I. FACTUAL BACKGROUND

A. The Parties

1. Claimants

1. Claimants are Burimi SRL and Eagle Games SH.A, and are hereinafter referred to as “Burimi SRL,” “Eagle Games,” or “Claimants.”

2. Burimi SRL is a company incorporated under the laws of Italy. Its business objective is “intermediation and commercial representation.”1

3. Eagle Games SH.A is a company incorporated under the laws of Albania. Its objective is to organize games of chance.2

4. Claimants are represented in this arbitration by Ms. Patrizia Di Nunno, Attorney-at-law, Brescia, Italy.

2. Respondent

5. Respondent is the Republic of Albania and is hereinafter referred to as “Albania” or “Respondent.”

6. Respondent is represented by Mr. Hamid Gharavi and Ms. Sophie von Dewall, of Derains & Gharavi, Paris, France.

7. Claimants and Respondent are hereinafter collectively referred to as the “Parties.”

B. The Dispute

8. On December 1, 2000, the Albanian Government enacted Law No. 8701 on Gambling, Casinos, and Hippodromes (the “Gambling Law”).3 This law introduced a new regulatory framework for the gambling industry and was aimed at reducing illicit gambling and associated practices.4

9. On March 29, 2004, Eagle Games was founded by two Albanian nationals, Ms. Alma Leka and Mr. Artan Serjani.5 Each owned 50 percent of the shares in the company.6 Eagle Games’ objective was to organize games of chance, mainly through the sale of “scratch and win” instant lottery tickets.7 Mr. Fatjon Luniku, also an Albanian national, was appointed General Director of the company.