VZCZCXRO8525
PP RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHNEH RUEHPW
DE RUEHKA #0693/01 1970103
ZNR UUUUU ZZH
P 160103Z JUL 09
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 9160
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHHMUNA/CDR USPACOM HONOLULU HI
RHHJJPI/PACOM IDHS HONOLULU HI

UNCLAS SECTION 01 OF 02 DHAKA 000693 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EB/IFD/OIA HGOETHERT AND KBUTLER, L/CID PPEARSALL 
DEPT ALSO FOR SCA/INSB 
 
E.O. 12958: N/A 
TAGS: EINV KIDE OPIC PGOV CASC BG
SUBJECT: BANGLADESH 527 REPORT 
 
REF:  STATE 49477 
 
¶1. (SBU) The United States Government is aware of five (5) claims of 
United States persons that may be outstanding against the Government 
of Bangladesh (GOB).  One case has been added in 2009. 
 
¶I. a.   Claimant A 
 
b.   1979 
 
c.   In 1977 Claimant A entered into an agreement with the GOB 
Ministry of Agriculture.  The agreement granted Claimant A a 
ten-year franchise to trap and export rhesus monkeys, with the 
obligation that Claimant A would build monkey-breeding farms in 
Bangladesh.  The dispute began in January 1979 when the GOB 
terminated the contract after alleging that Claimant A had failed to 
begin building the breeding farms as agreed. 
 
Claimant A immediately sought to resolve the dispute through direct 
discussions with Bangladesh, but those efforts failed. Claimant A 
then sought arbitration in accordance with the contract. In 1986, 
after the GOB failed to appoint an arbitrator, Claimant A appointed 
a sole arbitrator and received an arbitral award of over USD 16 
million.  Claimant A then sought to enforce the award in Bangladeshi 
courts for ten years.  In February 1996, a lower court ruled against 
Claimant A.  Claimant A appealed the lower court decision to the 
High Court. 
 
On March 14, 1999, the Bangladeshi High Court in Dhaka ruled in 
favor of Claimant A, but on November 2, 1999, the GOB filed an 
appeal in the Supreme Court.  The Supreme Court has yet to hear the 
appeal. 
 
Since the early 1980s, the U.S. Embassy has been in contact with the 
Government of Bangladesh to facilitate discussions with Claimant A. 
In 1995, the Embassy contacted the GOB to express concern that 
access to Bangladeshi courts was being denied.  After the 1996 
judgment, the U.S. Embassy again contacted the GOB to encourage 
settlement.  Since then, the Embassy has continued to monitor 
developments in the case. 
 
Claimant A's representatives met with Ministry of Agriculture 
officials during the December 2-3, 2001 U.S. Bangladesh Business 
Council's (USBBC) delegation visit to Dhaka.  Early in 2002, 
Claimant A's representatives met with GOB officials in Washington 
and expressed Claimant A's preference for resolving the matter 
amicably, but Claimant A's representatives also expressed firm plans 
to pursue all legal and political means to reach resolution. 
Claimant A followed up with calls and letters to the Bangladesh 
Embassy asking for an update on the GOB's position, but received no 
response. 
 
U.S. counsel for Claimant A met with its local attorneys in fall 
2006 in an attempt to expedite hearings on the appeal.  In June 2008 
Claimant A's attorney reported no change in the case, indicating 
that it was unlikely to be heard in the near future.  In June 2009, 
Claimant A's attorney could not be reached.  Post has not been 
approached by Claimant A since 2006. 
 
II. a. Claimant B 
 
b. 1995 
 
c. Claimant B, a U.S. citizen, borrowed USD 2.5 million from a 
Bangladeshi bank in 1989 to perform research and development, and to 
set up a factory to produce cataract lenses in Bangladesh.  Claimant 
B apparently did not make his scheduled payments, and after his 
government contact left office, an anti-corruption case was filed 
against Claimant B (in 1992).  Claimant B was arrested in 1995 and, 
after considerable U.S. Embassy effort and congressional interest, 
he was released from jail and allowed to leave Bangladesh.  Over the 
years there have been efforts to establish a reasonable payment plan 
to the bank; however Claimant B stated that his factory, which 
employed 90 people, had never made an operating profit and that in 
order to address the issue, he needs to be able to go to Bangladesh 
and run the factory without fear of arrest. 
 
A civil case against Claimant B, won by the bank for recovery of its 
funds, is on appeal and continues at an extremely slow pace.  On 
Feb. 28, 2001, the Anti-corruption court delivered a guilty verdict, 
and sentenced him to seven years in prison and a USD 4.63 million 
fine.  In order to appeal, Claimant B had to surrender himself to 
arrest and imprisonment within 60 days.  The U.S. Government has 
received no further information on the case since March 2001. 
 
III.  a. Claimant C 
 
 
DHAKA 00000693  002 OF 002 
 
 
b. 2006 
 
c. Claimant C and Petrobangla (an entity of the Government of 
Bangladesh) have been in a dispute over fees for gas pipeline usage 
since 1999.  On March 17, 2006, Claimant C filed for international 
arbitration of that dispute against GOB with ICSID, a World Bank 
body, per the terms of its contract with Petrobangla.  Petrobangla 
resisted that arbitration by pursuing a suit in a local Bangladeshi 
court; it later withdrew the lawsuit from the Bangladesh court. 
Despite this local challenge, the ICSID tribunal continued with its 
deliberations on the dispute.  The tribunal heard the dispute May 
18-19, 2009 in London.  ICSID will likely deliver its verdict by the 
end of 2009.  The Embassy remains in close contact with Claimant C. 
 
IV.  a. Claimant D 
 
b. 2007 
 
c. Claimant D represents a major U.S. hotel chain.  In 2006 Claimant 
D signed a 99-year lease with the Ministry of Communications for a 
piece of land in Dhaka, belonging to Bangladesh Railways, on which 
to build a hotel.  Environmental groups opposed the project, 
favoring instead the development of a park on the site. Soon after 
the lease was signed Bangladesh experienced a change in government. 
As the future of the site was debated, the new government withheld 
permission from Claimant E to begin construction of the hotel.  In 
December 2007 an inter-ministerial committee decided to cancel the 
lease, agreeing to find an alternate site for the hotel.  In May 
2008 the municipal government evicted Claimant E from the site.  The 
GOB has yet to offer an alternate site for the hotel, despite its 
stated desire to see the project move forward.  The Embassy has 
advocated on behalf of Claimant D with the Ministry of 
Communications, the Ministry of Law and the Ministry of Civil 
Aviation and Tourism on numerous occasions and will continue to do 
so. 
 
¶V.  a. Claimant E 
 
b. 2009 
 
c. Claimant E, which was founded in the United States 160 years ago, 
started operating in Bangladesh in 1990 as a joint venture with a 
Bangladesh firm.  In September 1997, what is now Claimant E became a 
100-percent foreign-owned shipping venture, following its 
registration with the Government of Bangladesh.  Since that time, 
Bangladesh Customs, a wing of the National Board of Revenue (NBR), 
has renewed every two years Claimant F's operating license as a 
100-percent foreign-owned shipping firm.  Claimant F applied to 
renew its license in 2009.  However, the renewal of Claimant E's 
license and the licenses of other 100-percent foreign-owned shipping 
companies are on hold because the Government of Bangladesh is 
considering a change to its investment policy in this sector.  The 
proposed change would require foreign-owned shipping companies to 
sell shares to local shipping firms and enter into minority joint 
ventures with the local firms. 
 
The Embassy, other diplomatic missions in Dhaka and Bangladesh 
exporters have urged the Prime Minister and the Finance Minister on 
numerous occasions not to change the investment rules in this 
sector.  In June 2009 the Prime Minister informed the Ambassador and 
the Assistant Secretary of State for South and Central Asia that 
100-percent foreign-invested firms already operating in Bangladesh 
would be permitted to continue operating as they have for the last 
decade.  NBR and Customs have thus far failed to implement this 
decision.  The Embassy continues to engage the GOB on this issue and 
remains in close contact with Claimant E. 
 
¶2. (SBU)  Claimant A: MOL, Inc. 
Claimant B: Dr. Rafiquzzaman 
Claimant C: Chevron 
Claimant D: Millennium Holdings, a Bangladeshi firm representing 
Hilton Hotels 
Claimant E: APL 
 
MORIARTY