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Turkish company claims $ 25 mln from Transport Ministry for breach of contract

Contractor is seeking enforcement by Kyrgyzstan of an arbitral decision of $ 25 million in the United States. The Russian Legal Information Agency (RAPSI) reported.

According to it, the District Court of Columbia partially granted the claim of the Turkish company Entes Industrial Plants, Construction and Erection Contracting Co. Inc., seeking confession and enforcement in the U.S. of an $ 25 million arbitral decision in a dispute with the Ministry of Transport and Communications of Kyrgyzstan about breach of contractual obligations.

The court will consider the issue of naming the republic as a defendant after the parties will submit additional arguments within 30 calendar days.

 In 1999, Entes and the Ministry of Transport and Communications of Kyrgyzstan entered into an agreement. The Turkish company has undertaken to restore about 620 kilometers of Bishkek — Osh road. A period of slightly less than three years was determined to complete the work. However, due to unforeseen circumstances, the deadline for the project was postponed to October 2005.

«At the same time, the additional costs of fulfilling contractual obligations, according to the applicant, increased by approximately $ 23 million. The Kyrgyz authorities agreed to fulfill only a part of the stated requirements. Entes initiated an arbitration in Bishkek in January 2009, indicating the Ministry of Transport and Communications of the republic as a defendant. Six years later, in September 2015, the claim of the Turkish company was granted, and the defendant was ordered to pay about $ 16.6 million,» the statement says.

Seeking confession and enforcement of the arbitral decision, Entes initially appealed to the Russian and Canadian courts.

 As a result, the Superior Court of Ontario granted its claims in November 2016, however, on September 26, 2018, the Turkish company appealed to the Federal District Court of Columbia, demanding almost $ 25 million from the Ministry of Transport and Communications and Kyrgyzstan itself as a foreign sovereign state.

«Arguing the choice of country for filing the application, Entes noted that defendants might own property in the United States that could not be considered in other jurisdictions. The Kyrgyz authorities filed a counterclaim to the U.S. court. According to the case file, they insisted that the Federal Court of Columbia was not the best place to consider the dispute. Moreover, if the American jurisdiction recognizes the right to initiate legal proceedings on enforcement of the arbitral decision, only the Ministry of Transport and Communications should act as a defendant, and not Kyrgyzstan, since the republic has never been a party to this arbitration dispute before,» RAPSI says.