ILIRIA S.R.L. v. ALBANIA

THIRD SECTION

DECISION

Application no. 32850/16
ILIRIA S.R.L.
against Albania

The European Court of Human Rights (Third Section), sitting on 2 April 2024 as a Committee composed of:

 Georgios A. Serghides, President,
 Darian Pavli,
 Oddný Mjöll Arnardóttir, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 32850/16) against the Republic of Albania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 28 May 2016 by an Italian company, Iliria S.R.L. (in liquidation) (“the applicant company”), registered in Naples and represented by Mr A. Saccucci, a lawyer practising in Rome;

the decision to give notice of the complaints under Article 6 § 1 of the Convention concerning legal certainty and delay in enforcing a judgement to the Albanian Government (“the Government”), represented by their then Agent Ms A. Hicka and subsequently by Mr O. Moçka, General State Advocate;

the fact that the Italian Government did not seek to exercise their right to intervene (Article 36 § 1 of the Convention and Rule 44 § 1 of the Rules of Court);

the parties’ observations;

Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1.  The present case concerns the non-recognition in Albania of a foreign arbitral award which was found by domestic courts to be incompatible with the basic principles of Albanian law.

2.  The applicant company’s pervious application to the Court resulted in a finding of a violation of Article 6 § 1 on account of the length of the recognition proceedings (see Iliria S.R.L. v Albania [Committee], no. 31011/09, 5 March 2024).

3.  On 31 July 1990 the Albanian authorities adopted the Protection of Foreign Investments Act (decree of the Presidium of the Peoples’ Assembly no. 7406 “On the protection of foreign investments”) and the Foreign Capital Companies Act (decree of the Presidium of the Peoples’ Assembly no. 7407 “On companies with foreign capital”).

4.  Under the Protection of Foreign Investments Act, investors had the right to resolve disputes by arbitration (see paragraph 65 below).

5.  The Foreign Capital Companies Act provided that a person residing outside Albania could enter, subject to an authorisation from the Council of Ministers, into an agreement with persons residing in Albania to establish an Albanian company.

6.  Section 5 of the act provided that such an agreement was to be governed by Albanian law.

7.  On 26 March 1991 the applicant company signed an agreement (“1991 Agreement”) with the Albanian Government and the municipal enterprise Durrës Seaside (Ndërmarrja Komunale e Plazheve Durrës) for the establishment of a mixed-ownership company (public-private) called “DIF” that would develop the Durrës’ seaside. DIF’s scope was to renovate the seaside, build infrastructure such as sewers, an aqueduct, roads and hotels to accommodate approximately 70,000 tourists.

8.  The agreement was governed by Swiss law and lex mercatoria. It stated that a prior approval had been obtained by the Council of Ministers as required by the Foreign Capital Companies Act.

9.  Disputes were to be resolved by arbitration.

10.  On 28 March 1991 the Council of Ministers approved the establishment of DIF.

11.  On 3 September 1993 an international arbitral tribunal set up on the basis of the 1991 Agreement ordered the Albanian Government to pay the applicant company 48,239,000,000 Italian Lira (“ITL”) and annual interest at a rate of 13% (“the Arbitral Award”). The proceedings and the reasons leading to the tribunal’s findings, as described in the award itself, were as follows.

(a)   Proceedings

12.  On an unspecified date the applicant company initiated contract-based arbitration proceedings against the Albanian Government and appointed one of the three arbiters. Upon request of the applicant company, and since the Government failed to appoint an arbiter, the International Chamber of Commerce (“ICC”) in Paris appointed the second arbiter, Mr F. L., an Albanian citizen and lawyer practicing in Tirana. The two arbiters subsequently appointed the third arbiter and president of the tribunal.

13.  The applicant company claimed that Albania had redrawn its administrative borders and had split the seaside area which was subject to the 1991 Agreement between two municipalities (Durrës and Kavaja), which made the investment impossible. It also claimed that the authorities had transferred the ownership of parts of the relevant land to its former owners and/or to farmers.

14.  The parties exchanged their respective observations in writing. Among others, the Government submitted that it had no passive standing in the arbitration proceedings as it had undertaken no obligations towards the applicant company under the 1991 Agreement.

15.  In a conciliation hearing of 3 July 1993, the Deputy Minister for Public Works maintained that both parties in the dispute had failed to fulfil their obligations and stated that authorities were ready to renegotiate the agreement and to take their share of responsibility up to 1 billion Italian Lira. The applicant company rejected the proposal.

16.  In the hearing of 17 July 1993 the applicant company rebutted as ill‑founded the Government’s plea that it had no passive standing in the proceedings. It produced a number of documents which in its view showed that the Government had appointed several members to the board of directors of mixed-ownership company DIF and, therefore, had performed a part of the contract and had passive standing.

17.  In addition, the applicant company submitted an expert report in respect of the quantum of its claim.

18.  For the Government, no one appeared at the hearing.

19.  The hearing of 18 July 1993 was postponed due to the non-appearance of the representative of the Government.

20.  The hearing of 19 July 1993 was postponed upon request of the Government who asked for sufficient time to respond to the expert’s report in respect of the quantum. The tribunal allowed seven days for this purpose.

21.  The Government submitted additional written observations on 27 July 1993, however it submitted no observations in respect of quantum.

22.  In the final hearing of 2 September 1993 the applicant company restated its claim in respect of the Government’s breaches of the 1991 Agreement whereas the Government insisted that it had no passive standing in the proceedings.

(b)   Reasons

23.  In so much as relevant, the tribunal relied on the following reasons to rule in favour of the applicant company.

24.  It noted that although the Albanian Government had not contested the alleged violations of the 1991 Agreement, the tribunal had to ascertain to a certain degree that they had actually occurred.

25.  The tribunal found that the Government had not provided a bank guarantee that they were required under the agreement to provide before the commencement of works. They had also divided administratively the investment area between the two distinct districts of Durrës and Kavaja and had given a part of the area to farmers and other private individuals. By so doing, the tribunal found that the Government had caused prejudice to both shareholders of the mixed-ownership company so that even assuming that the Government was not contractually liable, they were non-contractually liable.

26.  The tribunal also found that the applicant company had started preparing the relevant preliminary technical documents for the construction of a hotel whose construction could not move forward as a result of the obstacles created by the Albanian authorities as witnessed by a number of State authorities’ correspondence to the applicant company.

27.  In response to the Government’s plea that it could not be part of an agreement with private entities, the tribunal found that private contracts between sovereign governments and investors were common in international business law and did not violate the principle of sovereignty.

28.  The tribunal noted the 1991 Agreement had excluded the applicability of Albanian law, therefore the alleged lack of passive standing of the Government which was based in Albanian law could not be admitted.

29.  The tribunal pursued that in communist countries, which Albania was on the signing date of the 1991 Agreement, the economy was centralized and the central government was responsible for all its sub-divisions. Furthermore, many of the obligations appearing in the 1991 Agreement were explicitly attributed to the Government and were of such nature that could be fulfilled only by the central government.

30.  According to the tribunal, by way of its decision of 28 March 1991 (see paragraph 10 above) the Government had not simply “approved” the 1991 Agreement but had rather entered it.

31.  The tribunal also noted that the Government had participated in the implementation of the 1991 Agreement by appointing members of the DIF’s board of directors which suggested that the Government had drawn rights and obligations from the agreement. The passive standing of the Government was equally supported by the nature of the statements made by the Deputy Minister for Public Works before the tribunal (see paragraph 15 above). The tribunal concluded that whether the matter was examined under contractual liability or non-contractual liability, the Government was responsible for the damage it had caused to the applicant company.

32.  As regards quantum, the tribunal agreed with the applicant company’s claims as supported by an expert report which had not been challenged by the Government. Accordingly, the tribunal ruled with the majority of votes in favor of the applicant company.

33.  On 25 May 1995 the Ministry of Finance informed the applicant company that it would pay its debt after obtaining a loan from foreign banks.

34.  On 11 March 1998 the applicant company lodged a non-contentious request (i.e. without citing an opposing party) that the Tirana Court of Appeal recognise the Arbitral Award in the Albanian legal order as per Articles 393 et. seq. of the Code of Civil Procedure (“CCP”) (see paragraph 67 below).

35.  On 2 April 1998 the Tirana Court of Appeal approved the request and recognised the Arbitral Award thereby making it executable. As this decision referred only to the principal amount, on 5 May 2000 the same court supplemented its first decision by recognising the obligation of the debtor to pay interests too (the “Recognition Decisions”).

36.  On 10 April 1998 the Tirana Court of Appeal issued an enforcement writ in respect of the Arbitral Award as recognised by the domestic decisions.

37.  On 11 November 1998 and 20 May 2002 a bailiff forwarded to the Council of Ministers the information about the debt towards the applicant company and recommended that the parties enter into negotiations about the terms of the payment.

38.  On an unspecified date the Council of Ministers lodged with the Tirana Court of Appeal a request to appeal out of time (rivendosje në afat) against the Recognition Decisions. On 26 December 2003 the Tirana Court of Appeal accepted the request on the grounds that the impugned decisions had not been served on the Council of Ministers.

39.  Following the approval of their request to appeal out of time, on 5 January 2004 the Council of Ministers lodged an appeal on points of law challenging the Recognition Decisions.

40.  On 10 February 2005 the Supreme Court quashed those decisions and remitted the case for re-examination. It found that the Council of Ministers should have been afforded a possibility to oppose the recognition of the Arbitral Award.

41.  On 14 February 2006 the Tirana Court of Appeal decided to discontinue the examination of the case. It found that the representative of the applicant company had not obtained a valid authorisation from its director to start recognition proceedings in Albania. The applicant company lodged an appeal on points of law.

42.  On 26 September 2007 the Supreme Court quashed the lower court’s decision remitting the case for re-examination. It found that the court of appeal had failed to hear the applicant company on the matter of the authorisation and to grant to it a possibility to correct the alleged defects in that connection.

43.  During the re-trial, the applicant company submitted that the Government were estopped from raising before the court arguments that they had not raised before the arbitration tribunal. In particular, it noted that the Government had not contested the arbitrability of the dispute nor the lawfulness of the 1991 Agreement before the arbitration tribunal.

44.  On 31 March 2009 the Tirana Court of Appeal dismissed the applicant company’s request for the recognition of the Arbitral Award. It found several violations of the “basic principles of Albanian law” within the meaning of 394 (dh) of the Code of Civil Procedure (see paragraph 67 below) and of Article V (2) of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) (see paragraph 68 below). In respect of the New York Convention, the court clarified that although it had become binding in Albania in January 2000, it was classified as “procedural law” and for that reason was applicable to the dispute under review.

45.  The court found, firstly, that the 1991 Agreement created rights and obligations only for the municipal company signatory to the agreement, not for the Government. The Government had merely authorised the 1991 Agreement without undertaking obligations towards the applicant company, and under Albanian law state bodies bore individual, not collective, responsibility.

46.  Secondly, the applicant company had not been duly registered in Albania. Its establishment in Italy had taken place on 17 April 1991, several weeks after 26 March 1991 when it signed the agreement with the Albanian authorities.

47.  Thirdly, the Foreign Capital Companies Act provided that agreements for the establishment of such companies were governed by Albanian law (see paragraph 5 above), therefore it was not open to the parties to the 1991 Agreement to choose a foreign law as governing law (see paragraph 8 above).

48.  Fourthly, neither could the parties avoid Albanian courts and choose arbitration to resolve their dispute as this possibility was barred by both Article 70 of the 1981 Code of Civil Procedure (“the CCP”, see paragraph 64 below) and Article 37 of the 1996 CCP in force (see paragraph 66 below). Arbitration was available, as per Article 31 of the Foreigners Civil Rights Act, only where provided for under an international treaty to which Albania is party (see paragraph 63 below).

49.  In this connection, an agreement between Albania and Italy of 12 September 1991 “on the promotion and protection of investments” provided that investors could start arbitration proceedings to defend their rights related to their investments. However, the court found that this agreement was not “an international agreement approved by law” within the meaning of the applicable legislation. In any event this agreement had been adopted several months after the 1991 Agreement had been signed and although it was in force when the arbitration proceedings took place, it could not retroactively serve as basis for the arbitration clause.

50.  Moreover, the 1990 Protection of Foreign Investments Act was not an intergovernmental agreement or an international convention within the meaning of Article 31 of the 1964 Foreigners Civil Rights Act, therefore it could not serve as basis for arbitration either.

51.  Fifthly, the arbiters had not sent the draft Arbitral Award for approval by the ICC secretariat as required by the ICC Rules applicable at the time and the ICC’s secretariat had not notified the award to the Government.

52.  Sixthly, the translations of the 1991 Agreement and Arbitral Award were not in line with the translation requirements adopted in 2004 and 2005. The applicant company had not provided original or a certified copy of the Arbitral Award.

53.  On 26 April 2009 the applicant company lodged an appeal with the Supreme Court challenging all the appellate court’s findings. It submitted in in particular that the Arbitral Award was not contrary to Albanian law and that, in any event, the violation of a law was not sufficient to offend against Article 394 (dh) of the CCP which required the breach of “basic principle of Albanian law” in order to deny recognition of an award (see paragraph 67 below). In respect of the New York Convention which had been adhered to by Albania in January 2000, the applicant company maintained that it was not applicable as it had entered in force in respect of Albania after the relevant facts. In any event, the said convention did not warrant the dismissal of the recognition request.

54.  Moreover, it submitted that the parties had the freedom to choose the governing law of the agreement and to resolve disputes by arbitration. In this connection, it stressed that section 8 of the Protection of Foreign Investments Act was sufficient to provide a basis for the arbitration.

55.  On 12 April 2012 the Supreme Court rejected the applicant company’s appeal on points of law by way of a de plano decision noting that it did not include any admissible cassation arguments.

56.  On an unspecified date the applicant company lodged a constitutional appeal.

57.  On 10 July 2013 the Constitutional Court quashed the Supreme Court’s decision noting that that court should have listed in its decision the applicant company’s grounds of appeal to show that they had been reviewed appropriately.

58.  As regards the complaint that the Tirana Court of Appeal decision of 26 December 2003 to allow the Government’s appeal out of time breached the principle of legal certainty, the Constitutional Court found that the complaint had not been raised before the Supreme Court and in any event had not been brought to it within the statutory time-limit of two years. It accordingly rejected it as belated.

59.  On 4 October 2013 the Supreme Court ruled once again against the applicant company. Its judgment set forth the applicants company’s grounds of appeal and rejected them with a de plano reasoning.

60.  On 2 December 2014 the applicant company lodged another constitutional appeal.

61.  On 22 December 2015 the Constitutional Court dismissed the appeal finding that the Supreme Court’s decision was duly reasoned and there had been no violations of the fair trial requirements.

62.  On 16 July 2014 the Court of Appeal of Rome recognized the Arbitral Award in Italy.

Domestic and international Law

63.  The relevant articles of the Foreigners’ Civil Rights Act provided:

“Article 26

Non-application of foreign law

The laws and other provisions of a foreign country and the conditions set forth in contracts which are incompatible with the Albanian social and governmental order, shall not be applied or have effect in the People’s Republic of Albania.

[...]

Article 31

Non-implementation of the provisions of this act due to international treaties

The provisions of this act shall not apply when international conventions to which the People’s Republic of Albania has adhered include different provisions [in respect of the matters covered by this act].”

64.  Article 70 of the 1981 Code of Civil Procedure (law no. 6341 of 27 June 1981 which was in force until 1 June 1996) read:

“Article 70

The parties to a judicial dispute may not agree to submit disputes within the competence of Albanian courts to foreign courts or arbiters. An exception is made for contracts concluded between companies doing business abroad and foreigners, subject to the agreement being made in writing and approved by the relevant ministry.”

65.  Section 8 of the Act read:

“The People’s Socialist Republic of Albania will promote the spirit of goodwill and cooperation for the quick and fair resolution of disputes that may arise between the investing parties. If this is not achieved, at the request of either party, the matter shall be submitted to arbitration of their choice.”

66.  Article 37 of the CCP reads:

“Article 37

(As amended by Law No. 8812, dated 17.5.2001)

The jurisdiction of Albanian courts in respect of foreign natural and legal persons is regulated by law.

The jurisdiction of Albanian courts cannot be transferred by agreement to a foreign jurisdiction, except when the proceedings are related to an obligation between foreigners or between a foreigner and an Albanian citizen, or a legal entity without domicile or residence in Albania, as well as when these exceptions are provided for in international agreements ratified by the Republic of Albania.”

67.  The recognition and enforcement of foreign judgments in Albania is governed, among others, by the following articles:

“CHAPTER IX

RECOGNITION OF FOREIGN DECISIONS

Article 393

Conditions for the enforcement of judgments given by foreign courts

The judgments of the courts of foreign countries are recognized and enforced in the Republic of Albania, subject to the conditions provided for in this Code or in separate laws.

When for this purpose there is a special agreement between the Republic of Albania and the foreign State, the provisions of the agreement shall apply.

Article 394

Legal obstacles to the implementation of judgments given by foreign courts

The judgments of a court of a foreign State shall not be given force in the Republic of Albania when:

[...]

dh) it is incompatible with the basic principles of Albanian legislation.

Article 395

Examination of the request

The request to give effect to the decision of the foreign court shall be submitted to a court of appeal.

[...]

Article 397

The appellate court does not examine the case on its merits; it rather reviews whether the [foreign] judgment includes provisions that violate Article 394 [of the CCP].

[...]

Article 398

Enforcement of the judgment of a foreign court

A court judgment of a foreign State is enforced in the Republic of Albania only on the basis of the decision of the appellate court that gives effect to the [foreign] judgment and is executed in accordance with the relevant provisions of this Code.

Article 399

Judgment of the arbitral tribunal

The provisions of this chapter are also applicable to the recognition of a final judgment of a foreign arbitral tribunal.”

68.  Article V of the New York Convention reads as follows:

Article V

[...]

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) The recognition or enforcement of the award would be contrary to the public policy of that country.”

THE COURT’S ASSESSMENT

69.  The applicant company complained that the Tirana Court of Appeal decision of 26 December 2003 allowing the Government to submit an appeal out of time (see paragraph 38 above) amounted to a breach of the principle of legal certainty.

70.  The Court notes that the impugned decision allowing the Government to submit an appeal out of time was an instantaneous act which did not create a continuing situation, even if it entailed the reopening of the proceedings (compare with Khanyan v. Armenia (dec.), no. 19065/05, 5 July 2007;  and Gargali v. Bulgaria (dec.), no. 67670/01, 5 June 2006). Furthermore, if there is no adequate remedy against a particular act which is alleged to be in breach of the Convention, the date when that act takes place is taken to be “final” for the purposes of the six-month rule (see, for example, Stanca v. Romania (dec.), no. 59028/00, 27 April 2004).

71.  The applicant company submitted that the Tirana Court of Appeal’s decision of 26 December 2003 was not served to it, however the Court considers that the applicant company must have gained knowledge of that decision at the latest on 14 February 2006 when the Tirana Court of Appeal ruled once again on the matter (see paragraph 41 above). The applicant company did not bring the present complaint to the Court within six months of 14 February 2006 at which date it must have gained knowledge of the impugned decision. Indeed, in 2013 the Constitutional Court rejected this complaint as belated on the same grounds (see paragraph 58 above).

72.  It follows that this complaint is inadmissible under Article 35 § 1 of the Convention for non-compliance with the six‑month rule and that it must therefore be rejected pursuant to Article 35 § 4 thereof.

73.  The applicant company complained that the Government’s failure to enforce the Arbitral Award was also contrary to its right of access to court under Article 6 § 1 of the Convention.

74.  The Court reiterates that the execution of a judgment given by any court must be regarded as an integral part of a “hearing” for the purposes of Article 6. It also refers to its case-law concerning the non-enforcement or delayed enforcement of final domestic judgments (see Hornsby v. Greece, no. 18357/91, § 40, Reports of Judgments and Decisions 1997‑II).

75.  The Court notes that under domestic law the proceedings for the recognition of a foreign arbitral award preceded and were distinct from the subsequent proceedings concerning its enforcement (see paragraphs 35 - 36 and 67 above).

76.  Accordingly, the applicant company was obliged to obtain domestic recognition of the Arbitral Award (contrast with Marini v. Albania, no. 3738/02, §§ 73-75, 18 December 2007, where the domestic arbitral award, once final, was binding in respect of the State). This conclusion is unaltered by the fact under Article 6 § 1 of the Convention the applicant company was not required to initiate enforcement proceedings against the State (see Metaxas v. Greece, no. 8415/02, § 19, 27 May 2004).

77.  Although the Arbitral Award was initially recognized by domestic courts, that recognition was subsequently quashed and ultimately denied (see paragraphs 35, 40 and 43).

78.  The fact that the award was recognized in Italy does not change the fact that it was not recognized in the Albania. Accordingly, in so far as the Albanian legal system is concerned, the applicant company did not have a binding decision in its favour.

79.  It follows that the complaint about the non-enforcement of the unrecognized Arbitral Award is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

80.  The applicant complained that the Government’s failure to enforce the Arbitral Award was contrary to its right to property under Article 1 of Protocol No. 1 to the Convention.

81.  The Court has considered in a number of cases that claims based on arbitral awards, in view of their specific status under the domestic law, amounted to “possessions” within the meaning of Article 1 of Protocol No. 1 to the Convention (Stran Greek Refineries and Stratis Andreadis v. Greece, 9 December 1994, §§ 67-68, Series A no. 301-B, and BTS Holding, a.s. v. Slovakia, no. 55617/17, §§ 49-51, 30 June 2022). In the instant case, the applicant’s company claim was based on the Arbitral Award which was final and could be challenged only on the limited grounds provided for in Articles 394 and 397 of the CCP (see paragraph 67 above). Accordingly, although the award was not finally recognized by the domestic courts, it may be said to have amounted to a “legitimate expectation” in the terms of Article 1 of Protocol No. 1 to the Convention (see Pressos Compania Naviera S.A. and Others v. Belgium, 20 November 1995, § 31, Series A no. 332).

82.  The applicant company submitted that the non-enforcement of the Arbitral Award interfered with its property rights. The Court has already noted that the proceedings for the recognition of a foreign arbitral award preceded and were distinct from the subsequent proceedings concerning its enforcement (see paragraph 75 above).

83.  Accordingly, the Court considers that it was the non-recognition of the Arbitral Award that interfered with the applicant company’s property rights, rather than its non-enforcement which was ultimately a consequence of the non-recognition.

84.  This interference constituted neither a deprivation of possessions within the meaning of the second sentence of Article 1 of Protocol No. 1, nor a measure of control of the use of property within the meaning of its third sentence. It must accordingly be examined under the general rule embodied in its first sentence (see Stran Greek Refineries and Stratis Andreadis, cited above, §§ 67 and 68).

85.  It is an essential condition for an interference to be deemed compatible with Article 1 of Protocol No. 1 that it be lawful, with the Court’s power to review compliance with domestic law being limited to instances of manifestly erroneous application of the impugned legal provisions or arbitrary conclusions being reached (see, for example, Beyeler v. Italy [GC], no. 33202/96, § 108, ECHR 2000-I, with further references).

86.  In examining the lawfulness of the interference in the instant case, the Court must ascertain whether there was a manifest error or arbitrariness in the findings of the decision of the Tirana Court of Appeal dated 31 March 2009 (see paragraphs 44-52), which was subsequently upheld by the superior courts.

87.  In this connection the Court must point out that in its application form the applicant company complained in general terms about the non‑enforcement of the Arbitral Award but did not provide detailed submissions in relation to the various grounds for non-recognition contained in the decision of the Tirana Court of Appeal of 31 March 2009.

88.  In its subsequent submissions before the Court the applicant company commented on two issues that may be seen as challenging the Court of Appeal’s findings.

89.  Firstly, it explained that under Italian law the actions of a director or representative of a company under incorporation may be subsequently ratified by the new company once it is duly registered (see paragraph 46 above). Such actions were then considered as having been performed by the newly registered company.

90.  Secondly, the applicant company pointed out that the Arbitral Award had not been handed down by a tribunal of the ICC, which had acted solely as appointing authority for one arbitrator (see paragraphs 12 and 51 above).

91.  However, except for the above arguments, the applicant company’s submissions before the Court included no other specific challenges to the remaining findings of the Tirana Court of Appeal, in particular its conclusion that the recognition of the Award would have been in breach of the “basic principles of Albanian law”.

92.  In this respect, the Court notes the findings of the domestic courts that at the time of the signing of the 1991 Agreement between the applicant company and the Albanian authorities, Albania was still a Socialist republic, whose legal system included strong restrictions and conditions for the recognition of foreign judgments, including foreign arbitral awards, against the Albanian State. In essence, such recognition was possible only if based on an international treaty ratified by Albania that specifically provided for resolution of disputes with the Albanian State through international arbitration (see paragraph 48 above). Relying on the 1964 Foreigners’ Civil Rights Act, read together with the relevant provisions of the 1981 Code of Civil Procedure, which was in force at the time of the signing of the 1991 Agreement – as well as the similar provisions of the 1996 Code of Civil Procedure, which was in force at the time of the relevant domestic judgment – and the general principles of the New York Convention, the domestic courts reached the conclusion that no such international treaty had existed at the time of signature of the 1991 Agreement. As a result, the Arbitral Awards had been in breach of “the basic principles of Albanian law”.

93.  In these circumstances, the Court is unable to conclude that it was overall manifestly unlawful or arbitrary for domestic courts to find that the Arbitral Award should not be recognized in Albania (see, a contrario, BTS Holding, a.s., cited above, § 66-73).

94.  Furthermore, in view of the Court’s case-law (see Lekić v. Slovenia [GC], no. 36480/07, §§ 94-95 and 105, 11 December 2018), the non‑recognition and, thus, the non-enforcement of the Arbitral Award which was found to be incompatible with the basic principles of Albanian law, cannot be qualified as disproportionate or otherwise incompatible with the second paragraph of Article 1 of Protocol No. 1 to the Convention.

95.  It follows that the complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 16 May 2024.

 Olga Chernishova Georgios A. Serghides
 Deputy Registrar President