The Justice Ministry of Uzbekistan commented on the decision of the Arbitration Tribunal under the International Center for the Settlement of Investment Disputes (ICSID) in a lawsuit by Güneş Tekstil Konfeksiyon Sanayi ve Ticaret Limited Şirketi against Uzbekistan.
Güneş Tekstil and its partners in Tashkent owned a network of shopping centers operating under the brand Turkuaz.
So, according to the Ministry of Justice, 90% of the claims of Turkish investors against Uzbekistan for expropriating the trading network were rejected. The decision of the arbitral tribunal was issued on October 4.
“Despite the fact that the Justice Ministry of Uzbekistan remains committed to the requirement to maintain confidentiality of the details of this decision, after carefully examining the decision of the arbitral tribunal, the Ministry considered it necessary to draw public attention to certain points that are distorted in the press with reference to Turkish citizen V. Güneş,” the Ministry of Justice noted.
Firstly, the tribunal upheld the government’s position on many points of the claim and rejected the overwhelming majority of the plaintiffs’ overstated claims with the exception of the minimum amount.
Secondly, the Justice Ministry points out that, the tribunal, recognizing the absence of its jurisdiction, rejected the lawsuit of three of the six original plaintiffs, who did not fall under the concept of “investor” in the country.
Thirdly, the claimants’ statements for non-pecuniary damage in the amount of $180 million, as well as the overvalued estimates of pecuniary damage presented by the plaintiffs — more than $66 million — were completely rejected.
Fourthly, the tribunal refused to examine all the plaintiffs’ claims regarding allegations of so-called ill-treatment; therefore, all claims of abuse voiced by Vahit Güneş remain unilateral allegations.
Fifthly, the tribunal recognized the absence of a legal basis for filing a claim with the ICSID against Uzbekistan in accordance with the law of the Republic of Uzbekistan on foreign investments.
Ultimately, the tribunal awarded only 10% of the original amount of the claimed losses, which amounts to $26 million (excluding interest and expenses). This amount is based solely on calculations of the Tashkent court on criminal proceedings in the main criminal case against Vahit Güneş and other applicants in 2011. As the Justice Ministry notes, the tribunal defined the assessment provided by the plaintiffs as “speculative and unreliable”.
“At the same time, the tribunal did not draw any conclusions regarding other claims of the plaintiffs in relation to alleged violations by the Uzbek side of the bilateral investment agreement. The observed informational background around the interpretation of the arbitral award may indicate an attempt to distort the facts related to the previous activities of the claimants in Uzbekistan. As it became known, the plaintiffs currently do not see any obstacles for doing business in the republic,” the Justice Ministry concluded.
