Fondel files request for arbitration against Azerbaijani Government

Fondel, major Dutch aluminum producer, claims damages in the order of USD 300 million from Azerbaijan on the basis of the government of Azerbaijan's unlawful termination of a 25-year agreement providing Fondel with the right to manage and retain all profits of Azerbaijan Aluminum JSC. With significant capital investment and effort Fondel managed to transform Azerbaijan Aluminum's dilapidated facilities in Ganja and Sumgait into modern aluminum plants.

As a result Azerbaijan Aluminum emerged as Azerbaijan's single largest exporter outside the oil industry and as one of Azerbaijan's largest employers.

In the run-up and following the parliamentary elections in November 2005, the State of Azerbaijan took numerous hostile actions against many international and national companies operating in Azerbaijan, including Fondel.

In late October 2005 the government took control of Azerbaijan Aluminum, in breach of the management agreement. Finally, in February 2006 the government unlawfully terminated the management agreement with Fondel.

Azerbaijan State Committee for Management of the Public Properties told APA that it will also file a counter-appeal for arbitration against Fondel.

Committee spokesman Gulu Khalilov said that Fondel didn't fulfill the commitments as per the management agreement and the agreement was terminated because the required investment had not been made and other terms had not been honored.

"We want to resolve the dispute within law," he underscored.