VZCZCXRO9055
RR RUEHCI
DE RUEHKA #1126/01 1920737
ZNR UUUUU ZZH
R 110737Z JUL 07
FM AMEMBASSY DHAKA
TO RUEHC/SECSTATE WASHDC 4492
INFO RUEHNE/AMEMBASSY NEW DELHI 0026
RUEHIL/AMEMBASSY ISLAMABAD 1729
RUEHKT/AMEMBASSY KATHMANDU 9172
RUEHLM/AMEMBASSY COLOMBO 8002
RUEHGO/AMEMBASSY RANGOON 2554
RUEHCI/AMCONSUL KOLKATA 0824

UNCLAS SECTION 01 OF 02 DHAKA 001126 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPARTMENT PLEASE PASS TO EB/OIA HEATHER GOETHERT 
 
E.O. 12958: N/A 
TAGS: CASC EINV KIDE OPIC PGOV BG
SUBJECT: BANGLADESH: 527 REPORT 
 
REF: STATE 55422 
 
¶1.  (SBU) The United States Government is aware of three (3) 
claims of United States persons that may be outstanding 
against the Government of Bangladesh (GOB). 
 
¶2.    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 $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.  No hearing has yet 
been held on the appeal. 
 
Since the early 1980s, the US 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 US 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 US Bangladesh 
Business Council's (USBBC) delegation visit to Dhaka. 
Claimant A continues to maintain its flexibility in 
negotiating a reasonable settlement, assuming the GOB is 
willing to begin such negotiations promptly, either in 
Washington, D.C. or in Dhaka.  Early in 2002, Claimant A 
representatives met with GOB officials in Washington, and 
expressed Claimant A's preference for resolving the matter 
amicably, but Claimant A officials also expressed firm plans 
to pursue all legal and political means to reach resolution. 
Claimant A has followed up with calls and letters to the 
Bangladesh Embassy asking for an update on the GOB's 
position, but received no response. 
 
According to Claimant A's attorney, the case remains pending 
on appeal before the Bangladesh Supreme Court and no date has 
been set for a hearing.  Stateside counsel met with the local 
attorneys in September/October 2006 in an attempt to expedite 
hearings on the appeal, but local counsel continues to feel 
that GOB does not view this as a high priority matter. 
 
¶3.    a.  Claimant B 
 
      b.  1995 
 
      c.  Claimant B, a US citizen, borrowed $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 when his political connection fell 
from power, an anti-corruption case was filed against him (in 
1992).  Claimant B was arrested in 1995 and, after 
considerable US 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, however Claimant B states that his factory, 
which employs 90 people, has never made an operating profit 
and that in order to pay more than $5000 a month, he needs to 
be able to go to Bangladesh and run the factory without fear 
of arrest. 
 
DHAKA 00001126  002 OF 002 
 
 
 
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 $4.63 million fine.  In order to appeal, Claimant B had 
to surrender himself to arrest and imprisonment within 60 
days.  From March 2001, the US Government has received no 
further information on the criminal case. 
 
¶4.     a.  Claimant C 
 
       b.  2004 
 
       c.  From November 2001 to October 2004, Claimant C 
implemented a $3.9 million judicial reform project pursuant 
to a contract supported by a loan from the World Bank to the 
GOB.  Claimant C was not able to advance reforms as 
envisioned.  As a result the GOB holds Claimant C responsible 
for non-performance and, pointing to an external evaluation 
prepared by a competitor of Claimant C showing only 41% of 
the contract was completed, is withholding the balance of 
$1,194,725 due on the contract.  Claimant C asserts that it 
produced significant deliverables where it was permitted to 
deliver under the contract, and that explicit limitation 
placed on it by the courts, along with other obstructions and 
delays from the GOB, frustrated its ability to perform in 
other areas. 
 
The World Bank is actively seeking to resolve this matter, 
and has made several attempts to bring a mediator to 
Bangladesh to resolve this.  Claimant C has sent a signed 
Advocacy Questionnaire to the US Department of Commerce's 
Advocacy Center, and Embassy Dhaka's commercial section is 
also actively engaged in attempting to resolve this claim. 
Most recent contact with the World Bank was in June of 2007. 
 
¶5.  (SBU) Claimant A: MOL, Bangladesh; (US investment); no 
known privacy act waiver 
          Claimant B: Dr. Mohammad Rafiquzzaman; US citizen; 
no known privacy act waiver 
          Claimant C: IRIS Center at the University of 
Maryland; US entity; no known privacy act waiver 
 
¶6.  (SBU) COMMENT:  Claimant B's dispute involves a claim 
against him by a government-owned special purpose bank for 
repayment of a loan with interest due as per the loan 
agreement.  Claimant B apparently does not dispute the 
underlying claim or the amount due, but sought to reach 
agreement on a payment plan to clear the debt.  The parties 
have thus far been unable to negotiate a settlement of the 
debt, and the bank has obtained a judgment for the amount due 
against Claimant B.  Based on information contained in paras 
9 and 11 of reftel, Post believes this case is not an 
"investment" within the meaning of Section 527. 
 
¶7.  (SBU) Claimant C's dispute is included based on reftel's 
request to err on the side of inclusion.  While the GOB's 
reliance on an external report prepared by a competitor of 
Claimant C is dubious, it is undeniable that the inherent 
objective of the contract was not reached, leaving at least a 
colorable dispute between the parties. 
PASI