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Source(s) of the case information (above):

Lawyers, other representatives, expert(s), tribunal’s secretary

Award

Frequently Used Abbreviations and Defined Terms

1st ICC Arbitration Deutsche Bank AG v. BEG S.p.A, ICC Case No.17496/JHN/GFG commenced by a Request for Arbitration dated 27 October 2010
1st ICC Award Award rendered in the 1st ICC Arbitration, dated 18 April 2013 (R-033)
2nd ICC Arbitration Hydro S.R.L. (Italy) v. The Republic of Albania, ICC Case No. 20564/EMT/GR commenced by a Request for Arbitration dated 16 October 2014 (R-042)
2nd ICC Award Partial award rendered in the 2nd ICC Arbitration dated 8 January 2018 (Document attached to the Claimants’ letter dated 16 January 2018)
1st Rome Arbitration Hydro S.r.L v. Deutsche Bank AG commenced by application dated 15 July 2010
1st Rome Award Award rendered in the 1st Rome Arbitration dated 17 November 2011 (R-032)
2nd Rome Arbitration Hydro S.r.L v. Deutsche Bank AG commenced by petition dated 10 October 2010
2nd Rome Award Award rendered in the 2nd Rome Arbitration dated 7 August 2013 (R-035)
1998 Broadcasting Law Law No. 8410 on the Public and Private Radio and Television in the Republic of the Albania, 30 September 1998 (CL-033)
2007 Broadcasting Law Law No. 9742 on Digital Broadcasting in the Republic of Albania, 28 May 2007, Article 15 (CL-057)
2013 Media Law Law No. 97/2013 on Audiovisual Media in the Republic of Albania, 4 March 2013 (CL-084)
400 KV 400 KV Sh.p.k.
Agonset Agonset Sh.p.k.
Agonset.it Agonset.it S.r.l.
Agonset.uk Agonset.uk Ltd
AKBN National Agency of Natural Resources
Albania / Respondent Republic of Albania
Albaniabeg Albaniabeg Ambient Sh.p.k.
ASB Authorised State Body
Arbitration Rules ICSID Rules of Procedure for Arbitration Proceedings in effect from 10 April 2006
BEG Becchetti Energy Group Spa
BIT Agreement between the Government of the Republic of Italy and the Government of the Republic of Albania on the Promotion and Protection of Investment, which was signed on 12 September 1991, and entered into force on 29 January 1996
c-[#] Claimants’ Exhibit
CL-[#] Claimants’ Legal Authority
Cable System Cable System Sh.p.k.
Claimants Hydro, Costruzioni, Mr. Becchetti, Mr. De Renzis, Ms. Grigolon and Ms. Condomitti
Cogeco Cogeco S.r.l.
Concession Agreement Original Concession Agreement between BEG S.p.A and Ministry of Public Works, Land Planning, Tourism and Ministry of Mining and Energy Resources dated 24 May 1997 (C-014) Including the First Addendum to the Concession Agreement dated 2 November 2000 (C-191) Including the Second Addendum to the Concession Agreement dated 8 May 2007 (C-015) As of 8 May 2007, the Consolidated Concession Agreement (C-199)
Costruzioni / Second Claimant Costruzioni S.r.l.
Counter-Memorial Respondent’s Counter-Memorial dated 23 January 2017
Deutsche Bank Deutsche Bank AG
DigitAlb DigitAlb Sh.a.
Enel Enel SpA
Energji Energji Sh.p.k.
GE06 Agreement ITU International Symposium on the Digital Switchover Regional Agreement GE06 of 16 June 2006 (CL-051)
Hearing 1 Hearing on Jurisdiction held on 28 to 30 March 2017
Hearing Hearing on Jurisdiction and the Merits on 4 to 14 September 2017
Hearing Transcript, Day [#], [page:line] Transcript of the Hearing
Hydro / First Claimant Hydro S.r.l.
ICC International Chamber of Commerce
ICSID International Centre for Settlement of Investment Disputes
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965
ILA International Law Association
Investime Investime te Rinovueshme Sh.p.k.
JVA Joint Venture Agreement between BEG and Deutsche Bank dated 16 January 2007 (R-0101)
Kalivaç Project / Project The construction and operation of the Kalivaç hydroelectric power plant
KESH Korporata Elektroenergjitike Shqiptare
KGE Kalivaç Green Energy Sh.p.k.
Memorial on the Merits Claimants’ Memorial on the Merits dated 13 May 2016
METE Ministry of Economy, Trade and Energy
Mr. Becchetti / Third Claimant Mr. Francesco Becchetti
Mr. de Renzis / Fourth Claimant Mr. Mauro De Renzis
Ms. Condomitti / Sixth Claimant Ms. Liliana Condomitti
Ms. Grigolon / Fifth Claimant Ms. Stefania Grigolon
NCRT The National Council of Radio and Television created by the 1998 Broadcasting Law.
R-[#] Respondent’s Exhibit
RL-[#] Respondent’s Legal Authority
Rejoinder Claimants’ Rejoinder on Jurisdiction dated 20 February 2017
Reply Respondent’s Reply on Jurisdiction dated 20 January 2017
RTSH Radiotelevizioni Shqiptar
Switchover Strategy Decision of the Council of Ministers No. 292 on a Strategy of Switchover from Analogue to Digital Broadcasting, 2 May 2012 (CL-080)
Top Channel Top Channel Sh.a.
Tribunal Arbitral tribunal constituted on 19 November 2015
Tring Tring TV Sh.a.
Waste Management Concession Waste management concession agreement between Albaniabeg and Albania dated 26 May 2005

I. INTRODUCTION

1.
This case concerns a dispute submitted to the International Centre for Settlement of Investment Disputes ("ICSID" or the "Centre") on the basis of the Agreement between the Government of the Republic of Italy and the Government of the Republic of Albania on the Promotion and Protection of Investment, which was signed on 12 September 1991, and entered into force on 29 January 1996 (the "BIT"), and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which entered into force on 14 October 1966 (the "ICSID Convention").
2.
The Claimants are Hydro S.r.l. ("Hydro"), a company incorporated under the laws of Italy, Costruzioni S.r.l. ("Costruzioni"), a company incorporated under the laws of Italy, Mr. Francesco Becchetti, a natural person having the nationality of the Italian Republic, Mr. Mauro De Renzis, a natural person having the nationality of the Italian Republic, Ms. Stefania Grigolon, a natural person having the nationality of the Italian Republic, and Ms. Liliana Condomitti, a natural person having the nationality of the Italian Republic (together, the "Claimants").
3.
The Respondent is the Republic of Albania ("Albania" or the "Respondent").
4.
The Claimants and the Respondent are collectively referred to as the "parties." The parties’ representatives and their addresses are listed above on page (i).
5.
This dispute relates to the Claimants’ alleged investments in Albania’s hydroelectric energy, wind energy and media industries. The Claimants claim that Albania expropriated certain of the Claimants’ investments, and that Albania failed to accord fair and equitable treatment to the Claimants’ investments in Albania. The Claimants further argue that all of Albania’s actions against the Claimants form part of Albania’s, and in particular Prime Minister Rama’s, campaign against Mr. Becchetti, his companies, and associates.
6.
The parties’ specific requests for relief are set forth in Section V below, and a fuller summary of their positions is also contained below. In its analysis, the Tribunal has considered not only the positions of the parties as summarised in this Award, but the numerous detailed arguments made in the parties’ written and oral pleadings not referred to in this Award as well. To the extent that these arguments are not referred to expressly, they should be deemed to be subsumed into the Tribunal’s analysis.

II. THE PARTIES

A. The Claimants

7.
The Claimants in this arbitration have been helpfully summarised in a flow chart showing the shareholders and related companies:1

(1) Hydro S.r.l.

8.
The first Claimant, Hydro, is a company incorporated under the laws of Italy. Hydro is registered under No. 09563901009 at the Register of Companies of Rome and is headquartered at Piazza di Spagna, 66, 00187 Rome, Italy.2
9.
Hydro was created by the Becchetti Energy Group Spa ("BEG") and Deutsche Bank AG ("Deutsche Bank") to build and operate the Kalivaç Plant (the "Kalivaç Project" or the "Project"), for which BEG obtained a concession from the Government of Albania in 1997.3 For that purpose, Hydro acquired 100% of the shares of Kalivaç Green Energy Sh.p.k. ("KGE"), a company incorporated under the laws of Albania, in July 2007. Since 2013, Hydro has been wholly owned by BEG, which in turn is owned by members of the Becchetti family, including the Claimants Francesco Becchetti and Liliana Condomitti. Stefania Grigolon (also a Claimant) also holds a 10% share.
10.
Hydro is also the sole claimant in an ICC arbitration against Albania arising out of the concession agreement for the Kalivaç Project ("2nd ICC Arbitration").4 Hydro also owns a 5% share in Agonset.it S.r.l. ("Agonset.it"), an Italian television company and subsidiary of Agonset Sh.p.k.5

(2) Costruzioni S.r.l.

11.
Costruzioni is a company incorporated under the laws of Italy. Costruzioni is registered under No. 07070201004 at the Register of Companies of Rome and is headquartered at Vicolo del Bottino, 10, 00187 Rome, Italy.6 Liliana Condomitti holds 99.5% of the shares in Costruzioni.7
12.
Costruzioni owns 80% of the shares of Energji Sh.p.k. ("Energji", a company incorporated under the laws of Albania), the project contractor on the Kalivaç Project.8
13.
Costruzioni also holds 80% of the shares of Cable System Sh.p.k. ("Cable System"), a company created to develop a submarine cable between Albania and Italy.9 Cable System holds a minority share (23%) in Albaniabeg Ambient Sh.p.k. ("Albaniabeg"),10 a company that was originally created as the concessionary company on the Kalivaç Project and from which KGE was later spun off.11 Albaniabeg also signed a concession agreement to construct and operate a waste management facility on 26 May 2005 (the "Waste Management Concession").12
14.
Both Costruzioni and Albaniabeg are companies incorporated under the laws of Albania, and both are claimants in a separate ICSID arbitration13 in which they allege Albania breached the Energy Charter Treaty with respect to the Waste Management Concession.
15.
Costruzioni also owns 80% of 400 KV Sh.p.k. ("400 KV"), which it purchased from Cable System on 15 May 2013.14 400 KV, a company created to sell energy generated in Albania to Italy, in turn owns 90% of Rener Sh.p.k., which submitted a proposal to build and operate a large wind farm in southern Albania along with Energji.15 Again, both 400 KV and Rener Sh.p.k. are companies incorporated under the laws of Albania.
16.
Costruzioni is also registered as a 40% shareholder of Agonset Sh.p.k. ("Agonset"),16 an Albanian television company that produced television programs that it broadcast in Albania on Agon Channel Albania,17 and that Agonset's Italian subsidiary, Agonset.it., broadcast in Italy on Agon Channel Italy. Agonset owns 75% of the shares in Agonset.it. In March 2015, Costruzioni sold its 40% share in Agonset to Agonset.uk Ltd ("Agonset.uk").18 However, due to Albania's seizure of Agonset, this transfer of shares was never recorded in the Tirana Corporate Register.19

(3) Francesco Becchetti

17.
The third Claimant is Francesco Becchetti, an Italian national. In the Request for Arbitration, which was filed two days after Albania issued a warrant for his arrest, Mr. Becchetti’s residential address was listed as Piazza Rondinini 48, 00186 Rome, Italy. However, because of the arrest warrants and the subsequent extradition requests issued against him, Mr. Becchetti is not able to leave the United Kingdom. His address at the time of the final hearing was 1 Waverton Street, London, W1J 5QN, UK.
18.
Mr. Becchetti holds just over 25% of the shares of the Italian company BEG, which wholly owns Hydro (and therefore KGE, through Hydro).20 Mr. Becchetti founded BEG in 1995 to carry out renewable energy projects.21 Before founding BEG, Mr. Becchetti was a shareholder in, and Executive Vice President of, the Italian construction company Cogeco S.r.l. ("Cogeco"), which was also part of the Becchetti family’s group of companies.22
19.
Mr. Becchetti holds 100% of the shares of Agonset.uk, which has owned 40% of Agonset since March 2015. Agonset.uk also holds a 20% interest in Agonset.it.23

(4) Mauro De Renzis

20.
Mauro De Renzis is an Italian national. In the Request for Arbitration, his residence was listed as Viale della Repubblica, 258, 00047 Marino (Rome), Italy. Due to the criminal proceedings and extradition requests issued against him by Albania, however, Mr. De Renzis is not able to leave the United Kingdom. His address at the time of the final hearing was 23 Brook Mews N, London W2 3BW, UK.
21.
Mr. De Renzis is the Administrator of Energji and, until December 2015, was the Administrator of Agonset. He currently holds 80% of the Albanian company Investime te Rinovueshme Sh.p.k. ("Investime"), which owns 40% of Agonset. The other 20% of Agonset's shares are held by Fuqi Sh.p.k.24, a company owned by members of Mr. Becchetti's partner's family.25
22.
By order dated 9 June 2015, Albania seized Mr. De Renzis' indirect shareholding in Agonset.26 Mr. De Renzis' mandate as Administrator of Agonset lapsed on 27 December 2015. Agonset is currently without an Administrator.27 Mr. De Renzis is Ms. Grigolon's husband.28

(5) Stefania Grigolon

23.
Stefania Grigolon is an Italian national whose residential address is Viale della Repubblica, 258, 00047 Marino (Rome), Italy. She is the only individual Claimant against whom Albania has not brought criminal charges. While she remains an Italian resident, she spends a significant amount of time in London because Mr. Becchetti and Mr. De Renzis are not able to leave the United Kingdom.
24.
Ms. Grigolon currently holds 20% of the shares of Investime, which owns 40% of Agonset. She also holds a 10% share in BEG. She is Mr. De Renzis' wife.29

(6) Liliana Condomitti

25.
Liliana Condomitti is Francesco Becchetti's mother and an Italian national whose residential address is 1 Waverton Street, London, W1J 5QN, UK. Ms. Condomitti has relocated to London from Italy due to the criminal charges brought by Albania against her and her son.
26.
Ms. Condomitti acquired a 99.5% share of Costruzioni on 9 May 2002. Through Costruzioni, Ms. Condomitti owns majority interests in Energji, 400 KV, and Cable System, and until March 2015, held 40% of the shares in Agonset. Ms. Condomitti also owns over 25% of BEG, which fully owns Hydro, which, in turn, fully owns KGE.
27.
By order dated 9 June 2015, Albania seized Ms. Condomitti’s direct and indirect shareholdings in Energji, 400 KV, Cable System, and Agonset.30

B. The Respondent

28.
The Respondent is the Republic of Albania. Its President at the time of the final hearing was Mr. Bujar Nishani. He was elected by the Parliament of the Republic of Albania on 11 June 2012 and took office on 24 July 2012 for a five-year term. The head of Government is the Chairman of the Council of Ministers (Prime Minister). The Prime Minister at the time of the final hearing was Mr. Edi Rama. He was appointed by the President on 10 September 2013 and took office five days later, replacing Prime Minister Sali Berisha, who had been Prime Minister of Albania since 11 September 2005.

III. PROCEDURAL HISTORY

29.
On 11 June 2015, ICSID received a request for arbitration dated 10 June 2015 from Hydro, Construzioni, Mr. Becchetti, Mr. De Renzis, Ms. Grigolon and Ms. Condomitti against the Republic of Albania (the "Request"), together with Exhibits C-001 through C-078.
30.

On 29 June 2015, the Secretary-General of ICSID registered the Request in accordance with Article 36(3) of the ICSID Convention and notified the parties of the registration. In the Notice of Registration, the Secretary-General invited the parties to proceed to constitute an arbitral tribunal as soon as possible in accordance with Articles 37 to 40 of the ICSID Convention.

31.
After letters spanning 1 July 2015 through 6 October 2015, the parties confirmed their agreement that the Tribunal should consist of three arbitrators, one arbitrator appointed by each party, and the co-arbitrators jointly appointing the President, in consultation with the parties.
32.
By letter of 4 September 2015, the Claimants appointed Dr. Charles Poncet, a national of Switzerland, as arbitrator in this case.
33.
By letter of 25 September 2015, the Respondent appointed Mr. Ian Glick, a national of the United Kingdom, as arbitrator in this case.
34.
On 20 November 2015, the co-arbitrators, after consulting with the parties, agreed to appoint Dr. Michael Pryles, a national of Australia, as President of the Tribunal.
35.

On 23 November 2015, the Acting Secretary-General, in accordance with Rule 6(1) of the ICSID Rules of Procedure for Arbitration Proceedings (the "Arbitration Rules"), notified the parties that all three arbitrators had accepted their appointments and that the Tribunal was therefore deemed to have been constituted on that date. Ms. Aurélia Antonietti, ICSID Senior Legal Adviser, was designated to serve as Secretary of the Tribunal. On 7 December 2015, the Secretary-General informed the parties that Mr. Francisco Abriani, ICSID Legal Counsel, would replace Ms. Antonietti as Secretary of the Tribunal.

36.
On 5 December 2015, the Claimants filed their Request for Provisional Measures ("Request for Provisional Measures"), together with Exhibits C-079 through C-135 and Legal Authorities CL-001 through CL-010.
37.
On 20 January 2016, the Respondent filed its Response to the Claimants’ Request for Provisional Measures ("Response on Provisional Measures"), together with Exhibits R-001 through R-009 and Legal Authorities RL-001 through RL-024.
38.

On 22 January 2016, in accordance with ICSID Arbitration Rule 13(1), the Tribunal held a first session with the parties by teleconference.

39.
On 27 January 2016, the Tribunal issued Procedural Order No. 1 ("PO 1") recording the agreement of the parties on procedural matters. PO 1 provided, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006, that the Tribunal was properly constituted, that the procedural language would be English, that the place of the proceeding would be Paris, France, and that Dr. Albert Dinelli was to act as Assistant to the Tribunal. As the Respondent indicated its intention to file a Request for Bifurcation, no procedural calendar was finalised, and the Tribunal invited the parties to confer and produce an agreed-upon schedule.
40.
On 28 January 2016, the Claimants filed their Reply on Provisional Measures ("Reply on Provisional Measures"), together with Exhibits C-136 through C-171 and Legal Authorities CL-011 through CL-018.
41.
On 5 February 2016, the Respondent filed its Rejoinder on Provisional Measures ("Rejoinder on Provisional Measures").
42.
On 10 February 2016, the Tribunal held a hearing on the Request for Provisional Measures by teleconference.
43.
On 22 February 2016, the Tribunal ordered that:

a. the Claimants file their Memorial by 6 May 2016,

b. the Respondent file its Request for Bifurcation by 3 June 2016 (later amended to 13 May 2016 and 10 June 2016, respectively).

44.
On 3 March 2016, the Tribunal issued its Provisional Measures Order, in which it recommended that Albania:

a. suspend the proceedings identified as Criminal Proceeding No. 1564 until the issuance of a Final Award in this proceeding; and

b. take all actions necessary to suspend the extradition proceedings currently pending as Case Numbers 1502751601 (for Mr. Becchetti) and 1502752144 (for Mr. De Renzis), until the issuance of a Final Award in this proceeding, and

invited the Respondent to confer with the Claimants and seek to agree appropriate measures to be taken by the Republic of Albania to preserve:

c. the seized assets and the contents of the frozen bank accounts of Energji, KGE, 400 KV, Cable System, and Agonset;

d. the current shareholdings in those companies.

The Order also provided that, should the Respondent fail to comply within 60 days, the Claimants could apply to the Tribunal for further provisional measures.

45.
On 21 March 2016, the Claimants informed the Tribunal that the Respondent was not in compliance with the Provisional Measures Order and requested a telephone conference to discuss enforcement. The Respondent replied by letter of the same date.
46.
On 22 March 2016, the Tribunal noted that no formal application had been made by the Claimants and therefore declined their request to hold a telephone conference.
47.
On 25 March 2016, the Claimants requested that the Tribunal issue a Partial Award or order the Respondent to comply with the Provisional Measures Order ("Application for Further Measures"), together with Legal Authorities CL-019 through CL-023.
48.
On 5 April 2016, the Respondent filed its response to the Application for Further Measures ("Response on Further Measures"), along with an Application to Revoke or Modify the Order on Provisional Measures ("Application for Measures Revocation").
49.
On 18 April 2016, the Claimants filed their response to the Application for Measures Revocation ("Response on Measures Revocation") and their reply comments to the Response on Further Measures, together with Exhibits C-172 through C-176 and Legal Authorities CL-024 through CL-027.
50.
On 19 April 2016, the Tribunal asked the Respondent to provide its reply comments on the Response on Measures Revocation, by no later than 27 April 2016. This deadline was extended until 9 May 2016, pursuant to Tribunal orders of 27 April 2016, 3 May 2016, 5 May 2016 and 7 May 2016 due to the Respondent’s requests of 24 April 2016, 3 May 2016, 4 May 2016 and 6 May 2016 and with regard to the Claimants’ objections on 26 April 2016 and 5 May 2016.
51.
On 10 May 2016, the Claimants requested the Tribunal to decide the Applications for Further Measures and Measures Revocation based on the submissions already made.
52.
That same day, the Respondent submitted its reply comments to the Response on Measures Revocation, together with Exhibits R-010 through R-016 and Legal Authorities RL-0025 through RL-0030.
53.
On 13 May 2016, the Claimants submitted their Memorial on the Merits ("Claimants’ Memorial"), together with Exhibits C-177 through C-553, Legal Authorities CL-028 through CL-106, and two expert reports:

a. First Expert Report of Paul Rathbone dated 13 May 2016; and

b. Expert Report of Brent Kaczmarek and Kiran Sequeira dated 13 May 2016.

54.
On 1 June 2016, after considering the parties’ comments of 23 May 2016 through 31 May 2016, the Tribunal confirmed that it would hold a hearing on the Applications for Further Measures and Measures Revocation on 15 June 2016 in London.
55.
On 1, 2 and 10 June 2016, the Claimants updated the Tribunal on the status of the extradition proceedings pending in the United Kingdom, and submitted Exhibits C-554 through C-558.
56.
On 10 June 2016, the Respondent submitted its Request for Bifurcation ("Request for Bifurcation"), together with Exhibits R-017 through R-018 and Legal Authorities RL-031 through RL-043.
57.
On 12 June 2016, the Tribunal invited: the Respondent to provide its comments on the Exhibits submitted by the Claimants with their 10 June 2016 letter by 17 June 2016 and the Claimants to submit their reply to the Request for Bifurcation by 20 June 2016.
58.
On 14 June 2016, the Respondent requested that Exhibits C-557 through C-558 be excluded from the record.
59.
On 14 June 2016, the Claimants requested an extension until 24 June 2016 to submit their reply on the Request for Bifurcation. On 15 June 2016, the Tribunal granted the requested extension.
60.
A hearing on the Applications for Further Measures and Measures Revocation was held in London on 15 June 2016. The following persons were present at the Hearing:

Tribunal:
Dr. Michael Pryles President (By Video Conference)
Dr. Charles Poncet, M.C.L. Co-Arbitrator
Mr. Ian Glick, Q.C. Co-Arbitrator

ICSID Secretariat:
Mr. Francisco Abriani Secretary of the Tribunal

Assistant to the Tribunal:
Dr. Albert Dinelli Assistant to the Tribunal (By Video Conference)

For the Claimants :
Mr. Philippe Pinsolle Quinn Emanuel Urquhart & Sullivan UK LLP
Dr. Tai-Heng Cheng Quinn Emanuel Urquhart & Sullivan LLP
Mr. Alexander Leventhal Quinn Emanuel Urquhart & Sullivan UK LLP
Mr. Marco Garofalo Quinn Emanuel Urquhart & Sullivan UK LLP
Mr. Christopher J. Tahbaz Debevoise & Plimpton LLP
Mr. Shaun Palmer Debevoise & Plimpton LLP
Mr. Karel Daele Mishcon de Reya LLP
Mr. Julian B. Knowles, QC Matrix Chambers
Mr. Francesco Becchetti Claimant

For the Respondent :
Mr. Toby Landau, QC Essex Court Chambers
Mr. Siddharth Dhar Essex Court Chambers
Mr. Peter Webster Essex Court Chambers
Mr. Ben Brandon Three Raymond Buildings
Mr. David Breslin Gowling WLG (UK) LLP
Ms. Karen O'Connell Gowling WLG (UK) LLP
State Advocate General, State Advocacy Office
Ms. Alma Hicka (Albania)
Ms. Brunilda Lilo State Advocate, State Advocacy Office (Albania)

Court Reporter :
Ms. Claire Hill English-Language Court Reporter

61.
On 16 June 2016, the Tribunal: (i) invited the Respondent to provide any undertakings it was willing to assume by 27 June 2016, and the Claimants to respond by 6 July 2016; (ii) decided not to admit the Claimants’ exhibits C-557 and C-558 into the record; (iii) asked the Respondent to confirm the current status of the Interpol "Red Notice" in respect to the relevant Claimants; and (iv) ordered the parties to provide the judgment of the English court on the application to stay the extradition proceedings for an abuse of process to be handed down on 8 July 2016. The deadlines for (i) and (ii) were respectively extended until 29 June 2016 and 8 July 2016, pursuant to Tribunal orders of 27 and 28 June 2016, due to the Respondent’s requests of the same dates.
62.
On 24 June 2016, the Claimants submitted their Objections to the Request for Bifurcation ("Objections to Bifurcation"), together with Exhibits C-557 and C-558 and Legal Authorities CL-107 through CL-115.
63.
On 27 June 2016, the Tribunal invited the Respondent to file its reply, if any, to the Objections to Bifurcation by 1 July 2016.
64.
On 29 June 2016, the Respondent laid out the details of its undertakings.
65.
On 1 July 2016, the Respondent submitted its Reply to the Claimants’ Objections to Bifurcation ("Reply on Bifurcation"), together with Exhibits R-017 through R-018 and Legal Authorities RL-0044 through RL-0048.
66.
On 3 July 2016, the Tribunal invited the Claimants to submit a rejoinder on Bifurcation by 8 July 2016.
67.
On 8 July 2016, pursuant to the Tribunal’s order of 16 June 2016, the Claimants provided the UK Magistrates Court’s decision granting the Claimants’ application to stay extradition proceedings on the ground of abuse of process, submitted as Exhibit C-560.
68.
That same day, the Claimants provided their comments on the Respondent’s 29 June 2016 letter, and submitted Legal Authorities CL-116 and CL-122.
69.
Further, the Claimants filed their Rejoinder on the Request for Bifurcation ("Rejoinder on Bifurcation"), together with Legal Authorities CL-118 through CL-121 and CL-123.
70.
On 11 July 2016, the Tribunal invited the parties to provide their comments, if any, on the relevance of Exhibit C-560 to these proceedings by 18 July 2016.
71.
On 18 July 2016, the Claimants informed the Tribunal that Albania would not appeal the decision submitted as Exhibit C-560, and submitted the notification of same as Exhibit C-561.
72.
That same day, the Claimants submitted their comments on Exhibit C-560.
73.
On 18 July 2016, in light of the decision submitted as Exhibit C-561, the Respondent requested an extension until 22 July 2016 to submit its comments. The Tribunal granted this extension. On 19 July 2016, the Claimants noted that the Respondent’s request implied that they required additional time in order to respond to Exhibit C-561, not Exhibit C-560. Consequently, the Claimants reserved their rights to make comments on Exhibit C-561.
74.
On 21 July 2016, the Claimants submitted the Notices of Discharge issued by the Westminster Magistrates’ Court as Exhibits C-562 and C-563.
75.
On 22 July 2016, the Respondent made its comments on Exhibits C-560 and C-561.That same day, the Tribunal requested that the Respondent provide an explanation for the delay as its submission included issues it was meant to address by 18 July 2016.
76.
On 23 July 2016, the Respondent explained that it was confused regarding the deadlines and requested that the Tribunal admit the contents of the 22 July 2016 submission. On 24 July 2016, the Tribunal decided to allow the contents of the Respondent’s 22 July 2016 letter in their entirety.
77.
On 19 August 2016 (dated 19 July 2016), the Claimants provided the Tribunal with an update on the status of the Interpol Red Notices against Messrs. Becchetti and De Renzis. On 22 August 2016, the Tribunal invited the Respondent to provide any comments on the Claimants’ letter by 24 August 2016. On 24 August 2016, the Respondent noted to the Tribunal that it had no comments on this letter.
78.
On 1 September 2016, the Tribunal issued its Decision on the Applications for Further Measures and Measures Revocation ("Decision on Further Measures and Revocation"). In this Decision, the Tribunal decided that "[its] Provisional Measures Order of 3 March 2016 is revoked and, in lieu thereof, the Tribunal recommends that the Respondent (a) take no steps in the proceedings identified as Criminal Proceeding No. 1564 to recommence extradition proceedings in the United Kingdom against Messrs. Becchetti and De Renzis until the issuance of a Final Award in the proceeding; and (b) take all actions necessary to maintain the suspension of the extradition proceedings (Case Numbers 1502751601 (for Mr. Becchetti) and 1502752144 (for Mr. De Renzis)) currently stayed, and not to take any steps to resume those proceedings, until the issuance of a Final Award in this proceeding." The Tribunal also decided that the Applications were otherwise dismissed.
79.
On 1 September 2016, the Tribunal informed the parties that it had decided not to bifurcate the proceedings and a reasoned decision would be issued in due course. This was duly issued on 7 December 2016 ("Decision on Bifurcation"). The Tribunal invited the parties to confer on a procedural calendar and to submit their joint proposal by 9 September 2016. On 10 September 2016, the parties requested an extension until 13 September 2016 to produce a calendar. That same day, the Tribunal granted the extension.
80.
On 13 September 2016, the parties informed the Tribunal that they were unable to agree on a schedule for the proceedings.
81.
On 19 September 2016, the Tribunal issued Procedural Order No. 2 ("PO 2") fixing the timetable for the remainder of the proceedings. On 23 September 2016, the Respondent requested that the date for its Counter-Memorial be pushed back by one week, with the deadlines for the Claimants’ submissions being adjusted accordingly. On 26 September 2016, the Tribunal issued an updated procedural calendar accounting for the Respondent’s requested date change.
82.
On 28 November 2016, the Claimants informed the Tribunal of a civil claim brought in Albanian courts against Mr. Becchetti, Mr. De Renzis, and Ms. Condomitti (notice of which was submitted as Exhibit C-564) and reserved their rights to update quantum damages claimed in this arbitration and to request further provisional measures. The Tribunal invited the Respondent to reply to the Claimants’ letter by 12 December 2016. As the Respondent did not reply by this date, the Tribunal noted the contents of the Claimants’ letter, but did not propose taking any action at that time.
83.
On 24 December 2016, the Respondent requested an extension until 20 January 2017 to submit its Counter-Memorial. On 30 December 2016, the Claimants asked the Tribunal to reject the Respondent’s request.
84.
On 1 January 2017, the Tribunal issued Procedural Order No. 3 ("PO 3") amending the procedural calendar in line with the Respondent’s 24 December 2016 request.
85.
On 20 January 2017, the Respondent requested until 23 January 2017 to file its Counter-Memorial. The Tribunal granted the request. On 2 February 2017, the Tribunal stated that the Claimants’ deadline for filing their Reply was likewise extended until 25 May 2017.
86.
On 23 January 2017, the Respondent submitted its Counter-Memorial ("Respondent’s Counter-Memorial") together with Exhibits R-019 through R-098, Legal Authorities RL-0049 through RL-0101 and two expert reports:

a. First Expert Report of Gervase MacGregor dated 20 January 2017; and

b. First Expert Report of Petrit Malaj dated 20 January 2017.

87.
On 10 February 2017, the Claimants requested confirmation that the Respondent’s counsel, Gowling WLG, had been "validly retained pursuant to Albanian law."
88.
On 14 February 2017, the Respondent submitted the transcripts from the 2nd ICC Arbitration as Exhibits R-099 and R-100. By email of 16 February 2017, the Tribunal invited the Claimants to submit any comments on the Respondent’s submission by 22 February 2017. On 24 February 2017, the Tribunal noted that it had not received any comments from the Claimants and informed the parties of its decision to enter the transcripts into the record.
89.
On 23 March 2017, the Respondent noted continued disagreements between the parties in the matter of document production and asked the Tribunal to decide on the issue.
90.
On 4 April 2017, the Tribunal issued Procedural Order No. 4 ("PO 4") on the production of documents.
91.
On 6 April 2017, the Claimants requested from the Respondent "a written assurance from the Minister of Justice of Albania that external counsel were retained with the necessary approvals of the Minister of Justice as provided by the law and to receive the relevant copies of such approvals made at that time." On 19 April 2017, the Respondent stated that it had already addressed this issue and provided a copy of a letter from the State Advocate General dated 23 March 2017 confirming the retention of Gowling WLG UK LLP as counsel for Albania.
92.
On 25 April 2017, the parties were informed that Dr. Dinelli had resigned as Assistant to the Tribunal and that the Tribunal proposed to replace him with Mr. Timothy Maxwell, unless the parties objected. In the absence of objection, on 13 May 2017, Mr. Maxwell was appointed as Assistant to the Tribunal.
93.
On 2 and 11 May 2017, the Claimants stated that the Respondent’s delay in complying with the document production ordered in PO 4 had prejudiced their ability to prepare their Reply and requested an extension until 8 June 2017. On 10 and 11 May 2017, the Respondent objected to the Claimants’ requests and asked that the procedural calendar be preserved and asked that, if the Tribunal were nevertheless minded to grant it, the Respondent be given a commensurate two-week extension to file its Rejoinder. On 11 May 2017, the Tribunal ordered the parties to comply with PO 4 by no later than 19 May 2017, and granted the Claimants an extension until 2 June 2017 to file their Reply.
94.
On 16 May 2017, the Respondent confirmed that Albania had retained Gowling WLG UK LLP and provided a signed power of attorney.
95.
On 22 May 2017, the Tribunal asked the parties: (i) to submit a joint list of abbreviations by 31 May 2017; (ii) to submit an agreed dramatis personae, a list of issues to be decided by the Tribunal, and a chronology by 21 August 2017; and (iii) to confirm by 25 May 2017 their availability for a pre-hearing conference call.
96.
On 30 May 2017, the parties informed the Tribunal that they would submit their joint list of abbreviations by 7 June 2017. The Tribunal agreed to the revised deadline. The parties submitted the list of abbreviations on 6 June 2017.
97.
On 31 May 2017, the Tribunal asked the Claimants to provide a detailed table of companies and shareholders included in Annex A to their Memorial and any concerned investments that are the subject of the current arbitration. This was provided on 12 June 2017.
98.
On 2 June 2017, the Claimants filed their Reply on the Merits and Counter-Memorial on Jurisdiction ("Reply on the Merits"), together with Exhibits C-575 through C-661, Legal Authorities CL-133 through CL-229 and the following expert reports:

a. Second Expert Report of Paul Rathbone dated 2 June 2017;

b. Third Expert Report of Paul Rathbone dated 2 June 2017;

c. Second Expert Report of Brent Kaczmarek and Kiran Sequeira dated 2 June 2017;

d. Consultant’s Report of Enyal Shuke dated 2 June 2017;

e. Expert Report of Alberto Pasquale dated 2 June 2017;

f. Expert Report of Arben Qeleshi dated 2 June 2017; and

g. Expert Report of Sergio Garribba dated 2 June 2017.

99.
On 6 June 2017, the Respondent requested permission to make an application to the Tribunal in response to Claimants’ Reply on the Merits. On 7 June 2017, the Tribunal asked the Respondent to explain why this could not be addressed in its forthcoming Rejoinder.
100.
On 13 June 2017, the Claimants, referring to their letters of 10 February and 6 April 2017, sought the Tribunal’s permission to apply for the removal of the Respondent’s external counsel. On 14 June 2017, the Tribunal asked the Respondent to reply to the Claimants’ request.
101.
On 15 June 2017, in reference to their request of 6 June 2017, the Respondent further elaborated on its request, asking for permission to submit an application for the exclusion of evidence presented by the Claimants. On 16 June 2017, the Tribunal informed the parties that the Respondent’s application would be allowed.
102.
On 16 June 2017, the Respondent submitted its application for the exclusion of the three expert reports submitted with the Claimants’ Reply on the Merits, namely the reports of Mr. Pasquale, Professor Garribba, and Mr. Qeleshi. Alternatively, should the Tribunal decide not to exclude the reports, the Respondent requested an extension until 4 August 2017 to file its Rejoinder ("Application to Exclude Reports"). On 19 June 2017, the Tribunal invited the Claimants to reply to the Application to Exclude Reports by 20 June 2017.
103.
On 20 June 2017, the Claimants requested that the Application to Exclude Reports be rejected in its entirety, including the proposed modification of the procedural calendar and filed Legal Authorities CL-230 through CL-236 ("Response to Exclude Reports").
104.
That same day, the Claimants separately, inter alia, requested permission to address substantive points made in the Respondent’s 16 June 2017 letter regarding their application to disqualify the Respondent’s counsel, and requested that the upcoming hearing be moved from Paris to London.
105.
On 20 June 2017, in the absence of a response on the issue from the Respondent, the Tribunal granted the Claimants permission to submit their application for the removal of the Respondent’s external counsel.
106.
On 21 June 2017, the Respondent sought permission to reply to the Response to Exclude Reports.
107.
On 21 June 2017, the Tribunal asked the parties to confirm by 27 June 2017 if they were in agreement on moving the hearing from Paris to London, and stated its intention to make its decision upon receipt of the confirmation.
108.
On 22 June 2017, the Tribunal granted the Respondent’s request to reply to the Response to Exclude Reports, giving it until 23 June 2017 to do so. The Claimants were invited to provide any further comments on the issue by 27 June 2017.
109.
On 23 June 2017, the Respondent maintained its Application to Exclude Reports.
110.
On 27 June 2017, the Claimants applied to the Tribunal to submit an additional document onto the record.
111.
That same day, the Claimants separately reiterated their position stated in the Response to Exclude Reports.
112.
On 27 June 2017, the Tribunal issued Procedural Order No. 5 ("PO 5") stating that the expert reports of Mr. Pasquale, Professor Garribba and Mr. Qeleshi would remain on the record, while the reports of Mr. Nesho and Mr. Taylor were to be excluded. In PO 5, the Tribunal modified the procedural calendar, requiring the Respondent to submit its Reply on Jurisdiction by 7 July 2017, the Respondent to submit its Rejoinder on the Merits by 4 August 2017, and the Claimants to submit their Rejoinder on Jurisdiction by 4 August 2017.
113.
On 28 June 2017, the Claimants informed the Tribunal that the Respondent did not agree to their request to move the hearing to London. The Claimants asked that no further arrangements regarding the hearing in Paris be confirmed before they could submit an explanation as to why holding the hearing in Paris would cause them undue hardship. The Claimants explained later that same day that Messrs. Becchetti and De Renzis were unable to travel outside of the United Kingdom in light of the Interpol Red Notices placed on them due to the criminal proceedings in Albania that were addressed in the Provisional Measures phase of this arbitration. As such, the Claimants reaffirmed their request that the hearing be moved from Paris to London.
114.
On 28 June 2017, the Claimants submitted an application that the Tribunal, inter alia, declare that Gowling WLG and members of Essex Court Chambers were never valid representatives of the Respondent and that all evidence submitted by such counsel be excluded from the record ("Application to Remove Counsel"), together with Exhibits C-662 through C-671 and Legal Authorities CL-237 through CL-239.
115.
On 28 June 2017, the Tribunal asked the Respondent to respond to the Claimants’ application to move the hearing by 4 July 2017, and to respond to the Application to Remove Counsel by 5 July 2017.
116.
On 30 June 2017, the Respondent requested an extension until 12 July 2017 to file its response the Application to Remove Counsel. On 3 July 2017, the Tribunal granted the Respondent until 10 July 2017. On 4 July 2017, the Respondent requested a short extension to submit its comments on the hearing venue. The Tribunal granted the extension.
117.
On 5 July 2017, the Claimants submitted Exhibits C-672 through C-675 in support of the Application to Remove Counsel.
118.
On 5 July 2017, the Respondent asked the Tribunal to reject the Claimants’ application to change the venue of the hearing.
119.
On 7 July 2017, the Respondent submitted its Reply on Jurisdiction ("Reply on Jurisdiction") together with Exhibits R-099 through R-113 and Legal Authorities RL-102 through RL-131.
120.
On 9 July 2017, the Tribunal issued Procedural Order No. 6 ("PO 6") in which it requested that the Respondent confirm by 14 July 2017 that it would not seek the arrests of Messrs. Becchetti and De Renzis should they travel to Paris to attend the hearing.
121.
On 10 July 2017, the Respondent requested an extension until 12 July 2017 to file its comments on the Application to Remove Counsel. The Tribunal granted the requested extension. On 12 July 2017, the Respondent requested a further one-day extension. On 13 July 2017, the Tribunal informed the parties that it expected a response from the Respondent that week.
122.
On 14 July 2017, the Respondent submitted its response to the Application for Removal of Counsel ("Response on Removal of Counsel"), together with Exhibits R-114 through R-117.
123.
That same day, the Respondent separately noted that, as previously confirmed, there were no outstanding Interpol Red Notices against Messrs. Becchetti and De Renzis; however, for the sake of efficiency, it had decided to agree to a change of venue from Paris to London.
124.
On 14 July 2017, the Claimants requested leave to submit reply comments on the Response on Removal of Counsel. On 15 July 2017, the Tribunal granted the Claimants leave to submit their comments by 18 July 2017.
125.
On 18 July 2017, the Tribunal: (i) confirmed the hearing venue would be moved to London; and (ii) admitted Claimants’ Exhibit C-662 into the record.
126.
On 18 July 2017, the Claimants submitted further comments regarding the disqualification of the Respondent’s counsel ("Reply on Removal of Counsel").
127.
On 19 July 2017, the Tribunal invited the Respondent to submit any response to the Reply on Removal of Counsel by 25 July 2017. On 25 July 2017, the Respondent requested a one-day extension to make its submission. That same day, the Tribunal granted the requested extension.
128.
On 26 July 2017, the Respondent submitted comments on the Reply on Removal of Counsel.
129.
On 1 August 2017, the Tribunal issued Procedural Order No. 7 ("PO 7"), dismissing the Application to Remove Counsel.
130.
On 4 August 2017, the Respondent requested an extension to file its Rejoinder on the Merits, due that day, until 6 August 2017. The Tribunal granted the extension.
131.
On 4 August 2017, the Claimants asked the Tribunal to consider that the Respondent’s repeated delays in the filing of the Rejoinder on the Merits highly prejudiced the Claimants, and reserved their rights to raise the issue in an application for costs.
132.
On 4 August 2017, the Claimants filed their Rejoinder on Jurisdiction ("Rejoinder on Jurisdiction"), together with Exhibits C-682 through C-687 and Legal Authorities CL-240 through CL-263.
133.
On 6 August 2017, the Respondent requested a further one-day extension to file its Rejoinder on Jurisdiction. That same day, the Tribunal allowed the extension.
134.
On 7 August 2017, the Respondent filed its Rejoinder on the Merits ("Rejoinder on the Merits") together with Exhibits R-118 through R-220, Legal Authorities RL-132 through RL-138, and the following expert reports:

a. Second Expert Report of Gervase MacGregor dated 4 August 2017;

b. Second Expert Report of Petrit Malaj dated 4 August 2017;

c. Expert Report of Paolo Marino dated 4 August 2017; and

d. Expert Report of Luis Borrell dated 4 August 2017.

135.
On 8 August 2017, the Tribunal held a pre-hearing telephone conference with the parties.
136.
On 8 August 2017, the Claimants requested leave from the Tribunal to submit new evidence into the record. That same day, the Tribunal asked the Respondent to submit any objections to this request by 14 August 2017.
137.
On 12 August 2017, the Claimants: (i) stated that the Respondent’s expert report of Mr. Paolo Marino should not be submitted into the record due to a conflict of interest; and (ii) requested that references in the Rejoinder on the Merits to the Rejoinder on Jurisdiction be struck from the Respondent’s submission, as the two Rejoinders were scheduled to be submitted simultaneously. On 14 August 2017, the Tribunal invited the Respondent to respond by 17 August 2017.
138.
On 14 August 2017, the Respondent objected to the Claimants’ 8 August 2017 request to submit new evidence into the record.
139.
On 15 August 2017, the Tribunal admitted the Claimants’ documents of 8 August 2017 into the record without prejudice to the Respondent’s right to raise further objections.
140.
On 15 August 2017, the Respondent submitted the Expert Report of Arben Rakipi dated 15 August 2017 in support of the Rejoinder on the Merits.
141.
On 16 August 2017, the Claimants made an application to submit new evidence into the record and asked the Tribunal to compel the Respondent to produce documents relied on by their experts, including translations where necessary, and submitted Legal Authority CL-264. On 17 August 2017, the Tribunal invited the Respondent to comment on the Claimants’ application by 21 August 2017.
142.
On 17 August 2017, the Respondent requested a one-day extension to respond to the Claimants’ 12 August 2017 letter. The Tribunal granted the extension. On 18 August 2017, the Respondent asked the Tribunal to reject both of the Claimants’ 12 August 2017 requests.
143.
On 21 August 2017, the Tribunal issued Procedural Order No. 8 ("PO 8"), concerning the organisation of the hearing, and Procedural Order No. 9 ("PO 9"), addressing the Claimants’ 12 August requests. In PO 9, the Tribunal decided: (i) to provisionally admit Mr. Paolo Marino’s expert report, while inviting the Claimants’ to make a brief argument at the hearing on why it should be excluded; and (ii) to strike references to the Rejoinder on Jurisdiction from the Rejoinder on the Merits. The Respondent submitted a new version of the Rejoinder on the Merits on 28 August 2017.
144.
On 21 August 2017, the Respondent asked the Tribunal to dismiss the Claimants’ 16 August 2017 application.
145.
On 22 August 2017, the Tribunal issued Procedural Order No. 10 ("PO 10"), denying the Claimants’ 16 August 2017 application to submit new documents.
146.
On 23 August 2017, the Claimants commented on the Respondent’s document production. That same day, the Tribunal stated that it "expect[ed] the Respondent to produce the documents it has undertaken to provide," with outstanding matters to be addressed at the hearing.
147.
On 25 August 2017, the Claimants applied to the Tribunal for an extension to submit the points of disagreement of Professor Garribba. On 26 August 2017, the Tribunal granted an extension until 5 September 2017. On 5 September 2017, this was submitted.
148.
On 1 September 2017, the Claimants submitted their points of disagreement, excluding those of Professor Garribba.
149.
A hearing on jurisdiction and the merits was held in London from 4 through 14 September 2017 (the "Hearing"). During the Hearing, the parties submitted Exhibits C-688 through C-693, CH-001 through CH-002, CL-265 and R-221. The following persons were present at the Hearing:

Tribunal:
Dr. Michael Pryles, AO PBM President
Dr. Charles Poncet Arbitrator
Mr. Ian Glick, QC Arbitrator

ICSID Secretariat:
Mr. Francisco Abriani Secretary of the Tribunal

Assistant of the Tribunal
Mr. Tim Maxwell Assistant of the Tribunal

For the Claimants :
Counsel:
Mr. Philippe Pinsolle Quinn Emanuel Urquhart & Sullivan LLP
Dr. Tai-Heng Cheng Quinn Emanuel Urquhart & Sullivan LLP
Mr. Alexander Leventhal Quinn Emanuel Urquhart & Sullivan LLP
Mr. Marc Reifsnyder Quinn Emanuel Urquhart & Sullivan LLP
Mr. Marco Garofalo Quinn Emanuel Urquhart & Sullivan LLP
Mr. David W. Rivkin Debevoise & Plimpton LLP
Ms. Catherine Amirfar Debevoise & Plimpton LLP
Mr. Romain Zamour Debevoise & Plimpton LLP
Mr. Shaun A. Palmer Debevoise & Plimpton LLP
Mr. Alexandre de Fontmichel
Prof. Andrea Saccucci Saccucci & Partners

Support Personnel:
Ms. Mali Torres Debevoise & Plimpton LLP

Parties:
Mr. Francesco Becchetti Claimant 3
Mr. Tim Fritz Costruzioni S.r.l.
Ms. Marzia Amiconi Costruzioni S.r.l.

For the Respondent:
Counsel:
Mr. David Breslin Gowling WLG (UK) LLP
Mr. Michael Darowski Gowling WLG (UK) LLP
Ms. Karen O'Connell Gowling WLG (uk) LLP
Ms. Anna Packwood Gowling WLG (UK) LLP
Mr. Bertie Rooke Gowling WLG (UK) LLP
Mr. Myles Wallbank Gowling WLG (UK) LLP
Mr. Jonathan Zane Gowling WLG (uk) LLP
Ms. Ellie Ismaili Gowling WLG (UK) LLP
Mr. Siddarth Dhar Essex Court Chambers
Mr. Felix Wardle Essex Court Chambers
Mr. Peter Webster Essex Court Chambers
Mr. Artan Hajdari Haxhia & Hajdari Attorneys at Law

Parties:
Ms. Alma Hicka State Advocates Office, Republic of Albania
Ms. Brunilda Lilo State Advocates Office, Republic of Albania

Court Reporter :
Mr. Trevor McGowan English-language court reporter

Interpreters :
Mr. Genc Lemani English-Albanian interpretation
Mr. Ragip Luta English-Albanian interpretation
Ms. Elvana Moore English-Albanian interpretation
Ms. Delfina Genchi English-Italian interpretation
Ms. Daniela Ascoli English-Italian interpretation
Ms. Monica Robiglio English-Italian interpretation

Silent Observer
Ms. Caitlin Moustaka Michael Pryles Law Firm

150.
On 4 September 2017, the Tribunal reminded the parties that they were asked to produce a list of dramatis personae and a chronology, and invited them to produce these lists as soon as possible. The parties submitted them that day.
151.
During the Hearing, the following persons were examined:

On behalf of the Claimants:
Witnesses:
Mr. Shpetim Arbana
Mr. Francesco Becchetti
Ms. Endire Bushati
Ms. Sonila Mego

Experts:
Prof. Sergio Garribba
Mr. Brent C. Kaczmarek Navigant
Mr. Alberto Pasquale
Mr. Arben Qeleshi
Mr. Paul Rathbone CEG
Mr. Kiran P. Sequeira
Ms. Enyal Shuke Shuke Law

On behalf of the Respondent :
Experts:
Mr. Lluís Borrell Analysys Mason Limited
Mr. Paolo Marino Poyry Management Consulting
Mr. Gervase MacGregor BDO LLP
Mr. Petrit Malaj BDO LLP
Mr. Andrew Maclay BDO LLP
Mr. Matthew McDevitt BDO LLP
Mr. Jason Macdoombe BDO LLP
Prof. Arben Rapiki Albanian School of Magistrates, Tirana, Albania

152.
On 11 October 2017, the Claimants requested an extension until 20 October 2017 to file their cost submissions. The Tribunal granted the extension.
153.
The parties filed their submissions on costs on 20 October 2017 (respectively, "Claimants’ Costs Submissions" and "Respondent’s Costs Submissions").
154.
On 31 October 2017, the Respondent submitted an amended statement of costs ("Respondent’s Amended Costs Submissions").
155.
On 17 November 2017, the Claimants informed the Tribunal of certain developments on the Kalivaç Project. On 19 November 2017, the Tribunal invited the Respondent to reply by 27 November 2017 and reminded the parties that they were not to make submissions without having been granted leave of the Tribunal. On 27 November 2017, the Respondent confirmed it had no comments on the Claimants’ letter.
156.
On 7 December 2018, pursuant to the parties’ agreement at the Hearing that the Tribunal could consult the experts directly, the Tribunal sent a letter to the parties’ quantum experts, Mr. Rathbone and Mr. MacGregor, requesting them to calculate damages for the Claimants based on numerous valuations of Agonset.
157.
On 8 December 2018, the parties were notified of the Tribunal’s correspondence with the experts and advised that they would be invited to comment on the experts’ responses. However, such responses would be confined to the experts’ calculations and the parties were not to comment on the question of valuation already fully addressed by the parties at the Hearing.
158.
On 18 December 2018, the Tribunal wrote to the parties notifying the Respondent that, pursuant to ICSID Arbitration Rule 47, the Award would need to contain the decision on costs. The Respondent was invited to make an application for permission to make a further submission on costs as, in the Respondent’s Cost Submission, the Respondent had purported to reserve its position to make further submissions on costs depending on the precise reasoning of the Award.
159.
On 21 December 2018, the Respondent wrote to the Tribunal expressing concern with the fact that the Tribunal had not engaged in further discussion with the experts regarding the valuation of Agonset.it and Agonset Albania before requesting a calculation of damages.
160.
On 27 December 2018, the Tribunal wrote to the parties advising that the valuation of Agonset formed part of the parties’ submissions and had been fully articulated at the Hearing and in voluminous expert evidence and if the Tribunal decided to discuss valuation assumptions further with the experts the parties would be notified. Until and unless that happened, the Tribunal directed that the parties not make unsolicited submissions.
161.
On 31 December 2018, the Respondent applied for leave to make further submissions on costs ("Application for Further Costs Submissions"). On 3 January 2019, the Tribunal wrote to the parties inviting the Claimants to confirm whether they consented to the Application for Further Costs Submissions by 9 January 2019.
162.
On 3 January 2019, the parties’ quantum experts respectively submitted their views on the calculation of damages as requested by the Tribunal.
163.
On 4 January 2019, the Tribunal wrote to the parties asking them to make any comments on the calculations submitted by the quantum experts by 11 January 2019. The parties were reminded that they were only permitted to comment on the calculations and not on the underlying assumptions which were fully debated at the Hearing and in the parties’ memorials.
164.
On 9 January 2019, the Claimants objected to the Application for Further Costs Submissions on the basis that the Respondent had already been given the opportunity to make its costs submission in accordance with Article 6.1 of PO 8.
165.
On 11 January 2019, the Tribunal ordered that the Respondent could make a further submission on costs by 17 January 2019 and the Claimants could make a reply submission by 23 January 2019.
166.
On 11 January 2019, the Respondent confirmed it had no comments on the experts’ calculations but reiterated its concerns regarding the valuation assumptions and reserved its rights with respect to same.
167.
That same day, the Claimants confirmed they had no comments on the experts’ calculations but asked that the Award reflect the date of its issuance with respect to damages.
168.
On 17 January 2019, the Respondents filed its further submissions on costs ("Respondent’s Further Costs Submissions").
169.
On 23 January 2019, the Claimants filed their reply on the Respondent’s Further Costs Submissions ("Claimants’ Reply on Further Costs Submissions").
170.
The proceeding was closed on 25 March 2019.

IV. FACTUAL BACKGROUND

A. The KALIVAÇ Concession Agreement

171.
In 1992, the Albanian communist party lost national elections and left power.31 In 1993 and 1994, Francesco Becchetti met with various Albanian officials, including the Prime Minister and Foreign Minister at the time and administrators of the state electrical company, Korporata Elektroenergjitike Shqiptare ("KESH") to discuss the possibility of building hydroelectric plants in Albania with foreign investment.32
172.
In order to attract foreign investment in infrastructure, in 1995 the Parliament passed a law permitting the government to grant concessions to private companies.33 In the same year, Francesco Becchetti created BEG to carry out and operate large energy projects.34
173.
On 16 May 1995, BEG and KESH signed a cooperation agreement35 allowing BEG to conduct studies along the Vjosa River and gain access to the technical data prepared by the Albanian Government.36 Those studies and data indicated that a site in Kalivaç, in Krahes, would be optimal for a hydroelectric power plant.37 A number of other sites on the river were identified as being suitable for such power plants to be built.38
174.
On 28 September 1995, BEG submitted its prefeasibility study to the Authorised State Body ("ASB"),39 and in November and December began conducting feasibility studies on site at Kalivaç.40
175.
On 27 February 1996, BEG submitted its concession request to build a hydroelectric power plant at Kalivaç,41 and on 8 April 1996, KESH provided a favourable recommendation to the Ministry of Minerals and Energy Resources.42 On 3 June 1996, the Council of Ministers approved the request and invited BEG to commence negotiations.43 The Claimants also assert that during these discussions the Albanian Government and KESH offered BEG a right of first negotiation concerning other hydroelectric projects on the Vjosa River.44

(1) Terms of the original Concession Agreement

176.
On 24 May 1997, after nearly a year of negotiations, BEG and the ASB signed the Concession Agreement, "for the financing, engineering, construction, management and [transfer] at the Concession expiring date, of a Hydro-Power Plant in Albania according to a B.O.T. (Build Operate and Transfer) basis."45 It contained the following key terms.
177.
The Concession Period would run for 30 years from the beginning of the works,46 subject to any extension for force majeure events,47 or delay in the ASB performing its obligations and duties where it is at fault.48 During this period, starting from the Plant start up, BEG would pay to Albania a concession fee of 10% of the Kalivaç Plant's annual production.49 Otherwise, BEG was to be free to sell the plant's electricity on the open market (including the export market), and so during that 30-year period make a return on its investment.50 At the end of the 30-year period BEG was obliged to turn the Plant over to Albania fully operational, with sufficient spare parts for a further 5 years of operation.51
178.
The Concession Agreement imposed the following key obligations on BEG.

a. BEG warranted that it had the necessary technical, financial and managerial capabilities to perform the contract to international standards.52

b. BEG undertook to arrange all necessary financing and do everything necessary to build and manage the plant according to the specifications set out in the Concession Agreement53 and to manage the plant when completed.54

c. BEG undertook to begin the works within 10 months of Parliamentary ratification; to complete design within 12 months of the yard opening; and to complete the plant within 48 months of the beginning of the works55 (subject to extensions for delay in the ASB performing its obligations and duties under the Concession Agreement where the ASB is at fault56 and force majeure, discussed further below).

179.
The Concession Agreement provided that BEG was entitled to:

a. seek a "penalty equal to 80% of the Plant turnkey investment ready for the start up," fixed at USD 100,000,000, if Albanian authorities were to expropriate or confiscate the plant;57

b. seek to have privately held land necessary for the construction of the plant expropriated under the Albanian law on expropriation in force as at the signing of the Concession Agreement with the ASB’s assistance and at BEG’s expense;58

c. export all of the energy to which it was entitled under the Concession Agreement;59 and

d. transfer its profits freely.60

180.
The ASB provided the following exemptions and guarantees under the Concession Agreement.61

a. Exemption from customs duties on BEG’s import and export of goods, a provision which would remain in force even if Albanian law changed.

b. Exemption from tax on profits for the first two years of operation (subject to extension for delay in the ASB performing its obligations and duties under the Concession Agreement where the ASB is at fault62), following which the tax rate would be frozen at 15%.

c. Exemption from VAT.

d. A guarantee that VAT would be refunded within 30 days of BEG’s request for the refund.

181.
The ASB also:

a. granted "stabilisation", i.e. that subsequent laws "will not modify, in any way, the duties accepted by the parties, as well as the content of the present Concession Agreement";63

b. agreed to provide any necessary assistance with any organisation and Albanian authority to allow BEG to undertake the project;64 and

c. agreed to declare the plant a priority structure, letting it take precedence in the utilisation of infrastructure and retrieving materials necessary for works.65

182.
The Concession Agreement also provided for adjustments to the schedule for completion of the plant in the event of force majeure, described as follows.66

To make an example, not limitative, are considered as Force Majeure events as natural catastrophes such as floods and earthquakes, exceptional political events such as wars and revolutions, and third Parties' interventions having a law force.

In case that during the realization of the duties Force Majeure events occur, the Parties will have no right to ask each other refunds for possible delays or non-fulfilment in due time.

As far as the scheduled time is concerned according to previ[ou]s art. 12, will be consequently modified in accordance to the needs deriving from the stop due to the Force Majeure event.

The stop period and the postponing of the foreseen dates for mutual duties' fulfilment will have to be confirmed by integrative minute books to the present Concession Agreement agreed by the Parties.

183.
The Concession Agreement envisaged that an "Operating Company" would be established as a local subsidiary of the Concessionaire through which it would perform the Concession. The Concession Agreement promised that that Operating Company would, upon the appropriate legislation being executed, itself enjoy various tax exemptions under Albanian law.67 As noted, KGE was used by BEG as the Operating Company for the purposes of the project. Originally, however, Albaniabeg was the Operating Company. The legislation necessary to confer those exemptions on the Operating Company was passed in 2000.68 It provided the Operating Company with statutory rights enforceable under Albanian law.
184.
Article 14 of the Concession Agreement provided for termination of the agreement in the following terms.

The Authorized State Organ, according to art. 31, will have the right to start an annulment procedure of the Concession - through a previous warning to remove, by an adequate time, the irregularities that came out and in case the Concessionaire do not conform -beside a serious non-fulfilment of the duties established by the present Concession Agreement, also when the Concessionaire, due to neglicence [sic] and inexperience, compromises - in any phase -the running, the execution and the good results of the works themselves.

Should the situations mentioned in the previous comma occur, the Authorized State Organ will previously ask the Concessionaire to show within 30 days its justifications, and, in case it decides not to accept them, it will be entitled to start the procedure for the rescission, informing the Concessionaire. If for any reason imputable to the Concessionaire, after 15 months from the signing of the present concession Agreement, the Concessionaire do not begin the works, the Authorized State Organ can declare annulled the Concession.

Should the Authorized State Organ be late in the fulfilment of its duties, the Concessionaire may ask to annul the contract by adequate petition, and should it be accepted, the Concessionaire has right to the refund of the expenses supported; should the petition not be accepted, but being the Authorized State Organ still late, the Concessionaire is allowed to ask according to art. 31, for the annulment of the contract and the damage refund, by a previous petition containing the act of the Authorized State Organ being put in arrears.

Should the Authorized State Organ behave in a deeply non-fulfilling way, the Concessionaire has the right to ask for the annulment of the contract and for the damage refund, by a previous petition containing the act of the Authorized State Organ being put in arrears.

(2) Implementation of the Concession Agreement and further Vjosa River projects

185.
On 24 May 1997, on the day that BEG and the ASB executed the Concession Agreement, the Council of Ministers approved the agreement with Decision No. 222.69 That decision also decided:

4. To authorize B.E.G. SpA to study, at its own expense, the possibility of building hydropower plants on the lower part of the River Vjosa, after the Kalivaç hydropower plant.

If the study supports the construction of another hydropower plant with BOT concession, and if the Government grants its approval, B.E.G. SpA has the right to become the first negotiator.

186.
Decision No. 222 brought the Concession Agreement into force;70 however, the provisions in the agreement concerning the duration of the concession period,71 facilitation of expropriations,72 stabilisation,73 customs and fiscal exemptions,74 and expropriation of the plant75 required Parliamentary approval.76 If Parliament failed to approve these provisions within 60 days of the signing of the Concession Agreement, BEG could either rescind the Concession Agreement or pursue the Concession Agreement without these provisions.77
187.
The Parliament did not approve the relevant provisions until 2000, three years later.78 The delay was due to political turmoil in Albania.79 BEG did not exercise its right to rescind, nor its right to continue with the Concession Agreement absent the provisions that required parliamentary approval. It decided to wait, on the basis of assurances received from Albanian officials that parliamentary approval would be provided once the political situation was calmer.80
188.
Towards the end of this period, in September 1999, BEG submitted concession requests for three other projects along the Vjosa River, at Dragot, Kaludh, and Karbunare.81 In January 2000, the Albanian Institute of Hydrotechnical Studies and Planning carried out an analysis of the studies BEG had submitted on these proposed projects,82 which recommended the concessions be approved.
189.
When the political situation in Albania stabilised, in 2000, BEG and the then-relevant Albanian ministries83 signed the First Addendum to the Concession Agreement.84 This addendum removed the requirement that parliamentary approval occur within 60 days from the signing of the Concession Agreement and amended Article 13 of the Concession Agreement to allow BEG to build and operate the plant through a subsidiary company. The Parliament then approved the relevant provisions of the Concession Agreement in December of 2000.85
190.
BEG had applied for the three further concessions on the Vjosa River with its then-partner Enel SpA ("Enel"), the Italian state energy company. BEG and Enel signed a "Preliminary Cooperation Agreement" dated 12 March 1999 and a "Final Cooperation Agreement" dated 2 February 2000.86 Under those agreements, BEG was to contribute the Concession to a to-be-formed joint venture company that would develop the further projects.87
191.
Enel decided not to fund the project, however, and this led to two disputes, one between BEG and Enel, and another dispute between Albaniabeg (the BEG subsidiary that was the then Operating Company under the Concession Agreement) and Enel. Both disputes were arbitrated. BEG was unsuccessful,88 but Albaniabeg obtained an award for €25,188,500 in respect of lost revenue in 2004 and damages pursuant to a formula to compensate Albaniabeg for lost revenues that would have arisen from the sale of electricity in respect of 2005 to 2011.89 Albaniabeg is seeking to enforce that judgment on the basis that it is worth €433,091,870.90 In that arbitration, Albaniabeg asserted that but for Enel's wrongs the Kalivaç Project would have been completed in 2003.91
192.
Construction started on the plant at Kalivaç on 30 November 2003.92 The works were carried out by Albaniabeg until 2007, when a new entity was formed under the joint venture agreement between BEG and its new partner, Deutsche Bank, discussed in section C below.

B. Albaniabeg’s Waste Management Concession

193.
On 26 May 2005, Albaniabeg signed a concession agreement for the construction and operation of a Waste Management Concession in Albania.93 Albaniabeg had been chosen despite a request made for the same concession by Koço Kokedhima, an Albanian businessman who became a member of Parliament in 2013 and who, the Claimants assert, has ties to then Tirana Mayor (and later Prime Minister) Edi Rama.94
194.
Shortly after this concession agreement was signed, Shekulli, a newspaper owned by Mr. Kokedhima, purported to publish details of the concession agreement.95 The Claimants assert that this report was false.96 Mr. Kokedhima also made public statements against Albaniabeg and disparaged the Italian nationality of the company's shareholders, statements which Albanian and Italian courts ultimately found to be defamatory.97
195.
Erion Veliaj, the leader of a reform movement, became involved and organized protests against the project, along with other politicians, including Edi Rama.98 These protests were in part also directed against the Prime Minister at the time, Fatos Nano. Prime Minister Nano was later succeeded as the leader of the Socialist Party by Edi Rama. The Claimant also asserts that Mr. Veliaj is considered Prime Minister Rama's protégé. At the time of the final hearing, Mr. Veliaj was Mayor of Tirana.99
196.
Successive Albanian Governments postponed, but did not cancel, the concession agreement for the waste management project because of the protests. When Prime Minister Rama came to power he passed a ban on waste imports, at which point the Claimants assert that the project became impossible.100

C. Deutsche Bank Joint Venture and the Second Addendum

197.
On 16 January 2007, BEG and Deutsche Bank AG signed a joint venture agreement for the Kalivaç Project ("JVA").101 By the JVA, BEG undertook to incorporate a joint venture company to which it was to transfer the Concession,102 and Hydro was formed for this purpose.103 Because Deutsche Bank would only be involved in the Kalivaç Project and not the waste management facility, a new joint venture company, KGE, was ultimately created from Albaniabeg to construct and operate the Project.104 KGE was and is 100% owned by Hydro. Under the JVA, BEG would own a 55% share in Hydro, and Deutsche Bank would own a 45% share.105
198.
Also under the JVA, Deutsche Bank undertook to:106

a. make a capital contribution to Hydro and to provide a shareholders' loan; and

b. use its best efforts to find in the market project finance lenders and also use its commercial best efforts to find a suitable purchaser of energy produced by the Project, if that was a requirement of finance.

199.
Finally, BEG undertook to continue performing or procuring other companies to perform the construction works of the Project until "Financial Close" and to use its commercial best efforts to identify an Engineering, Procurement and Construction Contractor ("EPC Contractor") in respect of the Project.107
200.
Partly to facilitate the JVA between BEG and Deutsche Bank, a Second Addendum to the Concession Agreement was then agreed between BEG and the ASB108 on 8 May 2007.109 That addendum made the following key changes to the Concession Agreement.

(1) Terms of the Second Addendum

201.
Article 13 (Concession Limit) had originally provided that the Concessionaire, BEG, was not entitled to transfer all or part of the Concession. Under the amended provision, by Article 13.1, BEG undertook to procure within 180 days of approval of the Second Addendum that the Concession would be held by a company ("Newco") controlled by BEG and in which Deutsche Bank would have at least 45% share capital. Newco was to have a minimum corporate capital of €15 million. Article 13.2 provided that once that transaction was completed, the Concessionaire was not to transfer the Concession Agreement to any third party. Activities relating to the construction and management of the Plant were to be carried out by the Concessionaire through the Operating Company. Article 13.3 provided that, before the Commercial Operation Date, Deutsche Bank’s or BEG’s equity interest should not be transferred to any third party without prior written consent of the ASB, which was not to be unreasonably withheld.
202.
The Second Addendum added to Article 5 (Concessionaire Obligations) an obligation on the Concessionaire to provide the ASB, within 180 days of the date of effectiveness of the Second Addendum, with evidence of "the availability of the financial coverage for the Implementation of the Project, it being understood and agreed between the parties that non-fulfilment of this obligation will be considered as a serious breach of the Concession Agreement."
203.
Article 8 (Concession Period) was amended to record that works had begun on 30 November 2003, and so, as noted, the concession period would come to an end110 on 30 November 2033. The contractual deadline for completion became 16 July 2011 (i.e. 36 months from the granting of the construction license, rather than the 48 months from the start of works as provided in the original Concession Agreement). Article 14 (Concession Termination) was amended to include provisions for penalties if that date was not met and Article 15 was amended to oblige the Concessionaire to establish a cash deposit up to a total of €4 million in respect of its potential liabilities under those penalties.
204.
Article 9 (Concession Fee) was amended to increase the fee payable, from a flat 10% of production for the concession period to 10.5% in the first three years, starting from the Commercial Operation Date of the Plant, reverting to 10% in the balance of the concession period. The ASB had the option of either taking the electricity to which it was entitled or selling that electricity. If the ASB exercised the second option, the Concessionaire was to advance the present value of the expected production to the ASB.
205.
Article 14 (Concession Termination) was amended, inter alia, to provide as follows.

In the event that the Concessionaire does not complete the construction works by the date falling 36 months from the date of obtainment of the construction license:

(i) if the delay is attributable to the Concessionaire, the latter shall pay to the Authorised State Body penalties, both in cash and in kind, up to a maximum amount equal to 10% of the Estimated Project Costs; or

(ii) if the delay is attributable to the Authorised State Body, the latter shall pay to the Concessionaire penalties, both in cash and in kind, up to a maximum amount equal to 10% of the Estimated Project Costs.

206.
That Article was also amended to provide for how the envisaged penalties were to be calculated.
207.
Article 21 (Energy Transmission) was amended to provide that the Concessionaire was entitled to sell its share of the electricity generated "with the aim of obtaining Green Certificates or any equivalent incentives relating to renewable energy production." This change reflected changes in Italian and Albanian law since the Concession Agreement had been signed. In 1999, Italy passed a decree111 allowing producers of renewable energy, such as hydroelectric power, to obtain Green Certificates, a financial incentive, for the production of such energy. Albania created a similar incentive in 2000.112
208.
In 2002, the countries’ respective regulators signed a bilateral agreement to allow energy produced in Albania to be eligible for Green Certificates if transported to Italy.113 In 2006, Italy and Albania signed a second agreement.114 These agreements allowed energy produced in Albania and imported to Italy to qualify for Green Certificates. The Claimants assert that the availability of Green Certificates would allow the Project to obtain a significant mark-up on any energy it generated and sold.115
209.
By the new Article 26 (Referring Laws), the Concession Agreement was made subject to Albanian law, save that Article 26 preserved the operation of Law 8708, which provided that "No legal act may infringe the agreement once the concession agreement enters into force."116
210.
Finally, Annex D to the Second Addendum set out the works performed to date under the Concession Agreement, including detailed schedules of the costs of those works.117 On the basis of those figures, a value of at least €16,617,000 was ascribed to the completed works in that annex.

(2) Decision No. 363 Approving the Second Addendum

211.
On 6 June 2007, the Council of Ministers approved the Second Addendum with Decision No. 363.118 Decision No. 363 also stated that "Points 2, 4, and 5 of decision No. 222 of May 24th, 1997, of the Council of Ministers, ‘On the approval of the "BOT" type concession agreement for the Kalivaç hydroelectric power plant’, are invalidated." As set out in paragraph 185 above, point 4 had provided for BEG to have a right of first negotiation in certain circumstances.

(3) Expressions of interest in developing other plants

212.
Despite this, before and after Decision No. 363 was made, BEG and Deutsche Bank expressed interest in developing further power plants. On 30 May 2007,119 they wrote to the relevant Albanian officials expressing interest in developing three further plants on the Vjosa River. On 30 July 2007, they wrote to the same officials, reiterating that interest.120 On 6 August 2007, BEG and Deutsche Bank submitted joint concession requests for three other hydroelectric power plant projects in three further locations.121
213.
On 17 September 2007, the Minister of Economy, Trade and Energy replied to the 30 May letter sent by BEG and Deutsche Bank, informing them that the Albanian Government was considering the possibility of conducting a complete study of Vjosa River and would respond at the conclusion of that study.122
214.
In October 2007, Deutsche Bank representatives made a presentation to a number of Albanian officials, including then President Sali Berisha, to develop all six of the plants.123

D. The KalivaÇ Project from 2007 to 2013

(1) Work on the Project

215.
Between 2007 and 2013, KGE signed a number of agreements with Energji, the contractor on the Project, to facilitate construction of the plant.124 Before work ceased on the Project, no later than March 2013,125 the following works were undertaken:

a. the left and right embankments were prepared to install the dam;

b. excavations were completed, totalling 2,500,000 cubic metres;

c. the aprons were prepared, narrowing the river passage to install the dam; and

d. materials to construct the dam were selected and transported on site.126

216.
In 2009, a dispute arose between KGE and Energji over payment for works.127 As a result of this dispute, from November 2009 until May 2012, very little work was undertaken on the project.128 Work resumed in 2012, and then stopped in March 2013.129 In June 2014, Hydro decided to cease work on the project permanently.130

(2) Application for permission to build a submarine cable

217.
In order to ensure that energy produced could be transmitted to Italy, BEG was to build a transmission cable between Albania and Italy.131 Such a cable was an important element of the Claimants’ ability to obtain financing for the Project.132 To this end, Energji commissioned a study from the Italian company Consult.ing SNC, a technical engineering firm, in 2008.133 On 24 April 2009, Energji submitted a request for approval to the Minister of Economy, Trade and Energy.134 Energji never received a response.135
218.
Around the same time, permission was given to three of Energji’s competitors to build transmission cables for other projects. In early 2008, Albania approved a transmission cable for Moncada Energy Group.136 In November 2008, it approved an underwater cable to be built by Enel, which was constructing a coal plant.137 In 2009, Italy’s Marseglia Group obtained approval to build a transmission cable for its renewable energy power plants.138 None of these companies ultimately carried out their projects.139

(3)Funding for the Project and disputes with Deutsche Bank

a. Shareholder loan and political insurance

219.
Under the JVA with BEG, Deutsche Bank was obliged to provide a capital contribution to Hydro and to make a shareholder’s loan to Hydro.140 It provided approximately €33 million to the Project, constituted by €13.5 million of equity paid into Hydro (on 2 August 2007),141 a "Development Premium" of €5 million (also on 2 August 2007)142 and shareholder loan funding of approximately €14.5 million (from June 2008).143
220.
Under the JVA, Deutsche Bank was also obliged to use its best endeavours to secure third party financing for the Project, in which it was never successful. This lack of success led to a series of disputes, which are described further below.
221.
In 2007, the parties agreed that political risk insurance should be obtained for the Project144 and negotiations began with the Italian export credit agency, SACE. In August and September 2008, and again in July 2009, SACE indicated that in order to provide cover it would need certain conditions to be satisfied.145 SACE took the view that these were not satisfied and ultimately refused to provide cover. On 7 March 2011, SACE ended its review of the Project file after having received a threat of legal action from Hydro on 28 January 2011.146

b. Disputes with Deutsche Bank

222.
In 2008, the relationship between the joint venture parties deteriorated. BEG had taken the view that Deutsche Bank was trying to avoid releasing funds under the shareholder loan, and on 10 October 2008, Hydro obtained a decision from the Court of First Instance of Rome, instructing Deutsche Bank to pay an amount of money corresponding to Hydro's request for a draw down on the loan.147
223.
In 2010, Hydro brought an arbitration claim under Hydro’s articles of association seeking a declaration that Deutsche Bank had assumed an obligation to provide funding to carry out the Kalivaç Project ("1st Rome Arbitration"). It sought specific performance of the alleged funding obligation and damages caused by the breach of that alleged obligation. On 17 November 2011, the Tribunal awarded Hydro €28.9 million, which was said to represent lost profits from at least three years’ delay in the Plant becoming operational.148 That sum was paid by Deutsche Bank.149 No alternative financing had been obtained by this stage.
224.

In response to that claim, Deutsche Bank brought an ICC claim against BEG ("1st ICC Arbitration"). Deutsche Bank’s claim "expressed concern that BEG and Mr. Becchetti prevented the successful completion of the required activities to bring the Project to Financial Close".150 Deutsche Bank alleged that "the relationship with SACE had become very difficult and asserted that this was in part due to Mr. Becchetti’s interactions with SACE’s representatives".151 Deutsche Bank sought declarations that:

a. Deutsche Bank’s obligation was limited to using its best efforts to find project finance lenders;

b. Deutsche Bank had complied with certain obligations under the JVA and a Shareholders’ Agreement; and

c. BEG had breached its general duty under Italian law to act in good faith in the performance of its obligations under the Shareholders’ Agreement.

225.
In response, BEG alleged that Deutsche Bank had undertaken to finance the Project itself and that BEG had fully complied with its obligations. In a counterclaim, BEG claimed damages for losses said to have been caused by Deutsche Bank’s failure to fund the Project. BEG maintained that:

the plant would already be in operation or operating within a few months. Had Deutsche Bank procured financing, the Project would have, without any doubt, progressed to the stage of revenue generation. Furthermore, the plant would have been connected to the grid by 31 December 2012.152

226.
On 18 April 2013, in the 1st ICC Arbitration, the tribunal held that Deutsche Bank's obligations under the Shareholders' Agreement were limited to using commercial best efforts to find lenders in the market.153 It also held that Deutsche Bank had fulfilled those obligations, and so dismissed BEG's counterclaim. Further, it held that BEG had breached a provision of the Shareholders' Agreement relating to authority for execution of documents and had also breached its general duty under Italian law to act in good faith in the performance of its obligations under the SHA, given the manner in which it conducted itself regarding the relationship between Deutsche Bank and SACE during the application process before SACE.
227.
Although BEG was unsuccessful in its allegations concerning Deutsche Bank's obligations under the Shareholders' Agreement, this does not change the fact that on BEG's case, any delay in the Project between the end of 2009 and 2012 was attributable to lack of finance, and was not caused by any acts or omissions of Albania. Mr. Becchetti's evidence on cross-examination in the 2nd ICC Arbitration was to a similar effect.154 He accepted that work ceased on 2 November 2009, due to a lack of finance, and did not recommence until May 2012.155 It being pointed out that, in another related proceeding, the delays in construction of the Kalivaç Project between November 2009 and May 2012 were not attributed to Albania,156 Mr. Becchetti responded as follows.157

That is right but there was no reason to say so because it is not Albania that is responsible, it is the financial crisis and especially the financial crisis that Albania was living through and in the international context of the crisis.

228.
In cross-examination in the present proceedings, Mr. Becchetti suggested that Albania contributed to the delay during this period because the difficulties in obtaining finance were exacerbated by Albania's refusal to grant a permit to construct the transmission cable.158 Mr. Becchetti asserted that, even if there were some delays in the construction of the cable, with the permit the project would have been "bankable".159 This is because, after a delay of one to three years in construction (during which time energy could have been sold into Italy through Greece on the spot market), a financier could rely on 12 to 13 following years of profits from transmission into Italy via the submarine cable. These matters are addressed further in paragraphs 646 to 653 below.
229.
In 2013, Hydro brought a further arbitration against Deutsche Bank ("2nd Rome Arbitration"), alleging inter alia that Deutsche Bank had breached its obligation to fund the Kalivaç Project and that this had caused Hydro significant losses. Hydro’s largest claim concerned its alleged lost opportunity to exploit the Green Certificates regime.160 Hydro alleged that Deutsche Bank’s failure to provide financing meant the Project had not been completed by the cut-off date under the relevant Italian regime, 31 December 2012.
230.
Deutsche Bank accepted that the Plant could no longer benefit from Green Certificates, because it had missed the cut-off, but denied that it caused that loss by not providing financing.
231.
On 7 August 2013, in the 2nd Rome Arbitration, the tribunal held that that the Project would have been operational by the end of 2012 but for what it held was Deutsche Bank’s breach. It ordered Deutsche Bank to pay approximately €396 million, comprised of the following sums (which excluded the amount already awarded in the 1st Rome Arbitration for three years’ delay in the plant becoming operational161).

a. €329,292,000 plus interest for "income flows" that Hydro would otherwise have enjoyed relating to the Green Certificates, "calculated until the end of 2008 and then carried forward to 31 December 2012", by reference to the Project’s business plan.

b. €15,992,000 in respect of "an additional cash flow" and damage from lost profits calculated by reference to the business plan, and with additional compensation for delay in receipt. The sum awarded was after having given credit for the €28.9 million awarded in respect of this in the First Rome Award.

c. €10,753,000 in respect of the loss of "an additional profit flow that is no longer attainable". This was compensation for delay in the generation of remaining cash flows in respect of the Project.

d. €40,000,000 for damage to Hydro’s reputation.162

232.
In June 2013, Deutsche Bank commenced an ICC Arbitration seeking recovery of any sums which it paid under either the 1st or 2nd Rome Arbitration.
233.
In October 2013, the parties reached a settlement under which Deutsche Bank:

a. paid €135 million to Hydro and €10 million to KGE; and

b. transferred its 45% interest in Hydro to BEG, making BEG the sole owner of Hydro.163

234.
Hydro received its payment on 30 October 2013.164

c. Albania’s communications regarding funding obligations

235.
On 22 April of 2009 (after the financial reporting obligations under the Second Addendum to the Concession Agreement had come into effect165), the METE wrote to Hydro and stated that:166

Following to our letter dated 20th of March, 2009, and our last inspections too, we hereby confirm that, no breach of the concession of any sort was carried out by the Concessionaire also with respect to any construction permits, environmental, financing process of the project and EPC Contractor.

236.
However, on 12 December 2011, in the course of various documents being submitted to the METE under the Concession Agreement, the METE raised the following concern with KGE:167

The Company has not submitted the document that proves that the Contract is fully financially covered, the disbursement of funds according to the obligation foreseen by Deut[s]che Bank AG, referring to the letter dated 17.01.2007.

237.
The METE asked KGE to submit the requested documents within 15 days.
238.
On 14 December 2011, Deutsche Bank responded to the METE, asking it to "grant KGE a period of 90 days during which time you would refrain from taking any steps to cancel the concession, while we work with KGE and our Italian partner in the project to present to you a financing plan".168
239.
On 23 December 2011, the METE wrote to Deutsche Bank, copying Hydro, requesting "full compliance to your financial obligation and disbursement as soon as possible, not later than January 31st 2012."169
240.
On 6 February 2013, the METE wrote to KGE, setting out what the METE considered to be a number of failures of KGE to meet its obligations under the Concession Agreement, including the financial reporting obligations the subject of the correspondence with Deutsche Bank.170 On 14 February 2013, KGE responded, disputing a number of these allegations, stating that any delay in meeting any obligation was not its fault, and further stating that the METE (as provider of the concession as part of the ASB) was in breach of a number of its obligations.171

(4) Communications with the Albanian authorities about other aspects of the Project

241.
During this period from 2007 to 2013, there was a series of communications with, and between, the Albanian authorities for the purposes of the Project.

a. Environmental permit

242.
In 2008, KGE raised concerns with the METE regarding the time it was taking the relevant authorities to issue an environmental permit. On 21 April 2008, METE wrote to those authorities, expressing its concern regarding those delays and asking that the permit be issued immediately.172 The permit was then issued on 5 May 2008.173

b. Expropriation

243.
Also beginning in 2008, KGE corresponded with the METE concerning the expropriation of private lands necessary for the Project. On 13 June 2008, KGE wrote to the METE requesting the METE to activate the expropriation process under Article 10 of the Law No. 8561 dated 22 December 1999,174 and attaching certain documentation to that end.175 On 8 July 2008, the METE responded, stating that certain documents required by the statute had not been included, and that when the missing documents were included the file should be presented again to the METE for another review in 15 days.176 On 14 July 2008, however, the METE wrote to the Minister of Public Works, Transport, and Telecommunication and stated that "Concessionary Company Kalivaç Green Energy Ltd has lodged with the METE the needed and necessary documentation as required by law No. 8561, dated 22.12.1999".177
244.
On 21 July 2008178 and again in late 2008179 KGE requested more time to provide the requested documents. Ultimately, the METE gave KGE until the end of April 2009.180 On 28 January 2009, KGE informed the METE that the delay was due to a different government department failing to respond to KGE's request for some of the necessary documentation.181 On 11 August 2009, KGE and the METE executed an agreement on expropriation.182 On 26 August 2009, KGE complained that

the Authorized State Body has not verified the reasons for the delay in expropriation procedures which are exclusively due to the fault of the Authorized State Body itself, which make for us impossible to begin cementing the curtain under the quota of 87m, for which we were and are prepared an in waiting with all the damage that this situation has caused us and will cause us, and we will be forced to seek immediate restitution.183

245.
Nevertheless, in the same letter, KGE stated that works were ahead of schedule.
246.
On 20 May 2010, the METE sent KGE complaints raised by residents whose land was being expropriated.184

c. Flooding

247.
On 26 August 2009, KGE informed the METE of at least 18 floods, stating:185

It should be noted that the time advantage in connection to the schedule has been performed during the excavations in an extreme season for excavations extremely regarding meteorological phenomena, which have provoked at least 18 floods, which under Article 28 of the Contract of the concession entitle us for the significant extension period, which we have the right to document and do not relate to significant delays, as you are claiming.

248.
On 7 June 2010, KGE wrote to National Agency of Natural Resources ("AKBN"), informing it of difficulties encountered on the Project due to heavy rainfall and inclement weather, including landslides, erosion and obstructions to works.186 KGE attached six protocols to the letter regarding those difficulties. On 12 August 2010, KGE reiterated the matters it set out in its 7 June letter.187
249.
On 8 September 2010, KGE again wrote to AKBN, and complained that:188

[...] if seasonal events are encountered, the work schedule will be modified. In the last two years there have been many of these events, which were not verified in the last 20 years, and yet, even to this day, we are not granted postponement. This is another flaw in cooperation on the part of the Concession Granter and it is continuing to cause great damage to the project, and consequently to us.

250.
On 3 March 2011, KGE reiterated its concerns in this regard, this time in a letter to the METE.189
251.
On 8 November 2012, the Inspection Directorate of the Regional Taxation Directorate wrote to the General Taxation Directorate to inquire what should be the tax treatment of a provisional bridge and two supports on the left and right side of the dam, which no longer existed because they were "flooded and destroyed as a result of force majeure."190

E. Application to develop a wind farm

252.
On 3 April 2009, Energji submitted a proposal to build a wind energy plant, or wind farm, not far from Kalivaç.191 The proposal was to be carried out through a joint venture with Rener. Albania did not respond to Energji's proposal.
253.
Albania had approved seven other wind farm projects in the previous year, including a project proposed by the Italian company Moncada Energy Group.192

F. The end of the Kalivaç Project

254.
Construction work on the Kalivaç Project ceased in March 2013 and never resumed.193 In June 2014, Hydro decided to cease work on the Project permanently.194
255.
On 19 June 2014, KGE wrote to the Prime Minister, the Ministry of Energy and Industry and the Ministry of Transportation and Infrastructure.195 In that letter, KGE sought confirmation that the Albanian Government continued to support the Kalivaç Project.196 No reply was received.
256.
The Claimants assert that this failure to respond, being immediately followed by orders to seize documents from KGE in the criminal proceedings discussed in section IV.J(11) below,197 constitutes expropriation of the Kalivaç Project.198
257.
In October 2014, Hydro started the 2nd ICC arbitration under Article 30 of the Concession Agreement, seeking declaratory relief and damages in relation to its treatment by the Albanian tax authorities.199 In its Statement of Defence and Counterclaim, dated 14 April 2016, Albania sought, inter alia, a declaration that Hydro had breached the Concession Agreement, an Award terminating the agreement and damages.200
258.
On 5 May 2017, the Ministry of Energy and Industry ordered that:201

a. a commission be established to take on consignment the assets on the project's site;

b. the commission prepare an inventory of those assets, the works carried out on the site and a report for the Chairman of the Ministry;

c. the inventory and documentation be transferred for custody and administration to KESH "until the conclusion of the new procedures for granting in concession"; and

d. KESH undertake measures for the custody and security of these assets.

259.
On 29 May 2017, the Public Procurement Agency announced that it was opening the Kalivaç Project up to public tender.202
260.
In October 2017, the Kalivaç Project was apparently awarded by Albania to a consortium formed by a Turkish company, Ayen Enerji, and an Albanian company, Fusha.203
261.
On 8 January 2018, in the 2nd ICC Arbitration, the tribunal found that Hydro had "permanently abandoned the project in June 2014"204 and had breached the Concession Agreement by:205

a. failing to fulfil its obligations to finance and complete the project by the deadlines provided in the Concession Agreement;

b. abandoning the project; and

c. failing to fulfil its obligation to provide a financial guarantee, as required by Article 15.3 of the Concession Agreement.

262.
That tribunal also found that Albania had validly requested termination of the Concession Agreement in its Statement of Defence and Counterclaim and that termination was justified by Hydro’s breaches. It declared the Concession Agreement terminated as at the date of the 2nd ICC Award,206 being 8 January 2018.
263.
It further found that Albania’s actions taken to re-let the concession in 2017 (described in paragraphs 257-260 above) were legitimate steps taken to mitigate Albania’s losses due to Hydro’s breaches of the Concession Agreement.207

G. Commencement of Digital Broadcasting and the Creation of Agonset

(1) The historical Albanian television market and broadcasting regulation

a. The development of a commercial market

264.
Under the communist regime, Albania had a highly controlled media landscape.208 There was a single television station and a single radio channel, both controlled by the Government operator, Radiotelevizioni Shqiptar ("RTSH"). The content offered by RTSH consisted largely of Government-sponsored announcements and political propaganda. As a result, for decades, many Albanians watched Italian television channels in secret, via signal relay devices that carried the broadcasts from Italy.209
265.
After the communist regime ended in 1992, RTSH continued to dominate broadcasting in Albania for much of the 1990s.210 By the late 1990s, private television companies began to broadcast in Albania.211 In late 1998, Albania passed the first "Law on Public and Private Radio and Television" ("1998 Broadcasting Law").212 The 1998 Broadcasting Law created the National Council of Radio and Television ("NCRT"), a State regulatory authority whose members were elected by Albania’s Parliament. The NCRT was charged with regulating the Albanian media sector, awarding licenses to broadcasters and implementing legislation enacted by Albania’s Parliament.213
266.
After the 1998 Broadcasting Law was passed, private media conglomerates emerged, controlled by a small group of high-profile businessmen.214 One of these companies, Top Channel Sh.a. ("Top Channel") became one of the largest and most influential broadcasters in the country.215 Around 2004, the owners of Top Channel launched DigitAlb Sh.a. ("DigitAlb"), the first company in Albania to start broadcasting on digital frequencies. Top Channel and DigitAlb are now part of the Top Media Group, which also holds interests in the radio, online and print media sectors in Albania.
267.
DigitAlb broadcast from a satellite-based digital network, rather than a network based on broadcasting digital signals from terrestrial equipment. At the time DigitAlb was launched, Albania had no law covering digital broadcasting, meaning that DigitAlb operated without any license or regulation.216 DigitAlb became the most successful of the digital broadcasters in Albania.217 Two other digital channels began operating during this period, Tring TV Sh.a. ("Tring") and Supersport.218

b. The start of the change to digital broadcasting

268.
On 12 June 2006, Albania signed the European Union Stabilization and Association Agreement and officially became a candidate country for European Union Membership.219 Albania also ratified the ITU International Symposium on the Digital Switchover Regional Agreement GE06 of 16 June 2006 (the "GE06 Agreement"),220 which was implemented by Law No. 9851 of 26 December 2007. The GE06 Agreement required moving to an "all-digital" broadcast network by 17 June 2015.221
269.
In order to provide a regulatory framework for the introduction of digital broadcasting, in 2007 Albania promulgated the first "Law on Digital Broadcasting" (the "2007 Broadcasting Law"), which provided (among other things) that the digital switchover in Albania should be completed by 31 December 2012.222
270.
The 2007 Broadcasting Law, however, was never implemented.223 The NCRT attempted to organize bidding processes in 2008 and 2009 to award digital licenses under the 2007 Broadcasting Law, but no broadcast operators submitted applications.224 The NCRT issued ad hoc licenses to DigitAlb and Tring.225 These ad hoc licenses were not envisaged or regulated under the 2007 Broadcasting Law.
271.
Albania then began to develop a new legal and regulatory framework for audio-visual media.226 In May 2012, the Council of Ministers issued Decision No. 292 announcing a "Strategy of Switchover from Analogue to Digital Broadcasting" (the "Switchover Strategy").227 The Switchover Strategy outlined a series of political and technical measures for achieving a transition from analogue to digital broadcasting in Albania,228 and how the digital frequencies to which Albania was entitled under the GE06 Agreement would be allocated.
272.
Under the strategy, two multiplex licenses would be reserved for Albania's national broadcaster and five would be allotted to private national broadcasters.229 The strategy stated that the appropriate way to award digital licenses was by way of a closed "beauty contest" to which "national historic operators" and operators with experience in digital broadcasting would be invited by the media regulator.230 Such an approach was considered preferable to an open competition, in recognition of the significant investments that the established operators of digital stations had made.231

(2) Establishment of Agonset

273.
In 2006, Mr. Becchetti launched AgonFree, a free daily newspaper that was published until 2013.232 AgonFree printed and distributed approximately 20,000 copies per day on average to meet demand, with circulation occasionally reaching 100,000 copies. Mr. Becchetti started AgonFree in order to get a foothold in, and assess, the Albanian media landscape.233
274.
A few years after launching AgonFree, Mr. Becchetti began planning to launch a television station in Albania. In 2009, he and his colleague, Shpëtim Arbana, met with the then-head of the NCRT, Mesila Doda, to discuss the media market in Albania and the legal requirements for broadcasters.234
275.
Mr. Becchetti’s strategy for the television channel was twofold. First, it would broadcast independent content in Albania. Second, it would produce programs in Albania for broadcast in Italy, taking advantage of the low production costs in Albania and the high advertising revenues in Italy. Mr. Becchetti expected the acceptance of such programs in Italy to be facilitated by the close geographic and cultural ties between the two countries.235
276.
In 2011 and 2012, Mr. Becchetti consulted with various advisors about the Italian and Albanian media markets, including the costs of the broadcast and editing equipment. He made some rough internal calculations about how Agonset might perform.236 After an initial start-up period, he set a target of achieving a 1% share of the Italian market within two years of operation, increasing to a 4% share over the following four years, on the basis of various assumptions about costs.237 On Mr. Becchetti’s analysis, each percentage point of the Italian market was worth approximately €30 million.238 Although Mr. Becchetti did not consider this analysis to be a detailed valuation of the intended business, he believed that the delocalized production model had the potential to make significant profits.239
277.
During 2012 and 2013, Mr. Becchetti took the necessary steps to create Agonset and begin broadcasting in Albania. Agonset was incorporated on 3 May 2012.240 Mr. Becchetti was Agonset’s Artistic Owner and served as Chairman of the Administration Board which oversaw the organization.241 Mr. De Renzis became Agonset’s Administrator in December 2012 and oversaw the company’s day-to-day operations, reporting directly to Mr. Becchetti.242 Mr. Becchetti, Mr. De Renzis, and Ms. Grigolon together indirectly own 80% of the shareholding in Agonset.243
278.
In the course of developing Agonset, in late 2012, Mr. Becchetti spoke with Endire Bushati, who was then President of the NCRT, to discuss the requirements under the existing broadcasting regime to launch a television channel in Albania on a digital platform. Ms. Bushati stated that digital transmissions were unregulated and that the licensing procedure would be resolved under the new Law No. 97/2013 on Audiovisual Media in the Republic of Albania of 4 March 2013 (the "2013 Media Law").244 She later confirmed this advice in writing to Agonset’s lawyers.
279.
Beginning in 2012, Agonset leased office and production facilities of almost 20,000 sq ft in central Tirana and it invested over €6.2 million in technical equipment.245 The premises were refitted as fully-equipped studios. As of April 2014, Agonset’s Albanian production facilities were assessed by an independent real estate appraiser as being worth over €2.1 million for the studio alone.246
280.
Agonset also hired several prominent and experienced professionals, including Sonila Meço (a leading news anchor in Albania), Andeta Radi (the former Editor-in-Chief of Top Channel), Alessio Vinci (a longtime CNN anchor and bureau chief who led a major TV program in Italy for several years), Adi Krasta, Samir Kodra, and Gentian Zenelaj (leading Albanian journalists), and network director Maurizio Palladino (an experienced Italian creative director).247

(3) The 2013 Media Law

281.
On 4 March 2013, Albania promulgated the current 2013 Media Law, which came into force on 5 April 20 1 3.248 The 2013 Media Law changed the deadline for the digital switchover from 31 December 2012 (the deadline under the 2007 Broadcasting Law) to 17 June 2015 (the deadline under the GE06 Agreement) and set out the procedure for the allocation of digital licenses.
282.
The 2013 Media Law also replaced the NCRT with a new body, the AMA, initially composed of the members of the NCRT. Ms. Bushati remained as President of the AMA until November 2014. The AMA was to be responsible for, inter alia, issuing digital broadcasting licenses and authorizations, preparing instructions and regulations on usage of public broadcaster infrastructure, and the mediation of disagreements between operators.249 Like the decisions of the NCRT, the earlier regulator, the AMA’s decisions are subject to judicial review and the oversight of the Albanian courts.250
283.
As outlined in the Switchover Strategy, the Albanian Government’s intention was to effect a complete transition from analogue to digital broadcasting.251 Analogue licenses could no longer be issued after the entry into force of the 2013 Media Law, and existing licenses for television broadcasting would be replaced by digital "audiovisual" licenses under the 2013 Media Law within six months of its entry into force.252 Any operators who occupied digital frequencies without a license had to stop broadcasting within 30 days from the end of the transitional licensing procedure, and at the latest within six months from the entry into force of the 2013 Media Law, that is by 5 October 2013.253 The 2013 Media Law required the AMA to seize the equipment of any operator broadcasting unlawfully after this date.254
284.
The 2013 Media Law envisaged that commercial digital licenses would be awarded in two stages.

a. First, during the transitional period (which was to end on 17 June 2015), licenses could be awarded by way of a closed "beauty contest" in which "national historic private operators" and "existing operators experienced in digital broadcasting" would be invited to participate.255 This closed "beauty contest" was to be announced within three months and completed within six months of the Law’s coming into force, that is by 5 October 2013.256

b. Later licenses would be awarded by way of an "open competition, thus guaranteeing equal, objective and non-discriminatory treatment."257 The AMA was empowered to decide which operator would be granted the digital license, taking into account eight factors including "the nature, expertise and experience of the applicant" and the applicants’ "financial means".258

285.
National digital multiplex licenses were to be valid for up to 15 years,259 and holders of digital licenses were obliged to grant other providers access to at least 40% of the capacity on their digital networks on a fair and non-discriminatory basis.260 In the event of any dispute as to the terms of access, the relevant parties are entitled to appeal to AMA to resolve it. The relevant parties also have the statutory right to appeal AMA’s decisions to the Albanian courts.261

(4) The Launch of Agonset

286.
Agon Channel Albania was officially launched on 5 April 2013, on the Tring satellite digital platform. Shortly thereafter, Agonset obtained approval from the AMA under the 2013 Media Law to provide a satellite audiovisual program service, which allowed Agonset to broadcast its programming on licensed networks.262
287.
Agonset later expanded its reach by purchasing an analogue, terrestrial local license from the existing operator Telesport263 and concluding a contract to be included in the cable platform ABCom.264 Although under Article 55 of the 2013 Media Law licenses are not transferable, the AMA has the discretion to approve a transfer.
288.
Agonset applied to the AMA on 26 September 2013 to approve the transfer and to alter the terms of Telesport's license from a license limited to sporting themes to general programming. On 13 October 2013, the AMA exercised its discretion in Agonset’s favour by granting the change of use application and approving the license for a five-year period.265
289.
Agonset was then able to transmit across three broadcasting media (satellite digital, terrestrial analogue, and cable) while Albania transitioned to a fully digital system.266

H. Allocation of Digital Licenses and the Development of Agonset

(1) Introduction of the 2013 beauty contest regulation

290.
Following public consultations, the AMA passed Resolution No. 10 of 2 July 2013267 (the "Contest Regulation"), which set out the rules for the closed "beauty contest" under article 139 of the 2013 Media Law. That regulation started the digital licensing process by inviting "national historic private operators"268 and existing operators with "experience in the digital broadcasting"269 to participate in a beauty contest for the award of three digital licenses.
291.
According to the Contest Regulation, "[t]he decision to grant or refuse an audiovisual national broadcasting license is taken by AMA [...] not later than 60 days from the date of application."270 The Contest Regulation also stated that: "If at the end of the licensing process according to the procedure beauty contest [it] results that there are still unlicensed digital networks and free capacity in them, within 30 days AMA organizes [sic] an open competition in accordance with Chapter VII and VIII of [the 2013 Media Law]".271
292.
Each license would permit the broadcast of the broadcaster’s own services and the construction of a digital terrestrial network.272 In addition, the Contest Regulation provided that holders of a digital license were "obliged to provide access on fair, reasonable and non-discriminatory conditions" to 40% of the capacity of their digital network to other program operators, through commercial agreements, under the AMA’s supervision.273
293.
The AMA invited the operators of Top Channel, TV Klan, and Vizion Plus (as "historical national broadcasters"274) and DigitAlb and Tring (as companies "experienced in digital broadcasting"275) to compete in the beauty contest.276 Agonset was not invited to participate because it was neither a historical national broadcaster nor experienced in digital broadcasting.277
294.
At the time, DigitAlb was occupying 5 networks, and none of the operators was paying licensing fees.278 Following the process envisioned by the 2013 Media Law and the Contest Regulation, each commercial company would have only one network, and would be subject to licensing fees and other regulation.279

(2) Challenges to the validity of the Contest Regulation

295.
An additional licensing requirement under the Contest Regulation was that applicants demonstrate asset capital of at least ALL 1 billion (approximately €7.5 million).280 This requirement was also contained in the 2007 Broadcasting Law,281 with which DigitAlb and Tring had complied when obtaining Satellite Platform Digital Licenses under that law.282
296.
In July 2013, DigitAlb, Top Channel and TV Klan nevertheless challenged as ultra vires the AMA’s powers under the 2013 Media Law.283 On 30 or 31 July 2013, the Tirana District Court suspended the regulation licensing procedure pending a final decision.284 On 8 October 2014, the Administrative Court of Appeals found that the financial conditions imposed were invalid.285 The AMA appealed the decision to the Albanian Supreme Court shortly after it was made, while Ms. Bushati remained president.286 However, that appeal was discontinued by the AMA after she was replaced and the AMA reconstituted,287 as described in paragraphs 301 to 302 below.
297.
The Tirana District Court’s July 2013 suspension of the regulation licensing procedure prevented the AMA from issuing any licenses to broadcasters.288 As a result of this suspension, the AMA also could not apply Article 23(5) of the Contest Regulation, which provided that in the event that digital networks remain unlicensed or there is unused capacity on those networks at the end of the closed beauty contest, it should organize, within 30 days, an open contest for the award of the available licenses under chapters VII and VIII of the Media Law.289

(3) Change of national government and of the composition of the AMA

298.
In national parliamentary elections on 23 June 2013, the Socialist Party and the Social Movement for Integration defeated the incumbent Democratic Party. As a result, Mr. Edi Rama replaced Mr. Sali Berisha as Prime Minister. In the same elections, Mr. Kogo Kokedhima (the businessman mentioned in paragraphs 193 to 194 above) was elected as a member of parliament for a seat in Vlora. Mr. Rama took office on 15 September 2013.290
299.
The procedure for the appointment of the members of the AMA is intended to balance the competing political forces in Albania. The AMA is composed of seven members: a chair (the President), and six members (of whom one is elected by the other AMA members to serve as deputy chair).291 The 2013 Media Law provides that the Parliamentary Committee for Education and Means of Public Information (the "Parliamentary Committee") should elect the ordinary AMA members (excluding the President) to serve a term of five years.292
300.
The Media Law requires the participation of both political parties in this process and also provides that the Parliamentary Committee should take "account of maintaining the balance of three candidates supported by the majority in Parliament and three supported by the Opposition."293 The Parliamentary Committee identifies four candidates for Chairperson,294 and the opposition members are given an opportunity to eliminate two.295 The two remaining candidates are then put to the entire Albanian Parliament, choosing between them by simple majority vote.296 The political party in power at the time therefore appoints half the members and the President has the deciding vote.
301.
Ms. Bushati had been elected by the Parliament on 6 November 2009 (when the previous government was in power) under the 2007 Broadcasting Law.297 On 4 November 2014, the Parliament elected Mr. Gentian Sala as President of the AMA, replacing Ms. Bushati.298 The procedure just described was not followed, however, with the opposition party not being given the opportunity to participate in the identification of candidates to be put to the Parliament as a whole.299 Mr. Sala was a former senior executive at DigitAlb.300 His election followed a series of attempts by DigitAlb, Top Channel and TV Klan throughout 2014 to remove Ms. Bushati as President of the AMA.301
302.
At around the same time, the government members of the Parliamentary Committee appointed two members of AMA to positions which had been vacant since 2012, despite the opposition members of the Committee abstaining.302 Again, therefore this did not comply with the 2013 Media Law's requirement that the opposition members be involved, and does not appear to have met the requirement that the Committee take account of maintaining a balance of three AMA members supported by each side.
303.
There were also connections between Top Channel and the Rama Government. At the time of the final hearing, the former Vice General Manager of Top Channel, Skerdi Denova, served in the office of Tirana Mayor Erion Veliaj (elected to that position in 20 1 5).303 Veliaj had been appointed Minister for Youth and Social Welfare in the Rama Government in September 20 1 3.304 Engjell Agaçi, a lawyer who had represented Top Channel in a defamation dispute Mr. Becchetti had brought against Top Channel in Rome,305 was Secretary General of Prime Minister Rama's Cabinet at the time of the Final Hearing.306 Monica Stafa, a Top Channel host, was Head of the AMA Complaints Council at the time of the Final Hearing.307

(4) Development of Agonset in 2014 and 2015

a. Agon Channel Albania

304.
In 2014, Agon Channel in Albania broadcast 24 hours a day, seven days a week, and offered programming for all age groups. It also offered a diverse range of programming across a spectrum of subject areas, including news, entertainment shows, documentaries, movies, television series, sports events, and products and service advertising. Its programming, and hosts, received awards from media organisations in 2014 and 2015.308
305.
Agon Channel's coverage of the Berisha and Rama administrations, and of Agon Channel's competitors' compliance with regulations, was often critical. During the 2013 election, it compared Prime Minister Berisha's promises during previous elections with what he had accomplished in office.309 It obtained an exclusive interview with then-Prime Minister Berisha, and pressed him to agree that, unlike previous losing incumbent Prime Ministers who blamed voter fraud for their losses, he would resign if he lost the election.310
306.
On 15 and 28 March 2014, Agon Channel reported that, in the AMA's view, TV Klan and Top Channel were failing to respect the terms of their licenses and reported the AMA's attempts to enforce licensing restrictions.311
307.
In September 2014, Agon Channel, along with other outlets, covered the high-profile wedding of Minister Erion Veliaj.312 On or about 5 September 2014, the Minister became aware of the coverage in the lead up to his wedding. On that day he wrote to Agon Channel’s News Director, Ms. Mego, in the following terms.313

I see Agon's camera crew in Gjirokaster. I don't understand why are you doing this to me, I thought you stopped this silly thing the last time!

I don't want this! I'm absolute about that! You are forcing me to be your enemy! Tell [Francesco Becchetti] that the entire government is going to be his enemy for no reason! It's private damn it, respect it, I'm sick of this discussion with all of you!

308.
Minister Veliaj did not agree to meet with Mr. Becchetti to discuss the matter further, and did not respond to the Parliamentary Commission for Education and Public Information’s request for clarification regarding the matter.314
309.
On 18 February 2015, Agon Channel covered the mass emigration of Albanians due to Albania’s poor economy.315
310.
On 25 May 2015, Agon Channel revealed a large-scale identity fraud scheme that allowed the same person to vote up to twenty times in the 2015 municipal elections. In this election, Prime Minister Rama’s Socialist Party gained important positions; Minister Veliaj was one of the candidates elected to office following this election, as Mayor of Tirana.316

b. Agon Italy

311.
To pursue the delocalised production business strategy, Mr. Becchetti incorporated Agonset.it in Italy in March 2014 and Agonset.uk in April 2014.317 Agonset.it acquired the exclusive rights to content developed by Agonset in exchange for a cost sharing mechanism.318 Under this arrangement, Agon Channel Italy began broadcasting teasers in Italy in October and November 2014 and launched full programming on Italy’s terrestrial Channel 33 in December 2014.319 Programs were transmitted from the production centre in Tirana to a broadcasting centre in Italy, first through satellite and then through fibre optic cable.320
312.
Agon Channel Italy followed a similar broadcast model as Agon Channel Albania, employing high-profile talent and producing innovative programming.321 In the first few months of operation, it attracted €700,000 of advertising.322 There were, however, a number of staffing changes at the end of 2014 and the beginning of 20 1 5.323

(5) The 2015 Contest Regulation and awarding of licenses

313.
On 30 October 2014, Agonset wrote to the AMA asking it to hold a fair and transparent competition and permit Agonset to participate.324
314.
On 16 April 2015, the AMA issued a new Contest Regulation.
315.
In April 2015, the AMA invited five Albanian operators (TV Klan, Top Channel, Tring, Digitalb, and Digitalb’s 100% subsidiary Supersport) to bid for five digital national licenses under the 2015 Contest Regulation. These operators did not, however, meet the requirements prescribed under the Media Law. In March 2014, the AMA had determined that Top Channel and TV Klan did not meet the 80% national coverage requirement under Article 55 of the Media Law.325 Further, none of these operators complied with Article 62 of the Media Law, which then imposed certain ownership restrictions intended to ensure media plurality.326 Prime Minister Rama’s Socialist Party had sought to repeal those requirements, but this effort was abandoned following international criticism.327
316.
On 19 May 2015, Agonset again wrote to AMA, seeking an answer to its letter of 30 October 20 1 4.328 The AMA requested a copy of the letter in Albanian,329 which Agonset provided.330 Shortly thereafter Albania issued a warrant for the arrest of Messrs. Becchetti and De Renzis, as discussed in paragraphs 393 to 398 below.331
317.
On 15 June 2015, AMA issued a press release, explaining that due to various factors it was impossible for Albania to meet the deadline for the digital switchover.332 Those factors included the slow digitalization of the public broadcaster’ s two networks (itself in part caused by protracted legal disputes) and the AMA’s lack of quorum and thus inability to make decisions.333 The AMA had lacked quorum because two members appointed by the opposition party, Sami Neza and Suela Musta, had refused to participate in meetings pending the outcome of legal challenges to the appointment of members of the AMA.334
318.
On 1 February 2016, the AMA convened to make a decision on granting digital licenses under the 2015 Contest Regulation. The AMA concluded that:335

a. Super Sport should not receive a license because it did not comply with the 2013 Media Law’s requirements regarding cross-media ownership in Article 62.

b. TV Klan and Top Channel complied with the requirements necessary to be awarded a license. In the case of Top Channel, it explicitly assessed its ownership with regard to Article 61 of the 2013 Media Law and considered those requirements were not breached.

319.
The AMA nevertheless awarded no licenses, again determining that it did not have quorum to do so because Sami Neza and Suela Musta refused to participate.336 On this occasion, they refused to participate on the basis that the first digital licenses should have been awarded before the deadline for the digital switchover (17 June 20 1 5).337 As no licenses had been awarded by that date, they argued that AMA should proceed to the second licensing stage, an open competition.
320.
DigitAlb, TV Klan and Top Channel challenged the AMA’s decision not to award the licenses before the Administrative Court of First Instance. On 3 July 2016, the Court upheld that challenge and exercised its statutory powers to alter the AMA’s decision, granting the three applicants 15-year licenses.338 The State Attorney did not appeal the decision.339

I. The Tax Authorities’ Treatment of the Claimants and Agonset

(1) KGE’s VAT refunds

321.
Under Article 24 of the Concession Agreement, a number of tax and customs exemptions were granted by Albania and were confirmed by the Albanian Parliament in Law No. 8708.340 In particular, Albania was required to refund VAT paid by KGE within 30 days of a request. After making a request, KGE could obtain a refund either through direct refunds or by setting off the VAT refund amounts owed to it against its other tax obligations.341 Set-offs could be obtained by submitting a request for set-off,342 which the tax authorities would then confirm.343
322.
On 25 July 2008, KGE first applied for a VAT refund,344 however it received no response. On 10 October 2008, it made a second application, raising the cumulative credit claimed to ALL 499,567,390 (€3,910,960 at the time).345 Three days later, the authorities recognised the cumulative credit arising from the two requests346 but provided only approximately ALL 40,000,000 in refunds in the course of the following year.347 KGE only received a full refund for the amounts requested in July and October 2008, in the form of set-offs against tax liabilities, on 19 September 2011.348
323.
On 13 April 2011, KGE made a further VAT refund application for the amount of ALL 94,427,236 (€655,127 at the time).349 On 1 September 2011, the authorities recognised the amount was owing.350 On 12 September 2013, KGE obtained a full refund of that amount, mainly through set-offs.351
324.
On 7 February 2012, KGE made its final VAT refund request for ALL 45,393,878 (€317,837 at the time),352 which corresponded to a VAT credit incurred in the period between March and December 2011. The authorities did not respond to this request, and commenced the audit discussed in section IV.I(2) below.
325.
In 2009 and 2010, KGE repeatedly complained about these delays to the METE, the Ministry of Finance and the tax authorities.353 On 20 March 2009, the METE responded as follows.

Concerning the VAT reimbursement issue, the Ministry of Economy, Trade and Energy (METE), under the authority of the State Authorized Body (OSHA) has addressed, the Ministry of Finance with note no. 10098/2 dated 13.01.2008 to solve this concern (Attached the letter). Being aware of the ongoing delays, we want to inform you that METE will continue its effort to find a quick solution to the reimbursement of VAT issue.354

(2) Tax Audit 8159 of KGE

a. Process

326.
On 11 July 2012, Albania commenced a tax audit of KGE (Audit No. 8159).355 Its purpose was to investigate the following matters.

a. Inspection relating to the applicability of law no. 7928 of 27.04.1995 as amended, and the Directives of the Ministry of Finance "On Value Added Tax".

b. Inspection relating to the application of law no. 9920 of 19.05.2008 "On Tax Procedures in the Republic of Albania and directives pursuant to this law."

c. Inspection relating to the application of the requirements of law no. 8438 of 28.12.1998 "On Income Tax" and Directives of the Ministry of Finance "On Income Tax".

d. Inspection relating to the application of the requirements of law no. 9136 of 11.02.2003 and Directives of the Ministry of Finance "On collecting mandatory social security and health contributions".

e. Inspection relating to the application of law no. 8977 of 12.12.2002 "On the Tax System in the Republic of Albania".

f. Inspection relating to the application of the requirements of law no. 9228 of 29.04.2004 as amended by law no. 9477 of 09.02.2006 "On accounting and financial reports" and Directives of the Ministry of Finance pursuant to them.

g. Specification of the amount of reimbursable VAT, pursuant to the requirements [of law] no. 7928 of 27.04.1995 "On VAT" as amended, and of the Directives of the Ministry of Finance pursuant to it, as regards the confirmation of the Revenue Processing and Management Directorate's letter prot. no. 2148/1 of 16.02.2012, relating to the company's letter no. 04/12 of 07.02.2012, filed by us as no. 2148 no. 07.02.2012

327.
Audit No. 8159 was a re-audit of some periods that had previously been confirmed by the tax authorities and an audit for the first time of the request for VAT refunds made in February 2012. The audit took three years, concluding on 13 May 20 1 5.356 According to the original audit notification, the time limit for work on the audit was 200 hours.357 A series of increases to this limit were subsequently approved.358
328.
So long as the audit was open, KGE remained unable to ascertain its VAT credit and, as a consequence, set-off such credit with Energji.
329.
On 9 April 2015, the authorities provided a draft of the report to KGE359 and on 28 April 2015 KGE provided comments on that draft.360

b. Findings: alleged alteration of invoices and other documents

330.
The Audit Report found that there were differences between documents that had been produced in the arbitration between KGE and Energji361 and those that KGE had submitted to the tax authorities to claim reimbursement of VAT. The Audit Report alleged that those changes to documents were made to claim a VAT credit illegitimately. A VAT credit can only be claimed within 12 tax periods from when it arose. The problem allegedly identified by Audit No. 8159 was that the dates on four invoices had been erased so as to present a claim for a VAT credit outside the 12-month period within which KGE would have been entitled to such a credit.
331.
Audit No. 8159 found that:362

a. invoice No. 36 of 20 October 2010 relates in fact to a work certificate No. 15 dated 24 April 2009 (allegedly outside the permissible period for a claim);

b. invoice No. 37 of 29 October 2010 relates in fact to a works certificate No. 14 of 27 February 2009 (again allegedly outside the permissible period);

c. both invoice No. 43 of 28 March 2011 and invoice No. 47 of 6 December 2011 actually pertain to works carried out in 2009 according to five situation reports (allegedly more than 12 tax periods before the invoice) and Audit No. 8159 concluded that the date had been removed from invoice No. 47 and that relevant situation reports had been "corrected".

332.
The Audit concluded that these alleged actions amounted to fiscal evasion, contrary to Article 116 of Law No. 9920 of 19 May 2008 on Tax Procedures.

c. Findings: alleged failure to comply with the "tax representative rule"

333.
Audit No. 8159 also concluded that KGE had obtained services from a number of taxable persons not resident in Albania,363 and that the service providers had not nominated a tax representative in Albania when they were required to do so. Audit No. 8159 therefore concluded that KGE was liable to a penalty.

d. KGE’s appeal

334.
On 11 June 2015, KGE lodged an appeal against Audit No. 8159 with the tax authorities.364 The appeal did not challenge the allegation that dates on invoices and other documents had been altered.
335.
The appeal was rejected on 15 September 2015 on the basis that KGE had failed to pay, or provide a bank guarantee for the amount of, the tax allegedly owed, as allegedly required as a condition precedent to appealing by Article 107 of Law No. 9920 of 19 May 2008 on Tax Procedures.365 KGE did not appeal this decision to dismiss its appeal to the tax authorities to the Administrative Court.
336.
On 22 September 2015, the tax authorities froze KGE’s accounts and imposed a lien on them on 8 October 2015.366

(3) Energji’s tax set-off with KGE

337.
On 14 June 2010, KGE and Energji signed a set-off agreement according to which KGE would assign ALL 87.3 million (approximately €629,000) of its approved ALL 387.5 million (approximately €2.8 million) VAT credit to Energji, allowing Energji to set off its own tax liabilities with the VAT credit owing to KGE.367 On 11 June 2010, the Albanian tax authorities approved this arrangement concerning the credit the subject of the agreement, subject to that agreement being produced to the authorities.368
338.
On 3 March 2011, Energji set off large amounts of VAT in this manner for the first time.369 On 17 March 2011, the Albanian tax authorities reimbursed Energji for sums it had paid to the authorities in recognition of the credit to which it was entitled under the agreement.370 Energji continued to set off its tax liability with tax credits obtained from KGE and the Albanian tax authorities recognized these set-offs. Most of the VAT refunds that KGE obtained were not direct refunds but set-offs either from KGE’s own tax obligations or from Energji’s tax obligations.371 These set-offs were the subject of separate agreements between KGE and Energji, and separate approvals by the authorities.372
339.
For so long as Audit No. 8159 remained open, however, KGE could not get its VAT credits approved by the authorities, as KGE and Energji had to suspend their requests for set-off of the VAT credit against their own tax obligations and wait for the final amount of the tax credit to be confirmed by the tax authorities.373 On 26 July 2012, KGE complained about this situation to the tax authorities.374
340.
Energji accumulated significant tax liabilities and on 17 August 2012 the tax authorities froze Energji’s bank accounts in respect of Energji’s debt of ALL 52,684,742 (approximately €392,000).375 On 11 January 2013, they imposed a lien on Energji’s movable and immovable property.376
341.
On 12 August 2014, the General Customs Directorate informed Energji that it would initiate bankruptcy proceedings if Energji did not pay all of its outstanding tax liabilities.377 On 22 August 2014, Energji wrote to the Regional Taxation Directorate, asserting that the Directorate did not have the right, under the Law, to claim that Energji’s tax liability was "uncollectible".378 On 7 November 2014, the Regional Taxation Directorate nevertheless commenced bankruptcy proceedings.379

(4) Customs exemptions

342.
In Article 24 of the Concession Agreement, customs exemptions were granted by Albania.380 Article 4 of Law No. 8708 confirmed this and provided that KGE "is exempt from import duties, and any kind of tax that has to do with import and export of goods and services".381 Customs exemptions could be obtained by KGE submitting a request for authorisation for customs exemption,382 which the customs authorities would then authorise.383
343.
On 29 June 2012, KGE submitted a request for authorisation for customs exemption for certain equipment it was importing for the Project.384 However, when the equipment arrived, the customs authorities did not release it.385 On 5 July 2012, the General Directorate of Customs sought clarification from the Ministry of Finance regarding whether KGE was exempt from VAT on imports.386 On 19 July 2012, the METE confirmed that KGE was exempt from customs taxes and duties.387 On 23 July 2012, the General Directorate of Customs sought further clarification from the Ministry of Finance and the METE.388
344.
Over 24 July 2012 to 15 August 2012, correspondence was exchanged between KGE and the customs authorities regarding whether the customs exemption covered the VAT on the imported equipment.389 On 2 November 2012, KGE paid €33,725.15 for the release of the equipment despite maintaining that no customs duties, including VAT on imports, were owed.390

(5) 2013 Audit of Agonset

345.
On 11 December 2013, the General Taxation Directorate announced an audit of Agonset.391 The audit program provided with the notification of the audit stipulated the following tax categories and periods would be covered.392

a. June 2012 to November 2013 for VAT.

b. The year 2012 for income tax.

c. May 2012 to November 2013 for Social Insurance and others.

346.
On 19 December 2013, the tax inspectors requested an extension of the mandatory 72-man-hour limit on audit periods,393 which was granted on 20 December 20 1 3.394
347.
On 26 February 2014, a final report was issued that imposed a fine of approximately ALL 3,429,626 (equal to €24,039 at the time) in regard to tax on profits and income tax, penalties and interest.395 Of this amount, ALL 75,352 (equal to around €528 at the time) corresponded to arrears and penalties for tax on profits.
348.
Because challenging the audit would have been more costly than complying with its findings, Agonset paid this tax liability, even though it believed this liability to have been incorrectly assessed.396

(6)Investigation of Cable System and 400 KV

349.
In February 2014, Cable System and 400 KV, two companies that had made loans to Agonset several months earlier,397 were notified that they would be investigated by the tax authorities.398 The stated objective of these audits was the "verification of the transactions of the loan that you have made in the name of the company ‘AGONSET’ Sh.p.k."399 and the notices set out the steps to be taken to further this goal.
350.
The Claimants and their companies cooperated with this investigation.400 Agonset was funded through a series of intercompany loans, the majority of which ultimately came from the settlement with Deutsche Bank described in paragraphs 232 to 234 above.401

(7) The Claimants’ initial response

351.
The Claimants were concerned about what might have motivated the investigations, however, and so commissioned an independent expert report on the funding of Agonset from Grieg Taylor of FTI Consulting.402 On 1 May 2014 the report was issued, which detailed the amount, timing, and source of all cash inflows into eight of the Claimants’ companies in Albania, including KGE, Energji, Cable System, Agonset, Albaniabeg, and 400 KV.403
352.
The report was sent to the Albanian President, Prime Minister, Speaker of Parliament, Minister of Finance, Attorney General, Governor of the Central Bank, and the leaders of the parliamentary groups of the main political parties.404
353.
Also in response to the investigation, Mr. Becchetti arranged to meet with the Secretary General of Prime Minister Rama’s cabinet, Mr. Agagi, at a restaurant in Tirana, in late 2013 or early 2014.405 Mr. Becchetti asked why Prime Minister Rama’s Government was pursuing money laundering investigations and actions against KGE, Energji, Agonset, Cable System, and 400 KV.406 Mr. Agagi declined to respond to this question and told Messrs. Becchetti and Arbana that they should speak to Enkelejd Joti, the General Manager of Top Channel.407
354.
When asked why Mr. Becchetti should speak to Mr. Joti, who was not a public sector official, but the General Manager of a private television channel, Mr. Agagi said "It is not a good idea to oppose the State."408
355.
Mr. Becchetti asked Mr. Agagi to tell Prime Minister Rama that the investigation was unnecessary and unacceptable, and Mr. Agagi said he would speak with Prime Minister Rama.409

(8) Audit 3525 of Energji

356.
On 10 March 2014, Albania opened Audit No. 3525 into Energji.410 The following month, the tax authorities claimed that Energji had refused to provide it with documentation and imposed a ALL 1 million fine on Energji and Mr. De Renzis for allegedly obstructing the tax audit.411 On 18 May 2015 the Tirana Administrative Court of First Instance overturned the fine.412
357.
On 6 August 2014, Audit No. 3525 concluded, finding that Energji owed ALL 95,860,398 (€675,517 at the time) in tax liabilities, fines and interest.413 In order to challenge this audit, Energji obtained a guarantee from Banka Veneto on 5 September 2014.414
358.
On 8 January 2015, the Income Tax Appeal Directorate struck down 60% of these fines, on the basis that the audit had failed to recognise that the subject invoices had not yet been paid, meaning no payment had occurred that would be subject to withholding tax.415
359.
On 31 March 2015, the tax authorities ordered Banka Veneto to pay to them the amounts in the frozen bank accounts416 to satisfy other tax liabilities owed by Energji.417
360.
The Regional Tax Headquarters, Large Taxpayers Unit in Tirana audited Banka Veneto. It found that issuing the guarantee to Energji was in breach of Law No. 9920. The bank was fined ALL 24,297,492 and determined that no transactions could be performed with Energji’s accounts while freezing orders remained in place.418 On 10 April 2015, the bank therefore refused Energji’s request to extend the guarantee.419
361.
On 10 June 2015, the Administrative Court of First Instance rejected Energji’s appeal as to the balance of the liabilities determined to be owing by Audit No. 3525 on the basis that Energji had not satisfied a condition of bringing that appeal, namely either paying the full amount alleged to be owing or providing a bank guarantee for that amount.420

(9) Refusal of Agonset’s Application for VAT Exemptions

362.
Albania applies a value added tax to goods, including imported goods. Its VAT program is regulated under Law No. 7928 as amended by Law No. 125/2012 dated 20 December 2012.421 Before its amendment by Law No. 125/2012, Law No. 7928 provided a VAT deferral scheme, allowing investors to postpone the payment of VAT on some imported equipment. Law No. 125/2012 amended Law No. 7928 to permit complete VAT exemptions for some of this equipment, subject to conditions.
363.
Law No. 7928 as amended was supplemented by Decision of the Council of Ministers No. 180 dated 13 February 2013 ("Decision No. 180"), which came into force on 2 April 2013. This implementing decree repeated the text of Law No. 125/2012 but narrowed the Law’s application to some specified equipment, listed in an annex:

2. Importing machinery and equipment performed by the taxpayers specified in point 1 of this decision is exempted from VAT only in cases when such machinery and equipment are imported in order to carry out investment contracts and importation is carried out by taxpayers themselves without subcontracting. The list of machinery and equipment that are directly related to the investment is set forth in the annex 1, which is attached to this decision.

[...]

5. [...] The [exemption] procedure is valid only for the goods listed in the Annex 1 attached to this decision.422

364.
In early December 2013, Agonset requested deferrals and exemptions from the General Customs Directorate and the Tirana Customs Department, namely a VAT exemption on imported equipment already subject to VAT payment deferral and exemptions on equipment yet to be imported.423 On 4 December 2013, the Tirana Customs Department denied authorisation on the basis that the television equipment imported by Agonset was not listed in Decision No. 180.424
365.
On 25 July 2014, in Decision No. 4460, Tirana Administrative Court of First Instance upheld Agonset’s appeal of that denial. It did so on the basis that Decision No. 180 could not narrow the scope of Law No. 7928, and the Law did not limit the types of goods to which the relevant exemptions applied. As Agonset had complied with the Law’s requirements, it was entitled to the exemptions sought.425
366.
The attorney general of Albania and the customs authority filed an appeal against this decision. The General Customs Directorate issued nine administrative decisions between February and August 2014 to collect VAT from Agonset, including on goods the Tirana Administrative Court had found were exempt. Agonset filed appeals against some of these administrative decisions, which appeals were at the time of the hearing also still pending.426
367.
On 3 June 2015, the Tirana Customs Department sought to obtain a forced recovery of Agonset’s outstanding VAT under the nine decisions with Decision No. 238. Agonset contested Decision No. 238 before the Tirana Administrative Court of First Instance, which rejected the lawsuit as the merits were pending in a different proceeding. The court also considered that, as the Administrative Court’s Decision No. 4460 was not final pending appeal, the customs authorities could seek VAT collection in the meantime.427

(10) Cable System audit

368.
On 14 May 2014, the tax authorities commenced an audit of Cable System.428 The audit included an inspection of VAT, social security and income tax, and tax on profit, back to 2009.
369.
In its final report, the General Taxation Directorate informed Cable System that it was going to report all bank transactions for the audited period to the General Directorate for the Prevention of Money Laundering.429

(11) Further audits of KGE and Energji

370.
On 18 May 2015, five days after closing Audit No. 8159, Albanian tax authorities opened additional audits against KGE430 and Energji. The new audit of Energji was initiated despite the Albanian tax authorities having frozen Energji’s bank accounts in August 2012 and initiated bankruptcy proceedings against it in November 2014.431
371.
Energji’s audit covered a verification of the company’s income tax, VAT, and health and social tax compliance, as well as compliance with accounting procedures, without even any indication of which time periods were to be reviewed.432 KGE’s audit encompassed VAT tax, income tax, profit tax, and health and social tax compliance and "Identification of the business activity".433
372.
However, these tax audits were subsequently suspended on the request of the tax authorities.434 Due to the document sequestrations discussed in section IV.J(2) below, these companies no longer had in their possession the originals of the documents needed to carry out these tax audits. The tax authorities intended to continue the audits once the original documents were made available to them.435

J. The criminal investigation

(1) The first allegations of money laundering

373.
Also in February 2014, on the 17th, the Economic and Financial Crime Section of the Police General Directory in Tirana sent the Tirana Prosecution Office information ("February 2014 Information") that raised allegations that Mr. De Renzis was laundering money.436 The February 2014 Information led to the Prosecution opening Criminal Proceeding No. 1564 a few days later, on 24 February 2014.437
374.
The allegations were based on the investigators' mistaken belief that Mr. De Renzis was not only the Administrator of various companies in the Becchetti Group of companies, but also the sole investor.438 The investigators had obtained all of the materials from the tax authorities' audit of Agonset.439 On the basis of their mistaken understanding of Mr. De Renzis' role, the loans between various companies appeared to the investigators to be intended to disguise the source of funds that Mr. De Renzis controlled.440

(2) Orders for document production

375.
On 7 March 2014, the Prosecution wrote to the Albanian General Directorate for Taxation requesting detailed information on nearly all of the Claimants' companies in Albania, Cable System, 400 KV, Fuqi, Investime te Rinovueshme, and Agonset,441 all of which had been named in the February 2014 Information. The Albanian prosecution obtained the companies’ tax registration numbers, general tax history information, financial statements, control acts, books of sale and purchase, balance sheets, internal administrative decisions, analytical statements of income and expenses, and annual financial situations.442
376.
The Prosecution then issued a series of sequestration and seizure orders in Criminal Proceeding No. 1564.

a. On 21 April 2014, the Prosecution issued a sequestration order over the building plans and other technical documents relating to the Kalivaç Project held by KGE.443 The order recited that "According to the files administered during the investigation on this case, it appears that [Enerji and KGE] have performed among them financial transactions that create doubts in relation to the source of these transactions" and was apparently based in particular on the fact that "in 1997 the investment value was foreseen to be equal to 100.000.000 US dollars, and in the Addendum to the contract approved in 2007, the works value was foreseen to 129.000.000 Euro."444 The sequestration order was not sent to KGE until 12 September 2014.

b. On 23 June 2014, the Prosecution ordered the seizure of 69 invoices issued on the Kalivaç Project from KGE and Energji.445 This was the first time that any of the Claimants had been informed of the existence of Criminal Proceeding No. 1564. Again, the basis for the sequestration order was said to be an allegation of money laundering: "[...] it appears that the commercial companies ‘Kalivaç Green Energy’, ‘Cable System’ sh.p.k., ‘400 KV’, ‘Energji’ Sh.p.k., ‘Agonset’, carried out suspicious financial transactions between them, which create doubts about the source of funding."446

c. On 26 June 2014, the Prosecution seized "all fiscal buying and selling invoices, that are related to the construction of the Hydropower Plant of Kalivaç, as well as the contracts stipulated between this company and the contractor and its subcontractors" for KGE and Energji.447

d. Also on 26 June 2014, the Prosecution sent a seizure notice to Cable System for identical reasons and for the same Project, except that this time the allegation was with respect to Cable System, 400 KV, and Energji.448

e. On 26 August 2014, the Prosecution seized "all the fiscal acquisition invoices (accompanied with the works progress situations), from all the subcontractors that have carried out works at the Hydropower Plant of Kalivaç" from 400 KV, Cable System, Fuqi, and Investime te Rinovueshme. This time, however, the charge was that only Cable System, 400 KV, Energji and Fuqi had performed suspicious financial transactions.449

f. On 19 December 2014, Albanian authorities seized "all the original situation reports generated during the construction of the Kalivaç Hydroelectric Plant" from KGE. The basis for this seizure was stated to be "suspicious financial transactions" between KGE and Energji.450

g. On 19 January 2015, the Prosecution confiscated "all the certificates of the taking delivery of works and the contract(s) concluded between Energji sh.p.k. and Kalivaç Green Energy sh.p.k." from KGE on the suspicion that "suspicious financial transactions" were carried out between KGE and Energji.451

h. On 27 April 2015, the Prosecutor issued an order to examine documents relating to certain of KGE’s revenues, on the basis of "suspicious financial transactions" between KGE, Cable System, 400 KV, and Energji.452

377.
As the originals of these documents were removed, the tax audits of KGE and Energji that started in May 2015 (discussed in paragraphs 370-372 above) were suspended.

(3)International letters rogatory

378.
The Prosecution also sent a number of letters rogatory to foreign governments requesting assistance with the criminal investigation.
379.
The Italian authorities responded by asking that the Prosecution’s requests be "more specific, in time, people, documents and a list of banking institutions to which these documents will be required."453 Ultimately, the Italian authorities provided information to Albania.454
380.
In July 2014, Albania’s Ministry of Justice began sending requests for judicial assistance to its counterpart in Luxembourg. With the help of the authorities in Luxembourg, Albania obtained over 500 pages of banking documents regarding KGE.455 After it obtained general banking documents, it sought information regarding specific transactions. For example, on 23 April 2015, in response to Albania's request, authorities in Luxembourg provided information with respect to three specific transactions, as well as an Excel spreadsheet including all bank credit and debit bank activity for KGE's UniCredit Luxembourg S.A. account.456

(4) Prosecution of Mr. Becchetti for incident at Tirana Airport

381.
On 1 July 2014, Mr. Becchetti underwent a security check at the Tirana Airport, conducted by safety employee Older Hysa.457 There are varying descriptions about what occurred during this security check. Mr. Hysa made a complaint that Mr. Becchetti hit him with his head and captured him by his neck.458 Mr. Becchetti says that Mr. Hysa subjected him to an inappropriate security check and made offensive comments, however he did not hit Mr. Hysa.459
382.
Security footage,460 which recorded vision but not sound, shows Mr. Becchetti being searched after passing through a metal detector. In the course of the search Mr. Becchetti removes something from his pocket and removes his belt. While Mr. Becchetti is putting his belt back on and retrieving his jacket and luggage, he appears to speak to, and gesture towards, the security officer who searched him. Once Mr. Becchetti has his belt and jacket on, he appears to place his face very close to that of the security officer who searched him and then shove that