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Int’l tribunal refuses to award damages to Turkish businessman over confiscation of companies

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Turkish businessman Hamdi Akın İpek has lost a legal claim of $7 billion in damages he filed against the Turkish government at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C., for the confiscation of his companies, the state-run Anadolu news agency reported on Friday.

The UK-related claim, made by Ipek Investment Ltd. in 2018, sought to overturn the confiscation by Turkey of the Koza Group of companies on grounds that it was politically motivated and violated investment treaties pertaining to the UK and other European Union members.

The businessman now lives in exile in the UK, and his company, Ipek, once controlled Koza, active in media, mining, construction, aviation, agriculture and tourism. Turkey seized the companies for alleged links to the Gülen movement, which it accuses of masterminding a failed military coup in July 2016 and labels as a terrorist organization.

The movement strongly denies involvement in the coup attempt or any terrorist activity.

Turkey’s Savings Deposit Insurance Fund (TMSF) took over the Koza Ipek Group over alleged Gülen links in October 2015, and Ipek Investment Ltd. was founded in May of the same year, with Akın İpek the only board member and the shareholders other members of the İpek family, Anadolu said, citing Turkish lawyer Mustafa Doğan İnal.

According to İnal, Ipek Investment Ltd. sent a written notice to the TMSF on Dec. 23, 2016, saying that Koza İpek Group’s shares had been sold to Ipek Investment Ltd. on June 7, 2015 in a share sale agreement, and accordingly, the holding was transferred to them through an endorsement on Aug. 31, 2015.

İpek’s company accuses Ankara of violating a Turkey-UK bilateral investment treaty that protects the rights of foreign investors, the lawyer said, adding that the arbitral tribunal rejected all the claims of the plaintiff on the merits due to a decision of rejection of venue, meaning the case falls within the jurisdiction or responsibility of other courts.

The decision was made on the grounds that there was no real investment by the plaintiff in Turkey and that he abused the ICSID arbitration system, Anadolu said.

Following the failed coup, the Justice and Development Party (AKP) government launched a massive purge targeting real and alleged members of the movement under the pretext of an anti-coup fight, removing over 130,000 people from civil service jobs.

The AKP also seized schools, universities, media outlets, companies and their buildings and the assets of individuals, corporations and organizations that were believed to have had ties to the movement.

More than 1,100 companies have been transferred to Turkey’s TMSF, most of them following the failed coup. Journalists from confiscated newspapers and TV stations have been arrested, replaced and jailed.

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