Turkmenistan Pays Lawyers Another $6 Million for Arbitration with Belarusian Company

American law firm Squire Patton Boggs has asked Turkmenistan for an additional six million dollars to defend its interests in arbitration proceedings against Belarusian company Belgorhimprom. Turkmen.news learnt earlier that nine million dollars had already been paid for legal services.

Garlyk plant in Turkmenistan

According to the new documents in turkmen.news’ possession, the additional $6 million were requested in spring to meet increased litigation costs. In May President Serdar Berdimuhamedov instructed state company Turkmenhimiya to cover these expenses itself. The Central Bank was instructed to convert the relevant sum from manats at the state exchange rate. Turkmenhimiya, therefore, paid its legal team an additional fee of 21 million manats.

The overall payment for Squire Patton Boggs’ services, as far as we know today, is $15 million, or 52.5 million manats at the state exchange rate.

In early July turkmen.news discovered that Turkmenhimiya is seeking damages of $911 million from Belgorhimprom at the Swedish Chamber of Commerce’s Arbitrage Institute. Squire Patton Boggs are representing the Turkmen state company at these proceedings. There has been no official report on the arbitration process.

In 2009 the Turkmen authorities concluded an intergovernmental agreement on construction of a mining and processing plant at a potash deposit near the village of Garlyk. In March 2017 the presidents of the two countries, Gurbanguly Berdimuhamedov and Aleksandr Lukashenka, attended the Garlyk plant’s official opening ceremony. Two months later though, Belarusian Deputy Prime Minister Anatoliy Kalinin, said the contractor had not been paid for the work. At the same time independent journalists learnt that the plant was not working at full capacity. In November 2018 Berdimuhamedov officially confirmed that the plant’s capacity was far short of what it should be. In response, Lukashenka said that the debt for construction had not yet been paid.

According to the documents in turkmen.news’ possession, the Belarusian side dismissed the Turkmen claims, and on December 21, 2020 submitted a counter claim for $418 million. The Belarusian side says that the plant was built in accordance with all the requirements, and that it is not working properly because of the client’s attempts to start production without involving Belarusian specialists. Turkmenistan is also accused of unlawfully withholding construction equipment belonging to Belgorhimprom. The outcome of the arbitration proceedings has not yet been reported.