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Turkmenistan has fully won the international arbitration dispute with MTS - according to the court decision, the company is obliged to compensate Turkmenistan for millions of dollars in costs

Turkmenistan, being a responsible member of the world community, has demonstrated its commitment to international obligations by winning a complete victory in the long-term arbitration proceedings with Mobile TeleSystems PJSC (MTS). The Ministry of Foreign Affairs of Turkmenistan officially informed on July 1 about the completion of this process in favor of the Turkmen side.

The message from the Ministry of Foreign Affairs noted that in recent years, false reports about the so-called "claims" of MTS against Turkmenistan have repeatedly appeared in the media. In response to this, the economic and state structures of Turkmenistan have made every effort to peacefully, pre-trial and constructively resolve the situation artificially created by MTS.

However, despite these steps, in 2018, MTS initiated the process of international arbitration.

Ultimately, the tribunal, constituted under the rules of the International Centre for Settlement of Investment Disputes (ICSID), ruled to dismiss all of MTS’s claims against Turkmenistan on the merits. Moreover, the tribunal ordered MTS to pay Turkmenistan over US$11 million in legal and arbitration costs.

The tribunal clearly determined that the operating contract was a legitimate commercial agreement governed by Turkmen law and had expired according to its terms. Therefore, MTS had no right or legitimate expectation of its renewal. The tribunal also confirmed that Turkmenistan had not committed any wrongdoing in relation to MTS’s operations, dismissing all of the company’s remaining claims.

Three months after the tribunal’s decision, MTS attempted to challenge it in the Swedish courts (the seat of arbitration was Stockholm). However, the Svea Court of Appeal (Sweden) by its decision of June 27, 2025 finally rejected all claims of MTS, ruling in favor of Turkmenistan.

The court ordered MTS to compensate Turkmenistan for the costs associated with the proceedings, totaling 589 thousand euros. This amount must be paid in addition to the already judged 11 million US dollars.

It is important to emphasize that the decision of the Court of Appeal is not subject to further appeal, which makes it final. Thus, the decisions of authoritative international arbitration and judicial bodies fully confirmed the legality of the actions of the Turkmen side, which strictly adheres to the generally recognized norms of international economic relations.

ORIENT

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