Moscow Convention-based Awards against Kyrgyz Republic
According to publicly available information a total of three awards have been rendered against the Kyrgyz Republic under the Moscow Convention.
In Lee John Beck and Central Asian Development Corporation v Kyrgyz Republic the tribunal awarded USD 23 mln. It found that the respondent had expropriated the claimant’s investment by terminating the lease agreements with respect to various land plots in Bishkek (the capital of the Kyrgyz Republic).
In OKVV et al. v. Kyrgyz Republic the tribunal awarded c. USD 2.4 mln to the claimants. It found that the respondent had expropriated the claimants’ interests in the Avrora Green resort and residential complex.
Most recently in Stans Energy v. Kyrgyz Republic the tribunal apparently ruled in favour of the claimant though the award itself has not yet been finalised. In that case the claimant seeks more than USD 117 mln in compensation for the alleged expropriation of its interest in a rare earth minerals mining project.
In all three cases the claimants relied on the Moscow Convention as both the substantive basis for their claims and the basis for the tribunal’s jurisdiction. In particular they relied on Article 11 of the Convention, which provides that:
“disputes concerning implementation of investments within the framework of the present Convention are to be resolved by courts or arbitration courts of the state-parties, the Economic Court of the Commonwealth of Independent States and/or other international courts or international arbitration courts” (translation – the Convention’s only authentic text is in Russian).
In all three cases the tribunals agreed that this provision constituted the Kyrgyz Republic’s consent to submit any investment disputes to international arbitration of the investor’s choice.
The Kyrgyz Republic apparently disagrees with this finding and it implemented a two-tier strategy to counter it.
First, it applied to the Moscow Commercial Court to have the awards set aside (all arbitrations had been seated in Moscow). Two of these cases will be heard separately at the end of May with each one coming before a different judge. It has been reported that in all three cases the Kyrgyz Republic relies on the tribunal’s lack of jurisdiction (and in Stans Energy it applied to set aside the tribunal’s decision on jurisdiction).
Second, the Kyrgyz Republic requested an advisory opinion from the Economic Court of the Commonwealth of Independent States on the interpretation of Article 11 of the Moscow Convention and specifically on whether this provision on its own constitutes consent to jurisdiction of an international arbitral tribunal. On 7 April 2014 the Economic Court opened a case file, but no hearing has yet been scheduled. |
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