RECENT NEWS IN INVESTMENT ARBITRATION CLAIMS FILED BY TURKISH CONTRACTORS UNDER THE TURKEY-LIBYA BILATERAL INVESTMENT TREATY

24.12.2018

 

Due to the fact that Libya is one of the leading states with whom Turkish investors had worked before the civil war occurred in February 2011 , one of the countries with whom Turkish investors had problems concerning their investments is the state of Libya which was substantially damaged by the civil war.

In this respect, there are several investors who had same problems, terminated their investment activities and returned to Turkey due to the adverse events occurred in accordance with the political situation in Libya.At the following this problematic process, some of Turkish investors has initiated arbitration proceedings against the State of Libya within the scope of Bilateral Investment Treaty between Turkey and Libya being effective as of 22/04/2011.

The first awards in Turkish investor- Libya cases were given as of November 2018, in the cases of Cengiz İnşaat  and Tekfen. Tekfen case which has just been concluded was different from the Cengiz İnşaat case since it was filed on the basis of a contractual claim, not based on the Turkey-Libyan BIT. However, it is still very important since the tribunal awarded in favour of the Turkish investor  in consequence of arbitration process, taking 3 years.

The first award in investment arbitration claims filed by Turkish contractors under the Turkey-Libya bilateral investment treaty is Cengiz İnşaat Case, which has resulted in a sizable win for the company .

The case filed  In 2016, on the basis of the claims for damages  arising from the civil war because suspension of the projects due to the fact that the  work camps were overrun and destroyed.

According to recent news, the tribunal held Libya liable for denying full protection and security under the BIT. Arbitrators awarded approximately $50 million (US) in compensation, as well as further relief regarding the release of certain performance bonds and financial guarantees.

The Tribunal also awarded that it had jurisdiction to consider breach of various provisions of the BIT, including the full protection and security provision, notwithstanding that the treaty contains a special clause that applies to wartime and civil conflict

In addition, when viewed from the aspect of that  tribunal awarded that special “war clause” in BIT does not preclude claimants from mounting full protection and security claim, the award become more  significant since it will also positively   influence the other cases against Libyan State on the basis of Turkey-Lıbya BIT.

 

Source: https://www.iareporter.com/articles/an-update-on-7-turkish-investor-claims-against-libya/