Another International Arbitration Case against Albania

According to Monitor, the former investment fund Anglo-Adriatike, which the Albanian government selected in May 1996 to invest the privatization bonds in the state company privatization market, has filed a lawsuit against the Albanian government at the International Court of Arbitration.

Following the process back then in different former communist country, also Albania released treasury bonds, also called privatization bonds, which were distributed to the population to allow citizens to participate in the privatization spree. The idea was also that this would allow former state companies to remain in the hands of nationals.

In this scene full of inappropriate and mistaken legislation, “strategic investor” Declan Ganley entered Albania in 1996. Ganley registered three investment funds in the country, and bought the privatizations bonds from the Albanian citizens. Investment fund Anglo-Adriatik, one of the three that he registered, managed to amass around 12% of all the privatization bonds released by the Albanian government, at a value of around $120 million.

However, according to law no. 7979 “About investment funds” from 1995, no investment fund was allowed to own more than 10% of the slice released in a single emission. Their usage was conditioned by the fact that a fund couldn’t acquire more than 40% of the shares in a privatized entity, with 60% of the shares reserved for a local partner.

Thus the investment fund was blocked by the national authorities for owning too many bonds, and it was unable to continue its activities in Albania.

Later, the pyramid schemes and the popular uprising wreaked havoc on the country’s economy. Moreover, the new socialist government refused to allow the use of privatization bonds in the auctions of state-owned property.

In fact, their value on the informal market dropped from 25% of their nominal value in 196 to 1.5% in 1998.

These privatization bonds have never been accepted for the privatization of some strategic company, but only for the acquisition of shares by former employees of the companies, as envisioned by the low. They were allowed, however, many years later, for the legalization of illegally built houses on grounds owned by the state or private actors.

Curiously, the Rama government decided through a law approved on February 16, 2017, to extend the validity of the privatization bond beyond their original expiration date at the end of 2016.


Their validity has been extended more than 5 times by different Albanian government from 1991 to 2017. But in all previous cases, this decision was taken a year before their expiration. Only this time everything was done in a hurry and without any advance notification.

It now seems that Ganley and his Anglo-Adriatik investment fund has enough of the government’s delays, and has filed a lawsuit against the Albanian government. Another large arbitrage case, filed by Francesco Becchetti, has cost the Albanian government already more than €4 million in legal fees.