VZCZCXYZ0020
OO RUEHWEB

DE RUEHTI #0348/01 1591313
ZNR UUUUU ZZH
O 081313Z JUN 09
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8178
INFO RUCPDOC/USDOC WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY

UNCLAS TIRANA 000348 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EUR/SCE J.ISMAIL, EB/IFD/POI FOR H.GOETHERT 
 
E.O. 12958:N/A 
TAGS: CASC EINV KIDE OPIC PGOV AL
SUBJECT: ALBANIA: 2009 EXPROPRIATION REPORT 
 
REF:  STATE 49477 
 
¶1. (U) All four (4) previous claims of United States persons against 
the Government of Albania (GOA) are considered extinguished. 
 
¶2. (SBU) 
a. Claimant A 
b. 1939 
c. Claimant and her family left Albania in 1939 when the Italian 
occupying government allegedly expropriated their home and adjoining 
land, which covers an area of approximately 2,700 square meters in 
central Tirana and has a current estimated value of USD 1,000,000. 
Claimant, now a U.S. citizen, initiated proceedings before a 
privatization commission in 1995 to recover the property, occupied 
then and at present by the Albanian Republican Guard.  The 
commission ruled that Claimant was entitled to the property, 
provided that she pay approximately USD 8,000 to cover the cost of 
improvements made by previous occupants.  Claimant paid in full, but 
continues to be denied possession of the property.  Albanian law 
clearly prescribes that, pursuant to privatization commission 
rulings, occupants are allowed three years to vacate the premises, 
provided that they pay rent and that the titular owner is in accord 
with the arrangement.  Claimant sserts that she never agreed to 
such an arrangemet and that no attempt on the part of the currentoccupant 
 to pay rent has been made. 
 
In February2000, after her attorney'ss attempt to negotiate th 
current occupant's departure failed, Claimant fled suit a gainst the 
Ministry of Public Order and the Albanian Republican Guard to obtain 
payment f" back rent from 1995.  In 2002, the court ruled i  favor 
of Claimant.  The defendants appealed thed ecision, however, and the 
court of appeals subsqquently ruled in their favor.  The case is 
currently pending in Albania's Supreme Court.  Concerned about the 
slow pace of the Supreme Court docket, Claimant initiated a second 
lawsuit in mid-2003 to obtain actual ownership and possession (as 
opposed to mere rent collection).  Claimant has been unable to 
occupy or alter the property, which she wishes to use for the 
purpose of housing a charitable organization.  Her attorney 
indicated that Claimant is adamant about recovering the property in 
question.  Overdue rental payments are of secondary concern to 
Claimant.  Claimant entered into negotiations for settlement of all 
claims with the Ministry of Public Order in January 2005.  The 
chage in government in September 2005, however,resulted in the 
termination of settlement neotitons.  In 2006, a District Court, 
acting nClaman's econd lawsuit, ruled that Claimatdd ntownthe property, an 
d in March 200 liatappaed o the Court of 
Appeals. InMy20 h pel Cort proceeded with the hearn 
n eie oanl the previous decision ofFbrur 06aantthe defendant and to retur 
h caefrr-uget by another 
panel of jugesa he ititLvl Court.  The Plaintiff file anapea oteSpreme Cou 
rt on June 7, 2007  In Febury,drn 
meeting with the Ambassaor, Prime iistrBrisha committed 
himself to esolve this sue quickly.  As a follow-up, the 
laimant, with Embassy support, met with two of the rime Minister's 
advisors and both sides agreed o the steps required for the GOA to 
vacate her prperty and restitute it back to the Claimant.  The 
Council of Ministers must still approve the decison to vacate the 
facility as a final step before he government can return it to 
Claimant.  Althouh a final, positive resolution appears at hand, 
the past 13 years of back-and-forth litigation without result leaves 
us cautious in predicting a final resolution of this dispute. 
Embassy continues to seek an outcome satisfactory to Claimant. 
 
On June 6, 2009, Claimant was given keys to her property in the city 
of Tirana and an agreement signed by the Ministry of Interior 
acknowledges her right to the property.  Although much still needs 
to be done by the Claimant to resolve the financial claims and 
counterclaims, Post considers this case extinguished. 
 
¶3. (SBU) 
a. Claimant B 
b. 1993 
c. Claimant entered into a joint venture with the Government of 
Albania (GOA) in 1991 to establish a plastics manufacturing company. 
 Under the terms of the contract, the GOA was to provide the land, 
building facilities, staffing and installation of equipment, while 
Claimant provided capital and factory equipment.  After a two-year 
delay in building construction, Claimant initiated arbitration 
proceedings, which determined that the GOA was liable for timely 
completion of construction and restitution for lost profit and 
interest from Claimant's capital investment.  Execution of the 
decision was unenforceable, since the state arbitration board would 
not provide Claimant with a printed copy of the decision.  In 1995 
and 1997, the GOA unsuccessfully appealed the arbitration findings, 
and in 1998, the GOA sold the unfinished factory building to a third 
party.  Various court decisions between 1998 and 2001 upheld 
Claimant's rights.  However, the order remained unenforced. 
 
In August 2001 the GOA re-registered the buildings claiming sole 
ownership and entered into a 20-year lease contract with a third 
party, an Italian shoe manufacturer.  In October 2001, Claimant 
filed a complaint with the European Court for Human Rights, alleging 
discrimination and violation of the right to private property.  In 
April 2002, the GOA People's Advocate (equivalent to a government 
ombudsman) decided in favor of Claimant and recommended that the 
1998 decision be executed.  In June 2003, the Tirana Court of 
Appeals issued another ruling in favor of Claimant.  The Supreme 
Court and its Joint College of Judges heard the case in March 2004 
and ruled in favor of the GOA, and remanded the case back to the 
District Court.  The case was then appealed to the Constitutional 
Court, which heard arguments in February 2005 and eventually came 
out with a four to four tie decision (meaning the Supreme Court's 
decision was not reversed).  On December 18, 2007, the European 
Human Rights Court (EHRC) in Strasbourg ruled against the GOA, 
upholding in part Claimant's request.  The EHRC awarded Claimant 
330,000 euros for pecuniary and non-pecuniary damages and 5,700 
euros for legal costs and expenses.  The decision is not yet final 
as the GOA has appealed the decision to the EHRC' Grand Chamber. The 
Italian company continues to operate on the premises and has made 
physical improvements, including the addition of two new buildings. 
The Italian company currently employs over 1,200 workers and has 
become a major exporter of shoes.  The Embassy is striving to foster 
an equitable solution for Claimant, who remains committed to opening 
a plastics factory in Albania. 
 
Post has not heard from the Claimant in over one year.  Since the 
claim was filed before 1995, and since the case has been heard 
before the EHRC, pursuant to reftel special instructions in 
paragraph 19, Post considers this case extinguished. 
 
¶4. (SBU) 
a. Claimant C 
b. 2005 
c. Claimant is a builder/developer who had three projects/properties 
destroyed by Albania's Construction Police in the fall of 2005.  For 
the last ten years, Albanian law has prohibited the construction of 
private businesses on the grounds of public education facilities. 
During the Socialist Party-led rule from 1997 to 2005, however, a 
number of businessmen contracted directly with the GOA to build on 
such properties, in exchange for rehabilitating the educational 
facility or for providing rental income to the facility.  The 
government issued construction permits, and bars, hotels, gas 
stations, offices, etc. were built by private companies. 
 
In October 2005, the new Democratic Party-led government declared 
that such buildings were in contravention of the law and would be 
destroyed immediately, with no compensation to the owners.  One of 
the first properties destroyed was a popular bar owned by Claimant. 
Despite only a few hours of legal notice, Claimant obtained a court 
order enjoining the destruction of the bar until his rights could be 
determined in court. 
 
Claimant showed the certified Order to the Chief of Construction 
Police at the premises of the bar minutes before the destruction was 
to begin.  The Chief said he had to carry out his orders to destroy 
the building.  Within 20 minutes, the building was destroyed. 
Claimant filed a suit in Tirana District Court seeking roughly USD 
1,000,000.  In 2006, the court ruled in his favor and fined the 
Construction Police USD 400,000.  Claimant, not fully satisfied with 
the verdict, has appealed to the Court of Appeals to achieve the 
financial compensation he originally sought.  The Court of Appeals 
ruled in Claimant's favor and gave him an additional $140,000. 
Claimant, still not fully satisfied with verdict, has appealed to 
the Supreme Court.  The Supreme Court's verdict is still pending. 
 
Although the Minister of Transportation, Telecommunications and 
Public Works assured Embassy representatives that:  1) the 
Construction Police had to respect court orders and the legal 
process had to be played out; and 2) the Construction Police should 
give adequate formal notice of its plans, the police issued notice 
on a Friday evening and destruction occurred the following Monday 
morning before a court order could be obtained.  Compounding this 
situation, one of the buildings, an eight-story, 2,000,000 euro 
investment, was not even located on public property, but was 
attached to a two-story annex located on public property, a fact 
Embassy had brought to the GOA's attention earlier.  In the case of 
the eight-story building, the Claimant has brought two different 
charges, one against the Construction Police in order to block 
further demolition of the building, and the second against the 
National Council for the Regulation of the Territory (NCRT) to 
confirm the construction permit which was previously revoked by the 
NCRT after the demolition of the annex.  Claimant has won both cases 
in Tirana District Court.  On October 18, 2007, the Court of Appeals 
ruled in favor of Claimant on the case against the Construction 
Police.  The hearing process is on-going at the Court of Appeals on 
the case against the NCRT.  Claimant has not made any attempt to ask 
for compensation because he hopes to be able to complete the 
project. 
 
Post has not heard from the Claimant for over one year.  The 
Claimant, a member of the opposition Socialist Party, will likely be 
elected to Parliament in June.  Since the case is still in the court 
system, Post considers this case extinguished until additional 
factors surface. 
 
¶5. (SBU) 
a. Claimant D 
b. 2005 
c. Claimant is a large, internationally-known engineering company. 
Claimant entered into a contract with the GOA to build a rail line 
connecting the port of Durres to Tirana and Tirana''s international 
airport.  The 28-mile rail link project was valued at USD 
90,000,000.  In September 2005 a new government came to power and, 
after having criticized the project during the preceding electoral 
campaign, subsequently terminated the project. 
 
Claimant is pursuing an arbitration claim against the GOA under the 
terms of the project agreement, which follows the New York 
Convention on Arbitral Awards.  The first arbitration hearing held 
in June 2007 in Rome established that the GOA is liable to the 
claimant for damages.  Since then, different hearings were held to 
determine the amount of damages owed to the Claimant and its Greek 
partner.  In April 2008, both sides presented their final arguments 
on the case and the GOA's legal representatives asked for an 
independent expert to evaluate the claimed lost profits of the 
Claimant.  The GOA's representatives have submitted a settlement 
proposal to the Claimant and are waiting for a response.  Claimant 
and its partner are suing for a total of USD 20,000,000 in lost 
profits, of which Claimant's share is approximately USD 13,000,000. 
 
 
In summer 2008, Claimant was awarded a 14 million euro judgment by 
the International Chamber of Commerce in Paris.  Despite numerous 
attempts to negotiate a settlement with the GOA, the GOA refused to 
pay.  In early 2009, Claimant filed suits in the U.S. and Europe to 
claim Albanian assets to satisfy the judgment.  In June 2009, a 
Belgian court awarded Claimant fees due Albania for providing air 
traffic control to aircraft transiting Albanian airspace.  The exact 
amount or terms of the award are not known at this time.  Post 
considers this claim extinguished. 
 
¶6. (SBU) List of Claimants 
 
Claimant A:  Drita Ivanaj, U.S. Citizen.  Claimant has not signed a 
Privacy Act Waiver. 
Claimant B:  Vlash Marini, U.S. Citizen.  Claimant has not signed a 
Privacy Act Waiver. 
Claimant C:  Fidel Ylli, U.S. Citizen.  Claimant has not signed a 
Privacy Act Waiver. 
Claimant D:  General Electric Transportation Systems, U.S. 
corporation.  Claimant has not signed a Privacy Act Waiver. 
 
WITHERS