Another investor initiates ICSID arbitration over banking dispute with Cyprus

Belarussian investor Alexander Nelin has initiated arbitration at the International Centre for Settlement of Investment Disputes (ICSID) against the Republic of Cyprus under the 1998 Belarus-Cyprus bilateral investment treaty.

The request for arbitration was registered at ICSID on November 2, 2018.

While little information about the precise nature of the dispute is publicly available, the ICSID website states that the claims are related to a “banking enterprise”. According to a WikiLeaks cable, Alexander Nelin was the chairman of the Belarussian bank Golden Taler Bank in 2005. It appears that, in 2008, Golden Taler Bank became Fransabank OJCS as part of the global Fransabank Group. In 2010, Fransabank Group invested in the Cyprus entity USB Bank PLC, which would eventually be affected by the 2013 financial crisis in Cyprus. Mr. Nelin’s claim may relate to this chain of events.

According to the ICSID website, the claimant is represented by “British Arbitration Consultants” in London. (It is unclear whether this refers to a particular law firm, or is instead a shorthand reference to the claimants’ counsel.) Cyprus has not yet retained outside counsel.

The request for arbitration comes on the heels of a July 2018 award rendered in the case of Marfin v. Cyprus (which remains unpublished), dismissing all claims against Cyprus in a dispute brought by the former owners of another Cypriot bank, Cyprus Popular Bank (see our story here).