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

Decision on Jurisdiction

Table of Selected Abbreviations/Defined Terms

AGU Agreement of Good Understanding
Annex Agreement Annex Agreement to the AGU dated 28 March 2012
Application Kosovo's Preliminary Objections under Rule 41(5) dated 18 December 2017
Arbitration Rules ICSID Rules of Procedure for Arbitration Proceedings 2006
BIT Agreement between the Swiss Confederation and the Republic of Kosovo on the Promotion and Reciprocal Protection of Investments, which entered into force on 13 June 2012
c-[#] Claimant's Exhibit
CL-[#] Claimant's Legal Authority
Cl. post-hearing br. Claimant's Post Hearing Brief dated 17 February 2020
Cl. Supp. to RfA Claimant's letter supplementing the Request dated 16 June 2017
Commitment Agreement Commitment agreement among Mr. Berisha on behalf of UTC, KTA on behalf of SOE Sloga and the Grand Hotel LLC attached to the Purchase Agreement
Counter-Memorial or Cl. Counter-Mem. on Jurisd. Claimant's Counter-Memorial on Jurisdiction and Admissibility dated 14 May 2019
Grand Hotel Grand Hotel L.L.C.
Hearing Hearing on Jurisdiction and Admissibility held on 23 January 2020
ICSID Convention Convention on the Settlement of Investment Disputes Between States and Nationals of Other States dated 18 March 1965
ICSID or the Centre International Centre for Settlement of Investment Disputes
KTA Kosovo Trust Agency
Mabetex Mabetex Group Switzerland
Memorial or Resp. Mem. on Jurisd. Respondent’s Memorial on Jurisdiction and Admissibility dated 5 April 2019
NewCo New company
NewCos New companies
NTSH NTSH Eurokoha-Reisen
PAK Kosovo Privatization Agency
Performance Guarantee Performance guarantee dated 21 March 2012 issued by the National Commercial Bank Kosovo in the amount of EUR 20.2m in favor of Mabetex
Purchase Agreement Agreement for the "Sale of Ordinary Shares in Grand Hotel" concluded on 10 August 2006
R-[#] Respondent’s Exhibit
Rejoinder or Cl. Rejoinder on Jurisd. Claimant’s Rejoinder on Jurisdiction and Admissibility dated 20 September 2019
Reply or Resp. Reply on Jurisd. Respondent’s Reply on Jurisdiction and Admissibility dated 23 August 2019
Request or RfA Claimant’s Request for Arbitration dated 15 May 217
Resp. post-hearing br. Respondent’s Post-Hearing Brief dated 17 February 2020
RL-[#] Respondent’s Legal Authority
SCSC Supreme Court of Kosovo’s Special Chamber for Matters relating to the Privatization Agency
SOE Socially-owned property
Tr. [page:line] Transcript of the Hearing
Tribunal Arbitral tribunal constituted on 20 November 2017
UNMIK United Nations Interim Administration Mission in Kosovo
UTC N.T.P. Unio-Commerce
2005 Foreign Investment Law Foreign Investment Law No. 02/L-33, enacted on 21 November 2005 and entering into force upon promulgation by the Special Representative of the United Nations Secretary-General in April 2006
2014 Foreign Investment Law Foreign Investment Law No. 04/L-220, which entered into force on 24 January 2014

I. PROCEDURAL HISTORY

1.
On 15 May 2017, ICSID received a request for arbitration of the same date from Mabco against Kosovo, along with exhibits C-1 through C-17 (the "Request").
2.
On 2 June 2017, the Centre sent a first set of questions to Claimant.
3.
On 16 June 2017, Claimant responded by submitting a letter supplementing the Request, along with additional exhibits C-171 through C-21.
4.
On 26 June 2017, ICSID sent a second round of questions to Claimant.
5.
On 30 June 2017, the General State Attorney of Kosovo requested that the ICSID Secretary-General refuse the registration of the Request as being manifestly outside the jurisdiction of the Centre.
6.
On 4 July 2017, the Centre acknowledged receipt of Kosovo's letter of 30 June 2017 and reminded Kosovo that:

Pursuant to Article 36(3) of the ICSID Convention, the Secretary-General shall register the Request unless she finds, on the basis of the information contained in the Request, that the dispute is manifestly outside the jurisdiction of ICSID. Therefore, the Secretary-General's power to consider any objections to a request for arbitration is limited.

7.
On 12 July 2017, Claimant responded to the Centre's second set of questions and provided comments on Respondent's letter of 30 June 2017.
8.
On 21 July 2017, 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 Rule 7(d) of ICSID’s Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings.
9.
On 31 July 2017, Claimant made a proposal as to the method of constitution of the Tribunal, which Respondent accepted on 11 August 2017.
10.
By letter dated 15 August 2018, the Centre noted that the Parties had agreed to constitute the Tribunal in accordance with Article 37(2)(a) of the ICSID Convention, and that the Tribunal would consist of three arbitrators, to be appointed as follows:

1. Each party shall appoint one arbitrator;

2. The two party-appointed arbitrators shall, each in consultation with the party that nominated him/her, appoint the Chairperson of the Arbitral Tribunal within 90 days of the registration of the case;

3. None of the members of the Arbitral Tribunal shall be a national of Switzerland or the Republic of Kosovo;

4. In case the party-appointed arbitrators and the parties cannot agree on a Chairperson within the above-mentioned time limit, the Chairperson shall be appointed by the Chairman of the Administrative Council of ICSID.

11.
On 24 August 2017, Claimant appointed Mr. Gianrocco Ferraro, a national of Italy, as arbitrator in this case. Mr. Ferraro accepted his appointment on September 5, 2017.
12.
On 20 September 2017, Respondent appointed Professor Dr. August Reinisch, a national of Austria, as arbitrator in this case. Professor Dr. Reinisch accepted his appointment on 26 September 2017.
13.
On 23 October 2017, the co-arbitrators informed the Parties that they had been unable to reach an agreement on the presiding arbitrator within the 90-day period set forth in the Parties’ agreement; and inquired whether the Parties would agree to a 2-week extension for the appointment of the presiding arbitrator.
14.
On 25 October 2017, Claimant agreed to the extension of the deadline for the appointment of the presiding arbitrator until 2 November 2017.
15.
On 2 November 2017, the co-arbitrators inquired whether the Parties would agree to a further 2-week extension.
16.
By correspondence dated 3 and 6 November 2017, the Parties agreed to extend the deadline for the appointment of the presiding arbitrator. The Centre took note of such agreement on 6 November 2017.
17.
On 15 November 2017, the Centre informed the Parties that the co-arbitrators had appointed Professor George Bermann, a national of the United States, as the presiding arbitrator.
18.
On 20 September 2017, the 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. Mr. Francisco Abriani, ICSID Legal Counsel, was designated to serve as Secretary of the Tribunal.
19.
On 29 November 2017, the Centre requested the Parties to make an initial advance payment by 29 December 2017 in order to cover the cost of the proceeding, in accordance with ICSID Administrative and Financial Regulation 14(3).
20.
On 6 December 2017, the Tribunal informed the Parties that it would be available to hold the first session with the Parties by telephone conference on 17 January 2018 and invited them to confirm their availability on this date. A draft Procedural Order No. 1 was also circulated, and the Parties were invited to review its content, to agree on as many of the issues addressed in the draft order as possible, and to submit their comments on the proposed draft one week before the first session.
21.
On 14 December 2017, the Tribunal reiterated its request regarding the Parties' availability.
22.
On 18 December 2017, Claimant informed the Tribunal that it had initiated settlement negotiations with Respondent and requested the stay of the proceeding and the extension of the deadline for the payment of the advance on costs until 31 January 2018.
23.
On 18 December 2017, Respondent informed the Tribunal of its intention to submit an objection pursuant to Rule 41(5) of the ICSID Arbitration Rules for "manifest lack of legal merits within the deadlines set forth in the aforementioned rule."
24.
On 19 December 2017, the Tribunal invited Respondent to state, whether it agreed to Claimant’s request that the proceeding be stayed until 31 January 2018. The Tribunal also took note of Respondent’s intention to submit an objection pursuant to ICSID Arbitration Rule 41(5), and reminded the Parties that the deadline to submit an objection pursuant to Rule 41(5) was "30 days after the constitution of the Tribunal", i.e. 20 December 2017.
25.
On 22 December 2017, Respondent informed the Tribunal that there had been no official settlement negotiations initiated to that date and therefore it could not comment on Claimant’s request to stay the proceeding. Respondent also informed the Tribunal that it had already filed on 18 December 2017, its objections under Rule 41(5) in hard copy via express mail delivery.
26.
On 27 December 2017, the Centre acknowledged receipt on 22 December 2017, of one original hard copy of Kosovo’s Preliminary Objections under Rule 41(5) dated 18 December 2017, (the "Application"), along with exhibits R-1 through R-10. The Centre noted that the package did not contain the six additional copies mentioned in Kosovo’s cover letter. The Centre also attached: (i) a copy of the shipment label which the Centre received with Kosovo’s package; and (ii) the shipping information provided on the FedEx website based on the package tracking number. According to these documents, Respondent’s Application was dispatched on 20 December 2017, and was delivered at the seat of the Centre on 22 December 2017.
27.
By letter dated 29 December 2017, the Tribunal noted that, absent confirmation by both Parties that settlement negotiations were underway, the stay of the proceeding as requested by Claimant could not be granted at that stage. The Tribunal also noted that it appeared that Respondent’s Application was not "delivered at the seat of the Centre [...] before the close of business on the indicated date," as required by ICSID Administrative and Financial Regulation 29(2). The Tribunal however invited (i) Claimant to provide comments on the timeliness of Respondent’s Application by 3 January 2018, and (ii) Respondent to respond to Claimant’s comments, if any, by 5 January 2018. The Tribunal noted that it would then decide whether it would entertain Respondent’s objections under Rule 41(5). Finally, the Tribunal confirmed that the deadline to make the initial advance payment requested by the Centre, was extended until 10 January 2018.
28.
On 3 January 2018, Claimant submitted its comments on Respondent’s Application, to which the Respondent replied on 4 January 2018. Respondent also requested a deferral of the first session at least until 1 February 2018.
29.
On 5 January 2018, the Tribunal informed the Parties that it would not rule on the timeliness of the Application until the advance on costs was paid and both the Tribunal and Claimant had received copies of Respondent’s Application along with any attachments. The Tribunal further invited Claimant to confirm its agreement to the extension of the 60-day period set forth in ICSID Arbitration Rule 13(1) as proposed by Respondent, and invited both Parties to confirm their availability for a first session on any date during the week of 5 to 9 February 2018.
30.
By correspondence dated 7 and 9 January 2018, the Parties agreed to the extension of the 60-day period set forth in ICSID Arbitration Rule 13(1) and to hold the first session by telephone conference on 8 February 2018.
31.
On 10 January 2018, the Centre acknowledged receipt of Claimant’s payment of its share of the initial advance on costs and confirmed that the first session would be held on the agreed date.
32.
On 16 January 2018, the Centre informed the Parties of the default in the payment of Respondent’s share of the advance requested, and invited either Party to pay the outstanding amount by 31 January 2018.
33.
On 17 January 2018, Respondent submitted an electronic copy of the Application via email, along with exhibits R-1 and R-3 through R-10. Hard copies of the submission were subsequently delivered to Professor Bermann and Mr. Ferraro.
34.
On 30 January 2018, a draft agenda was circulated to the Parties for the first session.
35.
On 1 and 2 February 2018, Claimant and Respondent, respectively, submitted their proposed changes to the draft Procedural Order No. 1, indicating the items on which they agreed as well as their respective positions regarding the items on which they did not agree.
36.

On 7 February 2018, the Tribunal rendered its Decision on Respondent’s Preliminary Objections under Rule 41(5) of the Arbitration Rules. The Tribunal decided "that Respondent’s Application is untimely and declines to entertain the Application on the merits."2

37.
On 8 February 2018, the Tribunal held a first session with the Parties by telephone conference.
38.
On 15 February 2018, the Centre informed the Parties that ICSID’s Secretary-General would move the Tribunal to stay the proceeding if the outstanding portion of the first advance had not been received from either Party by 8 March 2018.
39.
On 21 February 2018, Claimant submitted a draft provisional procedural timetable to the Tribunal.
40.
On the same date, the Tribunal invited Respondent to comment on Claimant’s proposal by 23 February 2018.
41.
On 27 February 2018, Respondent submitted its draft provisional timetable.
42.
On the same date, the Tribunal acknowledged receipt of Respondent’s proposed procedural timetable and reminded the Parties, inter alia, that the proceedings could only go forward if the balance of the advance payment was paid by either Party.
43.
On 6 March 2018, Claimant provided its comments on Respondent’s draft procedural timetable.
44.
On 12 March 2018, the Centre informed the Parties that the Tribunal, pursuant to ICSID Administrative and Financial Regulation 14(3)(d) and the Centre’s motion, had decided to suspend the proceeding for non-payment of the required advances.
45.
On 14 August 2018, the Secretariat informed the Parties that they had not taken any steps during five consecutive months, and that, therefore, pursuant to ICSID Arbitration Rule 45, if no steps were taken by them before 12 September, 2018, the Secretary-General, after notice to the Parties, would move to discontinue the proceeding.
46.
On 19 September 2018, the proceeding was resumed following Claimant’s payment of the outstanding balance of the initial advance.
47.
On 5 October 2018, the Tribunal issued Procedural Order No. 1 recording the agreement of the Parties on procedural matters. Procedural Order No. 1 provides, inter alia, that the applicable Arbitration Rules would be those in effect from 10 April 2006, that the procedural language would be English, and that the place of the proceeding would be Paris, France. The Tribunal also invited the Parties to submit a proposed timetable.
48.
On 15 October 2018, Respondent requested an extension until the second week of November to submit the proposed timetable.
49.
On 16 October 2018, Claimant agreed to the extension of the deadline for the submission of the proposed timetable until 5 November 2018.
50.
On 17 October 2018, the Tribunal took note of the Parties’ agreement to extend until 5 November 2018, the deadline for the submission of the proposed timetable by the Parties and therefore granted the extension upon consent.
51.
On 5 November 2018, both Parties submitted their respective proposed procedural timetable, informing the Tribunal that they had not been able to agree on a joint procedural timetable.
52.
On 12 November 2018, the Tribunal transmitted the procedural timetable to the Parties.
53.
On 14 November 2018, Claimant objected to the procedural timetable set out by the Tribunal and requested the Tribunal to adjust it in accordance with the revised timetable then submitted by Claimant.
54.
On 15 November 2018, the Tribunal invited the Parties to submit an agreed timetable by 22 November 2018, or their respective positions for the Tribunal to issue a new timetable taking into account their respective views, absent an agreement between the Parties.
55.
On 22 November 2019, the Parties informed the Tribunal that they could not reach an agreement with regard to the procedural timetable and submitted their respective proposed timetable.
56.
On 28 November 2019, the Tribunal took note of the Parties’ failure to reach an agreement on the procedural timetable and transmitted to them the timetable it had therefore established.
57.
On 18 December 2018, Respondent requested an extension of the deadline for the submission of its Memorial on Objections to Jurisdiction and Admissibility until 29 March 2019.
58.
On 19 December 2018, the Tribunal invited Claimant to comment on Respondent’s request.
59.
On 21 December 2018, Claimant agreed to Respondent’s request and requested the Tribunal to set a deadline for the submission of the procedural timetable taking into account 29 March 2019 as the starting date.
60.
On 28 December 2018, the Tribunal granted Respondent’s extension request and invited the Parties to submit an agreed timetable using 29 March 2019 as the starting point, by 14 January 2019.
61.
On 14 January 2019, Claimant submitted the Parties’ agreed timetable to the Tribunal, which Respondent confirmed on 15 January 2019.
62.
On 30 January 2019, following exchanges with the Parties, the Tribunal transmitted the final procedural timetable to the Parties.
63.
On 25 March 2019, Dr. Florian Dupuy of Wagner Arbitration, informed the Centre that its law firm had been retained by Kosovo as legal counsel in these arbitration proceedings, and requested an extension until 5 April 2019 to file Respondent’s Memorial on Objections on Jurisdiction and Admissibility.
64.
On the same date, the Secretary of the Tribunal invited Wagner Arbitration to provide a new power of attorney, which was provided by Respondent on 26 March 2019.
65.
On 26 March 2019, the Tribunal invited Claimant to comment on Respondent’s request.
66.
On 27 March 2019, Claimant agreed to an extension of the deadline until 5 April 2019.
67.
On 28 March 2019, the Tribunal informed the Parties that the extension request was approved upon consent.
68.
On 28 March 2019, the Centre requested the Parties to make a second advance payment in order to cover the cost of the proceeding, in accordance with ICSID Administrative and Financial Regulation 14(3).
69.
On 5 April 2019, Respondent filed its Memorial on Objections to Jurisdiction and Admissibility along with exhibits R-001 through R-019 and legal authorities RL-001 through RL-015 (the "Memorial").
70.
On 25 April 2019, Respondent informed the Tribunal that "it [was] not in a position to honor the payment of its share of the advance."
71.
On 1 May 2019, the Centre informed the Parties of their default in the payment of the second advance, and invited either Party to pay the outstanding amount by 16 May 2019.
72.
On 2 May 2019, the Centre acknowledged receipt of Claimant’s payment of its share of the second advance requested by the Centre.
73.
On 9 May 2019, Claimant requested an extension of the deadline to file its Counter-Memorial on Jurisdiction and Admissibility until 14 May 2019, to which the Respondent agreed on 10 May 2019. On the same date, the Tribunal informed the Parties that the requested extension was granted upon agreement of the Parties.
74.
On 14 May 2019, Claimant filed its Counter-Memorial on Jurisdiction and Admissibility, along with the witness statement of Mr. Behgjet Pacolli dated 14 May 2019, the witness statement of Mr. Selim Pacolli dated 14 May 2019, exhibits C-026 through C-044, and legal authorities CL-001 through CL-018 (the "Counter-Memorial").
75.
On 21 May 2019, the Centre acknowledged receipt of Claimant's payment ofRespondent’s share of the second advance.
76.
On 12 June 2019, the Parties submitted their respective Redfern Schedules to the Tribunal.
77.
On 21 June 2019, the Tribunal issued Procedural Order No. 2 concerning the production of documents.
78.
On 12 July 2019, Respondent produced the documents ordered by the Tribunal in Procedural Order No. 2 and provided observations regarding certain requests, while Claimant produced some documents as per Procedural Order No. 2 and confirmed that no documents pertaining to requests nos. 2 and 3 were in its possession.
79.
On 22 July 2019, the Tribunal invited the Parties to confirm their availability to hold a pre-hearing organizational meeting by telephone conference on 18 September 2019.
80.
On 25 July 2019, Claimant's confirmed its availability and requested an extension until 13 September 2019 for the submission of its Rejoinder on Jurisdiction and Admissibility. Claimant further noted that, in light of such request, the deadlines set out in paragraphs 18.2 and 18.3 of Procedural Order No. 1 should be conducted within a deadline of 7 days instead of 14 and that the Parties would also have to agree to amend paragraph 20.3 of Procedural Order No. 1. Finally, Claimant provided further comments on Respondent’s letter of 12 July 2019.
81.
On 29 July 2019, Respondent confirmed its availability on the proposed date for the pre-hearing telephone conference and confirmed its agreement to an extension of the deadline for the submission of Claimant's Rejoinder on Jurisdiction and Admissibility until 13 September 2019 as well as to the amendment of paragraphs 18.2, 18.3 and 20.3 of Procedural Order No. 1.
82.
On 30 July 2019, the Tribunal: (i) granted the extension of the deadline for the filing of Claimant's Rejoinder on Jurisdiction and Admissibility upon consent; (ii) approved the Parties' agreement to reduce the time periods foreseen at paragraphs 18.2, 18.3 and 20.3 of Procedural Order No. 1; (iii) noted that, accordingly, the deadline for each party to notify each other and the Tribunal which witnesses and experts of the opposing party it intends to cross-examine at the hearing is 20 September 2019; and (iv) proposed that the conference call scheduled for 18 September 2019, be cancelled and that it take place instead on 23 September 2019.
83.
On 31 July 2019, Claimant confirmed its availability for a pre-hearing organizational meeting on the proposed date while Respondent confirmed its availability on 5 August 2019.
84.
On 15 August 2019, the Tribunal confirmed that the pre-hearing organizational meeting would take place on 23 September 2019. The Tribunal also circulated a draft agenda and invited the Parties to confer and submit their comments, indicating their points of agreement and their respective positions on the points of disagreement.
85.
On 23 August 2019, Respondent filed its Reply on Jurisdiction and Admissibility, along with the witness statement of Mr. Shkelzen Lluka dated 23 August 2019, the witness statement of Mr. Ahmet Shala dated 20 August 2019,3 exhibits R-020 through R-046, R-048 through R-080, R-082 and R-083, and legal authorities RL-016 through RL-065 (the "Reply ").
86.
On 2 September 2019, Claimant requested an extension of the deadline for its Rejoinder on Jurisdiction and Admissibility until 19 September 2019, to which the Respondent objected on 5 September 2019.
87.
On 11 September 2019, the Tribunal informed the Parties that Claimant’s request for an extension of 2 September 2019 was granted.
88.
On 12 September 2019, Respondent provided comments concerning the Tribunal’s decision to grant extension requested by Claimant and informed the Tribunal that it intended to request the postponement of the hearing on jurisdiction and admissibility. Claimant provided its comments on Respondent’s request on the same date.
89.
On 13 September 2019, the Tribunal informed the Parties that in order to assess the Respondent’s request, it would be relevant to know whether Claimant intended to submit new witnesses or experts with its Rejoinder on Jurisdiction and Admissibility, and therefore invited Claimant to disclose this information by 16 September 2019.
90.
On 16 September 2019, Claimant agreed to a postponement of the hearing on jurisdiction and admissibility. Claimant indicated, however, that its next available dates for a hearing were 30 October to 1 November 2019, and therefore requested an extension of the deadline to submit its Rejoinder on Jurisdiction and Admissibility until 27 September 2019. Respondent provided its comments on Claimant’s request on the same date.
91.
On 16 September 2019, the Tribunal confirmed that the deadline for the filing of the Rejoinder on Jurisdiction and Admissibility was 19 September 2019, and that the hearing on jurisdiction and admissibility would take place on 2-4 October 2019. The Tribunal further invited Claimant to answer its question regarding new witnesses. Finally, the Tribunal advised the Parties that, should it become necessary to postpone the hearing, and subject to finding a hearing room available in Paris, the Tribunal would be available to reschedule it for 6-8 November 2019, with 9 November in reserve.
92.
On 17 September 2019, Claimant responded the Tribunal’s inquiry of 16 September 2019. Claimant made further comments on Respondent’s request and requested, inter alia, that:

In any case, if the Tribunal decides to keep the hearing dates, the Claimant in its preparation of the Rejoinder having severely been jeopardized by the Respondent's procedural conduct submitting an unfair and ambiguous procedural request to which the Respondent has to respond on a daily basis losing a significant amount of time, the Claimant requests to submit its Rejoinder on Friday 20, 2019. The Claimant, however, offers to submit its Witness Statements before that date, if the Tribunal so requires.

93.
On the same date, Respondent proposed that, in light of the extension until 19 September granted to Claimant, the date for the Parties comments on the draft agenda be set to 25 September 2019 and that the pre-hearing organizational meeting take place on 25 September 2019. The Respondent also proposed that the new date for the Parties' notification of witnesses to be heard be set for 24 September 2019.
94.
On 18 September 2019, the Tribunal informed the Parties that the one-day extension for the filing of Claimant's Rejoinder was granted, that the hearing dates were maintained, and that if the hearing were to be postponed, the only practicable dates were the early November dates provided by the Tribunal.
95.
On 20 September 2019, the Claimant filed its Rejoinder on Jurisdiction and Admissibility, along with the second witness statement of Mr. Pacolli dated 20 September 2019, the witness statement of Mr. Remzi Ejupi dated 20 September 2019 and the witness statement of Ms. Lucina Maesani-Gaiatto dated 18 September 2019, exhibits C-045 to C-075, and legal authorities CL-019 to CL-049 (the "Rejoinder").
96.
On 21 September 2019, Claimant informed the Tribunal of its agreement with Respondent's suggested extensions of the various deadlines.
97.
On 22 September 2019, the Tribunal informed the Parties that the pre-hearing organizational meeting was postponed until 25 September 2019 upon agreement of the Parties.
98.
On 24 September 2019, Respondent requested, inter alia, that the hearing be postponed, while Claimant suggested to discuss this during the pre-hearing organizational meeting.
99.
On the same date, the Parties also submitted their comments on the draft agenda for the pre-hearing organizational meeting as well as their respective lists of participants for the pre-hearing organizational meeting, and notified the witnesses that they wish to cross-examine at the hearing. In its notification, Respondent noted, inter alia, that it "[did] not request the presence of any of the Claimant’s witnesses at the oral hearing, because the written witness testimony does not contain statements of sufficient precision to be tested by oral interrogation."
100.
On 25 September 2019, the Tribunal held a pre-hearing organizational meeting with the Parties by telephone conference.
101.
On 27 September 2019, Respondent, on behalf of the Parties, asked the Tribunal to formally confirm the postponement of the hearing, which the Tribunal did on the same date. The Tribunal also indicated to the Parties that it would revert to them regarding the available dates to hold the hearing in late November 2019.
102.
On the same date, Respondent informed the Tribunal that "as discussed during the pre-hearing organizational meeting, the Parties [had] conferred and reached an agreement on items 1.2., 1.5., 2.3., 3.3. and 4 of the Agenda" and submitted their proposed wordings for those items. Claimant confirmed its agreement on the same date.
103.
On 30 September 2019, the Tribunal proposed that the hearing on jurisdiction and admissibility be rescheduled for 25-26 November 2019, in Paris, and invited the Parties to confirm their availability on the proposed dates.
104.
On 1 October 2019, Respondent informed the Tribunal that it was not available on the proposed dates due to other engagements, and that its earliest period of availability would be 16-20 December 2019. On the same date, Claimant confirmed its availability during the week of 16-20 December 2019, but proposed that the hearing be rescheduled for 17-18 December 2019 due to travel arrangements.
105.
On 1 October 2019, Respondent requested that the Tribunal confirm that the Parties were requested to observe the 14-day deadline after the last submission (i.e. 4 October 2019) for the notification of the witnesses to be cross-examined at the hearing.
106.
On 4 October 2019, the Tribunal proposed that the rescheduled hearing be held on 12-13 November 2019.
107.
On 7 October 2019, the Tribunal informed the Parties that it preferred to hold the hearing on 11-12 November 2019.
108.
On the same date, Claimant indicated that it would not be available to hold the hearing on the proposed dated but proposed to hold the hearing in Zurich on 12-13 November 2019.
109.
On 8 October 2019, the Tribunal issued Procedural Order No. 3 concerning the organization of the hearing on jurisdiction and admissibility, and reiterated its invitation to Respondent to confirm its availability to hold the hearing on 12-13 November 2019 and to indicate whether it would be agreeable to hold the hearing in Zurich.
110.
On 9 October 2019, Respondent informed the Tribunal that it was not available on the proposed dates and reiterated that both Parties, and their witnesses, were available during the week from 16 to 20 December 2019.
111.
On the same date, Claimant confirmed that it did not intend to cross-examine Mr. Lluka and made some comments regarding Procedural Order No. 3.
112.
On 10 October 2019, the Tribunal circulated an amended version of Procedural Order No. 3.
113.
On 22 October 2019, the Tribunal invited the Parties to confirm their availability to hold the hearing on jurisdiction and admissibility on 23 -24 January 2020 at the World Bank in Paris.
114.
On 30 October 2019, following the Parties’ confirmations of 23 and 25 October 2019, the Tribunal confirmed that the hearing on jurisdiction and admissibility would be held on 23-24 January 2020 at the World Bank in Paris.
115.
On 14 November 2019, the Claimants requested the Tribunal to:

(i) set the Claimant a deadline to comment on the Respondent’s email of September 24, 2019 as to whether "Claimant’s written witness testimony does not contain statements of sufficient precision to be tested by oral interrogation" before the Tribunal makes a decision on whether the Claimant’s witness statements contain statements of sufficient precision and

(ii) to inform the Parties whether the Tribunal wishes to question Mr. Lluka not called upon by the Claimant for cross-examination.

116.
On 21 November 2019, the Tribunal invited Claimant to confirm that it: (i) intended to cross-examine M. Shala; (ii) did not intend to cross-examine Mr. Lluka; and (iii) anticipated no further cross-examination. The Tribunal also informed the Parties that it did not require that Mr. Lluka appear at the hearing for examination. The Tribunal further invited Claimant to comment on Respondent's 24 September 2019 contention that the witness statements of Claimant's witnesses Mr. Pacolli, Mr. Ejupi and Ms. Maesani-Gaiatto were of insufficient precision to allow cross-examination. Finally, the Tribunal asked Respondent to confirm that: (i) in the event that the Tribunal find those statements to be sufficient, it intended to cross-examine all those witnesses; and (ii) it anticipated no further cross-examination.
117.
On 28 November 2019, Claimant responded to the questions that the Tribunal asked on 21 November 2019.
118.
On 29 November 2019, the Tribunal gave Respondent the opportunity to reply to the Tribunal's questions by 2 December 2019.
119.
On 2 December 2020, Respondent: (i) confirmed its intent to cross-examine Messrs. Pacolli and Ejupi, and Ms. Maesani-Gaiatto; and (ii) informed the Tribunal that it was coordinating with Mr. Shala whether he was able to appear in person at the hearing.
120.
By letter dated 2 December 2020, the Tribunal noted that it found the witness statements of Mr. Pacolli, Mr. Ejupi and Ms. Maesani-Gaiatto of sufficient precision to allow for cross-examination and that Respondent anticipated no further cross-examination at the hearing. The Tribunal further urged Respondent to do everything possible to enable Mr. Shala to appear in person at the hearing.
121.
On 8 January 2020, Respondent informed the Tribunal that Mr. Shala would not be able to appear in person at the hearing and requested that the Tribunal allow him to be examined at the hearing by video-conference.
122.
On 14 January 2020, Claimant presented its comments on Respondent’s request of 8 January 2020.
123.
On 16 January 2020, Respondent provided its comments on Claimant’s email of 14 January 2020.
124.
On 17 January 2020, the Tribunal urged Respondent to exert all possible influence to persuade Mr. Shala to attend the hearing in person.
125.
On 21 January 2020, Respondent informed the Tribunal that Mr. Shala had made the arrangements to attend the hearing in person, and that Ms. Drita Kozmaqi of the Ministry of Justice of the Republic of Kosovo would not attend the hearing.
126.
A hearing on jurisdiction was held at the World Bank offices in Paris on 23 January 2020 (the "Hearing"). The following persons were present at the Hearing:

Tribunal:
Professor George Bermann President
Mr. Gianrocco Ferraro Arbitrator
Professor August Reinisch Arbitrator

ICSID Secretariat:
Mr. Francisco Abriani Secretary of the Tribunal

For the Claimant:
Counsel:
Dr. Christian Schmid Counsel for Claimant, Bratschi Ltd.
Ms. Sandra De Vito Bieri Counsel for Claimant, Bratschi Ltd.
Ms. Liv Bahner Counsel for Claimant, Bratschi Ltd.

Parties:
Ms. Susanne Betz Assistant of the board of Mabco Constructions SA
Mr. Valon Lluka CEO of Mabetex Holding

Witnesses:
Mr. Behgjet Pacolli Owner of the Mabetex Group
Mr. Remzi Ejupi Owner of Eurokoha Reisen NTSH
Ms. Lucina Maesani-Gaiatto CFO of Mabco Constructions SA

For the Respondent:
Counsel:
Dr. Philipp K. Wagner, LL.M. WAGNER Arbitration
Dr. Florian Dupuy, LL.M. WAGNER Arbitration
Mr. Petrit Elshani, LL.M. WAGNER Arbitration

Parties:
Mr. Sami Istrefi General State Advocate, Ministry of Justice of the Republic of Kosovo
Mr. Qemajl Marmullakaj General Secretary, Ministry of Justice of the Republic of Kosovo
Ms. Fellenza Limani Legal Officer, Ministry of Justice of the Republic of Kosovo

Witness:
Mr. Ahmet Shala Visiting Professor, James Madison University (Virginia, USA)

Court Reporter:
Mr. Trevor McGowan

Interpreters:
Ms. Francisca Geddes-Mondino English/Italian
Ms. Monica Robiglio English/Italian
Mr. Genc Lamani English/Alb anian
Mr. Ragip Luta English/Alb anian

127.
During the Hearing, the following persons were examined:

On behalf of the Claimant:
Mr. Behgjet Pacolli Owner of the Mabetex Group
Mr. Remzi Ejupi Owner of Eurokoha Reisen NTSH
Ms. Lucina Maesani-Gaiatto CFO of Mabco Constructions SA

On behalf of the Respondent:
Mr. Ahmet Shala Visiting Professor, James Madison
University (Virginia, USA)

128.
On 23 January 2020, the Tribunal invited the Parties to address the following issues in the post-hearing briefs:

1. The Tribunal asks what form did the investment take specifically, and when and how specifically was it made? The Tribunal wants references to particular documents that support the answer to that question.

2. The Tribunal welcomes an assessment of the significance of the violation of Kosovo law, if any, and any reason why any such violation, if it occurred, should be considered as having been overlooked. This includes the question of whether a violation of the tender rules, if any, constitutes a violation of Kosovo law within the meaning of the BIT and the Kosovo foreign investment law.

3. The Tribunal would welcome any observations on the temporal applicability of the BIT and the Kosovo foreign investment law to the present dispute.

129.
By letter dated 24 January 2020, the Tribunal indicated the Parties that the deadline for the submission of the Parties’ agreed corrections to the transcript, and for their indication of any points of disagreement, was 31 January 2020 and invited them to file their costs submissions one week after the filing of their post-hearing submissions, i.e. by 24 February 2020.
130.
On 27 January 2020, Claimant submitted a notarized and apostilled copy of the minutes of the extraordinary shareholders meeting of Mabco with regard to investments in Kosovo dated 22 January 2006 as exhibit C-76. The Claimant indicated that "contrary to the indication during the hearing, the attached document [did] not qualify as board resolution but show[ed] the minutes of an extraordinary shareholders meeting."
131.
On 31 January 2020, the Parties transmitted their agreed corrections to the transcript with an indication of the passages on which they disagreed.
132.
On 3 February 2020, the Tribunal: (i) acknowledged receipt of the Parties’ correspondence dated 31 January 2020; (ii) informed the Parties that it would resolve the Parties’ disagreements arising from the translation with the assistance of one of the Albanian/English interpreters that attended the Hearing; and (iii) indicated that once it had decided on the issue, it would communicate its decision to the Parties and request the court reporter to implement all the changes to the transcript.
133.
On 17 February 2020, the Parties filed simultaneous post-hearing briefs. Claimant's Post-Hearing Brief was accompanied by exhibit C-076 and legal authorities CL-050 through CL-062. Respondent's Post-Hearing Brief was accompanied by exhibits R-084 through R-088 and legal authorities RL-066 through RL-080.
134.
On 19 February 2020, the Tribunal informed the Parties of its decision on the passages of the transcript on which the Parties disagreed and transmitted the final version of the transcript.
135.
On 24 February 2020, the Parties filed their submissions on costs.

II. FACTUAL BACKGROUND

A. CENTRAL ENTITIES AND INDIVIDUALS INVOLVED IN THE DISPUTE

(1) Grand Hotel

(2) The Privatization Agency of Kosovo

(3) Mabco Constructions, S.A.

(4) Mabetex Group Switzerland

(5) Mr. Behgjet Pacolli

(6) Mr. Selim Pacolli

(7) Unio Commerce - UTC

(8) Mr. Zelqif Berisha

(9) NTSH Eurokoha-Reisen

(10) Mr. Remzi Ejupi

(11) Mr. Ahmet Shala

(12) Mr. Shkelzen Lluka

(13) Mr. Naser Osmani

B. PRIVATIZATION AND THE TENDER OF SHARES IN THE GRAND HOTEL

C. AGREEMENT AMONG CO-OWNERS

D. TRANSFER OF CAPITAL

E. PURCHASE AGREEMENT

F. AGREEMENT OF GOOD UNDERSTANDING

G. WITHDRAWAL OF THE SHARES

H. LEGAL PROCEEDINGS IN KOSOVO

III. STATEMENT OF CLAIM

224.

Claimant alleges that Respondent expropriated its investment and denied it fair and equitable treatment, while also committing a denial of justice - all in violation of its obligations under the BIT and the Foreign Investment Law.142

225.

With respect to expropriation, Claimant invokes Articles 5(1) and 5(2) of the BIT:

Article 5

(1) Neither of the Parties shall take, either directly or indirectly, measures of expropriation, nationalization or any other measure having the same nature or the same effect against investments of investors of the other Contracting Party...

(2) [D]ue process of law includes the right of an investor of a Contracting Party, which claims to be affected by expropriation by the other Contracting Party, to prompt review of its case, including the valuation of its investment and the payment of compensation in accordance with the provisions of this Article, by a judicial authority or another competent and independent authority of the latter Contracting Party.

226.

With respect to fair and equitable treatment, Claimant invokes Article 4(1) of the BIT:

Article 4

(1) Each Contracting Party shall in its territory accord to investments and returns of investors of the other Contracting Party at all times fair and equitable treatment as well as full protection and security. Neither Contracting Party shall impair, by unreasonable or discriminatory measures, maintenance, use, enjoyment, extensions or disposal of such investments.

227.
The provision applicable to the expropriation claim under the 2005 Foreign Investment Law is the following:143

Article 8

8.1. [An investment in Kosovo made by a foreign investor] shall... not be subject to any act of expropriation by or attributable to Kosovo.

8.2. Notwithstanding the prohibition contained in Article 8.1, Kosovo may take an act of expropriation affecting an asset of a foreign investor, foreign investment organization or foreign person, if the act of expropriation:

a. is for a clearly defined and legitimate public purpose;

b. is not inspired by any discriminatory objective;

c. is carried out in a non-discriminatory manner;

d. is carried out in accordance with due process of law; and

e. is accompanied by the prompt payment of adequate and effective compensation.

228.
Insofar as Claimant’s fair and equitable treatment claim relates to its claimed ownership of the Grand Hotel shares, the 2005 Foreign Investment Law is applicable.144 The relevant provisions follow:

Article 3

3.1. Kosovo shall accord fair and equitable treatment to foreign investors and their investments in Kosovo. Kosovo shall also provide foreign investors and their investments with full and constant protection and security. In no case shall the treatment, protection or security required by this Article 3.1 be less favorable than that required by international law or any provision of the present law.

3.2. Kosovo shall not impair by any unreasonable or discriminatory action or inaction, the operation, management, maintenance, use enjoyment or disposal of a foreign investment organization or other investment by a foreign investor in Kosovo. Kosovo shall in particular not interfere with the lawful activities, rights and legally recognized interests of a foreign investor.

3.3. Any public authority that violates or otherwise fails to respect the rights and guarantees provided by the present law to foreign investors and their investments shall be liable to pay compensation... for losses and expenses incurred as a consequence of such violation or failure..

229.
Insofar as Claimant’s fair and equitable treatment claim encompasses its claim of denial of justice, the 2014 Foreign Investment Law is applicable.145 The relevant provisions follow:

Article 3

1. Republic of Kosovo shall accord fair and equitable treatment to foreign investors and their investments in Kosovo with any local investors and local investments.

2. Republic of Kosovo shall also provide foreign investors and their investments with full and constant protection and security in accordance with the applicable legislation.

3. In no case shall the treatment, protection or security required by this paragraph be less favorable than that required by generally accepted norms of international law or any provision of the present law.

4. Republic of Kosovo shall not impair by any unreasonable or discriminatory action or inaction, the operation, management, maintenance, use, enjoyment or disposal of a foreign investment organization or other investment by a foreign investor in the Republic of Kosovo. Republic of Kosovo shall not interfere with the lawful activities, rights and legally recognized interests of a foreign investor.

5. Any public authority that violates or otherwise fails to respect the rights and guarantees provided by the present law to foreign investors and their investments shall be liable to pay compensation, in accordance with Article 8 paragraph 2 of this law, for losses and expenses incurred as a consequence of such violation or failure. No type of legal immunity shall serve as bar to the liability created by this Article.

A. CLAIMANT’S INVESTMENT UNDER THE BIT AND THE FOREIGN INVESTMENT LAW

230.
In this proceeding, Claimant maintains that it has made a qualifying investment within the meaning of the BIT, the Foreign Investment Law and the ICSID Convention. The definitions of "investment" under the BIT, the Foreign Investment Laws and the ICSID Conventions are different. For that reason, whether Claimant has made an investment must be examined separately for each of these three instruments.

(1) "Investment" within the meaning of the BIT

231.

According to Article 2 of the BIT, its provisions apply to investments in the territory of one Contracting Party established in accordance with its laws and regulations by investors of the other Contracting Party, "whether [made] prior to or after the entry into force of [the BIT]." However, the BIT does not apply "to claims and disputes arising out of events which occurred prior to its entry into force."

232.

Article 1(1) of the BIT defines an investment as "every kind of asset established or acquired by an investor of one Contracting Party in the territory of the other Contracting Party that has such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk." Such an asset may take the form of:

(a) movable and immovable property as well as any related rights, such as servitudes, mortgages, liens and pledges;

(b) a company, or shares, parts or any other kind of participation in a company;

(c) claims to money or to any performance having an economic value, except claims to money arising solely out of commercial contracts for the sale of goods and services;... [and]

(e) rights conferred pursuant to law, contract or decision of an authority such as concessions, licences, authorizations and permits.

233.

Article 1(2) defines "investor" to include "(b) a legal entity, including companies, corporations, business associations and other organisations, which are constituted or otherwise duly organized under the law of that Contracting party and have their seat, together with real economic activities, in the territory of the same Contracting Party."

234.

Article 11 of the BIT contemplates the arbitration of disputes "between an investor of a Contracting Party and the other Contracting Party regarding an investment of the former made in the territory of the latter... based on an alleged breach of obligations under [the BIT]."

235.

Claimant maintains that it has established all the requirements under the foregoing provisions of the BIT that must be met in order to qualify as a foreign investor that has made an investment in Kosovo. It maintains that both its shares in the Grand Hotel and its claims to performance of Kosovo’s undertaking to transfer ownership of those shares are assets that constitute investments within the meaning of Article 1(1) of the BIT.146 Claimant specifically argues that legal title to shares is not required to constitute an investment and that beneficial ownership suffices. Its ownership interest consisted of the right to registration of the Grand Hotel shares, thereby formally acquiring ownership of those shares. Thus, the fact that Claimant’s share ownership was not yet registered in Kosovo does not prevent it from constituting an investment.147

(2) "Investment" within the meaning of the Kosovo Foreign Investment law

236.
As explained above,148 with respect to the Foreign Investment Law, the Tribunal must take into account both the 2005 and 2014 Foreign Investment Laws, which are worded somewhat differently:

(a) The 2005 Foreign Investment Law

237.
Article 2(1) of the 2005 Foreign Investment Law defines "investment dispute" as "any dispute between a foreign investor and a public authority relating (i) to an investment in Kosovo made by such foreign investor..." The provision continues:

An "investment dispute" includes, but is not limited to, such a dispute that relates to:

a. any alleged inconsistency of an action or inaction of a public authority with any international agreement that is binding on Kosovo, the present law or any other law, regulation or normative or sub normative act of Kosovo;

... or

c. the making or attempt to make an investment in Kosovo.

238.
A "foreign investor" is defined under the 2005 Foreign Investment Law as "a foreign person that has made an investment in Kosovo," and a "foreign person" in turn includes, among others, "b. a business or other organization, entity or association - with or without legal personality - that has been established under the law of a foreign state or geographic territory outside Kosovo."
239.
An "investment" is defined under the 2005 Foreign Investment Law in part as:

[A]ny asset that has (i) been contributed to a Kosovo business organization in return for an ownership interest in that business organization;...

The term "asset" is in turn defined in part as:

[A]ny item of value, whether tangible or intangible, and includes, but is not limited to, the following and similar items:

a. movable and immovable property, including rights in and to such property such as a mortgage, lien, pledge, lease or servitude;... [and]

d. claims or rights to money, goods, services, and performance under contract;...

(b) The 2014 Foreign Investment Law

240.
Under Article 2.1.4 of the 2014 Foreign Investment Law, an investment is "any asset owned or otherwise lawfully held by a Foreign Person in the Republic of Kosovo for the purpose of conducting lawful commercial activities, including but not limited to":

...

1.4.3. cash, securities, commercial paper, guarantees, shares of stock or other types of owner ship interests in the Republic of Kosovo or foreign business organization; bonds, debentures, other debt instruments

1.4.4. claims or rights to money, goods, services, and performance under contract...

241.
Article 16(1) of the 2014 Foreign Investment Law requires that the claimant be a "foreign investor," defined as a "foreign person that has made an investment in the Republic of Kosovo."
242.

In Claimant’s view, its claim to performance by Kosovo of its obligation to register those shares and refrain from withdrawing them are assets qualifying as an investment under both the 2005 and 2014 Foreign Investment Laws. Moreover, as a Swiss entity, it is a foreign investor.

B. CLAIMANT’S INVESTMENT UNDER THE ICSID CONVENTION

243.

Article 25(1) defines the jurisdiction of ICSID as follows:

The jurisdiction of the Centre shall extend to any dispute arising directly out of an investment, between a Contracting State... and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre.

244.

Claimant maintains that it satisfies the jurisdictional requirements set out in Article 25(1) since:

a. the dispute is a legal one arising directly out of an investment (condition ratione materiae);

b. the dispute is between a Contracting State and a national of the other Contracting State (condition ratione personae); and

c. the parties consented to settlement of the dispute through ICSID arbitration (condition ratione voluntatis).149

According to Claimant, Respondent gave its consent to arbitration under both the BIT and the Foreign Investment Law.150

245.
Claimant also asserts that its purchase of shares in the Grand Hotel meets all the criteria of an investment under the ICSID Convention established by arbitral jurisprudence.151 These are a substantial capital contribution, entailing a certain risk, promising a regular profit and return, and having a certain duration.152 If an additional requirement - contribution to the host State's economic development - is imposed, Claimant meets that requirement as well, due to the importance of the Grand Hotel, including its renovation and operation, to the economy of Kosovo.
246.
Accordingly, Claimant contends that its ownership interest in the Grand Hotel constitutes an investment for purposes of Article 25(1) of the ICSID Convention.
247.
Claimant concludes from the above that it made a qualifying investment in Kosovo, within the meaning of the BIT, the Kosovo Foreign Investment Law and the ICSID Convention. It further claims that the present dispute arises directly out of that investment.153

IV. STATEMENT OF DEFENSE

248.
Respondent contests the jurisdiction of this Tribunal under Article 25(1) of the ICSID Convention on numerous grounds,154 including notably that it did not consent to arbitration of the claims asserted by Claimant under either the BIT or the Foreign Investment Law.155
249.
First, Claimant cannot avail itself of either the BIT or the Foreign Investment Law because it owns no qualifying asset, which is necessary, ratione materiae, in order for either of those instruments to apply. It never acquired ownership of, or a right or interest in, the asset at issue in this case.156 Moreover, while the ICSID Convention does not itself define an investment, arbitral jurisprudence has done so. According to the prevailing view, an investment must exhibit the following characteristics: a substantial capital contribution, a certain risk and a certain duration.157 In addition, it may be required to make a substantial contribution to the host State’s economic development.158 According to Respondent, Claimant fails to satisfy any of these requirements. It made no capital contribution, much less a substantial one and, because of that, it assumed no risk, made no investment of the requisite duration, and did not contribute substantially to the host State’s economic development.159
250.
Second, Claimant does not qualify as a foreign investor. Since Claimant made no investment, it is not an investor, much less a foreign investor. If any investment was made, it would have been made by Mr. Pacolli in his personal capacity. Being a national of Kosovo, he does not qualify as a foreign investor. Nor can Claimant itself be considered a foreign national, in this case a national of Switzerland, due to the absence of any real economic activity on its part in Switzerland. The Tribunal accordingly lacks jurisdiction ratione personae.
251.
Third, the alleged investment is not a protected one under either the BIT or the Foreign Investment Law because, if made, it was made unlawfully under Kosovo law.
252.

Fourth, because Respondent did not consent to arbitrate the present dispute, the Tribunal also lacks jurisdiction ratione voluntatis. Respondent’s consent to arbitrate was subject under Article 11(2) of the BIT and Article 16(2) of both the 2005 and 2014 Foreign Investment Laws to an "election of remedies" requirement.160 Under those provisions, because Claimant first brought litigation over its claims in the courts of Kosovo, it could no longer resort to arbitration over them. Also, under Article 11(1) of the BIT (although not under the Foreign Investment Law), Respondent’s consent to arbitrate was conditional upon Claimant’s engaging with the Respondent in an effort to settle their dispute "amicably through consultations," which Claimant failed to do.

253.

Fifth, Respondent argues that, even if all of the BIT conditions were otherwise met, the tribunal lacks jurisdiction ratione temporis. According to Article 2, while the BIT applies to investments made prior to the BIT's entry into force, it does not apply "to claims and disputes arising out of events which occurred prior to its entry into force." (Neither the 2005 nor the 2014 Foreign Investment Law contains such a limitation. On the contrary, the 2014 Law specifically states that "[t]he present law - and the rights, guarantees, privileges and protections established by the present law - shall apply equally to foreign investors that invested in the Republic of Kosovo prior to the effective date of this law."161) According to Respondent, the events giving rise to the dispute occurred on 16 December 2011, which is when the PAK decided to withdraw the shares of Grand Hotel or, at the latest 31 May 2012, which is when the PAK made the decision to execute the withdrawal of shares. Both dates precede the BIT's entry into force on 13 June 2012.162

254.
Sixth, the claim advanced in this proceeding is at variance with the scope and purpose of the ICSID Convention.
255.
Seventh, Claimant failed to establish a prima facie case on the merits.
256.
Respondent accordingly challenges the jurisdiction of this Tribunal ratione personae, ratione materiae and ratione voluntatis under the ICSID Convention, the BIT and the Foreign Investment Law, as well as ratione temporis under the BIT. The Respondent's jurisdictional objections and Claimant's responses thereto are dealt with in the following sequence:

A. The claim does not arise out of or relate to an investment in Kosovo.

B. Claimant is not a foreign investor.

C. Claimant's alleged ownership interest in shares of Grand Hotel LLC is not a "protected investment".

D. Respondent did not give its consent to arbitrate the present dispute.

E. The Tribunal lacks jurisdiction ratione temporis.

F. Claim falls outside the scope and purpose of the ICSID Convention.

G. Claimant has failed to establish a prima facie cause of action.

Each of these challenges is taken up in turn below.

A. THE CLAIM DOES NOT ARISE OUT OF OR RELATE TO AN INVESTMENT IN KOSOVO

257.
Respondent maintains that Claimant did not make an investment in Kosovo, within the meaning of the relevant instruments. It bases this contention on the following propositions:

(1) Claimant never held any assets relating to the Grand Hotel.

(2) Claimant’s payment of EUR 4m does not constitute evidence of an investment on Claimant’s part.

(3) Claimant did not become an owner of shares by virtue of the AGU.

(4) Claimant did not become an owner of shares by virtue of the Annex Agreement.

The Tribunal examines each of these propositions in turn.

(1) Claimant never held any assets relating to the Grand Hotel

(a) Respondent’s Position

258.
Respondent asserts that Claimant was involved in none of the steps of the tender process. The successful bid was made by UTC, not Claimant.163 Claimant accordingly was a third party and acquired no rights of ownership in the Grand Hotel. Respondent cites Article 5.1.3 of the Purchase Agreement by which UTC itself confirmed that:

[T]he Buyer is purchasing the Shares for its own use and not as an agent for a third party and during the tender for this Company, the Buyer has not formed any informal or formal undisclosed agreements or consortiums between two or more bidders or with any undisclosed third party.

According to Respondent, whether the alleged investor was Mr. Pacolli or Claimant, it would have been a secret investor in violation of the Tender Rules and the above-quoted provision of the Purchase Agreement.164

259.
Respondent also contests that Mr. Ahmet Shala invited Claimant to participate in the privatization of the Grand Hotel. It finds that in previous accounts of the transactions given by Mr. Pacolli, including in his witness statement, no mention of Mr. Shala is made.165 Nor is there any documentation to support Claimant's contention.166 Respondent also raises a temporal doubt about Claimant's contention because, while Mr. Pacolli represents that Mr. Shala approached him and Mr. Ejupi about their possible interest in investing in the Grand Hotel in early March 2006,167 UTC was not declared the winning bidder until 27 March 2006. At that time, the KTA had no reason to doubt UTC's ability to pay the purchase price. Above all, in his witness statement, Mr. Shala denies Mr. Pacolli's account, testifying that no such contacts were ever made.168
260.
Mr. Shala testified that he met Mr. Pacolli for the first time in September or October 1999 at a conference in Switzerland on the future of Kosovo, where Mr. Pacolli proposed that Kosovo transfer all public assets to a foundation of which he would be chair, a proposal that Mr. Shala did not favor.169 Mr. Shala further testified that he could not possibly have allowed Claimant to become owner of the shares without following the Tender Rules. Given the public scrutiny of the privatization process, if he deviated from the Tender Rules he would be killed; he testified in fact to having received death threats.170
261.
According to Mr. Shala, he and Mr. Pacolli met during a short conversation in Mr. Pacolli's office in Pristina in January 2019 and afterwards flew together to Rwanda on Mr. Pacolli's airplane, followed at a later time by a dinner at Mr. Pacolli's home and eventually a breakfast together in Berlin.171 The first time the subject of privatization of the Grand Hotel arose was afterwards, when Mr. Pacolli asked him to issue an invitation to him to invest in Kosovo, which Mr. Shala said he could not do.172
262.
Mr. Shala testified that, some days before the hearing in this arbitration, he learned that Mr. Ejupi had approached Mr. Shala's son-in-law, who is also a cousin of Mr. Ejupi, asking him to set up a meeting with him. That individual made the request, which Mr. Shala then refused, deeming it inappropriate.173 Counsel for Respondent questioned Mr. Pacolli about a statement made by Mr. Shala, according to which Mr. Pacolli met with him in June 2019 and asked him to confirm in this proceeding that he invited Mr. Pacolli to co-invest in the Grand Hotel,174 an allegation that Mr. Pacolli flatly denied.175
263.
Respondent further contends that, even if an investment was made, it was made by Behgjet Pacolli in his personal capacity and not as Claimant's representative. It claims that the funds were transferred to Mr. Berisha from Mr. Pacolli's personal account.176 Moreover, over a six-year period, between 2006 and 2012, there was no mention of Claimant in any of the relevant correspondence. Then, when suit was brought against Mr. Berisha in 2007 in Municipal Court in Pristina,177 seeking recognition that Claimant was owner of 40% of the shares, and NTSH owner of 20%o of the shares, it was not brought in Claimant's name, but in Mr. Pacolli's.178 The relief sought in that suit was that Mr. Pacolli (not Claimant) and NTSH (not Mr. Ejupi) be recognized as shareholders,179 a fact that Mr. Pacolli attributed to a mistake.180 The first reference to Claimant was allegedly made only after the BIT came into force.181
264.
Respondent cites two letters, dated 29 May 2010182 and 3 January 2012,183 in the first of which Behgjet Pacolli's lawyer, and in the second of which Selim Pacolli, state that Behgjet Pacolli is owner of the shares. Counsel for Respondent observes that in the first of these letters, Mr. Pacolli's lawyer refers to the alleged shareholders as Behgjet Pacolli, on the one hand, and NTSH, on the other, suggesting that, while Mr. Ejupi was acting as representative of NTSH, Mr. Pacolli was acting in a personal capacity,184 a suggestion that Mr. Pacolli denies.185 Similarly, counsel for Respondent points out that in the 3 January 2012 letter, Selim Pacolli refers to Behgjet Pacolli as "the owner of 40% of [the] shares."186 Further, in a letter of 29 February 2012, Behgjet Pacolli expressly stated that "my companies have not been involved in the purchase of assets of Grand Hotel."187 Mr. Pacolli testified that Respondent has distorted the import of that language because all that was meant by that statement was the obvious fact that his companies never participated in the tendering process and that only UTC entered into the Purchase Agreement. According to him the statement meant only that, "[n]othing more, nothing less."188
265.
Respondent adds that, even if Mr. Pacolli acted in a representative capacity, he could have been representing any one of the 35 companies comprising the Mabetex Group, not necessarily Claimant.189
266.
Then, in a letter dated 13 March 2012, Selim Pacolli identified Mabetex as shareholder alongside NTSH,190 and in a 15 March 2012 declaration, signed by Mr. Berisha (for UTC) and Ms. Ejupi (for NTSH), Selim Pacolli signed not for Claimant, but for Behgjet Pacolli and Mabetex.191
267.
Respondent further observes that in a letter of 28 March 2012 to the PAK, sent jointly with Ms. Ejupi and Mr. Berisha, Selim Pacolli identified himself as a representative of a company by the name of "NPN Mabetex Project Engineering - Pristina" and asked that that company be listed as shareholder of the Grand Hotel.192 Further, on 21 May 2012, Selim Pacolli wrote to the PAK stating that Mabetex Project Engineering was in contact with a company called "HMG Hotel management Group" regarding a potential joint management of the Grand Hotel.193 Neither of these letters indicated that Selim Pacolli was acting as Claimant's representative. (According to Claimant, Mabetex Project Engineering had been established in Pristina strictly as a purpose vehicle for holding investments made by Mabetex companies, including Claimant in Switzerland.194)
268.
According to Respondent, the letter of 20 June 2012,195 para. 209, supra, is the first correspondence specifically referring to Claimant, and not simply Mr. Pacolli, as involved in the privatization project.196 It was in response to that letter that the PAK, on 22 June 2012, wrote back, stating that the only funds it had received were those paid by UTC and that it had never accepted Claimant as shareholder. The PAK reiterated that position in a letter of 17 July 2012.197
269.
Respondent observes that the evidence adduced by Claimant in support of its ownership of shares in the Grand Hotel consists nearly exclusively of the witness statements of Behgjet and Selim Pacolli, both of whom have a material financial interest in the outcome of the proceedings and whose testimony should therefore be discounted.198 Respondent further argues that neither witness statement is supported by documentation in the record.199 For example, Respondent finds no documentary evidence that Mr. Shala invited Mr. Pacolli to invest in the project; that the KTA endorsed the investment; that Messrs. Pacolli, Berisha and Ejupi concluded an agreement prior to the 28 April 2006 transfer of funds; or that that transfer was made pursuant to that agreement.200
270.
According to Respondent, Claimant misrepresents the discussions that took place between Messrs. Pacolli and the PAK in the first half of 2012. Respondent describes those discussions as pertaining, not to any pre-existing interest in the Grand Hotel such as Claimant asserts, but only to the possibility that it, along with NTSH, might become involved as new investors so as to avoid a withdrawal of shares and a retendering201 Respondent cites the witness statement of Mr. Shkelzen Lluka in support of this proposition, as well as the fact that the PAK was in touch in that period with several prospective investors.202
271.
Respondent maintains that, under the BIT, Kosovo law determines whether a legal right has been created and in whom, while Article 17 of both the 2005 and 2014 Foreign Investment Laws designates as applicable the law of in Kosovo and such rules of public international law as may be applicable to the issues in dispute. Accordingly, the questions whether Mr. Pacolli acted in a representative capacity and to the extent to which he and his company enjoy distinct legal personalities are strictly governed by the law of Kosovo. Under that law, Mr. Pacolli did not act in a representative capacity and has a legal personality distinct from Claimant.203 Kosovo law also determines whether an investment was made and when ownership comes into being.204
272.
As summarized in Respondent’s post-hearing brief, the difficulties with Claimant’s case are that (a) the actions taken by Mr. Pacolli may not be attributed to Claimant, (b) Claimant’s alleged asset cannot properly be defined, (c) neither Mr. Pacolli nor Claimant ever became shareholders of the Grand Hotel L.L.C., and (d) even the contribution alleged to have been made cannot be established.205

(b) Claimant’s Position

273.
Claimant seeks to refute Respondent’s representations on various levels. It maintains that, despite the appearance of his name alone on much of the correspondence and other documents, all actions that Mr. Pacolli took in connection with the purchase of the shares of the Grand Hotel and the PAK’s withdrawal of them were taken in his capacity as representative of Mabco as part of the Mabetex Group.206 Mr. Pacolli testified that, because of his individual prominence in Kosovo, he typically uses his name when acting in the interest and on behalf of his companies, so that every transaction in which he engages within Claimant’s business sector, even if bearing his name, is made on behalf of Claimant.207 He asserts that everyone knows that he does not carry on construction business as a natural person in his own name.208 Accordingly, Claimant maintains that the PAK knew perfectly well that it was Mr. Behgjet Pacolli’s company that contributed the capital and that it was on the company’s behalf that Mr. Behgjet Pacolli acted.209
274.
Mr. Ejupi fully concurs, testifying that, whenever reference is made in Kosovo to a person - not only Mr. Pacolli - making an investment or even owning a particular asset, it is understood that it is that person’s company, if he or she has one, that made the investment or owned the asset. Thus, when any one asks him - Mr. Ejupi - to invest, they are asking NTSH to invest.210 Indeed, according to Mr. Ejupi, the KTA itself contemplated that it would be companies, not individuals, that invested in privatized assets.211 Claimant’s chief financial officer, witness Ms. Maesani-Gaiatto, also testified that when Mr. Pacolli uses the terms "me" or "I" in connection with his business dealings, including construction projects, he invariably has the relevant company in mind, and that it is not at all unusual for the sole owner of a company to identify himself or herself with his or her company.212 When Mr. Pacolli decides to make an investment, he selects the specific Mabetex company to make and conduct that investment.213 Starting in 2000, Claimant was the company that performed all the Group's important construction projects.214 In fact, Claimant was the most active company within the Mabetex Group of companies.215 According to Ms. Maesani-Gaiatto, since the term "Mabetex" has always been the Group name, and since it has become a useful "brand," its name is commonly used in connection with the transactions in which its individual companies engage.216
275.
Claimant concedes that it did not participate in the tender process, was not a party to the Purchase Agreement, and has never been registered as shareholder. However, it points out that its non-participation in the tender process by no means disqualifies its eventual ownership of shares as a protected asset under the BIT or Foreign Investment Law.217 It became a holder of shares in the Grand Hotel because it was specifically invited by the KTA to purchase part of the shares, paid close to half of the total purchase price of the shares in the Grand Hotel (as KTA knew), and entered into the AGU with UTC and NTSH to formalize the investment.218 (Claimant's reliance on the EUR 4m payment and the AGU are dealt with more fully in the sections that follow.) The reason that only UTC signed the Purchase Agreement is that UTC was officially the successful bidder.
276.
Claimant insists that Mr. Shala initiated discussion with Mr. Pacolli, along with Mr. Gazmend Abrashi, owner of a large company called Makos Ltd., of a possible investment in the Grand Hotel. According to Claimant, the privatization effort, launched toward the end of 2005, ran into difficulties due to the paucity of potential investors, even though the Grand Hotel was one of Kosovo’s "crown jewels."219 Faced with this problem, Mr. Shala invited Messrs. Pacolli and Abrashi to a meeting in Tirana, Albania, to discuss the privatization, urging them to submit bids.220 According to Mr. Ejupi, Mr. Shala asked him to seek to persuade Mr. Pacolli to co-invest and, in that context, assured Mr. Ejupi that, upon closure of the privatization procedure, the share ownership would be registered.221 Mr. Pacolli declined to participate.
277.
Claimant states that the bidding phase, slated for 18 January 2006, then had to be postponed to the following month due to only one prospective bidder having shown interest.222 In the postponed procedure, there were several interested parties, including Makos Ltd, as well as NTSH and UTC. Makos won the bid, with UTC placing second. However in March 2006, Makos withdrew from the tendering process and UTC became the winning bidder.
278.
However, UTC did not have sufficient funds to make the payment due on 24 April 2006. Mr. Ejupi testified that during the period in which Mr. Berisha had been required to pay the purchase price, Mr. Shala visited Mr. Ejupi in his office.223 At that meeting, Mr. Shala asked him to join the tender process, make the needed payment and assume the obligations set out in the Commitment Agreement but, knowing the difficulty of meeting a EUR 8m purchase price, again urged him to persuade Mr. Pacolli to participate as well. According to Mr. Ejupi, in that conversation, he received assurances from Mr. Shala that he would assist them in completing the required documentation.224 Mr. Pacolli ultimately agreed to participate. It is at that point, in early April 2006, that Messrs. Ejupi, Pacolli and Berisha had the meeting in Vienna described earlier (para. 166, supra) and an agreement to co- invest was reached.225 Claimant maintains that it is not at all unusual that no written report of that meeting was produced.
279.
Mr. Ejupi further testified that Mr. Shala meanwhile invited Messrs. Pacolli and Ejupi to accompany him to Croatia in an effort to attract other businesspeople to take part in the overall Kosovo privatization project. But while in Croatia, they learned that there had been a bomb threat at the Grand Hotel in Pristina, where Mr. Ejupi had established an office.226 According to Mr. Ejupi, Mr. Shala assured him that he need not worry about it.227 Mr. Ejupi referred in his testimony to there being a lot of pressure at that time from powerful parties in connection with the privatization, stating that upon their return from Croatia he learned that there was pressure for the Grand Hotel shares in particular to be acquired by persons whom Mr. Shala favored.228 Mr. Ejupi reports that he and Mr. Pacollli then began facing pressure to abandon ownership in the hotel, and that the KTA took action to impede efforts by Messrs. Pacolli and Ejupi to satisfy the KTA’s documentation requirements.229 Mr. Ejupi eventually requested that the funds that had been transferred be returned and that the KTA allow whoever it wanted to become owner.230
280.
Claimant rejects Respondent’s contention that these representations by Claimant contradict earlier statements on his part, notably statements made in connection with Mr. Pacolli’s lawsuit in the Municipal Court of Pristina. Claimant argues that Mr. Pacolli omitted mention of Mr. Shala in that proceeding because he did not want to publicly accuse Mr. Shala of wrongdoing, which also explains why Mr. Shala was not mentioned in Mr. Pacolli’s 29 February 2012 letter to the PAK. Even so, Claimant states that Mr. Ejupi had already by that time declared publicly that Mr. Shala was the person urging Mr. Ejupi to invest,231 so that it was no secret. Claimant observes that, Mr. Shala, who had taken the lead in the privatization effort during difficult times in Kosovo, would have had no choice but to approach them for help.232 Claimant also rejects as inconsequential the fact that Mr. Pacolli's witness statement says that Mr. Shala first contacted Mr. Ejupi who then contacted Mr. Pacolli, while Claimant's Counter-Memorial says that Mr. Shala contacted both Mr. Ejupi and Mr. Pacolli.
281.
According to Claimant, Respondent more generally misrepresents the litigation in the courts of Kosovo. Although the District Court reversed the Municipal Court's ruling that confirmed the co-ownership of the Grand Hotel shares, it did so not on the merits, but only for clarification, in light of an apparent inconsistency, of whether the litigant was Mr. Pacolli or the Mabetex Group. In its ruling, the court specifically acknowledged the existence of a power of attorney,233 but sought confirmation as to the issuer of the power of attorney and the party in favor of whom it was issued. According to Mr. Pacolli, he gave the power of attorney to counsel in the case as CEO of the Mabetex Group.234 As previously noted,235 on remand, the Municipal Court never decided the ownership question because by then the shares had been withdrawn.236 Claimant also observes that, notwithstanding the testimony of Mr. Lluka to the contrary,237 the KTA was necessarily aware of the litigation from the very beginning in mid-2007 and did not first learn of it, as testified to by Mr. Lluka, in March 2012. Asked why he and Mr. Pacolli brought suit in 2007 against UTC, and not the KTA, Mr. Ejupi explained that it was because the KTA refused to recognize them as investors.238 Mr. Pacolli explained that the reason why he, as CEO of Mabetex, rather than Claimant, initiated the proceedings was that Claimant was not registered in Kosovo.239
282.
Claimant maintains that the PAK’s decision of 16 December 2011 to withdraw the shares was illegal.240 It maintains, based on the agenda of the 16 December meeting and the absence of documents concerning the buyer’s alleged delinquencies or the possibility of a share call option, that the purpose of the 16 December meeting was not in fact to make a decision about the withdrawal of the shares. Claimant suggests that the meeting was in fact held to consider whether to demand additional payments from Mr. Pacolli as bribes.241 In its view, the PAK withdrew the shares, not due to non-fulfillment of the investment commitments, but due to Mr. Pacolli’s unwillingness to be bribed.
283.
In this regard, Claimant calls into question the PAK’s eventual justification for the withdrawal of shares. It observes that between 2005 and 2016, the PKA exercised its share call option in only four cases, including the Grand Hotel, even though only 39% of privatized special spin-offs actually met their investment commitments.242
284.
On cross-examination, Mr. Pacolli disputed Mr. Shala’s account of their travel to Rwanda. According to Mr. Pacolli, at Mr. Shala’s request, he hosted a dinner at his home for a prayer group coming from Washington, D.C., to which Mr. Shala belonged. At that dinner, Mr. Shala mentioned that the prayer group was going next to Rwanda, and asked whether Mr. Pacolli would like to join them.243
285.
Mr. Ejupi was questioned about his efforts to communicate with Mr. Shala in the weeks preceding the hearing. Mr. Ejupi testified that the reason for that contact had nothing to do with the Grand Hotel. Rather, as president of a football club, he was trying to acquire land for that club, and knew that Mr. Shala had landholdings that might be available.244
286.
When asked why there was so little documentation of the communications among the KTA, Mr. Shala, on the one hand, and Messrs. Berisha, Pacolli and himself, on the other, Mr. Ejupi explained that here was very little communication by email in Kosovo at that time, and that parties communicated predominantly by telephone, as well as by meetings in person since distances in the city are minimal, relying fundamentally on trust and the word of honor in dealings among themselves.245 He reported disappointment in Mr. Shala in that regard.
287.
More generally, Claimant urges that the witness statements of Behgjet and Selim Pacolli not be discounted on account of their supposed self-interest. In Claimant's view, what matters is the tribunal's assessment of the relevance and credibility of their testimony.246 Claimant further questions Respondent's assertion that their witness testimony is unsupported by documentary evidence. Without conceding a lack of documentation, Claimant rejects the notion that witness testimony must be corroborated by documentary evidence.247
288.
As a matter of law, Claimant rejects Respondent's contention that Kosovo law determines whether an investment was made and when ownership came into being.248 More specifically, it is irrelevant whether, under Kosovo law, Mr. Pacolli's actions were or were not attributable to Claimant.249 According to Claimant, Mr. Pacolli's authority to represent Claimant is governed by Swiss law, and under that law he is authorized to do so.250 Claimant also disputes Respondent's interpretation of the Kosovo legislation governing the registration of shares and corporate charters.251
289.
At the hearing, the Tribunal, in view of the contradictions between their testimony, conducted witness conferencing between Messrs. Pacolli and Shala.
290.
During that conferencing, Mr. Pacolli recalled Mr. Shala stating the following at their meeting in Tirana:

You have a luxury hotel. The hotels are in privatization now, Grand Hotel and Iliria Hotel. You have all the opportunity, because you have money, you have the hotel management, you have the experience, and I - we need investments, and I would ask you to invest in this sector.252

In reply to this assertion, Mr. Shala stated that, while he met with Mr. Pacolli in 1999, he did not recall meeting with him at all in 2005, and that, in any event, he never requested that Mr. Pacolli invest in the Grand Hotel.253 If he were ever to make such a request, it would only be before the bidding process had begun.254 Mr. Shala stated that it is significant that Mr. Pacolli never followed up on the alleged meeting with any correspondence, and did not participate in the tender process.255 He described the tender process as "100% bulletproof [from] manipulation."256

291.
At the witness conferencing, Mr. Pacolli asserted that present at the meeting in Tirana was also Gazmend Abrashi. According to Mr. Pacolli, Mr. Abrashi was the winner in the first round of bidding, but lacked both money and management experience, which is why Mr. Shala invited him to co-invest with Mr. Abrashi.257 Ultimately, Mr. Abrashi withdrew his bid though he proceeded with the other bid he had won, viz. the bid for another hotel, the Hotel Iliria. But to do so he needed a contribution by Mr. Pacolli of EUR 3.6m, which Mr. Pacolli made.258 Mr. Pacolli thereafter purchased Mr. Abrashi’s share of the Hotel Iliria and became its sole owner.259

(c) The Tribunal’s Findings and Analysis

292.
As noted, Respondent makes the following contentions with respect to Claimant’s alleged investment:

a. Claimant never held any assets relating to the Grand Hotel.

b. Claimant’s payment of EUR 4m does not constitute evidence of an investment on Claimant’s part.

c. Claimant did not become an owner of shares by virtue of the AGU.

d. Claimant did not become an owner of shares by virtue of the Annex Agreement.

Respondent’s basic position is that Claimant made no investment within the meaning of the ICSID Convention, the BIT or the Foreign Investment Law, and that if any investment was made, it was made only by Mr. Behgjet Pacolli in his individual capacity and not on behalf of Claimant. In addressing the question whether Claimant made an investment, within the meaning of the BIT, Foreign Investment Law and the ICSID Convention, each of these instruments, due to their distinctive language, must be considered on its own terms.

a. Does a claim of entitlement to ownership of shares require proof of actual ownership?

(i) The ICSID Convention

295.
Jurisdiction over a dispute under Article 25.1 of the ICSID Convention requires that the dispute "aris[es] directly out of an investment, between a Contracting State... and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre." The Convention does not however define the term "investment." It does not therefore offer in itself a solid basis for determining whether or not a claim of entitlement to ownership of shares requires proof of actual ownership. To make that determination, one must look at arbitral jurisprudence on the definition of investment under the Convention.
297.

The Salini test has been criticized as unduly rigid, and has by no means been followed by all tribunals.267 However, since the Salini test is on the whole more demanding than the alternative approaches that have been followed, and the Tribunal, as will be seen (para. 300), considers that test to have been met, the Tribunal need not examine the case through the lens of those alternatives.

298.
Respondent predicates its position on two basic assertions. First, having not acquired ownership of the shares and having no direct contract with either the KTA or the PAK, Claimant cannot maintain that it made an investment. Second, even if an investment was made, it would have been made by Mr. Pacolli in his personal capacity rather than on behalf of the Claimant - in other words, Claimant was not the investor. If Claimant was not the investor, then by definition it cannot satisfy the Salini test. It contributed no capital, incurred no risk, invested for no duration and made no contribution to Kosovo’s economic development. The Tribunal must therefore decide whether an investment within the meaning of the ICSID Convention was made and, if so, whether it was Claimant that made it.
299.
Taking the second issue first, the Tribunal finds, for reasons explained in detail below (paras. 339-345, infra), that Mr. Pacolli took his actions on behalf of Mabco. For that reason, in the discussion that follows, the Tribunal will impute the investment, if one was made, to Claimant rather than Mr. Pacolli. It now turns to the Salini criteria, namely, whether there was a contribution of capital, whether that contribution entailed a risk, whether the putative investment had the requisite duration and, if required, whether it would contribute to the economic development of Kosovo.
301.
As for contribution to the economic development of the host State, the Tribunal, as noted, joins those that have rejected it as a requirement. However, even were contribution to the economic development of a host State to be required, that requirement would appear to be met in the present case. Claimant and Respondent alike have subscribed to the view that promotion of tourism represents a prime component of Kosovo’s economic development policy and that no single facility stood to contribute more importantly to that policy than the Grand Hotel in Kosovo’s capital, Pristina.269 Accordingly, though in the Tribunal’s view the ICSID Convention does not make protection of investment contingent on that investment making a contribution to the host State’s economic development, any such requirement, were it to be imposed, would be satisfied.

(ii) The BIT

(iii) The Foreign Investment Law

b. Has Claimant adduced sufficient evidence of its entitlement to ownership of the Grand Hotel shares for it to constitute a claim of entitlement worthy of protection under the BIT and/or Foreign Investment Law?

322.
Assuming an asset in the form of a claim of entitlement can under some circumstances constitute an investment, as the Tribunal has found, the question then arises whether Claimant, under the circumstances of this case, has established such a claim. It bears repeating that it is not necessary that Claimant at this stage establish that it actually has an entitlement to the Grand Hotel shares. That remains an open question. At the same time, it certainly cannot suffice at the jurisdictional stage, for purposes of demonstrating a claim of entitlement, merely to articulate such a claim. In the Tribunal’s view, any such claim must be a colourable one, i.e., must be at the very least arguable. In the Tribunal’s view, what may be demanded at this stage is what may be called a prima facie showing, by which is meant a showing sufficient to find the asserted claim sufficiently plausible. That apparently is Respondent’s view as well.279
323.
The Tribunal finds that, by this standard, Claimant has made the necessary showing Claimant’s argumentation is admittedly less than linear. Neither the KTA nor the PAK entered into any formal agreement with Claimant for its acquisition of the shares, and so Claimant’s entitlement cannot be predicated on any agreement with Respondent or its agencies. Rather, in order to make a prima facie judgment on this score, the Tribunal in this case must piece together words and conduct - in a word, circumstances - taking place over a significant period of time, running between 2005/2006 and 2012 so as to produce a reasonable claim of entitlement.
324.
Claimant relies heavily on the proposition that Mr. Shala, upon finding that UTC, the winning bidder, could not pay the required price, expressly invited Claimant to participate in UTC’s acquisition of ownership of the shares.280 Mr. Ejupi testified that Mr. Shala approached him twice in 2006 (once at the outset of the bidding process and later upon Mr. Berisha’s failure to pay the share purchase price), specifically urging him to recruit Mr. Pacolli as co-purchaser of Grand Hotel shares.281 Even so, the Tribunal has difficulty lending substantial credence to this assertion. Not only is there no documentary evidence in the record of any such agreement, which one would normally expect, but Mr. Pacolli’s forceful assertion to this effect was met by Mr. Shala's equally forceful denial.282 In an effort to arrive at a finding on this point, the Tribunal conducted a witness conferencing in which Messrs. Pacolli and Shala were jointly examined and directly confronted one another.283 The Tribunal found that exercise to be inconclusive.284 In any event, even if the issuance of such an invitation could be established, it alone would not suffice to create a colourable claim to entitlement to the Grand Hotel shares. A mere invitation to bid, whether via a tender offer or otherwise, signifies little more than the inviting party's willingness to contemplate the possibility of an acquisition by the invitee.
325.
Moreover, the Purchase Agreement for privatization of the Grand Hotel was concluded between UTC and the KTA, not between Claimant and the KTA. Additionally, the Purchase Agreement required UTC to declare that it was "purchasing the Shares for its own use and not as an agent for a third party and [that], during the tender for this Company, the Buyer has not formed any informal or formal undisclosed agreements or consortiums between two or more bidders or with any undisclosed third party."285
326.
These circumstances weaken Claimant's assertion of a claim of entitlement to registration of the shares. However, other circumstances of the case, viewed in their totality, point in an opposite direction.
327.
Most basic is the fact of Claimant's transfer via NTSH and UTC to the KTA of the sum of Eur 4m for the hotel shares. UTC, which had won the bid for the Grand Hotel but lacked the resources necessary to pay the contract price, engaged Messrs. Pacolli and Ejupi of NTSH in discussions with a view to their participation in the acquisition of the shares. The parties reached an agreement at a meeting in Vienna in early April 2006 devoted to the purchase of the Grand Hotel shares, specifically on the understanding that Claimant and NTSH would contribute Eur 4m and Eur 1m, respectively, for that purpose, that Mr. Berisha would manage the project for a period of two years, at which point Claimant and NTSH would become legal owners of the shares, and that Mr. Pacolli, would make all investments required to meet the owners’ commitments under the Purchase Agreement.286 Claimant gave KTA a guarantee of payment of the Eur 20.2m that the KTA required prior to signing the Purchase Agreement with UTC in August 2006,287 and in January 2007 the AGU formalized that undertaking.288
328.
Clearly, the KTA was not a party to the AGU and is not bound by it. However, the existence and terms of the AGU do adequately establish the purposes of the transfer of Eur 4m to the KTA (via UTC). Respondent calls attention to the fact, as discussed more fully below (para. 348, infra), that the Eur 4m transfer was made prior to the meeting in Vienna and conclusion of the AGU. But it is not unreasonable to suppose that that transfer was made in anticipation of a formal agreement among UTC, NTSH and Mabco to be made thereafter.
329.
The question whether and to what extent this transfer in particular supports Mabco’s claim of entitlement to share ownership in the Grand Hotel is discussed in greater detail in the following section. As will be seen there (paras. 362-370, infra), the Tribunal finds that the transfer was made by Mabco for purposes of acquiring the Grand Hotel shares.
330.
There is no documentary evidence specifically establishing that, as Claimant maintains, the KTA or PAK was aware at an early point in time of the transfer of moneys by Claimant and the reasons for it,289 and there are inconsistent assertions as to when the KTA or PAK learned of the AGU in particular.290 Respondent maintains that the KTA and PAK were unaware that Claimant had invested Eur 4m in the Grand Hotel prior to 2012,291 and Mr. Lluka testified in support of that contention.292 However, there are circumstances suggesting otherwise. First, when Claimant’s first attempt to pay the EUR 4m failed, and NTSH was required to return the funds to Mabco, the letter from the Kosovo Central Bank (BPK) to Mabco reporting that its initial transfer of funds was unsuccessful was copied to the KTA.293 As far as the Tribunal can tell, the KTA did not express any question or concern about the fact that the funds were being paid by a party other than the winning bidder, much less give any other indication that it thought the payment was irregular or ineffective.
331.
Additionally, Claimant brought suit against UTC in the Municipal Court of Pristina in June 2007 and that court’s judgment in Claimant’s favour was the subject of appeal by UTC and ultimately reversed on 28 May 2010. (Notably, the appeals court did not make a ruling on the merits of Mabco’s claim. Rather, it remanded the case to the Municipal Court for a determination of whether the Claimant or Mr. Pacolli had standing to sue. The Municipal Court never made that determination because the case had been overtaken by events.) It is improbable that the KTA was ignorant of that litigation or the identity of the parties to it.
332.
It is not possible on the record to determine exactly when Claimant’s purchase of the shares became known to the KTA or PAK. But the circumstances, taken together, suggest that the KTA and PAK likely had knowledge of the transfer by 2007 or 2008. According to the record, only in October 2011, when Selim Pacolli, upon hearing that the PAK was considering withdrawing the shares, contacted the PAK urging it not to do so, did the PAK deny that Claimant had any ownership interest in the shares.294
333.
Over a period of several months early in 2012, years after receiving Claimant’s Eur 4m contribution, the PAK had communications and held meetings with Mr. Pacolli, in which it advised him that once he produced certain specific documents, the shares would be officially registered under Claimant's name.295 It is uncontested that Mr. Pacolli provided all the requested documentation.296
335.
It is not accurate to portray this case as one in which Claimant merely "sought" or "attempted" to make an investment.298 In the Tribunal's view, this is not an apt way of characterizing Claimant's position in this case. As will be developed more fully below, Claimant actually purchased the shares in question, the KTA became aware of that fact and eventually stated on several occasions stated that only certain documents, which Claimant promptly supplied, were required in order for the shares to be registered in Claimant’s name. (According to the allegations, the only thing that stood between that undertaking on the PAK’s part and formal registration of the shares was Claimant’s refusal, on several occasions, to pay a bribe.) Claimant did a great deal more than "attempt" to make an investment.
336.

Nor does the Tribunal’s finding of an investment in the present case by any means signify that every trans-border capital movement suffices to qualify as an investment. The Tribunal agrees with Counsel for Respondent in oral argument that "an investment is not just a transfer of money,"299 but rather "an asset acquired by the investor as a result of [a] contribution."300 However, this case cannot be reduced to a mere "transfer of money" or characterized as "any claim to obtain whatever has been contractually stipulated," as the Dissent suggests (paras. 20, 29). This was no "garden-variety" contract, much less the paradigmatic "one-off’ sale transaction that all would agree cannot qualify as an investment.301 The relationship between Claimant, on the one hand, and KTA and PAK, on the other, represented vastly more than that. What resulted from the relationships in this case was nothing less than a joint venture entailing all the characteristics of an investment: a contribution of capital in contemplation of gain or profit, an assumption of risk, a significant duration and even, if necessary, a contribution to the economic development of Kosovo. The Tribunal thus cannot agree with the Dissent’s suggestion (para. 41) that finding as we do "render[s] the distinction between a contract obligation and an investment largely meaningless."

c. Assuming a claim of entitlement in this case is sufficiently established, is it a claim that can be asserted by Claimant?

338.
In the preceding discussion, the Tribunal has, for simplicity, repeatedly referred to a claim of entitlement to shares on Claimant’s part. But of course Respondent forcefully argues (paras. 293-338, supra) that it is not Claimant that engaged with the KTA and PAK, on the one hand, and with UTC and NTSH, on the other, with a view to ownership of the Grand Hotel shares, but rather Mr. Pacolli in his individual capacity - with the result that any investment that could possibly have been made would have been made by Mr. Pacolli personally and not by Claimant.302
340.
That said, the Tribunal cannot ultimately conclude that, when Mr. Pacolli took the steps he did, he did so on his own account. First, it is not the case that Mr. Pacolli invariably, over the relevant period of time, wrote no correspondence and entered into no agreement in the name of Claimant. In the lawsuit brought against UTC in 5 June 2007,303 the plaintiff was identified as "Behgjet Pacolli from Prishtina, president of c.e.o MABETEX GROUP." Another example is the letter of guarantee - dated 3 August 2008 - sent by Mr. Pacolli to UTC’s bank (which expressly refers to the Grand Hotel acquisition and mentions Mabco, among other companies of Mabetex group).304 The 28 March 2012 letter to PAK305 was signed by Mr. Selim Pacolli on behalf of Mabetex. Further, when Selim Pacolli signed the Annex Agreement, dated 28 March 2012,306 he identified himself as "representing Mr. Behxhet Pacolli, acting on behalf of the company ‘MABETEX’ and in his personal name." For reasons given below (paras. 382-383, infra), the Tribunal does not, as Respondent urges,307 find the reference to Mabetex, rather than Mabco, disqualifying. Mabetex was nothing more than a group of separate companies, among them Mabco, and among those companies, Mabco was apparently the one that would have been charged with a project such as the project in the present case.308 Thus, for all practical purposes, any reference to Mabetex in the context of the present dispute signified a reference to Mabco. Indeed, if, as Respondent suggests, Mr. Pacolli was at all times acting solely for himself, there would be no reason to reference Mabetex at all.309
341.

The Tribunal agrees that only starting in June 2012, after the BIT had come into force, did the correspondence plainly come in Mabco’s name as such. Notably, in the 20 June 2012 letter to PAK,310 Mr. Pacolli is referred to as "a legal representative of MABETEX GROUP — working unit MABCO CONSTRUCTION S.A. headquartered in Lugano, Switzerland." Respondent suggests, and the Dissent agrees (para. 52), that this was done in order to make what was Mr. Pacolli’s investment appear to be Mabco’s investment so as to take advantage of the BIT which had only just entered into force. The Tribunal agrees that that is no coincidence. But it is not a suspicious one. The 20 June communication appears to be the very first correspondence with the KTA or PAK that came from counsel for Claimant, rather than Mr. Pacolli individually. According to Claimant, Mr. Pacolli engaged counsel at that point in time because the PAK had then just announced its decision to execute withdrawal of the shares.311 It should come as no surprise that counsel appreciated, far better than Mr. Pacolli in the past had, that in order for the action to be maintained, the claim had to be presented in Claimant's name. Therefore, in the Tribunal's view, it does not follow from the appearance of a reference to Mabco on 20 June 2012 that the claim was not Mabco's claim before that date and that it became Mabco's claim only then. The Tribunal cannot conclude that, in that correspondence, Mr. Pacolli and counsel were suddenly "converting" a claim belonging at all times to Mr. Pacolli into a claim belonging to Mabco.

343.
But there are more direct indications that, in the underlying transactions, Mr. Pacolli was representing Mabco and not himself as an individual. Of none of these is there any dispute. First, the Eur 4m transfer was made out of Mabco’s own bank account.314 Second, it was reflected on Mabco’s balance sheets and confirmed by Mabco’s external auditor.315 Third, the decision to invest in Kosovo a significant amount of monies was brought before and voted upon by Mabco’s shareholders, which adopted a resolution to that effect.316

(2) Claimant's payment of EUR 4m does not constitute evidence of aninvestment on Claimant's part

(a) Respondent’s Position

345.
Respondent contends that no link has been established between Claimant’s payment of EUR 4m and its alleged investment in the Grand Hotel. It finds no reference, in connection with the transfer, to the Grand Hotel privatization. Additionally, in the domestic court proceeding referred to earlier (para. 218, supra,), Mr. Pacolli mentions that he made the payment but makes no mention of Claimant in that connection.317
346.
In that proceeding, evidence was introduced of a transfer dated 27 April 2006 of EUR 4m from Kosovo Airlines, not Claimant, to NTSH in connection with the privatization process, for which no explanation was given. Respondent also asks why no evidence of a 28 April 2006 transfer was introduced in the Kosovo court actions.318 Respondent concludes that payments to the KTA for the shares were made only by UTC and NTSH, and not by Claimant. Respondent also speculates that the EUR 4m transfer may have been made in connection with a transaction having nothing to do with the Grand Hotel. It notes that, at the time of the Grand Hotel privatization, the KTA was conducting a tender process for privatization of Hotel Iliria, in which Behgjet and Selim Pacolli participated, as did Ms. Ejupi on behalf of NTSH.319
347.
Respondent also raises a question of timing. The EUR 4m payment was made in April 2006, but the AGU was only concluded in January 2007, i.e. 8 months later. Indeed, the Purchase Agreement between UTC and the KTA, dated 10 August 2006, was not yet even concluded.320 Thus, the payment could not have had investment in the Grand Hotel as its object. Moreover, the deadline set by the KTA for payment of the purchase price by UTC and the date when that payment was made was 24 April 2006, a date that had already passed by the time of the alleged 28 April 2006 transfer.321 Furthermore, in a letter of 29 February 2012,322 Mr. Pacolli stated that he met Mr. Berisha for the first time in Vienna in the summer of 2006. That means that investment in the Grand Hotel cannot have been the purpose of the 28 April 2006 transfer of funds on which Claimant relies as evidencing its investment.323
348.
Respondent observes a number of other peculiarities surrounding the transfer.324 Thus, although Mr. Pacolli purports to have transferred EUR 4m in contribution to the purchase price of the shares, the actual transfer was not in that amount, but rather in the amount of EUR 5,014,876.00, in two instalments of EUR 4,011,676.00325 and EUR 1,003,200.00.326 The latter figures appear in various letters by Selim Pacolli,327 which, Respondent points out, refer to the privatization of the Grand Hotel but not to a 28 April 2006 transfer. More particularly, the transfers of 4,011,676.00 and EUR 1,003,200.00 are shown as having been made to UTC by NTSH, not by Claimant. The alleged transfer of 28 April 2006 is unmentioned either in Behgjet Pacolli's 29 February 2012 letter or in the letters from Selim Pacolli.
349.
In short, Respondent's position is that Claimant made no investment in the Grand Hotel, whether for purposes of the ICSID Convention, the BIT or the Foreign Investment Law. Fundamentally, Claimant made no capital contribution, as required to constitute an investment, under all three instruments. Having made no capital contribution, Claimant neither incurred any risk, nor made an investment of the requisite duration, nor generated a profit or return, nor contributed to Kosovo's economic development.328 Thus, the requirements for an investment under the ICSID Convention were unmet.

(b) Claimant's Position

350.
Claimant disagrees. It maintains that the factual link between Claimant's payment of EUR 4m and its agreement to invest in the Grand Hotel is "evident."329 At the same time, Respondent's various representations and doubts concerning the transfer of funds are baseless. It is untrue, according to Claimant, that UTC transferred the purchase price to the KTA on the due date of 24 April 2006 and that by then the KTA had received all amounts due. In truth, by 24 April, only part of the purchase price had been paid. The KTA received payment in full only on 2 May 2006,330
351.
Claimant explains the chronology more specifically as follows.
352.
The Tender Rules required UTC, as winning bidder, to pay the purchase price to the designated bank account within a very short period, i.e., 20 days after being notified that it had won the bid.331 Having agreed with UTC and NTSH to co-invest, and knowing that payment in full was due on 24 April 2006, Claimant paid its agreed upon contribution of EUR 4m prior to that date, viz. on 20 April 2006. Claimant's CFO, Lucina Maesani-Gaiatto, testified that, in order to do so, Claimant asked its affiliate, Interfin, which owed payment to Claimant on a loan in the amount of EUR 6,997,500.00 on an unrelated matter, to make the EUR 4m payment to NTSH on its behalf.332 This Interfin did the following day.333 NTSH then transferred the sum of EUR 4,011,676.00 by wire to UTC. The wire contained the following notation: "PAY ACCORDING TO CONTR. DT. 18.04.06 FOR PRIVATIZATION ACCORDING TO REFERENCE P-78."334 Claimant notes that "P-78" was a specific reference to the Grand Hotel share transactions. Again, on the same day, UTC then ordered payment of a total sum of EUR 7,661,250 to the KTA (that sum reflecting an advance deposit of EUR 500,000 already made).335 On 24 April, the KTA should have received payment in full. However, what the KTA received on 24 April was not actually a transfer of that sum of money, but only a notice of a transfer order,"336 and the amount of money that the KTA actually received, as a result of the transfer, appears to have been the sums of EUR 3,661,000 and EUR 196,656, as shown by the KTA’s statement for the Grand Hotel account for the relevant period.337
353.
Claimant explains why the KTA received on 24 April a notice of transfer order in an amount of EUR 7,661,250, but actually received only the sum of EUR 3,661,000.338 What happened was that the Banking and Payment Authority had rejected the payment of EUR 4m that had been made by Interfin on behalf of Claimant. In a letter to Claimant of 25 April 2006, copied to the KTA, the Authority attributed the rejection to the fact that Interfin did not hold a license to perform financial activities in Kosovo.339 As a result, the EUR 4,011,676.00 was returned by NTSH to Interfin on 26 April 2006, and on the same day by Interfin to Claimant.340
354.
On 27 April 2006, Claimant then reordered the transfer, this time from its own account, but in this second attempt mistakenly had it sent to UTC not via NTSH, but via an NTSH affiliate, viz. Kosova Airlines.341 Upon receiving the funds back on 28 April 2006, Claimant on the same day transferred them directly to NTSH,342 as reflected in the Swiss Interbank Clearing (SIC) payment system343 and confirmed by Claimant’s account statements,344 as well as by Claimant’s external auditor.345 Then NTSH in turn forwarded the funds to UTC, a transaction confirmed by NTSH’s account statement.346 Finally, on 29 April 2006, UTC transferred the sum of EUR 4,011,000 to the KTA’s Grand Hotel bank account.347 Due to an intervening bank holiday and weekend, the credit only appeared in that account on 2 May 2006. Internal KTA communications confirm that the additional EUR 4,011,000 was indeed received and credited on 2 May 2006.348 According to Claimant, Mr. Berisha confirmed this entire chain of events by letter dated 19 June 2006.349
355.
According to Claimant, Respondent thus misrepresented this chronology, a chronology that clearly establishes Claimant’s payment of EUR 4,011,000 as part of the Grand Hotel purchase price. More specifically, at the time Claimant’s payment was made, the full purchase price had not been fully paid. It only became fully paid when Claimant’s payment appeared in the KTA’s Grand Hotel bank account on 2 May 2006.
356.
The KTA could not have failed to know that Claimant was participating in the purchase of shares so as to enable UTC to fulfill its obligations as successful bidder under the Purchase Agreement. First, when the bank rejected the transfer of moneys made through Interfin, it so stated in a letter to Mr. Pacolli, copied to Selim Pacolli and the KTA.350 Also the EUR 4m was thereafter, on 2 May 2006, credited to the KTA’s own account.351 The chronology is also fully consistent with the AGU, the agreement by which Claimant formalized its undertaking to make the necessary investment and comply with the obligations under the Commitment Agreement.
357.
As for the source of the EUR 4m, Mr. Pacolli testified that though he arranged the payment, the funds, as shown by Claimant's balance sheets and bank account, came from Claimant’s account.352 Further, the transaction had to be, and was, approved by resolution of the Claimant's Board of Directors.353
358.
Also according to Claimant, in early August 2006 and days before the Purchase Agreement was signed, Mr. Pacolli, on behalf of his group of companies, committed by letter to UTC's bank to guarantee the investments in the Grand Hotel in the amount of EUR 20,2m that was required under the Commitment Agreement,354 stating that "[t]he required investment and operating costs concerning Grand Hotel New Co located in Pristina will be provided by me personally and the group of my companies... as listed."355 The guarantee appears to have been actually provided on 21 March 2012.356
359.
Claimant calls attention to the negotiations that took place between Claimant and the PAK in the period of January through March 2012.357 The correspondence surrounding those discussions demonstrates that the PAK was quite aware that Claimant and NTSH had paid part of the purchase price.
360.
In his testimony, Mr. Ejupi describes as "absurd" Respondent's suggestion that the payment made by Claimant to NTSH was for any purpose other than purchase of the Grand Hotel shares.358 He affirms that the payment was unquestionably made for that purpose, and, in doing so, confirms Mr. Pacolli’s account of the difficulties encountered in the process of making the payment, as recounted in paragraphs 353-355, supra.359

(c) The Tribunal’s Analysis and Findings

361.
In respect of the 2006 Eur 4m transfer, Respondent’s position is three-fold. First, though there is no dispute that the Eur 4m payment was made by Mabco, there is insufficient evidence that it was made for purposes of acquiring the Grand Hotel shares. Second, the sequence of events casts serious doubt on the transfer of funds having the purpose that Claimant attributes to it. Third, the process of payment itself was irregular.

a. Is the Eur 4m payment attributable to the purchase of Grand Hotel shares?

363.
Nor is there evidence to suggest that those moneys were thereafter transferred elsewhere.

b. Is the chronology consistent with payment for purchase of the shares?

365.
Second, Respondent regards the chronology of events as inconsistent with the notion that Mabco made its payment for the purported purposes. However, the Tribunal cannot infer from the fact that the Eur 4m payment preceded conclusion of the AGU by 8 months that the payment had nothing to do with acquisition of the Grand Hotel shares. It is not inconceivable that Mabco would make the payment before arrangements among UTC, NTSH and Mabco became formalized, as long as those arrangements were in fact in place. Nor is it problematic that the payment also preceded conclusion of the Purchase Agreement between UTC and the KTA. Once the Purchase Agreement was formally concluded, UTC was immediately required to pay the purchase price into the KTA’s designated escrow account. It is not remarkable that Mabco would seek to ensure that UTC immediately had the requisite funds for the purchase.
366.
Respondent observes that, in a letter dated 29 February 2012, Mr. Pacolli reported meeting Mr. Berisha for the first time in Vienna in the summer of 2006,362 the suggestion being that the April 2006 transfer could therefore have had nothing to do with purchase of the Grand Hotel shares. The sequence of events is somewhat counter-intuitive. However, the Tribunal notes Mr. Ejupi’s testimony that, prior to the meeting in Vienna, he (allegedly at Mr. Shala’s request) engaged in conversations with Mr. Pacolli about the prospect, at the KTA’s suggestion, of participating with Mr. Ejupi in UTC’s purchase of the Grand Hotel. The possibility cannot be excluded that, on the strength of those conversations, Mr. Pacolli made his contribution prior to actually meeting Mr. Berisha. This would be consistent with the fact that, when Mabco made the Eur 4m transfer, it made that transfer in the first instance to Mr. Ejupi’s company, NTSH, with which it was cooperating, rather than to UTC directly.363

c. Is the payment process consistent with purchase of the shares?

368.
The apparent irregularities in connection with the actual payment of the funds are considerable, but they were effectively explained by Claimant's witness, Ms. Maesani-Gaiatto.364 The need for explanation was precipitated by Respondent's assertion that UTC's deadline for payment of the purchase price was 24 April 2006, but the transfer was actually made on 28 April 2006. Ms. Maesani-Gaiatto took the Tribunal through the precise chronology of the payment, explaining the reasons for the delay in receipt of the funds to the bank account that the KTA maintained at the BPK's letter to Mabco of 25 April 2006 rejecting the initial transfer of funds and requiring NTSH to return the funds to Mabco was copied to the KTA.365 The transfer that was eventually successful was made on 28 April 2006 and through successive transfers eventually credited to the KTA on 2 May 2006, specifically referencing purchase of the Grand Hotel shares.366 While the story, detailed above (paras. 353-355, supra), is indeed a convoluted one, and suggests a degree of ineptitude on Claimant's part, it adequately accounts for the delay in receipt of the monies.
369.
In sum, the Tribunal concludes that the Eur 4m represented Mabco's participation, alongside UTC and NTSH, in acquisition of the Grand Hotel shares.

(3) Claimant did not become an owner of shares by virtue of the AGU

(a) Respondent's Position

370.
According to Respondent, Claimant acquired no rights in the Grand Hotel as a result of the AGU because Claimant was neither a party to it nor its beneficiary. The AGU was entered into by Messrs. Pacolli, Berisha and Ejupi in their personal capacities.367 Although Mr. Pacolli was not only owner, but also CEO and authorized representative of the Mabetex Group, he was not acting in connection with the AGU in the capacity of agent or representative of Claimant.368 Respondent also cites laws and regulations in effect at that time for the proposition that if a party enters into a contract, its name must appear as either the contracting party or the beneficiary in order to claim performance under the contract.369 Yet, Claimant’s name is unmentioned in the AGU or surrounding documents. Thus, even if Mr. Pacolli entered into an agreement for co-ownership with Messrs. Berisha and Ejupi, and even if the payment was for shares in Grand Hotel, that would not, under the applicable investment law, constitute an investment by Claimant.370
371.
Respondent argues that, even if Mr. Pacolli was acting as Claimant’s agent in signing the AGU, the AGU was insufficient to transfer any share because (i) it is unclear, even with the presence of the word "Grand," to what shares the AGU refers, (ii) the AGU imposed no obligation on any party to transfer shares to another, and (iii) the shares were never in fact transferred.371 On the last point, Respondent remarks that the Law on Business Organizations of Kosovo requires that all changes to the information contained in a registered charter of a limited liability company be publicly notified,372 indicating the names and addresses of the owners and their respective ownership interests.373 Any such amendments must then be registered with the Business Registration Agency.374 However, neither Mr. Pacolli nor Mr. Ejupi was ever registered as an owner of the Grand Hotel.375 Accordingly, neither Mr. Pacolli nor Mr. Ejupi had ownership of shares in the Grand Hotel, even in their personal capacities.376 Moreover, in the Appellate Panel of the Special Chamber, UTC objected to the intervention of Claimant and NTSH on the ground that they had no legal interest in the Hotel.
372.
In addition, the AGU does not in any event purport to constitute a sale of shares, but refers only to a "property purchased jointly."377 But that prior purchase is not identified. Respondent observes further that the AGU postdates payment of the EUR 4m, and that it in itself imposes no further payment obligations.378 Respondent asserts, more generally, that the AGU was not a contract for the transfer of shares, but only an internal agreement establishing rules governing the relationship among the alleged stockholders. It therefore presupposed that a transfer of shares had actually occurred, but did not constitute such a transfer.379

(b) Claimant’s Position

373.
Claimant concedes that the AGU mentions only the names of Messrs. Pacolli, Ejupi and Berisha, rather than Claimant, NTSH and UTC, respectively, but considers that "one cannot seriously come to the conclusion that the AGU had the purpose of conferring ownership rights on the mentioned individuals."380 According to Claimant, these men all knew, from their prior discussions, that each was representing the company that they owned. Claimant also remarks that it was the respective companies that provided the funds for purchase of the shares.381 Moreover, when the AGU was concluded, Mr. Pacolli was registered in the Swiss Commercial Registry as director of Claimant with individual signatory authority.382 Thus, Messrs. Pacolli, Berisha and Ejupi did not sign the AGU in their personal capacities and for their personal interests. Even Mr. Berisha could not, through the AGU, agree to an allocation of shares in his personal capacity, since the shares were registered, not in his name, but in the name of UTC.383 If he was not acting in a personal capacity there is no reason to assume that either Mr. Pacolli or Mr. Ejupi was doing so.
374.
Claimant disputes that Law no. 02/L 123, requiring shareowners to be registered in the Kosovo Business Register has any relevance, as it was not in force when the investment was made or the AGU was concluded.384 More generally, Claimant cites academic authority385 and arbitral case law386 for the proposition that host State law does not govern the definition of an investment or the question whether an investment was made, but only the investment's legality,387 which is a separate issue. Moreover, the fact, pointed out by Respondent, that UTC objected to Claimant's intervention in its lawsuit in Kosovo has no bearing on whether Claimant did in fact acquire ownership of the shares.
375.
In any event, Claimant's contention is not that it acquired ownership of the shares through the AGU. The AGU merely formalized Claimant's ownership of the shares.388

(c) The Tribunal's Analysis and Findings

376.
Respondent calls into question Claimant's reliance on the AGU as the basis of its claimed entitlement. Although Respondent casts doubt on whether the AGU pertained to the Grand Hotel shares at all, the Tribunal finds sufficient evidence that, although the AGU itself imposed no obligations on the KTA, the subject of the AGU was acquisition of those shares.389
377.
Respondent is correct that the AGU did not itself effectuate a transfer of shares from UTC to Claimant.390 The AGU notwithstanding, the shares in question were never in fact transferred to Claimant and Claimant’s ownership of the shares is not publicly recorded, with the names and addresses of the owners and their respective ownership interests, as required by Kosovo’s Law on Business Organizations.391 Nor is it registered with the Business Registration Agency.392 But, as the Tribunal has indicated,393 it views as the fairest characterization of Claimant’s contention in this proceeding that it has an entitlement to share ownership, not ownership as such.

(4) Claimant did not become an owner of shares by virtue of the Annex Agreement

(a) Respondent’s Position

378.
Respondent observes that the Annex Agreement was not signed by any party acting as representative of Claimant. Mr. Berisha signed the Agreement on behalf of UTC and Mrs. Ejupi signed on behalf of Mr. Ejupi and NTSH, but Selim Pacolli signed on behalf of Behgjet Pacolli and on behalf of Mabetex.394 Claimant was neither party to nor beneficiary of the Annex Agreement. In fact, as in the case of the AGU, Claimant’s name is unmentioned in the Annex Agreement. In short, Claimant derived no rights from that Agreement or any property interest that could possibly constitute an investment.395 In any event, the Annex Agreement makes no reference to any payment of EUR 4m.
379.
Finally, Respondent notes that under Article 5 of the Annex Agreement, the Agreement "shall enter into force following its approval by [the PAK]." Since the PAK never approved the Annex Agreement, it never entered into force.

(b) Claimant’s Position

380.
Claimant replies that its assertion of ownership is not dependent on the Annex Agreement but was established prior to the time that the Agreement was concluded. Moreover, no significance should be given to the reference to Mabetex, since Mabetex is the group of companies to which Claimant belongs.396 If anything, the fact that Selim Behgjet signed the Annex Agreement on behalf of Mabetex refutes the proposition that Behgjet Pacolli made the investment in his personal capacity.

(c) The Tribunal’s Analysis and Findings

381.

The Tribunal does not linger over the 28 March 2012 Annex Agreement as a basis of Mabco’s claim of entitlement to ownership of the Grand Hotel shares because Claimant does not principally rely on that instrument. Also, by its terms, the Annex Agreement required the PAK’s approval, which appears not to have been given.397 Notably, however, appended to the Annex Agreement were (a) a business plan setting out the contemplated capital investments and increase in the number of employees over the following two years and (b) the required performance guarantee dated 21 March 2012 issued by the National Commercial Bank Kosovo in the amount of Eur 20.2m.398 Both submissions substantially corresponded to the items in the PAK’s 19 March 2012 request for documentation.399 It appears that the PAK at no time suggested that the submissions were inadequate. Claimant states that in reply to a letter that it sent to the PAK in late June 2012, the PAK acknowledged that the submissions were satisfactory, but justified its refusal to register the shares on the ground that UTC had told it that its co-owners showed a "lack of seriousness.400

382.
Respondent observes that, in the Annex Agreement, Mr. Berisha and Ms. Ejupi indicated expressly that they were acting on behalf of UTC and NTSH, respectively, while Selim Pacolli represented that he signed on behalf of Behgjet Pacolli and Mabetex.401 The Tribunal does not attach great significance to this fact. Having concluded that Behgjet Pacolli acted throughout on behalf of Mabco, the fact that Selim Pacolli acted on behalf of Behgjet Pacolli changes nothing. Nor, for reasons earlier explained,402 does the reference to Mabetex greatly assist Respondent's contention that Mr. Pacolli acted throughout on his own rather than Claimant's behalf. If he was acting entirely in a personal capacity, Mabetex would not warrant mention.

B. CLAIMANT IS NOT A FOREIGN INVESTOR

383.
Respondent argues that, for two reasons, Claimant is not a foreign investor:

(1) Claimant is not an investor.

(2) Even if Claimant were an investor, it was not a foreign investor.

384.
Under the ICSID Convention, as under the BIT and the Foreign Investment Law, it is insufficient to establish jurisdiction that an investment was made. Claimant must, among other things, have made the investment, i.e. qualify as an investor. It must be also have the requisite foreign nationality. Under the BIT, Claimant must have Swiss nationality. Under both the ICSID Convention and the Foreign Investment Law, Claimant must have a nationality other than that of Kosovo.

(1) Claimant is not an investor

(a) Respondent's Position

385.
Respondent's position on this point follows directly from all that has preceded. In its view, for all the reasons previously set out, the alleged investment in Kosovo was never made, and even if it was made, was made by Mr. Pacolli as an individual, not by Claimant. Also, according to Respondent, Mr. Pacolli lacked legal authority to represent it. As a consequence, Claimant is not an investor, within the meaning of ICSID Convention, the BIT or the Foreign Investment Law.

(b) Claimant’s Position

386.
Similarly, Claimant’s position on whether Mabco is an investor, within the meaning of the relevant instruments, has been fully set out above. It maintains that it constitutes an investor, within the meaning of ICSID Convention and otherwise. In addition, it denies Respondent’s suggestion that Mr. Pacolli lacked the requisite legal authority to represent Claimant in his dealings in this case, suggesting that, if the matter were to be further examined, it would need to be examined, not under the law of the host State, Kosovo, but under the law of the State of incorporation, i.e., Switzerland,403 whose requirements Claimant satisfies.404 It adds that, in any event, the question whether Mr. Pacolli validly represents Claimant is not a jurisdictional issue, but rather one that is substantive in nature and, if it is to be examined, is to be examined, not under the law of the host State, Kosovo, but rather under the law of the State of incorporation, i.e. Switzerland,405 which Respondent has not adduced. It maintains that, under Swiss law, Mr. Pacolli was empowered to represent it.406

(c) The Tribunal’s Findings and Analysis

387.

The Tribunal notes at the outset its disagreement with Claimant’s assertion that whether Mr. Pacolli validly represented the Claimant is a substantive rather than jurisdictional issue. Although Respondent claims that Mr. Pacolli lacked legal authority to represent Claimant, neither Party has adduced evidence of either Swiss or Kosovan law on the subject, and the matter was not pursued.

(2) Even if Claimant were an investor, it was not a foreign investor

(a) Respondent’s Position

389.
Respondent argues that not only the BIT and the Kosovo Foreign Investment Law, but also the ICSID Convention, under which this case is proceeding, imposes a nationality requirement on an alleged investor. Under the BIT, the alleged investor must be a national of the other Contracting State while; under the Kosovo Foreign Investment Law, it must be a foreign national; and under the ICSID Convention, it must be a national of another ICSID Contracting State. Claimant satisfies the requirements of none of these instruments.
390.
According to Respondent, Claimant is indisputably a foreign entity. But Claimant’s Swiss nationality is irrelevant because Claimant was not an investor in this case.407 Even if Mr. Pacolli made the investment that is alleged, as a national of Kosovo, he lacks the requisite nationality under ICSID, the BIT or the Foreign Investment Law. He is not a national of another Contracting State (for purposes of the ICSID Convention), or a national of Kosovo’s BIT partner (for purposes of the BIT) or any foreign nationality (for purposes of the Foreign Investment Law).408