Challenges And Prospects Of The Albanian Domestic Arbitration

• Published date: 15 September 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Kalo & Associates
• Author: Mr Oltjon Dano

Arbitration is largely considered as an extremely effective alternative dispute resolution method which is nowadays successfully spread and used worldwide. It is believed that commercial arbitration has existed since the rise of commerce, and it came as a necessity for the settlement of the disputes privately by an impartial authority.

In Albania, after the World War II and installation of the communist regime, the only trace of arbitration we find is the vertical controlled state entity called State Arbitrage, whose sole purpose of functioning was to settle potential disputes between state entities or enterprises.

After the fall of communism, there was no specific law on arbitration but the rules governing the domestic arbitration were incorporated in Title V of the Civil Procedures Code, enacted in 1996. This chapter was based on the UNCITRAL Model Law in International Commercial Arbitration (1985) aiming to adapt and modernize the laws on arbitral procedure to consider the particular features and needs of international commercial arbitration.

Unfortunately, despite of the ongoing Albanian legislator's endeavors to implement and orient the settlement of disputes towards arbitration to avoid the time consuming, expensive, rigid judicial system and its case load, we have seen during the years that very few disputes are settled by means of domestic arbitration

To increase local business awareness and their trust to use arbitration instead of litigation, as an alternative, cost effective, expeditious means of resolving disputes, the Albanian Government decided to undertake a reform on the arbitration legal framework by adopting a specific arbitration law to align it with the principles and rules of international arbitration sources. To this end, back in 2013 during the amendments of the Civil Procedures Code the applicable provisions on domestic arbitration were repealed, provided that such repeal would take effect with enactment of a new law on arbitration.

In late 2013, the Civil Procedure Code underwent another revision and the previous stipulation that arbitration provisions would be repealed only with the entrance into force of the new law on arbitration, were not included. This legislative lapsus or oversight created unnecessary gap and it became a source of strong debates between practitioners whether arbitration was...