Estonia's Windoor to file claim against Kazakhstan in Washington court ({{commentsTotal}})

A Windoor glass facade being installed.
A Windoor glass facade being installed. Source: (ERR)

Estonian construction company Windoor is planning on submitting a claim in an arbitration court in Washington against the Republic of Kazakhstan in May, as soon as the company reaches an agreement regarding the funding of the process in the amount of €4 million.

"We have chosen a legal advisor and it is one of the biggest law firms in the world," Windoor supervisory board chairman Mailis Lintlom told BNS, adding that the company does not want to disclose the name before submitting the claim, which it plans to do in may.

"Our talks with the financier are reaching the finish line," she said, adding that the company had initially expected to have submitted the claim by now.

The funding needed is €3-4 million and the financiers are companies that handle the funding of transnational disputes.

Windoor's primary claim against the Republic of Kazakhstan is €23 million plus fines for delay and legal costs, Lintlom said. "As of the end of February, the fines for delay and the primary claim amounted to a total of €30 million," she explained. "It is increasing every day."

€25 million building in Astana

In October 2012, Windoor concluded an agreement with Kazakh company Baltiiski Dom under which it was to design and supply glass and aluminum structures worth €25 million for an international business and conference center under construction in the Kazakh capital of Astana.

The building, situated next to the building of the Kazakh Ministry of Foreign Affairs, was to be used by the ministry as well to accommodate guests and officials. Diplomat Stroi Servis, the company that manages the ministry's real estate matters, issued a guarantee in the amount of €25 million for the project and Windoor was provided with credit insurance by Kredex, for whose benefit Diplomat Stroi Servis established a mortgage on the building.

Under the construction agreement, Baltiskii Dom was to execute the payment in two years. When the deadline arrived in 2014, the invoices were not paid and Windoor had to terminate the agreement as a result, Lintlom has previously said.

Windoor then referred the claim to Diplomat Stroi Servis in accordance with the letter of guarantee. The Kazakh state-owned company has not met the obligation and a court in Kazakhstan has suspended a bankruptcy proceeding initiated to have the obligation fulfilled. A Kazakh court has likewise decided to terminate the mortgage established for the benefit of Kredex.

Litigation has also been initiated in Kazakhstan to annul the guarantee provided to Windoor. The Estonian company finds this kind of activity particularly surprising and unusual as the disputes arising from the guarantee have been referred to an arbitration court in Stockholm.

Pursuant to a Bilateral Investment Treaty signed between Estonia and Kazakhstan, Windoor informed the Republic of Kazakhsstan that it is prepared to negotiate regarding the claim, however the latter did not react and the six-month deadline was reached at the end of 2016, Lintlom explained.

According to the Estonian company's supervisory board chairman, the proceeding in the Washington arbitration court may take approximately three years.

Estonia and Kazakhstan signed an agreement on the mutual protection and advancement of investments in 2011. Under said accord, signed by Estonia's then Minister of Economic Affairs and Communications Juhan Parts and Kazakhstan's Minister of Foreign Affairs Yerzhan Kazaykhanov, the two countries commit themselves to ensuring the full protection and security of investments by investors from the other party on their territory.

Editor: Aili Vahtla

Source: BNS

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