Cyprus-Forum.com

[joe]

http://www.prnewswire.co.uk/cgi/news/release?id=187837

World Bank Establishes Tribunal for Cypriot Investor Expropriation Case Against Turkey

WASHINGTON, January 10 /PRNewswire/ --

The World Bank's investment arbitration center has appointed the three members of the tribunal that will decide the US$10 billion expropriation case brought by Cypriot investment firm Libananco Holdings Company Ltd. against the Republic of Turkey.

The tribunal will be chaired by Michael Hwang, a senior arbitration specialist from Singapore considered one of the world's leading experts in resolving complex commercial disputes. He will be joined by Sir Franklin Berman QC, a London barrister who served as the senior lawyer in the British Foreign and Commonwealth Office and is an expert on international treaties. The third member is Henri Alvarez, a Canadian lawyer and arbitration specialist who handles international investment disputes at the World Bank.

All three members of the tribunal have agreed to serve on what is likely to be the largest claim ever brought at the World Bank's International Centre for Settlement of Investment Disputes (ICSID). The case is based on Libananco's claim that Turkey's actions violated the Energy Charter Treaty, a multilateral energy-sector investment treaty that entered into force in 1998 and has been ratified by more than 40 countries, including Turkey and the Republic of Cyprus. The treaty protects foreign investors from governmental expropriation and requires all disputes to be resolved in binding arbitration at ICSID in Washington.

Libananco of Nicosia, Cyprus, holds a majority of outstanding shares in two of Turkey's largest privately-owned hydroelectric utilities, Cukurova Elektrik Anonim Sirketi (CEAS) and Kepez Elektrik Turk Anonim Sirketi (Kepez). Both companies had been listed on the Istanbul Stock Exchange and were highly profitable suppliers of electricity. In June 2003, the Government of Turkish Prime Minister Recep Tayyip Erdogan abruptly expelled the companies' management through police raids and then issued administrative orders cancelling their 60-year concessions and seizing their substantial assets. The electric utility assets are now administered by Prime Minister Erdogan's Government, which has refused to pay compensation to any shareholders for the expropriation of the assets of the utilities. Instead, the annual profits of both utilities are being paid directly into the Turkish Government Treasury. The accumulated income of both utilities since the expropriation already amounts to several billion US dollars.

The ICSID arbitration comes at an awkward moment for Turkey as it continues to strive for EU membership. A major stumbling block in the EU accession talks is Turkey's refusal to recognize the Republic of Cyprus, an EU and United Nations member. The most recent flashpoint in this dispute is Turkey's refusal, despite its commitment to the EU, to open its ports and airports to commercial traffic from the Republic of Cyprus. Recognition of all EU member states is a requirement for accession to the EU.

Aside from the lack of progress in the EU accession talks, the tribunal could rule that Turkey in fact recognized the sovereignty of Cyprus -- and the investment rights of Cypriot companies -- under international law when it ratified the Energy Charter Treaty in 2001, several years after it was ratified by Cyprus.

"More than three years after stealing the assets of these companies and then looting the profits for its own gain, Turkey will now answer for its unprecedented violation of international law," said Stuart H. Newberger, a partner at the international law firm of Crowell & Moring LLP and the Washington, D.C.-based lead counsel for Libananco. "We look forward to presenting our case to the tribunal and are confident this injustice will be rectified."

In Nicosia, Libananco's Cypriot counsel Achilleas Demetriades stated, "There is no question that international law protects the property rights of Cypriot investors in countries, such as Turkey, which have ratified the Energy Charter Treaty. It is unfortunate that Turkey deliberately chose to expropriate my client's investment in these utilities after expressly undertaking not to do so in the same treaty. Once again, we must look to international judicial bodies to bring Turkey to justice."

With the arbitration proceedings moving ahead, it is expected that the tribunal could issue its first rulings by this summer.

For more information, visit http://www.crowell.com/libanancoholdings.

[souroul]

wait... how/why did a GC company get to own such a big share of such big companies in Turkey... i dont get it.
anybody want to explain this article cause..?

so... a GC company had 60 percent of those companies, and then Turkey snatched it and peaced out? wtf?

is it an offshore company?

[Pyrpolizer]

This is a foreign Company my friend, nobody ever heard of it. Most propably an offshore company, I really don't know.

But look at this:

QUOTE:

Both companies had been listed on the Istanbul Stock Exchange and were highly profitable suppliers of electricity. In June 2003, the Government of Turkish Prime Minister Recep Tayyip Erdogan abruptly expelled the companies' management through police raids and then issued administrative orders cancelling their 60-year concessions and seizing their substantial assets. The electric utility assets are now administered by Prime Minister Erdogan's Government, which has refused to pay compensation to any shareholders for the expropriation of the assets of the utilities. Instead, the annual profits of both utilities are being paid directly into the Turkish Government Treasury. The accumulated income of both utilities since the expropriation already amounts to several billion US dollars.

UNQUOTE

The conclussion out of this is that TURKEY continuous to be BANDIT state both internally and externally. I wouldn't be surprised in case their EU road closes to see them confescating all the assets of European Companies who invested there.

What age do the think they are? At the age of Suleyman the Magnificent?

[souroul]

what ever happened with this?