The operator of MTS said that he filed a lawsuit with the International Center for Settlement of Investment Disputes (ICSID) with the World Bank against Turkmenistan. The reason was that MTS, a subsidiary of MTS Turkmenistan, was forced to suspend operations in that country.

The subsidiary of MTS stopped working in Turkmenistan in September 2017 "in connection with the actions of the government" of the country, including the Ministry of Communications and other organizations and companies controlled by the state, MTS said.

The operator believes that Turkmenistan violated his rights as a foreign investor, fixed in an agreement with the Russian government, which "ultimately led to the complete expropriation of MTS investments in Turkmenistan." "The total losses of MTS, caused by violation of the rights of the company under the agreement, have not yet been determined definitively, but preliminary estimated at least $ 750 million," the company said.

The agreement of Turkmenistan with Russia provides that Russian investors in the country are provided with non-discriminatory conditions for doing business (for example, they are not restricted in comparison with Swiss or any other foreign investors), explains Ilya Rachkov, partner of Nektorov, Saveliev & Partners. In addition, the agreement guarantees that the expropriation of property of investors is possible only in the public interest, with the observance of "proper procedure", and if it suddenly happens, the government of the country undertakes to guarantee prompt and effective compensation adequate to the market value of the asset, the lawyer points out. If the company believes that any of these provisions are violated, it can apply to arbitration and demand from the government of the country to compensate for lost investments and lost profits, points out Rachkov.

 The operator noted that he was trying to settle the dispute through negotiations. "Unfortunately, the disagreements were not resolved, and therefore MTS initiates a trial in ICSID to protect its legitimate rights and investments in Turkmenistan," the company concluded.

MTS came to Turkmenistan in 2005, buying for $ 46.7 million local operator Barash Communications Technologies Inc. (BCTI). At the same time, she signed an agreement with the local Communications Ministry, under the terms of which BCTI was to annually transfer 20% of net profit to the budget of the republic.

In 2010, MTS Turkmenistan terminated its work for two years in the country due to the expiry of this contract. Business stoppage led to a depreciation of the asset in Turkmenistan, the company concluded, having written off losses of $ 137.8 million for the fourth quarter of 2010. To resume work in the country, MTS applied to the International Arbitration Court at the International Chamber of Commerce in Geneva and to the Arbitration Court the court of Turkmenistan, and the main owner of AFK Sistema (controls MTS), Vladimir Evtushenkov personally met with President Gurbanguly Berdymukhammedov to agree on the continuation of the company. Settlement of mutual claims of MTS and TurkmenTelecom was possible only in 2012. The companies signed a new agreement for a period of five years, he provided that MTS Turkmenistan would pay 30% of net profit monthly in favor of Turkmentelecom.

 However, in September 2017, "MTS Turkmenistan" again ceased to provide services to subscribers. The operator explained this by saying that the state telecommunications company "Turkmentelekom" disconnected MTS services for international and long-distance zonal communication and Internet access services. At the same time, the license to provide communication services in Turkmenistan from MTS operated until July 26, 2018, the Russian operator stressed. According to the company, in Turkmenistan at that time it had 1.7 million subscribers. Agency "Fergana" in June 2018, with reference to the company's announcements on the website, reported that "MTS Turkmenistan" began selling property. In particular, the company sold transformer substations.

MTS previously appealed to ICSID to obtain compensation from the government of Uzbekistan. In 2012, this republic revoked a license from the Uzbek "daughter" of MTS Uzdunrobita and presented her claims of $ 600 million. Uzdunrobitu itself was declared bankrupt by UzDunrobitu, and its assets were transferred to Uzbektelecom without the right to operate. MTS and Uzbekistan settled the dispute only in 2014. Under the terms of the amicable agreement, the company's property was transferred to a joint venture of Universal Mobile Systems (UMS), in which the Russian operator received 50.01%. The remaining share was received by the State Unitary Enterprise "Center for Radio Communication, Broadcasting and Television" under the State Committee for Communications, Informatization and Telecommunication Technologies of Uzbekistan.

The MTS claim itself was not found in the database of the International Center for Settlement of Investment Disputes to the correspondent of Vedomosti. All applications for arbitration disputes are initially studied by the Secretary General of the organization and only after he decides to register the case, it appears in the database, the representative of ICSID Damon Vis-Dunbar explained to Vedomosti.

"Vedomosti" sent a request for comments via e-mail of the ministries of communication, foreign affairs and finance of Turkmenistan.