Banker eyes foreign Kyrgyz assets after arbitration

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Latvian businessman and banker Valerijs Belokons is looking to stake claim on Kyrgyzstan's assets in foreign countries after its nationalization of his Manas Bank in Kyrgyzstan was ruled to be illegal by a UN arbitration court, representatives of Belokon Holding told BNS Tuesday.

They said that Kyrgyzstan had failed to comply with the ruling of the arbitration court, which had ordered the Kyrgyz government to pay 16.5 million US dollars to Belokons for the bank's illegal takeover. "In line with the UN New York (Arbitration) Convention, the winning party in such cases can ensure the enforcement of the award by staking claim on the country's assets in any contracting state of the convention," the representatives of Belokon Holding explained.

Citing the court's ruling, the company's representatives said that the Kyrgyz government has to pay nearly a million US dollars a year to Belokons if it misses the compliance deadline. "Consequently, Kyrgyzstan loses nearly 3,000 US dollars a day starting December 24, 2014, if it does not comply with the ruling," according to the company's representatives.

When the banker receives the compensation from Kyrgyzstan, he would owe about 750,000 US dollar in capital tax to the Latvian budget, the representatives of Belokon Holding added.

On October 24, 2014 an international court of arbitration in Paris delivered its verdict, ordering the Kyrgyz government to pay 16.5 million US dollars (EUR 13.8 mln) to Belokons for the nationalization of Manas Bank in Kyrgyzstan.

The ruling of the international court of arbitration has already taken effect and cannot be further appealed.

Belokons had filed a lawsuit against the Kyrgyz government over the nationalization of Manas Bank he formerly owned there. Belokons asked the court to assess whether the Kyrgyz government had any grounds for the takeover and demanded compensation for the loss of the bank.

Kyrgyzstan's interim government, which came to power as a result of a coup in April 2010, took over five commercial banks operating in Kyrgyzstan, including Manas Bank which belonged to Belokons. The government justified the move to prevent outflow of funds from bank accounts linked to ousted Kyrgyz President Kurmanbek Bakiyev and other former state officials. A criminal case was launched in Kyrgyzstan against Belokons, the key owner of Manas Bank.

In response in August 2011, Belokon's lawyers presented Kyrgyzstan with a statement on launching international arbitration proceedings over the nationalization of Manas Bank. 

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