Britain and Albania agreed on October 29, 1996, that Tirana would pay London $2 million in compensation for the Corfu Channel incident, and that Britain would give Albania $18 million from the value of the seized gold.
The Corfu Incident refers to three separate events that occurred in 1946, where Great Britain violated the sovereignty of Albania through a premeditated military operation with obvious threatening characteristics, entering Albania's internal and territorial sea.
These three incidents are considered an early manifestation of the Cold War.
Albanian version
On May 15, 1946, two warships sailing without a flag or other identifying marks entered Albanian territorial waters near Saranda. The coastal artillery battery signaled the warships to change course. After the ships continued on the same course, the battery opened warning fire. The warships hoisted the British flag and withdrew from Albanian territorial waters.
On October 22, 1946, four warships (1 cruiser and 3 destroyers) coming from the Port of Corfu, crossed the channel and entered our territorial waters, approaching between Cape Vares and Cape Cassiopeia. Near Cape Vares, two destroyers hit mines left over from World War II, causing structural and human damage.
On May 15, 1946, a small fishing boat with armed men came towards us and demanded that we leave their waters, without offering us any assistance, and then they left.
English version
On October 22, 1946, near Cape Vares, two of our destroyers hit mines laid by the Albanians. Our two destroyers hit mines, were damaged and sank, and several of our sailors lost their lives. (From the log of the English flagship, presented at the Hague trial).
Although the court acknowledged that on November 12, 1946 and November 13, 1946, the entry of British warships into Albanian waters, where the incident occurred, was a violation of Albanian sovereignty, the final decision blamed Albania for the incident, and issued a decision according to which Albania had to pay $844,000 to the United Kingdom.
The Albanian government refused to recognize the decision of the International Court of Justice in The Hague. The British government demanded the freezing of gold found in Germany after the end of World War II and that it be distributed proportionally to the countries whose national bank treasuries Germany had robbed.
