Continuation of obligations after the expiry of the contract?
“It is in our interest that this agreement with Norway enters into force. Of course, Norway is counting on us, because notes have been exchanged, a decision has been made in the government to support this agreement, they know. Therefore, we are interested in that the process takes place as planned, so that there are no surprises, “said Dace Liberte, head of the Department for Economic Cooperation and the OECD of the Ministry of Foreign Affairs.
On the basis of this contract, Pildegović and his company “North Star Ltd” will appeal to the international arbitration tribunal. The hearing on the case will begin next week. His claim against Norway is around 400 million euros. And although the Ministry of Foreign Affairs stresses several times that the agreement will not affect the disputes already initiated on investments, Pildegović wants to delay the resolution of the agreement. Even more, he and the Ministry of Agriculture spoke with one voice at the session of the Foreign Affairs Commission in Saeima,
calling for termination of the bilateral agreement so that existing investors can file complaints for another ten years after its termination.
Pildegović was quick to criticize the Ministry of Foreign Affairs as well. “If, in your opinion, an investment of 17 or 20 million is not enough for a Latvian company in such a complex market and for all other aspects as complex as Norway, well, that remains your private opinion or the opinion of the ministry you I think it is unfair to Latvia for entrepreneurs who seek new markets in this way, “Pildegović said at the meeting of the Foreign Affairs Commission on 12 October.
At the same meeting, however, the Deputy Secretary of State of the Ministry of Agriculture, Kaspars Cirsis, said: “The bottom line is as Mr. Pildegović said – it affects any possibility of starting any new process even in this case, if , for example, this is necessary [tiesas] a change in the composition or any recently discovered circumstances regarding these existing investments. “
Maintaining obligations after the end of the agreement is not beneficial to the Latvian state, stresses the Ministry of Foreign Affairs. Because Latvia’s direct investments in Norway are less than twenty million, while Norway’s investments in Latvia are 460 million, which are incomparably greater risks. And if someone sues the Latvian side again, the expenses for the arbitral tribunal can be unpredictable even if they manage to win. In Latvian practice there is already a case where the victory comes with a bill of three million for the lawyers, but the opponent remains only a shell from which nothing can be recovered.
Get rid of the old generation contracts
Norway plans to terminate investment protection agreements with all countries of the European Economic Area. Latvia has also already rejected several such agreements, and without disagreement, with Sweden, Austria and Finland. It also reflects
the general tendency of countries to get rid of old generation contracts, which create high risks of litigation costs in arbitration courts.
“These agreements are characterized by very broadly worded rules that allow investors to seek highly contentious compensation from countries that have received investments. And these compensations are often measured not in the hundreds of thousands, but more often in the millions and in some cases even billions “, explained the representative of the Ministry of Foreign Affairs.
The decision will be in the hands of the 14th Saeima
The 14th Saeima, who will meet for the first time next week, will have to decide on the continuation of the examination of the bill and its adoption.
According to publicly available documents relating to the upcoming arbitration, the company regards the fishing vessels and their equipment operating there as its investment. There is no information about the branch in Norway in the company reports. Pildegović refused to be interviewed before the court hearing.
Pildegović’s “North Star” was previously involved in several scandals both in relation to the origin of the ships and to possible violations in the employment of fishermen. In mid-October, the company’s tax liability to the SRS was over 163,000. The latest report shows North Star has no employees. In the same report, Pildegović also noted the negative impact of the Russian invasion of Ukraine on the company, including the fact that it is difficult to transport Russian sailors and citizens to and from the ships, which now have to travel a long and therefore expensive route in Earth. The company in Norway has switched to shrimp fishing for several years, which is not disputed among the countries.
Cows at the Saeima
Pildegović’s lawyers sent the letter to the Foreign Affairs Commission. But later, the same businessman looked for the way to the deputies, even calling the head of the commission, Rihardas Kol (National Union), who recommended looking for the official route for the Saeima commission.
“When asked by Mr. Pildegović, how it would be possible to meet the members of the Foreign Affairs Commission, I replied that it is not the practice for the Commission to work with individual companies in any context. I invited, however, possible representatives of the sector. Mr. Pildegović said that the organization of the sector has not existed for a long time. Well, then I only said it this way: it is a public meeting, you can approach the deputies individually, send some information to the committee, if any ” Kol told the “de facto” program.
The involvement of the Ministry of Agriculture was also unexpected.
Because when the issue was on the government’s agenda, it raised no objections. When asked why the Ministry of Agriculture has remembered the defense of the industry now, Deputy Secretary of State of the Ministry of Agriculture Kaspars Cirsis could not answer how exactly it happened.
You do not know?
Kaspars Cirsis: I won’t know.
So how did you get the information you now need to defend them?
In this case, the bill was placed on the commission’s agenda, and the ministry of the sector also responded accordingly, including we also sent a letter from the ministry of agriculture to the Saeima Foreign Affairs Commission, in which we also presented our vision, which was discussed at the committee meeting.
It is emphasized that the Ministry of Agriculture presented its letter with objections to the Foreign Affairs Commission at the beginning of the session.
The Farnesina has calculated that the law should be adopted and come into force by 10 February.
If not, the deal will expire in mid-March without a deal, but that will mean that arbitration requests against countries can be filed for another ten years.
“Consequently, I have repeatedly stressed here, including in committee, that we are not here to unravel legal disputes between two parties. It has corresponding formats. So here is an agreement between two governments, the governments of two countries, to reach a mutual agreement for denounce this treaty, “Cole said.
CONTEXT:
Norwegian authorities in early January 2017 arrested The fishing vessel “Senator” of the Latvian company SIA “North Star LTD”, which fished spider crab in the waters of Svalbard (Spitsbergen) on the basis of previously concluded contracts.
Norway filed a complaint against the shipowner for violation of the fishing rules, which the Latvian shipowner did not admit, stating that the fishing of spider crab in the waters of Svalbard took place in accordance with the international agreement concluded in Paris in 1920. , adopted according to the requirements of the EU regulation.
The Norwegian Supreme Court decision adopted at the beginning of 2019 is unfavorable to the Latvian spider crab vessel “Senator” and prohibits fishing in the waters of Svalbard.
After the incident, the Ministry of Foreign Affairs of Latvia submitted a note to the Norwegian embassy with a request to release the vessel and not to interfere with fishing, which is carried out in accordance with an international agreement. Meanwhile, Norwegian Ambassador to Latvia Steinars Ēgils Hagens stressed that Norway has the opportunity to authorize the fishing of spider crabs on its continental shelf, as the EU and Latvia cannot issue such licenses without Norway’s knowledge.
Latvia in 2020 lost before the Court of the European Union (EU). in the case of spider crab fishing.
