Dutch investment fund Homburg Eastern European Fund B.V., which represents private investors/pensioners, the owner of Homburg Zolitude and developer of the property in Riga, Priedaines Street 20, has submitted a warning to the State Treasury about the foreign investor’s litigation against the Republic of Latvia to the International Centre for Settlement of Investment Disputes worth EUR 11,763,898.95.
The warning is based on the agreement between Latvia and Netherlands on investments and mutual protection, which came into force on 1 April 1995. Among other things, this agreement provides for cooperation and protection of investments carried out in Latvia by Dutch investors and vice versa. This agreement also makes it mandatory for Latvia to secure fair and equal treatment of Dutch investors and their investments, as well as prohibits Latvian authorities from using unjustified and discriminating measures to limit the management, use or enforcement of investments. «Due to multiple related and mutually reinforcing conditions, a situation has formed that prevents us from using our investment object – apartment building in Riga, Priedaines Street 20. We have not seen any signs so far that would suggest that the situation may change in the foreseeable future,» – the company told BNN.
It is mentioned in the warning that the up until now the behaviour of Riga City Council – namely the unjustified classification of the building as a slum in order to artificially reduce the value of the investment, halting of the possible exchange for a different piece of real estate and other questionable actions – have led to the situation when the investor has lost all possible property-characterizing features. It can be said that what has taken place can be described as expropriation. This means a breach of rules of the Civil Law, the agreement between Latvia and Netherlands and Section 105 of the Constitution of the Republic of Latvia, notes the company.
It is also mentioned in the warning that the behaviour of the municipality goes hand in hand with unjustified and discriminating litigation against the foreign investor. There are reasons to believe the litigation as a process and decisions are already a breach of basic principles of fair and equal treatment. Against the investor’s controlled Homburg Zolitude, whose only crime is that, wishing to secure the highest possible quality for its project, the company hired a company that was then considered one of the best in its field, is faced with unjustified, unpredictable and improperly qualified measures. In addition, the investor is faced with discriminating criteria that blatantly breach proper court practice.
«Up until now the investor has complied with requirements of Riga City Council in regards to sorting out the property and supporting families of victims. Unfortunately, the countless civil litigations, restrictions imposed on the building, unjustified and simply confusing decisions by courts, which go against the rule of law and common sense, do not help our situation. If the treatment towards the investor does not change and no legal outcome is secured, the investor will not have any other choice left than to submit a claim against Latvia to the International Centre for Settlement of Investment Disputes,» – as noted by the company.