Summary

Arbitral Tribunal

Eduardo Silva Romero, Co-Arbitrator
Peter Rees QC, Co-Arbitrator
Willem Van Baren, President

ICC Arbitration 23988/MHM/HBH (c-24011/MHM/HBH)

Final Award

TABLE OF CONTENTS

I. THE PARTIES, THEIR REPRESENTATIVES AND THE ARBITRAL TRIBUNAL
A. The Parties and their Representatives
B. The Tribunal

II. BRIEF SUMMARY OF THE DISPUTE

III. PROCEDURAL HISTORY
A. The Initial Phase
B. The Written Phase
C. The Oral Phase
D. The Post-Hearing Phase

IV. FACTUAL BACKGOUND
A. The Contracts
B. The Contractor's Claims and the Amendment of the Contracts
C. Assessment of the Contractor's Claims
V. THE PARTIES' POSITIONS AND REQUESTS FOR RELIEF
A. Summary of Claimants' Position
B. Relief Sought by Claimants
C. Summary of Respondent's Position
D. Relief Sought by Respondent

VI. ARBITRATION AGREEMENTS AND APPLICABLE LAW
A. Arbitration Agreements
B. Applicable Substantive Law

VII. ANALYSIS AND REASONS FOR THE AWARD
A. Introduction
B. Admission of the Lazimi Report
C. The Tribunal's Jurisdiction
D. The Scope and Meaning of the Contract Amendments
E. Validity of the Contract Amendments under the Contract Terms
F. Validity of the Contract Amendments and IDB's Prior Consent Requirement
G. Involvement of Respondent in the (A)DRB Decisions
H. Qualification as Administrative Contracts
I. VAT
J. Conclusion

VIII. COSTS

IX. OPERATIVE PART

...

II. BRIEF SUMMARY OF THE DISPUTE

9. Claimants made claims under:

(a) the contract for the "Construction of Tirana-Elbasan Road Segment No. 1, Km (2+850) till Tunnel Entrance Km 13 (15+160) Road Project" between First Claimant and Respondent, signed on 10 February 2012, as amended (the "Segment 1 Contract");2 and

(b) the contract for the "Construction of Tirana-Elbasan Road Segment No. 3, Tunnel Exit km 15.2 (18+163) till Elbasan City Km 27 (29+275) Contract 666/1" between First Claimant and Respondent, signed on 13 February 2012, as amended (the "Segment Contract")

10. The scope of the Segment 1 Contract is the construction of a dual carriageway 2x2 lane motorway with a total length of 12.80 km with commencement at Km 0+00 at the Sauk roundabout and ending at Km 2+850 at the Farka roundabout (distance from the capital Tirana).

The works also include the construction of two junctions. The Segment 1 Contract is an integral part of a construction program, which included two other segments: Segment 2 (Tunnel, Ivan) and Segment 3 between Tirana and Elbasan from the tunnel exit. The scope of the Segment Contract is the construction of a dual carriageway 2x2 lane motorway with a total length of just over 11km between Tirana and Elbasan from the tunnel exit at Km 15,2 (18+163) to Elbasan City at Km 27 (29+275). The works also included the construction of two junctions. Both contracts comprise the FIDIC Conditions of Contract for Construction - Multilateral Development Bank Harmonised Edition (2005)

11. In an "Amicable Dispute Resolution Board ("ADRB") Decision" of 7 September 2017, the ADRB found that in respect of the Segment 3 Contract the First Claimant is entitled to the sum of USD 11,665,552.31 for extension of time (the "Segment 3 Decision")

12. In an "Amicable Dispute Resolution Board ("ADRB") Decision" of 9 October 2017, the ADRB found that in respect of the Segment 1 Contract the First Claimant is entitled to the sum of USD 25,220,016.37 for extension of time (the "Segment 1 Decision")

13. Claimants submit that the Segment 1 Decision and the Segment 3 Decision (jointly: the "(A)DRB Decisions") have become final and binding for the Parties and Respondent is bound to pay the awarded amounts, increased with VAT, to Claimant. Respondent denies that these are final and binding Dispute Board decisions as provided for and regulated by the FIDIC Contracts and submits that Claimants should present their claims for extension of time to the Tribunal under Sub-Clauses 20.8 (Expiry of Dispute Board's Appointment) of the Segment Contract and the Segment 3 Contract (jointly: the "Contracts").

...

Conclusion

399. In conclusion, Respondent shall bear: (i) the entirety of the ICC administrative expenses and the arbitrators' fees and expenses in the total amount of USD 593,000; (ii) its own legal fees and disbursements; and (iii) the reasonable legal fees and disbursement of Claimants in the amounts of EUR 161,524.38.

400. Respondent will therefore be ordered to pay to Claimants (i) Claimants' share of the advance on costs paid to and not reimbursed by the ICC, i.e., EUR 261,556.75; and (ii) the amount of EUR 161,524.38 for legal fees and disbursements.

IX. OPERATIVE PART

401. On the basis of the facts and legal grounds set forth above, the Tribunal makes, in accordance with the rules of law, the following final award:

(1) The Tribunal finds that it has jurisdiction to hear and determine Claimants' request for declaratory relief and to hear and determine Claimants' request for monetary relief insofar as it requests the Tribunal to order Respondent to make payments to the First Claimant;

(2) The Tribunal declares that the "Amicable Dispute Resolution Board ("ADRB") Decision" of 9 October 2017 regarding Segment 1 and the "Amicable Dispute Resolution Board ("ADRB") Decision" of 7 September 2017 regarding Segment 3 are final and binding upon Respondent;

(3) The Tribunal orders Respondent to immediately pay to the First Claimant:

(a) an amount of USD 25,220,016.37 as determined in the Segment 1 Decision of 9 October 2017 increased with USD 5,044,003.27 for 20% VAT, therefore a total amount of USD 30,264,019.64; and

(b) an amount of USD 11,665,552.31 as determined in the Segment 3 Decision of 7 September 2017 increased with USD 2,333,110.46 for 20% VAT, therefore a total amount of USD 13,998,662.77.

(4) Respondent shall bear the arbitration costs fixed by the Court at USD 593,000 and Respondent shall therefore pay to the First Claimant EUR 261,556.75 as reimbursement for Claimants' share of the advance toward the ICC Court administrative fees and the Tribunal's fees and expenses;

(5) Respondent shall pay to the First Claimant EUR 161,524.38 as reimbursement of the legal and other costs incurred by Claimants in this arbitration; and

(6) All other and further requests and claims are rejected.