The main event of last week was the termination of the contract with the Czech company Liglass Trading. The company did not pay the promised $ 37 million. The Cabinet of Ministers in response has decided to discontinue all relations with the Czechs. However, investors themselves do not intend to simply abandon the deal with
Return $ 1 million
Liglass Trading issued an official statement almost immediately after the information about termination of the contract. Several claims to the authorities of
So, it turned out that Liglass Trading wants to return the guarantee fee for participating in the tender for the construction of small hydropower plants in the amount of $ 1,147,720. While Kyrgyz authorities asked the public and journalists to wait until September and not hasten with accusations, Liglass Trading wrote letters to our officials.
In total, Liglass Trading sent three written notices — on August 11, August 17 and September 14 on return of the guarantee fee.
The Czech company is sure that it has fulfilled all the conditions for the return of the fee. The Kyrgyz side had to return the money till August 11, 2017.
«The Kyrgyz side probably got under the pressure of the media and, without further explanation of its actions, has not yet returned the guarantee fee. The proof of the unreliability of the Kyrgyz side was a blatant violation of government decree No. 175 dated March 24,
Liglass Trading believes that the non-return of money is a significant warning signal not only for the company itself, but for all potential investors.
«Even the guarantees of the highest state bodies are not a sufficient guarantee of observing of unconditional commitments by
We were not aware of quarrel with RusHydro
The same statement contains one more revelation of the Czech company. The Kyrgyz side allegedly hid from Liglass Trading a fundamental obstacle in the implementation of the project. Because of it, the previous investor, RusHydro, puts the project at risk because of arbitration with
It turned out suddenly: Liglass Trading did not know that the envisaged transfer of 50 percent of the shares of Upper Naryn HPP company was not coordinated with RusHydro, and this is done only on the ground of termination of the contract with the company against its will.
«No sane entrepreneurial entity can ignore such a serious risk that could lead to the loss of all investments of Liglass Trading. The government of
Liglass Trading notes that in these circumstances it had to do everything to preserve its investments and to act with extreme caution. As a result, it was decided not to terminate the contract, but simply to suspend the payment of $ 37 million.
Who will sue whom?
The government of
The reaction was immediate. Liglass Trading threatened
In fact, the scandal with Liglass Trading can last for at least six months — negotiations with mutual claims will certainly continue. And only then one can talk about legal proceedings.
The State Committee for Industry, Energy and Subsoil Use of the
Officials threatened that Kyrgyzstan would take all the measures provided by the investment agreement and Kyrgyz legislation regarding the violation of the investment agreement by Liglass Trading, including, in addition to the termination of this document, the recovery of unfulfilled obligations from the investor.
International arbitration again
There was a short pause in the dispute between the parties. Officials of the
Additional information on the appeal to international arbitration appeared on its official website.
The statement says that the statement of the Government of the
At the same time, Liglass Trading not for the first time reminds that even the resolution of litigation in accordance with the legislation of
Under the Kyrgyz law on investment, any investment dispute is resolved in the courts of Kyrgyzstan, unless one of the parties requests consideration by appealing to international arbitration.
The disgruntled investor can apply to the
The second option is to file a claim to arbitration or an international temporary arbitration tribunal (commercial court) established in accordance with the arbitration rules of the UN Commission on International Trade Law.
Recall, the former investor of the project — Russian company RusHydro — is also preparing to file a lawsuit to international arbitration against