Monday, 22, April, 2024

An ICSID tribunal has ordered Uzbekistan to pay US$40 million to a group of Turkish investors in a shopping mall as a result of an expropriation while rejecting a larger claim for moral damages relating to physical abuse allegedly suffered at the hands of state authorities.

In April 2012, Vahid Gunes, a 50-year-old Turkish businessman, and his partners, who founded the Turkuaz shopping center in Tashkent, filed a lawsuit to ICSID against the Uzbek authorities in April 2012 to demand the return of his expropriated property.

The tribunal chaired by Belgian arbitrator Hans van Houtte issued the final award on 4 October in an arbitration launched by Turkish company Gunes Tekstil and its owners, who are investors in one of Tashkent’s largest shopping centres.

GAR understands the tribunal partially upheld its jurisdiction under the Turkey-Uzbekistan bilateral investment treaty but not under the Uzbek foreign investment law.

It awarded three of the claimants damages for the expropriation of their investments, including but not limited to the Turkuaz Shopping Centre, though the amount awarded was significantly less than what was claimed. A US$180 million claim for moral damages was dismissed.

The tribunal also awarded the investors part of their costs and legal fees, bringing the state’s total liability under the award to around US$40 million.

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