International arbitration rejects claims of foreign investors against Azerbaijan

Azpetrol İnternational Holdings B.V., Azpetrol Oil Services Group B.V. and Azpetrol Group B.V. had applied to the international court to solve investment disputes in July 2006.

But Fondel Metal Participations B.V. has applied against violation of requirements of the agreement on energy charter and obligations of the agreement on management of 'Azeraluminum' JSC in November 2006.

Expropriation of investors' property was also another item of the suit.  

"Plaintiff has failed to explain its requirements during three years of arbitrage processes and to achieve consideration of the case as a result of correct advocacy of Azerbaijani side," the ministry said.

As a result, lawyers of Fondel company proposed to solve the issue peacefully. The peace agreement was signed between the Azerbaijani government and the company without paying any contribution.

The international arbitrage came to a conclusion that there is no legal dispute between the sides and decided to close the case.

Azerbaijan could preserve positive image worldwide by fulfilling all obligations on the international agreements, protection of investors' rights. Groundlessness of certain circles' suits willing to defile Azerbaijan's image was proved as a result of the international court processes, the ministry said.

Fondel concluded the agreement with the Azerbaijani government in 2001 to acquire a right to operate aluminum plant in Sumgait for 25 years, aluminum oxide plant in Ganja with project capacity of 450,000 tons per year and Zeylik alunite field in Dashkesan.

The contract was canceled as a result of non-fulfillment of obligations to invest $202 million in restoration of Azeraluminum JSC scheduled for the first three years of management.

/Trend Capital/