Libra LLC and others v. Republic of Azerbaijan

At a glance

Parties

Libra LLC, Neptun Azerbaijan-British LLC and Virgo Developments Ltd. (companies incorporated in Azerbaijan), and the Estate of Mr. Efruz Muduroglu (a deceased UK national), v. the Republic of Azerbaijan

Case no.

ICSID Case No. ARB/23/46

Forum and rules

ICSID Convention arbitration; ICSID Arbitration Rules in force as of 1 July 2022; place of proceeding Washington, D.C.

Treaty

United Kingdom–Azerbaijan BIT of 4 January 1996

Tribunal

Prof. Eduardo Zuleta Jaramillo (President), Mr. D. Brian King, Prof. Claus von Wobeser (replaced Ms. Carolyn B. Lamm, who resigned)

Sector

Real estate development (Landmark buildings, Baku)

Outcome

Pending. The published documents are interim decisions: bifurcation was denied (2 May 2025); after earlier refusals, the Tribunal recommended on 2 July 2025 that Azerbaijan lift all travel restrictions on Mr. Eran Muduroglu; it denied Azerbaijan's request for reconsideration and most of the Claimants' requested sanctions, but accepted in principle an interim costs award (30 October 2025).

Amount

The merits claim amount is not stated in the published documents. For sanctions, the Claimants sought provisional-measures costs of USD 1,371,161 (as of 24 August 2025) and a daily penalty of USD 50,000. Landmark III was ordered auctioned at AZN 120 million.

The dispute

The Claimants are three Azerbaijani companies, Libra, Neptun and Virgo, said to have been majority-owned by UK nationals at all relevant times, and the Estate of Mr. Efruz Muduroglu. Their alleged investments include the Landmark buildings in Baku, the Baku II Site and the Venetian Palace. The Claimants say a 50% stake in Landmark III was taken by Azerbaijan's First Lady. They also say that, under Presidential Decree No. 570, the International Bank of Azerbaijan transferred Libra's construction debt to the State-owned lender Aqrarkredit, which then obtained a court-ordered foreclosure and auction of Landmark III. They claim breaches of the UK–Azerbaijan BIT and say Azerbaijan used successive travel bans, tax audits and criminal charges against Libra's and Neptun's director, Mr. Eran Muduroglu, to pressure them into dropping the arbitration. Azerbaijan raised six jurisdictional objections (standing of the Estate, foreign control of the local companies, ownership of the shares, and Virgo's authorisation). It denies that Aqrarkredit's conduct is attributable to it and maintains that the travel bans and tax measures were lawful under Azerbaijani law.

Key holdings

1. The Tribunal refused a temporary restraining order to stop the December 2024 auction of Landmark III. The Claimants had waited, without good cause, until one business day before the auction to apply, and a party cannot assert urgency after delaying its application. TRO Decision ¶¶ 17–18
2. The renewed request for provisional measures was dismissed. On the record, the Tribunal could not find the Neptun travel ban unlawful, but it voiced concern at Mr. Muduroglu's prolonged inability to leave Azerbaijan and ordered updates by 15 April 2025. Relief on the Landmark III proceedings failed for delay; granting it would also have prejudged whether Aqrarkredit's acts are attributable to the State, and damages would likely be an adequate remedy. Decision on Renewed Request ¶¶ 61–65, 68–71
3. Bifurcation was denied. Upholding fewer than all of the ratione personae objections would not dispose of a substantial part of the dispute. Five of the six objections, on foreign control and ownership, are closely linked to the State conduct at issue on the merits. The Tribunal adopted Scenario 2 of the timetable in Procedural Order No. 1. Decision on Bifurcation ¶¶ 57–61
4. The Tribunal recommended that Azerbaijan immediately take all actions necessary to lift the restrictions on Mr. Eran Muduroglu's right to leave Azerbaijan and facilitate his departure. Since January 2024 he had been subject to five successive travel bans, three still in force. He is a key witness, and the bans risked a chilling effect on his testimony. Travel bans are discretionary under Azerbaijani law, and lifting them would not stop the State's investigations, so the measure was proportionate. The other requests were denied as insufficiently substantiated. Decision on Second Renewed Request ¶¶ 57–64
5. The provisional measures order covers the travel ban imposed for the criminal tax investigation. Reconsideration requires a material change in circumstances, and none was shown. Article 53-1.4 of the Criminal Procedure Code says proceedings "may" be suspended, so suspension is not automatic, and Azerbaijan's undertakings lacked specificity. ICSID provisional measures are binding despite the word "recommend". Decision on Reconsideration and Sanctions ¶¶ 42–57, 60
6. Azerbaijan did not comply with the order. The Tribunal refused daily monetary penalties and suspension of Azerbaijan's participation: it doubted its authority to impose them, and in any event they would be disproportionate and raise due process concerns. It also refused an in-person case management conference and unilateral publication of the Claimants' pleadings. It found an interim costs award for the provisional measures phase appropriate and invited a statement of costs. Decision on Reconsideration and Sanctions ¶¶ 59–76

Procedural history

1. 6 September 2023Request for Arbitration filed.
2. 14 February 2024The Claimants file their first Request for Provisional Measures, supplemented on 3 April 2024.
3. 6 June 2024Tribunal constituted.
4. 8 July 2024First Decision on Provisional Measures: the request is denied. On 12 July 2024 the proceeding is suspended after the Claimants propose the disqualification of Ms. Carolyn Lamm. Following her resignation, the Tribunal is reconstituted with Prof. Claus von Wobeser on 12 November 2024.
5. 26 December 2024Decision denying the Claimants' request for a temporary restraining order against the Landmark III auction.
6. 3 January 2025Procedural Order No. 1 (procedural rules and timetable) and Procedural Order No. 2 (transparency) issued after the first session of 5 December 2024.
7. 7 March 2025Decision dismissing the Claimants' Renewed Request for Provisional Measures and directing updates on the travel bans.
8. 2 May 2025Decision denying Azerbaijan's Request for Bifurcation.
9. 2 July 2025Decision on the Second Renewed Request: the Tribunal recommends that Azerbaijan lift all restrictions on Mr. Eran Muduroglu's right to leave the country.
10. 30 October 2025Decision denying Azerbaijan's Request for Reconsideration and most of the Claimants' requested sanctions; interim costs to follow. An Interim Cost Order dated 26 November 2025 is listed, but its text is not included.

Tribunal, counsel and experts

Decided by

• Eduardo Zuleta President
• D. Brian King Co-arbitrator
• Claus von Wobeser Co-arbitrator (replaced Ms. Carolyn B. Lamm on 12 November 2024)
• Carolyn B. Lamm Co-arbitrator — appointed by the respondent (resigned after the Claimants' disqualification proposal of July 2024)

For the claimant

King & Spalding LLP

For the respondent

Quinn Emanuel Urquhart & Sullivan, LLP

Experts

Arif Ayyubov (respondent) · Firuza Abbasova (respondent)

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Keywords

• provisional measures
• travel ban
• temporary restraining order
• Eran Muduroglu
• Landmark III
• Aqrarkredit
• bifurcation
• foreign control
• Article 25(2)(b) ICSID Convention
• standing of an estate
• UK–Azerbaijan BIT
• attribution
• Article 26 exclusivity
• reconsideration of provisional measures
• non-compliance with provisional measures
• sanctions
• criminal investigation
• interim costs
• real estate

Summary generated with AI from the published documents — refer to the award for the authoritative text.