Albania was ordered to pay €110 million to Italian businessman Francesco Becchetti following the “politically motivated” government closure of his Agon television channel in 2015.
On Friday, an ad hoc panel of International Centre for Settlement of Investment Disputes (ICSID), an arbitration court, rejected a request by the Albanian government for the annulment of the court’s decision in April 2019 to award Bechetti €110 million. This is a final decision by the arbitration court and it means that Albania must start paying Becchetti now.
It is the largest amount lost by Albania in an arbitration case, according to Voice of America.
In May 2019, Exit already reported on the ICSID verdict of April 24, the contents of which at that point were still unconfirmed. Back then, Prime Minister Edi Rama Prime Minister refused to disclose any details, citing a confidentiality agreement.
The ICSID concluded back then that in the expropriation of Becchetti’s TV channel there was evidence of politically motivated campaign. The tribunal found that the evidence “strongly support[s] an inference that the seizure decisions were the culmination of a political campaign against the claimants.” Becchetti had originally claimed €650 million in damages but the court awarded him €110 million.
The Albania government filed a request for the annulment of the award of €110 million in August 2019. The court suspended the execution of its April decision to review the annulment request. It took the court two years to issue its final verdict today, rejecting the Albanian government’s request, and ordering it to pay the Italian businessman the award.
In this last phase of the arbitration, Albania was represented by Foley Hoag law firm, Becchetti was represented by Debevoise & Plimpton and Quinn Emanuel Urquhart & Sullivan.
Background of the conflict
The conflict between the government and Becchetti started after the 2013 parliamentary elections.
After he came to power, Prime Minister Rama canceled two concessions of Becchetti from the period of Prime Minister Fatos Nano, which had been renegotiated during the government of Sali Berisha: one for the construction and operation of the hydropower plant in Kalivaç, and one for the construction and operation of a recycling plant.
Meanwhile, in 2015, the Office of the General Prosecutor investigated Becchetti for tax evasion. Initially, the accusations related to tax evasion, forgery of documents, and money laundering, estimated to amount to €39 million, but these were later reduced to tax evasion.
On June 5, the Tirana District Court ordered the freezing of all Becchetti’s assets, including the companies Energji, Cable System, 400KV, and Fuqi. The blockade also resulted in the closure of his media company AgonSet and the dismissal of about 500 employees of Agon Channel.
On June 8, an international arrest warrant was issued for Becchetti for tax evasion and fraud.
Becchetti, as well as a number of political commentators, qualified the investigation as an intentional attack of the Rama government, because of Agon Channel’s critical stance toward the government.
A tweet of Prime Minister Rama posted on June 9 confirms this: “decriminalization, a fig leaf that falls and leaves the PD uncovered when crime is struck at. Freezing the source of dirty money which fed Agon Channel is a success!”
On June 12, Prime Minister Rama gave an interview to Vizion Plus program “Talk Show,” stating that Becchetti’s TV station Agon Channel is financed by “dirty money”:
It is about a massive money laundering scheme, which has been under investigation for a long period of time by the Government structures and it was reported for profound investigation to the prosecutor’s office. This is not connected at all with Agon Channel in the sense of a media outlet which is being fought against; because there is no greater shame to become the advocate of a screen [media], as regards freedom to inform, when the screen is switched on and off, set in operation through sources of dirty money. […]
I represent the Albanian government, the structures of the Albanian State, the structure of the Albanian executive power, which have carried out an investigation and reported an outrageous scheme of fraud and money laundering to the prosecutor’s office. I defend this belief because it has been formulated by State structures. I am not saying that there should be punishment or there should not be punishment, how to punish, how much to punish, whom to punish. I am talking as to why I have said that and why I stand by such belief.
On June 29, 2015, Becchetti filed a request to institute arbitration proceedings against the Albanian state at the ICSID.
Failed extradition request
In November 2015, Becchetti was arrested in London, and the Albanian government sought his extradition.
In July 2016, however, the Westminster Magistrates Court decided against the extradition, calling the government’s evidence “totally misleading.”
The court had found that the Albanian government had made, on purpose, false statements in the extradition request, including misleading information regarding Albanian legislation. It qualified the attempts of the Albanian government to be a “manipulation and usurpation” of the juridical process. For these reasons it voted against the extradition.
Initially, the government announced that it would appeal the decision. But in the last days before the deadline, it informed the court that it would forgo an appeal.
Mounting Costs
Up to November 2016, the Rama government had spent upwards of €4 million on legal fees through special decisions of the Council of Ministers (VKM), outside the control of Parliament.
- On September 22, 2015, the KM decided on a payment of 220,000 US dollars for administrative costs of the arbitration; 200,000 euro for the defense lawyers.
- On the same date, the KM decided on a payment of 39,050,000 lekë (about 280,000 euro) for the lawyers dealing with the case of the recycling plant.
- On December 9, 2015, the KM decided on an additional payment of 1.95 million euro for the lawyers dealing with the case of the hydropower plant of Kalivaç.
- On November 2, 2016, the KM decided on another additional payment of 1.18 million euro and 125,000 US dollars for the lawyers in the Kalivaç case.
The total costs of the case for the Albanian taxpayers have not been disclosed.
