ASHGABAT (TCA) — The International Centre for Settlement of Investment Disputes (ICSID) has dismissed the claim of private Turkish company Içkale Inşaat Limited against Turkmenistan for the amount of USD 537 million and EUR 26.7 million.
The arbitration dispute was submitted by the Turkish company (Claimant) to the ICSID on the basis of the Agreement between Turkey and Turkmenistan concerning the Reciprocal Promotion and Protection of Investments (BIT), the ICSID said last week. The dispute arises out of a series of thirteen construction contracts concluded by the Claimant with various Turkmen State organs and State entities during the period from March 2007 to July 2008, and the alleged governmental interference with the performance of the contracts, in breach of the BIT.
The Turkish company based its claims on various measures taken by Turkmen State organs which increased without compensation the company’s scope of the works; abolished the State Fund for the Development of the Oil and Gas Industry and Mineral Resources which was supposed to finance the works, resulting in substantial delays in progress payments made under the Contracts; changed financial terms of the Contracts; blocked bank accounts for non-payment of value-added tax; imposed unfair penalties; terminated the still ongoing Contracts without valid justification; initiated judicial proceedings without notice and participation, resulting in fines and confiscation of machinery and equipment; refused to pay retention amounts; discriminated against the Claimant in favor of Polimeks, another Turkish contractor which, like the Claimant, had been awarded a contract for half of one of the projects.
According to the Claimant, it made several investments in Turkmenistan, including establishing a branch, bringing valuable know-how, machinery and equipment to the construction projects, and executing the construction projects.
The Turkish company claimed a total of over USD 537 million and EUR 26.7 million in compensation for the loss and damage it allegedly sustained as a result of the Respondent’s conduct.
The Turkmen side denied that the Turkish company’s claims had any merit, and said that the arbitration was merely an attempt by the Claimant to blame Turkmenistan for its own failure to perform under the Contracts.
