Claims by Russian cellular operator MTS against Turkmenistan, where the company was forced to cease operations in 2017, have been rejected, according to Squire Patton Boggs, which represented official Ashgabat in an international arbitration court.
The law firm achieved a significant victory for Turkmenistan, obtaining complete dismissal of all claims on the merits, valued at $2bn. Turkmenistan has been awarded more than $11mn in compensation for the legal and arbitration costs incurred during the proceedings before ICSID (The International Centre for Settlement of Investment Disputes).
"This Award is the culmination of a case that spanned almost 5 years, and a repeat of a nearly identical dispute between the parties that arose in 2010, when MTS’ prior contract was not renewed", the press release reports.
MTS, one of the largest Russian telecommunications companies, had been operating as a cellular services provider in Turkmenistan since 2005, under contracts and licenses issued by the government.
The dispute arose out of the expiration of MTS’ 2012 contract, which was not renewed when it expired in 2017.
The court ruled that the operating contract was a lawful commercial contract under Turkmen law; that it expired in accordance with its terms at the end of the 5-year period; and that MTS had no right or legitimate expectation of renewal.
MTS argued that Turkmenistan’s refusal to extend the contract constituted an expropriation of MTS’ operations in breach of the agreement between Russia and Turkmenistan.
The tribunal found that Turkmenistan had not engaged in any wrongful conduct with respect to MTS’ operations. Currently, only the national company TM CELL operates in the local cellular services market.
Credits: Eziz Boyarov
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