Together with a team from Schultze & Braun, Gleiss Lutz has successfully conducted ICSID arbitration proceedings for Dr. Dirk Herzig (Schultze & Braun), the insolvency administrator of Unionmatex Industrieanlagen GmbH (“Unionmatex”). In November, the ICSID arbitral tribunal ordered Turkmenistan to pay a seven-figure amount to Unionmatex.
In 2018, Dr. Herzig – acting on behalf of Unionmatex – sued Turkmenistan for damages before an arbitral tribunal under the arbitration rules of the International Centre for the Settlement of Investment Disputes (ICSID), claiming that it had breached the bilateral investment treaty (“BIT”) between Germany and Turkmenistan.
Unionmatex had concluded two contracts in Turkmenistan for the construction of five cutting-edge mill complexes, two bakeries and two shops in five regions of Turkmenistan (“mill project”). However, the mill project was delayed and thwarted by arbitrary and obstructive measures taken by Turkmenistan, in particular by the state grain products association, GALLA. Unionmatex was banished from the country in 2012 and was forced to leave equipment, machines and documents behind. It filed for insolvency in 2014.
The ICSID arbitral tribunal found that Turkmenistan had, through its ministries and other state institutions, violated the prohibition of arbitrary and discriminatory treatment in Article 2(2) of the BIT, thereby contributing to delays in Unionmatex’s fulfilment of the contracts. The arbitral tribunal awarded Dr. Herzig damages. In addition, it dismissed all of Turkmenistan’s counterclaims.
The following Gleiss Lutz team acted as Dr. Herzig’s lead advisors in the ICSID arbitration proceedings: Prof. Stephan Wilske (partner), Dr. Claudia Krapfl (counsel), Dr. Björn P. Ebert, Todd J. Fox and Dr. Friedrich Weyland (all Dispute Resolution/Arbitration, all Stuttgart).
Dr. H. Philipp Esser and Manuela Becker-Schnurr of Schultze & Braun also advised on the proceedings.
Gleiss Lutz regularly advises German and foreign investors on matters involving international investment protection law, helping them to structure foreign investments or protect these against unlawful measures by host states, and represents them in investment arbitration proceedings as well as subsequent annulment and enforcement proceedings.
Forward
