Durres Kurum Shipping SH. P.K. and others v. Republic of Albania
ICSID · Investment (ICSID and treaty) · Albania · 26 Jul 2024
Why it matters
This award is significant for its detailed analysis of the denial of benefits clause under the US-Albania BIT, particularly the timing of assessment of substantial business activities and the requirement for timely invocation. It also clarifies the test for distinguishing contract from treaty claims and the procedural protections owed to investors under the fair and equitable treatment standard.
Summary
The dispute arose from a 35-year concession agreement to operate the naval shipyard at the Port of Durres, Albania, between DKS and Albania. The Claimants alleged that Albania unlawfully expropriated their investment and breached fair and equitable treatment through a series of actions, including termination of the concession, lack of due process, and arbitrary conduct. The Tribunal first addressed multiple jurisdictional objections. It rejected most objections, including those based on illegality, purely contractual claims, and lack of prima facie violation. However, it upheld the denial of benefits objection against MCTC, finding that MCTC did not have substantial business activities in the US at the relevant time and that Albania timely invoked the denial. The Tribunal also found it had jurisdiction over DKS and DCT as Albanian companies controlled by US nationals under the ICSID Convention and the US-Albania BIT. On the merits, the Tribunal dismissed all claims. It held that Albania did not breach procedural protections, as the termination process, while flawed, did not amount to a violation of fair and equitable treatment. The Tribunal found that Albania's actions were not arbitrary or pretextual, and that the Claimants' legitimate expectations were not frustrated. The expropriation claim failed because the termination was a lawful exercise of sovereign authority, not a taking without due process. The Tribunal ordered the Claimants to bear 70% of Albania's costs.
The detail
Parties: Durres Kurum Shipping SH. P.K. and others v. Republic of Albania
Case number: ICSID Case No. ARB/20/37
Outcome: The Tribunal dismissed all claims on the merits, but found it lacked jurisdiction over MCTC's claims. Claimants ordered to pay 70% of Respondent's costs.
Applicable law: UK-Albania BIT (1994), US-Albania BIT (1995), ICSID Convention
Issues in play: The case involved the distinction between contract and treaty claims, the legality of investments, denial of benefits under the US-Albania BIT, and the standard for fair and equitable treatment and unlawful expropriation.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.