Procedural Background

This Order addresses an application for provisional measures filed by the Claimants (Hydro S.r.l. and others) against the Respondent, the Republic of Albania, pursuant to Article 47 of the ICSID Convention and Rule 39 of the ICSID Arbitration Rules. The Claimants sought orders to suspend various domestic administrative and criminal proceedings initiated by Albania, which they alleged were retaliatory and threatened the procedural integrity of the arbitration. These domestic actions included tax investigations, asset sequestrations, and criminal proceedings for money laundering, document forgery, and tax evasion, which had culminated in arrest warrants and extradition requests for two of the individual Claimants, Mr. Becchetti and Mr. De Renzis.

Tribunal's Analysis and Decision

The Tribunal first affirmed its prima facie jurisdiction to decide the application. In assessing the appropriate standard, the Tribunal acknowledged that while provisional measures require a showing of urgency, necessity, and proportionality, a "particularly high threshold" must be met when the relief sought would interfere with a State's sovereign right to investigate and prosecute crime.

The Tribunal found that the Claimants had established a grave concern for the procedural integrity of the arbitration, which is a right capable of protection by provisional measures. It reasoned that the potential incarceration of Mr. Becchetti and Mr. De Renzis, key figures in the dispute, as a result of the extradition proceedings would prevent them from effectively participating in the arbitration. This harm was deemed irreparable by a future award of damages. The Tribunal determined that an "imminent risk" to the Claimants' participation existed, satisfying the urgency requirement. In balancing the parties' interests, the Tribunal concluded that the measures were proportionate. It reasoned that a stay would merely delay, not terminate, Albania's criminal proceedings, whereas failing to grant the stay would cause irreparable harm to the Claimants' procedural rights. The risk of asset dissipation by the Claimants was considered low, given the physical location of the investments in Albania.

Operative Orders

Based on its analysis, the Tribunal ordered as follows:

1. The Tribunal recommended that the Republic of Albania suspend the domestic criminal proceedings (identified as Criminal Proceeding No. 1564) and the associated extradition proceedings against Mr. Becchetti and Mr. De Renzis until the issuance of a Final Award in the arbitration.

2. The Tribunal declined to order the lifting of asset seizures and the freezing of bank accounts. Instead, it invited the parties to confer and agree on appropriate measures to preserve the status quo of the seized assets and shareholdings. The Order provides that if no agreement is reached within 60 days, the Claimants may re-apply to the Tribunal for further provisional measures.

3. The Tribunal denied the Claimants' broader requests to restrain Albania from initiating any other proceedings, finding such requests to be overly broad, vague, and premature. All questions of costs were reserved for the Final Award.