WASHINGTON, Feb. 23 – LAWFUEL – The Law N…

WASHINGTON, Feb. 23 – LAWFUEL – The Law News Network — Cypriot investment firm Libananco Holdings Company Ltd. announced today that it has filed a US$10 billion investment arbitration claim against the Republic of Turkey for its unlawful
2003 expropriation of the assets of Cukurova Elektrik Anonim Sirketi (CEAS)
and Kepez Elektrik Turk Anonim Sirketi (Kepez), two of Turkey’s largest
hydroelectric companies.

Libananco’s lead attorney Stuart H. Newberger, a senior partner of the
international law firm Crowell & Moring LLP, announced that his firm had filed
the US$10 billion claim at the World Bank’s International Centre for
Settlement of Investment Disputes (“ICSID”) in Washington, D.C. The claim
alleges that Turkey violated the Energy Charter Treaty, (“ECT”) which protects
foreign investors in the Turkish energy sector from unlawful expropriation.

Libananco’s earlier efforts to resolve the dispute amicably were rejected
by the Government of Turkey’s Prime Minister Erdogan. The refusal to reach an
amicable resolution raises a serious question about Turkey’s willingness to
comply with international law and investment treaties, one of the conditions
for accession to the European Union. As Newberger stated today, Turkey
reaffirmed its recognition of the Republic of Cyprus in 2001 when it ratified
the Energy Charter Treaty. “By ratifying the Energy Charter Treaty Turkey
expressly promised to protect Cypriot investors in the Turkish energy sector
from these very acts of expropriation and to submit investment disputes like
this for arbitration at the World Bank’s ICSID.”

Libananco’s co-counsel in Nicosia, Cyprus, Achilleas Demetriades,
successfully waged a 17-year legal struggle against Turkey in the European
Court of Human Rights (ECHR) in the precedent-setting Loizidou case, which
arose from Turkey’s 1974 military invasion and occupation of northern Cyprus.
Demetriades’ client, a Cypriot citizen, had been denied access to her property
in Turkish-occupied northern Cyprus and the ECHR ruled that Turkey’s actions
violated her human rights, ordering Turkey to pay substantial damages. In 2003
Turkey complied with the monetary part of the ECHR judgment and paid
substantial compensation, including interest and legal costs.

“Turkey’s acts of expropriation of these utilities are not only contrary
to the Energy Charter Treaty and international law, but clearly constitute a
violation of the right to property which, in Europe, is a fundamental human
right,” Demetriades said from Nicosia. “This lawsuit makes clear that Turkey
has failed to come to terms with the criteria necessary to join the European
Union, including respect for the rule of law and the rights of private

Under ICSID arbitration procedures, the arbitration will proceed before a
three-member tribunal to assess Libananco’s damages resulting from Turkey’s
unlawful expropriation of all of the assets of the two utilities. The Tribunal
award to Libananco could amount to more than US$10 billion to be paid by
Turkey in damages, interest and legal costs. In addition, the Tribunal could
determine that Turkey’s adoption of the Energy Charter Treaty establishes that
it has recognized the sovereignty of Cyprus, thus undermining Prime Minister
Erdogan’s position of non-recognition of Cyprus, a major sticking point in the
EU ascension process. Finally, the tribunal could issue an injunction
directing Turkey to return the assets and management of both utilities to the
shareholders, including Lebanon.

For further information regarding ICSID and ECT, visit their websites at
http://www.encharter.org and http://www.worldbank.org/icsid. For further
information regarding Crowell & Moring LLP and to obtain copies of the Request
for Arbitration and supporting documents, visit
http://www.crowell.com/libanancoholdings. For further information regarding
Demetriades, visit http://www.ldlaw.com.cy. For more information regarding
the Loizidou case at the ECHR, visit http://www.echr.coe.int/echr.

Contact: Nicole Quigley
(202) 624-2849
[email protected]

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