Kuwait logistics firm Agility said a World Bank body that arbitrates between foreign investors and states will hear its dispute with Iraq’s government over the company’s investment in the Iraqi telecom industry.
The International Centre for Settlement of Investment Disputes (Icsid) ruled it has jurisdiction to hear some of the claims filed by Agility against Iraq and will consider some of Agility’s claims on the merits, the company said on Sunday.
"We are pleased with the Icsid tribunal’s decision,” said Tarek Sultan, vice chairman and chief executive of Agility. “The ruling upholds the protections to which Agility is entitled and acknowledges that the Republic of Iraq cannot evade its treaty obligations and scrutiny for its violations of international law.”
The logistics and warehousing company is seeking to settle by arbitration a $380 million (Dh1.4 billion) dispute with Iraq’s government after it invested in the country's telecom sector. Agility and its partner, France's Orange, are seeking compensation for the loss of their holding in wireless operator Korek Telecom after the telecoms regulator handed their stake to local investors.
Agility claims that the government denied it the ability to challenge the decision by Iraq's telecom regulator, the Communications & Media Commission, to annul its investment in Korek.
Agility also alleges the government had moved ahead on the regulator's decision by ordering the transfer of shares acquired by Agility and its co-investors back to the original Iraqi shareholders in March 2019 without returning Agility’s original investment.
In March 2011, Agility and Orange said they would acquire a 44 per cent stake in the Iraqi mobile telecoms operator Korek Telecom.
The regulator transferred the mobile unit stake jointly owned by Orange and Agility to three local investors including Korek's managing director Sirwan Barzani, Bloomberg reported in May citing documents it had seen.
The Washington-based Icsid, part of the World Bank group, handles international investment dispute settlements.
Agility, one of the biggest logistics companies in the Arabian Gulf, posted a 7.3 per cent year-on-year rise in net profit for the first three months of 2019 as its core logistics business grew.
Net income for the quarter stood at 20.3m Kuwaiti dinars (Dh244.5m) and operating income was 378.8m dinars, up 1.8 per cent from the year-earlier period.