WASHINGTON, October 18, 2011 /PRNewswire/ --
Crowell & Moring LLP announced today that its client, Tulip Real Estate and Development, B.V., of Rotterdam, Netherlands, has filed a request for arbitration against the Government of Turkey for the termination of a state-of-the-art housing and development project in Istanbul, known as the Ispartakule III project. The project is one of the largest of its kind in Turkey, worth hundreds of millions of dollars.
As alleged in the Request for Arbitration, Tulip was formed by experienced Dutch real estate and housing developers to invest and build major projects in Turkey. It was encouraged to invest in the Istanbul project, its first in Turkey, by the office of Turkish Prime Minister Recep Tayyip Erdogan. In 2006, a government agency known as TOKI, through its state-owned company Emlak GYO, solicited bids for investors in the project. Tulip won the bid based on its world-class housing designs and favorable financial terms, which later resulted in highly successful sales of housing units. In May 2010, Tulip lost its entire investment when the project was terminated.
Meyer Benitah is a Dutch investor who played a lead role in the Tulip project. He said, "When we first came to Turkey, our group was quite excited about the opportunities for developing major projects that would provide Turkish citizens with modern, convenient apartments with excellent value. However, the Government's unfair and discriminatory actions have deprived us of our entire investment and we have no choice but to seek justice under international law."
As a Dutch investor in Turkey, Tulip is guaranteed protection from unlawful governmental interference with its business and seizure of its assets. A bilateral investment treaty between the Netherlands and Turkey provides that investment disputes between Dutch companies and the Turkish government may be resolved in arbitration. The Tulip claim has been submitted to the International Centre for Settlement of Investment Disputes (ICSID), which is associated with the World Bank in Washington, D.C.
Stuart H. Newberger, a partner at Crowell & Moring in Washington, is lead counsel for Tulip in the arbitration. He said, "The details of this dispute are set forth in the Request for Arbitration, and describe how Tulip was encouraged to come to Istanbul and invest substantial amounts of money to construct a state-of-the-art, green-compliant project to provide Turkey's growing middle class with superior and affordable housing choices. Only after it was a success and when construction was well under way did the Government unlawfully terminate its contract without any legal basis, which is a clear violation of the Netherlands-Turkey treaty. Turkey agreed to submit disputes with Dutch investors to ICSID at the World Bank, and we look forward to obtaining a favorable arbitration award."
To access a full copy of the ICSID Request for Arbitration, visit http://www.crowell.com/tuliparbitration.
Contact: Meredith Reilly
SOURCE Crowell & Moring LLP