Judge Subramanian explained that the arbitration is the most appropriate forum for resolving the issues at hand, particularly given the smoother and less contentious nature of the proceedings there. He noted that ICSID has seen voluntary participation from both Alcazar and the Kurdistan Regional Government, a contrast to the highly adversarial nature of the litigation in U.S. courts.
“The ICSID is where Alcazar wanted to have these issues adjudicated in the first instance,” Judge Subramanian stated, adding that it makes sense to wait for the arbitration to unfold before proceeding further with litigation in New York.
The origins of the dispute trace back to Alcazar’s $250 million loan, which allowed Korek Telecom to pay for a license to install mobile networks outside the Kurdistan region. In 2014, Iraqi regulators declared their previous approval of a deal between Alcazar, Agility, and Korek to be void, setting off a wave of litigation. Agility and Alcazar allege fraud, bribery, and corruption by Korek and its Iraqi shareholders, while the Kurdish government contends that the losses resulted from a failure to anticipate the rescission of regulatory approval.
