Claim of Turkish company for €67 million against Turkmenistan is rejected

The country’s authorities noted that the lawsuit is based on the contracts which don’t relate to the company.

The suit of the Turkish company «Lotus Holding» for 67 million euros against Turkmenistan brought in 2017 was rejected by the Tribunal of International Centre for Settlement of Investment Dispute (ICSID) on April 6. The claim says that the country violated the agreements between parties in the energy sector. It was reported by the «Global Arbitration Review» magazine.

According to the management, the subsidiary Lotus Enerji allegedly completed all the works according to the concluded contracts. These are two power plants with a capacity of 254 MW. The plaintiff accused the Turkmen government of arrogated to itself a number of projects without having made the appropriate payment.

In addition, a claim was brought against the illegal termination of the agreement with the oil refining complex, which led to the bankruptcy of the Turkish company. The lawsuit was based on a violation of the clauses of the Energy Charter Treaty (ECT) and the Bilateral Investment Agreement (BIT) between Turkey and Turkmenistan. The suit mainly focuses on non-compliance with the provisions on non-discriminatory behavior, and the seizure of property of individual owners. According to company executives, fair and equitable treatment was also violated.

The Turkmen government, in turn, filed a motion to dismiss the claim in accordance with arbitration rule 41 (5) of the ICSID, which permits the accelerated rejection of claims that have no clear legal basis. State representatives underlined that all the pretenses are based on contracts that don’t relate to the company.

Having analyzed the situation and having conducted the relevant investigation, the arbitration court ruled in favor of the Turkmen government. According to the conclusion of the president of the tribunal Vaughan Lowe, the claim of Lotus Holding is legally unfounded. He noted that the company did not specifically indicate what it meant by filing the complaints.

The tribunal highlighted that the Turkish company is obliged to pay Turkmenistan 1 million dollars for legal costs incurred during the proceedings.

10 апр 2020, 10:32
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