contest” in which “national historic private operators” and “existing operators experienced in digital broadcasting” would be invited to participate.255 This closed “beauty contest” was to be announced within three months and completed within six months of the Law’s coming into force, that is by 5 October 2013.256
b.
Later licenses would be awarded by way of an “open competition, thus guaranteeing equal, objective and non-discriminatory treatment.”257 The AMA was empowered to decide which operator would be granted the digital license, taking into account eight factors including “the nature, expertise and experience of the applicant” and the applicants’ “financial means”.258
285.
National digital multiplex licenses were to be valid for up to 15 years,259 and holders of digital licenses were obliged to grant other providers access to at least 40% of the capacity on their digital networks on a fair and non-discriminatory basis.260 In the event of any dispute as to the terms of access, the relevant parties are entitled to appeal to AMA to resolve it. The relevant parties also have the statutory right to appeal AMA’s decisions to the Albanian courts.261

(4)

The Launch of Agonset

286.
Agon Channel Albania was officially launched on 5 April 2013, on the Tring satellite digital platform. Shortly thereafter, Agonset obtained approval from the AMA under the 2013 Media Law to provide a satellite audiovisual program service, which allowed Agonset to broadcast its programming on licensed networks.262



  255 Ibid, Article 139.
  256 Ibid, Articles 138(4) and 139(1)(b).
  257 Ibid, Article 70.
  258 Ibid, Article 71(2).
  259 Ibid, Article 74(1)(a).
  260 Ibid, Article 63(1).
  261 Ibid, Article 63(7).
  262 AMA Resolution No. 08, 22 May 2013 (C-272); 2013 Media Law, Article 54(4) (CL-84).
287.
Agonset later expanded its reach by purchasing an analogue, terrestrial local license from the existing operator Telesport263 and concluding a contract to be included in the cable platform ABCom.264 Although under Article 55 of the 2013 Media Law licenses are not transferable, the AMA has the discretion to approve a transfer.
288.
Agonset applied to the AMA on 26 September 2013 to approve the transfer and to alter the terms of Telesport's license from a license limited to sporting themes to general programming. On 13 October 2013, the AMA exercised its discretion in Agonset’s favour by granting the change of use application and approving the license for a five-year period.265
289.
Agonset was then able to transmit across three broadcasting media (satellite digital, terrestrial analogue, and cable) while Albania transitioned to a fully digital system.266

H.

ALLOCATION OF DIGITAL LICENSES AND THE DEVELOPMENT OF AGONSET

(1)

Introduction of the 2013 beauty contest regulation

290.
Following public consultations, the AMA passed Resolution No. 10 of 2 July 2013267 (the “Contest Regulation”), which set out the rules for the closed “beauty contest” under article 139 of the 2013 Media Law. That regulation started the digital licensing process by inviting “national historic private operators”268 and existing operators with “experience in the digital broadcasting”269 to participate in a beauty contest for the award of three digital licenses.



  263 Contract between Agonset and Telesport, 21 September 2013 (C-276).
  264 Contract between Agonset and ABCom, 23 December 2014 (C-334).
  265 AMA Decision No. 16, 11 October 2013 (C-277).
  266 First Becchetti Statement, paras. 97 and 105.
  267 Entitled “Regulation on the licensing of digital networks and their programs, through beauty contest procedure” (CL-088).
  268 Ibid, Article 4.
  269 Ibid.
291.
According to the Contest Regulation, “[t]he decision to grant or refuse an audiovisual national broadcasting license is taken by AMA [...] not later than 60 days from the date of application.”270 The Contest Regulation also stated that: “If at the end of the licensing process according to the procedure beauty contest [it] results that there are still unlicensed digital networks and free capacity in them, within 30 days AMA organizes [sic] an open competition in accordance with Chapter VII and VIII of [the 2013 Media Law]”.271
292.
Each license would permit the broadcast of the broadcaster’s own services and the construction of a digital terrestrial network.272 In addition, the Contest Regulation provided that holders of a digital license were “obliged to provide access on fair, reasonable and non-discriminatory conditions” to 40% of the capacity of their digital network to other program operators, through commercial agreements, under the AMA’s supervision.273
293.
The AMA invited the operators of Top Channel, TV Klan, and Vizion Plus (as “historical national broadcasters”274) and DigitAlb and Tring (as companies “experienced in digital broadcasting”275) to compete in the beauty contest.276 Agonset was not invited to participate because it was neither a historical national broadcaster nor experienced in digital broadcasting.277
294.
At the time, DigitAlb was occupying 5 networks, and none of the operators was paying licensing fees.278 Following the process envisioned by the 2013 Media Law and the Contest Regulation, each commercial company would have only one network, and would be subject to licensing fees and other regulation.279



  270 Ibid, Article 23(1).
  271 Ibid, Article 23(5).
  272 Ibid, Article 8(1.1).
  273 Ibid, Article 7.
  274 2013 Media Law, Article 139 (CL-084).
  275 Ibid.
  276 First Bushati Statement, para. 29.
  277 Bushati cross-examination, Hearing, Day 3, T121.13-T121.18. The AMA later discovered that two of these operators (TV Klan and Top Channel), however, did not meet one of the 2013 Media Law’s licensing requirements. National operators were required to make their broadcasts available to at least 80% of Albania’s territory: 2013 Media Law, Article 55. TV Klan and Top Channel covered only roughly 38.8% of the territory with a good signal: First Bushati Statement, para. 36.
  278 Bushati cross examination, Hearing, Day 3, T124.8-T124.21; First Bushati Statement, para. 14; Second Bushati Statement, para. 11.
  279 Ibid, T124.14-T124.21; See Second Bushati Statement, para. 11 and 2013 Media Law Articles 19(1)(i) and 62(7).

(2)

Challenges to the validity of the Contest Regulation

295.
An additional licensing requirement under the Contest Regulation was that applicants demonstrate asset capital of at least ALL 1 billion (approximately €7.5 million).280 This requirement was also contained in the 2007 Broadcasting Law,281 with which DigitAlb and Tring had complied when obtaining Satellite Platform Digital Licenses under that law.282
296.
In July 2013, DigitAlb, Top Channel and TV Klan nevertheless challenged as ultra vires the AMA’s powers under the 2013 Media Law.283 On 30 or 31 July 2013, the Tirana District Court suspended the regulation licensing procedure pending a final decision.284 On 8 October 2014, the Administrative Court of Appeals found that the financial conditions imposed were invalid.285 The AMA appealed the decision to the Albanian Supreme Court shortly after it was made, while Ms. Bushati remained president.286 However, that appeal was discontinued by the AMA after she was replaced and the AMA reconstituted,287 as described in paragraphs 301 to 302 below.
297.
The Tirana District Court’s July 2013 suspension of the regulation licensing procedure prevented the AMA from issuing any licenses to broadcasters.288 As a result of this suspension, the AMA also could not apply Article 23(5) of the Contest Regulation, which provided that in the event that digital networks remain unlicensed or there is unused capacity on those networks at the end of the closed beauty contest, it should organize, within 30 days, an open contest for the award of the available licenses under chapters VII and VIII of the Media Law.289



  280 Article 16; Bushati cross examination, Hearing, Day 3, T122.11-T122.15.
  281 2007 Broadcasting Law, Annex 1(2) (CL-57).
  282 First Bushati Statement, para. 30.
  283 First Bushati Statement, para. 30; I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 24 (R-070).
  284 Judgment of the Albanian Administrative Appeals Court, 8 October 2014 (CL-097); First Bushati Statement, para. 30; I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 24 (R-070).
  285 First Bushati Statement, para. 30; I Londo, “The process of switchover to digital broadcasting,” Albanian Media Institute, 2015, p. 25-26 (R-070). In the interim, there was a series of proceedings that ultimately determined that the dispute was appropriately heard by the Administrative Courts; and see Bushati cross-examination, Hearing, Day 3, T137.1-T137.11.
  286 Bushati cross-examination, Hearing, Day 3, T136.11-T137.18; First Bushati Statement, para. 30.
  287 Second Bushati Statement, paras. 20 to 21.
  288 First Bushati Statement, para. 31.
  289 Ibid.

(3)

Change of national government and of the composition of the AMA

298.
In national parliamentary elections on 23 June 2013, the Socialist Party and the Social Movement for Integration defeated the incumbent Democratic Party. As a result, Mr. Edi Rama replaced Mr. Sali Berisha as Prime Minister. In the same elections, Mr. Koço Kokëdhima (the businessman mentioned in paragraphs 193 to 194 above) was elected as a member of parliament for a seat in Vlora. Mr. Rama took office on 15 September 2013.290
299.
The procedure for the appointment of the members of the AMA is intended to balance the competing political forces in Albania. The AMA is composed of seven members: a chair (the President), and six members (of whom one is elected by the other AMA members to serve as deputy chair).291 The 2013 Media Law provides that the Parliamentary Committee for Education and Means of Public Information (the “Parliamentary Committee”) should elect the ordinary AMA members (excluding the President) to serve a term of five years.292
300.
The Media Law requires the participation of both political parties in this process and also provides that the Parliamentary Committee should take “account of maintaining the balance of three candidates supported by the majority in Parliament and three supported by the Opposition.”293 The Parliamentary Committee identifies four candidates for Chairperson,294 and the opposition members are given an opportunity to eliminate two.295 The two remaining candidates are then put to the entire Albanian Parliament, choosing between them by simple majority vote.296 The political party in power at the time therefore appoints half the members and the President has the deciding vote.



  290 B Likmeta, “Edi Rama Sworn in as Albania PM,” Balkan Insight, 16 September 2013 (C-275).
  291 Second Bushati Statement, para. 21; 2013 Media Law, Article 8(1) (CL-84).
  292 Second Bushati Statement, para. 21; 2013 Media Law, Article 9(1) (CL-84).
  293 2013 Media Law, Article 9(4) (CL-84).
  294 Ibid, Article 10(3)(a).
  295 Ibid, Article 10(3)(c).
  296 Ibid, Article 10(3)(d).
301.
Ms. Bushati had been elected by the Parliament on 6 November 2009 (when the previous government was in power) under the 2007 Broadcasting Law.297 On 4 November 2014, the Parliament elected Mr. Gentian Sala as President of the AMA, replacing Ms. Bushati.298 The procedure just described was not followed, however, with the opposition party not being given the opportunity to participate in the identification of candidates to be put to the Parliament as a whole.299 Mr. Sala was a former senior executive at DigitAlb.300 His election followed a series of attempts by DigitAlb, Top Channel and TV Klan throughout 2014 to remove Ms. Bushati as President of the AMA.301
302.
At around the same time, the government members of the Parliamentary Committee appointed two members of AMA to positions which had been vacant since 2012, despite the opposition members of the Committee abstaining.302 Again, therefore this did not comply with the 2013 Media Law’s requirement that the opposition members be involved, and does not appear to have met the requirement that the Committee take account of maintaining a balance of three AMA members supported by each side.
303.
There were also connections between Top Channel and the Rama Government. At the time of the final hearing, the former Vice General Manager of Top Channel, Skerdi Denova, served in the office of Tirana Mayor Erion Veliaj (elected to that position in 2015).303 Veliaj had been appointed Minister for Youth and Social Welfare in the Rama Government in September 2013.304 Engjell Agaçi, a lawyer who had represented Top Channel in a defamation dispute Mr. Becchetti had brought against Top Channel in Rome,305 was Secretary General of Prime Minister Rama’s Cabinet at the time of the Final Hearing.306 Monica Stafa, a Top Channel host, was Head of the AMA Complaints Council at the time of the Final Hearing.307



  297 Bushati cross-examination, Hearing, Day 3, T112.19-T112.21; Second Bushati Statement, para. 10.
  298 First Bushati Statement, para. 37; Second Bushati Statement, para. 22; Meço Statement, para. 11.
  299 First Bushati Statement, para. 37; Second Bushati Statement, para. 22; Bushati re-examination, Hearing, Day 3, T145.15-T145.24.
  300 First Bushati Statement, para. 9.
  301 Ibid, para. 32-38.
  302 Second Bushati Statement, para. 23.
  303 Meço Statement, para. 11.
  304 Ibid, para. 30.
  305 First Becchetti Statement, para. 123.
  306 Meço Statement, para. 11.
  307 Ibid.

(4)

Development of Agonset in 2014 and 2015

a.
Agon Channel Albania
304.
In 2014, Agon Channel in Albania broadcast 24 hours a day, seven days a week, and offered programming for all age groups. It also offered a diverse range of programming across a spectrum of subject areas, including news, entertainment shows, documentaries, movies, television series, sports events, and products and service advertising. Its programming, and hosts, received awards from media organisations in 2014 and 2015.308
305.
Agon Channel’s coverage of the Berisha and Rama administrations, and of Agon Channel’s competitors’ compliance with regulations, was often critical. During the 2013 election, it compared Prime Minister Berisha’s promises during previous elections with what he had accomplished in office.309 It obtained an exclusive interview with then-Prime Minister Berisha, and pressed him to agree that, unlike previous losing incumbent Prime Ministers who blamed voter fraud for their losses, he would resign if he lost the election.310
306.
On 15 and 28 March 2014, Agon Channel reported that, in the AMA’s view, TV Klan and Top Channel were failing to respect the terms of their licenses and reported the AMA’s attempts to enforce licensing restrictions.311
307.
In September 2014, Agon Channel, along with other outlets, covered the high-profile wedding of Minister Erion Veliaj.312 On or about 5 September 2014, the Minister became aware of the coverage in the lead up to his wedding. On that day he wrote to Agon Channel’s News Director, Ms. Meço, in the following terms.313
I see Agon’s camera crew in Gjirokaster. I don’t understand why are you doing this to me, I thought you stopped this silly thing the last time!

I don’t want this! I’m absolute about that! You are forcing me to be your enemy! Tell
[Francesco Becchetti] that the entire government is going to be his enemy for no reason! It’s private damn it, respect it, I’m sick of this discussion with all of you!



  308 Ibid, para. 24; First Becchetti Statement, paras. 103 to 104.
  309 Meço Statement, para. 30.
  310 Ibid.
  311 Ibid; First Bushati Statement, para. 36.
  312 Meço Statement, para. 30.
  313 Meço Statement, paras. 30 and 39-47; Text messages from Minister Veliaj to Ms. Meço, 5 September 2014 (C310).
308.
Minister Veliaj did not agree to meet with Mr. Becchetti to discuss the matter further, and did not respond to the Parliamentary Commission for Education and Public Information’s request for clarification regarding the matter.314
309.
On 18 February 2015, Agon Channel covered the mass emigration of Albanians due to Albania’s poor economy.315
310.
On 25 May 2015, Agon Channel revealed a large-scale identity fraud scheme that allowed the same person to vote up to twenty times in the 2015 municipal elections. In this election, Prime Minister Rama’s Socialist Party gained important positions; Minister Veliaj was one of the candidates elected to office following this election, as Mayor of Tirana.316
b.
Agon Italy
311.
To pursue the delocalised production business strategy, Mr. Becchetti incorporated Agonset.it in Italy in March 2014 and Agonset.uk in April 2014.317 Agonset.it acquired the exclusive rights to content developed by Agonset in exchange for a cost sharing mechanism.318 Under this arrangement, Agon Channel Italy began broadcasting teasers in Italy in October and November 2014 and launched full programming on Italy’s terrestrial Channel 33 in December 2014.319 Programs were transmitted from the production centre in Tirana to a broadcasting centre in Italy, first through satellite and then through fibre optic cable.320



  314 Meço Statement, paras. 39-47.
  315 Ibid, para. 30.
  316 Ibid.
  317 Agonset.it’s excerpt from the Rome Registry of Companies, 25 January 2016 (C-406); Agonset.uk Certificate of Incorporation, 6 November 2014 (C-323). Agonset.uk owns 20% of Agonset.it: First Becchetti Statement, para. 106.
  318 Contract between Agonset Sh.p.K. and Agonset.it, 19 May 2014 (C-296).
  319 First Becchetti Statement, paras. 106 to 107.
  320 Ibid, para. 107.
312.
Agon Channel Italy followed a similar broadcast model as Agon Channel Albania, employing high-profile talent and producing innovative programming.321 In the first few months of operation, it attracted €700,000 of advertising.322 There were, however, a number of staffing changes at the end of 2014 and the beginning of 2015.323

(5)

The 2015 Contest Regulation and awarding of licenses

313.
On 30 October 2014, Agonset wrote to the AMA asking it to hold a fair and transparent competition and permit Agonset to participate.324
314.
On 16 April 2015, the AMA issued a new Contest Regulation.
315.
In April 2015, the AMA invited five Albanian operators (TV Klan, Top Channel, Tring, Digitalb, and Digitalb’s 100% subsidiary Supersport) to bid for five digital national licenses under the 2015 Contest Regulation. These operators did not, however, meet the requirements prescribed under the Media Law. In March 2014, the AMA had determined that Top Channel and TV Klan did not meet the 80% national coverage requirement under Article 55 of the Media Law.325 Further, none of these operators complied with Article 62 of the Media Law, which then imposed certain ownership restrictions intended to ensure media plurality.326 Prime Minister Rama’s Socialist Party had sought to repeal those requirements, but this effort was abandoned following international criticism.327



  321 Ibid, paras. 108-109.
  322 Agency Contract between PRS S r.l. and Agonset.it S r.l., 16 September 2014 (with subsequent invoices) (C-317).
  323 Becchetti cross-examination, Hearing, Day 2, T162.7-T162.14.
  324 Letter from Agonset to the AMA, Prot. No. 94/14, 30 October 2014 (C-063).
  325 First Bushati Statement, para. 36.
  326 Ibid, paras. 40 and 42. One aspect of this requirement was later found to be invalid by the Constitutional Court of Albania: Constitutional Court Decision No. 56, 27 July 2016 (R-097).
  327 Ibid, para. 41.
316.
On 19 May 2015, Agonset again wrote to AMA, seeking an answer to its letter of 30 October 2014.328 The AMA requested a copy of the letter in Albanian,329 which Agonset provided.330 Shortly thereafter Albania issued a warrant for the arrest of Messrs. Becchetti and De Renzis, as discussed in paragraphs 393 to 398 below.331
317.
On 15 June 2015, AMA issued a press release, explaining that due to various factors it was impossible for Albania to meet the deadline for the digital switchover.332 Those factors included the slow digitalization of the public broadcaster’s two networks (itself in part caused by protracted legal disputes) and the AMA’s lack of quorum and thus inability to make decisions.333 The AMA had lacked quorum because two members appointed by the opposition party, Sami Neza and Suela Musta, had refused to participate in meetings pending the outcome of legal challenges to the appointment of members of the AMA.334
318.
On 1 February 2016, the AMA convened to make a decision on granting digital licenses under the 2015 Contest Regulation. The AMA concluded that:335
a.
Super Sport should not receive a license because it did not comply with the 2013 Media Law’s requirements regarding cross-media ownership in Article 62.
b.
TV Klan and Top Channel complied with the requirements necessary to be awarded a license. In the case of Top Channel, it explicitly assessed its ownership with regard to Article 61 of the 2013 Media Law and considered those requirements were not breached.



  328 Letter from Agonset to the AMA, 19 May 2015, Prot. No. 81/15 (C-355).
  329 Letter from the AMA to Agonset, 25 May 2015, Prot. No. 919/1 (C-358).
  330 Letter from Agonset to the AMA, 1 June 2015, Prot. No. 41/15 (C-359).
  331 The only substantive response to Agonset’s letter of October 2014 was sent by Mr. Sala on 11 February 2016: Letter from Mr. Sala, AMA to Ms. Hicka, General State Advocate, dated 10 February 2016 (R-076). In that letter, Mr. Sala states (among other things) that the 2015 beauty contest was limited to “national historical private operators” and “existing operators, with experience in digital broadcasting”. However, the letter was sent after Albania had issued warrants for the arrest of Messrs. Becchetti and De Renzis; Agonset had been shut down (as discussed in paragraphs 429-434 below); and ICSID proceedings had been commenced by the claimants. The letter was also sent, not to Agonset, but to Ms. Hicka, the General State Advocate.
  332 The AMA, “On disregarding the terms of the digitization process,” 15 June 2016 (R-079); I Londo, “Postponement of the digital switchover deadline and lack of quorum of the media regulator,” Albanian Media Institute, September 2015 (R-078).
  333 2013 Media Law, Article 14 (CL-084).
  334 The AMA, “On disregarding the terms of the digitization process,” 15 June 2016 (R-079).
  335 AMA Decision No. 34, 1 February 2016 (R-093). See also AMA Decision No. 35, 1 February 2016 (R-094) and AMA Decision No. 32, 1 February 2016 (R-095).
319.
The AMA nevertheless awarded no licenses, again determining that it did not have quorum to do so because Sami Neza and Suela Musta refused to participate.336 On this occasion, they refused to participate on the basis that the first digital licenses should have been awarded before the deadline for the digital switchover (17 June 2015).337 As no licenses had been awarded by that date, they argued that AMA should proceed to the second licensing stage, an open competition.
320.
DigitAlb, TV Klan and Top Channel challenged the AMA’s decision not to award the licenses before the Administrative Court of First Instance. On 3 July 2016, the Court upheld that challenge and exercised its statutory powers to alter the AMA’s decision, granting the three applicants 15-year licenses.338 The State Attorney did not appeal the decision.339

I.

THE TAX AUTHORITIES’ TREATMENT OF THE CLAIMANTS AND AGONSET

(1)

KGE’s VAT refunds

321.
Under Article 24 of the Concession Agreement, a number of tax and customs exemptions were granted by Albania and were confirmed by the Albanian Parliament in Law No. 8708.340 In particular, Albania was required to refund VAT paid by KGE within 30 days of a request. After making a request, KGE could obtain a refund either through direct refunds or by setting off the VAT refund amounts owed to it against its other tax obligations.341 Set-offs could be obtained by submitting a request for set-off,342 which the tax authorities would then confirm.343



  336 Ibid.
  337 Albanian Media Institute Newsletter, February 2016 (R-080).
  338 DigitalB, TV Klan & Top Channel v. AMA (Decision No. 1044 of the Tirana Administrative Court of First Instance), 7 March 2016 (R-152).
  339 First Bushati Statement, para. 43.
  340 See paragraphs 180 and 209 above.
  341 Law No. 9920 on Tax Procedures in the Republic of Albania, 19 May 2008, Article 75(1) (CL-065).
  342 See for example Request for set-off dated 6 July 2010 and reimbursement order from General Taxation Directorate to KGE, 19 July 2010, Prot. No. 38291/1 (C-427.11).
  343 Ibid.
322.
On 25 July 2008, KGE first applied for a VAT refund,344 however it received no response. On 10 October 2008, it made a second application, raising the cumulative credit claimed to ALL 499,567,390 (€3,910,960 at the time).345 Three days later, the authorities recognised the cumulative credit arising from the two requests346 but provided only approximately ALL 40,000,000 in refunds in the course of the following year.347 KGE only received a full refund for the amounts requested in July and October 2008, in the form of set-offs against tax liabilities, on 19 September 2011.348
323.
On 13 April 2011, KGE made a further VAT refund application for the amount of ALL 94,427,236 (€655,127 at the time).349 On 1 September 2011, the authorities recognised the amount was owing.350 On 12 September 2013, KGE obtained a full refund of that amount, mainly through set-offs.351
324.
On 7 February 2012, KGE made its final VAT refund request for ALL 45,393,878 (€317,837 at the time),352 which corresponded to a VAT credit incurred in the period between March and December 2011. The authorities did not respond to this request, and commenced the audit discussed in section IV.I(2) below.



  344 KGE Request for Reimbursement, 25 July 2008, Prot. No. 21946 (C-427.1).
  345 KGE Request for Reimbursement 10 October 2008, Prot. No. 31040 (C-427.2). See also Table of Detailed VAT credit balance, refunds and compensation 2008-2015, as well as underlying requests and refund orders (C-427).
  346 Audit Report from General Taxation Directorate to KGE, 13 October 2008, Prot. No. 27086/3 (C-427.3).
  347 Table of detailed VAT credit balance, refunds and compensation 2008-2015, as well as underlying requests and refund orders, C-427, see lines in between C-427.2 and C-427.4.
  348 Ibid, lines between C-427.39 and C-427.40.
  349 KGE Request for Reimbursement, 13 April 2011 (C-427.30).
  350 Final Audit Report, 1 September 2011, Prot. No. 15320/3 (C-251).
  351 Table of Detailed VAT credit balance, refunds and compensation 2008-2015, as well as underlying requests and refund orders, C-427, lines below C-427.66.
  352 Request for set-off from KGE to Tax Directorate of Large Taxpayers, 7 February 2012, Prot. No. 04/12 (C-427.46).
325.
In 2009 and 2010, KGE repeatedly complained about these delays to the METE, the Ministry of Finance and the tax authorities.353 On 20 March 2009, the METE responded as follows.
Concerning the VAT reimbursement issue, the Ministry of Economy, Trade and Energy (METE), under the authority of the State Authorized Body (OSHA) has addressed, the Ministry of Finance with note no. 10098/2 dated 13.01.2008 to solve this concern (Attached the letter). Being aware of the ongoing delays, we want to inform you that METE will continue its effort to find a quick solution to the reimbursement of VAT issue.354

(2)

Tax Audit 8159 of KGE

a.
Process
326.
On 11 July 2012, Albania commenced a tax audit of KGE (Audit No. 8159).355 Its purpose was to investigate the following matters.
a.
Inspection relating to the applicability of law no. 7928 of 27.04.1995 as amended, and the Directives of the Ministry of Finance “On Value Added Tax”.
b.
Inspection relating to the application of law no. 9920 of 19.05.2008 “On Tax Procedures in the Republic of Albania and directives pursuant to this law.”
c.
Inspection relating to the application of the requirements of law no. 8438 of 28.12.1998 “On Income Tax” and Directives of the Ministry of Finance “On Income Tax”.
d.
Inspection relating to the application of the requirements of law no. 9136 of 11.02.2003 and Directives of the Ministry of Finance “On collecting mandatory social security and health contributions”.
e.
Inspection relating to the application of law no. 8977 of 12.12.2002 “On the Tax System in the Republic of Albania”.
f.
Inspection relating to the application of the requirements of law no. 9228 of 29.04.2004 as amended by law no. 9477 of 09.02.2006 “On accounting and financial reports” and Directives of the Ministry of Finance pursuant to them.
g.
Specification of the amount of reimbursable VAT, pursuant to the requirements [of law] no. 7928 of 27.04.1995 “On VAT” as amended, and of the Directives of the Ministry of Finance pursuant to it, as regards the confirmation of the Revenue Processing and Management Directorate's letter prot. no. 2148/1 of 16.02.2012, relating to the company's letter no. 04/12 of 07.02.2012, filed by us as no. 2148 no. 07.02.2012



  353 Letter from KGE to the General Directorate of Taxation, 23 February 2009, Prot. No. 10/09 (C-222); Letter from KGE to the METE, 26 August 2009, Prot. No. 51/09 (C-231); Letter from KGE to the METE, 21 September 2009, Prot. No. 59/09 (C-232); Letter from KGE to the Ministry of Finance, 2 February 2010, Prot. No. 02/10 (C-239).
  354 Letter from METE to Hydro and KGE, March 20, 2009, Prot. No. 10098/3 (C-223).
  355 Final Audit Report, 13 May 2015, Prot. No. 8159/14, p. 8 (C-353).
327.
Audit No. 8159 was a re-audit of some periods that had previously been confirmed by the tax authorities and an audit for the first time of the request for VAT refunds made in February 2012. The audit took three years, concluding on 13 May 2015.356 According to the original audit notification, the time limit for work on the audit was 200 hours.357 A series of increases to this limit were subsequently approved.358
328.
So long as the audit was open, KGE remained unable to ascertain its VAT credit and, as a consequence, set-off such credit with Energji.
329.
On 9 April 2015, the authorities provided a draft of the report to KGE359 and on 28 April 2015 KGE provided comments on that draft.360
b.
Findings: alleged alteration of invoices and other documents
330.
The Audit Report found that there were differences between documents that had been produced in the arbitration between KGE and Energji361 and those that KGE had submitted to the tax authorities to claim reimbursement of VAT. The Audit Report alleged that those changes to documents were made to claim a VAT credit illegitimately. A VAT credit can only be claimed within 12 tax periods from when it arose. The problem allegedly identified by Audit No. 8159 was that the dates on four invoices had been erased so as to present a claim for a VAT credit outside the 12-month period within which KGE would have been entitled to such a credit.



  356 Ibid.
  357 Ibid, p. 7.
  358 See, for example, ibid, p.10.
  359 Republic of Albania, Ministry of Finance, Inspection Report, Prot. No. 8159/11, Tirana, 9 April 2015 (C-019).
  360 Observations dated 28 April 2015 with Prot No. 19/15 (R-067).
  361 Energji v. KGE, Award, 20 August 2013 (R-065).
331.
Audit No. 8159 found that:362
a.
invoice No. 36 of 20 October 2010 relates in fact to a work certificate No. 15 dated 24 April 2009 (allegedly outside the permissible period for a claim);
b.
invoice No. 37 of 29 October 2010 relates in fact to a works certificate No. 14 of 27 February 2009 (again allegedly outside the permissible period);
c.
both invoice No. 43 of 28 March 2011 and invoice No. 47 of 6 December 2011 actually pertain to works carried out in 2009 according to five situation reports (allegedly more than 12 tax periods before the invoice) and Audit No. 8159 concluded that the date had been removed from invoice No. 47 and that relevant situation reports had been “corrected”.
332.
The Audit concluded that these alleged actions amounted to fiscal evasion, contrary to Article 116 of Law No. 9920 of 19 May 2008 on Tax Procedures.
c.
Findings: alleged failure to comply with the “tax representative rule”
333.
Audit No. 8159 also concluded that KGE had obtained services from a number of taxable persons not resident in Albania,363 and that the service providers had not nominated a tax representative in Albania when they were required to do so. Audit No. 8159 therefore concluded that KGE was liable to a penalty.



  362 Final Audit Report, 13 May 2015, Prot. No. 8159/14, p. 40 and 47 (C-353); see also documents provided by the Regional General Tax Directorate – Large Taxpayers’ Unit containing relevant situation reports (R-066).
  363 For example, Lombardi SA, ERM Italia SpA, Hydro and AV SET Proucioni Spa: Final Audit Report, 13 May 2015, Prot. No. 8159/14, p. 21 to 33 (C-353).
d.
KGE’s appeal
334.
On 11 June 2015, KGE lodged an appeal against Audit No. 8159 with the tax authorities.364 The appeal did not challenge the allegation that dates on invoices and other documents had been altered.
335.
The appeal was rejected on 15 September 2015 on the basis that KGE had failed to pay, or provide a bank guarantee for the amount of, the tax allegedly owed, as allegedly required as a condition precedent to appealing by Article 107 of Law No. 9920 of 19 May 2008 on Tax Procedures.365 KGE did not appeal this decision to dismiss its appeal to the tax authorities to the Administrative Court.
336.
On 22 September 2015, the tax authorities froze KGE’s accounts and imposed a lien on them on 8 October 2015.366

(3)

Energji’s tax set-off with KGE

337.
On 14 June 2010, KGE and Energji signed a set-off agreement according to which KGE would assign ALL 87.3 million (approximately €629,000) of its approved ALL 387.5 million (approximately €2.8 million) VAT credit to Energji, allowing Energji to set off its own tax liabilities with the VAT credit owing to KGE.367 On 11 June 2010, the Albanian tax authorities approved this arrangement concerning the credit the subject of the agreement, subject to that agreement being produced to the authorities.368
338.
On 3 March 2011, Energji set off large amounts of VAT in this manner for the first time.369 On 17 March 2011, the Albanian tax authorities reimbursed Energji for sums it had paid to the authorities in recognition of the credit to which it was entitled under the agreement.370 Energji continued to set off its tax liability with tax credits obtained from KGE and the Albanian tax authorities recognized these set-offs. Most of the VAT refunds that KGE obtained were not direct refunds but set-offs either from KGE’s own tax obligations or from Energji’s tax obligations.371 These set-offs were the subject of separate agreements between KGE and Energji, and separate approvals by the authorities.372



  364 Appeal dated 11 June 2015 with Prot. No. 24/15 (C-368).
  365 Letter from the Ministry of Finance to KGE, 15 September 2015, Prot. No. 19778/6 (C-387).
  366 Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute Security Measures for KGE, Order Prot. No. 11531, 22 September 2015 (C-168); General Taxation Directorate, Notice to KGE of Imposition of Mortgage and Security Lien, Prot. No. 12614, 8 October 2015 (C-095).
  367 Set-off Agreement between KGE and Energji, 14 June 2010 (C-244).
  368 Letter from General Tax Directorate to Energji, 11 June 2010, Prot. No. 9857/2 (C-243).
  369 Request for set-off dated 3 March 2011 with Prot. No 12/11 and reimbursement order from General Taxation Directorate to KGE dated 17 March 2011 with Prot. No 4887/1 (C-427.27).
  370 Ibid.
  371 Table of Detailed VAT credit balance, refunds and compensation 2008-2015, as well as underlying requests and refund orders (C-427).
  372 See letter from General Taxation Directorate dated 27 December 2012 (C-427.43) providing for 19.860.164 Lek of KGE’s VAT credit to be used to compensate Energji's dividend tax for 2009 pursuant to an agreement dated 23 December 2011 between KGE and Energji (R-068). See similarly General Taxation Directorate letter dated 26 January 2012 (C-427.45).
339.
For so long as Audit No. 8159 remained open, however, KGE could not get its VAT credits approved by the authorities, as KGE and Energji had to suspend their requests for set-off of the VAT credit against their own tax obligations and wait for the final amount of the tax credit to be confirmed by the tax authorities.373 On 26 July 2012, KGE complained about this situation to the tax authorities.374
340.
Energji accumulated significant tax liabilities and on 17 August 2012 the tax authorities froze Energji’s bank accounts in respect of Energji’s debt of ALL 52,684,742 (approximately €392,000).375 On 11 January 2013, they imposed a lien on Energji’s movable and immovable property.376
341.
On 12 August 2014, the General Customs Directorate informed Energji that it would initiate bankruptcy proceedings if Energji did not pay all of its outstanding tax liabilities.377 On 22 August 2014, Energji wrote to the Regional Taxation Directorate, asserting that the Directorate did not have the right, under the Law, to claim that Energji’s tax liability was “uncollectible”.378 On 7 November 2014, the Regional Taxation Directorate nevertheless commenced bankruptcy proceedings.379



  373 First Becchetti Statement, para. 72.
  374 Letter from KGE to the Large Taxpayer’s Unit, 26 July 2012, Prot. No. 29/12 (C-259).
  375 Blocking Order No. 16613, 17 August 2012 (C-260).
  376 Restrictive Measures, 11 January 2013, Prot. No. 505 (C-267).
  377 Letter from the General Customs Directorate to Energji, 12 August 2014, Prot. No. 12784 (C-304).
  378 Letter from Energji to the Regional Taxation Directorate, 22 August 2014, Prot. No. 29/12 (C-305).
  379 Regional Tax Directorate, Ministry of Finance, Summons, Application for Insolvency Proceedings, Prot. No. 16586, 7 November 2014 (C-094).

(4)

Customs exemptions

342.
In Article 24 of the Concession Agreement, customs exemptions were granted by Albania.380 Article 4 of Law No. 8708 confirmed this and provided that KGE “is exempt from import duties, and any kind of tax that has to do with import and export of goods and services”.381 Customs exemptions could be obtained by KGE submitting a request for authorisation for customs exemption,382 which the customs authorities would then authorise.383
343.
On 29 June 2012, KGE submitted a request for authorisation for customs exemption for certain equipment it was importing for the Project.384 However, when the equipment arrived, the customs authorities did not release it.385 On 5 July 2012, the General Directorate of Customs sought clarification from the Ministry of Finance regarding whether KGE was exempt from VAT on imports.386 On 19 July 2012, the METE confirmed that KGE was exempt from customs taxes and duties.387 On 23 July 2012, the General Directorate of Customs sought further clarification from the Ministry of Finance and the METE.388



  380 Concession Agreement, Article 24 (C-025).
  381 Law No. 8708 on Some Exemptions and Granting Incentives for the Construction of Kalivaç Hydropower Plant on “BOT” Concession, 1 December 2000 (C-192).
  382 See for example Letter from KGE to General Directorate of Customs, 17 December 2009, Prot. No. 917 (C-234). See similarly, Letter from KGE to METE, 21 December 2009, Prot. No. 9855 (C-235).
  383 See for example Letter from General Directorate of Customs to KGE, 27 January 2010, Prot. No. 826 (C-237).
  384 Letter from KGE to General Directorate of Customs, 29 June 2012, Prot. No. 23/12 (C-020).
  385 First Becchetti Statement, para. 65.
  386 Letter from General Directorate of Customs to Ministry of Finance, 5 July 2012, Prot. No. 10569/1 (C-21).
  387 Letter from METE to General Directorate of Customs, 19 July 2012, Prot. No. 6207 (C-22).
  388 Letter from General Directorate of Customs to Ministry of Finance and METE, 23 July 2012, Prot. No. 10569/13 (C-23).
344.
Over 24 July 2012 to 15 August 2012, correspondence was exchanged between KGE and the customs authorities regarding whether the customs exemption covered the VAT on the imported equipment.389 On 2 November 2012, KGE paid €33,725.15 for the release of the equipment despite maintaining that no customs duties, including VAT on imports, were owed.390

(5)

2013 Audit of Agonset

345.
On 11 December 2013, the General Taxation Directorate announced an audit of Agonset.391 The audit program provided with the notification of the audit stipulated the following tax categories and periods would be covered.392
a.
June 2012 to November 2013 for VAT.
b.
The year 2012 for income tax.
c.
May 2012 to November 2013 for Social Insurance and others.
346.
On 19 December 2013, the tax inspectors requested an extension of the mandatory 72-man-hour limit on audit periods,393 which was granted on 20 December 2013.394
347.
On 26 February 2014, a final report was issued that imposed a fine of approximately ALL 3,429,626 (equal to €24,039 at the time) in regard to tax on profits and income tax, penalties and interest.395 Of this amount, ALL 75,352 (equal to around €528 at the time) corresponded to arrears and penalties for tax on profits.



  389 Letter from KGE to General Directorate of Customs, 24 July 2012, Prot. No. 27/12 (C-24); Letter from General Directorate of Customs to KGE, 26 July 2012, Prot. No. 12047 (C-26); Letter from KGE to General Directorate of Customs, 1 August 2012, Prot. No. 34/12 (C-27); Letter from General Directorate of Customs to KGE, 3 August 2012, Prot. No. 12017/3 (C-28); Letter from KGE to General Directorate of Customs, 6 August 2012, Prot. No. 38/12 (C-30); Letter from General Directorate of Customs to KGE, 10 August 2012, Prot. No. 12925 (C-31); Letter from KGE to General Directorate of Customs, 15 August 2012, Prot. No. 39/12 (C-32).
  390 Letter from KGE to Minister of Finance, 2 November 2012, Prot. No. 52/12 (C-34); Customs Payment Bank Transfer, 2 November 2012 (C-264).
  391 Notification of Tax Audit from the Tax Inspection Directorate of the Ministry of Finance to Agonset, Prot. No. 53a, Tirana, 11 December 2013 (C-048).
  392 Ibid, p. 4.
  393 Albanian Taxation Inspection Team’s Request for Time Extension of the Tax Audit from Tax Inspection Directorate of the Ministry of Finance, 19 December 2013 (C-049).
  394 Notification of Time Extension of the Tax Audit, Prot. No. 53321, 20 December 2013 (C-050).
  395 Letter from the Income Tax Inspection Directorate to Agonset, 27 February 2014 (C-283); Final audit report, 26 February 2014 (C-282).
348.
Because challenging the audit would have been more costly than complying with its findings, Agonset paid this tax liability, even though it believed this liability to have been incorrectly assessed.396

(6)

Investigation of Cable System and 400 KV

349.
In February 2014, Cable System and 400 KV, two companies that had made loans to Agonset several months earlier,397 were notified that they would be investigated by the tax authorities.398 The stated objective of these audits was the “verification of the transactions of the loan that you have made in the name of the company ‘AGONSET’ Sh.p.k.”399 and the notices set out the steps to be taken to further this goal.
350.
The Claimants and their companies cooperated with this investigation.400 Agonset was funded through a series of intercompany loans, the majority of which ultimately came from the settlement with Deutsche Bank described in paragraphs 232 to 234 above.401

(7)

The Claimants’ initial response

351.
The Claimants were concerned about what might have motivated the investigations, however, and so commissioned an independent expert report on the funding of Agonset from Grieg Taylor of FTI Consulting.402 On 1 May 2014 the report was issued, which detailed the amount, timing, and source of all cash inflows into eight of the Claimants’ companies in Albania, including KGE, Energji, Cable System, Agonset, Albaniabeg, and 400 KV.403



  396 First Becchetti Statement, para. 119.
  397 See loan agreements by and between Agonset, KGE, Energji, and 400 KV, 7 November 2013 to 9 June 2014 (C-298).
  398 Directorate of Tax Control, Notification of Tax Control for the Execution of the Tax Control Inspection on Cable System, Prot. No. 7293, Tirana, 5 February 2014 (C-052); Directorate of Tax Control, Notification of Tax Control for the Execution of the Tax Control Inspection on 400 KV, Prot. No. 7292, Tirana, 5 February 2014 (C-053); Inspector of Tax Control, Request for Detailed Information From Cable System, 10 February 2014 (C-054); Inspector of Tax Control, Request for Detailed Information From 400 KV, 10 February 2014 (C-055).
  399 Directorate of Tax Control, Notification of Tax Control for the Execution of the Tax Control Inspection on Cable System, Prot. No. 7293, Tirana, 5 February 2014 (C-052); Directorate of Tax Control, Notification of Tax Control for the Execution of the Tax Control Inspection on 400 KV, Prot. No. 7292, Tirana, 5 February 2014 (C-053).
  400 First Becchetti Statement, paras. 125 to 126.
  401 Ibid, para. 125.
  402 Ibid, para. 125.
  403 FTI Report on cash inflows recorded on bank statements of KGE, Energji, Cable System, Agonset, Albaniabeg Ambiant Sh.p.K, 400 KV and UJE SH.A, 1 May 2014 (C-072).
352.
The report was sent to the Albanian President, Prime Minister, Speaker of Parliament, Minister of Finance, Attorney General, Governor of the Central Bank, and the leaders of the parliamentary groups of the main political parties.404
353.
Also in response to the investigation, Mr. Becchetti arranged to meet with the Secretary General of Prime Minister Rama’s cabinet, Mr. Agaçi, at a restaurant in Tirana, in late 2013 or early 2014.405 Mr. Becchetti asked why Prime Minister Rama’s Government was pursuing money laundering investigations and actions against KGE, Energji, Agonset, Cable System, and 400 KV.406 Mr. Agaçi declined to respond to this question and told Messrs. Becchetti and Arbana that they should speak to Enkelejd Joti, the General Manager of Top Channel.407
354.
When asked why Mr. Becchetti should speak to Mr. Joti, who was not a public sector official, but the General Manager of a private television channel, Mr. Agaçi said “It is not a good idea to oppose the State.”408
355.
Mr. Becchetti asked Mr. Agaçi to tell Prime Minister Rama that the investigation was unnecessary and unacceptable, and Mr. Agaçi said he would speak with Prime Minister Rama.409



  404 Letter from Mr. Francesco Becchetti to the Albanian government, parliament, and various administrations circulating the FTI Report, 2 May 2014 (C-073).
  405 First Becchetti Statement, para. 123; Arbana Statement, para. 9.
  406 First Becchetti Statement, para. 123; Arbana Statement, para. 10.
  407 First Becchetti Statement, para. 123; Arbana Statement, para. 10.
  408 First Becchetti Statement, para. 123; Arbana Statement, para. 10.
  409 First Becchetti Statement, para. 124; Arbana Statement, para. 10 and 13.

(8)

Audit 3525 of Energji

356.
On 10 March 2014, Albania opened Audit No. 3525 into Energji.410 The following month, the tax authorities claimed that Energji had refused to provide it with documentation and imposed a ALL 1 million fine on Energji and Mr. De Renzis for allegedly obstructing the tax audit.411 On 18 May 2015 the Tirana Administrative Court of First Instance overturned the fine.412
357.
On 6 August 2014, Audit No. 3525 concluded, finding that Energji owed ALL 95,860,398 (€675,517 at the time) in tax liabilities, fines and interest.413 In order to challenge this audit, Energji obtained a guarantee from Banka Veneto on 5 September 2014.414
358.
On 8 January 2015, the Income Tax Appeal Directorate struck down 60% of these fines, on the basis that the audit had failed to recognise that the subject invoices had not yet been paid, meaning no payment had occurred that would be subject to withholding tax.415
359.
On 31 March 2015, the tax authorities ordered Banka Veneto to pay to them the amounts in the frozen bank accounts416 to satisfy other tax liabilities owed by Energji.417
360.
The Regional Tax Headquarters, Large Taxpayers Unit in Tirana audited Banka Veneto. It found that issuing the guarantee to Energji was in breach of Law No. 9920. The bank was fined ALL 24,297,492 and determined that no transactions could be performed with Energji’s accounts while freezing orders remained in place.418 On 10 April 2015, the bank therefore refused Energji’s request to extend the guarantee.419



  410 Notification of tax inspection, 10 March 2014, Prot. No. 3525 (C-286).
  411 Fiscal Liabilities Assessment Report, 13 June 2014, Prot. No. 3525/13 (C-299).
  412 Decision No. 2703 of the Tirana Administrative Court of First Instance, 18 May 2015, p. 9 (C-354).
  413 General Tax Directorate, Tax Audit Report, 6 August 2014 (C-038).
  414 Letter from Banka Veneto to Tax Appeals Directorate and General Taxation Directorate, 5 September 2014, Prot. No. 18761 (C-309). Under Article 107 of Law 9920, a taxpayer must post a guarantee equal to the value of the penalties alleged if it wishes to contest those penalties: Law 9920 dated 19 May 2008 as amended by Law 164/2014, 4 December 2014.
  415 Income Tax Appeal Directorate, Decision of Income Tax Appeal Directorate, Tirana, 8 January 2015, Prot. No. 24149 (C-040).
  416 Frozen by Blocking Order No. 16613, 17 August 2012 (C-260), referred to in paragraphs 340 and 341 above.
  417 Ibid; Letter from the General Tax Directorate to Veneto Bank, 15 April 2015, Prot. No. 3924/8 (C-339). The Claimants alleged, in paragraph 283 of the Memorial, that the authorities collected the whole of the guarantee to satisfy these other liabilities. This is not supported by the text of the letter from Banka Veneto, which states that the guarantee had expired, and, in a separate paragraph, that the Bank had been ordered to pay the tax authorities “the frozen amount up to today”. The Respondent pointed this out in paragraph 324 of the Counter-Memorial, and the Claimants did not address the issue in either the Reply or submissions at the Final Hearing.
  418 Letter from Daniele Scavaortz, General Director of Veneto Bank, to Energji, Prot. No. 7907, 10 April 2015 (C-075).
  419 Ibid.
361.
On 10 June 2015, the Administrative Court of First Instance rejected Energji’s appeal as to the balance of the liabilities determined to be owing by Audit No. 3525 on the basis that Energji had not satisfied a condition of bringing that appeal, namely either paying the full amount alleged to be owing or providing a bank guarantee for that amount.420

(9)

Refusal of Agonset’s Application for VAT Exemptions

362.
Albania applies a value added tax to goods, including imported goods. Its VAT program is regulated under Law No. 7928 as amended by Law No. 125/2012 dated 20 December 2012.421 Before its amendment by Law No. 125/2012, Law No. 7928 provided a VAT deferral scheme, allowing investors to postpone the payment of VAT on some imported equipment. Law No. 125/2012 amended Law No. 7928 to permit complete VAT exemptions for some of this equipment, subject to conditions.
363.
Law No. 7928 as amended was supplemented by Decision of the Council of Ministers No. 180 dated 13 February 2013 (“Decision No. 180”), which came into force on 2 April 2013. This implementing decree repeated the text of Law No. 125/2012 but narrowed the Law’s application to some specified equipment, listed in an annex:
2.
Importing machinery and equipment performed by the taxpayers specified in point 1 of this decision is exempted from VAT only in cases when such machinery and equipment are imported in order to carry out investment contracts and importation is carried out by taxpayers themselves without subcontracting. The list of machinery and equipment that are directly related to the investment is set forth in the annex 1, which is attached to this decision.

[...]
5.
[...] The [exemption] procedure is valid only for the goods listed in the Annex 1 attached to this decision.422



  420 Administrative Court of First Instance Decision 3132, 10 June 2015 (C-364).
  421 Law No. 7928 on Value Added Tax dated 27 April 1995, as amended by Law No. 125/2012, 20 December 2012 (CL-081).
  422 Decision of the Council of Minister No. 180, February 13, 2013 (CL-083).
364.
In early December 2013, Agonset requested deferrals and exemptions from the General Customs Directorate and the Tirana Customs Department, namely a VAT exemption on imported equipment already subject to VAT payment deferral and exemptions on equipment yet to be imported.423 On 4 December 2013, the Tirana Customs Department denied authorisation on the basis that the television equipment imported by Agonset was not listed in Decision No. 180.424
365.
On 25 July 2014, in Decision No. 4460, Tirana Administrative Court of First Instance upheld Agonset’s appeal of that denial. It did so on the basis that Decision No. 180 could not narrow the scope of Law No. 7928, and the Law did not limit the types of goods to which the relevant exemptions applied. As Agonset had complied with the Law’s requirements, it was entitled to the exemptions sought.425
366.
The attorney general of Albania and the customs authority filed an appeal against this decision. The General Customs Directorate issued nine administrative decisions between February and August 2014 to collect VAT from Agonset, including on goods the Tirana Administrative Court had found were exempt. Agonset filed appeals against some of these administrative decisions, which appeals were at the time of the hearing also still pending.426



  423 Letter from Agonset to the General Customs Directorate, 26 December 2013, Prot. No. 140/13 (C-279).
  424 See Verdict of the Republic of Albania, Administrative Court of First Instance, Tirana, Verdict No. 4460, 25 July 2014, pp. 32 and 46 (C-056).
  425 Verdict of the Republic of Albania, Administrative Court of First Instance, Tirana, Verdict No. 4460, 25 July 2014, pp. 33 to 34 and 46 (C-056).
  426 Letter from Mr. de Renzis to Mrs. Elisa Spiropali, Director General of Customs, Prot. No. 63/14, 1 September 2014 (C-061); Letter from Mr. De Renzis to Mrs. Elisa Spiropali, Director General of Customs, Prot. No. 61/14, Tirana, 26 August 2014 (C-058).
367.
On 3 June 2015, the Tirana Customs Department sought to obtain a forced recovery of Agonset’s outstanding VAT under the nine decisions with Decision No. 238. Agonset contested Decision No. 238 before the Tirana Administrative Court of First Instance, which rejected the lawsuit as the merits were pending in a different proceeding. The court also considered that, as the Administrative Court’s Decision No. 4460 was not final pending appeal, the customs authorities could seek VAT collection in the meantime.427

(10)

Cable System audit

368.
On 14 May 2014, the tax authorities commenced an audit of Cable System.428 The audit included an inspection of VAT, social security and income tax, and tax on profit, back to 2009.
369.
In its final report, the General Taxation Directorate informed Cable System that it was going to report all bank transactions for the audited period to the General Directorate for the Prevention of Money Laundering.429

(11)

Further audits of KGE and Energji

370.
On 18 May 2015, five days after closing Audit No. 8159, Albanian tax authorities opened additional audits against KGE430 and Energji. The new audit of Energji was initiated despite the Albanian tax authorities having frozen Energji’s bank accounts in August 2012 and initiated bankruptcy proceedings against it in November 2014.431
371.
Energji’s audit covered a verification of the company’s income tax, VAT, and health and social tax compliance, as well as compliance with accounting procedures, without even any indication of which time periods were to be reviewed.432 KGE’s audit encompassed VAT tax, income tax, profit tax, and health and social tax compliance and “Identification of the business activity”.433



  427 Decision No. 5405 of the Tirana Administrative Court of First Instance, 27 October 2015 (C-394).
  428 General Taxation Directorate, Final Audit Report, 13 October 2014, Prot. No. 29601/8-9, p. 2 (C-321).
  429 Ibid, p. 44.
  430 Notification of Regional Tax Office the Unit of Large Taxpayers to KGE and Shpëtim Arbana, Prot. No. 5928, 18 May 2015 (C-077).
  431 See paragraphs 340 and 341 above.
  432 Notification of Regional Tax Office the Unit of Large Taxpayers to Energji and Mauro De Renzis, Prot. No. 5927, 18 May 2015 (C-076).
  433 Notification of Regional Tax Office the Unit of Large Taxpayers to KGE and Shpëtim Arbana, Prot. No. 5928, 18 May 2015 (C-077).
372.
However, these tax audits were subsequently suspended on the request of the tax authorities.434 Due to the document sequestrations discussed in section IV.J(2) below, these companies no longer had in their possession the originals of the documents needed to carry out these tax audits. The tax authorities intended to continue the audits once the original documents were made available to them.435

J.

THE CRIMINAL INVESTIGATION

(1)

The first allegations of money laundering

373.
Also in February 2014, on the 17th, the Economic and Financial Crime Section of the Police General Directory in Tirana sent the Tirana Prosecution Office information (“February 2014 Information”) that raised allegations that Mr. De Renzis was laundering money.436 The February 2014 Information led to the Prosecution opening Criminal Proceeding No. 1564 a few days later, on 24 February 2014.437
374.
The allegations were based on the investigators’ mistaken belief that Mr. De Renzis was not only the Administrator of various companies in the Becchetti Group of companies, but also the sole investor.438 The investigators had obtained all of the materials from the tax authorities’ audit of Agonset.439 On the basis of their mistaken understanding of Mr. De Renzis’ role, the loans between various companies appeared to the investigators to be intended to disguise the source of funds that Mr. De Renzis controlled.440

(2)

Orders for document production

375.
On 7 March 2014, the Prosecution wrote to the Albanian General Directorate for Taxation requesting detailed information on nearly all of the Claimants’ companies in Albania, Cable System, 400 KV, Fuqi, Investime te Rinovueshme, and Agonset,441 all of which had been named in the February 2014 Information. The Albanian prosecution obtained the companies’ tax registration numbers, general tax history information, financial statements, control acts, books of sale and purchase, balance sheets, internal administrative decisions, analytical statements of income and expenses, and annual financial situations.442



  434 Letter from General Tax Directorate to Regional Tax Directorate, 1 July 2015, Prot. No. 19305/2 (C-373).
  435 Ibid.
  436 Albanian State Police General Directory, Economic and Financial Crime Section, “Information on Reporting a Criminal Offence to the Prosecutor,” 17 February 2014 (C-281).
  437 See letter of Prosecutor’s Office at the Tirana District Court dated 20 January 2016, which provides brief background to the criminal proceedings and the role of the prosecutor's office (R-009).
  438 Albanian State Police General Directory, Economic and Financial Crime Section, “Information on Reporting a Criminal Offence to the Prosecutor,” 17 February 2014, pp. 11 to 12 (C-281).
  439 Ibid, pp. 9 and 12.
  440 Ibid, p. 12.
  441 Letter from the Albanian General Directorate of Taxation Regional to the Prosecutor’s Office of the District Court of Tirana, 11 April 2014, Prot. No. 17483 (C-292).
  442 Ibid.
376.
The Prosecution then issued a series of sequestration and seizure orders in Criminal Proceeding No. 1564.
a.
On 21 April 2014, the Prosecution issued a sequestration order over the building plans and other technical documents relating to the Kalivaç Project held by KGE.443 The order recited that “According to the files administered during the investigation on this case, it appears that [Enerji and KGE] have performed among them financial transactions that create doubts in relation to the source of these transactions” and was apparently based in particular on the fact that “in 1997 the investment value was foreseen to be equal to 100.000.000 US dollars, and in the Addendum to the contract approved in 2007, the works value was foreseen to 129.000.000 Euro.”444 The sequestration order was not sent to KGE until 12 September 2014.
b.
On 23 June 2014, the Prosecution ordered the seizure of 69 invoices issued on the Kalivaç Project from KGE and Energji.445 This was the first time that any of the Claimants had been informed of the existence of Criminal Proceeding No. 1564. Again, the basis for the sequestration order was said to be an allegation of money laundering: “[…] it appears that the commercial companies ‘Kalivaç Green Energy’, ‘Cable System’ sh.p.k., ‘400 KV’, ‘Energji’ Sh.p.k., ‘Agonset’, carried out suspicious financial transactions between them, which create doubts about the source of funding.”446
c.
On 26 June 2014, the Prosecution seized “all fiscal buying and selling invoices, that are related to the construction of the Hydropower Plant of Kalivaç, as well as the contracts stipulated between this company and the contractor and its subcontractors” for KGE and Energji.447
d.
Also on 26 June 2014, the Prosecution sent a seizure notice to Cable System for identical reasons and for the same Project, except that this time the allegation was with respect to Cable System, 400 KV, and Energji.448
e.
On 26 August 2014, the Prosecution seized “all the fiscal acquisition invoices (accompanied with the works progress situations), from all the subcontractors that have carried out works at the Hydropower Plant of Kalivaç” from 400 KV, Cable System, Fuqi, and Investime te Rinovueshme. This time, however, the charge was that only Cable System, 400 KV, Energji and Fuqi had performed suspicious financial transactions.449
f.
On 19 December 2014, Albanian authorities seized “all the original situation reports generated during the construction of the Kalivaç Hydroelectric Plant” from KGE. The basis for this seizure was stated to be “suspicious financial transactions” between KGE and Energji.450
g.
On 19 January 2015, the Prosecution confiscated “all the certificates of the taking delivery of works and the contract(s) concluded between Energji sh.p.k. and Kalivac Green Energy sh.p.k.” from KGE on the suspicion that “suspicious financial transactions” were carried out between KGE and Energji.451
h.
On 27 April 2015, the Prosecutor issued an order to examine documents relating to certain of KGE’s revenues, on the basis of “suspicious financial transactions” between KGE, Cable System, 400 KV, and Energji.452



  443 Judiciary District Prosecution of Tirana, Decision on Document Sequestration for KGE, Case. No. 1564, Tirana, 12 September 2014 (C-070).
  444 Ibid.
  445 Prosecutor’s Office at the First Instance Court of Tirana, Judgment on the Invoice Seizure for KGE, Case. No. 1564, Tirana, 23 June 2014 (C-096); Prosecutor’s Office at the First Instance Court of Tirana, Judgment on the Invoice Seizure for Energji, Case. No. 1564, Tirana, 23 June 2014 (C-097).
  446 Prosecutor’s Office at the First Instance Court of Tirana, Judgment on the Invoice Seizure for KGE, Case. No. 1564, Tirana, 23 June 2014 (C-096); Prosecutor’s Office at the First Instance Court of Tirana, Judgment on the Invoice Seizure for Energji, Case. No. 1564, Tirana, 23 June 2014 (C-097).
  447 Judiciary District Prosecution of Tirana, Decision on Document Sequestration for KGE, Case. No. 1564, Tirana, 26 June 2014, Prot. No. 9499/1 (C-066); Judiciary District Prosecution of Tirana, Decision on Document Sequestration for Energji, Case. No. 1564, Tirana, 26 June 2014, Prot. No. 9499/1 (C-067); Judiciary District Prosecution of Tirana, Minutes on the Material Evidence of Sequestration, Case. No. 1564, Tirana, 7 July 2014 (C-068).
  448 Judiciary District Prosecution of Tirana, Minutes on the Material Evidence of Sequestration, Case. No. 1564, Tirana, 7 July 2014 (C-068).
  449 Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation for 400 KV Sh.p.k., 26 August 2014 (C-043); Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation for Cable System Sh.p.k., 26 August 2014 (C-044); Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation for Fuqi Sh.p.k., 26 August 2014 (C-306); Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation for Investime Te Rinovueshme Sh.p k., 26 August 2014 (C-307).
  450 Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation, 23 December 2014 (C-099).
  451 Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation, 20 January 2015 (C-100).
  452 Prosecutor’s Office at the First Instance Court of Tirana, Order for Sequestration of Documentation from KGE, 27 April 2015, Prot. No. 6165 (C-340).
377.
As the originals of these documents were removed, the tax audits of KGE and Energji that started in May 2015 (discussed in paragraphs 370-372 above) were suspended.

(3)

International letters rogatory

378.
The Prosecution also sent a number of letters rogatory to foreign governments requesting assistance with the criminal investigation.
379.
The Italian authorities responded by asking that the Prosecution’s requests be “more specific, in time, people, documents and a list of banking institutions to which these documents will be required.”453 Ultimately, the Italian authorities provided information to Albania.454



  453 Letter from the Albanian Embassy to the Albanian Ministry of Foreign Affairs, 11 March 2015, forwarded on 18 March 2015 (C-150).
  454 Summaries of Delivery of Materials in the Criminal Procedure No. 1564/14, 18 November 2015, 25 November 2015, and 9 December 2015, points 7 to 8 (C-149).
380.
In July 2014, Albania’s Ministry of Justice began sending requests for judicial assistance to its counterpart in Luxembourg. With the help of the authorities in Luxembourg, Albania obtained over 500 pages of banking documents regarding KGE.455 After it obtained general banking documents, it sought information regarding specific transactions. For example, on 23 April 2015, in response to Albania’s request, authorities in Luxembourg provided information with respect to three specific transactions, as well as an Excel spreadsheet including all bank credit and debit bank activity for KGE’s UniCredit Luxembourg S.A. account.456

(4)

Prosecution of Mr. Becchetti for incident at Tirana Airport

381.
On 1 July 2014, Mr. Becchetti underwent a security check at the Tirana Airport, conducted by safety employee Older Hysa.457 There are varying descriptions about what occurred during this security check. Mr. Hysa made a complaint that Mr. Becchetti hit him with his head and captured him by his neck.458 Mr. Becchetti says that Mr. Hysa subjected him to an inappropriate security check and made offensive comments, however he did not hit Mr. Hysa.459
382.
Security footage,460 which recorded vision but not sound, shows Mr. Becchetti being searched after passing through a metal detector. In the course of the search Mr. Becchetti removes something from his pocket and removes his belt. While Mr. Becchetti is putting his belt back on and retrieving his jacket and luggage, he appears to speak to, and gesture towards, the security officer who searched him. Once Mr. Becchetti has his belt and jacket on, he appears to place his face very close to that of the security officer who searched him and then shove that officer in the chest.



  455 Summaries of Delivery of Materials in the Criminal Procedure No. 1564/14, 18 November 2015, 25 November 2015, and 9 December 2015, p. 4 and 11, points 7 and 8 (C-149).
  456 Letter from Unicredit to judicial police of Luxembourg, 23 April 2015 (C-098).
  457 First Becchetti Statement, para. 129; Commissariat of Border Police of Rinas Tirana, Minutes – Statement About Obtaining Data From Persons Under Investigation, 1 July 2014 (C-064).
  458 Commissariat of Border Police of Rinas Tirana, Minutes – Statement About Obtaining Data From Persons Under Investigation, 1 July 2014 (C-064).
  459 First Becchetti Statement, para. 129; Commissariat of Border Police of Rinas Tirana, Minutes – Statement About Obtaining Data From Persons Under Investigation, 1 July 2014 (C-064).
  460 Security camera footage of Mr. Becchetti’s Tirana airport incident, 1 July 2014 (R-001).
383.
After the incident, Mr. Becchetti was questioned by the Police, in the presence of his lawyer Thedhori Sallaku.461 During the questioning, Mr. Becchetti informed the Police that he resided in Italy, but also had a residence in Albania.462
384.
On 16 September 2014, the Public Prosecutor issued an invitation to Mr. Becchetti at his residence in Albania to attend the Public Prosecution’s office.463 The Public Prosecutor did not issue the invitation to Mr. Becchetti’s residence in Italy.464 Only issuing the invitation to Mr. Becchetti’s Albanian address was not compliant with the Albanian Code of Criminal Procedure.465
385.
After undertaking further steps in the investigation, on 3 November 2015, the Public Prosecution charged Mr. Becchetti with the penal act of opposition of an employee while implementing a state duty.466 On 2 December 2014, Mr. Sallaku, acting for Mr. Becchetti, applied to the Court of Tribunal District Tirana to cease the penal case on the basis of invalid procedural acts taken by the Public Prosecutor.467 On 26 December 2014, the Court granted Mr. Sollaku’s application to cease the penal case brought against Mr. Becchetti in relation to the incident at the Tirana airport.468

(5)

Expert investigations of work undertaken at Kalivaç

386.
On 10 September 2014, the Prosecution issued orders to perform an accounting expert investigation and a technical expert investigation to “determine the volume of works performed realistically, in the [hydro-power plant] of Kalivaç” and to determine “the type and volume of works acquired by company ‘Energy’ LLC and of its subcontractors and also the type and volume of works invoiced from company ‘Energy’ towards ‘Kalivaç Green Energy’ for the works on the hydro-power plant of Kalivaç.” On the face of these orders, KGE, Energji, and Cable System were accused of engaging in suspicious financial transactions.469



  461 First Becchetti Statement, para. 129; Commissariat of Border Police of Rinas Tirana, Minutes – Statement About Obtaining Data From Persons Under Investigation, 1 July 2014 (C-064).
  462 Commissariat of Border Police of Rinas Tirana, Minutes – Statement About Obtaining Data From Persons Under Investigation, 1 July 2014 (C-064).
  463 Court of Tribunal District Tirana, Act No. 3512, Sentence No. 3298, 26 December 2014, p. 12 (C-65).
  464 First Becchetti Statement, para. 130.
  465 See Court of Tribunal District Tirana, Act No. 3512, Sentence No. 3298, 26 December 2014, p. 12 (C-65) and Appeals Court of Tirana, Act No. 1762, Decision No. 1498, 5 October 2015 (C-148).
  466 Court of Tribunal District Tirana, Act No. 3512, Sentence No. 3298, 26 December 2014, p. 14 (C-65).
  467 Ibid, p. 11.
  468 Ibid, p. 14. See also Appeals Court of Tirana, Act No. 1762, Decision No. 1498, 5 October 2015 (C-148).
  469 Prosecutor’s Office for the District of Tirana, Decision on Performing the Accounting Expertise, 10 September 2014 (C-311).
387.
The AKBN was engaged to conduct the engineering audit. That agency had, in the course of the Project, produced a series of reports on the progress of works.470 One of the engineers who had participated in some of the AKBN’s prior investigations, Fetah Dervishi, was named to conduct the AKBN’s report for the Prosecution, but soon resigned.471 Albania later brought criminal charges against Mr. Dervishi and another colleague who had participated in the prior investigation, Sokol Koçi.472
388.
In April and May of 2015, a final accounting expert report and a final technical expert report were issued.
389.
The accounting expert report included the following findings.
a.
Funds were transferred from KGE to Energji as a result of a 20 August 2013 arbitration award issued under the aegis of the Albanian Commercial Arbitration and Mediation Center (“Medart”) in a dispute between KGE and Energji (the “Medart Award”).473 This arbitration was brought by Energji against KGE for delayed work and delayed payment.
b.
Energji was charging KGE significantly more than it was paying its subcontractor for works.474
c.
Energji had sufficient liquidity to pay its tax liabilities.475



  470 See, for example, AKBN Monitoring Report, No. Prot. 1256, 27 July 2010 (C-107).
  471 Prosecutor’s Office for the District of Tirana, Decision for the Assignment and Replacement of the Experts, 3 October 2014 (C-320); Letter from Fetah Dervishi to Prosecutor’s Office for the District of Tirana, October 2014 (C-322).
  472 Letter from Prosecution Office of the District Court of Tirana, 20 January 2016 (R-009).
  473 Additional Accounting Expertise Report of the Penal Proceeding 1564 Year 2014, 19 May 2015 (C-356).
  474 District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1547, 5 June 2015, p. 19 (C-103 bis).
  475 Additional Accounting Expertise Report of the Penal Proceeding 1564 Year 2014, 19 May 2015, p. 4 (C-356).
390.
In the engineering report, the AKBN engineers noted that they were not able to measure the full works actually carried out “because of inability to enter in some zones that present a risk.”476 They did not state in the expert report that the work invoiced had not been done.
391.
On 23 September 2015, Agonset asked the Prosecutor to state precisely the role it was alleged to have played in the alleged money laundering.477 The Prosecutor declined to do so.478

(6)

Interrogation of Claimants’ associates

392.
Between 29 December 2014 and 30 April 2015, the Prosecution questioned a number of the Claimants’ employees and family members.479 It did not question Mr. Becchetti, Mr. De Renzis or Ms. Condomitti.

(7)

Issue of arrest warrants

393.
On 5 June 2015, the District Court of Tirana issued Acts Nos. 1545, 1546, and 1547,480 ordering the immediate arrest of Mr. Becchetti, Mr. De Renzis, and Erjona Troplini, a business associate of Messrs. Becchetti and De Renzis (the “Arrest Warrants”).



  476 AKBN, Expertise Act for the Prosecution of the Judicial District of Tirana, 7 April 2014, p. 100 (C-291).
  477 Letter from counsel for Agonset Sh.p.k. to Prosecution, 23 September 2015 (C-388).
  478 Letter from Prosecution to Agonset Sh.p.k., 2 October 2015 (C-391).
  479 Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to A. Ceccobelli, 27 April 2015 (C-341); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to A. Kondi, 27 April 2015 (C-342); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to E. Meta, 27 April 2015 (C-343); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to E. Troplini, 27 April 2015 (C-344); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to H. Shehu, 27 April 2015 (C-345); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to M. Sula, 27 April 2015 (C-346); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to S. Arbana, 27 April 2015 (C-347); Prosecutor’s Office at the First Instance Court of Tirana, Summons for Questioning to V. Kamberi, 27 April 2015 (C-348).
  480 District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1546, 5 June 2015 (C-102 bis); District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1547, 5 June 2015 (C-103 bis); District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1545, 5 June 2015 (C-360).
394.
On 6 June 2015, the accused requested copies of the Arrest Warrants. The Prosecution denied this request on 31 July 2015.
395.
The Arrest Warrants contained the following factual allegations.
a.
“[…] through the companies ‘Kalivaç Green Energy’ shpk; ‘Cable System’ shpk; ‘400 KV’ shpk; ‘Energji’ shpk; ‘Fuqi’ shpk; ‘Investime te Rinovueshme’ shpk and ‘Agonset’ shpk. suspicious financial transactions with no economically logical basis were made.”481
b.
Funds were transferred to KGE “from abroad, an indication that they are the product of illegal criminal activities.”482
c.
Invoices totalling €3,410,940 were issued for work not done, namely “the preparation of material selected and embankment for the construction of the dam” on the Kalivaç Project in 2009.483
d.
A letter from KGE to Energji dated 11 June 2007 was forged, as KGE had only been registered on 9 July 2007, and so had no legal personality before that date.484
e.
The arbitration between KGE and Energji that resulted, on 20 August 2013, in an award of €15 million to Energji, was “carried out with regard to a fictitious (false) dispute which was based on forged documentation created by way of an agreement between” KGE and Energji.485 The purpose of this conspiracy was to conceal the true source of the funds paid out subject to the award.486
f.
Energji had failed to pay a tax debt of ALL 770,423,159.487



  481 See, for example, District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1546, 5 June 2015, pp. 18 and 31 (C-102 bis).
  482 Ibid.
  483 Ibid, p. 20.
  484 Ibid, p. 26.
  485 Ibid, p. 26.
  486 Ibid, pp. 26-27.
  487 Ibid, p. 26.
396.
On the basis of those factual allegations, the Arrest Warrants set out the following criminal charges.
a.
Document forgery, concerning the work done on the Kalivaç Project.
b.
Money laundering.
c.
Tax evasion.
397.
The Arrest Warrants ordered the arrest of the concerned individuals because of the “danger” they posed and the “nature of the suspect[s]”:488
In light of the above, the Court—given the danger posed by “document forgery, in cooperation with others and more than once” and “laundering products of an offence or criminal activity” set forth under arts. 186/2 and 287 of the Criminal Code, the circumstances and the mechanism of their execution, the consequences arising from them and the nature of the suspect in question—concludes that a restrictive measure must be enacted against those under investigation.
398.
Mr. Becchetti and Mr. De Renzis challenged the Arrest Warrants in Albanian courts.489 Their appeals have been rejected at each level and they are now without any recourse before Albanian criminal courts.490 On 19 October 2015, Mr. Becchetti submitted an application to the European Court of Human Rights. The application was notified to Albania on 20 January 2016.491



  488 Ibid, p. 31.
  489 See for example Decision of the Tirana Court of Appeals, 5 August 2015 (C-125); Appeal submission of Francesco Becchetti against Act No. 1546 for hearing on 5 August 2015 (C-381); Appeal submission of Mauro De Renzis against Act No. 1547 for hearing on 5 August 2015 (C-382).
  490 Decision of the Tirana Court of Appeals, 5 August 2015 (C-125); Screenshot of Supreme Court Registry showing rejection of Mr. Becchetti’s appeal, 3 December 2015 (C-170); Screenshot of Supreme Court Registry showing rejection of Mr. De Renzis’ appeal, 3 December 2015 (C-171); Decision No. 00-2015-2986 of the Albanian Supreme Court, 3 December 2015 (C-400); Decision No. 00-2015-2975 of the Albanian Supreme Court, 3 December 2015 (C-398); Decision No. 00-2015-2985 of the Albanian Supreme Court, 3 December 2015 (C-399).
  491 Application Form for Francesco Becchetti and Others, European Court of Human Rights, 19 October 2015 (C-154); Letter from the European Court of Human Rights, 20 January 2016 (C-155).

(8)

The Criminal Notifications

399.
On 16 July 2015, the Prosecution served Mr. Becchetti and Mr. De Renzis with a “Measure of Acquisition of Subject as Accused and Notification of Prosecution” (the “Notifications”), formally bringing the criminal charges found in the Arrest Warrants. The Notifications included the following two new charges.
a.
Fraud with Abuse of Responsibility in Concert: Albania alleged that Mr. Becchetti “abused the powers recognised by the Bylaws of the company and transferred the money to the company ‘Energji’ on the basis of false documents.”492
b.
Creation of Fraudulent Schemes in Relation to Value Added Tax: In particular, the Prosecution alleged that KGE “unjustly profited from the reimbursement by the Office of Potential Taxpayers, and unjustly deposited VAT in its own accounts for work which was not performed.”493
400.
In addition to Messrs. Becchetti and De Renzis, Ms. Condomitti was also served with a Notification and charged with money laundering.494 Albanian law did not permit her pretrial detention because she is over 70 years old.495
401.
On 30 July 2015, Albania formally named 400 KV, KGE, Energji, and Agonset as defendants in Criminal Proceeding No. 1564.496



  492 Prosecutor’s Office at the First Instance Court of Tirana, Measure Submitted for Notification of Prosecution, No. 10912, 16 July 2015, p. 4-30 (C-116).
  493 See Prosecutor’s Office at the First Instance Court of Tirana, Measure Submitted for Notification of Prosecution, No. 10912, 16 July 2015, p. 32 (C-116).
  494 Prosecutor’s Office at the First Instance Court of Tirana, Measure Submitted for Notification of Prosecution, No. 10911, 16 July 2015 (C-104).
  495 Albanian Code of Criminal Procedure (CL-001), Article 230(2). Ms. Condomitti was 73 when the arrest warrants were issued. Passport of Liliana Condomitti (C-7).
  496 Prosecutors Office at the First Instance Court of Tirana, Summons to 400 KV, 30 July 2015 (C-119); Prosecutors Office at the First Instance Court of Tirana, Summons to KGE, 30 July 2015 (C-120); Prosecutors Office at the First Instance Court of Tirana, Summons to Energji, 30 July 2015 (C-121); Prosecutors Office at the First Instance Court of Tirana, Summons to Agonset, 30 July 2015 (C-122). See also Prosecutors Office at the First Instance Court of Tirana, Decision for Considering the Person as Defendant and Notification of Accusation for KGE Sh.p.k., 7 July 2015 (C-375); Prosecutors Office at the First Instance Court of Tirana, Decision for Considering the Person as Defendant and Notification of Accusation for 400 KV Sh.p.k., 7 July 2015 (C-376); Prosecutors Office at the First Instance Court of Tirana, Decision for Considering the Person as Defendant and Notification of Accusation for Agonset Sh.p k., 7 July 2015 (C-377).
402.
On 12 August 2015, it was reported that an order was issued to Albanian police to stop Agon Channel employees at the border and subject them to searches when leaving the country.497 The concerned individuals, who were characterized as “very dangerous people,” included news journalists, editors, and analysts as well as cameramen, operators, and hairdressers.498

(9)

The extradition requests

403.
On 21 July 2015, Albania sent two Requests for Extradition to the Home Office of the United Kingdom for Messrs. Becchetti and De Renzis (the “Extradition Requests”). On the basis of these Extradition Requests, Messrs. Becchetti and De Renzis were forced to submit to an arrest by appointment in London on 26 October 2015. Pending a decision on the Extradition Requests, Messrs. Becchetti and De Renzis were required to surrender their travel documents and were subjected to a nightly curfew.

(10)

INTERPOL Red Notices

404.
After the Arrest Warrants were issued, INTERPOL issued “Red Notices” at Albania’s request in relation to Messrs. Becchetti and De Renzis.499 A Red Notice is a request to INTERPOL’s member countries to detain or arrest a person pending extradition proceedings.500 On 17 June 2015, Mr. Becchetti lodged a complaint concerning the Red Notices with INTERPOL, and on 28 September 2015 Mr. De Renzis also did so.501
405.
The complaints requested the data held by INTERPOL against them at Albania’s request be deleted, so rescinding the Red Notices. The essence of the complaints was that: 1) the Red Notices were not issued for a proper purpose; 2) Albania could not legitimately pursue their extraditions; 3) the matter was of a political character; 4) they had been deprived of due process; and 5) there was an insufficient evidentiary basis for the Red Notices.502



  497 “Berisha defends the journalists of Agon Channel,” Lapsi, 12 August 2015 (C-126); Meço, Statement, para. 53.
  498 “Berisha defends the journalists of Agon Channel,” Lapsi, 12 August 2015 (C-126).
  499 Commission for the Control of INTERPOL’s Files, Decision of the Commission, 23-26 January 2017, para. 7 (C-604).
  500 Ibid, para. 12.
  501 Ibid, paras. 1 and 2.
  502 Ibid, para. 10.
406.
On 31 August 2016, the Commission for the Control of INTERPOL’s Files (“INTERPOL Commission”) invited Albania to provide further information on Messrs. Becchetti’s and De Renzis’ arguments regarding: 1) the lack of a proper purpose for Albania’s request and the inappropriateness of extradition;503 2) the political character of the charges and the lack of due process;504 and 3) the lack of an evidentiary basis for the charges, in particular asking Albania to provide further details of the precise actions taken by the accused that resulted in the charges against them.505
407.
Apart from providing the Arrest Warrants in response to the third query, Albania did not respond to the request for further information, nor to reminders sent on 18 November 2016 and 8 December 2016.506 In its Decision of 23-26 January 2017, the INTERPOL Commission points out that although the Arrest Warrants state that there is evidence establishing the guilt of Messrs. Becchetti and De Renzis they do not specify what Messrs. Becchetti and De Renzis did personally to aid in the commission of the crimes charged.507
408.
The Decision recorded that INTERPOL’s rules:508
a.
require that it only undertake activities for a purpose that is consistent with its aims;
b.
stipulate that INTERPOL is strictly forbidden from undertaking any activities of a political character;
c.
require it to undertake its activities with regard to due process and the basic rights of the people subject to those activities; and
d.
require a sufficient evidentiary basis if a Red Notice is to be issued.



  503 Ibid, para. 19.
  504 Ibid, para. 24.
  505 Ibid, para. 26.
  506 Ibid, paras. 19,24,27 and 28.
  507 Ibid, para. 27.
  508 Ibid, paras. 11-15.
409.
The INTERPOL Commission found that retaining the data concerning Messrs. Becchetti and De Renzis in its files, and so maintaining the Red Notices, did not conform with INTERPOL’s rules. The INTERPOL Commission reached this conclusion on the basis of Albania’s failure to respond to the Commission’s multiple requests for a response to its queries.509 On 4 April 2017, the INTERPOL Commission informed Messrs. Becchetti and De Renzis that the data complained of had been deleted, and they were no longer subject to Red Notices.510

(11)

Seizure orders

410.
On 5 June 2015 (the day the Arrest Warrants were issued), the Albanian Court of the Judicial District of Tirana issued Act No. 768 “Decision on Preventative Sequestration of Properties” (the “Seizure Decision”).511 This Decision sought to sequester the holdings of Ms. Condomitti, Mr. De Renzis, and Ms. Troplini in a number of companies, including Agonset. The Decision omitted Mr. Becchetti, who, according to the Tirana Commercial Register, had no indirect holdings in Agonset because Costruzioni’s sale of its shares to Agonset.uk had not yet been registered.512
411.
At the Prosecution’s request, the Court ordered:513
[...] the sequestration of the mobile articles (bank accounts, etc.) and immobile articles that the citizens under investigation Liliana Condomitti, Mauro De Renzis, Erjona Troplini, own proportionally to their shares in the company “Energji” ltd., the company “400” KW, the company “Fuqi” ltd., “Cable System” ltd. and the company “Agon Set” ltd., up to the amount of euro 39,001,863 (thirty-nine million and one thousand and eight hundred and sixty three) and 770,423,159 (seven hundred and seventy million and four hundred and twenty three thousand and one hundred and fifty-nine) lek that the company “Energji” ltd. has appropriated and transferred to the other companies as a result of the criminal offense.



  509 Ibid, para. 28.
  510 Letter from the Commission for the Control of INTERPOL’s Files to Quinn Emanuel, 4 April 2017 (C-604).
  511 Decision on Preventive Sequestration of Properties, No. 768, 5 June 2015 and Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute the Decision on Determining the Security Measures, 9 June 2015 (C-110).
  512 See paragraph 16 above.
  513 Decision on Preventive Sequestration of Properties, No. 768, 5 June 2015 and Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute the Decision on Determining the Security Measures, 9 June 2015, p. 22 (C-110).
412.
The basis for the decision was that the Prosecution had concluded that:514
sufficient data [exists] to attribute to the citizens under investigation Francesco Becchetti, Mauro De Renzis, Erjona Troplini and Liliana Condomitti, elements that show the commitment of the criminal acts: “Evasion of taxes and fees,” “Falsification of documents” and “Laundering of proceeds of the criminal offence or the criminal activity,” provided for respectively in Articles 181, 186 and 287 of the Criminal Code.
413.
The Court went on to state that “‘Energji’ ltd. [had] reinvested [the money obtained for work that was allegedly not done and in an allegedly false arbitration] in other companies, such as: ‘400 KV’ ltd., ‘Cable system’ ltd., and ‘Costruzioni’ ltd.”515
414.
The Claimants were not served with the Seizure Decision.516

(12)

Execution of the Seizure Decision

415.
On 8 June 2015, the Prosecution ordered the execution of the Seizure Decision and appointed the AASCP and the judicial police to carry out the order (the “Seizure Execution Decision”).517
416.
On the same day, and before it had notified the AASCP that the agency was responsible for executing the Decision, the Prosecution sent a letter to the banks at which 400 KV, Fuqi, Cable System, and Agonset held accounts and ordered the freezing of these companies’ bank accounts.518 At this time, the Claimants, as well as the employees of Agonset, had not been informed that the AASCP was purportedly running Agonset,519 400 KV, Fuqi, and Cable System, or that these companies’ accounts had been frozen.520 They became aware one week later.



  514 Ibid, p. 35.
  515 Ibid, p. 35.
  516 First Becchetti Statement, para. 145; Meço Statement, paras. 48 to 50.
  517 Decision on Preventive Sequestration of Properties, No. 768, 5 June 2015 and Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute the Decision on Determining the Security Measures, 9 June 2015 (C-110).
  518 Prosecutor’s Office at the First Instance Court of Tirana, Order to Execute Security Measures, 8 June 2015 (C-113).
  519 The Respondent disputes the Claimants’ assertion that the AASCP had an obligation to run Agonset: Counter-Memorial, paras. 533-536.
  520 First Becchetti Statement, para. 145.
417.
On 10 June 2015, the AASCP wrote to Albania’s commercial registry to block Ms. Condomitti’s, Mr. De Renzis’ and Ms. Troplini’s shareholdings in the relevant companies.521 On the same day, the seizure of these shareholdings was recorded on Agonset’s excerpt from the Albanian Registry of Companies. The note in the excerpt also stated that: “[The AASCP] are tasked with the execution of this decision and the management of the assets that will be seized.”522
418.
On 10 and 11 June 2015, the AASCP also ordered the freezing of the bank accounts523 and transportation vehicles524 of Ms. Condomitti, Mr. De Renzis and Ms. Troplini, and also of Energji, 400 KV, Fuqi, Cable System and Agonset.
419.
On 17 June 2015, the AASCP went to Agonset and sequestered hundreds of technical items.525 It also borrowed an accounting inventory from Agonset employees.526
420.
On 19 June 2015, Albania sequestered the property of Energji, Cable System, 400 KV and Fuqi.527
421.
On 26 June 2015, Ms. Condomitti appealed the Seizure Decision.528 Her appeal, however, was denied by the Tirana Court of Appeal and the Albanian Supreme Court.529 On 13 July 2015, both Ms. Condomitti and Agonset challenged the Seizure Execution Decision.530 This appeal was also unsuccessful before the Court of Appeal and the Supreme Court.531



  521 Letter from the AASCP to the National Registration Center, 10 June 2015, Prot. No. 376 (C-365).
  522 Agonset Sh.p k.’s excerpt from the Albanian Registry of Companies, 29 February 2016, pp.17 and 18 (C-409).
  523 Letter from the AASCP to Banks, 10 June 2015, Prot. No. 377 (C-366).
  524 Letter from the AASCP to Road Transport Services General Directorate, 11 June 2015, Prot. No. 379 (C-367).
  525 Meço Statement, para. 50; Prosecutor’s Office at the First Instance Court of Tirana, The Record for the Identification, Sequestration and Placement under the Administration of the Agency for the Administration of Sequestered and Confiscated Property, 17 June 2015 (C-115).
  526 Meço Statement, para. 50.
  527 Prosecutor’s Office at the First Instance Court of Tirana, The Record for the Identification, Sequestration and Placement under the Administration of the Agency for the Administration of Sequestered and Confiscated Property of Energji, Cable System, 400 KV, and Fuqi Sh.p.k., 19 June 2015 (C-147).
  528 Appeal to the Court of Appeals of Tirana submitted on behalf of L. Condomitti, 26 June 2015 (C-123).
  529 Decision No. 1032 of the Tirana Court of Appeal, 14 July 2015 (C-378); Decision No. 00-2015- 2987 of the Albanian Supreme Court, 3 December 2015 (C-401).
  530 Appeal to the Court of Appeals of Tirana submitted on behalf of L. Condomitti and Agonset Sh.p k., 15 July 2015 (C-379).
  531 Decision No. 00-2015-2987 of the Albanian Supreme Court, 3 December 2015 (C-401).

(13)

Responses to the Seizure Decision

422.
On 9 June 2015, Prime Minister Rama stated on Facebook and Twitter, “Blocking the source of the dirty money that feeds Agon Channel a success!”532
423.
On or around 12 June 2015, Prime Minister Rama stated the following in an interview on television channel Vizion Plus.533
[T]here is no greater shame than making the “lawyer” of this channel for the sake of free speech, when this channel turns off and on with the help of dirty money. [...] It does not exist a principle where the freedom of speech is fed by the dirty money in the form of a commercial television. In that case we need to be careful, there is no mercy.
424.
On 17 June 2015, Prime Minister Rama appeared on TV Klan’s “Opinion” program and said as follows.534
I have said “it as a success”, because that kind of investor has caused to this state and to these people incalculable damages, with manipulated trials and in the meanwhile is holding in hostage the Albanian government with the concessions, for which he has not applied none of the conditions.



  532 Tweet of E. Rama, Twitter, 9 June 2015 (C-128); Facebook Post of E. Rama, Twitter, 9 June 2015 (C-363).
  533 English language transcript and original video of Vizion Plus interview with Prime Minister E. Rama, uploaded on 12 June 2015 (C-370).
  534 English language transcript and original video of Opinion interview with Prime Minister E. Rama, 17 June 2015, p. 3 (C-129).
425.
Prime Minister Rama called Mr. Becchetti and the Claimants a “scandalous phenomena against which we have declared a war, and we will fight up to the end”,535 and made the following comments regarding the judiciary.536
[...] what we have done with the electric power is nothing in front of what we will do with the judicial system. We will shake the foundations of the judicial system, in a manner that all the extravagant and canaille, that have used the vests of judge to become part of the crime, cannot even imagine
426.
On 21 June 2015, Elsa Ballauri, the President of the Albanian Human Rights Group, criticized Prime Minister Rama’s statements and made the following comments.537
It is clear that the situation has gone beyond normality, I would say that it is dangerous in some aspects. First, the Prime Minister cannot afford to release a similar verdict he has not the competence, the position to make such statements, but the same Premier is in a very contradictory position: on one hand he should have waited for the verdict of justice, on the other hand our courts are shameless and unreliable

[…]

[I]ts [sic] not just a matter of opinion. This is the question of Albania, in the sense that even if the courts are corrupted it does not mean that they are also unable, unjust to issue sentences, but the courts are in the hands of the rulers. The court executes the provisions of the Government, what the leader of the moment says and that’s what does not work in the Albanian justice. The court is “captured” by the policy as it continues to be also in this case, not only the court, but the whole judicial system. So we are faced with a rather risky fact, according to me.



  535 Ibid.
  536 Ibid, p. 14.
  537 E. Ballauri, Excerpt from Agon News 2015 Electoral Coverage, 21 June 2015 (C-372).
427.
On or about 2 July 2015, the Chairman of the Parliamentary Commission for Education and Public Information Media criticised Prime Minster Rama’s statements as an improper intervention in the criminal process.538
428.
On and around 8 August 2015, in a speech in Parliament and open letters to the media, former Prime Minister Berisha criticised “propagandistic media attacks that Rama has done to businessman Becchetti and his mother” and the “incomparable attack of the denigrating media campaign toward the Italian investor that attempted to invest in Albania.”539

(14)

Closure of Agonset

429.
After the Seizure Decision was executed, neither Agonset nor the AASCP on its behalf payed its liabilities. This led to an ALL 43,768,412 tax lien,540 lawsuits from former Agonset employees for unpaid salaries,541 demand letters from other creditors,542 and an eviction notice from Agonset’s landlord.543
430.
On 29 September 2015, the AASCP wrote to the Prosecution and the Judge who had issued the Seizure Decision, stating it was unable to administer the relevant companies’ assets because of the decision’s “unclear formulation”.544
In framework of the preventative seizure, due to the unclear formulation of the court’s Decision, according to us, has made the implementation of this decision impossible.

Our uncertainty regarding the decision lies in the fact that the decision provides for the seizure of the quotas and assets on behalf of natural persons who are part of other legal entities, with separate legal personality.

From the above we request from you to determine the exact quotas and assets in the name of these persons in order for us to be clearer concerning the administration.



  538 G. Pollo’s speech at a parliamentary session, uploaded 2 July 2015 (C-374).
  539 S Berisha, “A Long Note on the Defence of Becchetti and his Mother,” Tema, 8 August 2015 (C-090).
  540 Notice from the General Taxation Directorate to Agonset, Prot. No. 50196, 20 July 2015 (C-157).
  541 Letter from Modus Legal Services to Agonset, 29 August 2015, Prot. No. 154/15, and attached Power of Attorney, 26 August 2015, Prot. No. 3283 (C-160); Letter from Modus Legal Services to Agonset, 29 August 2015, Prot. No. 153/15, and attached Power of Attorney, 25 August 2015, Prot. No. 3287 (C-161); Letter from Studio Legale CMM e Associati to Agonset, 25 September 2015, Prot. No. 164/15 (C-162).
  542 Letter of invoice liquidation from the National Chamber of Private Judicial Bailiffs to the AASCP, 25 September 2015, Prot. No. 550 (C-165); Letter from Agon Channel to Rai Way, 1 October 2015, Prot. No. 151/15 (C-166); Letter from Rai Com to Agonset, 5 November 2015, Prot. No. 191/15 (C-167).
  543 Notarial Notice from the Notary Chamber of Tirana, 23 September 2015, Prot. No. 163/15 (C-163); Lawsuit against Agonset, Act No. 12464, 7 October 2015 (C-164).
  544 Letter from AASCP to Prosecutor, 29 September 2015, Prot. No. 554 (C-151).
431.
On 14 October 2014, the Prosecution responded as follows.545
In response to your note prot. no. 554 of 29 September 2015, you are hereby notified that the Court Decision includes the shares owned by the citizens under investigation Liliana Condomitti, Mauro de Renzis, Erjona Troplini in the companies subject of the seizure decision, at the moment of carrying out the criminal offence. [...]

Therefore based on the above mentioned percentages, it appears that Liliana Condomitti owns 39,8% of the shares of the “Agon Set” company and Mauro de Renzis 32% of this company’s shares meaning that both citizens under investigation Liliana Condimitti and Mauro de Renzis own 71,8% of the Agon Set company shares. (When making calculations, extracts from the National Registration Centre should once more be obtained for any possible change carried out). [...]

As above, also based on the decision No. 964 of 30 July 2015, we request to take all necessary measures for the execution of the Court decision.
432.
Throughout this time, Agon Channel Albania continued to broadcast. Although its employees had not been paid in months, the majority continued to work for free.546
433.
When Agonset sought to pay employees at bank accounts outside of Albania through Agonset.it, the employees received a message from their banks saying that these transfers were refused due to “bank policy.”547



  545 Letter from Prosecutor to AASCP, 14 October 2015, Prot. No. 14407 (C-393).
  546 Meço Statement, para. 58.
  547 Email from STB Bank to Alda Kola, 1 October 2015 (C-390).
434.
On 10 October 2015, the power at Agonset’s studios was cut.548 Agon Channel Albania ceased broadcasting on the same day.549 Agon Channel Italy continued to broadcast “re-runs” until 16 November 2015.550
435.
On 14 October 2015, the Parliamentary Commission for Communication and Means of Public Information (the “Parliamentary Commission”) voted unanimously to request an explanation from the AASCP551 and on 21 October 2015 the Chairman of the Commission wrote to the AASCP in the following terms.552
The parliamentary Commission for Education and Means of Public Information has received information concerning the serious situation created at the AGON CHANNEL television company, which being under your administration has been obliged to close down its activity. [...]

As claimed in the information obtained, it appears that it is precisely the [AASCP]’s failure to meet these legal obligations, and its freezing of the bank accounts and activity of TV AGON CHANNEL, which have made it impossible for the latter to pay its dues to the OSHEE [Electricity Distribution Operator], its employees, taxes, duties and other liabilities for the supplies necessary to carry out its activity.

Also, the claim continues that contrary to its legal obligation, the [AASCP] has not undertaken any measure to cover necessary expenses for safeguarding and administering the sequestrated assets, funds which should be met out of the funds secured by its administrators, in any kind of legal capacity or source.
436.
On 16 February 2016, the AASCP responded to a further query from the Parliamentary Commission.553 It claimed that it could not administer Agonset because it could not exercise control over the indirect shareholdings of Mr. De Renzis and Ms. Condomitti via Costruzioni and Investime, which were not named in the Seizure Decision.554
The AASCP, pursuant to the provisions of law 10192/2009 and the law “On commercial companies” cannot exercise the activity of administration, still less take decisions in the name of the owners of shares in Agonset sh.p.k. because 80% of these shares are owned by the companies Costruzioni s.r.l. and Investime te Rinovueshme sh.p.k. which are not the object of decision no. 768 dated 05.06.2015 of the Tirana Judicial District Court, and 20% are owned by Fuqi sh.p.k. whose owners are Hysni Kamberi and Arvin Kamberi who are not included in this decision […]

The AASCP, even if it had been tasked by the court with the administration of AGONSET sh.p.k., in the problematic financial circumstances in which this company finds itself from its foundation until now, would have been unable to carry on its activity, since the large losses and liabilities reflected in its financial statements could not be covered by funds from the budget.



  548 Notification from OSHEE regarding interruption of energy supply, 2 October 2015, Prot. No. 2250 (C-392).
  549 Meço Statement, para. 56; “Berisha backs Agon Channel: Rama shut it down arbitrarily,” Civitas.al, 10 October 2015 (C-131).
  550 “Agon Channel, end of broadcasts. Gone is the Albanian dream,” Affaritaliani, 16 November 2015 (C-127)
  551 Letter from the Albanian Parliamentary Commission for Education and Public Information Media, 21 October 2015 (C-114).
  552 Ibid.
  553 Letter from the AASCP to the Parliamentary Commission for Communication and Means for Public Information, Prot. No. 114/2, 16 February 2016 (C-407).
  554 Ibid.
437.
On 25 April 2016, a Tirana Court ordered Agonset be evicted from its premises.555

V.

THE PARTIES’ CLAIMS AND REQUESTS FOR RELIEF

A.

THE CLAIMANTS

438.
In their Memorial and Reply on the Merits and Counter-Memorial on Jurisdiction the Claimants sought an award:
a.
Declaring that Albania has breached its obligations under the Italy-Albania Treaty;
b.
Ordering Albania to pay monetary damages in an amount that would wipe out all the consequences of its illegal acts and re-establish the situation that would have existed if those acts had not been committed, in an amount to be determined;
c.
Ordering Albania to bear the costs of this proceeding and to reimburse the Claimants’ costs and expenses, including attorneys’ fees, in an amount to be determined in a later phase of this proceeding by such means as the Tribunal may direct;
d.
Ordering Albania to pay interest on all sums awarded based on a commercial rate, compounded annually, until full payment is received; and
e.
Ordering any such other relief as the Tribunal may consider just and appropriate in the circumstances.



  555 Notification on Tirana court website regarding eviction of Agonset, 25 April 2016 (C-419).
439.
In their Memorial, the Claimants sought damages in the amount of at least €1,038,007,000, constituted as follows.556
a.
Losses due to the expropriation of the Kalivaç Project, calculated as of June 2014: EUR 111,433,000 owing to the expropriation of the Kalivaç Project itself and EUR 1,940,000 in losses incurred by Energji;
b.
A penalty for expropriation of the Kalivaç Project, pursuant to article 29 of the amended Concession Agreement: EUR 103,200,000;
c.
Damages due to the inability of the Kalivaç Project to obtain Green Certificates because of delays caused to the Project by Albania, calculated as of January 2012, the date on which the plant would have begun to obtain Green Certificates but for Albania’s breaches: EUR 223,780,000;
d.
Damages arising from Albania’s refusal to allow Hydro to exercise its right of first negotiation on the Poçem concession, calculated as of September 2015: EUR 12,484,000;
e.
Damages to the Claimants resulting from Albania’s discriminatory refusal of the proposal to build a wind farm as of April 2009: EUR 31,988,000;
f.
Damages to the Claimants’ investment in Agonset, calculated as of March 31, 2018: EUR 394,116,000;
g.
Damages to the Claimants resulting from the criminal and extradition proceedings as well as Albania’s failure to comply with the Tribunal’s Provisional Measures Order;
h.
Pre-award interest, compounded annually, for the Claimants’ renewable energies investments, of EUR 149,065,000 at the Albanian cost of debt or EUR 116,542,000 at a rate of LIBOR plus 4%; and
i.
Moral damages resulting from Albania’s harassment and abusive criminal proceedings against the Claimants: EUR 10,000,000 (EUR 5,000,000 for Mr. Becchetti and EUR 1,000,000 for each of the remaining Claimants).



  556 Memorial, para. 662. References omitted, emphasis in the original.
440.
At the final hearing, the Claimants stated they no longer pressed item b, a sum representing a penalty under the amended Concession Agreement for expropriation of the Kalivaç Project,557 and advanced the following claims.
a.
Expropriation of the Kalivaç Project contrary to Article 5 of the BIT and failure to accord the Claimants fair and equitable treatment in relation to the project in breach of Article 2(2) of the BIT.558
b.
Costruzioni had a legitimate expectation that the Kalivaç Project would not be expropriated, and so the expropriation constituted a failure to accord Costruzioni fair and equitable treatment under Article 2(2) of the BIT. Costruzioni thereby lost its share of the profits that Energji would have made in completing the project.559
c.
In failing to consider Energji’s application to build a transmission cable between Albania and Italy,560 Albania failed to accord fair and equitable treatment to, and discriminated against, Costruzioni, in breach of Article 2(2) of the BIT.561 Costruzioni thereby lost the value of its share of that potential asset.
d.
In failing to respect Hydro’s asserted right of first negotiation for a concession agreement to build a power plant at Poçem, contrary to Hydro’s legitimate expectations, Albania failed to accord Hydro fair and equitable treatment in breach of Article 2(2) of the BIT. Albania also discriminated against Hydro in favour of a Turkish consortium, in breach of Article 3 of the BIT. Hydro thereby lost the value of that potential investment.562
e.
Albania discriminated against Costruzioni and Liliana Condomitti in breach of Articles 2 and 3 of the BIT by refusing to consider Energji’s request to build a wind farm.563 Those Claimants thereby lost their share of the value of that potential asset.
f.
Albania’s failure to approve Energji’s application to build a transmission cable and contributing to delays in the Kalivaç Project were contrary to Hydro’s legitimate expectations and led to Hydro not being able to meet the deadline for obtaining the Green Certificates.564
g.
Claims relating to Agonset:
i.
Albania’s criminal and tax measures to seize the Claimants’ assets and freeze their accounts in relation to Agonset were unlawful and constituted expropriation contrary to Article 5 of the BIT.565
ii.
Those criminal and tax measures, as well as Agonset’s exclusion from the digital licensing process, were arbitrary, unjust, discriminatory and unfair, constituting a failure to provide fair and equitable treatment, in breach of Article 2(2) of the BIT, and constituting a breach of Article 3 of the BIT.566566



  557 Hearing, Day 1, T85.1-T86.8; T87.6-T87.15; T120.12-T121.1.
  558 Claimants’ closing presentation, slides 34-45.
  559 Ibid, slide 62.
  560 See section IV.D(2) above.
  561 Claimants’ closing presentation, slides 66-72.
  562 Ibid, slides 73-76.
  563 Ibid, slides 77-81. See also section IV.E above.
  564 Claimants’ closing presentation, slides 82-86. See paras. 207 and 208 above.
  565 Claimants’ closing presentation, slides 92-116.
  566 Ibid, slides 117-131.
441.
In their closing presentation, the Claimants summarised their claims and the amount sought in relation to each as follows.
[TABLE UNAVAILABLE - SEE ORIGINAL PDF]

B.

THE RESPONDENT

442.
In its Rejoinder on the Merits,567 the Respondent invited the Tribunal, if it determined that it had jurisdiction over one or more of the Claimants and/or their claims, to dismiss each and every such claim advanced by each such Claimant, and award the Respondent its costs of the proceedings. The Respondent maintained this position at the final hearing.568

VI.

JURISDICTION

443.
In its Counter-Memorial and Objections to Jurisdiction, the Respondent summarised its objections to the Tribunal’s jurisdiction and the admissibility of the Claimants’ claims as follows.569
(a)
There is no valid arbitration agreement; the offer of arbitration in the Italy-Albania Bilateral Investment Treaty (“BIT”) does not extend to multiple claimants.
(b)
Assets held indirectly by a Claimant are not “Investments” made by an “Investor” under the BIT.
(c)
The arbitration was not validly commenced.
(d)
The BIT does not protect the mere passive holding of assets.
(e)
The claims are an abuse of right / involve no qualifying investment because of the circumstances in which the alleged “investments” were acquired.
(f)
A number of the claims brought by the Claimants are in respect of alleged “investments” not made in Albania at all.
(g)
A number of the claims brought by the Claimants are: (i) on analysis claims which ought to have been addressed in the first instance to the ICC tribunal; and/or (ii) claims already submitted to the Albanian courts.
(h)
Various “projects” about which the Claimants complain do not constitute an “investment”.



  567 Rejoinder on the Merits, p. 221.
  568 Closing Note of the Respondent, p. 1, fn. 1.
  569 Counter-Memorial on the Merits and Objections to Jurisdiction, para. 6.
444.
With the exception of the claim for penalties under the Concession Agreement they withdrew at the final hearing, the Claimants continued to assert that the Tribunal had jurisdiction to hearing their claims and that all of those claims were admissible.

A.

WHETHER THERE IS AN AGREEMENT TO ARBITRATE

(1)

The Parties’ Positions

a.
The Respondent’s Position
445.
The Respondent asserts that the BIT does not allow for multiple claimants to claim in relation to multiple disputes. It does so primarily on the basis that, on its analysis, the language of the BIT indicates only one investor is envisaged, bringing a single dispute. The Respondent also asserts that this interpretation is supported by the following statement in Tulip Real Estate :570
[…] consent is the cornerstone of all international treaty commitments and that here the provisions of the BIT qualify the state sovereignty of Turkey. Here, Article 8 is a specific and qualified derogation to Turkey’s sovereign immunity and the Tribunal accepts that in its interpretation and application there is an inertia against too expansive a construction of the reach of the BIT.
446.
On the Respondent’s reading of the BIT, where the drafters intended to refer to investors generally, the plural is used.571 Where, however, the BIT is referring to the specific circumstance of a claim being made, such as Article 8,572 the singular is used. Article 8 reads as follows.
1.
Any dispute relating to investments arising between an investor and the other Contracting Party, including disputes over compensation for expropriation, nationalization, requisition, and similar measures, should be resolved amicably wherever possible.
2.
If such disputes cannot be resolved amicably within 6 months of the date of the request sent in writing, the concerned investor may, at its discretion, refer them:
a)
to the competent court, and to the successive levels of jurisdiction, of the Contracting Party in whose territory the investment was made;
b)
to an Arbitration Tribunal established on a case by case basis. Arbitration will be conducted according to the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) as set forth in UN General Assembly Resolution No. 31/98 of December 15, 1976, or according to a subsequent UN Regulation agreed by the Contracting Parties.

There will be three Arbitrators and, if not citizens of the Contracting Parties, must be citizens of a Country that has diplomatic relations with the Contracting Parties.

If necessary, the President of the Arbitration Institute of the Stockholm Chamber of Commerce, or another President of an Arbitration Institute chosen by common agreement, will be asked to appoint the arbitrators in accordance with the aforementioned Regulation. The place of arbitration will be Stockholm, unless otherwise agreed to by the parties in dispute.

The reconciliation procedures recommended by this same UN Commission may also be followed.
c)
to the International Center for Settlement of Investment Disputes (ICSID) for the application of the arbitration and reconciliation procedures set forth in the Washington Convention on Settlement of Investment Disputes between States and Nationals of Other States of March 18, 1965 as soon as the Contracting Parties have both validly ratified it, or the rules of the additional “mechanisms” for the settlement of arbitration at the aforementioned International Center.

Pursuant to Article 25 of the Washington Convention of March 18, 1965 and as of the date on which it becomes applicable for both Contracting Parties, companies legally holding the nationality of one Contracting Party involved in the dispute, but with the majority of capital owned by investors of the other Contracting Party or of another Third Party, shall be considered as holding the latter's nationality;
d)
the recognition and enforcement of the arbitration ruling in the territory of the Contracting Parties will be governed by the respective national legislation in accordance with the International Conventions to which they are a party. The arbitration awards shall be binding and final;
e)
A Contracting Party that is a party to a dispute may not, at any stage of the proceedings resulting from investment disputes, claim immunity from jurisdiction in its defense because the investor has received compensation from insurance policies entered into to partially or totally cover losses or damages suffered.



  570 Tulip Real Estate Investment and Development Netherlands BV v. Turkey (ICSID Case No. ARB/11/28), Decision in Bifurcated Jurisdictional Issues, 5 March 2013, para. 44 (RL-0035) (emphasis added by the Respondent).
  571 Reply on Jurisdiction, para. 9, referring to Articles 2 to 4 and 5(2); and see Counter-Memorial and Objections to Jurisdiction, para. 15.
  572 The Respondent also relies on: Article 7, which refers to the singular “investor” in the context of a particular investor having been given an insurance guarantee on which payments have been made (Reply on Jurisdiction, para. 9(b)); and Article 5(3), which also refers to “the investor” in the context of a particular disagreement arising between an investor and a Contracting Party and being resolved according to Article 8’s procedures (Reply on Jurisdiction, para. 9(c)).
447.
The Respondent emphasises the references to “an investor”, in Article 8(1), “the concerned investor […] at its discretion” in the chapeau to Article 8(2) and “the investor” in Article 8(2)(e).573 According to the Respondent, this contrast between the language used in the general and specific cases reflects a conscious drafting choice which can only be explained by an intention to limit the Republic of Albania’s consent to arbitrate to claims brought, in each case, by a single investor.574



  573 Counter-Memorial and Objections to Jurisdiction, paras. 12-14;
  574 Counter-Memorial and Objections to Jurisdiction, para. 15; Reply on Jurisdiction, paras. 11-12.
448.
The Respondent also asserts that the language of the BIT and the Convention similarly limits consent to the arbitration of a single dispute, relying on the following text.575
a.
Article 8(1) of the BIT refers to “dispute” in the singular.
b.
One of the options is to refer a dispute to an arbitration board under UNCITRAL Rules established on a case by case basis.
c.
The provision regarding ICSID arbitration, Article 8(2)(c), refers to “the dispute”.
d.
Neither the UNCITRAL Rules 1976 nor the ICSID Convention (referred to in Articles 8(2)(b) and (c) respectively) provide for consolidation of disputes. They instead envisage that, absent consent, disputes will be resolved in separate proceedings.
e.
The requirement that there be a single dispute is also present in the ICSID Convention: see Article 25(1). Further, Article 25(2) ICSID Convention also refers to “dispute” in the singular.
449.
The Claimants, on the Respondent’s case, are impermissibly attempting to bring multiple disputes because their claims “involve different alleged investments, allege different types of wrongdoing at different times and arise (allegedly) as a result of different State measures by different alleged emanations of the State” and because “not every Claimant [...] relies on the same provisions of the BIT.”576
450.
Given that consolidation would not be permitted if the claims were brought separately, the Respondent further asserts that it is prejudiced as:
a.
it has lost the opportunity to select an arbitrator particularly suited to each of these different disputes;577
b.
the Claimants are impermissibly seeking a forensic advantage by seeking “to muddy the waters and make proper analysis as difficult as possible”,578 including by attempting to “pollute the Tribunals’ [sic] consideration of issues in respect of one dispute (for example, that relating to the Kalivac project) with prejudicial allusions to what is relied upon in respect of other unrelated disputes (such as Agonset).”579



  575 Counter-Memorial and Objections to Jurisdiction, para. 17; Reply on Jurisdiction, paras. 27-31.
  576 Reply on Jurisdiction, para. 30.
  577 Counter-Memorial and Objections to Jurisdiction, para. 38; Reply on Jurisdiction, para. 32(b)(i).
  578 Reply on Jurisdiction, para. 32(b)(ii).
  579 Ibid, para. 32(b)(iii).
451.
Finally, the Respondent asserts that the decisions in which tribunals have permitted multiple claimants to bring their claims in one arbitration on which the Claimants rely580 ought not be followed and are, in any event, distinguishable from the present case. The Respondent urges the Tribunal instead to follow a recent decision in which a distinguished PCA tribunal held that it did not have jurisdiction in respect of claims against Turkmenistan by a number of claimants in respect of a variety of investments that the multiple claimants sought to advance as one arbitration.581
452.
As to whether the Abaclat and Ambiente decisions should be followed, the Respondent contends that both had very strong dissents,582 one of which focused on the need to give effect to the use of “investor” in the singular.583 The reasoning of each majority in those cases differs from the other,584 that reasoning has been criticised,585 and neither has yet been followed.586 Further, none of these cases has yet resulted in a final award, and so none has been subject to the scrutiny of an annulment panel.587



  580 Ambiente Ufficio S.P.A. and others v. Argentine Republic, (ICSID Case No. ARB/08/09), Decision on Jurisdiction and Admissibility, 8 February 2013 (CL-112) (“Ambiente”); Giovanni Alemanni and others v. Argentine Republic, (ICSID Case No. ARB/07/8), Decision on Jurisdiction and Admissibility, 17 November 2014 (CL-114) (“Alemanni”); Abaclat and others v. Argentine Republic, (ICSID Case No. ARB/07/5), Decision on Jurisdiction and Admissibility, 4 August 2011 (CL-111) (“Abaclat”); Guaracachi America, Inc. and Rurelec PLC v. Plurinational State of Bolivia, PCA Case No. 2011-17, Award, 31 January 2014 (CL-182) (“Guaracachi”).
  581 Case Report by Luke Eric Peterson, Investment Arbitration Reporter, 23 June 2015 (RL-103) (“PCA decision”).
  582 Reply on Jurisdiction, para. 16.
  583 Santiago Torres Bernádez’s dissent in Ambiente, para. 84ff.
  584 Counter-Memorial and Objections to Jurisdiction, para. 28(c).
  585 Reply on Jurisdiction, para. 16.
  586 Counter-Memorial and Objections to Jurisdiction, para. 28(c).
  587 Reply on Jurisdiction, para. 16.
453.
Even if the Tribunal were to follow the reasoning in the decisions on which the Claimants rely, the Respondent asserts that it would not apply here because the claims being brought are so disparate. The Respondent relies on the following analysis of the authorities to support its contention.
454.
First, the Respondent asserts that the language of the relevant BIT in Ambiente, Alemanni and Abaclat, between Italy and Argentina, is materially different. That BIT refers within the Article containing consent to arbitration to “investor” and “investors” interchangeably.588 As outlined in paragraph 447 above, on the Respondent’s analysis, the Italy-Albania BIT only uses the plural to describe general provisions, and not to deal with a specific claim brought by an investor.
455.
Second, the Respondent asserts that the decisions on which the Claimants rely require a close similarity, even identity, of: the interests for which a group of claimants seeks protection in a single arbitration; the alleged breaches of which the claimants complain; and the subject matter covered by the claims.589
a.
In Alemanni, the Tribunal found that “the interest represented on each side of the dispute has to be in all essential respects identical for all of those involved on that side of the dispute.”590
b.
In Abaclat, the majority considered the relevant question to be “whether Claimants have homogeneous rights of compensation for a homogeneous damage caused to them by potential homogeneous breaches by Argentina of homogeneous obligations provided for in the BIT.”591
c.
The Tribunal in CMS v. Argentina,592 although not concerned with an arbitration brought by multiple claimants, nevertheless addressed objections to jurisdiction on the basis that more than one dispute was being brought.593 It found that “As long as they affect the investor in violation of its rights and cover the same subject matter, the fact that they may originate from different sources or emerge at different times does not necessarily mean that the disputes are separate and distinct.”594
d.
In Guaracachi, the two claimants were parent and subsidiary companies, and the Tribunal found that a single arbitration could be brought “given the obvious link between both claimants and the identity of the facts alleged”.595 The claims by the two claimants were found to be “in essence one and the same claim”.596



  588 Counter-Memorial and Objections to Jurisdiction, para. 27. The relevant consent to arbitration is also contained in Article 8 of the Italy-Argentina BIT, an unofficial translation of which can be found at para. 270 of Abaclat.
  589 Counter-Memorial and Objections to Jurisdiction, para. 37; Reply on Jurisdiction, paras. 28-31.
  590 Alemanni, para. 292 (CL-114).
  591 Abaclat, para. 541 (CL-111).
  592 CMS Gas Transmission Company v. Argentina, ICSID Case No. ARB/01/8, Decision on Objections to Jurisdiction, 17 July 2003 (CL-144) (“CMS”).
  593 Ibid, para. 90.
  594 Ibid, para. 109 (Respondent’s emphasis).
  595 Guaracachi, para. 340 (CL-182).
  596 Ibid, para. 345.
456.
The Respondent asserts that the Claimants’ claims cannot satisfy these requirements because they “relate to different purported investments in different industries (hydroelectric energy, wind energy, media) which are subject to different Albanian laws involving different Albanian entities and involve different factual inquiries. The alleged breaches of the BIT are said to have happened in different ways and at different times.”597
457.
Further, not each investor has an interest in each investment, as can be seen from the table reproduced in paragraph 441 above.
b.
The Claimants’ Position
(i)
Whether the BIT provides consent for arbitration by multiple claimants
458.
The Claimants begin598 by pointing out that Article 31 of the Vienna Convention provides that the BIT must be “interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”599



  597 Counter-Memorial and Objections to Jurisdiction, para. 36.
  598 Rejoinder on Jurisdiction, para. 12.
  599 Vienna Convention on the Law of Treaties, concluded on 23 May 1969 (CL-242), Article 31.
459.
According to the Claimants, the plain language of Article 8 of the BIT makes it clear that it was intended to apply to multiple investors. The title, “Settlement of disputes between Investors and one of the Contracting Parties”, refers to investors in the plural and a singular Contracting Party.600
460.
The singular and plural are used, on the Claimants’ account, interchangeably throughout the BIT.601 The Claimants assert that the Respondent’s distinction between use in the BIT of the plural and singular to refer to general and specific cases should be rejected as having no basis in the text of the BIT, its object or purpose, or authority.602 In any event, the Claimants assert that the use of the plural in Article 8’s title indicates that it was intended to be a general provision and not limited to the specific situation of an investor.603
461.
As to the object and purpose of the BIT, the Claimants point out that its stated purpose is “to create favourable conditions for greater economic cooperation between the two Countries and, in particular, for investments by investors of one Contracting Party in the territory of the other Contracting Party”.604 The Claimants also point out that the BIT specifically covers types of investment likely to involve multiple investors, such as stocks, bonds and exploration of natural resources.605 The stated purpose of the BIT could not, therefore, be furthered by permitting only one investor at a time to bring a claim, fragmenting proceedings, multiplying costs and risking contradictory rulings.606



  600 Ibid, para. 13.
  601 Reply on the Merits and Counter-Memorial on Jurisdiction, para. 253.
  602 Rejoinder on Jurisdiction, para. 14.
  603 Ibid, para. 15.
  604 Preamble to the BIT, quoted at Rejoinder on Jurisdiction, para. 18.
  605 Reply on the Merits and Counter-Memorial on Jurisdiction, para. 256, referring to Articles 1(1)(b) and 1(1)(e) of the BIT, and para. 258, referring to Abaclat, para. 490 (CL-111).
  606 Rejoinder on Jurisdiction, para. 19.
462.
The Claimants also assert that this reading of the BIT is supported by authority and international practice. Multiparty arbitration is, on the Claimants’ account, commonplace in ICSID arbitration and there is no need for specific consent beyond that ordinarily given.607 The Claimants also rely on Alemanni, in which the Tribunal found that there was no justification for reading “but only one” investor into the text of the Italy-Argentina BIT (which also refers to an investor in the singular) or to take even the exclusive use of the singular to exclude multiparty arbitration.608
463.
The Claimants assert that the Respondent’s attempts to distinguish the decisions in Ambiente, Alemanni and Abaclat on the basis that the Italy-Argentina BIT being interpreted in those decisions differs to the Italy-Albania BIT must fail. On the Claimants’ argument, the arbitration clauses in the two are materially the same, as both refer to “investors” in the plural in their title and “investor” in the singular in the body of the Article.609 The tribunals in all three of the bondholder decisions found that multiparty arbitration is permissible.
464.
As to the PCA decision on which the Respondent relies, the Claimants assert that it in fact supports their position. In that decision, the tribunal acknowledged that several claimants can join their claims in one proceeding where there are common linkages between the claims but declined jurisdiction because the claims were “entirely unrelated.” The Claimants contend that this is not the case here, for the reasons that the Claimants assert there is only one dispute before the Tribunal (summarised in the next section).610
(ii)
Whether the claims are within jurisdiction
465.
The Claimants respond in two ways to the Respondent’s assertion that the Tribunal lacks jurisdiction over the claims because multiple disputes are sought to be arbitrated.



  607 Reply on the Merits and Counter-Memorial on Jurisdiction, para. 255, referring to: Ambiente, para. 141; Guaracachi, para. 343 (CL-182); C. Schreuer, The ICSID Convention, A Commentary, Cambridge University Press, 2nd ed., 2009, pp. 162-163 (CL-004 bis). See also Rejoinder on Jurisdiction, para. 20.
  608 Alemanni, paras. 270-271 (CL-114).
  609 Rejoinder on Jurisdiction, para. 23.
  610 Ibid, para. 28.
466.
First, they assert that the BIT permits multiple disputes to be arbitrated, relying on Article 8(2) stating that if “such disputes” cannot be amicably resolved within 6 months the concerned investor may refer “them” to arbitration. Doing so is consistent with the purpose of the BIT, as it avoids unnecessary cost and allows investors to dispose of their disputes with the State in an expeditious fashion.611 The Claimants assert that the Respondent’s reliance on Abaclat and Alemanni in this context is misplaced. Whilst those tribunals found that only a single dispute could be brought under the Italy-Argentina BIT, the Claimants assert that the language of the arbitration provision in that BIT refers to a single “dispute”. The Claimants therefore assert that those decisions are not relevant when interpreting the Italy-Albania BIT.612
467.
Second, the Claimants assert that they are seeking to have several claims arbitrated but only one dispute, being “Albania’s campaign of destruction against Mr. Becchetti, his companies, and associates.”613 The Claimants contend that the authorities permit all of the claims brought to be considered in one arbitration, emphasising that “dispute” has been broadly defined as a “disagreement on a point of law or fact, a conflict of legal views or interests between” parties.614 A dispute is therefore a broader concept than a claim,615 and so “the fact that [the claims] may originate from different sources or emerge at different times does not necessarily mean that the disputes are separate and distinct.”616
468.
The Claimants accept that the CMS decision requires claims to share the same subject matter if they are to constitute one dispute.617 They assert that the claims being brought here do so. Further, the reason the claims are brought together is said to be the following:618
Several claimants have interests in multiple investments. For example, Mr. Becchetti has interests in claims related to Agonset as well as those related to Hydro, another Claimant in this arbitration; Ms. Condomitti has interests in claims related to Agonset, Hydro, and the Costruzioni companies (Energy, Cable System, 400 KV, and Rener); and Mr. De Renzis has an interest in the claims of Agonset and Rener. These investments have been the target of a concerted campaign of destruction on behalf of the Government of Albania. In order to avoid unnecessary costs and the risk of contradictory decisions, therefore, it is only logical to adjudicate all claims in one proceeding.



  611 Ibid, para. 33.
  612 Ibid, para. 34-35.
  613 Ibid, para. 38.
  614 Mavrommatis Palestine Concessions, PCIJ, Judgment No. 2, 30 August 1924, p. 11 (CL-133).
  615 Vestey Group Ltd v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/06/4, Award, 15 April 2016, para. 151 (CL-188).
  616 CMS, para. 109 (CL-144).
  617 Rejoinder on Jurisdiction, para. 40.
  618 Ibid, para. 41 (footnotes omitted).
469.
Finally, the Claimants assert that there can be no prejudice to Albania in all claims being addressed in this arbitration. Albania will face these claims either separately or together, and will enjoy the same cost benefits as the Claimants if all claims are heard together.619 Contrary to Albania’s assertions, the Claimants contend that no particular expertise is required to determine the issues of fact raised in each claim.620 The Claimants also deny that there has been any attempt to “muddy the waters” as to which Claimant has suffered what loss in relation to each alleged breach. The Claimants point out that they provided in their Memorial a detailed table showing the interest of each investor in each investment,621 and that in any event those matters go only to the issue of how any award of damages should be allocated between the Claimants.622

(2)

The Tribunal’s Analysis

470.
The Respondent is right to point out that too expansive a construction is not to be given to consent, following the decision in Tulip Real Estate,623 and that the burden lies with the Claimants to show that the Tribunal has jurisdiction.624
471.
It is also trite to observe that, following Article 31 of the Vienna Convention, the BIT must be “interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”625
472.
When the relevant terms of the BIT are examined, there is some force in the Respondent’s analysis of the use of the singular and plural of “investor” throughout the BIT.626 However, that analysis cannot bear the weight that the Respondent’s arguments require it to. As the Claimants point out, the plural “investors” is used in the heading of Article 8. More significantly, the BIT specifically covers types of investment likely to involve multiple investors, such as stocks, bonds and exploration of natural resources.627 The use of the singular “investor” in Article 8, on which the Respondent relies, must be read in this context. The Tribunal therefore respectfully agrees with the reasoning of the Tribunal in Alemanni that there is no justification for reading into the Article the words “but only one”. For the reasons given by the Claimants, the relevant treaty in that decision is certainly sufficiently similar to assist the Tribunal in its interpretation of the BIT.628 The Tribunal’s finding is further supported by the fact that, as Professor Schreuer points out, multiparty arbitration is commonplace in ICSID arbitration and there is no need for specific consent beyond that ordinarily given.629



  619 Ibid, para. 42.
  620 Ibid, para. 43-44.
  621 Reproduced in section II.A above.
  622 Rejoinder on Jurisdiction, para. 45.
  623 Tulip Real Estate Investment and Development Netherlands BV v. Turkey (ICSID Case No. ARB/11/28), Decision in Bifurcated Jurisdictional Issues, 5 March 2013, para. 44 (RL-0035).
  624 ICS Inspection and Control Services Limited v. The Argentine Republic, PCA Case No. 2010-9, Award on Jurisdiction, 10 February 2012, para. 280 (CL-172).
  625 Vienna Convention on the Law of Treaties, concluded on 23 May 1969 (CL-242), Article 31.
  626 Summarised in paras. 446-448 above.
  627 Articles 1(1)(b) and 1(1)(e) of the BIT, and see Abaclat, para. 490 (CL-111).
  628 The Tribunal does not find the Respondent’s suggestion that the bondholder cases have been controversial of assistance in determining what weight to accord the reasoning in those decisions, which of course stands or falls on its own merits.
  629 C. Schreuer, The ICSID Convention, A Commentary, Cambridge University Press, 2nd ed., 2009, pp. 162-163 (CL-004 bis).
473.
As there is no bar to multiple investors bringing a claim under the BIT, the question becomes:
a.
whether the BIT permits more than one dispute to be brought in a single arbitration; and / or
b.
whether the relationship between the various claims brought by the Claimants is such that they constitute one dispute.
474.
As the Tribunal has found, for the reasons that follow, that the claims do constitute one dispute it is not necessary to address the first question and the Tribunal does not do so.
475.
The parties agree, and the authorities establish, that there must be some linkage between different claims if they are to be brought in one arbitration.630 There is less agreement in the authorities as to how that linkage is to be expressed, as the summary of the parties’ contentions above demonstrates. The Tribunal accepts that there must be a common thread or common elements running through the various claims. However, any attempt to lay down, in the abstract, principles of general application regarding how closely those claims must be related is unlikely to be useful.631 The Tribunal respectfully agrees with the observation made in CMS v. Argentina that “the fact that [the claims] may originate from different sources or emerge at different times does not necessarily mean that the disputes are separate and distinct.”632



  630 Reply on the Merits and Counter-Memorial on Jurisdiction, paras. 27-31; Rejoinder on Jurisdiction, paras. 38-40.
  631 A view also taken by the majority in Ambiente at para. 154 (CL-112).
  632 CMS, para. 109 (CL-144).
476.
The gravamen of the Respondent’s complaint is that:
a.
not all investors have an interest in each investment the subject of a claim; and
b.
the claims “relate to different purported investments in different industries (hydroelectric energy, wind energy, media) which are subject to different Albanian laws involving different Albanian entities and involve different factual inquiries. The alleged breaches of the BIT are said to have happened in different ways and at different times.”633
477.
Regarding the first, there is significant overlap in the holdings of the various Claimants, as can be seen from the table reproduced in paragraph 441 above and the Claimants’ submissions extracted in paragraph 468 above.
478.
Regarding the second, there are significant interrelationships between the investments over which the Tribunal finds it has jurisdiction,634 such as the relationships between the Kalivaç Project, Energji’s lost profits, the submarine transmission cable and the Green Certificates.635 Further, aspects of the tribunals’ decisions in Abaclat, Ambiente and Funnekotter 636 are of assistance here. In each of those decisions, the tribunals emphasised that the only relationships (or disparities) that are relevant are those that relate to the treaty claims being advanced.637 Thus, differences between the contractual relationships of each of the claimants in the bondholder cases were found to be relevant only to contractual claims that might be brought by the claimants, and not to their treaty claims.638



  633 Counter-Memorial and Objections to Jurisdiction, para. 36.
  634 The Tribunal has found, as set out in section VI.H below, that is does not have jurisdiction over the claims concerning Energji’s request to build a wind farm.
  635 As explained in sections IV.A(2), IV.C(1) and IV.D(2) above.
  636 Bernardus Henricus Funnekotter and others v. Zimbabwe, ICSID Case No. ARB/05/6, Award, 22 April 2009 (CL-161) (“Funnekotter”).
  637 Abaclat, paras. 541-542 (CL-111); Ambiente, paras. 161-162 (CL-112), and see Funnekotter, paras. 94-95 (CL-161).
  638 Abaclat, paras. 541-542 (CL-111); Ambiente, paras. 161-162 (CL-112).
479.
Viewed in light of this analysis, the Respondent’s complaint that the claims relate to different industries subject to different Albanian laws and entities involving different factual enquiries does not necessarily mean that they cannot constitute a dispute grounding jurisdiction under the BIT. The question is whether there is a sufficient link between the treaty claims that are being brought.
480.
When the Claimants’ complaints and the factual narrative that emerges from the evidence are viewed as a whole, the Tribunal finds that a sufficient relationship does emerge. The Tribunal emphasises that this finding is based on the very particular set of facts (and particular allegations as to how the Claimants have been harmed by the measures of which they complain) with which it has been presented.
481.
It would, for example, be highly artificial to attempt to disentangle the effects of the State measures of which the Claimants complain on each investment given the allegation that those measures constitute a campaign against the group of Claimants as a whole. There is no doubt that the criminal investigations, seizure orders, arrest warrants and criminal charges which the Claimants allege constitute part of this campaign are predicated on a conspiracy that involves all of the Claimants and their investments to varying degrees. So much is apparent from the recitation of facts in section IV.J above, and in particular the factual allegations that based the Arrest Warrants,639 and the effect of the Seizure Decision on all of the Claimants’ investments.640



  639 As described in paragraphs 393-398 above.
  640 As described in paragraphs 429-437 above.
482.
The allegations made by the Claimants are therefore relevantly common and the issues raised by the various claims are sufficiently intertwined to demonstrate that the claims constitute one dispute for the purposes of Article 8. The Claimants also seek the same relief, namely indemnification under the BIT for the acts allegedly committed by the Respondent.641

B.

WHETHER INDIRECT INVESTORS ARE PROTECTED BY THE BIT

(1)

The Parties’ Positions

a.
The Respondent’s Position
483.
As can be seen from Annex A to the Memorial, extracted in section II.A above, a number of the Claimants are making claims in relation to assets in which they hold an indirect interest. As the Respondent points out, the Annex shows a series of indirect investments via a number of intermediaries, some of which are themselves Claimants. Frequently, the chain between Claimant and purported investment involves several layers of (at times) minority shareholdings, meaning that the purported “investor” does not control the chain of companies.642
484.
The Respondent asserts that the language of the BIT does not permit claims to be brought by a party who has indirectly invested in Albania. It does so on the basis of the language of Articles 1(1) and 1(2), which respectively relevantly provide as follows.
“Investment” means, independently of the selected legal form and legal system of reference, every asset invested by investors of one Contracting Party in the other’s territory in compliance with the latter’s laws and regulations.

“Investor” means an individual or a legal entity of a Contracting Party who, having obtained every required administrative approval, has undertaken, undertakes or has assumed an irrevocable obligation to make investments in the territory of the other Contracting Party, in compliance with the latter’s laws and regulations.



  641 See paragraph 438 above.
  642 Counter-Memorial and Objections to Jurisdiction, para. 42.
485.
The Respondent draws the following points from the following specific aspects of those definitions.643
(a)
An “Investment” under the BIT means “every asset invested by” an “Investor”. That contemplates […] that the investor has itself made the investment (and not via an intermediary company) […].
(b)
An Investment is one that is made “in the territory of the other Contracting Party.” That strongly suggests that if a shareholding is to constitute an investment, it must be an investment in an Albanian company that is said to constitute the investment.
(c)
The definition of “Investor” in Article 1(2) provides that in order to qualify, the putative “investor” must have undertaken irrevocable obligations and obtained every necessary administrative approval to make investments in Albanian territory and in accordance with its laws and regulations. That wording plainly envisages that the putative investor will itself have entered into such obligations and/or itself obtained the necessary authorisations. It also importantly envisages that the Investor will itself have actually made the investment in the other Contracting Party's territory. The only way this can sensibly be understood, when applied to Article 1(1)(a) of the BIT, is that in order for an Investor “to make” an investment in the shares of an Albanian company, it has to hold those shares itself and not via an intermediate subsidiary.
(d)
Likewise, the reference in Article 6 to an Investor having complied with tax requirements of the relevant country as a precondition to being able to transfer funds in exchangeable currency presupposes a direct link between the investor and the country in which the investment is to be made.
(e)
Article 1(1)(a) of the BIT does not contain the wording that one sometimes sees in investment treaties, viz. that an investment covers assets held or controlled “directly or indirectly” […].



  643 Ibid, para. 46.
486.
The Respondent asserts that the language it emphasises therefore demonstrates that the BIT was not intended to apply to indirect investments. In particular, the Respondent asserts that Article 1(2) requires that a putative investor “undertake an irrevocable obligation to make investments in Albanian territory.”644 On this basis, the Respondent asserts that even if, in principle, an indirect shareholder could qualify as an investor in respect of its shareholding in an Albanian subsidiary, that shareholder would still need to demonstrate that it had undertaken an irrevocable obligation to make investments in Albania. As none of the Claimants has done so, jurisdiction is lacking on that ground alone.645
487.
The Respondent contends that this reading is supported by the decision of the tribunal in Berschader v. Russia 646 and at least left open by the decision in Standard Chartered Bank.647 In Berschader, the tribunal distinguished decisions on which the claimants in that case sought to rely (which overlap with the decisions on which the Claimants in this proceeding seek to rely to the same end) as showing indirect investments were covered by the treaty. It did so on the basis that the tribunals in those other authorities were not confronted with the scenario in Berschader that “the sole claimants are foreign shareholders in a foreign incorporated company seeking to rely upon the terms of a BIT without having made any direct investment on their own part.”648 It therefore concluded that the relevant BIT could not be presumed to encompass “the kind of indirect investment relied on in the case.”649
488.
In contrast, the Respondent asserts that the decisions on which the Claimants rely should be distinguished from the present case for the following reasons.650
a.
In AMPAL v. Egypt,651 the relevant treaty expressly provided that the definition of “own or control” for the purposes of investment included “ownership or control that is direct or indirect, including ownership or control exercised through subsidiaries or affiliates”.
b.
Though the treaty being interpreted in European American Investment Bank v. Slovak Republic 652 did have a reference to investing in the territory of the host State, and investment in accordance with local laws, it did not have the further provision that the investor had to have undertaken an irrevocable obligation to make an investment in the host State territory.
c.
Mobil v. Venezuela 653 concerned a claim by a Dutch holding corporation and four wholly owned subsidiaries, located either in Delaware or the Bahamas. The tribunal held that there was no doubt that the ultimate holding company controlled the subsidiaries. The Venezuela-Netherlands BIT did not contain a restriction in the definition of “investment” that it be made in the territory of Venezuela, a point that the tribunal noted in its discussion of the “direct/indirect investment”.654
d.
In Kardassopoulos v. Georgia,655 the treaty wording differed, and the issue was considered only briefly by the tribunal, the focus of the respondent’s argument having been on whether in fact the claimant had established the existence of the investment on which he relied.
e.
In Noble Energy v. Ecuador,656 the tribunal considered that Noble Energy, a Delaware entity, did have jus standi to bring a claim under the Ecuador-USA BIT. The wording of that treaty is materially different to the Albania-Italy BIT before this Tribunal. Further, the facts are different: the relevant subsidiary, Michala Power CIA Ltda, was wholly owned by the ultimate holding company claimant, Noble Energy Inc. Further, Ecuador had signed an investment agreement with an entity in the corporate chain that was higher than Michala Power CIA Ltda.



  644 Reply on Jurisdiction, para. 40(a), emphasis in the original.
  645 Ibid, para. 43(b).
  646 Berschader v. Russia (SCC Case 080/2004), Award, 21 April 2006 (RL-0036) (“Berschader”).
  647 Standard Chartered Bank v. Tanzania (ICSID Case No ARB/10/12), Award, 2 November 2012, para. 240 (RL-0037).
  648 Berschader, para. 135 (RL-36).
  649 Ibid.
  650 Reply on Jurisdiction, para. 42 and 44.
  651 Ampal-American Israel Corporation and others v. Arab Republic of Egypt, ICSID Case No. ARB/12/11, Decision on Jurisdiction, 1 February 2016, para. 342 (CL-187).
  652 European American Investment Bank AG v. The Slovak Republic, PCA Case No. 2010-17, Award on Jurisdiction, 22 October 2012 (CL-176).
  653 Mobil Corporation, Venezuela Holdings, B.V. and others v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010 (CL-110) (“Mobil”).
  654 Ibid, para. 163.
  655 Ioannis Kardassopoulos v. Georgia, ICSID Case No. ARB/05/18, Decision on Jurisdiction, 6 July 2007 (CL-108) (“Kardassopoulos”).
  656 Noble Energy Inc. and Macalapower Cia. Ltda. v. Republic of Ecuador, ICSID Case No ARB/05/12, Decision on Jurisdiction, 5 March 2008 (CL-121) (“Noble”).
489.
The Respondent also relies657 on the policy concerns raised by the Tribunal in Noble, agreeing with the comments made by the Tribunal in Enron v. Argentina that:658
the Argentine Republic has rightly raised a concern about the fact that if minority shareholders can claim independently from the affected corporation, this could trigger an endless chain of claims, as any shareholder making an investment in a company that makes an investment in another company, and so on, could invoke a direct right of action for measures affecting a corporation at the end of the chain.
490.
On this basis, the Respondent contends that the Tribunal should analyse the language of the BIT in the context of the real difficulties of overlapping, multiple claims to which allowing claims by indirect shareholders give rise, and find it lacks jurisdiction because:659
a.
none of the Claimants have established that they undertook an irrevocable commitment to make an investment in Albanian territory;
b.
the BIT does not extend to indirect investments; and
c.
even if it did, the relevant Claimants would need properly to identify the investments which they claim were theirs and identify why, given the intervening corporate structure, the assets count as their investment.
b.
The Claimants’ Position
491.
The Claimants assert that the BIT covers indirect investments, including those on which the Claimants rely. They do so primarily on the basis that there is no reference to direct or indirect investment in the language of the BIT, and so, in their contention, no reason to imply an exclusion on indirect investment.



  657 Reply on Jurisdiction, paras. 44(c) and 45.
  658 Enron Corporation Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Decision on Jurisdiction, 14 January 2004, para. 50 (CL-020).
  659 Reply on Jurisdiction, paras. 45 and 46.
492.
The Claimants assert that the arguments made by the Respondent to support its view that indirect investments are not covered are not supported by the language of the BIT for the following reasons.
a.
Article 1 does not require a putative “investor” to undertake an irrevocable obligation to invest in Albania. The Article refers to “an individual […] who […] has undertaken, undertakes or has assumed an irrevocable obligation to make investments in the territory” of Albania. There are therefore three possibilities: (i) having undertaken; (ii) undertaking; or (iii) assuming an irrevocable obligation to make, investments in Albania.660
b.
Even if it did so require, there is no reason that investors could not satisfy the requirement by assuming an irrevocable obligation to make investments in Albania indirectly through other investment vehicles.661
c.
The requirement that an investor make an investment in the territory of Albania could also be satisfied in the same, indirect, way,662 as could the requirement to comply with any administrative or taxation obligations.663



  660 Rejoinder on Jurisdiction, para. 51. At paragraph 52 the Claimants also state that this reading is supported by the traveaux.
  661 Ibid, para. 53.
  662 Ibid, paras. 54-55.
  663 Ibid, para. 56.
493.
The Claimants find support for their position in the following decisions, and assert that the Respondent is wrong to seek to distinguish them for the following reasons.
a.
In Mobil, the tribunal found that “a literal reading of the BIT does not support the allegation that the definition of investment excludes indirect investments.”664 The tribunal did not refer to the arguments on the basis of which the Respondent seeks to distinguish the decision in its reasoning that supports this conclusion.665 Rather, that reasoning is explicitly based in the fact that “there is no explicit reference to direct or indirect investments in the BIT” and that the BIT includes a “very broad” definition of investments, which “does not require that there be no interposed companies between the ultimate owner [...] and the investment”.666
b.
In Kardassopolous, the tribunal reached the same conclusion, following the same reasoning:667
The BIT is silent on whether the investor is required to directly own shares in a company investing in Georgia in order to qualify as an “investment” under the treaty. The tribunal in the ICSID case of Siemens A.G. v. Argentina was faced with a similar situation. That tribunal reasoned as follows: “[...] The Tribunal observes that there is no explicit reference to direct or indirect investment as such in the Treaty. The definition of ‘investment’ is very broad [...] The Treaty does not require that there be no interposed companies between the investment and the ultimate owner of the company. Therefore, a literal reading of the Treaty does not support the allegation that the definition of investment excludes indirect investments.” The Tribunal agrees.
The Claimants further assert that, contrary to the Respondent’s submissions, there are no relevant differences in the language of the relevant treaties.668
c.
The tribunal in Noble v. Ecuador concurred “with previous tribunals that have held that an indirect shareholder can bring a claim under the ICSID Convention and under a BIT in respect of a direct and an indirect investment. Failing any contrary wording, the BIT and the ICSID Convention encompass actions of indirect shareholders for their damages.”669 The Claimants assert that the factual differences between that case and the present to which the Respondent refers are not mentioned in the tribunal’s reasoning on this issue.670 The Claimants also point out that the tribunal did explicitly rely on the fact that the relevant treaty included a broad definition of “Investment” that encompassed “every kind of asset,” including “shares stocks and other securities and any other form of interests in a company” without the requirement that the investment be a direct one or that there be no interposed companies.671



  664 Mobil, para. 165 (CL-110), relied on at Reply on the Merits and Counter-Memorial on Jurisdiction, para. 275.
  665 Rejoinder on Jurisdiction, para. 58.
  666 Mobil, para. 165 (CL-110), relied on at Rejoinder on Jurisdiction, para. 59.
  667 Kardassopoulos, paras. 123-124 (CL-108), relied on at Reply on the Merits and Counter-Memorial on Jurisdiction, para. 275.
  668 Rejoinder on Jurisdiction, para. 60.
  669 Noble, para. 77 (CL-121).
  670 Rejoinder on Jurisdiction, para. 62, referring to Noble, paras. 77-83.
  671 Ibid, para. 61, referring to the treaty between the United States of America and the Republic of Ecuador concerning the Encouragement and Reciprocal Protection of Investment, signed on 27 August 1993 (RL-109).
494.
The Claimants accept that the tribunal in Noble was concerned about the possible policy implications of indirect investors claiming under the treaty and stated that “[t]here may well be a cut-off point somewhere, and future tribunals may be called upon to define it.”672 They point out, however, that the tribunal in that case found that it did not need to define such a cut-off point as “the cut-off point, whatever it may be, is not reached with two intermediate layers.”673 The Claimants go on to assert that this standard, even if it existed, would have no bearing on the instant case because the Claimants’ investments fall within such a standard.674

(2)

The Tribunal’s Analysis

495.
The Tribunal accepts the Claimants’ analysis of the language of the BIT and agrees with the Claimants that there are no material reasons to distinguish the present case from that before the tribunals in Mobil, Kardassopolous and Noble, all of which reached the same conclusion.
496.
The Tribunal also accepts, with the tribunals in Noble and Enron, that concerns may arise if minority shareholders seek to claim for harm alleged to have been done to the company at the end of a corporate chain. However, that is not a concern that arises on the present facts. The Claimants are right to point out that the present investments come within the “two intermediate layers” said to be permissible by the tribunal in Noble. More importantly, the corporate structure through which the indirect investments were made in this case was established for the purpose of the Claimants investing in Albania (as described in section II.A above and discussed further in section VI.A(2) below).



  672 Ibid, para. 62, referring to Noble, para. 82.
  673 Ibid, para. 62, referring to Noble, para. 82.
  674 Ibid, para. 62.
497.
For these reasons, this objection to jurisdiction also fails.

C.

WHETHER NOTICE WAS VALIDLY GIVEN

498.
The Respondent asserts that the Claimants have failed to give the six months’ notice of their disputes, as required by Article 8 of the BIT, before requesting arbitration. It asserts that this requirement is jurisdictional, cannot be varied through the application of the BIT’s Most Favoured Nation (“MFN”) clause, and applies regardless of whether negotiations between the parties would be futile.
499.
The Claimants assert that:
a.
they gave the required notice;
b.
the requirement under Article 8 of the BIT is in any event not jurisdictional;
c.
to the extent that it is alleged that notice was given, but is ineffective because it was within six months of the request for arbitration, the Claimants are entitled to rely on the shorter notice period provided by other BITs to which Albania is a party by virtue of the MFN clause in the BIT; and
d.
in any event, it was not required to comply with the notice period because it had become futile.
500.
The Tribunal has found, for the reasons given in section VI.C(2) below, that the notice required by Article 8 of the BIT was given by the Claimants more than six months before they requested arbitration in relation to those claims over which the Tribunal has otherwise found it has jurisdiction.675 It is therefore unnecessary for the Tribunal to consider the other matters raised by the parties in this context and it does not do so.

(1)

The Respondent’s Position

501.
The Request for Arbitration was dated 10 June 2015. Between them, the Claimants sent 11 notices of dispute to the Respondent in October and November of 2014,676 more than six months before the Request for Arbitration. The Respondent alleges that these notices were not effective to notify it of the disputes the Claimants now seek to have resolved because the notices did not describe those disputes in sufficient detail, or in some cases at all.
502.
The Respondent asserts that “it was incumbent upon the Claimants meaningfully to inform Albania about the nature of any alleged disputes that they intended this Tribunal to determine in advance of submitting the RFA.”677 The Respondent accepts that not every fact or legal argument need be set out in notices.678 However, it asserts that the Claimants are required, at the very least, “to refer in the notices with a proper degree of specificity to each of the alleged disputes and to the subject matter of it.”679



  675 As discussed in section VI.H below, and for the reasons there stated, the Tribunal has found that it does not have jurisdiction over the claims relating to the Windfarm. For the reasons set out in section VII.D below, the Tribunal has also found that the Claimants’ asserted right of first negotation in relation to the Poçem plant does not arise. The issue of whether those claims or disputes were properly notified to the Respondent is therefore not addressed here.
  676 See Annex A to the Counter-Memorial and Objections to Jurisdiction. Annex A also shows the six further notices that were sent in January 2015, within six months of the date of the Request for Arbitration.
  677 Reply on Jurisdiction, para. 65.
  678 Counter-Memorial and Objections to Jurisdiction, para. 70.
  679 Ibid, para. 65, relying on Burlington Resources, Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Jurisdiction, 2 June 2010, para. 309 (RL-0046) and Tulip Real Estate and Development Netherlands B.V. v. Republic of Turkey, ICSID Case No. ARB/11/28, Decision on Bifurcated Jurisdictional Issue, para. 57 (RL-0035).
503.
The Respondent alleges that it was not notified of the following disputes with sufficient detail, or in some cases at all.
a.
No notice of dispute was filed by the Claimants alleging that there was a dispute in respect of the bringing of criminal proceedings or extradition proceedings against Mr. Becchetti and Mr. De Renzis in Case No. 1564.680
b.
No notice of dispute was filed by the Claimants alleging expropriation of the Kalivaç Project or of Agonset.681
c.
There were complaints in the notices of dispute regarding the tax treatment of the Kalivaç Project and the criminal investigations relating to companies involved in the project. However, there was no reference to the type of dispute which the Claimants now seek to advance, namely that Albania had caused the delay of the project by, for example, failing to issue permits, disrupting the process of expropriating land and failing to provide support following floods, resulting inter alia in a loss of the Green Certificates.682
d.
No notice of dispute filed by the Claimants mentions a dispute regarding Agonset’s allegedly discriminatory exclusion from the process of awarding digital licenses, allegedly in breach of Article 2(2) and Article 3 of the BIT. The Respondent asserts this is plainly distinct from the claims regarding the allegedly abusive tax treatment and the criminal investigations of Agonset that were mentioned in notices of dispute.683
e.
No notice of dispute filed by the Claimants particularises any dispute concerning the failure to consider and / or grant an application to construct a submarine cable, now alleged to be a breach of Article 2(2) of the BIT as being a discriminatory measure that failed to accord the Claimants fair and equitable treatment.684
504.
The Respondent rejects the Claimants’ assertion that, to the extent that certain claims now brought were not specifically referred to in the notices, they arise out of the same subject matter as claims of which Albania was notified, and so may be brought. It does so on the basis that, in the case of Agonset, the notices referred only to the tax treatment of the company, and the Claimants now assert that it was expropriated. On the Respondent’s case, this cannot be considered the same “subject matter”.



  680 Counter-Memorial and Objections to Jurisdiction, para. 61(a).
  681 Ibid, para. 61(b).
  682 Ibid, para. 61(d).
  683 Ibid, para. 61(f).
  684 Reply on Jurisdiction, para. 63, fn 72.
505.
The Respondent also rejects the Claimants’ contention that these matters, which the Respondent describes as separate “disputes”, are properly understood as “claims” that are subsumed within a broader, single dispute between the parties of which the Respondent was adequately notified. The Respondent does so on the basis that there are “a multitude of claims in this arbitration covering many different areas and which allegedly arose at different times. It is not plausible to say that all of these claims arose out of a single dispute.”685

(2)

The Claimants’ Position and the Tribunal’s Analysis

506.
The parties are largely in agreement on the principles to be applied in determining whether adequate notice was given. Relying on the same authority as the Respondent, the Claimants assert that they “need only notify their dispute ‘with a reasonable degree of specificity’; they need not notify the specific claims arising from that dispute or the entirety of the facts underlying those claims.”686 This is in essence the same as the principles on which the Respondent relies, summarised in paragraph 502 above, and this is the approach that the Tribunal has adopted.
507.
Relying on CMS v. Argentina,687 the Claimants also assert that, where new claims arising after a notice of dispute has been sent relate to the same subject matter as notified claims, the Tribunal has jurisdiction.688 Albania did not express a view as to whether this is right as a matter of principle,689 however the Tribunal accepts that this must be so. Otherwise, as the Claimants point out, where there are ongoing breaches of a treaty a claimant would never be in a position to make its claim.690



  685 Ibid, para. 68.
  686 Rejoinder on Jurisdiction, para. 84, quoting Burlington Resources, Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5, Decision on Jurisdiction, 2 June 2010, para. 309 (RL-0046).
  687 CMS Gas Transmission Company v. The Republic of Argentina, ICSID Case No. ARB/01/8, Decision of the Tribunal on Objections to Jurisdiction, 17 July 2003 (CL-144).
  688 Reply on the Merits and Counter-Memorial on Jurisdiction, paras. 292-294. The Claimants also rely on Crystallex International Corporation v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/11/2, Award, 4 April 2016 (CL-106).
  689 Instead, as noted in paragraph 504 above, it asserts that the subject matter of the new and notified claims was in any event different.
  690 Reply on the Merits and Counter-Memorial on Jurisdiction, para. 292.
508.
Within that framework, it is clear that all of the matters of which the Respondent complains were adequately notified to the Respondent in the notices of dispute sent in October and November 2014, for the reasons that follow. The Tribunal addresses each of the five matters on which the Respondent relies, summarised in paragraph 503 above, in turn.
509.
First, Mr. Becchetti’s first notice, Ms. Condomitti’s first notice, Hydro’s first notice, Mr. De Renzis’ first notice and Costruzioni’s first notice691 all referred to the criminal investigations and proceedings that ultimately led to the criminal and extradition proceedings against Mr. Becchetti and Mr. De Renzis in Case No. 1564.692
a.
Mr. Becchetti and Ms. Condomitti complained that Albania is in “violation of the Italy-Albania BIT by opening patently baseless criminal and civil investigations against my companies for purported money-laundering on the basis of business transactions among my businesses.”
b.
Hydro complained that “Albania is in further and continuing violation of the Italy-Albania BIT by opening patently baseless criminal and civil investigations against KGE for purported money-laundering on the basis of business transactions considered suspicious without any legitimate reason.”
c.
Mr. De Renzis complained that “Albania is in further and continuing violation of the Italy-Albania BIT by opening patently baseless criminal and civil investigations against Energji for purported money-laundering on the basis of business transactions considered suspicious without any reason.” Mr. De Renzis also complained that Albania “has also opened investigations into the work that Energji has been involved with at the Kalivaç power plant under the pretense of determining if work is being carried out, when it patently is.”
d.
Costruzioni complained that “Albania is in further and continuing violation of the Italy-Albania BIT by opening patently baseless criminal and civil investigations against Costruzioni’s Albanian companies, Energji, Cable System, 400 KV Sh.pk. and Agonset Sh.p.k. for purported money-laundering on their basis of business transactions.”



  691 F. Becchetti's First Notice of Dispute, 11 October 2014, p. 2 (R-017); L. Condomitti’s First Notice of Dispute, 10 October 2014, pp. 1-2 (C-082); Hydro’s First Notice of Dispute, 10 October 2014, p. 2 (C-080); M. De Renzis’ First Notice of Dispute, 9 October 2014, p. 2 (C-137); and Costruzioni’s First Notice of Dispute, 10 October 2014, p. 2 (C-081); respectively, all of which were sent in October 2014.
  692 Rejoinder on Jurisdiction, para. 89.
510.
It is clear from the recitation of the facts in section IV.J above that the criminal and extradition proceedings in Case No. 1564 (the disputes concerning which Albania asserts were not notified) are sufficiently connected to the investigations and proceedings to form one dispute.
511.
In particular, the criminal investigations, Seizure Orders, Arrest Warrants and criminal charges are predicated on Albania’s allegation of a conspiracy to launder money that involves all of the Claimants and their investments to varying degrees. As noted in paragraph 481 above, this is particularly apparent when regard is had to the factual allegations that founded the Arrest Warrants,693 and the effect of the Seizure Decision on all of the Claimants’ investments.694 The Arrest Warrants were founded, in part, on the following allegations said to support charges that included money laundering.
a.
“[…] through the companies ‘Kalivaç Green Energy’ shpk; ‘Cable System’ shpk; ‘400 KV’ shpk; ‘Energji’ shpk; ‘Fuqi’ shpk; ‘Investime te Rinovueshme’ shpk and ‘Agonset’ shpk. suspicious financial transactions with no economically logical basis were made.”695
b.
Invoices totalling €3,410,940 were issued for work not done, namely “the preparation of material selected and embankment for the construction of the dam” on the Kalivaç Project in 2009.696



  693 As described in paragraph 395 above.
  694 As described in paragraphs 410 to 420 above.
  695 See, for example, District Court of Tirana, Judgment regarding the adoption of the precautionary measure, Act. No. 1546, 5 June 2015, pp. 18 and 31 (C-102 bis).
  696 Ibid, p. 20.
512.
Those factual allegations mirror the complaints notified to Albania in October and November of 2014 extracted in paragraph 509 above. The Tribunal therefore finds that the criminal proceedings and extradition proceedings against Mr. Becchetti and Mr. De Renzis in Case No. 1564 form part of the same subject matter as the complaints of which Albania was notified in October and November 2014 and so rejects the Respondent’s challenge to the Tribunal’s jurisdiction over those matters.
513.
Second, the Tribunal turns to the issue of whether Albania was notified of the Claimants’ allegation that the Kalivaç Project and Agonset were expropriated. Certainly, the October and November notices did not refer to “expropriation”, however in those notices the Claimants allege “retaliatory” actions being taken to “harass” and “damage” the investors and their investments.697 Mr. Becchetti alleged that the Albanian Government was “seeking to undermine [his] investment in Agonset” and complained that “Albania has not stopped harassing [him] and damaging [his] investments made under the Italy-Albania BIT.”698 The notices sent by Mr. De Renzis, Ms. Condomitti, and Costruzioni on 17 November 2014 also alleged that the Albanian government’s actions are “designed to completely destroy [an investor’s] investment in Energji,”699 a company involved in the Kalivaç Project.700
514.
Both parties acknowledge that there is no requirement that a claim be fully pleaded out. The allegations in the notices of damage to investments, referring as they do to damage to investments and “complete destruction” of others, are certainly adequate to put Albania on notice of an expropriation claim.



  697 Hydro's First Notice of Dispute, 10 October 2014 (C-080); Costruzioni's First Notice of Dispute, 10 October 2014, p. 2 (C-081); L. Condomitti's First Notice of Dispute, 10 October 2014, p. 2 (C-082); Costruzioni’s Second Notice of Dispute, 17 November 2014, p. 2 (C-083); L. Condomitti’s Second Notice of Dispute, 17 November 2014, p. 2 (C-084); M. De Renzis’ Second Notice of Dispute, 17 November 2014, pp. 1-2 (C-140); S. Grigolon’s Second Notice of Dispute, 17 November 2014, p. 1 (C-141); F. Becchetti's First Notice of Dispute, 11 October 2014, p. 2 (R-017); F. Becchetti’s Second Notice of Dispute, 17 November 2014, p. 2 (R-018).
  698 F. Becchetti's First Notice of Dispute, 11 October 2014, p. 2 (R-017).
  699 M. De Renzis’ Second Notice of Dispute, 17 November 2014 (C-140), L. Condomitti’s Second Notice of Dispute, 17 November 2014 (C-084), Costruzioni’s Second Notice of Dispute, 17 November 2014 (C-083).
  700 Rejoinder on Jurisdiction, para. 90.
515.
Third, the Respondent also asserts that it was not notified of any claim that Albania had caused the delay of the Kalivaç Project by, for example, failing to issue permits, disrupting the process of expropriating land and failing to provide support following floods, resulting inter alia in a loss of the Green Certificates. It further asserts that it was not notified of any claim relating to an application to build a submarine transmission cable (the fifth item listed in the summary in paragraph 503 above).
516.
The Tribunal noted above that the Kalivaç Project, Energji’s lost profits, the submarine transmission cable and the Green Certificates are all, as a matter of factual substance, interrelated.701 Further, the complaints of which Albania was notified allege a broad range of state actions that were alleged to constitute harm to various investments, including the Kalivaç Project.702 Those allegations included improper seizure of “vast volumes of old documents” and an improper investigation of whether Energji had carried out work on the Kalivaç Project as well as the allegations referred to by the Respondent concerning the tax treatment of the project and criminal investigations relating to companies involved in the project.
517.
Given the breadth of the allegations made in the October and November 2014 notices and the interrelationship between the Kalivaç Project, Energji’s lost profits, the submarine transmission cable and the Green Certificates, the Tribunal is satisfied those allegations made in the October and November 2014 notices are adequate to cover the additional state measures alleged to have harmed these investments. In particular, those relationships (such as the need to complete construction of the Kalivaç Project by a certain date, and be capable of transmitting energy to Italy, if the project was to be eligible for the Green Certificates) meant delays were likely to harm all of those investments.



  701 Noted in paragraph 478 above. The substantive factual interrelationships are described in detail in sections IV.A(2), IV.C(1) and IV.D(2) above.
  702 Costruzioni's First Notice of Dispute, 10 October 2014, p. 2 (C-081); L. Condomitti’s First Notice of Dispute, 10 October 2014, p. 2 (C-082); Costruzioni’s Second Notice of Dispute, 17 November 2014, p. 1 (C-083); L. Condomitti’s Second Notice of Dispute, 17 November 2014, p. 1 (C-084); M. De Renzis’ First Notice of Dispute, 9 October 2014, pp. 1-2 (C-137); M. De Renzis’ Second Notice of Dispute, 17 November 2014, p. 1 (C-140); F. Becchetti’s Second Notice of Dispute, 17 November 2014, p. 2 (R-018).
518.
Fourth, the Claimants rightly point out that the reason the October and November 2014 notices did not refer to Agonset’s exclusion from the digital licensing process is that the exclusion did not take place until after those notices were given.703 Section IV.H(5) above summarises the relevant events, which occurred in 2015. The relevant notices refer to a range of measures that the Claimants assert were taken against Agonset, including improper imposition of customs duties and harassment of Agonset journalists,704 and general allegations that Albania has sought to undermine that investment.705 It is therefore clear that the allegations of which the Respondent complains it was not notified relate to the same subject matter as those of which it was notified, namely Agonset.

D.

WHETHER ANY OF THE CLAIMANTS ARE EXCLUDED AS PASSIVE INVESTORS

(1)

The Parties’ Positions

a.
The Respondent’s Position
519.
The Respondent asserts that in order to attract protection of the BIT as an “investor” a person or entity must have “actively” invested in Albania. Merely passively holding shares in a company or passive ownership of other assets does not suffice. The Respondent asserts this requirement emerges from language in the BIT that refers to “making” and “investing” (and not merely “owning”) assets.706 The Respondent further argues that this language is analogous to the language considered in Standard Chartered Bank v. Tanzania,707 where the tribunal found, according to the Respondent, that such an active relationship was necessary.708



  703 Rejoinder on Jurisdiction, para. 91.
  704 Costruzioni's First Notice of Dispute, 10 October 2014, p. 2 (C-081); L. Condomitti’s First Notice of Dispute, 10 October 2014, p. 2 (C-082); Costruzioni’s Second Notice of Dispute, 17 November 2014, p. 2 (C-083); L. Condomitti’s Second Notice of Dispute, 17 November 2014, p. 2 (C-084); M. De Renzis’ First Notice of Dispute, 9 October 2014, p. 2 (C-137); S. Grigolon’s First Notice of Dispute, 9 October 2014, p. 1 (C-138); M. De Renzis’ Second Notice of Dispute, 17 November 2014, p. 2 (C-140); S. Grigolon’s Second Notice of Dispute, 17 November 2014, p. 1 (C-141); F. Becchetti's First Notice of Dispute, 11 October 2014, p. 1 (R-017); F. Becchetti’s Second Notice of Dispute, 17 November 2014, pp. 1-2 (R-018).
  705 Becchetti’s First Notice of Dispute, 11 October 2014, p. 1 (R-017); F. Becchetti’s Second Notice of Dispute, 17 November 2014, pp. 1-2 (R-018).
  706 Counter-Memorial and Objections to Jurisdiction, paras. 73-80; Reply on Jurisdiction, paras. 37-43.
  707 Standard Chartered Bank v. Tanzania, ICSID Case No ARB/10/12, Award, 2 November 2012, (RL-0037) (“Standard Chartered Bank”).
  708 Counter-Memorial and Objections to Jurisdiction, paras. 75-80. The Respondent also relies on the decision in Gold Reserve Inc v. Venezuela [2016] EWHC 153 (Comm) (RL-0039) (“Gold Reserve”).
520.
In Standard Chartered Bank, the claimant (Standard Chartered Bank – “SCB”) was a UK company. The alleged investment was a loan acquired by a subsidiary of SCB, namely Standard Chartered Bank (Hong Kong) Limited (“SCB HK”). The loan had been made to finance a power plant in Tanzania. It had not been made by SCB HK, but rather the loan had been later acquired by SCB HK with SCB HK’s own funds.709 After considering both the text of the relevant BIT (UK-Tanzania) and its purpose, the tribunal concluded that the parent company, SCB, had not made an investment and the tribunal therefore did not have jurisdiction.710
521.
The Respondent relies on the following findings of the tribunal in support of its case.711
It is difficult to see how the treaty’s protections could promote investment by nationals of a Contracting State if the national of the Contracting State had no role in deciding to make the investment, funding the investment, or controlling or managing the investment after it was made.

[...]

[...] a claimant must demonstrate that the investment was made at the claimant’s direction, that the claimant funded the investment or that the claimant controlled the investment in an active and direct manner. Passive ownership of shares in a company not controlled by the claimant where that company in turn owns the investment is not sufficient.

The Tribunal is not persuaded that an “investment of” a company or an individual implies only the abstract possession of shares in a company that holds title to some piece of property.

Rather, for an investment to be “of” an investor in the present context, some activity of investing is needed, which implicates the claimant’s control over the investment or an action of transferring something of value (money, know-how, contacts, or expertise) from one treaty-country to the other.



  709 Standard Chartered Bank, para. 196 (RL-0037).
  710 Summary drawn from the Counter-Memorial and Objections to Jurisdiction, para. 76.
  711 Standard Chartered Bank, paras. 228-232 (RL-0037).
522.
On the Respondent’s case, it is therefore for the Claimants to demonstrate that their shareholdings in alleged investments in Albania were not passively held.712 The Respondent asserts that each Claimant is required to demonstrate, but has not, either that it has:713
a.
entered into an irrevocable undertaking to make such investments;
b.
made a (demonstrable) financial contribution in respect of those assets; or
c.
has demonstrable control over the alleged investments at the bottom of the chain.
523.
The Respondent asserts that the Claimants have done no more than show that some of the investments are by direct, rather than indirect shareholdings, and made a “half-hearted” attempt to argue that Mr. Becchetti was actively involved.714 On the Respondent’s reading of the authorities, whether shares are directly or indirectly held is not to the point.715 As such, the Respondent asserts that the Claimants have failed to show that any one of them is protected by the BIT.
b.
The Claimants’ Position
524.
The Claimants deny that the BIT requires any such active relationship between a putative investor and investment, disputing the Respondent’s interpretation of the text of the BIT. They also assert that, when the test for “active” investment in Standard Chartered Bank and Gold Reserve is properly understood, each claimant is in any event an active investor.



  712 Counter-Memorial and Objections to Jurisdiction, para. 80.
  713 Reply on Jurisdiction, para. 105.
  714 Ibid, para. 104.
  715 Ibid, para. 102(b).
525.
According to the Claimants,716 the Standard Chartered Bank decision should be read in the context of the tribunal’s finding that:717
In the absence of text in the BIT expressing a contrary intent and on a record indicating no involvement or control of the UK national over the investment, it would be unreasonable to read the BIT to permit a UK national with subsidiaries all around the world to claim entitlement to the UK-Tanzania BIT protection for each and every one of the investments around the world held by these daughter or granddaughter entities.