The lawsuit of the German company EMO-APO in the International Court of Arbitration risks costing Albania 40 million euros. The conflict with the Albanian state culminated when the government formalized the agreement for “Durrës Yachts & Marina” project with investor Mohamed Alabar. The CEO of EMS-Fehn-Group, Mr. Manfred Mueller, explains in an interview for Faktoje that he warned the authorities about the possibility of arbitration in August 2022, but this fact did not worry them enough. The verification of Faktoje highlights some untruths stated earlier by the head of the Durrës Port Authority, Piro Vëngu, regarding the fate of this concession contract.
“All concession contracts will be respected where the state is a party, where the port authority is a party, they will all be respected.” – declared at the end of last year, the director of the Port Authority Piro Vëngu, during a television show, when he was asked about the fate of the concessionary companies operating in the Port of Durrës, after the agreement for the “Durrës Yachts & Marina” project being finally signed by the Albanian government and investor Mohamed Alabar.
“All the operators have agreed and are now looking forward to the commercial activity moving to Porto Romano. Even the German company has expressed its agreement to relocate its activity.”, said Mr. Vëngu.
But contrary to what he declares, the project to transform the port of Durrës into a tourist port by moving the cargo port to Porto Romano, raised a concern for operators regarding the continuation of their economic activity.
One of them was precisely the German company EMS – APO, which for almost a decade has been processing cargo ships in the eastern terminal of the port of Durrës. In 2013, EMS signed a 35-year concession contract for the management, operation and maintenance of the eastern terminal in the Port of Durrës.
“We hope that the honorable Assembly will listen to our concerns and consider their consequences. The foregoing does not prejudice or affect, does not constitute and shall not be read or interpreted as a waiver of any suit, claim, right, remedy, title and/or interest of any nature whatsoever, which EMS and/or or EMS APO, jointly or individually, enjoy, may exercise and/or present under contract, law, bilateral and/or multilateral international agreements.” – wrote the German company in a letter addressed to the authorities two days before the Parliament of Albania approved “Durrës Yachts & Marina” project with 76 votes in favor.
What happened next?
Due to the concern of the German company EMS and the ‘threat’ of an arbitration, Faktoje addressed a request for information to the Port Authority of Durrës. In its response received on February 2, the Port Authority informed us that the concessionaire EMS-APO had been consulted in advance with the development plans and the project idea for the development of the tourist marina and the waterfront of Durrës in June 2021. According to the Port Authority, the German company had even supported the government’s plans for developing the tourist port of Durrës, expressing also its readiness for gradually emptying the terminal’ for the smooth implementation of that project.
“With their letter no. 131 dated 18.06.2021 EMS-APO has also presented a map of the modifications of the concession spaces as per the agreement between the parties,” concluded the clarification for Faktoje, Durrës Port Authority.
In addition to the request to the Durrës Port Authority, Faktoje also addressed a request for comment to the German company EMS.
40 million euro lawsuit against Albania
At a time when the Durrës Port Authority denied the disputes with the concessionaire company, the Germans of EMS Shipping & Trading were preparing their lawsuit against the Albanian state in the International Court of Arbitration ICSID, (Washington). The German company EMS Shipping & Trading GmbH, which has the eastern terminal in the Port of Durrës with a concession, demands 40 million euros in compensation from the Albanian government for unilateral breach of the concession contract.
Their lawsuit was registered at the International Court of Arbitration ICSID on April 7.
How did the contract get to Arbitration?
Contrary to what the Durrës Port Authority claims, CEO of EMS-Fehn-Group, Mr. Manfred Mueller, explains in an interview for Faktoje, that the conflict between the parties began to crystallize three years ago, to culminate this year with the lawsuit in arbitration.
“The current conflict with the Albanian authorities crystallized in 2020, although the first tensions had already appeared in previous years. On the other hand, we at EMS-Fehn-Group have a strong impression that the Albanian authorities have deliberately hindered the activities of the EMS Albanian Port Operator (EMS APO’s) in order to profit as much as possible from the company’s business, perhaps to facilitate the transformation of the Port of Durrës into a tourist port.
Over the past two years, EMS has repeatedly contacted a number of different institutions in Albania, including the Durrës Port Authority, the Ministry of Infrastructure and Energy and the Prime Minister himself, to find a solution to the conflict. Unfortunately, none of them has shown any real interest in engaging in a dialogue, much less in reaching an agreement,” says Mr. Mueller, emphasizing that the company has informed the authorities about the possibility of arbitration since August last year, but none of them have responded.
“More than six months after the Albanian Government was officially notified in August 2022 of EMS’s intention to initiate an arbitration if an amicable solution could not be found, the company had still not received any response to its letter. Thus, it filed its request for arbitration against the Albanian state before the International Center for Settlement of Investment Disputes (ICSID) in Washington, DC, USA, filed on April 7, 2023.” – says the CEO of EMS-Fehn-Group, Mr. Manfred Mueller, adding that the German company had no alternative but arbitration.
“The purpose of arbitration is to seek financial compensation for losses caused by Albania’s violations of the bilateral investment treaty between Germany and Albania, including but not limited to the reduction in the amount of cargo handled by EMS APO, as well as losses coming as a result of further actions by Albania.”, he says further.
The German company claims that the Albanian government has treated it in an arbitrary and discriminatory manner, causing great financial damage in violation of the concession agreement. Mr. Mueller emphasizes the government’s alleged preferential treatment for two other concessions, the one for the transformation of the cargo port into a tourist port, as well as the MBM port in Porto Romano.
What does the Durrës Port Authority say?
The Durrës Port Authority continues to insist with the same arguments. In another response to our request for information, Durres Port Authority tells Faktoje that it has received the consent of the Germans for both development projects in the port areas of Durrës – Porto Romano, while denying their claims that they had no other way than to settle by arbitration.
“Durres Port Authority has also had a continuous correspondence with EMS-APO regarding these issues and referring to the proposal of EMS-APO itself, the Albanian Government has continued with the further procedural steps to enable the necessary amendments to the Concession Contract and the updating of the area of operation, without affecting at any time the object of the Contract’s activity or its continuity. Also, within the framework of the will expressed by EMS-APO itself to support the development projects of the port of Durrës, the Albanian authorities have continued with the legal evaluation and approval of the Strategic Investment “Marina & Yachts of Durrës”.
The Port Authority adds that the state authorities have shown their full readiness to evaluate and guarantee all the requirements of the EMS-APO subject, more specifically:
- The guarantee from the Contracting Authority for the continuity of the activity of the concessionaire EMS – APO, for the remaining period of the concession contract;
- The empltying of certain surfaces according to the proposal of EMS-APO itself, excluding the latter from the payment of rent for these surfaces;
- Review of the costs and expenses of the Concessionaire, where the value of the investments will not change, but adaptations of specific items are required;
- Other commitments of the parties in accordance with the provisions of the contract.
For this purpose, the Port Authority of Durrës adds that there has been continuous written communication with EMS – APO, and that meetings have also been organized between the concessionaire and representatives of the relevant state authorities.
The State Advocacy Office is preparing the defense
All these claims are presented by the parties in what is known as the first stage of the arbitration process. Currently, the authorities together with the State Advocacy Office are preparing their defense strategy against the Germans of EMS-APO in the international ICSID court.
“The defense strategy is prepared by the State Advocacy Office in cooperation with the relevant institutions and includes a set of actions and interactions enabled by the legislation in force to meet the actual needs of the process in question. Since the process is ongoing and not complete, the information you are looking for may not be made available to you, because it contains confidential data of the parties involved in the process, and the disclosure of such information would harm the interests of the Albanian state, in this arbitration process”, writes in an official answer to Faktoje the State Advocate, being careful not to disclose any details that could harm the upcoming arbitration process.