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King & Wood Mallesons appointed by Kyrgyz Government to handle all investment arbitration work

King & Wood Mallesons has been appointed by the Government of the Kyrgyz Republic, following a public procurement tender, to handle its current and future investment arbitration portfolio.

King & Wood Mallesons has been appointed by the Government of the Kyrgyz Republic, following a public procurement tender, to handle its current and future investment arbitration portfolio.

The firm has been instructed to begin work immediately on all pending investment arbitration claims asserted against the Government, which include:

  • Defence of a US $450 million claim against the Government by Mikhail Nadel, former chairman and 70% shareholder of once Kyrgyz Republic’s largest bank, AsiaUniversalBank.  He seeks compensation for the nationalisation of AsiaUniversalBank following the 2010 popular uprising and change of government in the country.  The UNCITRAL panel seated in London comprises V.V. Veeder QC (President), Brigitte Stern and Professor Arthur Rovine.  Italian firm, Astolfo Di Amato e Associati, is acting for the claimant;
  • Defence of a US $120 million BIT claim against by BTA Bank, the second largest bank in Kazakhstan which alleges that management of a competing bank, AsiaUniversalBank, conspired with Kyrgyz government officials in a corporate raid on BTA Bank's subsidiary bank in Kyrgyzstan.  The UNCITRAL panel with the seat in the Hague comprises Sir Daniel Bethlehem QC (President), Judge Bruno Simma and Judge Stephen M. Schwebel.  White & Case is acting for the claimant;
  • Challenge, in the Russian courts, of a US $120 million arbitral award made by the Moscow Chamber of Commerce Arbitration in favour of the Canadian miner, Stans Energy in respect of the alleged expropriation by the Kyrgyz Government of Stans’ rare earth project in the country as well as resisting enforcement of the award in Ontario; 
  • Resisting enforcement in Ontario and New York of a US $11 million ICSID Additional Facility award made in favour of a Turkish property developer, Sistem Mühendislik Insaat Sanayi Ve Ticaret, A.Ş., in relation to alleged expropriation of a hotel development in the Kyrgyz Republic through a series of local court decisions;
  • Challenging in the French courts a US $16 million UNCITRAL arbitral award made against the Kyrgyz Republic and in favour of Latvian businessman Valeri Belokon, formerly the majority owner of Manas Bank, who claimed compensation for nationalization of the bank in 2010, as well as resisting enforcement of the award in Ontario.

This appointment follows King & Wood Mallesons securing a landmark victory in September 2014 for the Government in a regional investment treaty interpretation case at the CIS Economic Court, where the Court recognised that a loosely drafted dispute resolution provision of the Moscow Convention for Protection of Investors’ Rights does not entitle investors to commence arbitration proceedings against States Parties to the Convention in any arbitration of their choice. 

This judgment was recognised by Global Arbitration Review as being among the ten most important decisions of 2014.  Lead counsel in the case for the Kyrgyz Republic was King & Wood Mallesons' Arbitration partner Andrei Yakovlev, who will also lead the current portfolio of work.

King & Wood Mallesons will work alongside Kyrgyz firm Satarov Askarov & Partners, who have acted jointly with King & Wood Mallesons on prior cases.