As one of the most commonly used methods for settling international disputes, arbitration is common in Albania. The latter has signed and ratified important and well-known international conventions such as the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards and The European Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which facilitates the process of enforcement and recognition of foreign and international awards in Albania.
Concerning Albanian legislation, many attempts have been made in order to better adapt it to international arbitration. In spite of many drafts being prepared, the Code of Civil Procedure (“CCP“) remains the main legal text that regulates arbitration proceedings, however.
The provisions which regulate arbitration are divided under six headings in the CCP:
- Chapter I – General Provisions (Articles 400-406);
- Chapter II – Formation of the arbitral tribunal (Articles 407-414);
- Chapter III – Arbitration (Articles 415-427);
- Chapter IV – Arbitral Court Decision (Arts 428-433);
- Chapter V – Appeal against the arbitral tribunal’s decision (Articles 434-438); and
- Chapter VI – International Arbitration (Articles 439-441).
Some of these provisions are mandatory. The most important ones are the following:
- The validity of an arbitration agreement depends on whether it is in a written form or not;
- The respect of the kompetenz-kompetenz principle; and
- The rendered arbitration award has to be in compliance with national public policy.
Legislation, however, contains no specification concerning arbitrable disputes. In practice, issues concerning the status and capacity of individuals, divorce and judicial separation, for example, are to be considered as non-arbitrable matters.
Concerning arbitration institutions in Albania, there are no local arbitration institutions in Albania. There exists, however, a center used for mediation, named MEDART (which only handles about 10 cases per year).
Usually, private companies instead choose institutions like the International Chamber of Commerce (ICC) for their arbitration proceedings.
- Interaction between local courts and arbitration proceedings
In case of a court proceeding started by one party in violation of an arbitration agreement, in respect to the kompetenz-kompetenz principle an Albanian court will refuse to hear the case if the latter were to be resolved by arbitration, as agreed by the parties. Unless the arbitration agreement is manifestly void or inapplicable, the Albanian judge will declare himself or herself incompetent.
The existence of an arbitration agreement must be raised by one of the parties prior to any defense on the merits of the case, however. If not, the party that has failed to raise it will be considered to have waived its right to arbitration.
National courts are not entirely excluded from an arbitration. In some cases, a local judge can intervene in order to assist the arbitrators or facilitate the proceedings. For example, a local judge will help with the production of evidence process, he can call witnesses and experts, and the court may ensure that the sanctions imposed by an arbitral tribunal are enforced.
- The possibility to appeal
In case of an international arbitration, when an arbitration award has been rendered in Albania, the latter can be set aside but not be subject to an appeal. The only decision that can be challenged is, eventually, the exequatur decision. One can, however, commence a procedure demanding for an award to be set aside. It should be noted that such a demand does not suspend the execution of the arbitration award, unlike in certain jurisdictions.
The grounds upon which an arbitration award can be set aside include:
- The arbitral tribunal was irregularly constituted;
- An award was rendered on a matter outside the tribunal’s mission;
- The arbitral tribunal declared itself wrongly to be competent;
- The adversarial principle has not been respected; or
- The recognition or enforcement of the arbitral award would be contrary to international public order.
The parties, however, can expressly waive their right to demand an annulment of an arbitration award.
- The enforcement of an arbitration award
In order to enforce an award in Albania, the award must not be manifestly contrary to Albanian international public policy. The competent jurisdiction is the Court of Appeal and, more precisely, the Tirana Court of Appeal if the arbitral award has been rendered in a foreign country.
Every refusal to render an enforcement decision must be justified by the court. This refusal can be challenged within one month of the notification of the decision when the arbitration is an international one and the award is rendered in Albania.
Concerning foreign awards, Albania is a party to the main treaties dealing with the recognition and enforcement of foreign awards, namely:
- Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) of 1958;
- European Convention on International Commercial Arbitration of 1961; and
- ICSID Convention of 1966 (the Convention on the Settlement of Investment Disputes between States and Nationals of Other States).
Therefore, Albania can be qualified as an “arbitration friendly” country. The enforcement of foreign awards is not subject to many difficulties, as long as the procedure is respected. In case of refusal of enforcement, as indicated above, the decision can be challenged within one month of its notification.