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Albania Moves to Establish Local Arbitration Court to Replace ICSID

Despite warnings that it could deter investment, Albania is pushing ahead with plans to establish a local commercial court to replace the World Bank-funded international arbitration body.

Albania’s Justice Minister, Ulsi Manja, presented a draft law on Thursday for the establishment of a local court to settle commercial disputes, after the PM announced that Albania might leave the international arbitration body.

The Prime Minister Edi Rama has said Albania is considering quitting the Washington-based International Centre for the Settlement of Investment Disputes, ICSID, after it decided in favour of Italian businessman Francesco Becchetti, who claimed he was politically persecuted in Albania, granting him around 110 million euros in compensation.

Manja said the new draft law would make it easier for businesses to solve issues if they have disputes with each other, or with institutions.

“This draft law creates the opportunity to resolve disputes, whether between the state and private individuals or between private individuals, to resolve them completely,” Manja said on Thursday.

“It would be a quick choice and eliminate informalities, but at the same time fulfill the obligations arising from commercial disputes,” Manja added, predicting that it would also encourage investments in the country.

The draft law establishes as a basic condition that local arbitration is raised only in cases where two businesses have previously signed an agreement that defines arbitration as a possible solution for disputes, so avoiding domestic courts or international arbitration.

The draft law also states there are cases where Albania might not implement decisions of the ICSID, such when disputes cannot be solved through Albanian legislation and when implementation of the ICSID decision would go against public order.

The head of the Helsinki Committee in Albania, Erida Skendaj, told BIRN that leaving the ICSID would put foreign investments in the country at risk.

“This creates concerns to do with the shrinking of investments from businesses that operate with standards and consequently the reduction of competition for strategic investments and public concessions, or clientelization in relation to them,” Skendaj told BIRN, adding that this kind of move should only be made after consultation with interested parties.

Business organizations aso said leaving the ICSID would harm the business climate in the country and would not bring foreign investment.

According to local media, Albania has ten ongoing cases before the ICSID, where businesses have sued the state and other decisions that Albania is not implementing.

Source; Balkanisight