Construction, Estonia, EU – Baltic States, Financial Services, Legislation, Real Estate

Chairwoman of the supervisory board of Windoor Mailis Lintlom confirmed to the paper that the Stockholm court ordered Diplomat Stroi Servis of Kazakhstan to pay the company 22.7 million euros inclusive of interest on arrears. She added that legal advisers have advised the company to await judicial recognition of the ruling which a Kazakh court is expected to make on Wednesday.

Windoor's original claim was for 18 million euros. At the beginning of November, the court of arbitration recognized a 4.7 million euro increase bringing the claim to 22.7 million euros. In October Windoor received a positive partial decision awarding it 130,000 euros in legal costs.

Windoor concluded in October 2012 an agreement with the Kazakh company Baltiiski Dom under which it was to design and supply glass-aluminium structures worth 25 million euros for an international business and conference center under construction in the Kazakh capital Astana.

The building situated next to the building of the Kazakh Foreign Ministry was to be used also by the ministry to accommodate guests and officials. The Diplomat Stroi Servis company that manages the ministry's real estate issued a guarantee in the amount of 25 million euros for the project and Windoor was provided with credit insurance by Kredex, for whose benefit Diplomat Stroi Servis established a mortgage on the building.

Under the construction agreement, Baltiskii Dom was to execute the payment in two years. When the deadline arrived in 2014, the invoices were not paid and Windoor had to terminate the agreement as a result, Lintlom earlier said.

Windoor then referred the claim to Diplomat Stroi Servis in accordance with the letter of guarantee. The Kazakh state-owned company has not met the obligation and a court in Kazakhstan has suspended a bankruptcy proceeding initiated to have the obligation fulfilled. Besides a court in Kazakhstan has decided to terminate the mortgage established for the benefit of Kredex.

In addition, a litigation has started in Kazakhstan to annul the guarantee provided to Windoor. Windoor finds this kind of activity especially surprising and unusual because the disputes arising from the guarantee have been referred to the Stockholm arbitration court.

Estonia and Kazakhstan signed an agreement on the mutual protection and advancement of investments in 2011. Under the said accord, signed by Estonia's then Minister of Economic Affairs and Communications Juhan Parts and Kazakhstan's Foreign Minister Yerzhan Kazaykhanov, the countries commit themselves to ensuring the full protection and security of investments by investors from the other party in their territory.

Windoor takes the position that the state of Kazakhstan has not fulfilled the agreement and has interfered with the process where Windoor is demanding the state-owned company to meet its obligations.