Bloomberg News

Tubin of Turkey May Take Bilfinger to Court After Tribunal Award

February 15, 2012

Feb. 15 (Bloomberg) -- Tubin Insaat Sanayi Turizm & Ticaret AS, a Turkish contractor, is considering taking a Bilfinger Berger SE-led joint venture to German court to extract a payment tied to a highway project dispute in Qatar.

Tubin won a ruling in November by the International Chamber of Commerce, a Paris-based arbitration panel to resolve international business disputes, more than three years after it filed the case, Tubin Vice Chairman Turgay Ozkan said.

Tubin, hired in 2006 as a subcontractor by the joint venture, had a stake of about 40 percent in the $300 million project in the capital city of Doha, Ozkan said. Qatar’s Public Works Authority, known as Ashghal, canceled an expressway after delays and cost overruns, Bilfinger said in 2009. Bilfinger set aside 80 million euros to cover the fallout from the project.

The venture must pay a “very substantial amount not too far away from what Bilfinger set aside as reserve” in 2009, Ozkan said in an interview in Istanbul on Feb. 13. “Honoring the decision of the ICC tribunal would be the only action befitting the history and name of Bilfinger.”

Tubin terminated its $100 million subcontract with the joint venture, which consists of Mannheim, Germany-based Bilfinger and Qatar’s Al Hamed, for not receiving payment and is now pursuing its assets in Qatar and Germany, Ozkan said.

Unpaid Bills

Bills for 100 million euros to 200 million euros had not been paid for the project, Herbert Bodner, Bilfinger’s then chief executive officer, said after construction was canceled. The delays were caused by “circumstances beyond our control that didn’t appear in the original project drawings,” Ozkan said.

“Bilfinger Berger isn’t involved directly, the arbitration award has been directed against the joint venture Bilfinger Berger and Al Hamed,” said Martin Buellesbach, a spokesman for Bilfinger Berger. “The substance of the matter is related to claims that are to be ultimately settled by the client,” referring to Ashghal, he said.

The joint venture filed “its respective claims” with a Qatari court and “efforts are underway to reach an out-of-court settlement with the client,” Buellesbach said.

Letters at personal and corporate level to Bilfinger officials including the chairman and chief executive officer Roland Koch requesting payment after the ICC decision weren’t answered, Ozkan said. The awarded payment will help compensate for Tubin’s losses from the project, Ozkan said.

--Editor: Benedikt Kammel

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net.

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net.


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