Chișinău faces €66m arbitration over bus stops
Chișinău Municipality faces the risk of international arbitration by the company EPAMEDIA, which is seeking damages exceeding €66 million.
The dispute concerns a public-private partnership (PPP) contract signed in 2007 for the installation of 300 bus stops and the provision of advertising space in the capital. While the local administration claims the dispute stems from errors made by previous municipal leadership, councilors accuse a lack of transparency and mismanagement.
Municipal Councilor Victor Chironda's Warning
"The company EPAMEDIA is seeking damages exceeding €66 million from Chișinău City Hall," wrote municipal councilor Victor Chironda of the DA Platform. He published the arbitration notice and a note from the Legal Assistance Department on social media, documents which he claims were communicated to councilors "only today, April 22, the very deadline for appointing an arbitrator."
"This is very, very serious! I urge Mayor Ion Ceban and Deputy Mayor Ilie Ceban to urgently convene the Chișinău Municipal Council (CMC) and present comprehensive information on this subject," stressed Chironda.
Chișinău City Hall's reaction
The municipal administration acknowledges the existence of the dispute but rejects accusations of incompetence. In an official statement, City Hall disputes the amount of €66 million. "It is a figure claimed by the private partner of this contract, based on calculated lost gross revenue without considering operational expenses for the period from 2007 to the present."
The Municipality also states that the dispute is rooted in previous administrations: "City Hall has a history of many past lawsuits posing significant risk to the municipality. These date from previous years until Mayor General Ion Ceban took office."
According to a note from the Legal Assistance Department signed by its head, EPAMEDIA built and put into operation the 300 stations stipulated in the contract, while the municipality did not provide the promised advertising panels.
According to a legal opinion drafted by an external law firm, "based on the information presented by the City Hall [...], it results that, in fact, it was precisely the City Hall that violated essential obligations under the Contract."
Warnings from PAS
Dumitru Ivanov, Vice-Chairman of the PAS faction in the Chișinău Municipal Council (CMC), notes that his party requested the termination of the contract back in 2021, demanding that this contract be terminated. "Because if we had issued the notification in time," Ivanov stated, "it would not have been automatically extended for another 5 years. Consequently, we then submitted a draft decision to the Municipal Council to notify the company about terminating all contractual obligations between the City Hall and this company, but it was not supported."
The councilor also accuses the mayor of a change in attitude. "When he became mayor, he criticized the company and said that the contract should be terminated. After some time, they started praising the company," Ivanov further suggested. PAS claims to have also reported the case to law enforcement.
PSRM criticisms
Dinari Cojocaru, a municipal councilor from the PSRM, also believes that the current situation is the result of a preferential relationship fostered between City Hall and the EPAMEDIA company. According to him, his party repeatedly warned that this company was placing advertising abusively and non-transparently on public land, without respecting the principles of fair competition.
Cojocaru argues that EPAMEDIA benefited from priority access to the best locations in the city, while other companies did not have the possibility to sign similar contracts or compete on equal terms: "This is a step taken together with the mayor general. We warned that EPAMEDIA is a company detrimental to the municipality, which has been illegally posting advertising for several years."
We requested a reaction from City Hall regarding these accusations. So far, we have not received a response.
Arbitration or negotiation?
In the arbitration notice signed by Dr. Holger Bielesz on behalf of EPAMEDIA, the company requests the municipality to appoint an arbitrator. Otherwise, it reserves the right to apply to an appointing authority and to seek full recovery of costs.
Translation by Iurie Tataru
