The Republic of Belarus defeats investment treaty claims pursued by Lithuanian companies UAB Pavilnių saulės slėnis 14 and UAB Modus grupė
On 5 December 2023, an ICSID tribunal dismissed an investment treaty claim brought by Lithuanian companies UAB Pavilnių saulės slėnis 14 and UAB Modus grupė against the Republic of Belarus.
In December 2020, Lithuanian companies UAB Pavilnių saulės slėnis 14 and UAB Modus grupė initiated arbitration proceedings against the Republic of Belarus under the Agreement between the Government of the Republic of Lithuania and the Government of the Republic of
Belarus on the Promotion and Protection of Investments, seeking approximately US$9 million in the alleged damages.
The Claimants’ claims related to a business centre with a hotel and multi-level parking construction project next to the Minsk National Airport. To implement the project, in autumn 2016, the Claimants’ Belarusian subsidiary took part in an auction following which it entered into a lease agreement with the Minsk City Executive Committee for a land plot located near the airport terminal complex of the Minsk National Airport.
Under the auction terms, the Claimants’ subsidiary undertook to commence construction by mid-2019. The construction has never been commenced, neither by that date or at all.
The Claimants alleged that the delays occurred because Belarus had refused to ensure proper coordination of the project, including by failing to assist in resolving disagreements between the Claimants’ subsidiary and adjacent land users. The Claimants complained about those to various government agencies of the Republic of Belarus.
In order to settle the dispute, in the first half of 2020, representatives of government agencies organised several working meetings with the Claimants’ representatives in attendance. Even though most of the disagreements were ultimately resolved, the Claimants chose to commence the international arbitration proceedings.
The arbitral tribunal found its jurisdiction over the dispute and, having considered the Claimants’ claims on the merits, concluded that the Republic had not breached its international law obligations. In the Award on the merits, the arbitral tribunal dismissed the Claimants’ claims in full and ordered the Claimants to reimburse the Republic of Belarus for the major part of the legal and arbitration costs and expenses.
Accordingly, the Republic of Belarus prevailed in the investment dispute against Lithuanian companies UAB Pavilnių saulės slėnis 14 and UAB Modus grupė.