NEWSLETTER-2017

185 ARBITRATION LAW and equipment that belonged to the Claimant in order to cover unfair penalties for contested delays. On the other side, Turkmenistan based its procedural defences on the well-known provision of the Turkey-Turkmenistan BIT that requires the dispute first be referred to the local courts, which the Claimant failed to do, that the works of the Claimant do not qualify as investment, and that these claims are contractual claims, rather than treaty claims. According to Turkmenistan, this arbitration was initi- ated by the Claimant, only to blame Turkmenistan for its own failure to perform its own undertakings. The Decision The Tribunal dismissed the claims of the Claimant “ in their en- tirety for lack of merit. ” The Tribunal analyzed Article VII(2) of the Turkey-Turkmenistan BIT that requires submission of the dispute first to the local courts, which the tribunal did not have the consensus to as to whether this provision should be dealt with as to jurisdiction or admissibility of the claims. Later on, the Tribunal mainly examined whether the works of the Claimant would qualify as an investment under the said BIT, and whether they are contractual or treaty claims and, finally, the availability of substantive protection standards for the claims of Ickale. The Interpretation of Article VII(2) of the Turkey - Turkmenistan BIT The Article VII(2) of the Turkey - Turkmenistan BIT is often discussed in the disputes between Turkish construction companies and Turkmenistan. According to this Article, the investor is required to, or may submit, the dispute first to local courts, and only if no decision is reached within a year, the investor may refer its claim to international arbitration. Ickale claimed that this provision is a kind of fork-in-the road clause, which entitles the investor to choose either submitting the dispute to the local courts or to investment arbitration, while Turk- menistan argued that this provision is a kind of domestic litigation