Winergy applies to world arbiter against Latvia

Winergy, through its primary owner Estonian shareholder Indrek Kuivallik, announced in a press release Thursday that it has applied to the United Nations court of world trade arbitration (UNCITRAL) against the government of Latvia for breaching the bilateral investment promotion and protection treaty with Estonia.

In its claim submitted November 12, Winergy complains that Latvia has taken the side of commercial bank Norvik in its dispute with the wind-farm power-generator, which accuses the bank of attempting to raid the company’s assets in a hostile takeover attempt. It is asking to be paid no less than €51m in compensation.

“We are not happy to turn against the State, where we have made investments, over many years successfully conducted business activity and paid taxes more than 1.2 million euros, also encouraging employment in Riga and regions. However, in a situation where law enforcement authorities are obviously acting in the favor of one party in a civil dispute, and, the Supervisory authority of the banks, on its turn, pretends being blind to one commercial banks’ violations of the regulating laws, not to mention business ethics, unfortunately, we are forced to do it", said Kuivallik. 

The civil dispute between Winergy and Norvik began in May of 2013, when the bank cancelled its loan contracts and demanded immediate repayment of all of its credits. Norvik’s simultaneous petition for the launch of further criminal proceedings led to the paralysis of Winergy via a full freeze of its assets, disabling its ability to repay its loans. Norvik further has conducted an intensive mass media paid-advertising campaign to popularize its position in the public sphere.

Winergy calls all of these moves on the part of Norvik premature and unreasonable, and faults Latvia’s law enforcement authorities for “unlawful and discriminatory” siding with the bank, calling it “apparent lobbying” for its “bad faith” business interests at the expense of state administrative and financial resources.

The Riga Central District Court on August 15 approved a legal protection plan applied upon Winergy which stalled the process, however that was followed by then-Justice Minister Gaidis Bērziņš’ submission of the case to the General Prosecutor’s Office on October 1.

Winergy received €18.58m in credits from Norvik in 2012, which the bank demanded back the following May, however rendering the repayment impossible as the asset freeze ordered by the Economic Crimes Prevention Board took effect.

On his part Norvik Bank’s prime shareholder, Russian financier Grigory Guselnikov has presented his side as being a victim of criminal-scale credit fraud and is simply protecting his legal interests.  Norvik is the eighth-largest commercial bank in Latvia according to the Commercial Banking Association’s data.

Winergy’s largest owner is Estonian company Wind One.

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Economy
Economy