Bulgaria won arbitration case filed by Omani fund over Corpbank insolvency

Bulgaria won the arbitration case filed by the State General Reserve Fund of the Sultanate of Oman, the Bulgarian National Bank (BNB) said on April 22.

The claims of the State Reserve Fund, in its capacity as a shareholder in Corporate Commercial Bank (CCB), were based on an argument that Bulgaria violated the standards of treatment of foreign investors set out in the Agreement on the Mutual Encouragement and Protection of Investments between Bulgaria and Sultanate of Oman through the actions of the Bulgarian government, the Bulgarian National Bank and the Bulgarian court, related to placing CCB under the special supervision of BNB and the revocation of the license of Corporate Commercial Bank.

The State Reserve Fund sought 80 million euro in compensation.

As a result of the successful defence by the Bulgarian side, the State General Reserve Fund of the Sultanate of Oman has dropped its claims against BNB and other Bulgarian institutions, which prevents the possibility of any future claims in this or any other international arbitration tribunal, BNB said.

The conclusion of the case in Bulgaria’s favour proves the legality of the BNB actions and decisions concerning the Corporate Commercial Bank, challenged by the State General Reserve Fund of the Sultanate of Oman, the central bank added.

The Omani fund filed its arbitration claim on 22 October 2015, after it lost a 30 per cent stake in Bulgaria’s Corporate Commercial Bank (CCB) at the International Centre for Settlement of Investment Disputes (ICSID). Bulgaria was represented by experts from the Ministry of Finance and leading law firms.

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Corporate Commercial Bank, Bulgaria’s fourth-largest lender by assets at the time, was placed under special supervision of the Bulgarian National Bank on June 20, 2014, following a bank run. On 6th of November, 2014, the BNB Governing Council revoked CCB’s banking license.

The indictment for the siphoning off of Corporate Commercial Bank was filed by the Specialised Prosecutor’s Office on 20 July, 2018. All copies of the indictment included more than 210,000 pages. 18 people have been indicted. The charges pressed against them exceed 5,000 pages.

The former majority shareholder of Corporate Commercial Bank Tzvetan Vassilev and the former deputy governor of Bulgaria’s central bank (BNB), Tzvetan Gounev, are among the indicted.

Vassilev was indicted on a total of 146 counts. He and the other defendants are alleged to have embezzled a total 2.56 billion BGN. He is also alleged to have led an organised crime group.

Vassilev is in neighbouring Serbia awaiting a court ruling on an extradition request by Bulgaria.