Tradex Hellas S.A. v. Republic of Albania
ICSID · Investment (ICSID and treaty) · Albania · 29 Apr 1999
Why it matters
This is one of the early ICSID cases addressing the burden of proof for expropriation claims. The tribunal applied a strict standard, requiring the claimant to prove both a taking and its attribution to the state. It also clarified that administrative decisions preparing for land privatization do not per se constitute expropriation. The case is often cited for its analysis of indirect expropriation and the allocation of proof in investment arbitration.
Summary
Tradex Hellas S.A., a Greek company, entered into a joint venture with Torovitsa N.B., an Albanian state farm, in January 1992 to cultivate land. After the Democratic Party won elections in 1992, Albania began privatizing state farms. In August 1992, Decision No. 364 transferred 140 hectares of Torovitsa's land to a village for potential distribution to villagers. Tradex alleged that this and subsequent events, including alleged invasions by villagers, a speech by Prime Minister Berisha, and the dissolution of the joint venture in April 1993, amounted to expropriation without compensation. Albania argued that the measures were lawful administrative steps and that the joint venture failed due to commercial reasons. The tribunal, applying the 1993 Albanian Foreign Investment Law, held that Tradex bore the burden of proving expropriation. It examined each alleged act individually and collectively, finding that Tradex failed to prove that any state action deprived it of its investment or that the alleged invasions were attributable to Albania. The tribunal noted that Tradex itself had ordered a feasibility study for expansion in January 1993, indicating it did not then believe its investment had been expropriated. Consequently, the claim was denied, and each party bore its own costs.
The detail
Parties: Tradex Hellas S.A. v. Republic of Albania
Case number: ICSID Case No. ARB/94/2
Outcome: Claim denied; each party bears own costs and half of arbitration costs.
Applicable law: Albanian Law No. 7764 of 1993 on Foreign Investments (1993 Law); ICSID Convention; ICSID Arbitration Rules
Issues in play: The key issue was whether Albania's actions constituted expropriation under the 1993 Law, requiring proof of a taking attributable to the state. Tradex failed to meet its burden of proof.
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