Dutch fund gives to Latvia notice of investment dispute worth EUR 11.76 mln

  • 2016-05-26
  • From wire reports

Dutch investment fund Homburg Eastern European Fund B.V., the owner of Homburg Zolitude company, which was developing a property in the Zolitude area in Riga where a Maxima supermarket used to stand before its roof caved in, killing over 50 people in November 2013, has notified the State Chancellery about an investment dispute that might be referred to the International Centre for Settlement of Investment Disputes.

The total amount of the claim is estimated at EUR 11.764 million.

The notice of investment dispute has been handed to the State Chancellery based on the agreement between the governments of Latvia and the Netherlands about promotion and mutual protection of investments that took effect in April 1995.

Homburg Zolitude said that, due to a number of inter-related circumstances and actions by the Riga City Council, it could no longer use the investment object – the unfinished multi-apartment building at 20 Priedaines Street, Riga, situated on the same plot as the collapsed supermarket – and there were no indications that the situation might change for the better in the nearest future.

The company claimed that the Riga City Council had wrongly declared the unfinished building as a dilapidated structure, had been stalling the possible swap of properties, organizing schemes behind Homburg Zolitude’s back that would leave the company with a property that could not be used for any commercial purpose. In fact, the company's property was as good as expropriated, Homburg Zolitude said.

On its part, Homburg Zolitude has been duly following all instructions from the city council about suspending construction in the wake of the fatal supermarket collapse and helping the families of the victims.

The company urged the Latvian government to find a legitimate and fair solution to the situation with the property of Homburg Zolitude otherwise the investor will have no choice but to file with the International Centre for Settlement of Investment Disputes a claim against Latvia.

As reported, 54 people died and scores were injured when the roof of the "Maxima" supermarket in Riga's Zolitude neighborhood caved in on November 21, 2013.

Homburg Zolitude and Tineo used to bee co-owners of the plot of land on which the ill-fated supermarket stood and had plans for further development of the property but construction of the multi-apartment building next to the supermarket was suspended after the tragedy. The Riga City Council which intends to create a memorial to the victims of the supermarket in the land plot, made a deal with Tineo in 2015, and Tineo gave its portion of the land plot (70 percent) to the local government as a gift.