Iliria S.R.L. v Albania: Landmark Decision Affirms Need for Timely Justice

In a landmark decision rendered by the European Court of Human Rights (ECtHR), the recent case of Iliria S.R.L. v Albania underscores the imperative need for timely justice in matters of international arbitration in the context of a complex and extensive legal battle over the recognition of an arbitral award against Albania in the Albanian domestic courts.

In September 1993, an arbitral tribunal issued an award in favour of Iliria S.R.L., an Italian company undergoing liquidation, against the Albanian government, handing down an order for a substantial payment from the Albanian government to Iliria (the Arbitral Award). This marked the starting point of a protracted and intricate legal journey to enforce the Arbitral Award within the Albanian legal framework.

Following protracted delays in the Albanian legal system, Iliria took the case to the ECtHR. Central to the case was the alleged violation of Article 6(1) of the Convention for the Protection of Human Rights and Fundamental Freedoms (the Convention), which guarantees the right to a fair trial within a reasonable time.

THE ECtHR DECISION

The ECtHR reiterated that the reasonableness of the length of proceedings must be assessed with reference to:

• the circumstances of the case;
• the conduct of the applicants;
• the complexity of the case; and
• the relevant authorities and what was at stake for the applicants in the dispute.

The ECtHR found that, for the purpose of a fair trial within a reasonable time, the clock started ticking on 31 March 1998 when Iliria had first sought recognition of the Arbitral Award in Albania and ended on 22 December 2015, when the Albanian Constitutional Court dismissed Iliria’s claim—that is, a period of 17 years and nine months.

The Albanian government had sought to argue that Iliria was to blame for certain of the delays. However, rejecting that argument, the ECtHR pointed to an initial delay of five years and eight months between the first 1998 decision recognising the enforceability of the Arbitral Award and a 2003 Tirana Court of Appeal decision allowing the Council of Ministers’ request to appeal out of time. Further delays occurred as the case was remitted twice to the Albanian Supreme Court for re‑examination and once to the Albanian Constitutional Court.

Additionally, the ECtHR dismissed the Albanian government’s contention that delays were attributable to the complexity of the case, emphasising that, even if the case were complex, it could not justify legal proceedings lasting for 17 years and nine months.

Ultimately, the ECtHR found that the delays in the proceedings could not be attributed to the applicant company’s conduct or the complexity of the case, leading to a violation of Article 6 § 1 of the Convention on account of the length of proceedings. Iliria was not seeking pecuniary damages but rather €100,000 in non-pecuniary damages in respect of the delays and €21,000 in respect of the expenses it had incurred as a result of the proceedings in Albania. The Albanian government contested the claim as unreasonable. Ruling on an equitable basis and the documents submitted, the ECtHR awarded €4,800 in respect of non‑pecuniary damages and €6,000 in respect of expenses.

GOING FORWARD

The ECtHR decision in Iliria S.R.L. v Albania stresses the need for expeditious legal proceedings, particularly in cases involving international arbitration. The decision serves as a reminder that justice delayed is tantamount to justice denied, and calls for a diligent and timely approach to the resolution of legal disputes.

Enforcement is invariably an important consideration from the outset of legal proceedings, and indeed from the time of the original underlying transaction. This is particularly the case where the counterparty is a state or state-related entity.

Whilst the case of Iliria shows that the Convention and the ECtHR can be useful tools in respect of the enforcement of awards, it is also important to consider their limitations—in particular, that the ECtHR process can be slow and the level of compensation available is more restricted. Alternative routes, such as through claims under international investment treaties, should also be considered.