Arbitrations, the government has 180 million euros in liabilities to pay for lost lawsuits with businesses

2025-07-10 07:45:00, Aktualitet CNA

Arbitrations, the government has 180 million euros in liabilities to pay for

The Albanian government faces a bill of almost 180 million euros from lost cases and those in process in international arbitration, with various businesses, according to data from the Ministry of Finance for the end of 2024.

This amount includes both remaining payment obligations and contingent liabilities, which may materialize in the future if the decisions in the process prove unfavorable to the state.

According to the official table, of this amount, 69.4 million euros represent outstanding payment obligations from final decisions, which have not yet been liquidated, and 110.5 million euros are categorized as contingent liabilities, arising from legal proceedings opened in international arbitration courts and are noted in public finance reports as potential liabilities, but are not directly included in public debt until there is a final decision.

The contingent liability includes the case "Hydro and others against Albania", of Italian entrepreneur Francesco Becchetti, which includes a liability worth 108 million euros for the decision of "Hydro and others against Albania", and 2 million euros in legal costs for this same case.

Finance still recognizes this amount as a contingent liability, which includes potential financial obligations that may be imposed on the Albanian state as a result of open cases in international arbitration courts, in the event that the decision is rendered in favor of the plaintiff against the state.

The obligation to the Italian entrepreneur is still being recognized as potential, although the latter, after inviting a lawsuit with the Albanian government for an amount of 110 million euros, is aiming to collect the money in the accounts that the Albanian state has abroad, the most important of which is the account of the state company that manages air traffic, Albcontrol, at Eurocontrol in Brussels, which has been frozen since 2021.

The amount that Albcontrol has failed to collect due to the blocking of its accounts at Eurocontrol, as a result of the conflict between the Albanian government and the Italian investor, Francesco Becchetti, has reached 10.5 billion lek (about 105 million euros) at the end of 2023, according to data in its annual report, causing the company to borrow from the state and other state-owned companies in the amount of 74 million euros.

So far, the government has spent 6.7 million euros in legal costs for the arbitration against “Hydro and others against Albania”, of which it has only liquidated half. In April 2023, Becchetti finally wins the Arbitration with the Albanian government, after a clash between the state and the investor in June 2015, when Francesco Becchetti’s assets were frozen.

After Becchetti, the largest liability is for the "Copri Actors" case with the Greek company that won the case for the conflict over the construction of the Tirana-Elbasan highway, with an invoice worth around 42.4 million euros, for which nothing has been paid until the end of 2024, although this amount is recognized as a remaining liability from the Arbitration decisions.

For the lost case with the company "Construzioni Dondi", the bill is 13.4 million euros to be paid, due to the unilateral termination of the contract by the National Water Supply and Sewerage Agency in 2018, regarding a project for the sewerage system of Tirana. This amount is recognized as a remaining obligation from the Arbitration decisions.

The fourth highest invoice is for the arbitration with “GBC Oil Company Ltd. v. Republic of Albania, Albpetrol”, the Albanian side lost to GBC Oil, with an invoice of 12.24 million euros. GBC Oil claimed that Albania – through the Ministry of Infrastructure and Energy, the National Agency for Natural Resources (AKBN) and Albpetrol – violated a fiscal stability clause in the contracts for three oil fields (Gorisht-Kocul, Cakran-Mollaj, Ballsh-Hekal). This amount is recognized as a remaining obligation from the Arbitration decisions.

In 2024, the government paid only 4.9 million euros in legal expenses

The total initial liability for arbitrations was 206.8 million euros, according to the Ministry of Finance table, of which 79.5 million euros is recognized as an invoiced liability. Of this total amount, a total of 23.4 million euros have been liquidated, reducing the total liability at the end of 2024 to 179.94 million euros.

In 2024, only 4.88 million euros were paid, which were for legal protection.

"For 2024, the total value of costs paid from the state budget in the context of: legal representation, defense according to the levels of trial, judicial or other expenses related to international arbitration decisions, resulted in the amount of 495.7 million LEK," according to the Ministry of Finance.

Below is a table of budget payments, according to the responsible state institutions:

– Approximately 143.4 million LEK from the Ministry of Finance, for the payment of legal services and other legal costs for the representation and defense of the Republic of Albania in international arbitration decisions.

– Approximately 223.0 million LEK from the Durrës Port Authority, for the payment of court costs, other legal costs for representation and defense in international arbitration matters.

– Approximately 56.2 million LEK from the Ministry of Infrastructure and Energy, for the payment of legal and administrative costs, for representation and defense related to international arbitration decisions.

– Approximately 52.2 million LEK from Albpetrol sh.a, for the payment of court expenses, legal and administrative costs for representation and defense in international arbitration matters.

– Around 20.9 million LEK from the Ministry of Agriculture and Rural Development, for the payment of legal and administrative costs related to an international arbitration decision,” the actual budget report states.

Meanwhile, for the conflict with EMS Shipping and Durrës Kurum, the Albanian state had to pay around 2.2 million euros last year for defense and administrative costs. In August 2024, the German company “EMS Shipping & Trading GmbH” terminated the Arbitration trial for the concession contract for the processing of re-entered cargo ships at the Eastern Terminal of the Port of Durrës.

In the lawsuit filed by her in April 2023, 40 million euros in damages were requested for unequal and discriminatory treatment of the contract. Despite the termination of the case, the Albanian state has been burdened with legal and administrative costs./ Monitor Magazine