Hydro S.r.l. and others v. Republic of Albania (I)
ICSID · Investment (ICSID and treaty) · Albania · 1 Sep 2016
Why it matters
This decision illustrates the ICSID tribunal's power to modify or revoke provisional measures under Rule 39(3) when circumstances change. It also clarifies that a tribunal may decline to order return of assets if claimants seek only damages in their memorial, and that non-compliance with provisional measures does not automatically warrant penalties. The case underscores the importance of good faith in party communications and the tribunal's discretion to adapt orders to evolving facts.
Summary
The case arises from an ICSID arbitration initiated by Italian investors (Hydro S.r.l. and others) against Albania concerning their investments in the Kalivac hydroelectric project and related companies. In March 2016, the Tribunal issued provisional measures recommending Albania suspend criminal proceedings and extradition requests against two individuals (Becchetti and De Renzis) to ensure their participation in the arbitration. Albania did not immediately comply, leading the Claimants to seek a partial award and penalty for non-compliance, while Albania applied to revoke or modify the order. The Tribunal held a hearing in June 2016. Meanwhile, a UK court stayed the extradition, and the Claimants filed a memorial seeking only damages, not return of assets. The Tribunal found that the original rationale for the provisional measures (risk of incarceration) was now addressed by the UK stay, and that the Claimants' shift to damages made asset preservation orders unnecessary. It revoked the original order and issued a narrower recommendation: Albania must not take steps to recommence extradition and must maintain the stay. The Tribunal rejected the penalty request, finding no clear non-compliance and noting damages could compensate any loss. The decision confirms the tribunal's power to modify provisional measures under ICSID Rule 39(3) and emphasizes that such measures are not res judicata.
The detail
Parties: Hydro S.r.l. and others v. Republic of Albania (I)
Case number: ICSID Case No. ARB/15/28
Outcome: The Tribunal revoked its earlier provisional measures order and issued new recommendations: Albania must not recommence extradition proceedings against Messrs Becchetti and De Renzis until final award, and must maintain suspension of existing extradition proceedings. Claimants' request for a penalty was dismissed.
Applicable law: ICSID Convention, ICSID Arbitration Rules, Albania-Italy BIT (presumed)
Issues in play: The case involved the tension between a State's sovereign right to prosecute criminal offenses and the procedural integrity of an ICSID arbitration, specifically the right of claimants to participate fully without risk of incarceration.
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