Westwater Resources Prevails in Key Decision in the International Arbitration Against Turkey
Westwater Resources, Inc. (Nasdaq: WWR), an energy materials development company, announced that the tribunal appointed by the International Centre for Settlement of Investment Disputes (ICSID) has issued a procedural order that denies a request made by the Republic of Turkey to bifurcate the arbitration proceeding. As a result, a hearing on the merits is now scheduled for September 2021.
In December 2018, Westwater invoked the provisions of the bilateral investment treaty between Turkey and the United States and filed for international arbitration before ICSID as a result of the decision by the Turkish government to revoke seven uranium licenses held by Adur Madencilik Ltd. (“Adur”), a wholly-owned subsidiary of Westwater, located in Turkey. In March 2020, Turkey requested that the arbitral tribunal bifurcate the arbitration and decide two jurisdictional issues first, a procedural move that would have delayed the arbitration and potentially avoided a hearing to quantify damages. In its request, Turkey alleged that Westwater’s purchase of Adur in 2015 did not qualify as an investment in Turkey protected by the treaty, and also alleged that Westwater filed its arbitration demand too early.
In Procedural Order #2 issued on April 28, 2020, the arbitral tribunal denied Turkey’s bifurcation request and commented that Turkey’s jurisdictional objections that Westwater’s acquisition of Adur did not qualify as a proper investment in Turkey, was “standard fare” in investor state arbitration. With regard to that objection, the arbitral tribunal found Turkey’s position “would, if accepted, create great complexity” by “creating a chequerboard of rights” that did not fit with “public international law concepts of State responsibility.” On the issue of the timing of the commencement of the arbitration, the arbitral panel observed that “providing for a further period of negotiation would be, and would have been futile.” As a result of this decision, the tribunal will make a final decision on both objections in the course of the arbitration, rather than delaying proceedings to consider them separately.
Christopher M. Jones, President and Chief Executive Officer, commented, “This step forward in our case for compensation from Turkey is important to Westwater and our investors. We appreciate the time and effort that has gone into these proceedings by the arbitral panel and our legal team, and look forward to timely resolution of our dispute with the Republic of Turkey.”