Mamidoil Jetoil Greek Petroleum Products Societe S.A. v. Republic of Albania
ICSID · Investment (ICSID and treaty) · Albania · 30 Mar 2015
Why it matters
This award is significant for its detailed analysis of the legality requirement for investments under the Greece-Albania BIT, particularly the application of the 'in accordance with host state law' clause. The Tribunal held that minor or technical violations of local law do not necessarily deprive an investment of protection, but serious violations, such as fraud or corruption, will. The case also clarifies the distinction between FET and full protection and security, and the due diligence standard for the latter.
Summary
Mamidoil, a Greek company, invested in the Albanian fuel market through a local subsidiary. It claimed that Albania violated the Energy Charter Treaty (ECT) and the Greece-Albania BIT by expropriating its investment, failing to provide fair and equitable treatment (FET), and failing to provide constant protection and security. The alleged harms included the closure of the port of Durres, which Mamidoil used for imports, and general smuggling and tax evasion that allegedly harmed its business. Albania argued that Mamidoil's investment was illegal because it was made in violation of Albanian law, specifically regarding the acquisition of shares in a company that held a fuel import license. The Tribunal first addressed jurisdiction, finding that Mamidoil had made an 'investment' under the ICSID Convention and the BIT. On the legality issue, the Tribunal held that while the investment must be made in accordance with host state law, not every violation of local law renders an investment illegal; only serious violations, such as fraud or corruption, will do so. Here, the alleged violations were minor and did not affect the validity of the investment. On the merits, the Tribunal rejected all claims. It found no expropriation because the port closure was a general regulatory measure not specifically targeting Mamidoil, and Mamidoil continued to operate profitably. The FET claim failed because Albania had not made specific promises to Mamidoil that could create legitimate expectations, and the legal framework was not unstable. The constant protection and security claim failed because Albania had made reasonable efforts to combat smuggling and tax evasion, and the general insecurity was part of the investment climate when Mamidoil invested. The Tribunal ordered Albania to reimburse Mamidoil for a portion of the costs, as per the BIT's cost allocation provision.
The detail
Parties: Mamidoil Jetoil Greek Petroleum Products Societe S.A. v. Republic of Albania
Case number: ICSID Case No. ARB/11/24
Outcome: The Tribunal rejected all of Claimant's claims on the merits, but ordered Respondent to reimburse Claimant USD 149,759.14 for costs.
Quantum: USD 149,759.14 (costs reimbursement)
Applicable law: Energy Charter Treaty (ECT), Greece-Albania BIT, ICSID Convention, international law
Issues in play: The case involved the interplay between the fair and equitable treatment (FET) standard and the constant protection and security standard under the ECT, as well as the legality requirement for investments under the BIT and the principle of good faith.
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