ICSID arbitration tribunal orders Türkiye to pay nearly USD 500 million damages award to gas importer Akfel after expropriation and breaches of BITs

Compass Lexecon provided quantum expertise to Akfel Commodities from Singapore and I-Systems Global from the Netherlands, both parts of the Akfel Group, in an investor-state arbitration against the Republic of Türkiye. The dispute related to Akfel’s investment in the Turkish natural gas and energy sector, for which they claimed indirect expropriation as well as breaches of the Singapore-Türkiye and Netherlands-Türkiye BITs. The ICSID tribunal rendered a favourable award to Akfel in July 2025.

Situation

In late 2016, following a failed political coup, the Turkish government seized control of Akfel Group’s assets in Türkiye because they claimed that its owners had ties to the Gülen movement. The Akfel Group companies in Türkiye were the largest private importer of natural gas. Akfel’s international investors, Akfel Commodities Pte. Ltd. from Singapore and I-Systems Global B.V. from the Netherlands, filed a case with the International Centre for Settlement of Investment Disputes (‘ICSID’) claiming over USD 1 billion in damages (including interest and tax gross up) based on indirect expropriation and breaches of the Singapore-Türkiye and Netherlands-Türkiye Bilateral Investment Treaties (‘BITs’).

Our role

Compass Lexecon advised Akfel Commodities Pte. Ltd. and I-Systems Global B.V. during the ICSID arbitration proceedings (case ARB/20/36). Boaz Moselle from Compass Lexecon and James Nicholson from FTI Consulting acted as quantum experts in this landmark investment dispute by assessing the value of the expropriated assets, and the interest rate to be applied.

Outcome

In July 2025, the ICSID tribunal rendered a favourable award to the Claimants. The Tribunal awarded more than 60% of the claimed amount before interest (c.a., USD 800 million) adopting Compass Lexecon’s and FTI Consulting’s estimates on most issues. It also awarded compound interest at a rate of 5.4% (the rate on Turkish government bonds) as proposed by the Claimants’ quantum experts.

The team

The Compass Lexecon team was led by Boaz Moselle, with support from Luis Agosti, Despina Doneva, Bernard Lee, Duygu Tutluoglu, and Jiacheng Tian.

The FTI Consulting team was led by James Nicholson, with support from Marion Gady and Ben Blandin.

The Claimants were represented by an arbitration team from Freshfields, led by partner Noah Rubins KC and Sylvia Noury KC, together with Vasuda Sinha, Annie Pan, Yuri Mantilla, Joseph Spadafore and Danielle Jooste, Helen Taylor, Celine Leong and Kathleen Wang.