Squire Patton Boggs achieved a complete victory for its long-standing client, the Republic of Kosovo, in an arbitration under the rules of the International Chamber of Commerce (ICC). The dispute, AS IuteCredit Europe v Republic of Kosovo, concerned the revocation of a microfinance license issued to the claimant’s local Kosovo subsidiary and was governed by Kosovo’s 2014 Law on Foreign Investment. Squire Patton Boggs has now secured three consecutive victories for the Republic of Kosovo in investment arbitrations, saving Kosovo taxpayers nearly half a billion euros in claims.
The Squire Patton Boggs team was led by partners Luka Misetic (New York) and Rostislav Pekar (Prague), senior associate Matej Pustay (Prague) and associates Fellenza Limani, Mailis Meier-Lutterodt, Tamara Koresova and Helena Cech (all Prague).
The case involved several issues concerning the legality of the investments, both at the time of the making of the investment and subsequently. The tribunal eventually concluded that the claimant’s conduct was not sufficient to preclude the tribunal’s jurisdiction, but found in Kosovo’s favor on all claims on the merits. In doing so, the tribunal accepted Kosovo’s argument that the revocation of the microfinance license represented a bona fide exercise of Kosovo’s regulatory powers, which was neither arbitrary nor discriminatory and provided the claimant with due process. Based on this conclusion, the tribunal rejected all claims brought by the claimant, including its claims for expropriation, breach of the FET standard, breach of the FPS standard and breach of the umbrella clause.
“We are pleased to have secured a third consecutive victory in investment arbitration for the people of Kosovo,” commented Mr. Misetic. “The arbitral award confirms that the Central Bank of Kosovo acted in line with domestic and international standards in revoking the claimant’s license in order to protect the interests of Kosovo’s consumers and general public.”
The tribunal also awarded Kosovo all the costs of the arbitration and 20% of Kosovo’s own costs.
Squire Patton Boggs has represented the Republic of Kosovo in five international arbitrations. This is the third to have reached a final award. The first, ACP Axos v Republic of Kosovo, resulted in a complete victory for Kosovo in defeating a €380 million claim. The second, Bedri Selmani v Republic of Kosovo, was issued in August 2022 and also resulted in a complete victory for Kosovo in a case where the claimant had sought in excess of €45 million before interest.