Turkmenistan wins $500 million claim by Turkish company Sehil

The ICSID Tribunal completely rejected all claims against the government of the Central Asian country.

The Turkmen authorities have won a claim brought by the Turkish construction company Sehil, which has filed a lawsuit for about 500 million dollars in the International Center for the Settlement of Investment Disputes (ICSID). The decision to reject all claims was taken by the tribunal of the institution. It was reported by the press office of the law firm Squire Patton Boggs on May 11.

The company represented the government of Turkmenistan in court. The team included lawyers from New York. One of them, Ali Gursel, said that the case was complex, and the arbitration was long and hard-fought.

The claim was filed by representatives of the Sehil Company and the majority shareholder of the holding, Mukhammet Chap. The case was registered 9 years ago, in 2012.

The dispute concerned 32 construction projects on the territory of Turkmenistan. It includes water and waste treatment plants, an iron and steel plant, schools and government buildings.

The plaintiffs stated that the Turkmen side did not fully fulfill its obligations and delayed the construction process. In addition, as noted by businessmen, the company was engaged in work outside of the scope of the contracts, and they haven’t been paid for that yet. According to them, they were subjected to unfair fines for delayed work, inspections by the tax authorities. The management of Sehil stressed that the contracts were terminated in the framework of some decisions of the Turkmen courts.

The Turkmen side argued that the termination of contracts and fines were justified, since the Turkish construction company did not fulfill part of the contractual obligations. The emphasis was placed on the non-completion of projects and the defective work.

The ICSID Tribunal ruled that the Turkmen courts, tax authorities and prosecutors acted exclusively within the framework of the country’s legislation and in accordance with international law. It rejected all claims. The decision was announced on May 4th.

In addition, the court stressed that most of the company’s statements should be transferred to the judicial authorities of Turkmenistan. ICSID also recognized the claims of the plaintiff company regarding threats against it from Turkmen officials as unfounded and inconsistent with reality. Turkmenistan is not the reason for the loss of the investments by the shareholders, as well as the bankruptcy of the holding, ruled the court.

The costs of the nine-year proceedings, according to the decision of the arbitration panel, will be borne by the plaintiff.

It must be underlined that the lawyers of Squire Patton Boggs won a court case against Turkmenistan for the second time in the last year. In April 2020, the International Centre for Settlement of Investment Disputes dismissed 67 million euros claims against the Central Asian state brought by Lotus Holding.

13 05 2021, 07:30
Photo source: icsid.worldbank.org

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