Developers from ECE will initiate arbitration against the state

Prague - The German development group ECE Projektmanagement can submit a request for arbitration against the state by the end of this or next week. Josef Tobek, the managing director of ECE, told the Czech Press Agency today. The subject of the dispute is the authorities' handling of the construction of a shopping center in Liberec; ECE will seek approximately 50 million euros, or about 1.3 billion crowns, from the Czech Republic in arbitration. The state is already looking for lawyers for the case.
    The Ministry of Finance announced today a public tender for legal representation of the state in amicable dispute resolution and in arbitration proceedings with ECE. The Czech Press Agency found out from the overview of public contracts on the website www.centralniadresa.cz. The value of the announced tender for legal representation of the Czech Republic against ECE is 170 million crowns, and lawyers can submit their bids until August 26.
    "The Ministry of Finance does not agree to any compensation for the German investor," said spokesperson Ondřej Jakob today to the Czech Press Agency. "We have never recognized ECE's claims," he added. The goal of the state in the dispute with the developer, according to the spokesperson, is for the Czech Republic not to have to pay a single crown at the end of the pending arbitration.
    However, ECE is confident in the dispute. "We already have an analysis from international law firms regarding our chances," said the managing director of the construction company.
    ECE halted the construction of the Galerie Liberec shopping center in February. The project has been plagued by competitive disputes with the Dutch firm Multi Development, which is literally building a shopping center called Forum across the street. The company appealed against the original zoning decision, and Czech authorities blocked the entire construction by ECE.
    According to Tobek's earlier statements, the main reason for halting the construction was the conduct of the building authority, which reportedly suspended the building proceedings without legal reasons. Another reason was allegedly the unlawful conduct of the Ministry for Regional Development. In 2008, the Ministry overturned the previous statements of the Liberec city council and the regional office and recognized the competitor Multi Development as a participant in the building proceedings.
    The ECE group manages around a hundred shopping centers in 14 countries. In the Czech Republic, it has so far invested more than 200 million euros (almost five billion crowns). In Brno, it built the Galerie Vaňkovka shopping center, and in Prague last year, it opened the Arkády Pankrác shopping center together with the developer Unibail-Rodamco.