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The Government is preparing new agreement on Kumtor, where significant strengthening
Kyrgyzstan's positions is stipulated. It is hard to say whether Canadian side will approve
this document.
However taking into attention last negotiations, the management of Centerra Gold company clearly
stated that it is not going to give up more than 50% in the joint enterprise. But the
Parliament stands on its position -- no less that 67% to Kyrgyzstan or the Government has
to take drastic measures -- denunciation or nationalization of Kumtor deposit. However
in this case republic face long lasting court trials. The President is appealing parliament
members to find efficient solution on Kyrgyzstan's major budget revenue generating enterprise.
Just in two weeks International court trial starting in Netherlands over the law suit
of Kazakhstan company Visor. Kyrgyzstan is party to be charged. Sum of the lawsuit is
400 million US dollars. Foreign investor valued its losses after recall of the license for
mining at Jerui deposit in Talas Province. Canadian company Stans Energy is also trying
to recover losses through the court trials. Sum of the lawsuit exceeds 100 millions US
dollars for expropriation of Kutesai-2 deposit. These precedents are not the first and single
cases when investors defend their rights in international jurisdiction. Alas not always
Kyrgyz side manages to win cases.
Uluk Kydyrbaev, executive director of the Tax Consultants Chamber:
The state cannot mayhem all the time. There are boundaries and limits when companies can
bear. After they begin to file lawsuits. Notably, not to Kyrgyzstan courts but international
arbitrage courts. According to international norms an investor has a right to file a lawsuit
to any arbitrage court to defend their investments, capital and property.
All complications and consequences of loud court litigations, particularly, potential
arbitrage over the lawsuit of Centerra discomfort the president. Following the results of his
visit to South Korea president stated that as realist he considers 50% shares as a maximum
possible for the country. And all demands of Members of Parliament are merely politics
and populism.
Almazbek Atambaev, the president of Kyrgyz Republic
One of the parliament members came and said we will denounce agreement on unilateral basis
and will enter Kumtor. I say it will be a looting. Because the denunciation must be
accepted by both sides. If one of the sides comes and seizes enterprise using force -- it
is a usual looting. We have to wait for court's decision. Denunciation comes to force judicially
after the court's decision. But court can review such issues for years. One year, 7
years and 10 years. Ten years we will work by the 33 to 67 scheme. We will be waiting
how beautiful it will be in ten years. After ten years Kumtor ... will there be ore?
Experts also support president's position. While members of parliament are not able to
rationally explain demands for 67% it is possible to consider it as a political manipulation.
And populist statements on unilateral withdrawal from agreement will lead only to more unfortunate
consequences.
Baktygul Sheradilov, political expert Then, this is neither economic nor political
issue. It turns out that those suggested schemes, those taken actions that we witness can be
qualified as usual raider seizure. When on the grounds of alleged derogation of countries'
and its citizens' interests, there is pure redistribution attempt.
Long-lasting court trial over Kumtor is possible not only in case of denunciation, but in case
of nationalization of the deposit. Leader of Ata-Meken party Omurbek Tekebaev who stands
for this option, should understand that during court trials the scheme of Kumtor's work and
dividends distribution will stay according to acting agreement from 2009. In case if
Canadian investor wins the court trial, besides payment of expenses, 33% of shares belonging
to Kyrgyzstan can be frozen to secure claim.