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back in 2013 during the amendments of the Civil Procedures Code the applicable provisions on domestic arbitration were repealed, provided that such repeal would take effect with enactment of a new law on arbitration.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the Civil Procedure Code underwent another revision and the previous stipulation that arbitration provisions would be repealed only with the entrance into force of the new law on arbitration, were not included.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 provided for in law or not at all.

Notwithstanding the above, more than 8 years have passed from the abrogation of these legal provisions and the new law on arbitration is not yet adopted. Currently there is a revised draft of the arbitration law which is filed by the Ministry of Justice in the Albanian Parliament pending for adoption, covering both domestic and international arbitration inspired by UNCITRAL Model Law. Many Albanian practitioners still refer to Civil Procedures Code arbitration rules as being fully applicable and even the Albanian courts are recognizing and enforcing arbitral domestic awards rendered under these abrogated rules.

In light of the above and the ongoing vetting process of the Albanian judicial system which has significantly slowed down the activity of the courts, the lawmakers should take advantage of these positive circumstances to promote the use of arbitration. The latter should be considered as one of the top priorities and consequently the adoption of the new arbitration law has become imperative.

Properly organized domestic arbitration is deemed to be one of the best alternative dispute resolution methods at least for the small and medium civil/commercial claims, the settlement of which in the international arbitration forums would be very expensive.

On the other hand, the mere adoption of a new law is not enough to increase the trust and to boost the use of domestic arbitration. This should be followed also by a thorough implementation process, establishment of reliable domestic arbitration forums which would ensure appointment of impartial, reliable professionals and high integrity arbitrators. All the involved actors, including the Ministry of Justice and the law practitioners should contribute to the boost of the domestic arbitration by encouraging the parties to pursue this alternative dispute resolution method which ensures flexibility, time and costs efficiency, confidentiality of the arbitration proceedings and enforcement of final award.

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