Specht Rechtsanwalt GmbH wins Major International Investment Dispute for Austrian Investor

Alpha Projektholding GmbH, represented by Specht Rechtsanwalt GmbH, wins International Centre on Settlement of Investment Dispute (ICSID) case against Ukraine.

In the case Alpha Projektholding GmbH v Ukraine (ICSID Case No ARB/07/16), Specht Rechtsanwalt GmbH client, Alpha Projektholding claimed losses incurred in relation to an investment in Ukraine. The case marks the first ICSID ruling recognizing expropriation under a 1996 agreement on the promotion and reciprocal protection of investments between the Republic of Austria and Ukraine (UABIT). In addition, the case resulted in the first ruling on a challenge to an ICSID arbitrator who had attended the same law school as claimants counsel. During the case, the Ukrainian government challenged one of the three arbitrators fulfillment of disclosure obligations according to the standards set forth in Article 57 ICSID. The attempt strove to disqualify the arbitrator from the case for having attended Harvard Law School at the same time as claimants counsel. In March, the panels remaining two arbitrators dismissed the complaint in a decision bound to set a precedent regarding such challenges.

Alpha Projektholding GmbH is a real estate development company founded in Villach, Austria. From 1996 to 2001 Alpha Projektholding GmbH made contributions into joint activity with a Ukrainian state-owned company for the renovation and operation of parts of the Hotel Dnipro in Kyiv, Ukraine. Alpha Projektholding GmbH claimed that the joint activities would entitle Alpha to participate in the operation of the hotel and to receive monthly income distributions. According to Alpha, in the period from 2001 to 2007, the government of Ukraine had undertaken a series of actions which led to the loss of Alpha Projektholdings investment in Ukraine and the rights attached to it. In June 2007 Alpha submitted a request for arbitration to the ICSID. Oral and written arguments in the case were presented until late 2009. Alpha was represented jointly by Dr. Leopold Specht, Prof. Gianmaria Ajani and Ms. Mira Suleimenova of Specht Rechtsanwalt GmbH and Laura Steinberg of Sullivan & Worcester.

In November 2010, the ICSID tribunal ruled in favor of Alpha Projektholding GmbH awarding the Austrian investment company USD 5.25 million in damages including interest.