On June 7, 2024, after several years of arbitration proceedings, the international court operating under the International Chamber of Commerce (ICC) with headquarters in Paris has given the final decision on the dispute raised by “Bankers Petroleum against the Ministry of Energy and Industry of Albania (MIE) ) and Albpetrol.
The dispute, brought to arbitration by Bankers, related to cost recovery proceedings under the 2004 License Agreement and Hydrocarbons Agreement related to Bankers in connection with operations in the Patos Marinza oil field.
At the end of the trial, and because Bankers sought through arbitration to retain all sums generated from the production of the Patos Marinza field through the cost recovery procedure, Albania prevailed on many of the issues of interpretation of the Agreements before the Tribunal.
Specifically, the Court agreed with Albania’s interpretation of important aspects of the agreements, in particular that the categories of recoverable costs are specifically listed in the agreement, so that other costs such as payments made to Bankers’ Canadian operations or payments for settlements of understanding disputes with other oil supply companies cannot be recovered (contrary to Bankers’ claims).
The court also concluded that disputed costs that had been incurred, such as investments in community relations that had been exaggerated or payments for land rents, could not be claimed either. The tribunal agreed with Albania that important subcontracts should be awarded through rigorous tendering processes, increasing the transparency and efficiency of the project.
The Decision concludes that over 236 million dollars of the costs claimed by Bankers and contested by AKBN have been rejected and declared irrecoverable. The result of the dispute is that Bankers will have to return to Albania sums on account of the Patos Marinza oil field. This will increase the historical profits of the oil field and lead to profit tax payments to the state.
/abcnews.al
