Copri Constructions et al. v. Albanian Road Authority

Case summary

At a glance

Parties: Copri Construction Enterprises W.L.L. (Kuwait), Aktor S.A. (Greece) and JV Copri Construction Enterprises W.L.L. & Aktor Technical Société Anonyme (Albania) v. Albanian Road Authority (Autoriteti Rrugor Shqiptar)
Case no.: ICC Cases No. 23998/MHM and 24011/MHM (consolidated as ICC 23998/MHM/HBH (C-24011/MHM/HBH)); Paris Court of Appeal RG 20/17978
Forum and rules: ICC arbitration seated in Paris; set-aside proceedings before the Paris Court of Appeal
Treaty: Contract claims under FIDIC Red Book (2005) construction contracts for Lots 1 and 3, as amended in 2017
Court: Paris Court of Appeal, International Commercial Chamber (Pôle 5 – Chambre 16): François Ancel (President), Fabienne Schaller, Laure Aldebert
Underlying award(s): Final Award of 1 September 2020 (Tribunal: Willem van Baren (President), Eduardo Silva Romero, Peter Rees)
Sector: Construction; motorway (Tirana–Elbasan)
Outcome: The Court rejected the Albanian Road Authority's application to set aside the award (31 May 2022).
Amount: Award: USD 30,264,019.64 (Lot 1, including VAT) and USD 13,998,662.77 (Lot 3, including VAT); arbitration costs fixed at USD 593,000, with reimbursements of EUR 261,556.75 (advance on costs) and EUR 161,524.38 (legal costs). Set-aside: EUR 150,000 under Article 700 CPC against the Road Authority.

The dispute

JV Copri, a joint venture of the Kuwaiti company Copri and the Greek company Aktor, won the tenders for the Tirana–Elbasan motorway in Albania. The project was pre-financed by the Islamic Development Bank. The Lot 1 and Lot 3 contracts were based on the 2005 FIDIC Red Book. In July 2017 the parties signed amendments (Amendment No. 7 to Lot 3 and Amendment No. 12 to Lot 1) that set up ad hoc dispute boards. Those boards awarded JV Copri USD 11,665,552.31 and USD 25,220,016.37. The Albanian Road Authority (ARA) did not pay, and the contractors brought ICC arbitrations to enforce the board decisions and to recover VAT. The ARA then asked the Paris Court of Appeal to set aside the resulting award. It argued that the arbitration clauses were void because the amendments were signed before the Bank gave its prior "No Objection" under Article 4 of the Agency Agreement. It also argued that the tribunal had no jurisdiction over the VAT claims, and that recognising the award would breach international public policy, because it would breach Albania's agreements with the Bank and because criminal investigations were pending.

Key holdings

The jurisdiction objection fails. The amendments made only technical or purely formal changes to the steps before arbitration. The parties' common intention to arbitrate, already expressed in the 2012 contracts, was unchanged. This holds even if the amendments were irregular under Albanian law or the powers of the PMU director, and the ARA cannot rely on those points to challenge its consent to arbitration. ¶¶ 50–52
The challenge to the VAT awards (USD 7,377,143.73 in total) is a question of admissibility, not jurisdiction. The claim had not first been put to the dispute boards, but the parties had agreed to arbitrate their disputes under the two contracts. Admissibility is not a ground for setting aside an award, even in part. ¶¶ 64–67
No breach of international public policy based on the financing and agency agreements with the Islamic Development Bank. Review for public policy does not extend to whether Albania kept its own commitments. The award gives effect only to the construction contracts, not to the Bank agreements, to which the contractors are not parties. ¶¶ 91–95
The audit irregularities and the criminal investigations for abuse of authority do not by themselves amount to a manifest breach of international public policy. In any event, the Tirana District Court dropped the abuse-of-authority charges against the PMU director and the ARA director general on 28 July 2021. ¶¶ 96–98
The contractors' claim for damages for abusive proceedings under Article 559 CPC is rejected. Bringing a challenge is a right in principle, and the ARA may have been mistaken about the extent of its rights. ¶ 104
The ARA bears the costs of the proceedings and pays the contractors EUR 150,000 under Article 700 CPC. ¶¶ 105–106; operative part

Procedural history

10 and 13 February 2012Contracts for Lot 1 and Lot 3 of the Tirana–Elbasan motorway signed with JV Copri.
4 and 24 July 2017Amendment No. 7 (Lot 3) and Amendment No. 12 (Lot 1) set up ad hoc dispute boards. The Bank sent its observations on 25 July 2017, after both amendments were signed.
7 September and 9 October 2017The dispute boards award JV Copri USD 11,665,552.31 (Lot 3) and USD 25,220,016.37 (Lot 1).
16 and 22 October 2018ICC arbitrations 23998/MHM (Lot 1) and 24011/MHM (Lot 3) filed; the two cases are later consolidated.
1 September 2020Final Award, notified on 8 September 2020: the board decisions are declared final and binding, and the ARA is ordered to pay the amounts plus VAT and costs.
8 December 2020The ARA applies to the Paris Court of Appeal to set aside the award.
28 July 2021The Tirana District Court acquits the former ARA director general and the former PMU director of abuse of authority.
31 May 2022The Paris Court of Appeal rejects the set-aside application.