22-04-2013

Recognition And Enforcement Of Ιnternational Arbitration Awards In Albania

Authors

  • Prof. Ass. Dr. Flutura Kola-Tafaj, Lecturer, University of Tirana, Faculty of Law
    Partner at Kola & Associates Law Firm

Which is the legal framework governing recognition and enforcement of international arbitration awards in Albania?

The provisions of the Albanian Code of Civil Procedure on International Arbitration were abrogated by the law no. 8812, dated 17.05.2001. However, referring to the provisions of the Code of Civil Procedure which govern domestic arbitration, ad contrario we can conclude that: Arbitration shall be considered international if the following conditions: are NOT met cumulatively:

a. The parties to the arbitration agreement at the time of drafting this agreement are domiciled or residing in the Republic of Albania;

b. Place of arbitration proceedings under the arbitration agreement is the Republic of Albania,

c. The applicable law is the Albanian law. The legal framework on recognition and enforcement of international arbitration awards in Albania consists of:

  • New York Convention “On the recognition and enforcement of foreign arbitration awards” ratified by the Republic of Albania by the law no. 8688, dated 09.11.2000
  • Bilateral Agreements entered into between the Republic of Albania and other states, such as “The agreement on mutual judicial aid in civil matters between the Republic of Albania and the Republic of Greece, ratified by Law no. 7760, dated 14.10.1999; Agreement on mutual judicial aid in civil matters between the Republic of Albania and the Republic of Turkey, ratified by Law no. 7760, dated 14.10.1999 etc.
  • Code of Civil Procedure of the Republic of Albania ratified by Law no. 8116, dated 29.03.1996.

How can the applicable law be determined in the case of applications for recognition of international arbitration awards?

The hierarchy of normative acts related to the recognition and enforcement of international arbitration awards should be as follows:

1. Bilateral agreements;

2. New York Convention;

3. The provisions of the Code of Civil Procedure.

However, despite the above hierarchy, the law applicable in the case of applications for recognition of international arbitration awards varies depending on the place of international arbitration and the existence or not of bilateral agreements. For recognition of awards of international arbitration, the place of which has signed a bilateral agreement with the Republic of Albania for the recognition and enforcement of foreign arbitration awards in the Republic of Albania, based on the Constitution of the Republic of Albania, in Article VII, paragraph 1 of the New York Convention and Article 393 paragraph 2 of the Code of Civil Procedure in force, are applicable the provisions of the bilateral agreement on the recognition of foreign arbitration awards. For recognition of awards of international arbitration, the place of which is a contracting state of New York Convention, but not the Republic of Albania, are applicable the provisions of the New York Convention on recognition of foreign arbitration awards OR the provisions of the Code of Civil Procedure in force regulating the recognition of the award of a foreign state. The right to choose between them in accordance with Article VII, paragraph 1, of the New York Convention belongs to the party interested to the recognition of the award. For recognition of awards of international arbitration, the place of which has neither signed a bilateral agreement with the Republic of Albania and is neither a Contracting State to the New York Convention, are applicable the provisions of the Code of Civil Procedure in force. For recognition of awards of international arbitration, the place of which is the Republic of Albania, are applicable only to the provisions of the New York Convention. The provisions of the Code of Civil Procedure in force can not be applied in this case because if we refer to Article 399 of the Code, we can note that: “The provisions of this chapter (the Code) apply to the recognition of a final arbitration award of a foreign state”. This means that these provisions may not apply to international arbitration awards of the Albanian state.

Which is the competent court in which it should be filed the request for recognition of an international arbitration award?

Recognition of international arbitration awards follows a procedure which is referred mutatis mutandis to the provisions of the Code of Civil Procedure for recognition of foreign court decisions and specifically Articles 393 to 399 thereof. Under these articles, the request for recognition of an international arbitration award is submitted to the Court of Appeal. To determine the competent Court of Appeal, it should be taken into consideration the aim of the request for recognition of an international arbitration award, which ultimately is the enforcement of the international arbitration award. Therefore, in determining the competent Court of Appeal it should be made reference to Article 49 of the Civil Procedure Code, according to which: “Lawsuits, requesting enforced execution on things, are brought in the court of the place where these things are or the greatest part of their value is. Lawsuits requesting enforced execution on performance of or omission to perform a certain action are brought in the court of the place where such enforcement must be fulfilled. Thus, the competent Court of Appeal shall be determined in accordance with this provision. The Albanian legislation provides that the person who is interested in the recognition of an international arbitration award may file the request for recognition of such award:

i. Directly in the Court of Appeal, by himself or his representative; as well as

ii. In a diplomatic way, when it is permitted by international agreements and on the basis

of reciprocity, as a constitutional principle. Procedurally, recognition of international arbitration awards through diplomatic way requires first the verification of whether there is a bilateral agreement on mutual judicial aid and specifically for mutual recognition of foreign arbitral awards between the Republic of Albania and the state where the award is issued. Then the request for recognition of an international arbitration award, together with the documents as required in the bilateral agreement, is submitted by the interested person with the Ministry of Justice of the place where it is issued the award. The Ministry will send the relevant award through diplomatic channels to the Ministry of Justice of the Republic of Albania, which in turn will send the award to the competent Court of Appeal for recognition. Under the provisions of the Civil Procedure Code in force in cases where the interested party has not appointed a representative, the president of the Court of Appeal shall appoint an attorney to file the request.

Which are the documents that should be attached to the request for recognition of an international arbitration award?

When it comes to the recognition of arbitration awards of countries with which the Republic of Albania has ratified international agreements then the list of documents will be that provided for in the agreement, otherwise the list of documents is defined in Albanian procedural law or the New York Convention subject to the chosen applicable law. Thus, if the New York Convention is chosen as applicable law, in accordance with article 4 of the Convention, to ensure the recognition and enforcement of the award, the party seeking recognition must submit at the same time of submitting the request the following documents:

a. the original award, duly certified or a duly certified copy;

b. the original arbitration agreement or a duly certified copy.

Otherwise, in the absence of a multilateral or bilateral agreement between the Republic of Albania and the state in which the award was issued or if the interested party chooses to apply the domestic law, the interested party must enclose to the request for recognition of the international arbitration the following documents provided for in Article 396 of the Code of Civil Procedure:

a. A copy of the award to be enforced and its translation in the Albanian language, legalized and certified;

b. Confirmation by the court that issued the award that it has become final, as well as its translation in the Albanian language, legalized and certified by the notary. The copy of the award and the confirmation that the award has become final, shall be certified by the Ministry of Foreign Affairs of the Republic of Albania;

c. Power of Attorney, if the request is filed by the representative of the interested person, translated and certified by a notary.

Which is the procedure that the Court of Appeal follows when judging the requests for recognition of international arbitration awards?

In any case, the request for the recognition of an award is reviewed by the Court of Appeal, which in accordance with Article 35 of the Code of Civil Procedure judges in a panel consisting of three judges. In principle the hearings are open, unless the court deems that it is not in favor of the process. In any case, the decision is announced publicly. Under the provisions of the Code of Civil Procedure in force, the request for recognition of an award is a process without an opposing party. In this trial, the Court of Appeal does not consider the merits of the case, but only controls whether there exist or not any of the legal obstacles for granting recognition to the award provided explicitly in the agreements ratified by the Republic of Albania or in the Albanian procedural law.

Should the party against whom the award shall be enforced be notified to participate in the process of recognition of the international arbitration award and would he be legitimated to make recourse in the High Court, if he was not notified to participate in such a process?

Despite the applicable law chosen by the interested party, whether the New York Convention, or any other bilateral agreement or the provisions of the Albanian Civil Procedure Code, the procedural instrument to set in motion the court to give effect to an international arbitration award is the “request”. In terms of the Albanian procedural law, “the request”, as an instrument to initiate a process and to set in motion the court, initiates a trial without an opposing party, therefore at a first glance we would say that even in the case of a request for recognition of an international arbitration award, unlike the trial of a lawsuit, the court shall conduct the hearing in the presence of the applicant or his representative and the presence or notification of the party against whom is the arbitration award which recognition is sought would not be necessary. But in fact, the Court of Appeal in the trail of the application for recognition of an international arbitration award should call as a third party the person against whom the arbitration award is and ensure that this party is duly notified, because looking at article 394 of the Code of Civil Procedure, we note that the procedure followed by the court in the recognition of a foreign judgment/award is not entirely a formal procedure, but requires judicial inquiry concerning the existence or not of any of the legal obstacles for granting recognition to the award provided by this Code. If it is proven their existence, the decision/award of a foreign court is not given effect in the Republic of Albania. Furthermore, in case that for the recognition of a foreign arbitration award is chosen or is applicable the New York Convention (as explained in the second question) then under article V which provides that:

“Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:...”

It is clear that the presence of the party against whom the arbitration award shall be enforced is mandatory. Lack of notification to the party against whom the award shall be enforced in the process of recognition of this award, entitles him to claim for violation of the right to a fair trial, as provided for in Article 42/2 of the Constitution of the Republic of Albania, Article 6 The European Convention on Human Rights as well as Article 18 of the Code of Civil Procedure. Therefore he is entitled to address the High Court based on Article 472/c of the Civil Procedure Code, because if the party would have been notified to participate and if him was given the opportunity to participate in the process, the evidence presented by him, eventually could have led the court to conclude that there is one or more of the obstacles set out in Article 394 of the Code of Civil Procedure, or in article V of New York Convention a fact that will constitute a condition for the non-recognition of the international arbitration award in the Republic of Albania.

Which are the legal obstacles or grounds of refusal of recognition of international arbitration awards?

Legal obstacles to recognition of the international arbitration award depend on the chosen applicable law. If the applicable law is a bilateral agreement, the grounds of refusal of recognition will be those set out in this agreement. In the event that the applicable law is the New York Convention, the legal obstacles will be those set out in Article V thereof.

Under this article, recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:

a. The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

b. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or

c. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or

d. The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

e. The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

a. The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or

b. The recognition or enforcement of the award would be contrary to the public policy of that country.

While according to the provisions laid down in the Code of Civil Procedure of the Republic of Albania, which as it was previously mentioned are mutatis mutandis the provisions for recognition of foreign court decisions, precisely Article 394, a foreign arbitration award is not given effect by the competent authority of the Republic of Albania, which is the Court of Appeal, if one of the following six grounds exists:

a. According to the provisions in force in the Republic of Albania, the dispute could not be in the competence of the court which rendered the judgment, which in terms of arbitration it should be read as, according to the provisions in force in the Republic of Albania the object of the dispute could not be settled with arbitration;

b. The claim and notification for trial has not been duly notified to the absent respondent, in order to give him the opportunity to defend himself;

c. Between the same parties, for the same object and for the same reason, it is issued an other different decision by the Albanian court;

d. It is being judged by the Albanian court a lawsuit that is filed before the decision of the court of a foreign state has become final; which in terms of arbitration it should be read as, it is being judged by the Albanian court a lawsuit that is filed before the international arbitration award has become final;

e. It was given the final form in violation of its law;

f. Is incompatible with the basic principles of Albanian legislation.

Which is the procedure of enforcement of the international arbitration award?

The enforcement procedure of an international arbitration award is the same as the procedure for the enforcement of the decision of domestic arbitration and enforcement of a final decision of a state court and is governed by the Civil Procedure Code. International arbitration awards are considered executive titles, thus they become mandatory for enforcement in the Republic of Albania after they are recognized by the Court of Appeal. The compulsory execution of these awards goes into two stages:

  • Issuance of Order of execution by the Court of Appeal;
  • Conduct of enforcement actions for executing the order issued by the Court of Appeal.

The Court of Appeal should issue the order of execution within 5 days from the date of filing the application. If the court does not issue the execution order against this decision special appeal is allowed as provided by the Code of Civil Procedure. The Execution Order is enforced by the state or private bailiff service at the creditor request, to which it is attached: -The Executive Title -The Execution Order -The document evidencing payment of fees of enforcement -The Power of Attorney if there is a representative.

GREEK LAW DIGEST REPUBLIC OF ALBANIA MINISTRY OF INTEGRATION Union of Chambers of Commerce and Industry of Albania
Nomiki Bibliothiki ALBANIA INVESTMENT DEVELOPMENT AGENCY Foreign Investors Association of Albania
     

 

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