Developer ECE threatens arbitration against the Czech Republic

Prague - The development company ECE is considering international arbitration against the Czech Republic due to alleged damage to investor interests. The company is dissatisfied with the decision of the Ministry for Regional Development in the dispute between ECE and the firm Multi Development concerning the construction of shopping centers in Liberec. This was reported by Radio Czech.
    ECE disagrees with the decision of the Ministry for Regional Development, which overturned the previous statements of the Liberec magistrate and the regional office, and recognized the competing Multi Development as a participant in the building permit process. The advisory body of the ministry, known as the appeal commission, recommended that the ministerial decision be canceled, Radio Czech reports.
    "The decision of Minister Jiří Čunek is a clear and evident reason that the Czech Republic is harming our investor interests, and for this reason we are forced, through our representatives, to prepare materials for international arbitration. This step is prompted by Mr. Čunek's approach, which did not respect the opinions of the experts from his appeal commission, and he did not conclude the proceedings instigated purposefully by our competitor," said ECE executive Josef Tobek. The press department of the MMR conveyed to Radio Czech that Minister Čunek "will not provide an interview on this matter due to his great busyness."
    ECE, which has German owners, stated that it has invested approximately 400 million crowns in the site preparations for the Liberec Gallery so far. And this amount would also be claimed in arbitration if it had to halt construction work.
    The company Multi Development, with Dutch owners, which is building the Forum shopping center, was the first to obtain a building permit. However, after a few months, a competing project by ECE, the Liberec Gallery, emerged, which Multi challenged at the Liberec magistrate claiming it disadvantaged them. However, they were unsuccessful even after appealing to the regional office. It was only the Ministry for Regional Development that recognized Multi as a participant in the proceedings.
    The city of Liberec itself considers the zoning decision to be valid. "The matter has become so complicated that practically no one understands it," said Liberec mayor Jiří Kittner. "It has essentially turned into a war of lawyers, which, I feel, does not have much effect on the actual situation. For us, it means that the zoning decision is valid. We are simply continuing according to the law and will wait to see what comes of it, but nothing else can be done. ECE today, because it still has a valid zoning decision, can apply for a building permit, and we will continue processing that further," he added.
    According to Radio Czech's findings, the issue has reached the Office of the Government. The German owner of ECE, Alexander Otto, wrote a letter to Prime Minister Mirek Topolánek to have the entire matter investigated.