Tashkent, Uzbekistan, Feb.21
By Demir Azizov- Trend:
International Center for Settlement of Investment Disputes (ICSID) in Washington dismissed a lawsuit by Israeli Metek Metall Technology (Metal-Tech) against Uzbekistan due to lack of jurisdiction, a source in government circles told Trend.
The agreement on encouragement and mutual protection of investments between the Government of Uzbekistan and Israel, which refers to Metal-Tech, does not fall under the jurisdiction of ICSID, and that was the reason for refusal to comply with the requirements of the Israeli company, the source said.
As previously reported to Trend, in January 2010 Metal-Tech filed a lawsuit in the ICSID against Uzbekistan, saying a decision by the authorities of the country led to the bankruptcy of the Uzbek-Israeli joint venture "Uzmetall Technology".
"Uzmetall Technology" was created in 2000 by an Israeli company, Almalyk AMMC (Almalyk city, Tashkent region) and Uzbek Refractory and heat-resistant metals (UZKTJM Chirchik town Tashkent region) with an authorized fund of $1 million. The Israeli company's share in the project was 50 percent, UZKTJM JV - 30 percent, and AMMC - 20 percent.
In 2002, an Israeli company upgraded molybdenum production in Uzbekistan at the total cost of $19.39 million. The company within the framework of the project in AMMC, commissioned the complex primary molybdenum concentrate roasting where molybdenum cinder was launched. The Israeli company also built production molybdenum facilities (molybdenum trioxide) with capacity of 600 tons per year.
At the same time, the company launched a workshop for producing molybdenum products. Prior to this final product molybdenum production at AMMC was molybdenum concentrate, which was delivered for further processing at UZKTJM.
The annual production of molybdenum was to reach about 350 tons in accordance with the business plan of the joint venture in 2006, including 240 tons to be exported.
The Uzbek Government abolished the exclusive right of raw molybdenum supply from AMMC to "Uzmetall Technology" in July, 2006. Actually, the situation in connection with the entire procession of AMMC molybdenum industrial products at "Uzmetall Technology" JV was reversed.
In 2007, the Economic Court of Uzbekistan declared "Uzmetall Technology" JV bankrupt in the UZKTJM lawsuit connected with non-payment of dividends to the founders in 2005.
The joint venture property complex was put up for auction at a starting price of 10 million dollars in December 2007, but then the assets were withdrawn from auction due to lack of buyers.
Subsequently, the JV assets, including the Israeli partner assets were transferred to the government.
Translated by S.I.
Edited by C.N