Albania wins arbitrary confrontation with Hydro S.R.

Arbitration summary with reference ICC Case 20564

The Republic of Albania (acting through the Ministry of Public Works, Transport and Telecommunication and the Ministry of Economy, Trade and Energy) was indicted in October 2014 at the International Arbitration of the International Chamber of Commerce (“ICC Arbitration”) by Hydro SRL the resolution of the concession agreement concluded between the litigants for the construction of a hydropower plant in Kalivaç, for the fault of Albania, and was requested the payment of an indemnity in the amount of € 137,235,090, as well as all costs of the Claimant and the arbitration process.

The Republic of Albania filed a counterclaim in this process, claiming that, despite the good faith and goodwill that Albania has always characterized in relation to the implementation of this concession, the Claimant has been in breach and failure to fulfill the concession contract for his fault by thus causing a damage of € 158,000,000.00. In addition to payment of this damage, Albania also requested the payment of interest-delays for non-performance of the contract up to the amount of € 12,900,000.00 as well as the legal costs and the arbitration process.

The Trial Chamber decided to overrule all claims of the Claimant by charging the latter with a breach of contract termination and payment of interest-time delays up to the above quoted value and of all legal costs and the arbitration process suffered by the Respondent, amounting to approximately € 1,258,642.00.

In a second decision, the Trial Chamber will decide the amount of compensation that the Claimant will have to pay to Albania for failing to comply with the Concession Contract for its fault, together with all other interest and other applicable costs.

The decision was welcomed by the Minister of Infrastructure and Energy, Mr. Damián Gjiknuri, through a post on his Facebook page, which states:

“A VERY GOOD NEWS
Dear friends! Albania gained significant controversy at ICC International Arbitration versus Hydro S.R.L. I take the opportunity to express my gratitude to the team that represented Albania in arbitration: the lawyers of the Ministry of Infrastructure and Energy for the work done and the State Advocacy, which professionally successfully led this process. Arbitration decision confirmed once again the truthfulness of what we have stated from the beginning for the concession of the Kalivaç hydropower plant. This important energetic work can now be concretized by a serious investor.”