IN THE MATTER OF AN ARBITRATION UNDER THE 1976 ARBITRATION

RULES OF THE UNITED NATIONS COMMISSION ON INTERNATIONALTRADE

LAW

- between -

UAB "GARSU PASAULIS"

(Lithuania)

Claimant

- and -

THE KYRGYZ REPUBLIC

Respondent

Before: Mr Kaj Hobér

Mr Ian Laird

Professor Nina Vilkova

Tuesday, 13 June 2023

(Day 2)

Transcript produced by JURISCRIPT (info@juriscript.co.uk)

INDEX

MR ANDRIUS LUKOSEVICIUS (called) ....................5

Direct examination by MR DAUJOTAS ...................7

Cross-examination by MR ALEKHIN ...................11

Re-examination by MR DAUJOTAS ...................89

Questions from THE TRIBUNAL ...................91

MR VYTAUTAS MIELIAUSKAS (called) ...................94

Direct examination by MR DAUJOTAS ...................95

Cross-examination by MR ALEKHIN ...................96

Cross-examination by MR BAYANDIN ..................104

Cross-examination by MR ALEKHIN ..................151
(continued)

Questions from THE TRIBUNAL ...................170

[Page 1]

1 Tuesday, 13 June 2023

2 (9.30 am)

3 THE PRESIDENT: Good morning, everyone, and welcome back to

4 Day 2 of our arbitration.

5 What I'm going to say now, there's no need to

6 translate it for the time being.

7 But we will be cross-examining Mr -- how should

8 I pronounce your name? "Lukosevicius"; is that not

9 correct? Yes, okay.

10 THE WITNESS: It was more or less okay.

11 THE PRESIDENT: I see a new face in Respondent's team today,

12 and who is that, if I may ask?

13 MR ALEKHIN: Yes, absolutely, Mr Chairman. We have

14 Judge Madina Davletbayeva, our legal expert. She has

15 arrived last night and she is of course part of the

16 Respondent's team.

17 THE PRESIDENT: Very good. Very welcome.

18 I assume you have no objection to that?

19 MR DAUJOTAS: Actually we do, Mr Chairman. We have an

20 objection.

21 Of course, I think there was no agreement between

22 the parties that the experts will participate in

23 cross-examination of the witnesses.

24 There's also an issue with the equality of parties

25 presenting their case. Our expert is not here, he was

[Page 2]

1 not supposed to be here and of course our expert will

2 not assist us in the preparation of questions, and our

3 expert will not hear the testimony of today's witness,

4 will not hear any new facts of today's witness that he

5 will say or not say, we don't know.

6 And of course the parties in any case, and the

7 experts, will not have a chance to give any new

8 arguments, for example based on the witness testimony

9 today. And of course the experts, our experts, will

10 have an opportunity to have a hearing transcript after

11 this hearing, after cross-examination of witnesses, and

12 that should be applied to both of the parties so that

13 the experts, legal experts, they can have the hearing

14 transcripts, but not to participate here and sort of

15 prepare in advance their position which we will hear

16 tomorrow.

17 So we have an objection of Judge Davletbayeva's

18 participation in the cross-examination.

19 THE PRESIDENT: Well, I'm looking at our Procedural Order

20 No. 4, point 4.5.6, and it says that:

21 "Witnesses shall be sequestered prior to their

22 examination, however they may be present during the

23 presentation of opening statements."

24 Now, usually you make a difference between

25 witnesses, fact witnesses, and experts, and experts are

[Page 3]

1 usually allowed to sit in even before their examination.

2 So that is the traditional approach that we take,

3 certainly in this jurisdiction. So I think we will

4 allow Judge Davletbayeva to stay in, taking into account

5 the fact that she has been sitting in during

6 cross-examination when she is cross-examined. I think

7 that is a reasonable compromise under the circumstances.

8 I understand that was not something you expected,

9 but the traditional rule is the one I mentioned and

10 I think we will -- we have taken note of your objection

11 and we will take that into account when she is being

12 cross-examined.

13 MR PARCHAJEV: Mr Chairman, one question about tomorrow's

14 cross-examination of experts. Will the experts be

15 allowed to sit during the other expert's

16 cross-examination, just for our understanding?

17 THE PRESIDENT: Yes.

18 MR PARCHAJEV: Noted, thank you.

19 MR ALEKHIN: Mr Chairman, if I may assure the Tribunal,

20 Judge Davletbayeva does not really speak English well,

21 so her presence here with the English and Lithuanian

22 channels is of no practical input, if you wish, and we

23 can of course provide an undertaking that she will not

24 provide any (inaudible) if that reassures my opposing

25 counsel, thank you.

[Page 4]

1 THE PRESIDENT: We have taken note of that.

2 Just to remind you again, you need to speak up a bit

3 and speak closer to the mic, because otherwise it will

4 be difficult for us to hear and I think for the court

5 reporters too.

6 So before we get on with cross-examination, I had

7 one question remaining from yesterday to basically

8 Claimant, perhaps also to Respondent, but I will start

9 with the Claimant, and that is your Request for Relief

10 concerning loss of business reputation.

11 Am I correct in understanding that you are relying

12 on precisely that loss of business reputation as opposed

13 to moral damages, or is it the same thing, or is there

14 a difference in your view? And maybe a short comment

15 from Respondent too on that. Please.

16 MR DAUJOTAS: Yes, Mr Chairman. Of course we do make

17 a difference between moral damages and our claim for

18 business reputation in this case. We think that the

19 principles applied in the jurisprudence that were

20 applied to moral damages calculations thereof and burden

21 of proof shall not be applied to our claim for business

22 reputation. We think it's different and different

23 standards should be applied. That's the short answer.

24 THE PRESIDENT: Thank you. Any comment from Respondent on

25 that?

[Page 5]

1 MR ALEKHIN: Yes. Is this better, can you hear me now?

2 Thank you so much.

3 Yes, we have dealt with this in paragraph 2.15 of

4 our Rejoinder whereby we essentially said this is

5 a repackaged claim for moral damages. So Claimant

6 presents this as a non-pecuniary loss, whereas the

7 authorities clearly suggest that if you can even discuss

8 a loss of reputation that might be compensable, it would

9 be in the form of pecuniary loss. So moral damages

10 which would of course therefore mean that the standard

11 of proof is much higher and as such non-pecuniary loss

12 is not compensable with authorities we have provided in

13 this setting.

14 THE PRESIDENT: Have we received an electronic copy of

15 Respondent's opening statement?

16 MR ALEKHIN: It was emailed. We can double-check it now,

17 but it was emailed at the start of our opening.

18 THE PRESIDENT: Okay. So it should be there somewhere,

19 okay, fine.

20 Very good. So let's proceed to cross-examination

21 then of Mr Lukoševicius.

22 MR ANDRIUS LUKOSEVICIUS (called)

23 THE PRESIDENT: Welcome. You've been called here as

24 a witness in this arbitration, and in international

25 arbitrations we do not ask witnesses to testify under

[Page 6]

1 oath, but you have in front of you a statement, if you

2 look there's a paper in front of you with the statement

3 in English that I would like you to read out the first

4 part of it which starts under the heading "Factual

5 witness declaration". So if you could just read out

6 that, please.

7 A. I, Andrius Lukoševicius, solemnly and sincerely declare

8 and affirm that the evidence I shall give will be the

9 truth, the whole truth and nothing but the truth.

10 THE PRESIDENT: Thank you.

11 I will ask you in a short moment to introduce the

12 witness by taking him to his statements and asking him

13 to confirm and so on and so forth. But just a couple of

14 ground rules with respect to cross-examination.

15 As you probably know, leading questions are not to

16 be put in direct examination, nor in redirect.

17 Cross-examination, of course, is all about leading

18 questions. So that's fine.

19 Also, in international arbitration, and certainly

20 not this chairman is very fond of objections being

21 raised by the other side during cross-examination, in

22 this case from the Claimant. If you think something

23 should be said or added or commented upon, you will do

24 that in your redirect, and let the cross-examiner go on

25 with his cross-examination.

[Page 7]

1 Okay?

2 MR DAUJOTAS: Understood.

3 THE PRESIDENT: Also to you, Mr Lukoševicius, if you don't

4 understand a question, say so and the question will be

5 put to you again or reformulated perhaps. If you don't

6 remember the answer, say so. This is not a memory test

7 necessarily. So it's okay to say I don't remember.

8 Okay? Without further ado, I ask you to introduce

9 the witness.

10 Direct examination by MR DAUJOTAS

11 MR DAUJOTAS: Thank you, Mr Chairman.

12 Good morning, Mr Lukoševicius. So just to check can

13 you hear the translation well into Lithuanian?

14 A. Yes, I can hear you perfectly well.

15 Q. So before I ask this one question, you have two binders

16 before you on paper. Can you confirm?

17 A. Yes, I have those.

18 Q. So these are statements you have submitted before this

19 tribunal; is that correct?

20 A. Yes, that's right.

21 Q. So, are you familiar with those witness statements?

22 A. Yes, I am.

23 Q. So for the record, your native language is Lithuanian;

24 is that correct?

25 A. Yes, that's right.

[Page 8]

1 Q. And the last question, did you participate in

2 preparation of these witness statements?

3 A. No, I didn't participate. I wrote everything down. The

4 lawyers just helped to formalise these witness

5 statements.

6 Q. Do you wish to make any modifications to your witness

7 statement?

8 A. No.

9 Q. Okay. So one question I have. Can you please open your

10 first witness statement, paragraph 31.

11 A. Yes, I have it.

12 Q. I will read some sentences for the record. You say:

13 "A tender for excise stamps was announced in autumn

14 of 2020, but due to unknown reasons to Garsu Pasaulis,

15 it was cancelled after submission of the bids and in the

16 beginning of 2021, it was re-announced, but after

17 submission of the bids, the procedure of opening the

18 bids has been postponed for more than 12 times ..."

19 And you say that:

20 "We believe that Garsu Pasaulis' conflict with the

21 Kyrgyz Republic is the reason for that."

22 My basic question, can you please explain what you

23 meant here, and why do you think this cancellation has

24 happened?

25 A. First of all, it seems very strange in the international

[Page 9]

1 public procurement context, this opening of bids,

2 postponing for 12 times over the period of half year or

3 even more, if I remember well.

4 Without indicating any reasons, the bid was

5 terminated, and then the new law of the Kyrgyz Republic

6 was released which indicated that those excise stamps

7 fall within the category of products which have to be

8 produced within the country, within the Kyrgyz Republic.

9 And right after the new tender was announced, where

10 we did not take part in because we could not go through

11 the qualification requirements because we were not among

12 the local producers, and the shareholder of that local

13 producer had to have 51% of the shares had to be owned

14 by Kyrgyz State. That seemed very strange to us,

15 because then, and to my knowledge even now, in the

16 Kyrgyz Republic there is not a single printing house,

17 which would be close to the well ... what security

18 printing manufacturers can produce. This is explicitly

19 about the safe printing which is excise stamps.

20 So based on this law, local producers, as far as

21 I remember there are two partly state companies where

22 the State has more than the 50% of shares, only they

23 could take part in this tender.

24 But since the technical base that they have does not

25 allow them to produce a product that would be even close

[Page 10]

1 to excise stamp, so it was pretty obvious that those

2 products will be subcontracted from a foreign company

3 and would be imported into the Kyrgyz Republic and would

4 be declared as they would be produced in the

5 Kyrgyz Republic, because there was no another option for

6 such a ...

7 After this new law was released, we also received

8 several enquiries from those companies, state owned

9 companies, which I mentioned and they were asking if we

10 could be a subcontractor to printing something, not

11 excise stamps, but something else. But we refused the

12 request because that would mean an infringement of this

13 new law.

14 So to our belief local businesses had an impact on

15 this law, on the release of this law, so that the

16 companies like Garsu Pasaulis, which were operating in

17 the Kyrgyz Republic as of 2013, and we were operating

18 there successfully in the area of excise stamps, that

19 they would be eliminated from the competition in the

20 Kyrgyz Republic.

21 That's it.

22 Q. Thank you.

23 Mr Chairman, I have no further questions on the

24 direct.

25 THE PRESIDENT: Thank you.

[Page 11]

1 So cross-examination, please then.

2 Cross-examination by MR ALEKHIN

3 MR ALEKHIN: Mr Lukoševicius, good morning.

4 My name is Sergey Alekhin. I'm counsel for the

5 Kyrgyz Republic and I will ask you a number of questions

6 regarding Claimant, Garsu Pasaulis, and its involvement

7 in the 2018 tender for the manufacturing of passports in

8 the Kyrgyz Republic.

9 THE PRESIDENT: Sorry, Mr Alekhin, you need to speak closer

10 to the microphone.

11 MR ALEKHIN: I understand. I'm just trying to -- okay.

12 Is this better? Thank you so much.

13 Mr Lukoševicius, you should have the two witness

14 statements in front of you; correct? Your two witness

15 statements.

16 A. Yes.

17 Q. Now, I will demonstrate certain documents to you on the

18 screen that you and the Members of the Tribunal will

19 see. There will be the originals and the translations

20 that we have on the record. So if anything is unclear

21 or you cannot see something clearly or you want to look

22 at another part of the exhibit, you let me know; okay?

23 And of course as Mr Chairman mentioned --

24 A. Okay.

25 Q. -- if you don't understand the question that I'm asking,

[Page 12]

1 of course feel free to ask me to clarify it. I would be

2 happy to do it; okay?

3 A. Of course, I will.

4 THE PRESIDENT: Sorry. You need to wait for the translation

5 and then put your next question because otherwise, you

6 know, it's difficult to follow.

7 MR ALEKHIN: Of course.

8 In terms of volume, is this fine right now for

9 everyone? Just to make sure. Thank you so much.

10 Mr Lukoševicius, can you remind me, please,

11 Garsu Pasaulis was acquired by this Belgian company,

12 Semlex, in 2014 or 2015; correct?

13 A. I think, yes, 2014, 2015, I don't remember exactly.

14 Q. I assume you have heard about Semlex before that, I mean

15 before it acquired Garsu Pasaulis in 2014/2015?

16 A. Yes, because our activities entail international

17 markets. So we had participated in various

18 international tenders and we had to encounter them as

19 competitors before. Yes, I knew about this company.

20 Q. Not only competitors, I assume, but there were perhaps

21 various projects you worked together on before they

22 acquired Garsu Pasaulis?

23 A. Yes, since we encountered them as competitors, they saw

24 us as a potential company for their projects for

25 subcontracting projects to produce various blanks, yes.

[Page 13]

1 Q. Let's be a bit more specific. So on the screen you have

2 paragraph 14 of your first witness statement.

3 You should have it now, I apologise. Do you see

4 paragraph 14 of your first witness statement on the

5 screen?

6 Thank you.

7 Now, I highlighted certain projects here.

8 A. Yes.

9 Q. Can we start, perhaps, with Madagascar, the e-passports

10 and ID cards.

11 So Madagascar is among the countries that

12 Garsu Pasaulis produced biometric passports for; is this

13 correct?

14 A. Yes, that's correct.

15 Q. Was that the same project you worked on together with

16 Semlex?

17 A. Yes, we have worked as a subcontractor for document

18 blanks in Madagascar.

19 Q. For Semlex; correct?

20 A. Yes, correct.

21 Q. The Comoros project, e-passports and ID cards, was this

22 also a joint project you worked with together with

23 Semlex?

24 A. That was an analogous project to the Madagascar project.

25 Q. The Mozambique passport project; same thing?

[Page 14]

1 A. No. In Mozambique we took part as a supplier, direct

2 supplier to the end consumer, to the State and client to

3 the State.

4 Q. So Semlex, if it had any activities in Mozambique, that

5 was without your involvement; correct?

6 A. Yes, that's correct.

7 Q. And the Congo project, I believe passports also, was

8 this a joint project with Semlex?

9 A. It was a joint venture project where we took part as

10 a partner who was supplying exceptionally blanks for

11 passports, passport blanks.

12 Q. Thank you. And are you aware of the details of this

13 cooperation on the Congo project? Were you involved in

14 it?

15 A. Just like I mentioned, we took part in the production of

16 passport blanks and supply of those passport blanks.

17 Q. Do you recall, Mr Lukoševicius, as a supplier of those

18 blanks in Congo, would Garsu Pasaulis normally itself

19 sign a contract supplying those passports?

20 A. Yes, there was a joint venture agreement signed, just

21 like I mentioned, and a part of that was Garsu Pasaulis,

22 a part of that contract.

23 Q. And normally it would be the director general or the

24 CEO, I assume, I mean someone from Garsu who would, you

25 know, sign this joint venture agreement or the

[Page 15]

1 consortium agreement?

2 A. Yes, it may be, but it also may be an authorised person.

3 Q. Like Mr Karaziwan; right?

4 A. Yes, the way I see it now, it may be true.

5 Q. Yes, okay. For the record, RER-AM-14. I hope I gave

6 the reference correctly, but it's on the record.

7 A contract for the Congo project involving Semlex as

8 a consortium with Garsu Pasaulis represented by

9 Mr Karaziwan.

10 So this is just for the record, Mr Lukoševicius.

11 There was no question here.

12 So if I were to tell you in light of what we've seen

13 that Semlex was totally not involved in Garsu Pasaulis'

14 activities or affairs, you would say that's inaccurate;

15 correct?

16 A. I did not say that Semlex did not take part at all in

17 the activities of Garsu Pasaulis. Like you see in this

18 case, Albert Karaziwan, as he was a shareholder of

19 Garsu Pasaulis, had an authorisation to sign this

20 agreement on behalf of Garsu Pasaulis as one of the

21 partners of the consortium.

22 Q. And that was just one instance out of several of such

23 cooperation between Semlex and Claimant; correct?

24 A. Namely this, just like I see in front of me, yes,

25 I understand and agree with you. I don't have any

[Page 16]

1 information, I do not know or remember about any other

2 cases.

3 Q. Thank you, Mr Lukoševicius. You've just said,

4 and I quote the translation that I heard, "I did not say

5 that Semlex did not take part at all in the activities

6 of Garsu Pasaulis". If I take you to paragraph 45 of

7 your first witness statement, that is what you said in

8 the witness statement, that Semlex is not involved at

9 all in Garsu Pasaulis' activities or affairs. Would it

10 be fair to say now that it is not an exact statement and

11 you would be maybe want to correct that statement or

12 qualify it in your witness statement?

13 A. Semlex participation in our activities was limited as

14 shareholders. Mr Karaziwan, he would come once or two

15 times a year to Vilnius. So I think that was an

16 ordinary or normal communication, but Semlex did not

17 interfere into our activities at all.

18 Q. If I can take you to an exhibit that I will show you now

19 on the screen, so it is from your witness statement. It

20 is exhibit 02 and it is called "GP profile", so I assume

21 some information about Garsu Pasaulis. I will show it

22 to you on the screen now.

23 So I've increased this last page of the exhibit,

24 Mr Lukoševicius. It says 53 countries at the bottom.

25 We've seen 55 somewhere else. I assume two more added.

[Page 17]

1 And we were told, Mr Lukoševicius, that Garsu is active

2 in 55 or more countries.

3 Would it be accurate, Mr Lukoševicius, to say that

4 Garsu and/or Semlex are active in those countries?

5 A. Yes.

6 Q. Thank you, Mr Lukoševicius.

7 If we can now move to another block of questions.

8 So let's look at paragraphs 22 and 23 of your first

9 witness statement. Here you describe the 2012 tender

10 for e-passports; correct?

11 A. Yes, that's true.

12 Q. And in fact you have signed the tender bid on Garsu's

13 behalf; do you recall that?

14 A. It may be, yes.

15 Q. Just to confirm, Mr Lukoševicius, it is so. Your

16 signature in exhibit 2 is on the screen, but I think you

17 would not dispute that this is your signature?

18 A. No, I will not argue, that is my signature.

19 Q. Thank you, Mr Lukoševicius.

20 Can we agree that Garsu Pasaulis did not win the

21 tender?

22 A. No, I do not agree, because the tender was terminated.

23 Q. Okay. So no one won the tender; right?

24 A. Well, that is how it looks like.

25 Q. Yes. So imagine, just as a hypothetical, you have to

[Page 18]

1 prepare some promotional materials or a statement of

2 capability about Garsu back in 2012/2013. You would of

3 course not have put the fact that Garsu has won somehow

4 this 2012 tender as that would be factually wrong;

5 correct?

6 A. Since nobody won that tender, so that's the fact, that

7 nobody won that tender.

8 Q. In fact, it's not only just a fact that no one won the

9 tender; if you put something like this, that Garsu or

10 someone else has won this tender, that would be

11 misleading; would you agree?

12 A. After opening the bids in this tender the price level

13 was known and judging from some other information that

14 we learned by talking to our clients, that our tender

15 had to be the best one.

16 Q. Would you have put, Mr Lukoševicius, in a promotional

17 material or a capability statement the fact that you

18 potentially won a tender that you did not win and that

19 no one did win?

20 A. No, we would not have done this.

21 Q. Okay. Just so that we're clear, your lawyers are fine

22 putting this in the Statement of Claim in this

23 arbitration by saying that the tender was technically

24 won. Do you maybe want to, as part of the client,

25 correct that and say that it was technically not won by

[Page 19]

1 Claimant?

2 A. No, I do not agree, because just like I mentioned

3 before, according to the information that we had, our

4 proposal, our tender was the best. Our offer was the

5 best, just like I indicated in my statement.

6 Q. Okay. And by saying that it was the best, do you mean

7 it was the lowest offer?

8 A. The assessment was not only based on price, but also on

9 qualification and the price. So -- well, from my own

10 opinion, my judgment, since we met the qualification

11 requirements, and we also offered the best price, so

12 this is what allows me to assume that our offer had to

13 win.

14 Q. Mr Lukoševicius, you offered the best price, meaning the

15 lowest price, or how could the price, if it's not

16 lowest, could be the best? Was it the lowest price?

17 A. No, our price was not the lowest. The lower price was

18 offered by Mühlbauer company which was almost two times

19 lower and it showed how inadequate that price was,

20 because other companies offered a price that was similar

21 to our price, I mean, and the only offer from Mühlbauer

22 had two times lower, almost two times lower price.

23 Q. So if there was an offer saying 30% lower, that would

24 not be shocking to you, or abnormal?

25 A. Well, you know, it doesn't matter if you are shocked or

[Page 20]

1 not, but we base ourselves on technical documents of the

2 tender which include technical and qualification

3 requirements and then you simply match the prices of

4 your prices, competitors' prices, and sometimes it

5 should not be lower up to 30%. To my estimation, there

6 can only be a deviation of 10 to 15%. What I remember

7 from the Mühlbauer case, their price was so much lower,

8 so we knew that their proposal was not in line with the

9 qualification requirements and other technical

10 requirements.

11 Q. And conversely, if there are several proposals that are

12 much higher in terms of price, they would also be

13 somehow abnormal; right?

14 A. Yes, correct. In public procurement there's even

15 a requirement when the price is inadequately low or

16 inadequately high, and I have in mind that for the

17 proposals which meet the qualification requirements,

18 then the procuring organisation has to get a detailed

19 explanation where these prices come from or how they are

20 made up.

21 (Pause)

22 Q. I'm just waiting for the police to pass,

23 Mr Lukoševicius, sorry.

24 You mentioned, Mr Lukoševicius, that when the tender

25 bids were opened, and I'm going to take you to

[Page 21]

1 an exhibit that shows the prices for this 2012 tender,

2 so it's exhibit CWS-Mieliauskas-2-13 for the record,

3 it's on the screen. It's a press report from

4 August 2012 about that tender.

5 You see here six offers, Garsu is in it. You have

6 Mühlbauer, 28.8 million, Morpho for France,

7 41.3 million, Garsu 49.9 approximately, roughly 50, two

8 others.

9 You mentioned -- that's not my question yet. You

10 mentioned that your offer was the best and it was

11 somehow in your qualification best because it was not

12 only based on price, but something else. But my

13 question to you is, Mr Lukoševicius, when those bids are

14 open, the only information that is public are the price,

15 the names of the participants and maybe information and

16 guarantees; correct?

17 A. Yes, that's right.

18 Q. Okay. So your knowledge about some other parameters of

19 your competitors' bids, where did it come from?

20 A. We communicate a lot with our competitors and in this

21 case I remember that Mühlbauer participated in this

22 tender and Mühlbauer was represented by the same person

23 who also was in charge of the former Soviet Union and

24 right after the tender we met in the hotel and discussed

25 this tender and he clearly stated that their company

[Page 22]

1 will not risk in Kyrgyz without receiving 100% of

2 advance payment, and it was a key violation, major

3 violation of the tender.

4 So this knowledge, this news spread among

5 competitors and this tender when the bids are opened.

6 Q. But of course you haven't seen actual Mühlbauer's bid,

7 right? So someone told you whatever they wanted to tell

8 you; right?

9 A. That's right.

10 Q. Can I show you paragraph 31 of your first witness

11 statement, Mr Lukoševicius.

12 So you recount here the story of the Kyrgyz tender

13 for those excise stamps that was announced in 2020;

14 correct?

15 A. Yes, that's right.

16 Q. And you say here that it was cancelled for unknown

17 reasons to Garsu Pasaulis; correct?

18 A. Yes, that's right. And I'm also continuing that the

19 procedure of opening the bids has been postponed for

20 more than 12 times and it was something new in my

21 career, which is 20 years long, because sometimes the

22 opening of the bids is postponed due to technical

23 reasons once or twice, but I have never had this

24 experience that the procedure is postponed for more than

25 12 times.

[Page 23]

1 I can only suspect that since it was the autumn of

2 2020, the proceedings have already started, I mean of

3 this case, and the Kyrgyz Republic made every effort to

4 eliminate the company which participates in the arbitral

5 tribunal from participating in the competition and they

6 made every effort to not have won this tender.

7 Q. Thank you, Mr Lukoševicius. So we can only suspect,

8 I take note of that.

9 But that was not really my question, because I asked

10 you, you know, is it correct that -- you say in your

11 witness statement that due to unknown reasons to

12 Garsu Pasaulis, the tender was cancelled. So do you

13 maintain that it was due to unknown reasons to you that

14 this tender was cancelled, not postponed, cancelled?

15 A. Yes, that's right. I can state that we don't know that

16 officially, but the tax inspectorate, GNS, and its

17 staff, with whom we communicated on the project that had

18 not ended yet, and we were informed several times -- we

19 informed them that our head doesn't know what to do in

20 this procedure, how to continue or postpone this

21 process, but this communication was not formal and

22 I cannot say formally that Garsu Pasaulis was aware of

23 the reasons why this tender was cancelled. I cannot say

24 that, that we were aware of that.

25 Q. Thank you very much, Mr Lukoševicius. But then my

[Page 24]

1 problem with this statement that you confirmed is that

2 you reference an exhibit here, a document. It's

3 footnote 24. And if you look at that document, and

4 again it's something you've attached to your witness

5 statement, right, it is a letter or a decree from the

6 Prime Minister of the Kyrgyz Republic, explaining

7 precisely why the tender was cancelled, because the part

8 of the technical requirements had to be reviewed or

9 heightened.

10 Have you seen this letter before?

11 A. Yes, I saw it.

12 Q. You may want to correct your witness statement probably

13 at paragraph 31, and say that for reasons known to

14 Garsu Pasaulis -- if you've seen this letter, which

15 tells you the reason why the tender was annulled, you

16 want to probably correct that to due to known reasons to

17 Garsu Pasaulis the tender was cancelled?

18 I can help you like this.

19 A. I agree.

20 Q. Thank you very much.

21 Now, staying on paragraph 31 of your witness

22 statement, which was slightly corrected or clarified

23 with you, Mr Lukoševicius, I assume you carefully

24 monitored the status of this tender, given that Garsu

25 was supplying excise stamps for the Kyrgyz authorities

[Page 25]

1 for many years; correct?

2 A. Yes, that's right.

3 Q. Can you just clarify, Mr Lukoševicius, do I understand

4 correctly that Garsu actually submitted the tender

5 proposal but then the opening bids have been postponed

6 multiple times; is that what happened?

7 A. Yes, the bid was submitted electronically.

8 Q. Garsu Pasaulis submitted the bid; correct?

9 A. Yes, that's right.

10 Q. What I'm trying to understand, Mr Lukoševicius, is if

11 you look at -- one second.

12 So this is an exhibit, again attached to your

13 witness statement, that refers to postponement of

14 submitting a tender application in the e-procurement

15 system. So the procurement procedure actually remained

16 open for a longer period of time; correct?

17 A. No, that's not right. The first date when the bid could

18 be submitted, and bids were submitted and it closed just

19 the opening of the bids was postponed.

20 Q. But this is not your own document. It says deadline for

21 submitting a tender application, changed, postponed,

22 postponed, postponed. Is the system incorrect or your

23 testimony is incorrect?

24 A. I cannot comment on that right now because I don't

25 remember well.

[Page 26]

1 Q. That is fine.

2 A. I would like to comment. We submitted our bid until the

3 first deadline which was included in the documents of

4 the tender and a submission meant that we submit the bid

5 in the electronic procurement platform. There was just

6 one key we had to press, and then we looked for other

7 procedures, and every time when the bids had to be

8 opened, we received this message that it was changed,

9 changed and then postponed, postponed.

10 Q. Did you have any queries or clarifications that you may

11 want to ask the procurement entity via the system?

12 A. As far as I remember, no, we didn't do that.

13 Q. For any other projects in the Kyrgyz Republic have you

14 ever asked for any clarifications from the procuring

15 entity via the platform?

16 A. Yes, we did. In 2018 tender on passports the tender was

17 electronic and we could submit questions and receive

18 responses and, as far as I remember, we sent a few

19 enquiries.

20 Q. And for this tender, the 2020 tender, for excise stamps,

21 you may not have asked any questions, but indeed others

22 have. Actually 38 questions spanning many, many months.

23 Do you recall any of that sort?

24 A. It may be the case.

25 Q. It would be natural, until all the clarifications and

[Page 27]

1 questions are answered, that the procuring entity would

2 prolong the tender, for instance, just because there

3 happens to be a lot of questions from the bidders;

4 correct? Not from you, from other bidders.

5 A. Yes, such a procedure would be normal, but not in this

6 case when the opening of the bids is postponed for

7 12 times.

8 Q. So it was normal -- that's paragraph 36 of your first

9 witness statement -- sorry, totally normal -- for the

10 2018 tender, but not normal at all for the 2020 tender;

11 is that your testimony?

12 A. Yes, that's what I want to say, because in 2018 tender

13 the questions were submitted until a certain date or

14 when they could be submitted and the procuring

15 organisation responded, and after the deadline we

16 couldn't submit any more questions, and the procuring

17 institution answered the questions and on the basis of

18 them, the companies involved in the tender had to submit

19 their bids.

20 Q. I see.

21 Mr Lukoševicius, by the way, do you recall what

22 incoterms were applicable in the tender documentation

23 for the 2018 tender for passports?

24 A. I don't really remember.

25 Q. Can you take it from me that it's CIP, or do you want me

[Page 28]

1 to show you the document?

2 A. If you are saying this, that it's CIF or CIP, I would

3 trust you.

4 Q. I appreciate, Mr Lukoševicius. Just for avoidance of

5 doubt, it is CIP, exhibit R-17. Do you recall what CIP

6 stands for, or should I clarify?

7 A. CIP is -- involves insurance and transportation to the

8 final destination. Delivery to the final destination.

9 Q. Right.

10 The terms of the 2018 tender documentation, the

11 destination was the Manas airport in Bishkek; correct?

12 A. As far as I can see, that's right.

13 Q. So CIP is in contrast, in your experience

14 Mr Lukoševicius, to let's say DDP, delivery duty paid?

15 Those are two different concepts requiring two different

16 levels of logistics; correct?

17 A. Physical logistics is the same. The delivery is the

18 same, but the calculation of taxes is different.

19 Q. Because under DDP you would then require not only to

20 bring the goods in the country, but clear them for

21 import, pay for duties, carry out customs operations;

22 correct?

23 A. Yes, that's right.

24 Q. Actually the excise stamp contract, both of them,

25 between Garsu Pasaulis and the Kyrgyz authorities, was

[Page 29]

1 under DDP; correct?

2 A. If I remember well, yes, that's right. We had to carry

3 out all the import procedures.

4 Q. Thank you. Since we established a trust relationship,

5 you can trust me it was DDP. I will not take to you

6 a document.

7 So that would require a local office to handle the

8 logistics, because you had to do the duties and taxes

9 yourself, store the stamps somewhere, you know, plus

10 set up the hardware systems, train local personnel, and

11 all of that was in the excise stamp contract; yes?

12 A. Yes, that is right.

13 Q. Now, in contrast, the idea behind the 2018 tender for

14 e-passports was just manufacturing blank passports and

15 delivering them to Manas airport on CIP basis, as we

16 established; correct?

17 A. Yes, that's true what you are saying, but I would like

18 to add something. The e-passport blank is not made of

19 paper which you make and you deliver it to the client

20 and that's it. Even the regulations of the tender held

21 it that this e-passport should be compatible with all

22 the equipment available in the Kyrgyz Republic, I mean

23 that the chip has to be fully programmed and it should

24 be in line with all the e-passport personalisation

25 equipment and the systems used at that time in

[Page 30]

1 Kyrgyz Republic.

2 So the passport should not have been just printed on

3 paper, but it had to be compliant with the passport

4 issue system that was valid in the Kyrgyz Republic at

5 that point in time. So we had a lot of work in place of

6 destination in order to make this chip compliant with

7 the software that was used at that time in the

8 Kyrgyz Republic.

9 Q. That would of course be (inaudible) process. I'm just

10 trying to figure out how it works here, Mr Lukoševicius.

11 So you agree on technical specifications, you make sure

12 the chip is compliant with them and then you print the

13 passports, insert the chip and ship it to Manas airport

14 on a CIP basis; correct?

15 A. Yes, that's right, but I would like to add again that

16 these e-passport blanks had to work, or be compliant,

17 compatible with the equipment that was used in the

18 Kyrgyz Republic, and for them to work we had to have

19 electronic personalisation, and we had to have data and

20 this data should have been entered into this chip. And

21 all these things have to take place locally, not online,

22 not electronically, and not in a distance mode.

23 Q. I'm sorry, are you saying that the tender was also for

24 personalisation of passports, or electronic

25 personalisation?

[Page 31]

1 A. No, the tender was for blanks, but there was

2 a requirement for those blanks to work and operate on

3 the existing e-passport system or e-passport issuance

4 system in Kyrgyz Republic. And for them to work we had

5 to make intense adjustment on site, on the spot, and

6 taking various software into account.

7 Q. Okay. Well, let's explore this 2018 tender in a bit

8 more detail.

9 If you need water, or if you want to pause, of

10 course, let us know and I guess we can adapt. We are in

11 the Tribunal's hands, but we do not want to --

12 THE PRESIDENT: As I said, we are in your hands, but we need

13 to make a coffee break at some point before lunch. So

14 it's really up to you.

15 MR ALEKHIN: Thank you very much. We're halfway through.

16 Paragraph 46 of your first witness statement says:

17 "Garsu Pasaulis has never received any notices or

18 requests from the Tender Commission or the GRS."

19 That's what your witness statement says. Do you

20 want to qualify or correct that statement here as we've

21 done several times previously with the other paragraphs

22 in your witness statement?

23 A. After opening the bids, the only time when we were

24 approached by the client, that was when all participants

25 of the tender were requested to specify their offers

[Page 32]

1 regarding one of the paragraphs of the terms and

2 conditions of the tender, and we have specified that

3 just like all the other participants. That was the only

4 time when we were approached and contacted before the

5 announcement of the winner of the tender, when we were

6 approached by the client.

7 Q. I should probably clarify, Mr Lukoševicius.

8 Paragraph 46 is in a part of your witness statement

9 which deals with the period after the announcement of

10 the results. So we're talking here about 45, for

11 instance. That's, you know, February 2019 period, about

12 the negative articles. And so in response to that,

13 paragraph 46 of your witness statement says:

14 "Garsu Pasaulis has never received any notices or

15 requests from the Tender Commission or the GRS."

16 So it's not really the period, you know, prior to

17 the opening of the bid or shortly thereafter, if you

18 wish, it's the period of February onwards. And, again,

19 the question is: do you want to qualify or clarify or

20 correct your statement at 46 similarly to what we've

21 done previously with you in other paragraphs of your

22 witness statement?

23 A. I'm sorry, but I don't really understand the question

24 because, just like I mentioned, we only received

25 a request to specify one of the conditions of the tender

[Page 33]

1 just like all the other participants, and that was

2 before the announcement of the winner of the tender.

3 After the results of the tender were announced, we

4 did not have any contacts with the Tender Commission.

5 We only exchanged several email messages where I was

6 already aligning and agreeing on my arrival and the

7 signing of the contract.

8 Q. You're qualifying or describing email messages, for

9 instance, as something different from notices or

10 requests; do I understand that right?

11 A. All the notices about the tender, the developments of

12 the tender, we would receive from the online portal of

13 public procurement up until the announcement of the

14 winner of the tender, and after the announcement of the

15 results, I only was entitled to download the manuscript

16 or the draft of the agreement. And then I received

17 an email message from someone in the Tender Commission

18 or the GRS, I don't remember exactly, and there we

19 started agreeing on the signing of the agreement. This

20 is what the communication we had with this tender --

21 with this procuring organisation.

22 Q. So to qualify paragraph 46, Garsu never received any

23 notices or requests from the Tender Commission or the

24 GRS except for the email communications Garsu and GRS

25 had with respect to the draft tender; would that be

[Page 34]

1 a more accurate representation of the facts?

2 A. Yes, that would be closer to what I'm saying.

3 Q. Yes. And if we can even make it a bit closer closer, so

4 Garsu Pasaulis never received any notices or requests

5 from the Tender Commission or the GRS. Now we have

6 agreed that we should add "except emails exchanged

7 between Garsu and SRS with respect to the draft tender

8 contract" and "except a letter from SRS asking Garsu to

9 extend its tender validity bid, and Garsu replying that

10 it would do that"; would that be more accurate?

11 A. Yes, as for the validity of the offer, the guarantee of

12 the offer, yes. That you made a right correction.

13 Q. Thank you. I appreciate that.

14 Now, if we can look at one of those exchanges that

15 we agreed with you, we should add as a qualifier to

16 paragraph 46 of your witness statement, Mr Lukoševicius,

17 so it would be exhibit C-029. Just one second.

18 (Pause)

19 So you have it in your witness statement under

20 a different exhibit, but do you remember this email?

21 A. Yes, I do.

22 Q. Thank you. And then with respect to this email, I'm

23 going to jump back for a second to your witness

24 statement, Mr Lukoševicius. I'm interested in

25 paragraph 48. This paragraph here, and this sentence

[Page 35]

1 here:

2 "The Tender Commission sent us the draft contract

3 for our review ..."

4 And let's leave it there.

5 Now, the footnote here, 39, is a reference, take it

6 from me, to this email that I have shown you, and I'm

7 going to go back now to that email if I may. Just keep

8 in mind that paragraph of your witness statement,

9 please.

10 So you have it in Russian on your left-hand side and

11 you have it now in English normally on your right-hand

12 side or the other way round.

13 So you've said in your witness statement the Tender

14 Commission sent us a draft for our review, and that's

15 the email.

16 What I'm struggling to understand, Mr Lukoševicius,

17 is there's no mention of the Tender Commission sending

18 in this email any draft contract for your review; is

19 that correct?

20 A. As far as I remember, by reading this email, we were

21 dealing with the entire contract, entire agreement,

22 which includes the draft text of the agreement which

23 I have downloaded, along with there was also the

24 delivery timetable, technical specifications, and

25 tenders documents and our bid, our offer. So I wanted

[Page 36]

1 to agree on everything and to align everything and to

2 see how it will look like in its end form of how we will

3 sign it: what the final version of it would look like.

4 So I understand that we were talking not only about

5 the contract itself, but an entire set of documents

6 which I just mentioned before, all the parts of those

7 documents, which would entail or be incorporated into

8 one single agreement.

9 Q. Let's take a step back, Mr Lukoševicius.

10 So on February 6, 2019 -- we are jumping back about

11 10 days or so -- you receive a reply from a human being,

12 not an automated system, on the tender platform,

13 Ulan Baltabayev. Do you remember this email?

14 (Pause)

15 A. Yes.

16 Q. Okay. And in this email, of course, no one is sending

17 you a draft contract; correct?

18 A. As far as I understand, there's no attachment.

19 Q. Yes. And the same document, but we're going slightly

20 back in the chronology, 4 February, two days earlier,

21 again that's an email from Ulan Baltabayev to yourself;

22 correct?

23 A. Yes, true.

24 Q. And this highlighted portion here -- I'm happy to show

25 the Russian version if you wish. I'm going to highlight

[Page 37]

1 this part here for you in Russian and then in English.

2 I'll ask my question now.

3 Do I understand it correctly that aside from a draft

4 that you've downloaded from the e-procurement platform

5 of the contract, you have never received any other draft

6 contract or any contract documentation from the SRS?

7 A. As far as I remember, I did not receive any.

8 Q. Is it also true that SRS told you on 4 February 2019 --

9 it's on the screen, that email -- that the contract that

10 you have downloaded from the system is generated

11 automatically by the platform? The contract will be

12 concluded according to the form, template, of the tender

13 documentation considering agreements -- so in Russian

14 "(Russian spoken)", approvals for validations, comments,

15 so in Russian "(Russian spoken)" or introduction of

16 corrections or comments, and attachments, or "(Russian

17 spoken)" of the parties; correct?

18 A. Well, this is how it looks like.

19 Q. It's how it looks like.

20 Can we please now go to -- actually one more thing

21 in relation to this point.

22 Now, this is an email from you to the CRS, asking to

23 send you the draft contract. So that would confirm that

24 the SRS did not send you a draft contract; correct?

25 A. I have downloaded draft project, so probably they have

[Page 38]

1 not sent the draft agreement to me, so because we only

2 spoke about what I have downloaded myself, and in this

3 point I have already clarified that what I had in mind.

4 The entire set of documents, the entire agreement, not

5 only the text of the contract, not only the template or

6 the draft or the form of the contract.

7 Q. Have you ever written to SRS saying "What should I do

8 with the template contract that I downloaded and why

9 haven't you sent me a contract that you want us to sign

10 or agree on?", or you just proceeded on the presumption

11 that whatever you downloaded, the SRS would be happy

12 with, even though you're asking them to send you a draft

13 contract?

14 A. It may be so that we found certain mismatches between

15 the form that was generated by the system and the terms

16 and conditions of the tender which will -- the contract

17 that was attached, the terms and conditions; this may be

18 the case.

19 Q. Okay. If I can take you to paragraph 18 of your second

20 witness statement, Mr Lukoševicius. So here you say:

21 "... communication from GRS [or SRS as we referred

22 to] stopped after 21 February 2019, as GRS did not

23 respond to any further enquiries from Garsu Pasaulis."

24 Can we be clear here, what you mean to say is that

25 Garsu did not send any further enquiries to SRS from

[Page 39]

21 February 2019 onwards; is this correct?

A. Yes. When we have agreed on everything, as you may see
before, I only asked for them to send the final draft of
the entire contract. I also asked, I think, about the
guarantees of implementation of the contract and I did
not receive any response to this email. When I received
no response, I did not send anything to them and I was
waiting for the response, but I did not receive
anything.

Q. So this should be correct, and I have several questions
here. So this paragraph again, now by way of tradition,
should be corrected to say:

"Communication from GRS stopped after
21 February 2019, as GRS did not respond to any previous
queries from Garsu Pasaulis."

Correct?

A. No, I don't think so, because from the email that we had
seen before, that we were communicating, but after my
last enquiry, they did not respond to it. And did not
respond at all.
So this paragraph is true in my view. I don't see
a way of how it could be corrected.

Q. Mr Lukoševicius, were there any emails, letters, faxes,
text messages, friendly calls, whatever it was, from
Garsu to SRS after 21 February 2019?

[Page 40]

A. No, there was not any. A general explanation. So the
last email was the last official correspondence we
received from the Kyrgyz Republic.

Q. Just to re-confirm, Garsu Pasaulis did not deem it
necessary to follow up with the SRS, saying "We've asked
you for a draft contract several times, could you please
send it to us"; correct?

A. You see, when you mentioned that we have sent several
enquiries and we did not receive any answer, and I even
had bought plane tickets because I expected this
cooperation to continue, but it stopped, and at that
point in time our representatives in the Kyrgyz Republic
informed us about information that appeared online,
online media, that certain investigations had started,
and if I remember well, we decided to wait a bit because
we did not receive this information in a formal way. So
we were just waiting for the comments from SRS.

Q. Was that on 21 February that you learned about those
news, 25 February, the 23rd, the 24th, can you remember?
Your witness statement says after 21 February 2019, so
I'm trying to just establish a chronology here,
Mr Lukoševicius, really.

A. I don't remember exactly, but logically it could --
should have been several days after 21 February or maybe
a week after the 21st, because as far as I remember,

[Page 41]

I started changing the dates of the flight because it
was not quite clear and when should I go to sign the
contract we have agreed on. So it could be two weeks
time, I don't really remember exactly.

Q. When you say the contract you've agreed on, do you mean
the contract, the draft of which you've been asking
several times from the SRS and they've never sent it to
you; is that the contract that you somehow agreed on?

A. Yes. That's what I mean.

Q. Can we go to paragraph 50 of your first witness
statement. I'm going to show it on the screen.
Here again:

"... to the present day [so the witness statement is
from mid 2020], Garsu Pasaulis has not received any
communications or requests for information from any
Kyrgyz authorities in respect of the investigations
conducted."

Now, that concerns the GKNB investigations.
My first question again is very simple: do you still
maintain this statement?

A. Yes, I maintain it, and it's true to the present day.

Q. Are you sure?

A. As far as I'm aware, I'm sure. Unless you show
something new to me.

Q. Do you want to take a moment just to confirm for the

[Page 42]

third time, "Yes, I'm sure"?

A. Yes, I'm sure.

Q. Now, back in February to May 2019 how often would you
speak or exchange messages with Marat Sagyndykov?

A. I can't tell how often. I know that we exchanged
messages. He was our sort of our representative, local
representative. So we exchanged messages and I don't
know what you mean by saying often or not often.

Q. Okay. Let's put this in a specific context.
I assume he would have been quick to tell you that
he was interviewed by the GKNB; correct?

A. I was not personally informed about it, but, as far as
I remember, my colleague spoke to him. I learned about
it when in our company we discussed the events taking
place in the Kyrgyz Republic, and my colleague said that
"Marat told me that he was called or he had to go to
this state security committee and he had to be
interviewed", and he said that it was very unexpected
for him.

Q. (inaudible) I assume you also were aware of that; right?

A. I don't remember that, but this may be the case.

Q. Generally, would you say you trust Mr Sagyndykov?
I mean, he's Garsu's local representative, he has some
powers to act on your behalf for instance. Do you trust
him?

[Page 43]

A. He was not authorised in writing, but we knew this
person and we did not expect anything bad from him. So
probably we trusted him, because we continued working
with him.

Q. In fact, he is one of the witnesses who is supporting
the Claimant's case; correct?
Could the translator kindly translate the answer, if
it was given, for the transcript?
Mr Lukoševicius, could you please repeat your answer
to my last question, which is: he is one of the
witnesses who is supporting the Claimant's case;
correct?

A. You mean the question whether I know that Mr Sagyndykov
will be a witness? So I told that: as far as I know,
yes.

Q. Thank you.
Now --

THE PRESIDENT: Mr Alekhin, before you move on, maybe now
it's time to take a coffee break, if it's not too
inconvenient for you.

MR ALEKHIN: Five, seven more minutes with this line of
questioning, or -- I do not want to press. If the
witness wants to take a break, we're fine. It will not
interrupt my line of questioning, but it's five to
seven minutes to the end of this line of questioning.

[Page 44]

THE PRESIDENT: Is that okay, Mr Witness? Do you want
a break now?

THE WITNESS: We can continue.

MR ALEKHIN: Just to reiterate, you maintain you have not
received this letter -- you have seen this letter by
now, right? First question.

A. No, I haven't seen it.

Q. You haven't seen this letter?

A. No, I haven't.

Q. First time you see this letter?

A. Yes.

Q. At the bottom it is signed by Mr Sagyndykov in Russian.
It says "received Sagyndykov ΜΑ 10/04/2019". There's
a translation mishap in the English version. It says
"Sagladayov", but could you confirm the Russian version
says "Sagyndykov MA" to the best of your knowledge and
understanding?

A. I am not an expert in that and I don't know whether it's
his real name or surname or signature.

Q. Thankfully we have Mr Sagyndykov tomorrow. We will
confirm it's his signature.
For now, presume it is his signature.
Now, with that in mind, Mr Sagyndykov never told
you, or anyone from Garsu: hey, I received a letter from
the GKNB addressed to you, here is a copy; is that what

[Page 45]

your testimony would be?

A. Since I haven't seen this letter, I assume that he
neither sent it to me, neither I was told about it, so
I don't know anything about it.

Q. Would you trust a person that is not showing you
a material letter addressed to you calling you for
a witness questioning in a GKNB investigation?

A. As I have already mentioned, I trust this person. As
you mentioned, you will interview him tomorrow and he
will confirm that. If you go to the Institution to find
out the situation and when he is detained there and he
is interrogated, maybe he was under stress and he did
not send it to me, I don't know. I just can guess what
can be the reasons.

MR ALEKHIN: We can break now. Thank you very much.

THE PRESIDENT: Thank you very much. So let's break then
for 15 minutes.
Mr Lukoševicius, you are not allowed to talk to
anyone about your testimony or the case, but you can
walk around and have a cup of coffee. Understood?

THE WITNESS: Understood.

THE PRESIDENT: Very good. So 15 minutes.

(11.03 am)

(A short break)

(11.19 am)

[Page 46]

THE PRESIDENT: So, Mr Alekhin, when you're ready, please
continue.

MR ALEKHIN: Thank you, Mr Lukoševicius.
So we went over this letter that you say you've
never seen up until the hearing, the letter from the
GKNB, signed as received by Mr Sagyndykov. So in
relation to that, moving on further, as a preliminary
point, does the name Baktybek Zhumashev ring a bell?

A. No, I haven't heard this name.

Q. So by way of background, maybe to refresh your memory,
or just for your information, he's a Kyrgyz lawyer that
acted for Garsu in the Administrative Court proceedings,
for instance. With that information does that change
your testimony? Does that refresh your testimony about
Mr Zhumashev? Do you now recall who he is?

A. Maybe. I don't remember exactly. As far as I remember,
like as a company, Garsu Pasaulis, we were a part of the
administrative case as a third party, and probably there
was some lawyer involved who represented our interests
in that case. So most probably that could be the
person.

Q. Can you confirm if you've ever spoken with Mr Zhumashev,
you've never met him; that is your testimony?

A. Yes. I haven't met him and I haven't talked to him.

Q. So you never told him to, say, reply on your behalf to

[Page 47]

a letter addressed to you and Mr Mieliauskas that we've
just seen before the break?

A. I don't remember such a case.

Q. Do you remember maybe Mr Mieliauskas told you at some
point that he spoke with Zhumashev and he told him to
reply something?

A. No, I don't remember anything like this.

Q. You don't remember any engagement letter, for instance,
between yourself and Mr Zhumashev; engagement letter, so
a contract for legal services between yourself and
Mr Zhumashev?

A. No, I don't remember.

THE INTERPRETER: And could you please speak closer to the
microphone?

THE WITNESS: Yes.

THE INTERPRETER: Thank you.

MR ALEKHIN: So I'm going to show you a letter now. It's
R-059 for the record. It is an application, rather.
The right-hand side is in Russian, the left-hand side is
in English.
So it says here:

"From Attorney Zhumashev in the defence of the
rights and legitimate interests of general director of
JSC Garsu Pasaulis ..."

So apologies for the pronunciation, Ana Janauskiene,

[Page 48]

Mr Mieliauskas and yourself. It's a request to the GKNB
dated 12 April 2019.
Here Attorney Zhumashev is asking the GKNB to send
him questions that the GKNB want to ask you and
Mr Mieliauskas in the context of this investigation that
the GKNB is undertaking. Mr Zhumashev is referring
expressly to this letter we have just seen with you
before the break that you say you've never seen.
Mr Zhumashev is even saying that "those two people", so
yourself and Mr Mieliauskas, "are outside of the
Kyrgyz Republic, and their appearance in Bishkek would
be difficult", and he is concluding:

"If you have any questions, please pass those
questions on in writing and they can be passed through
me."

Have you ever seen this letter or this application,
Mr Lukoševicius?

A. No, I have not seen this application. Just like I told
you, I don't remember Mr Zhumashev or who he is. Like
I read now, I see that he was our lawyer, but I remember
one thing which is related to GKNB, that somebody from
the Kyrgyz Republic, without introduction, called me
and I remember I was sitting with Mr Mieliauskas in the
same office and we were talking about business, and
somebody called him and he had an awkward conversation

[Page 49]

and when he put the phone down, he said that somebody
who did not introduce himself called from the
National Security and asked him when we could arrive to
the Kyrgyz Republic for the interrogation.
So this is what I remember, and then I realised that
Mieliauskas told him: please send us an official request
for Garsu Pasaulis in writing, and then we will respond.
This is how it all ended, and I don't know anything more
what you are telling now me about.

Q. I'm going to explain to you -- that's not a question,
just an explanation -- about what an attorney's order
that is attached to this letter of Mr Zhumashev is. I'm
going to highlight it in English and in Russian.
So an attorney's order, Mr Lukoševicius, is a sort
of a power of attorney, but it's used in criminal
proceedings specifically. This is a feature of Kyrgyz
law and post Soviet legal systems.
An attorney's order is a document you attach in the
context of criminal proceedings as a lawyer, when you're
making requests or applications on behalf of your
client, and an attorney's order is issued by the
Bar Association, so where this lawyer is registered, and
the attorney's order is issued by the Bar Association on
the basis of an engagement letter between the client and
the attorney.

[Page 50]

Just go with me that this is the case. We can
debate this with the lawyers if you wish, but this is
how the system works.
What I'm trying to understand, Mr Lukoševicius, is
you confirmed to me you've never signed any engagement
letter with Mr Zhumashev; correct?

A. I have not signed any personally.

Q. But then Mr Zhumashev, just on the basis of this letter,
is attaching an attorney's order and is asking on your
behalf and in your interests certain things from the
GKNB; correct?

A. Just like you have put it, it looks like true.

Q. In your experience, 20 plus years of public procurement
in other projects and other words, have you ever had
a lawyer that would do such a thing in other countries
or even in Kyrgyzstan, without your knowledge, writing
something on your behalf?

A. I have not ever faced such a case.

Q. If you were faced with this, would you fire this lawyer,
make a complaint to the Bar Association maybe?

A. I'm not sure what actions could be taken. I cannot
comment on this. It depends on the situation. In this
specific situation, I don't really know and can't even
imagine what actions could be after I have learned this
information, I'm not a lawyer. I don't really

[Page 51]

understand where it leads.

Q. Okay. You've confirmed in your witness testimony, and
I think it's not really contested, that you've closely
monitored the Kyrgyz media when it comes to this
investigation. Is this a correct statement?

A. Yes, true.

Q. So this is exhibit C-033. It's a press report from
17 April 2019. Have you seen this press report before?
It's from Kaktus Media, 17 April 2019. It talks about
Garsu Pasaulis quite a lot.

A. Maybe I have seen it. I don't remember now. I need to
look through it. There were tonnes of similar articles,
so I can't refer to any particular one.

Q. If you were to have actually seen it, Mr Lukoševicius,
and it talks -- it's some sort of an interview with
Mr Zhumashev, the attorney, who says:

"Representatives Garsu Pasaulis Mieliauskas and
Lukoševicius were summoned for questioning by the GKNB.
They are overseas, and I want to give them the
investigation but questions ..."

The translation seems to be imperfect. It's
a Claimant's exhibit. I apologise. If I may translate
freely:

"They are abroad. I want to hand over the questions
of the investigation but the GKNB investigator is silent

[Page 52]

said Baktybek Zhumashev to the Kaktus Media."
That's the highlight on top.
Then the second highlight is:

"After receiving the letter, as a lawyer of the
above persons, on the same day I turned out to
investigator Abyshkaev with a petition that Mieliauskas
and Lukoševicius were outside the Kyrgyz Republic ..."

Et cetera. If you were to have seen this press
report at the time, for instance -- I'm not saying you
have -- would that raise concerns with you? Someone is
saying something on your behalf, saying he's your
lawyer, saying he's reached out to the GKNB? Would that
be problematic or suspicious for you?

A. If I had known this information at that time, about the
things that are written here, maybe of course I would
have had questions. This is how I see the situation
now.

Q. Because you would agree that the situation is quite --
not just problematic, but dangerous? What if, you know,
knowing that you simply don't care or don't know, he
would have done something more substantial on your
behalf? I mean, actually gave some answers to the GKNB
or, God forbid, make a confession on your behalf. You
recognise that this is a difficult situation. Someone
saying acting on your behalf, on your instructions, with

[Page 53]

an attorney's order which presumes a letter of
engagement that exists between you specifically and
Mr Mieliauskas and the lawyer, giving statements. You
recognise that the situation is quite problematic, if
you follow your logic that you've never seen that
exchange, that you've never given any instructions;
would you agree with that?

A. Maybe it looks very awkward, but this is an article from
Kaktus Media, which Kaktus Media may write anything,
what anybody says. But I would like to go back to the
fact that I have not known any of this information, and
another highlight I would like to add: it seems even
more awkward to me that a national security department
up until now did not manage to personally hand us any
notice, any letter or pass any message to us personally,
to us as Garsu Pasaulis or to me personally or to
personally my colleague, Mieliauskas. This seems much
more awkward to me than this article from Kaktus Media.
Because I don't really remember that lawyer and his
talks to Kaktus Media doesn't seem very awkward to me.

(Pause)

Q. Sorry, there was an internal discussion.
It seems very awkward to you.
Are you ready to testify before the GKNB,
Mr Lukoševicius?

[Page 54]

A. Do you mean now, at a given time?

Q. Yes?

A. Yes, if I receive a request, questions for something,
yes. So they may approach me. We have been waiting for
this for three years.

Q. Now do you wish to go to Bishkek?

A. No, I will not go to Bishkek. No.

Q. Okay. Just for the abundance of caution, exhibit R-062
is a response to lawyer Zhumashev, who apparently was
doing unauthorised charity work, refusing his
application for written exchanges and recalling, or
rather demanding again that he should relay to
Mr Mieliauskas and Lukoševicius that they should please
present themselves to the GKNB at the time convenient to
them to conduct investigative actions with their
participation.
That letter you've also never seen; correct?

A. No, I have not seen this letter that you are presenting
on screen now.

Q. We will move to the next block of questions, and before
I go there, I want to reiterate that you have stated in
both of your written witness statements and you've just
confirmed to the esteemed members of the Arbitral
Tribunal that you would only tell the truth. It's not
a question. I'm just reminding you of that.

[Page 55]

With that in mind, is there an ongoing investigation
into or involving Garsu Pasaulis by the Lithuanian
Prosecutor General's Office?

A. As far as I know, no, at the moment.

Q. Has there been -- sorry.

A. I would like just to add, I'm not the person in our
company who is responsible for legal matters. There are
designated people and a unit who are involved in that,
so I cannot comment in terms of the investigations that
are carried out now or were carried out in the past.

Q. To your knowledge there's no ongoing investigation into
or involving Garsu Pasaulis by the Lithuanian Prosecutor
General's office?

A. Every month when we participate in international
tenders, we provide the confirmation about the state of
our company which is confirmed by the Registrar Centre
which is part of the Ministry of the Interior, and the
last time we submitted this document was three weeks
ago, and it didn't have any entries you are referring
to.

Q. That would concern convictions though; correct?

A. Most probably, yes.

Q. Is there an ongoing investigation to the best of your
knowledge into or involving Garsu Pasaulis by the
Lithuanian Prosecutor General's office?

[Page 56]

A. I don't know now, or I don't remember.

Q. Has there been, to the best of your knowledge,
an investigation into or involving Garsu Pasaulis by the
Lithuanian Prosecutor General's office in the past
five years?

A. As far as Garsu Pasaulis is concerned, I cannot comment
because I don't know about it.

Q. So to the best of your knowledge, in the past five years
there has not been an investigation into or involving
Garsu Pasaulis by the Lithuanian Prosecutor General's
office?

A. At least I don't know about it. I don't remember.

Q. So this, Mr Lukoševicius, is an exhibit to your
quantum expert person, and it's several emails exchanged
between various currency exchange providers -- not
banks, but financial services providers -- and
Garsu Pasaulis' people -- not you, but Garsu Pasaulis'
staff. And there was a question asked by one of those
financial service providers to Garsu Pasaulis. Do you
know Mr Simonas Naujikas?

A. Yes, he is my colleague.

Q. What function does he perform?

A. He is the head of the commercial division. I would like
to explain. At that time there were two units in the
company. One was this security printing and another one

[Page 57]

is commercial division, commercial printing division.
So Simonas Naujikas was the head of this commercial
printing division.

Q. Yes. And a question is asked to him, and it's
August 2019: is there any details of an ongoing
investigation into Garsu Pasaulis by the Prosecutor
General's office in Lithuania? That's not my question
to you. I have asked it three times. You've answered.
Would you believe that Mr Naujikas somehow
misinformed this financial services provider into
telling them that there was or was not an investigation
into Garsu Pasaulis by the Prosecutor General? Do you
have any reason to believe that his exchange with this
financial services provider might be untruthful or
misrepresentation?

A. I would like to apologise, but I don't see any letters,
any correspondence with the financial services provider.
I can see Carlsberg representative and Ardas Zaleckis
and I can see Ardas Zaleckis' letter to
Simonas Naujikas, and you are asking about a financial
services provider.

Q. If we go to CER3, exhibit 59. So this exhibit,
Mr Lukoševicius, is a combination of several documents.
This is how we received it. So I apologise if the chain
of emails or the way of presentation is confusing. It's

[Page 58]

not our exhibit.
This exhibit starts with a letter from Carlsberg to
your colleagues. We will get to that in a second. It's
page 1 of this exhibit.
And it goes on, on page 2 to another exchange, so
the first is from September 2020 with Carlsberg, the
second page is 7 August 2019 between Mr Naujikas, whom
you confirmed you know and who works with Garsu of
course, and an Ardas Zaleckis.
And here -- and I apologise for saying financial
institution. That was my bad, and we will get to the
financial institutions later. I apologise for that.
There is an exchange saying:

"Further to the information you provided, we would
like to know ..."

Fourth bullet point:

"Is there any details of an ongoing investigation
into Garsu Pasaulis by the Prosecutor General's office
in Lithuania?
Thanks a lot and kind regards, Dirk."

Dirk is the person from Carlsberg.
I apologise for confusing you, Mr Lukoševicius.
That was not my intention. This exchange is with
Carlsberg.
So Carlsberg is enquiring with your colleagues in

[Page 59]

August 2019: are there any details of an ongoing
investigation into Garsu Pasaulis by the Prosecutor
General's office? And why they're asking your
colleagues this, Mr Lukoševicius, is because if you look
at the bottom of the page, there was a letter from
Ardas Zaleckis. Who is Ardas Zaleckis? Do you know
him?

A. It's my former colleague who was dismissed when the
contract was not signed. I mean when the contract with
Carlsberg was not signed.

Q. Yes. And he responds, so that's the bottom of the page:

"Hello Dirk, please find attached our third party
due diligence questionnaire."

We don't have the questionnaire, if that's something
you might want to look at.

"Attached please find some documents."

So that was in July 2019. In response to which, as
we understand it, there's a question from Dirk:

"Can you give me more details about the ongoing
investigation into Garsu by the Prosecutor General's
office in Lithuania."

We have no response to that from Garsu.
Now, just to confirm, this is the first time you
hear about an ongoing investigation into Garsu Pasaulis
back in August 2019 by the Lithuanian Prosecutor

[Page 60]

General's office; is this your testimony?

A. As far as I understand, this is a question, a general
question whether such investigations are being carried
out and not about a very specific investigation. That
is not a statement, it's just a question.

Q. Now, if we look at another exhibit, and this one is
attached to your witness statement, I will show it on
the screen momentarily. It's CW SA L137.
It is a letter from Luminor. It's a bank; right?
You have to say "yes" or "no".
Luminor is a bank that Garsu Pasaulis had accounts
with; correct?

A. It had.

Q. Yes. A letter dated April 2019. By this letter
Luminor, the bank, informs Garsu that it will be closing
its accounts; correct?

A. As far as I can see, yes.

Q. And that wasn't because of any ongoing investigation by
the Lithuanian Prosecutor General's office into Garsu to
the best of your knowledge; correct?

A. I don't know, I cannot comment on that.

Q. (Inaudible) because let's say Semlex's ownership of
Garsu and the associated reputational issues; correct?

A. This statement equals to this statement if I said that
the bank closed our accounts after the evaluation of the

[Page 61]

risk of the events that -- event that took place in the
Kyrgyz Republic, so it would be the same to say.

Q. There's no reference, would we agree with that
Mr Lukoševicius, to any specific reason or issue that
the bank identified in this letter; correct?

A. Yes, that's right. And to state that this was not
because of our shareholder, Semlex, or because of the
investigation carried out by the Lithuanian Prosecutor
General, it's not stated here.

Q. And it was not logically because of the Kyrgyz events
because it's also not stated here.

A. It's logical to me because it's April, 25 April and
a lot of mud was poured on us and if you are relating
this to Semlex, so Semlex became our shareholder in 2014
or 2015.
So I believe this letter is more related to the
Kyrgyz Republic rather than Semlex.
Since the reasons are not stated in this letter from
Luminor, we can only make assumptions. So my opinion
would be the one I stated.

Q. Assumptions or speculations, would you agree?

A. This is my opinion.

Q. In paragraph 73 of your first witness statement, it
says:

"Banks [plural] immediately demanded that

[Page 62]

Garsu Pasaulis closes its accounts and transfers its
funds anywhere else. Banks [plural] have argued that
Garsu Pasaulis cannot be their client because of the
Kyrgyz scandal and accusations of corruption in the
Kyrgyz Republic."

Just to be clear, that is not what the banks have
argued, but that is what you are arguing or speculating
about; correct?

A. This statement is right.

Q. You mentioned banks in plural, but aside from Luminor,
there is no other evidence on the record of this
arbitration. We didn't see anything suggesting that any
other bank terminated its relationship with Garsu at
that time; would you agree with that?

A. Referring to the banks in plural, I meant Swedbank and
SEB bank, with whom we cooperated and they issued the
bid guarantees in the tenders we participated abroad.
After this event the banks did not issue these
guarantees to us and they also said that they are not
going to provide services to us anymore. And we have
discussed this a number of times within our company and
this information came to me from my colleagues who
worked in banks, the financial departments, the
accounting departments and so on.

Q. Has had any other bank aside from Luminor closed

[Page 63]

accounts of Garsu and asked Garsu to transfer its funds
elsewhere?

A. If I remember well, Swedbank did that. SEB retained the
account but restricted it for incoming funds and the
amounts payable. This is what I know from my
colleagues. So this was the case and the guarantees
were not issued.
So Swedbank and SEB bank's responses were not
submitted to you because we did not receive them from
the banks, and the risk assessment is the internal issue
of the bank and they make the internal decisions. We
expected similar letters like from Luminor from other
banks, but they did not provide us with such letters.

Q. To be clear, Swedbank to the best of your recollection
closed Garsu Pasaulis' account without any written
evidence or justification or notice to you, you just
discovered overnight that you no longer have an account
with Swedbank; is that how it happened?

A. I don't know what the procedure looked like. I just
know that they stopped providing services to us.

Q. Okay. Now, you mentioned financial institutions that
provided currency exchange services and this is in
reference to the same paragraph, 73, of your witness
statement. There's a footnote here, 55, and it is for
the exhibit communication with banks,

[Page 64]

CWS Lukoševicius 1/37. So we started to look at this
exhibit, it starts with the letter from Luminor, and it
goes on. It's on the screen now. That's another page,
a subsequent page of this exhibit. It's in your witness
statement.
An exchange between AFEX and Asta Vasareviciene. Do
you know who Asta Vasareviciene?

A. Yes, she's chief financier in our company.

Q. Just to go back to your witness statement, you're saying
that immediately banks have closed Garsu's accounts and
argued that cannot be their client because of the Kyrgyz
scandal. So presumably that would have been somewhere
around -- well, at least from March onwards 2019; right?
March, April, June; correct?

A. If I remember well, it was April in Luminor's letter of
2019. End of April.

Q. Yes. And then this -- sorry. Did I interrupt the
translator?

THE INTERPRETER: No, that's fine. That's fine.

MR ALEKHIN: And then you attached to the statement that
we've just seen this specific letter, this exchange with
Ms Asta, that dates to May 2017 whereby a financial
currency exchange service says that it cannot provide
a currency account for Garsu Pasaulis.
You attach this letter to support your statement

[Page 65]

that banks -- let's expand it to financial
institutions -- terminated their relationships and were
unwilling to work with Garsu because of the Kyrgyz
scandal.
Do you want to maybe correct your testimony and say
that, you know, this, for instance, currency exchange
service had nothing to do with the Kyrgyz scandal,
simply for the reason that it writes you in May 2017, so
like two years before the scandal?

A. Exactly, the date of this letter shows that this is
response and comment two years prior the events that we
are discussing now, and banks before that, for those
two years, they worked fine with us and they carried out
all the operations and had no problems with
Garsu Pasaulis.

Q. The currency service back in May 2017 had an issue with
Garsu Pasaulis, and actually they've clarified what the
issue is: ownership of Garsu Pasaulis, so Semlex;
correct?

A. Well, the problem was, as I see it, that they are saying
that they are some kind of problems with the ownership
of Garsu Pasaulis, but I did not know anything about it,
and I did not experience this in my daily work. So it
did not really raise any thoughts for me because I did
not know about that.

[Page 66]

Foreign exchange or AFEX account was not significant
for us so that, you know, we would worry about it too
much.

Q. Mr Lukoševicius, I'm sure you had no problems with the
issue of ownership of Garsu Pasaulis. But a financial
exchange or currency service had, and not only that,
you're submitting this document supporting your
assertion in the witness statement at paragraph 73 that
banks weren't willing to have anything to do with Garsu
because of the Kyrgyz scandal. So my question to you,
Mr Lukoševicius, is: do you want to maybe take out this
specific document from the evidence allegedly supporting
your proposition that the banks weren't willing to work
with Garsu because of the Kyrgyz scandal?

A. No, I don't want to because this document from AFEX,
this email from AFEX, shows that the events that closure
of the bank accounts of Garsu Pasaulis and this email,
it supports the facts that I'm mentioning in 73, that
exactly the events in Kyrgyz Republic predetermined the
behaviour of banks in respect of Garsu Pasaulis.

Q. How can a closure of a financial institution account or
a refusal to open a financial institution account in
May 2017 have anything to do with the Kyrgyz scandal,
Mr Lukoševicius?

A. This letter clearly states that is from 2017, two years

[Page 67]

before the events in Kyrgyz Republic. And it shows that
for two years before the events, all the banks that we
have worked with and the problem that you indicated to
AFEX, they did not see that problem and they operated
and worked in a normal regime.

Q. How does a letter from AFEX saying that they cannot
provide a current account to Garsu Pasaulis due to the
ownership of Garsu Pasaulis support a proposition that
banks had no problem working with Garsu Pasaulis back in
2017?

A. The letter itself probably does not do anything, but
based on dates, you can clearly see that if AFEX had
such an information and so probably banks already had
this data, but it did not seem as a problem for them
because the events in Kyrgyz Republic.

Q. Maybe one last question. Actually I'm going to move on.
We're going to go to Garsu's relationships with
a project in Mozambique. So we are still with those
reputational issues.
So just to set the tone here, Garsu participated in
a tender for passport manufacturing, opposing Mühlbauer,
in around August 2017 in Mozambique; correct?

A. It could be true.

Q. Just to refresh your memory and make sure that we're all
on the same page, Mr Lukoševicius, it is true.

[Page 68]

November 2017 is the report, public report, it's
exhibit R-220, and it talks about a tender that happened
in Mozambique and it says:

"In early August ..."

It's the third highlight:

" ... the Mozambican Ministry of Interior announced
that it had selected Mühlbauer, from Germany, and
Garsu Pasaulis, from Lithuania, for the final phase of
the tender for the new service provider."

Does that refresh your memory?

A. Yes.

Q. Now, if Garsu participated in that tender, I assume you
know and can recall the basic idea of what was to be
supplied was like local infrastructure needed, for
instance, or some required time to start up the
activities?

A. Could you please repeat your question?

Q. Apologies. So if you are aware of this tender and what
it was about, is it fair to say that the scope of this
tender involved not just manufacturing of passports, but
also some local infrastructure that was needed and that
required some time to set up after or if a contract is
signed?

A. Most probably, yes.

Q. So put aside the tender. Do you recall Garsu entering

[Page 69]

into a contract, into a contractual relationship, with
Mozambique or an entity related to Mozambique in around
December 2017?

A. Yes, the situation was as follows. Since the tender,
since Mühlbauer was announced as the winner of the
tender, as far as I remember, it was appealed and the
decision took a bit longer before the signing of the
agreement.
The Mozambique Ministry of Interior meanwhile
approached us, asking if we could provide passport
production services for them, because they had all the
infrastructure, all the capacities, to issue those
passports themselves. So we agreed that they will order
500,000 passports for five years, 100,000 passports
a year. So that was the agreement between us and
Mozambique.
And since this tender that you are referring to, it
was total clarity of how it will end and this is how we
agreed on this.
So as far as I know about this project and this
agreement, it was highly unsuccessful and, as far as
I know, Mühlbauer started providing passports only
a year or two ago.
I would also like to add that Semlex, when they
worked before, and it also says that due to poor quality

[Page 70]

and chronic errors, they have terminated the contract
with Semlex, the State of Mozambique. As far as I know,
Semlex also started the arbitration process and won the
process, and the State of Mozambique has lost this
process and had to admit their errors.

Q. Your contractual relationship with Sotux, so that's the
Mozambique entity, did not follow any tender procedure,
there was a direct contract between Garsu and
Mozambique; correct?

A. Yes, due to the circumstances, it was not an announced
tender, it was only, yes, a purchase from the direct
source.

Q. And the circumstances were that Garsu used to print
passports for Mozambique under the Semlex agreement
directly, indirectly, whatever?

A. Semlex has nothing to do with this agreement and this
delivery.

Q. Did Garsu print passports for Mozambique prior to
December 2017?

A. As far as I remember, no.

Q. You have mentioned 500,000 passports and obviously the
contract we have is only for 100,000. So am I correct
to assume that this agreement was verbal with
Mozambique? We will do 500,000 passports for you in the
scope of the next five years, that was, what, oral?

[Page 71]

A. Yes, it was a verbal agreement for 100,000 passports per
year by providing an order and full payment, advance
payment.

Q. What I'm struggling to understand, aside from the oral
agreement for millions of dollars, is the chronology.
Because Semlex, as I'm sure you're aware, started
actually manufacturing passports in Mozambique some time
in -- I apologise. I misspoke.
Mühlbauer, as I'm sure you're aware, started
manufacturing passports for Mozambique some time in late
2018, early 2019, correct?

A. I cannot confirm this, but people or the servants who we
spoke to due to implementation of our agreement, they
said that with Mühlbauer the situation was totally
unclear and it was not clear when and if they will start
providing the passports, and if they will be able to
provide the passports, and I cannot confirm that the
agreement was signed.
The only thing that I know, that with Mühlbauer,
they had huge problems. This is why they planned to
continue passport printing and delivery with us.

Q. So exhibit R-221, a press report from a Mozambique news
agency from January 2019, "German company producing
passports and ID documents". First paragraph:

"The German company Mühlbauer ... began [so that's

[Page 72]

January 2019] producing identity documents and biometric
passports as part of a contract signed with the
Mozambican government in November 2017. In the initial
phase the company will produce [a certain number of
passports per year]."

Have you had any previous exposure to this
information? Does it surprise you that Mühlbauer
started producing passports for Mozambique in
January 2019?

A. Yes, it is surprising, because they haven't started
producing those passports back then, I can guarantee
this.
And I'm also surprised that this article from
a newspaper in Africa, you know, I have encountered
similar articles many times, where, you know, they
present the news that has nothing to do with the
reality.
And if you would bother to interest, you know, you
could have asked the State of Mozambique when the first
passports were delivered by Mühlbauer.

Q. You mentioned those press reports that may have nothing
to do with reality because it's Africa. Could you say
the same about Kyrgyzstan, maybe?

A. No, I couldn't, because we have, you know, had -- we
have seen ourselves, that you know, everything that was

[Page 73]

written in the articles later came to reality. And in
case of this article in Mozambique, nobody can confirm
the facts that are presented here.

Q. When was the last time that Garsu delivered passports to
Mozambique? When was the last order placed, and when
was it delivered, date?

A. I don't remember exactly. I only remember that there
were two orders and the third order was in preparation,
because there are certain nuances in Africa that they
always are late with the orders and they already need
them very fast, and e-passports cannot be produced
overnight or in two weeks or in a month. So we, without
having even an order, we bought all the materials or all
the raw materials that are needed for 100,000 passports.

Q. You can take it from me, Mr Lukoševicius, that your
quantum expert, based on documents she has seen and
attached to her expert report -- I will not go there in
the interests of time -- says, based on documents, that
the last order was delivered some time in late 2018.
Just bear with me and assume that's correct.
Do you have any idea what happened with passport
manufacturing in Mozambique after late 2018, or you just
stopped following that completely?

A. I don't even imagine, because I did not follow that
information. But we were told that they will not give

[Page 74]

any orders for us due to certain events in
Kyrgyz Republic. I had nothing to add. I just said
that we are now in different relations with the State --
with the Kyrgyz Republic, and that we now have an
arbitration process, and after we will sort this out.
It will turn out.
This is where our communication stopped. We tried
to reach out and ask about the situation for the third
order with Garsu Pasaulis, but nobody spoke to us.

Q. Was it in the same way as you tried to reach out to SRS
in February 2019, but not sending anything to them after
21 February, or was it some more proactive reaching out?

A. Since all the procedure in Mozambique did not take place
according to the public procurement procedure, so this
means that there was no indication of what way should we
use for communication with the client. So we had all
the contact details, the phone number, which we would
use to call the client and ask, while in the
Kyrgyz Republic it was told that we cannot communicate
with the client in any other way than it was indicated
in the tender documents: that was an email or the public
procurement portal.

Q. On that note, you would then confirm and testify that
you or Garsu Pasaulis or Garsu Pasaulis' representatives
never communicated with the Kyrgyz authorities outside

[Page 75]

of email and any other way indicated in the tender
documents, essentially email and letters; is that your
testimony?

A. Yes, except for the cases that we have discussed today,
what was the communication between us and the State
registration service of the Kyrgyz Republic.

Q. Coming back to Mozambique, what I'm trying to understand
there, Mr Lukoševicius, is you say at paragraph 78 of
your first witness statement that Garsu Pasaulis'
long-term contract with Mozambique was terminated
because Mozambique told you something. Okay.
You would want to probably clarify this again and
correct, as we regularly did over the course of past
two hours, that Garsu Pasaulis' long-term oral contract,
I assume, with Mozambique was terminated orally. Is
this how it happened? Am I correct in the way I'm
trying to clarify your written witness testimony?

A. They no longer provided the contracts -- orders, I'm
sorry, which we have agreed upon. And yes, the later,
everything else is correct.

Q. Paragraph 26 of your second witness statement, where you
say:

"Before the Kyrgyz scandal, Garsu supplied
Mozambique with e-passports and had [an excellent
relationship] with them for years."

[Page 76]

That would be more accurate to say "for a year";
correct?

A. Yes, the statement is right.

Q. The question that I posed to you or the statement on the
screen?

A. The statement on the screen.

Q. Mr Lukoševicius, did Garsu have a contractual
relationship with Mozambique for a year, not years?

A. It turns out that two years, for two years.

Q. Let's put this in months, Mr Lukoševicius. More than
12 months?

A. I don't remember when the first order was placed and
when the second order was placed, and when the contract
was concluded on the first order and the next order, and
when we completed the first -- the second order and when
we were preparing for delivering the third order.

Q. Moving on to another of your former clients,
Mr Lukoševicius. Paragraph 28 of your second witness
statement, I'm going to show it to you on the screen
now.
So this is the Baltic Tobacco Factory in
Kaliningrad, Russia, close to Lithuania, as it happens.
So you say here, paragraph 28:

"The same is also true ..."
Sos that was we discussed the Mozambique oral

[Page 77]

agreement and the reasons for termination:
"... for our lucrative contract with the Baltic
Tobacco Factory."

And you can confirm once again that the sole reason
for the termination of the contract with the Baltic
Tobacco Factory was the Kyrgyz scandal, etc.
Now, you did not deem it useful to have
Baltic Tobacco somehow confirm this to you for the
purposes, say, of this arbitration, because you're
claiming a significant sum of money from the
Kyrgyz Republic as damages arising out of this
termination, as you say, of the contract. You didn't
think it was necessary; is this correct?

A. I'm not a lawyer, but it seems that the Baltic Tobacco
Factory did not write that they are terminating the
contractual relationships because of the Kyrgyz scandal,
just because potentially they did not want any
litigation with us. If they based their termination of
contractual relationships on this news they received,
this is not a sufficient basis for formal termination of
the contract. Maybe that is why they did not explain
the reasons.

Q. So am I getting this right: any contractual relationship
you had, assuming it was terminated, you could say,
well, it was for the Kyrgyz Republic's scandal and if it

[Page 78]

doesn't feature that reason in the termination papers,
but some other reason features, or no reason features,
your excuse would be that, well, it's because they are
concerned, it's not a good enough reason and that is why
they are omitting putting it in, but we should presume
in all instances of all the contractual misfortunes
Garsu Pasaulis, that it is solely because of the Kyrgyz
scandal; is that the logic?

A. Yes, this is my logic, because all the four projects
that I mentioned in my witness statement, including
Mozambique and the Baltic Tobacco Factory and the
Carlsberg and the Swiss Ministry of Interior, I suppose,
so this was a coincidence that all the four contracts
were finished at that point in time, although in the
Swiss example the order was placed and it was suspended.
In the case of Mozambique, the order was not placed,
although it was agreed about it, and the Baltic Tobacco
Factory terminates the contract after 20 years of
cooperation and they are saying "Thank you very much, we
no longer need your services", and the Carlsberg case is
identical to the case of Baltic Tobacco Factory. And
none of them are officially indicated to us by a formal
letter that orders are terminated because of the Kyrgyz
scandal, although every one of them explained to us
informally about it.

[Page 79]

Q. So they picked up the phone and said "We are terminating
your contract, we're not extending your contract",
either for no reason or a different reason, "but then
over the phone we are going to tell you it's because of
the Kyrgyz Republic, correct?

A. Yes, the Mozambique case and the Baltic Tobacco Factory
case was like this. And the Swiss project on visas and
in case on Carlsberg, they just stopped placing orders
and they terminated the orders they had already placed.

Q. Mr Lukoševicius, would you have made such a resolute
statement about the reasons for terminating contractual
relationships with Garsu by those four companies, and
its sole attribution to the Kyrgyz Republic, if you were
in front of a criminal court under oath?

A. I gave an oath here as well.

Q. Would you have given the same answers you have given
about the reasons for terminating contractual
relationship of Garsu with four companies attributable
solely to the Kyrgyz Republic if you were in a criminal
court under oath, knowing the sanctions for perjury
which are quite severe, and including criminal
punishment?

A. Yes.

MR ALEKHIN: Thank you.

No further questions at this stage, but there is

[Page 80]

a note here, if I may, Members of the Tribunal.

We're approaching lunchtime. There is one short
line of questioning that we, under the Tribunal's
control, would like to ask first Mr Lukoševicius and
then Mr Mieliauskas. Of course we know that the
witnesses are segregated and it's perfectly fine and we
are certain that this is going to be abided by.

I assume Mr Mieliauskas is ready to -- after lunch;
right? And if Mr Lukoševicius, and if it's fine with
the Tribunal, perhaps could stay after lunch and answer
one short line of questioning while Mr Mieliauskas is
definitely in a different room, this is part of the
questioning strategy. There are two similar lines of
questioning and we really want them to go one after all.

So if it is acceptable to the Tribunal that the
witness be not excused, but we take a break and then we
have five to seven minutes for Mr Lukoševicius and then
we move on to Mr Mieliauskas.

THE PRESIDENT: What does Claimant say about this?

MR DAUJOTAS: I think we have no objections to that. But
just maybe for logistics, it maybe depends how many
minutes do you plan to spend on this line of
questioning. Just maybe do it now.

MR ALEKHIN: It's one line of questioning. It's going to
take seven to 10 minutes tops. They are going to be the

[Page 81]

same questions on the same documents being shown to both
witnesses consecutively. If the other witness could
please be segregated, and of course we trust that
segregation is going to be done in a proper way, but if
we can ensure that the witness is segregated, for
instance by one of our colleagues just being somewhere
in the corridor, there are practical ways we can do
this, but I want to be really sure that there's no
communication between the two when we consecutively ask
them the same lines of questioning. It's important for
our cross-examination.

THE PRESIDENT: But if I understand you correctly, you want
to start with Mr Mieliauskas?

MR ALEKHIN: No, I want to finish with Lukoševicius after
lunch for seven minutes and then immediately start with
Mieliauskas.

THE PRESIDENT: Why not continue with him now then before
lunch? We can break for lunch at 1.00. I don't
understand the ...

MR ALEKHIN: I would rather -- and we of course accept good
faith of everyone involved -- I would rather there be no
break between examination of two witnesses on that
specific line of questioning that I have.

THE PRESIDENT: I mean, this seems a bit too complicated.

I mean, if you go on and ask Mr Lukoševicius now, and he

[Page 82]

will continue to be sequestrated over lunch, that should
ensure that there will be no communication between them.

I mean, at some point we have to just trust people.

MR ALEKHIN: Oh, I think we have established some line of
trust.

(Pause)

Would a three to five-minute short break just to
arrange some exhibits and make sure we're very well
aligned be suitable for the Tribunal and the witness?

THE PRESIDENT: You mean right now?

MR ALEKHIN: Yes, a technical break just to make sure --

THE PRESIDENT: Five minutes will be okay, because we do
want to break at lunch. I don't know how much you have
in formal redirect, but preferably we should do that
also before lunch.

MR DAUJOTAS: Not a lot of questions, just a few questions.

THE PRESIDENT: So five minutes starting now.

MR ALEKHIN: That's sufficient, thank you.

THE PRESIDENT: So Mr Lukoševicius, you just remain where
you are.

THE WITNESS: Okay.

(12.29 pm)

(A short break)

(12.35 pm)

MR BERTROU: Mr Chairman, we to have a slight technical

[Page 83]

issue. We have an IT issue. Would you mind either --
would you mind either breaking for 15 or finishing right
after the lunch?

THE PRESIDENT: In that case I suggest we break for lunch
now.

MR BERTROU: And apologies, really apologies, but again, you
know --

THE PRESIDENT: We will break for lunch now and come back
then in one hour, let's say, 1.40.

During lunch, Mr Lukoševicius, you are still under
sequestration, ie you cannot talk to anyone about your
testimony or the case. I'm sure Claimant will give you
something to eat.

MR DAUJOTAS: Yes.

THE PRESIDENT: We will continue after lunch with
cross-examination and then redirect, and maybe questions
from the Tribunal as well. Okay? Very good.

MR ALEKHIN: Thank you very much. I'm grateful, thank you.

(12.36 pm)

(The short adjournment)

(1.40 pm)

THE PRESIDENT: So welcome back and we now continue with the
cross-examination of Mr Lukoševicius. Then we will have
redirect and then questions from the Tribunal, if any,
and then we move on to the next witness.

[Page 84]

So please.

MR ALEKHIN: Thank you very much.

Mr Lukoševicius, thank you for your indulgence and
for being available for further witness sequestration
during the lunch break. We apologise for the technical
issue and for taking our time to find a couple of
documents we wanted to show you.

It is a very short line of questioning.

If I may take you, please, to paragraph 12 of your
first witness statement, and I'm going to share my
screen again.

It's this highlighted part that I'm interested in:
"Garsu Pasaulis has never offered or transferred or
even mentioned any 'compensations' or 'bribes' to
anyone."

Do you confirm this statement? That it would be to
the best of your knowledge --

THE TRANSCRIBER: I didn't get the answer to that question.

MR ALEKHIN: Mr Lukoševicius, could you please repeat your
answer to my previous question?

(Pause for technical issue)

MR ALEKHIN: Mr Lukoševicius, I apologise for asking the
same question for the third time, but it is for the
record.

Paragraph 12 of your first witness statement, do you

[Page 85]

confirm that Garsu Pasaulis has never offered or
transferred or even mentioned any "compensations" or
bribes to anyone?

THE INTERPRETER: I'm sorry, I cannot hear -- okay.

A. Yes, I confirm.

THE INTERPRETER: The answer was "Yes, I confirm".

MR ALEKHIN: You are familiar with the project of
Garsu Pasaulis in Moldova for passport manufacturing;
correct?

A. Yes.

Q. You would supervise this project; correct?

A. Yes, the part of blank passport production.

Q. Are you aware of the recent investigations into the
Moldova passport project by the Moldovan authorities and
Moldovan investigative journalists?

A. Some six months ago a representative of one television
have contacted me. I have responded those questions
and I know nothing else about it.

Q. That would be R-224. This is the report we are
referring to from investigative journalists. It was
indeed prepared by a Moldovan TV channel and an
investigative reporter. If I may draw your attention,
Mr Lukoševicius, to page 3 and 4. It is going to be on
the screen.

Now, you replied via email -- this is top of page 4,

[Page 86]

and I'm going to highlight it right now -- that:
"'As for the exact details of other commercial
contracts, we cannot provide any details as
confidentiality commitments bind us',
Andrius Lukoševicius wrote in an email. 'However, we
can confirm that we have never had and do not currently
have commercial or other relations with Mr Plahotniuc
and Romanian businesswoman Ms Ileana-Mihaela Burcea'."

Do you confirm the accuracy of this statement?

A. Yes, just like I mentioned, this is an excerpt from an
email message where I responded to the questions of some
television reporter. I don't remember which television
that was.

Q. Thank you.

Now, this investigation -- and for background
purposes, if I may remind you, Mr Plahotniuc is
a high-ranking former politician from Moldova, just for
your background information, and this article talks
about an investigation into how he was involved in
a passport procurement operation in Moldova.

Now, the same page of this article, next paragraph,
I'm going to increase it for ease of reference, next two
paragraphs.

Here the story is about money being transferred from
Garsu Pasaulis to a firm called Prime Union Solutions in

[Page 87]

UAE in the Arab Emirates. The money, the article says,
then continues to flow to Mr Plahotniuc's, this
high-ranking former official, other accounts:
"Employees at Moldovan Money Laundering Prevention
and Combating Services obtained information from
colleagues in Dubai that the majority shareholders of
this company [Prime Union Solutions] are Romanian
citizen Ileana-Mihaela Burcea ..."

To the best of your knowledge, Mr Lukoševicius, has
Garsu Pasaulis ever had any business dealings or
relationships for that matter with Prime Union
Solutions FZ LLC?

MR DAUJOTAS: Excuse me, Mr Chairman. I just wanted to now
where this was going with respect to our case? Is it at
all relevant to our case and issues discussed here?

Because these arguments we have never seen them before
in any of the submissions of the Respondent in respect
of the Moldovan investigation. So I don't know how are
they relevant at all to the witness cross-examined here.

MR ALEKHIN: They are on the record and they featured in the
opening submissions.

THE PRESIDENT: As I said, you can pick that up in redirect.
And we will determine whether or not it's relevant at
some point. So please go ahead.

MR ALEKHIN: I can repeat the question.

[Page 88]

Has Garsu Pasaulis ever had, to the best of your
knowledge, any business dealings or relationships with
Prime Union Solutions FZ LLC?

A. As for exact name of the company, I cannot confirm that
because I don't remember, but I know that our company
has paid a royalty for each passport issued for the use
of passport issuance system, for the right of the use of
passport issuance system, which Garsu Pasaulis has
acquired, well, to be operational in Moldova.

Q. To the best of your recollection, and that is to the
best of your recollection, did Garsu Pasaulis have any
business dealings or relationships with Prime Union
Solutions FZ LLC, a UAE company?

A. I will repeat myself. I know that we have paid to some
company in the United Arab Emirates, primarily in Cyprus
and then later in the United Arab Emirates, for each
passport issued a royalty fee for the ability to use
a passport issuance system which they have subcontracted
and which was used in Moldova.

Q. Is it normal in your experience for a royalty fee to be
paid to a UAE company owned or controlled as the article
says by a woman that is, we understand, Plahotniuc's
wife -- assume it's the case?

A. I did not -- I don't know who wrote this article and who
owned the company, but I know that we had a contract

[Page 89]

with a company where all the contractual obligations
were described and we paid them a royalty for each
passport issued.

Q. So it would not surprise you, Mr Lukoševicius, if I show
you a wire transfer confirmation for 400,000 euros made
from Garsu Pasaulis in February 2019 to Prime Union
Solutions FZ that is exhibit CER-354 coming from your
own quantum expert, using it to prove some expenses in
the Kyrgyz Republic; it would not surprise you that
400,000 euros were paid to a Dubai entity that --
assume -- is owned or controlled by a former politician
in Moldova?

A. If there was such a transaction, so it was based on that
agreement that we have done and what it has to do with
the Kyrgyz Republic and this passport project, I didn't
really understand.

MR ALEKHIN: No further questions. Thank you.

THE PRESIDENT: Mr Daujotas, redirect, please.

Re-examination by MR DAUJOTAS

MR DAUJOTAS: Yes, thank you, Mr Chairman. I only have
a few questions. Rather not so complex questions.

So Mr Lukoševicius, you have told me, and there was
a small discussion with counsel of the Respondent, on
the relationship between Garsu Pasaulis and Semlex. So
can you please clarify, does Garsu Pasaulis participate

[Page 90]

very often with Semlex in mutual projects or agreements?

A. In joint projects or agreements we do not take part at
all. We only take part as subcontractors in a few of
their projects in supplying document blanks.

Q. And the other question, also you have discussed this
point with the Respondent's counsel, and for the
reference to the transcript, it's 10/49, and you said
that "we have agreed on everything" when referring to
the e-passports contract in 2018 tender.

So can you please clarify why did you believe that
all of the terms of this contract were already agreed?

A. Because a contract, as entire contract, had to, well,
include our offer, including all the technical terms,
and just like our correspondence show, I just wanted to
make sure again that everything is as we agreed in the
last email, and if they can send the lat version we
planned to sign ...

THE TRANSCRIBER: I couldn't hear the end of the question.

MR DAUJOTAS: I will repeat the question.

So this morning you said, and for the reference to
the Tribunal at 10/49, "We have agreed on everything",
when referring to the e-passports contract in 2018
tender". So can you please clarify why did you believe
that all of the terms were already agreed?

A. Just like I mentioned in my last email, I asked the

[Page 91]

Kyrgyz representatives to send me the final draft,
agreed draft that we have agreed upon before, just to
read it through, review it, and so that I could go and
sign it. I just wanted to get the final version of it.

MR DAUJOTAS: Thank you. We have no further questions.

THE PRESIDENT: Thank you.

Colleagues, do you have any questions? Ian?

Questions from THE TRIBUNAL

MR LAIRD: I just have one question.

So, there was a discussion earlier concerning the
Statement of Claim, paragraph 82, and it was discussing
the 2012 excise stamp bid and how Garsu had lost that
bid, and it said in the Statement of Claim, and this was
discussed, that bringing a court case or bringing some
sort of administrative procedure to protest was not --
I think the wording was -- best option. But the
Statement of Claim doesn't describe why it was not
a best option.

What was the thinking at the time of not objecting
to losing that bid?

A. I'm sorry, you mentioned 2012. The stamp excise stamp
in 2012. There was a tender which was cancelled due to
ID documents and the entire system, and the excise stamp
that was in 2013, which we have won, and in 2016, which
we have won, and in 2020 there was another tender for

[Page 92]

excise stamps which was terminated.

In 2021 we did not take part for the tender on
excise stamps because of the new law.

MR LAIRD: So, apologies, I'm incorrect. I think there was
a reference to the passport tender, the 2012 passport
tender. There was a tender in 2012; correct? And so
I guess the question goes to why was it not a best
option to object in the courts? What was the reasoning
behind not further objecting?

A. So the answer was that this tender in 2012 for passport
was terminated by the decree of the Government. And the
witness responded that he believes that, you know, the
decree of the Government is not something that you can
protest against or object against.

MR LAIRD: So I think in relation to the not objecting, not
protesting, in the 2018 passport tender there was
a similar situation in which ostensibly as of 2 April
and then in a later statement by the SRS that there had
been an expiration and that the tender was over, and
it's my understanding that there was an opportunity
there for Garsu to go to court to protest that, but did
not. That's correct, there was no protest from Garsu?

A. Yes, you are right. There was no protest, no objection,
because we did not have anything to object against
because we did not receive any official information that

[Page 93]

the tender was terminated or that it was ended in one
way or the other. We did not have any of that official
information. And we only received official information
almost a year later, in 2020, when in the official news
portal, public procurement portal, there was a message
that the tender was terminated, and unofficially, yes,
there were messages in the press, in the media that
Shaikova of the public procurement organisation had
given an interview where she mentioned that the tender
was terminated because the validity term of those bids
expired.

So that was the message in the newspapers, but it
was not officially provided to us.

MR LAIRD: So just to follow up on that, there was
a document, and it's C48, which I believe was a notice
from April 17 from the SRS. Is that a document you're
familiar with?

A. I'm sorry, as far as I understand, this is the first
notice after opening the bids and after the primary
assessment. And yes, after the primary announcement,
there were two claims by Mühlbauer and IDEMIA which were
examined and they were refused, as far as I understand
from this letter.

MR LAIRD: Just to follow up, from the last paragraph it
refers to an expiration of the validity of the tender on

[Page 94]

2 April. And then it concludes at the end that the
tender held is deemed to not have taken place. Do you
recall seeing this?

A. No, I have not seen this.

MR LAIRD: Okay, thank you.

THE PRESIDENT: Nina, do you have any questions?

PROFESSOR VILKOVA: No.

THE PRESIDENT: In that case, thank you very much,
Mr Lukoševicius. You are now a free man. Thank you.

And thank you for coming and taking the time.

Are we ready to move on to the next witness? If you
could call Mr Mieliauskas.

MR ALEKHIN: We will be switching between two
cross-examiners.

(Pause)

MR VYTAUTAS MIELIAUSKAS (called)

THE PRESIDENT: Good afternoon, Mr Mieliauskas. Welcome.

As you know, you have been called as a witness in this
arbitration. And today you will be cross-examined by
representatives from the Respondent. But before that,
Claimant will introduce you as a witness.

I hope you have your two witness statements in front
of you?

A. Yes, they are here.

THE PRESIDENT: As well as a piece of paper with

[Page 95]

a statement, affirmation. If you could read out.

A. Okay. Right now?

THE PRESIDENT: Yes, please.

A. The factual witness declaration. I,
Vytautas Mieliauskas, solemnly and sincerely declare and
affirm that the evidence I shall give will be the truth,
the whole truth and nothing but the truth.

Vytautas Mieliauskas.

THE PRESIDENT: Thank you.

As you probably know, everything you say will be
taken down by a court reporter. So it's important that
you speak slowly and clearly.

A. Okay.

THE PRESIDENT: If you don't understand a question, say. So
if you don't remember, say so.

So please, Mr Daujotas.

Direct examination by MR DAUJOTAS

MR DAUJOTAS: Thank you.

Good afternoon, Mr Mieliauskas. So I'll ask a few
questions first.

As mentioned, you have before you two small binders
would your witness statements; is that correct?

A. Yes.

Q. Are these your witness statements?

A. Let me check. The first one is mine. The second too,

[Page 96]

yes.

Q. And you are familiar with your witness statements?

A. Yes, I am.

Q. And your English language is -- I mean, the native
language is Lithuanian?

A. Yes, my mother tongue is Lithuanian.

Q. Okay. And you personally participated in preparation of
those witness statements?

A. Yes.

Q. Correct?

A. Yes.

Q. And do you want to make any modifications to those
witness statements?

A. No.

MR DAUJOTAS: Thank you. That's it. We have no further
questions.

THE PRESIDENT: Mr Mieliauskas, please speak into the
microphone and look at us when you answer your
questions. Otherwise it will not be heard.

Cross-examination by MR ALEKHIN

MR ALEKHIN: I will start, Mr Chairman, and then we will
move to Mr Bayandin in about five to seven minutes.

Mr Mieliauskas, thank you very much for being here.

My name is Sergey Alekhin. I am counsel for the
Kyrgyz Republic. Myself and my colleague

[Page 97]

Dmitry Bayandin will be asking you some questions about
this case.

So as Mr President mentioned, if there's anything
unclear or you want to see some document different part,
let me know. They will be on the screen for you, on the
big screen.

A. Okay.

Q. If I can draw attention to paragraph 27 of your second
witness statement, which says:
"I also state very clearly that I have never offered
or transferred or even mentioned any compensations or
bribes to anyone."

Could you please confirm the accuracy of this
statement?

A. Yes.

Q. To the best of your knowledge, that would also extend to
Garsu Pasaulis as a corporate entity; correct?

A. Yes. Yes.

Q. Thank you.

Are you familiar with the Moldova passport project
that Garsu Pasaulis is undertaking?

A. Yes, of course, but I'm not sure if we are undertaking
now. I think it's finished.

Q. It finished or was terminated?

A. No. It was definitely not terminated but to my

[Page 98]

knowledge it's executed to the end and it's finished.

Q. Are you aware of reports in early 2023 in media
reporting on investigations by the Moldovan authorities
into this project?

A. I'm aware of reports in media.

Q. Are you aware of the allegations or statements made in
those reports with respect to payments that
Garsu Pasaulis has made to certain offshore or remotely
incorporated companies?

A. Payments for services, you mean?

Q. Payments to certain companies that, according to those
reports, are associated with high-ranking politicians?

A. So Garsu Pasaulis in Moldova had some partners and of
course for services provided by those partners,
Garsu Pasaulis was paying for those services.

If I remember correctly, articles you are referring
to there were companies mentioned related to some
politicians and that's exactly what happened, that
Garsu Pasaulis wasn't paying to these companies. But
customer decided to have direct contract with them and
to pay them directly.

Q. You are referring, for instance, to a company Prime
Union Solutions FZ LLC that was a company in UAE in the
Arab Emirates related to those politicians.

A. I'm not aware that it's related to politicians. Yes,

[Page 99]

sir, the company you mentioned, the company you
mentioned, it was the company who took over rights of
the software used by Garsu Pasaulis in Moldova.

Q. Prime Union Solutions. On the screen you have
exhibit R-224. So this is the report of those Moldovan
investigative journalists, and at the top of page 4 on
the right-hand side of your screen -- I'm going to
increase it a bit -- paragraph 3 talks about a company
called Prime Union Solutions and there are statements
here made according to the investigative journalists
based on reports of the investigation in Moldova that
Garsu Pasaulis made payments to Prime Union Solutions.

Now, you referred to companies related to
politicians in the transcript. Is that the company you
are referring to?

A. No, I was referring to the company in Bulgaria where
a customers decided to have direct contact because we
refused because we had some doubts about this company.
So customer decided to establish direct contact.

This company, Prime Union Solutions, was a company
who took over the intellectual property rights of the
software used in Moldova from another company. I don't
remember the name.

Q. When you say you have doubts about that other Bulgarian
company, where did those doubts come from? How did they

[Page 100]

materialise? Did you do due diligence on the Bulgarian
company?

A. No, we just had a feeling that customer wants and is
forcing us to contract that company. But we didn't know
about capacities of this company, about experience or,
you know, we wouldn't -- we didn't like to take the
risk.

Q. Were you aware of any experience of Prime Union
Solutions FZ for the services it provided to you?

A. As I explained already, Prime Union Solutions wasn't
a company we started business with. It was the company
who took over ownership of the software we used in
Moldova.

Q. Which would then mean there would be no financial
relationships between the two companies, correct, if
it's --

A. Which one?

Q. Prime Union Solutions?

A. And.

Q. And Garsu?

A. No. Garsu Pasaulis in Moldova -- sorry, I don't know
how it's related to Kyrgyzstan, but Garsu Pasaulis in
Moldova used third party software. Ownership of the
software belonged to the company. I do not remember's
the name, but maybe somebody from Garsu Pasaulis could

[Page 101]

find it. At some point this company transferred rights
of the software, intellectual property rights of the
software we were using and paying royalties for using to
this company in Moldova to the company Prime Union
Solutions, which was established in UAE.

Q. And you had no --

A. So we continued to pay royalties to the different
company. That's it. They took over ownership.

Q. Which means that it posed no questions to you in terms
of due diligence whatsoever of this transfer of
licensing of the software. So you just continued paying
substantial amounts of money to --

A. We continued to pay exactly same amount of money. What
we used to do before the change of ownership of this
software.

Q. How much, roughly?

A. I don't remember now. But, you know, it's data,
I think, available. Nothing changed. I mean,
financial -- financial conditions, they didn't change.
We didn't then negotiate them. Nothing changed. Just
there was a change of ownership.

Q. As, according to your case, a reputable international
company, have you done any due diligence on this UAE
entity, Prime Union Solutions, to which some rights were
transferred and to which you were told or asked to

[Page 102]

further direct money to?

A. We did -- we had to ensure that we have all legal rights
to use software we are using in project in Moldova. As
the software owner changed, so we changed the party
where we are -- whom we are paying royalties to.

Q. Without asking any questions as to who the beneficial
owner, what's the corporate structure, what does the
company have to do, did you see a license transfer
agreement between the Moldovan entity --

A. Yes. There was a three side agreement. Three parties
agreement.

Q. And do you remember any beneficial owners of Prime Union
Solutions?

A. No.

Q. And you haven't done any background check on it?

A. It was a long time ago, but now I do not remember's the
details. But, you know ...

Q. It was several years ago. Would it surprise you to
learn that Prime Union Solutions is beneficially owned
by a person closely related to a high-level politician
in Moldova?

A. I still don't know how reliable this information is,
because what happened later, once -- once Prime Union
Solutions took over ownership of the software used in
Moldova, Garsu Pasaulis was responsible for solution

[Page 103]

itself, for passport issuance solution, and the solution
requires regular maintenance. It's not something, you
know, a product off the shelf, you put it on -- you
install it into the server and it works; no. Changes
are always happening, and at some point we understood
that we need to do a lot of things to maintain the
system, and at some moment we are already developed our
own system, 100% owned by GP, and we were in position
not to use any third party.

And then we got a conflict with
Prime Union Solutions. Again I don't understand how
it's related to Kyrgyz case, but again we had let's say
a big legal fight with Prime Union Solutions because
once we released the new version of the system, we just
informed that: okay, system has been changed, at
end-customer, your software is not used anymore, so we
are not going to pay you any royalties anymore. That's
it.

And then of course we got some attack on us, big
pressure, lawyers, you know, claims and everything.

Q. Thank you. You mentioned that you don't really recall,
you know, how much money was paid to Prime Union
Solutions. Just trying to understand in a proportion of
the whole contract, was it a couple of per cent, was it
more? You should keep records of it.

[Page 104]

A. No, it was very expensive. From our point of view, it
was too expensive. And one of the reasons why we kept
developing and investing in our own solution for
Moldovan let's say project was commercial side.

Q. Okay. So a payment of roughly 400,000 euros to Prime
Union Solutions in, say, early 2019 would not be
something abnormal, according to you, coming from
Garsu Pasaulis?

A. A payment to Prime Union Solutions? I don't know.
Maybe my English is too bad. But payments to Prime
Union Solutions haven't changed. They remain exactly on
the same prices agreed with previous owner of software.

Q. And how often were those payments?

A. If I remember correctly, I think it was monthly base
payments, but payments were calculated based on the
issued documents. So basically per each issued
documents, we were paying some royalties for software
use. So it was usage based calculation.

So from month to month, it could vary, but it wasn't
flat rate. It was based on the issued documents.

Q. That's very useful. Thank you very much. I will now
yield the floor to my colleague, Mr Bayandin, but we may
be changing a bit. So I'm going to sit right here but
he's going to ask the questions.

Cross-examination by MR BAYANDIN

[Page 105]

MR BAYANDIN: Good afternoon, Mr Mieliauskas.

A. Good afternoon.

Q. As introduced by my colleague, my name is
Dmitry Bayandin. I'll be asking you a number of
questions related to your witness testimonies in this
arbitration related to the 2018 tender in the
Kyrgyz Republic and the surrounding circumstances.

Just before we begin, you confirmed to your counsel
earlier that you prepared the content of your witness
statement yourself. Is that correct?

A. Yes. Final structuring was made by lawyers, but the
content, it was done by me.

Q. Certainly. And together with your witness statement,
you referred to a number of documents in footnotes.
They have a specific numbering that is specific to your
witness testimony. Just out of curiosity, did you
select those, or did Claimant's counsel propose them to
you to support the statements you were making?

A. Actually I was making statements and then maybe
something needed to be supported. So then we looked for
the documents. But statements came from me and finally
we were prepared in this form by the lawyers.

Q. Thank you.

I would like to start with a few general questions
related to your duties at Garsu Pasaulis.

[Page 106]

On the screen you will see paragraph 9 of your first
witness statement, where you say that you were the CEO
of Garsu Pasaulis from 2018 to 2019; is that accurate?

A. Yes.

Q. And could you be a bit more precise as to when exactly
did you leave the position of the CEO?

A. Okay. I started -- I joined the company back in 2007
and I had one project delivered as a project manager.
It was for ID documents. And back in 2007 we started
big ID related projects in Lithuania. Back in 2007 it
was Lithuanian e-passport. Electronic passport. And
2008, national ID card.

As from the very beginning of Lithuanian electronic
passport project, I was heavily involved. I was also
managing that project. So in course of this project
delivery, I took over the role of CEO of the company.

Q. Thank you, Mr Mieliauskas. My question was a bit
different.

In 2019 you left the position of the CEO?

A. Yes.

Q. Which month, roughly?

A. From very beginning of the year.

Q. Would you care to elaborate --

A. January.

Q. Thank you. Would you care to elaborate why did you

[Page 107]

leave the company -- not the company, but the position
of CEO at the beginning of 2019?

A. I don't like to work.

Q. Fair enough.

A. I'm old enough to have time for myself.

Q. I understand.

On the screen you will see now your CV which you
submitted with your witness statement. It's
exhibit CWS-VM-2. And you have this line here which
says that until present you are working as technical
expert consultant for Garsu Pasaulis; is that correct?

A. I think it's -- I think it's a mistake. It's '19.

Q. That was my second question, that there is 2019 --
2017 --

A. May I have a look. Where does it come from?

Q. It was your CV that was submitted together with your
first witness statement. It's on the screen now.

If we go to the second page of this document, you
see it's written here that you were general director
until --

A. No, I think there is a mistyping. It's not 2017, but
2018, end of 2019. And from 2019 I am -- I'm in fact
the main lead, but I'm still was very tightly bound to
GP, was this case, Kyrgyz project, because I was, you
know, for many years involved in that project, and after

[Page 108]

my leave from GP CEO position, all the situation
happened. Obviously I had to -- somehow to help to
resolve it.

Q. So do you confirm that until present you are technical
expert consultant to Garsu Pasaulis, as stated in your
CV?

A. I still consulting from time to time. We work a lot
because -- okay, let's start from what I'm doing now.

I have several companies and all of them are IT
companies because that's my background in fact. And
once I left GP, I started IT companies focused on
ID document issuance solutions.

And I stayed in very tight cooperation with GP until
even now, although I try to work less, but, I mean, my
company is working with GP on a daily basis.

Beginning 2019 was a bit different because I had
a special role of adviser for this situation what
happened in Kyrgyzstan, because you can imagine, I just
left the company and all this big scandal happened, and,
you know, although I wasn't following our official
tender procedures, but, you know, everybody was pointing
to me, asking questions, and so of course I cooperated
with the company, with GP, on a daily basis to helping
to resolve this situation in Kyrgyzstan.

Q. Thank you. I will take it as a yes, you're still an

[Page 109]

expert consultant to Garsu Pasaulis.

A. You can say that.

Q. Are you aware, Mr Mieliauskas, that in this arbitration
Mr Andrius Lukoševicius also submitted witness
statements?

A. Yes.

Q. Did you consult with Mr Lukoševicius when preparing your
own witness statements?

A. When preparing statements we didn't consult, but I know
for sure that he's also in that because we work very
closely on other projects and, you know, when it
concerns Kyrgyz case, he and myself, we were two main
persons, you know, involved from GP side in that
project.

Q. So would it be fair to say that your account of events
should be roughly largely similar?

A. Yes, I hope so.

Q. Thank you.

I would like to move to paragraph 22 of your second
witness statement, which will appear on the screen
momentarily.

Here you say, I quote:
"... I must emphasise that Garsu Pasaulis never had
any reputation problems before the Kyrgyz scandal.
Garsu Pasaulis was always a highly regarded company,

[Page 110]

respected by local and international clients ..."

The first question is: do you stand by this
statement today?

A. Absolutely.

Q. I just want to explore this with you a bit, given your
experience as a company CEO. I have never been a CEO,
so, you know, it's interesting to me what reputation is
to you and how valuable it is.

Do you agree with me, Mr Mieliauskas, that
a company's reputation can suffer from negative press?

A. It may, but it depends what kind of press we are talking
about. Is it New York Times or is it, you know, village
news.

Q. Is there a difference?

A. Big difference.

Q. So village news, negative news from the village, let's
say, would not harm Garsu Pasaulis' reputation; correct?

A. We are talking about this negative information, whatever
it is, true or false, how many people it's reaching.

Q. Okay. So would you agree with me that negative press
can damage a company's reputation; would you agree?

A. Yes, of course it can.

Q. And it can damage a company's reputation even though the
facts reported may not necessarily be true?

A. Yes.

[Page 111]

Q. And would you agree with me that when repeated negative
press concern the same company in different countries
and throughout different periods, then this would
inevitably affect a company's reputation? And I'm not
talking about Garsu Pasaulis right now. It's just
a hypothetical.

A. Here I can't agree. Again, let's leave Garsu Pasaulis
aside. Let's take whatever -- whatever big company and
you will find that regularly somewhere in the world you
will get negative information about that company, be it
BMW or be it Intel or be it Google, whatever. But it
does not mean that it ruins the reputation of the
company. All the negative flow of information is
regular, every year. If you do a small investigation,
you will find that you can find negative news about
Facebook, for example, every month somewhere. Some day,
maybe Nigeria, some day in Russia, some day in US. But
it doesn't mean that it's ruined reputation of Facebook.
It depends how a company reacts, it depends how
justified that information is.

Q. How justified in the sense whether it is true?

A. Yes. I mean, how it is supported.

Q. Okay.

A. If somebody says that they think that it's something is
bad, it means not too much.

[Page 112]

Q. Would you agree with me, Mr Mieliauskas, that actions of
the company's top officers or company's owners or
company's shareholders when they come in to press might
hurt reputation of a company?

A. It might.

Q. So let's say I'm public procurement officer in
a country, and I'm looking for --

A. Public procurement?

Q. Yes. Or even private procurement.

A. So please decide, public or private.

Q. Let's say I work for Coca-Cola.

A. So it's private, okay.

Q. And I look for a company to do business with.

A. Yes.

Q. And I google a company and I see articles, a lot of
articles from different periods, from different
publications alleging scandals, corruption, fraud, etc.
As a Coca-Cola officer do I go into detail of the
article in the sense do I go and check whether every
allegation in the article is correct, or do I just steer
clear from that company?

A. In case of Coca-Cola, I think that you will not waste
your time and if you see that those articles are
everywhere and especially if they are supported by
government of any country, that would be big issue, of

[Page 113]

course.

Q. What if I changed my hat to a public procurement officer
of a country?

A. Public procurement is public. That means that everybody
is free to attend if it qualifies. Qualification
requirements they set certain -- they define the rules.

Who can participate in public. And in public
procurement participation of the company which was
mentioned in some newspaper is not a problem. If it's
charged, or if there are known real cases happening with
a company, it can be a problem.

Every time company participants in public
procurement, it provides qualification documents. In
the set of these documents, normally you must provide
evidence that you don't have any charges, that you made
nothing criminal. So you provide that evidence and that
is enough.

Q. But for private companies that would be more important,
you would say?

A. For private companies, private companies, they have
freedom not to justify their decision not to have
business with you.

Q. Thank you. I would like to now talk about
Garsu Pasaulis, and its reputation historically and
specifically during your tenure as the CEO.

[Page 114]

Before you took over in 2008 the CEO of
Garsu Pasaulis was Mr Vainikonis; is that correct?

A. Yes.

Q. But Mr Vainikonis actually stayed at the company as the
chairman of the board or a member of the board and the
beneficial owner at least until 2015; would that be
accurate?

A. Yes. Yes. Again, I must clarify. I'm not a legal
person. I don't know if we can call him ultimate
beneficial owner because he had maybe, I don't know, 45%
of shares, for example. But definitely he was the main
shareholder.

Q. If he owned the company through a company would you
consider him beneficial owner?

A. No, what I'm trying to say, Mr Vainikonis owned
Garsu Pasaulis together with other persons, and he owned
the biggest portion of shares, but he didn't have, let's
say, 60 or 90% of the shares. He always had a bit less
than 50%.

But anyway, I mean, for me, yes, he was ultimate
beneficial owner.

Q. Thank you. And do you agree with me, Mr Mieliauskas,
that public reputation scandals concerning Mr Vainikonis
reflected on the reputation of Garsu Pasaulis while he
was connected to the company?

[Page 115]

A. No. I didn't feel it. Yes, we had articles, we had
something, but we never had problems because of that.

I mean, when talking with banks, talking with credit
institutions, with customers, it's never been a problem.

Q. This is interesting. I would like to show you
exhibit R-016, which is your interview to a Lithuanian
newspaper, and an excerpt is on the screen and there is
a quote from you, coming from you, and you say that the
change of owner, from Mr Vainikonis that is, was
"a psychological relief, because no one will hang
anything or not, it will not be necessary".

A. Yes. I'm referring to some campaigns we had against GP,
Garsu Pasaulis, and those campaigns are arranged by
competitors or by some interested parties who maybe were
very interested to take over the company. They always
tried to use let's say biographical data of Vainikonis,
some historical data of him. And although again there
was nothing real, just emotions and references to some
old facts, and for me as a manager of a company, it was
pretty complicated -- it was not complicated in terms of
doing business, but it was pretty complicated for
someone to talk to journalists because journalists say:
look, your owner is a bad guy. That's it. Why?

Because in 1990 he was related to some people. So what?

In 1990 I was at school. So am I part of mafia too?

[Page 116]

That was my position.

But for me, anyway, there was always pressure,
because I had somehow to try to prove that whatever it
was, whatever happened in 1980s, it has no impact on
current business operations. Vainikonis was out of
business. I was general manager. He had no influence
on my business decisions.

So of course then I can tell even more that the sale
of the company was done by myself in fact. And I was
happy because I knew that from Vainikonis it was a good
exit, the old man, with lot of debts from other
businesses, for him it was kind of resolution.

And for me it was okay because at least nobody could
keep playing the same music, saying: oh, your owner is
a bad guy, your owner is a bad guy. Do you have any
evidence? No. But people say that.

So that's why I felt relief.

Q. Thank you, that's very helpful.

I would like to speak now about Garsu's current sole
shareholder, Semlex.

So based on what you just told me, as the CEO of
Garsu Pasaulis, were you pleased when your company was
acquired by Semlex?

A. Yes, from business point of view, I was very pleased.

Q. At paragraphs 18 and 19 of your first witness statement

[Page 117]

you state the following:
"... despite ownership by Semlex, Garsu Pasaulis
conducted its activities on its own and mostly
separately from Semlex."

Then you go on:
"I personally communicated with Semlex people ...
rather briefly and mostly on some special occasions,
such as corporate events ..."

Et cetera. And then you have paragraph 22 of your
second witness statement which says:
"... Garsu Pasaulis always conducted its activities
separately and independently from Semlex."

Could you maybe just clarify, mostly or always?

A. Okay. So let's get back to the moment when the
ownership of Garsu Pasaulis was transferred from
Mr Vainikonis to Semlex. So at that time it happened
about 2015, roughly. At that time Semlex was our
client. Garsu Pasaulis was producing a lot of document
blanks for Semlex, for their own projects in different
countries of the world.

So for me it was very good to have Semlex as the
owner from the point -- from the sales point of view,
because I was just one potential supplier for Semlex.
I was fighting for each order with PWPW, Polska
Wytwórnia Papierów Wartosciowych, from Warsaw, Cetis in

[Page 118]

Slovenia, Hungarian Banknote Printing Team in Budapest,
and every time for each order I had to fight. It was
very obvious that once Semlex takes ownership of the
company, my production is loaded because all projects of
Semlex will be produced here in GP, in Garsu Pasaulis.

What I'm trying to say in this statement, that for
business operations Semlex has no influence in the
share -- in the company acquisition, in shares
acquisition agreement, there was a statement that once
Semlex buys out shares from Mr Vainikonis, they will
establish a board and appoint board members from Semlex,
just to control us Lithuanians working on the ground.

But in fact it never happened because new owners
were absolutely happy with our performance. Their own
orders were always fulfilled in time.

On another hand, we operated separately and we
operated very -- we performed very well. I mean,
working as a separate unit, we still were earning nice
margins and good profits. So from investor point of
view we had full trust of Semlex and we never, ever were
involved in company management.

Q. Thank you very much. So you referred to projects that
you participated together with Semlex. I'm just going
to name a few and you're going to tell me if that's
correct, if that's the project.

[Page 119]

1 Democratic Republic of Congo?

2 A. Delivery of booklet.

3 Q. Madagascar?

4 A. Delivery of booklet.

5 Ω. Comoros?

6 A. Delivery of booklet, delivery of e-ID cards.

7 Ω. Mozambique?

8 A. For the -- with Semlex, nothing.

9 Ω. Would it surprise you, Mr Mieliauskas, to learn that

10 Semlex, when bidding for the Mozambique passport

11 project, bid as Garsu Pasaulis and not as Semlex? And

12 you have exhibit R-030 on the screen.

13 A. Okay.

14 Ω. Apologies. Just ... apologies, this is exhibit R-030.

15 This is again the press article about a scandal in

16 Mozambique and it says that Semlex did not submit a bid

17 in its own name but as a Lithuanian company

18 UAB Garsu Pasaulis?

19 A. Which tender it was about?

20 Ω. This is the 2017 tender.

21 A. And how it ended?

22 Ω. Excuse me?

23 A. How did it end?

24 Ω. They lost.

25 A. You mean GP lost or Semlex lost?

[Page 120]

1 Ω. Semlex.

2 A. Or GP?

3 Ω. You tell me.

4 A. So that's what I'm trying to say, that even in

5 Mozambique, Mozambique was a project of Semlex, and

6 Semlex worked for Mozambique for many years, and we

7 we -- once we started, once we started Mozambique

8 project, we didn't have any contacts between our

9 companies.

10 In fact, I can tell that I met Semlex in Mozambique

11 when I was approaching Mozambique from GP side,

12 travelling and meeting people and trying to find out

13 what is the need of the country.

14 And what happened, that Semlex contract ended up and

15 then at some point GP started to work with Mozambique

16 directly, with different scope. Don't mix those things

17 up, because sometimes you deliver just booklets, just

18 document blanks, sometimes you deliver full scope

19 solution. So Semlex was doing full scope solution. GP

20 later, without any involvement of Semlex, even without

21 knowledge of Semlex, we signed delivery of booklets, and

22 that continued for few -- few orders, but unfortunately

23 it was stopped mainly because of this situation we are

24 discussing today.

25 Ω. Thank you. Are you aware that on their website Semlex

[Page 121]

1 actually advertises projects that were performed by

2 Garsu Pasaulis, for example the Kyrgyz projects or the

3 Singaporean visa projects?

4 A. I'm not sure if they are still advertising, but at some

5 point, when Semlex was the owner of GP, yes, they were

6 advertising as a group.

7 Ω. Excuse me, you said when Semlex was the owner of GP?

8 A. Life is going on, Semlex is not owner of GP.

9 Ω. So Semlex sold GP to a different owner?

10 A. Yes.

11 Ω. And when did that happen?

12 A. A couple of years ago.

13 Ω. Could you be more precise?

14 A. I don't remember now. But you can check. It's open

15 data.

16 Ω. Thank you.

17 If I can move to paragraph 19 of your first witness

18 statement. It's going to appear on the screen. You

19 say:

20 "Definitely, Semlex never participated in any

21 contracts or tenders involving the Kyrgyz Republic."

22 And then in paragraph 21 of your second witness

23 statement you say:

24 "They have never ... participated in any contracts

25 or dealings related to the Kyrgyz Republic."

[Page 122]

1 And that's correct?

2 A. Yes.

3 Ω. Are you aware, Mr Mieliauskas, that after the start of

4 the so-called Kyrgyz scandal, Semlex sent a separate

5 letter to the Kyrgyz Government, saying that

6 Garsu Pasaulis is part of Semlex. It argued that the

7 scandal caused it reputational damages and threatened to

8 sue the Kyrgyz Republic?

9 A. Yes.

10 Ω. Was that letter vetted with you? Did you consult with

11 Semlex?

12 A. What do you mean this letter was contract, or

13 negotiations?

14 Ω. The letter --

15 A. No, it was just reaction to what's going on. Because in

16 Kyrgyzstan, for some reason again Semlex name appeared.

17 Although Semlex never was involved in any tender, Semlex

18 never made any presentation, Semlex never participated

19 in any negotiations, demonstration or whatever, but for

20 some reason when scandal got escalated, journalists, of

21 course those journalists they were fed the information

22 from government, they started -- you know, it's company

23 of Semlex. Semlex, Semlex is here. Although company is

24 no way related to Kyrgyzstan.

25 Of course it was reaction of Semlex. I know that

[Page 123]

1 they reacted. No, they didn't ask me to -- you know, to

2 draft the letter or to review it. It came from their

3 lawyers. Either from Brussels or Paris, but definitely

4 not from Vilnius.

5 Ω. So what you are saying, Mr Mieliauskas, is that Semlex's

6 letter concerned exclusively press publications about it

7 in the Kyrgyz Republic and not to the alleged violations

8 by the Kyrgyz Republic of the 2018 tender?

9 A. No, I can just repeat that Semlex wasn't involved in the

10 tender procedures. Semlex wasn't part of consortium.

11 Semlex wasn't bidding. There was no Semlex in this

12 tender.

13 Ω. And when Garsu Pasaulis started this arbitration

14 proceedings did you have an input in the Notice of

15 Arbitration that was sent to the Kyrgyz Republic? Did

16 lawyers show it to you?

17 A. No, at that moment I wasn't in GP anymore, but actually

18 that was -- I really supported the idea because I was so

19 much disappointed with State position towards GP, and

20 although I left the company, but it was obvious that we

21 must look for some justice. And I really supported

22 management of the company who decided to go for that.

23 Ω. Okay. Thank you. I would like to just come back to

24 your earlier statements that essentially you say that

25 Semlex owns Garsu Pasaulis, Garsu Pasaulis has

[Page 124]

1 independent business operations, and the advantage being

2 that they can work directly for Semlex as its printing

3 facility; is that correct?

4 A. Yes.

5 Ω. Did Garsu Pasaulis see Semlex as a gateway, conduit to

6 enter different markets, new markets?

7 A. In fact if we look at Semlex projects, for example,

8 Madagascar, Comoros, even Democratic Republic of Congo,

9 and Democratic Republic of Congo situation is a bit

10 different because there is a consortium of

11 Garsu Pasaulis as a producer and Semlex.

12 What I'm trying to say in those projects,

13 Garsu Pasaulis never had any other responsibilities but

14 production and delivery of physical document blank, be

15 it e-ID or e-passport or visa, or whatever other

16 security document.

17 Semlex, on the other hand, they had totally

18 different responsibilities. They had responsibility to

19 do customer service, enrollment, biometric enrollment,

20 automatic fingerprint matching and face matching, data

21 preparation, document personalisation and document

22 issuance, plus payments and everything else.

23 So it's -- there are two different things. So from

24 that point of view of course for GP it was good, because

25 we have organisation, we have a lot of customers, we

[Page 125]

1 have a big population, and obviously GP as a producer is

2 loaded with orders to produce those document blanks.

3 Because, just to illustrate, we produce -- we are

4 producer for Lithuania. So Lithuania population is

5 3 million. In African state, even the smallest state,

6 it has such a population. So of course we are very

7 interested to have orders to produce booklets, ID cards,

8 visa stickers, whatever other security documents.

9 Ω. Thank you, Mr Mieliauskas. I would just quote from your

10 interview that we saw earlier. You can take it from me

11 it's accurate and your lawyers can correct me if I'm

12 wrong.

13 "The Semlex group is our gateway to French-speaking

14 countries. Theoretically, we can compete in such

15 countries ourselves, but in practice this is not

16 possible. 'It's the same as saying that you can work

17 with the world with an English translator' ..."

18 So is it correct, Mr Mieliauskas, that you intended

19 to bid for projects together with Semlex, at least at

20 the time where Garsu Pasaulis was acquired by Semlex?

21 A. Sorry, I didn't get your question.

22 Ω. Would it be --

23 A. To bid together with --

24 Ω. Because earlier you told me that the intention was

25 always for Garsu Pasaulis to operate its projects

[Page 126]

1 independently from Semlex.

2 A. Yes, but not in French-speaking countries.

3 Ω. So in the French-speaking countries you would enter the

4 market, bid on the projects together with Semlex; is

5 that what you're saying?

6 A. Yes. Yes, if we can limit our scope just for production

7 of the document. Because to deliver the project is not

8 the same thing as to produce the document. It's a big

9 project. It's a big business process. Customer

10 service, biometric enrollment, data storage, data

11 matching. It's totally different business.

12 If you look at the Semlex, it's really that is

13 a good illustration, because they -- until they bought

14 Garsu Pasaulis, they didn't have any production

15 facilities at all. They were buying document blanks

16 from different producers and delivering big projects.

17 So of course I always want to be such a partner for

18 such, let's say, general contractors, especially form

19 Portuguese, French and Spanish-speaking countries,

20 because we are very bad at languages.

21 Ω. And so with such a tight cooperation with Semlex, would

22 you agree that scandals, investigations into Semlex

23 would necessarily have a negative impact on

24 Garsu Pasaulis' reputation?

25 A. Until it happened in Kyrgyzstan, we didn't feel at all.

[Page 127]

1 Because it looked a bit similar maybe to the -- our

2 previous owner Vainikonis. Somebody says that he's

3 a bad guy. That's it. No charges, no evidence, nothing

4 at all. But --

5 Ω. Mr Mieliauskas, if I can show you paragraph 20 of your

6 first witness statement, here you say that you:

7 "... and the management of Garsu Pasaulis were aware

8 of the negative article by Reuters in 2018 where the

9 press alleged Belgian investigation into the owner of

10 Semlex, Mr Karaziwan, relate to the passports contracts

11 in the Democratic Republic of Congo and the Comoros."

12 Do you remember this statement?

13 A. Yes.

14 Ω. And is this the same Congo project where Garsu Pasaulis

15 participated together with Semlex?

16 A. I think so.

17 Ω. And this was not the only Reuters article on the

18 subject, was it?

19 A. I don't know. I'm not following Reuters Africa,

20 honestly speaking. I knew about those articles. I have

21 seen them, but I'm not sure how many of them are.

22 Ω. I'll show you exhibit R-031 which is another article by

23 Reuters which basically says that your consortium was

24 selling passports for $185 a piece to Congolese citizens

25 and that most money was going to a relative of the local

[Page 128]

1 president. Have you ever seen this article?

2 A. Okay. So it's build, operate, transfer model, where you

3 build everything and you have revenue sharing scheme

4 with government and local partners.

5 As I explained to you, GP was -- GP's scope is

6 production of booklet. So we are producing the booklet,

7 we are delivering, we get paid for the booklet.

8 How it is organised in the country, what is -- even

9 what is the revenue share scheme, I don't know.

10 Ω. In other words, you were just executing your role and

11 not looking at the big picture?

12 A. Yes.

13 Ω. Because at paragraph 21 of your first witness statement

14 you continue talking about this Reuters article and you

15 call it a result of a smear campaign initiated by Semlex

16 competitors; correct?

17 A. Yes.

18 Ω. So you yourself, Mr Mieliauskas, say here that this

19 article from Reuters had a negative impact on

20 Garsu Pasaulis' reputation; yes?

21 A. It had some impact, but not anything critical.

22 Ω. And have you ever tried discussing the allegations with

23 Semlex, learning whether it's true, whether someone sent

24 money to the local president?

25 A. Absolutely.

[Page 129]

1 Ω. And the response was?

2 A. Look, you must understand what is GP, Garsu Pasaulis.

3 Garsu Pasaulis is a licensed company in European Union.

4 It's licensed. Activity of security printing is

5 licensed and in order to get licence, you must get

6 access to classified information, because all passports,

7 they have some classified information.

8 So everybody from the management team of

9 Garsu Pasaulis is screened by national security service.

10 So our Parliament members, not all of them get

11 access to classified information, but we do because we

12 are in this business, in licensed business. There is no

13 way to get licence if your management team has no access

14 to classified information, by law, that's it.

15 So we are under regular supervisory of

16 national security service of Lithuania. One thing.

17 Another thing, documents like Schengen visa, it's

18 a Schengen standard, and also they have requirements.

19 For example, Sweden is a member of Schengen area. But

20 Sweden can't order Schengen visas from garage.

21 Ω. Mr Mieliauskas, I'm really sorry, your inputs are really

22 helpful, but I would ask you to keep to the question.

23 A. So caring about our licence and our company status in

24 European Union and in Lithuania, of course we are asking

25 questions to our owners: is it true? Do you really have

[Page 130]

1 any legal problems? Have you ever received any charges

2 or whatever? Because that could have impact on the

3 entity we run in Lithuania. It's very obvious, because

4 when national security service is checking our company,

5 they are checking owners of the company, and if any of

6 owners was charged or imprisoned, so forget about this

7 business.

8 So of course we ask, and every time the answer was

9 no, it's just rumours, just some journalists spreading

10 something. We have nothing.

11 Ω. Okay. And so have you or someone from Garsu Pasaulis

12 ever tried reaching out to Reuters to correct the

13 information about Garsu Pasaulis in there, because it's

14 named in these articles? Have you ever tried doing

15 that?

16 A. No, it's to my knowledge, it's not Reuters. It's

17 Reuters Africa. And we did -- we organised some events

18 to local journalists, to clarify situation, to let

19 them -- to give them a chance to ask questions about

20 everything, about everybody of us. Yes, we did, but not

21 on Semlex. We left Semlex for Semlex. I was focusing

22 on GP.

23 Ω. You mentioned press conference. So something that you

24 did in the Kyrgyz Republic as well, correct, in the

25 present case?

[Page 131]

1 A. In Kyrgyz Republic it was done by GP, but I was invited.

2 It was already after -- after my leave. But we had

3 similar events in Lithuania in Vilnius.

4 Ω. So a part of the DRC scandal, are you aware that Semlex

5 and/or its owner, Karaziwan, were implicated in at least

6 five other scandals involving manufacturing of passports

7 in Chad, Guinea-Bissau, Madagascar, Mozambique,

8 The Gambia, all of which happened before the Kyrgyz

9 scandal; were you aware of that?

10 A. No, I'm not aware of any -- anything wrong done by

11 Semlex.

12 Ω. I will not be walking you through the documents, but you

13 can take it from me that on the record of this

14 arbitration there are reports by Reuters again, by

15 OCCRP, which is a respected conglomerate of

16 investigative journalists, all reporting on Semlex being

17 involved in bribes, fraud, in those countries, etc.

18 Would this fact surprise you, that this reporting

19 exists?

20 A. So, as we already talked, for any company you will find

21 some reports or facts, but I know what -- what fake news

22 have impact on the operations, and what are just noise.

23 So till Kyrgyzstan, we had a lot of noise on

24 different matters, but it never had any impact on our

25 business.

[Page 132]

1 Ω. Noise, and in your second witness statement you refer to

2 reportings as "drama novels". A different word.

3 I'm just wondering, Mr Mieliauskas, what level of

4 reporting would be convincing to you when Reuters or

5 OCCRP are just noise and drama novels?

6 A. What do you mean?

7 Ω. What I'm saying is that you qualify reports by respected

8 journalists as noise, as drama novels, just because

9 Semlex tells you that nothing happened. So my question

10 to you is: what would be the level of the publication

11 that would raise some questions with you? I mean, what

12 press do you read?

13 A. First of all, I look at it from my personal perspective.

14 If you look at the Lithuanian media, it's very easy.

15 You can Google "Mieliauskas, half a million fine for

16 unpaid taxes" and you will find the article in

17 Lithuanian media. And I know what it means. I know

18 that I wasn't fined. I wasn't fined. But those

19 articles appeared and appeared and appeared because

20 I know why, because somebody who is behind those media

21 channels was in an alcohol business and he was

22 interested to take over the company. Okay. But it's

23 business.

24 But if it says that I am fined by tax authorities

25 and I know that I'm not fined, and a tax authorities has

[Page 133]

1 no questions to me, so at one day I decided to stop it.

2 I just requested certificate from tax authorities: what

3 is my status. They gave me the paper saying that no

4 debts, no complaints, nothing at all, and then I went to

5 court and I said stop it. This is declaration from tax

6 authorities.

7 So I guess that and so on or later, Semlex could do

8 the same. But I have experience. I know what it means.

9 The problem is of course that when you have

10 businesses, especially with private companies, it's more

11 complicated because there could be nothing, just noise,

12 but this noise can start breaking your business.

13 Ω. Can I suggest to you, Mr Mieliauskas, that the depart

14 between Semlex and Garsu Pasaulis of which we learned

15 a few minutes ago, would one of the reasons be just for

16 Garsu Pasaulis to get rid of the negative media baggage

17 of Semlex? Just as it departed before with

18 Mr Vainikonis?

19 A. Sorry, say again? I didn't get the point.

20 Ω. I'll rephrase. Would you agree with me that one of the

21 reasons for which Garsu Pasaulis is no longer owned by

22 Semlex is the negative reputation of that company?

23 A. Of GP or of Semlex?

24 Ω. Of Semlex.

25 A. I can't state that because in fact I know how -- how

[Page 134]

1 this buy-out was organised, and I was even invited to

2 participate in that buy-out of Garsu Pasaulis from

3 Semlex and Mr Karaziwan. In the beginning

4 I participated, but later I decided to exit. So I don't

5 know. I think maybe. Maybe.

6 Ω. Just to close this large section on reputation, let's

7 talk about Garsu Pasaulis properly.

8 During your time as the CEO, Mr Mieliauskas, how

9 many times would Garsu Pasaulis -- how many times was it

10 investigated officially by criminal authorities except

11 for Kyrgyz Republic?

12 A. Why do you say except? There was no investigation for

13 Kyrgyz Republic.

14 Ω. We will get to that later. In other countries.

15 A. No. None.

16 Ω. None.

17 A. None.

18 Ω. And not in your home, Lithuania, either?

19 A. We had investigation. The only investigation for

20 Garsu Pasaulis was related not to let's say tenders or

21 procurements or whatever, it was related to the usage of

22 European subsidies. We had a programme which -- during

23 that programme Garsu Pasaulis received a subsidy from

24 European Union for investment into new lines. Basically

25 acquisition of production of passports was done with big

[Page 135]

1 help from European Union. So after that there was

2 investigation if Garsu Pasaulis was, you know -- if

3 Garsu Pasaulis used those funds properly.

4 Ω. And the body that was investigating Garsu Pasaulis,

5 would you recall which body that was?

6 A. Verslo Paramos Agentura. So it's Agency for Business

7 Support.

8 Ω. No other investigations?

9 A. No. That's the only case.

10 Ω. If I could bring you, Mr Mieliauskas, to one of the

11 exhibits you submitted with your witness statements,

12 CW16789VM1-41. This is exchange between employees of

13 Garsu Pasaulis and Carlsberg, if I'm not mistaken. And

14 in this exchange Carlsberg requested to fill in

15 a questionnaire, and a follow-up email reads:

16 "Is there any detail on an ongoing investigation

17 into Garsu Pasaulis by the Prosecutor General's office

18 in Lithuania?"

19 Would you care to elaborate whether --

20 A. There no -- there was no Prosecutor General

21 investigation on GP.

22 Ω. Then why would Carlsberg refer to it as an ongoing

23 investigation and requesting details?

24 A. You may ask Dirk, but I can only guess that they are

25 referring to that because, you know, we are not hiding

[Page 136]

1 away any processes from our key customers.

2 Carlsberg for years was our key customer and

3 Carlsberg used the GP not only as a producer, but also

4 as a platform for all pilot projects we are rolling out

5 in Eastern Europe. So it was a key platform for

6 Carlsberg, and once it happened in Kyrgyzstan, and we

7 also shared with them all the information about general

8 prosecutor investigation on several employees of

9 Garsu Pasaulis for this EU subsidy proper usage, because

10 in fact Garsu Pasaulis as a company has never got any

11 claims or no case in court for that, but only some

12 employees, they were investigated.

13 Finally those investigations were closed with no --

14 no -- basically their outcome was that these people did

15 nothing bad.

16 Ω. And --

17 A. But Carlsberg knew about that. So I'm pretty sure that

18 they are referring to those investigations against

19 employees of Garsu Pasaulis, but not as a company.

20 Ω. And earlier my colleague Sergey Alekhin talked to you

21 about the Moldovan passport project. Are you aware that

22 there's an investigation into Garsu Pasaulis in that

23 country as well?

24 A. No.

25 Ω. Okay.

[Page 137]

1 So Mr Mieliauskas, coming back to paragraph 22 of

2 your second witness statement, which we saw at the

3 beginning, where you say Garsu Pasaulis never had any

4 reputation problems before the Kyrgyz scandal, let me

5 just recap.

6 So we have Vainikonis and you very emotionally

7 explained to us what problems it caused to you as the

8 CEO. We have Semlex scandal in Congo. We have scandals

9 with Garsu Pasaulis proper. Apparently there are some

10 investigations.

11 All of that, according to you, and according to

12 Claimant, had no impact whatsoever throughout the years

13 on its reputation, whereas one scandal in a small

14 post-Soviet country, relayed by local media, picked up

15 by international media, would have completely destroyed

16 your business model, caused multi-million losses. Is

17 that the proposition you're advancing?

18 A. I don't think that is very correct for me now to comment

19 on the performance of Garsu Pasaulis now. But I'm

20 pretty sure that company is not destroyed.

21 But certainly there was big damage to the company,

22 at least packaging division of the company was -- was

23 completely destroyed.

24 Q. Again --

25 A. And some security printing projects of course were also

[Page 138]

1 very heavily damaged.

2 But it's not right to say that company is destroyed.

3 Company survived. But again maybe it's better to ask

4 company to comment for current performance.

5 Ω. So, again, one scandal in Kyrgyzstan would have caused

6 multi-million dollar damages that are claimed in this

7 arbitration, whereas all the previous instances

8 scandals, investigations, were just, to quote you,

9 noise; is that correct according to you?

10 A. Absolutely. Because there was no case when somebody

11 ever told that I bribed somebody or anybody from GP

12 bribed somebody. And in Kyrgyzstan it was told by

13 officials. Not by a competitor, but by officials.

14 That's big difference, believe me.

15 MR BAYANDIN: I think it's a convenient time for a break,

16 Mr President.

17 THE PRESIDENT: Very good. Let's break for 15 minutes.

18 During the break you cannot talk to anyone about

19 your testimony or the case. So you have to have

20 a coffee on your own.

21 15 minutes then.

22 (3.26 pm)

23 (A short break)

24 (3.41 pm)

25 THE PRESIDENT: Whenever you're ready, Mr Bayandin.

[Page 139]

1 MR BAYANDIN: Thank you. Just a few seconds.

2 Mr Mieliauskas, I would now like finally to talk

3 about the infamous 2018 tender and specifically about

4 the GKNB investigation that was launched by the

5 Kyrgyz Republic into the results of this tender.

6 If I may direct you to paragraph 49 of your first

7 witness statement where you say:

8 "Garsu Pasaulis did not receive any information or

9 official notices or complaints from any institution from

10 the Kyrgyz Republic."

11 And:

12 "Garsu Pasaulis only knew of such accusations from

13 the local Kyrgyz press."

14 Do you confirm this statement?

15 A. Yes. Yes.

16 Ω. And when you say Garsu Pasaulis, do you mean the company

17 as an entity, or do you mean the company yourself,

18 Mr Lukoševicius?

19 A. To my knowledge no one received any accusations or

20 questions.

21 Ω. So even you personally, you did not receive any

22 information about the investigation apart from the

23 Kyrgyz local press; correct?

24 A. I haven't received any accusations or official letters.

25 The only -- the only information which wasn't from the

[Page 140]

1 press was information I was getting from our local

2 partner, Marat -- sorry, I don't remember the last name.

3 But the guy who was in Bishkek. So that's the only

4 source of information I was getting.

5 Ω. Okay. So we can already qualify your statement here

6 that you only learned about the investigation from the

7 local press and from your local representative,

8 Marat Sagyndykov, who is witness of Garsu Pasaulis in

9 this arbitration?

10 A. Exactly, Sagyndykov, yes.

11 Ω. If I may direct you, Mr Mieliauskas, to a document which

12 is exhibit R-058 in this arbitration. It is a letter

13 from the GKNB which is addressed to representatives of

14 Garsu Pasaulis, Mr Mieliauskas and Mr Lukoševicius.

15 Have you ever seen this letter?

16 A. No, we haven't got this letter, but I can guess that

17 Marat from Kyrgyzstan was referring maybe to this when

18 he asked me to call his local KGB or whatever we call

19 it, this local investigation office.

20 But we haven't received this letter.

21 Ω. When was the first time that you saw this letter?

22 A. I don't remember. The letter itself -- I don't know.

23 Ω. You can take your time and read it if you like.

24 A. I see that it's dated April 2019, but -- so end of March

25 or very beginning of April. I don't recall it

[Page 141]

1 precisely. Marat told me that people from let's say

2 secret services, they want to talk to me. And he passed

3 me a phone number where I could call. So I called.

4 I said, okay, how can I help? Should I come or

5 whatever? So please invite. He said okay, okay, and

6 then nothing happened.

7 Ω. Did Mr Sagyndykov show you this letter? Did he send you

8 a photo, a copy of this letter?

9 A. No.

10 Ω. Or anything?

11 A. I don't remember this letter.

12 Ω. So is it your testimony, Mr Mieliauskas, that

13 Mr Sagyndykov did not share with you a copy of this

14 document which is addressed to you and to

15 Mr Lukoševicius at the time?

16 A. I can check my emails, but I'm pretty sure that he

17 haven't sent it to me.

18 Ω. So today is the first time you say that you see the

19 letter?

20 A. The letter itself, most likely yes, but as I said,

21 I knew about the fact that they wanted to talk to me.

22 Ω. And so you learned about this. You tried to call GKNB

23 and apparently nobody responded to you?

24 A. No, no, no, no. I didn't tell that nobody responded to

25 me. Marat gave me a phone number to call and to talk to

[Page 142]

1 some investigator. I called and I said, okay, I'm --

2 I'm ex-CEO of the company. I'm still -- if you want,

3 I have, you know -- I can get mandate to represent the

4 company. How can we help you? What's going on?

5 Because we are not informed. We haven't received

6 anything, you know, no information. We only read in

7 press that something is going on.

8 And I asked to take some action somehow to inform us

9 or invite if they need -- then we will consider going

10 there for talking. We haven't got any information that

11 we have some status, legal status in the process,

12 because first of all we would pass it to the lawyers

13 because we are not lawyers, neither me nor Lukoševicius.

14 And after this discussion on the phone, nothing

15 happened. So I never received any official invitation

16 or accusation or whatever. And I know that it works in

17 Kyrgyzstan because we do have experience. We used to

18 receive invitation to the court listening in Kyrgyzstan,

19 in Bishkek.

20 Yes, as Garsu Pasaulis, we have received -- we now

21 how it looks like. You receive official letter saying

22 that court listening will be happening in some

23 district court, please come and attend at that time, and

24 so on, I have seen this, because we were receiving that

25 for another project, for -- I mean, we were third party,

[Page 143]

1 but anyway, we know that those processes are somehow

2 defined, and there are procedures, how to inform, how to

3 invite, and here nothing happened at all.

4 And I asked: if you really want us to do something,

5 okay, we are open, just tell us what to do.

6 Ω. So if I just assume for a moment that you indeed did not

7 see this letter at the time and Mr Sagyndykov did not

8 share it with you, looking at this letter today,

9 Mr Mieliauskas, if at the time you had received it,

10 would it be official enough for you to react and to

11 respond?

12 A. That would be -- that would be for sure reason to react.

13 Of course if the letter is dated 9 April, it's

14 impossible to be on 12 April in -- on ground in Bishkek,

15 but at least we would, you know, got back to inviting

16 party, asking either to postpone or to arrange it

17 remotely or whatever.

18 Ω. But your testimony is that since you did not see

19 a letter, you did not take any action?

20 A. Yes. I ask myself for some official letters or

21 invitations.

22 Ω. If I can show you now exhibit R-059, this is a letter,

23 an application by a lawyer whose name is

24 Baktybek Zhumashev. Have you seen this letter before?

25 A. I'm sorry, but, you know, those things are happening in

[Page 144]

1 2019, April. As we started, I'm out of the company

2 starting Thursday -- I mean, in 2019, I'm not in the

3 company. So I'm not on a daily communication on those

4 topics.

5 Ω. But it was --

6 A. Who is this lawyer? Wait a second. May I read?

7 (Pause)

8 Ω. This is Mr Zhumashev, a lawyer appointed by

9 Garsu Pasaulis to represent them in the country.

10 (Pause)

11 It was your earlier your testimony, Mr Mieliauskas,

12 that the Kyrgyz scandal weighed on you heavily, that it

13 was a really emotional matter and, you know, you've got

14 enough of it to leave the company, to leave the position

15 of the CEO. Is that a fair statement?

16 A. Where I said that it was the main reason of leaving the

17 company? Are you sure I told that?

18 Ω. I withdraw this.

19 Would you agree with me, Mr Mieliauskas, that you

20 followed the Kyrgyz scandal closely when it started?

21 A. You know, it impacted me personally. So of course

22 I followed it. But not on a daily basis. I wasn't in

23 the company. I was assisting the company to resolve the

24 situation, but all those letters, when somebody says

25 that letters were sent to citizen Mieliauskas, sorry, it

[Page 145]

1 never happened.

2 What address were used to send to citizen

3 Mieliauskas? How they did -- how do they know where

4 I live? All the way they could ask it, because we had

5 phone conversation. But even small things are obvious

6 that it's fake. Nobody sent. Nobody ever tried to send

7 it. Because they would first of all -- they would need

8 to know where to send those letters.

9 Q. Again, Mr Mieliauskas, this document is, as indicated at

10 the top, a letter from an attorney, Baktybek Zhumashev,

11 who says that he's writing in defence of the rights and

12 legitimate interests of general director of

13 Garsu Pasaulis, Ana Janauskiene -- apologies if

14 I pronounce it wrongly -- Vytautas Mieliauskas and

15 Andrius Lukoševicius. Again, have you seen this letter

16 before?

17 A. No, this letter wasn't somehow agreed with me for sure.

18 I know that GP had a lawyer, but to my knowledge the

19 lawyer was for some specific complaint or whatever they

20 were making on this tender.

21 Ω. So you say this letter was not vetted with you?

22 A. No.

23 Ω. Is it your submission, Mr Mieliauskas, that someone at

24 Garsu Pasaulis appointed a lawyer to represent you

25 before criminal authorities of the Kyrgyz Republic and

[Page 146]

1 vetted the dispatch of this letter?

2 A. I don't know. I really don't know. If this lawyer had,

3 let's say, representation of myself as a citizen,

4 I don't know.

5 Ω. Mr Mieliauskas, this document at the end contains an

6 attachment which is entitled "attorney's order",

7 and I appreciate you're not a lawyer, but in the

8 criminal proceedings an order is sort of an engagement

9 letter, an agreement between the client and an attorney

10 to represent him or her --

11 A. Okay, so you mean that this attorney order has a mandate

12 to represent me as a person?

13 Ω. And it could not --

14 A. May we have a look?

15 Ω. And it could not have been signed without your

16 agreement?

17 A. But may we have a look at this order?

18 MR ALEKHIN: Sorry, Mr Mieliauskas, the criminal proceedings

19 are my field, if you wish, here. So an order,

20 an attorney's order in the Kyrgyz legal system is a tiny

21 piece of paper with a stamp on it from the Attorney

22 Bar Association. So an attorney in Kyrgyz Republic, in

23 France, everywhere, they are members of the Bar, right?

24 A. Yes.

25 MR ALEKHIN: In criminal proceedings, of course, there is an

[Page 147]

1 engagement letter, a proof that you have a mandate

2 between a client and an attorney. Now, on the basis of

3 this engagement letter, the Bar Association issues

4 an order, so a short piece of paper, confirming just

5 that this lawyer has a mandate. The mandate itself,

6 an engagement letter as a confidential document, as you

7 would probably agree with me, is not disclosed to the

8 investigative authorities, but the Bar Association, so

9 the association of lawyers, which regulates the

10 profession, confirms, and this is in the law, by way of

11 this order that they have seen the engagement letter

12 between a client and a lawyer, and they confirm that

13 this lawyer has powers to do whatever he has to do in

14 the criminal proceedings.

15 Sorry, I haven't asked my question.

16 So the question would be: have you signed an

17 engagement letter with Mr Zhumashev at any point in time

18 back in 2019?

19 A. I really don't understand -- don't remember, but

20 I really would like to see any mandate signed by me that

21 I authorise anybody to represent me as a person in

22 Kyrgyzstan. That would be -- maybe I -- maybe I just

23 forgot about that, but I really don't remember, and --

24 but you say that it's an attachment. So can we have

25 a look at this attachment?

[Page 148]

1 MR ALEKHIN: Mr Mieliauskas, we did not anticipate that

2 an order which is literally four lines of text would

3 raise concerns. We can extract it from the record of

4 the criminal investigation if needed. We've seen it.

5 A. No --

6 Ω. If I may finish, it only says: this lawyer confirmed by

7 the Bar Association has powers to represent. It does

8 not of course include your engagement letter, whether it

9 was signed or not, or anything of that sort. This is

10 a method protecting disclosure of engagement letter,

11 which is a confidential attorney client piece of paper,

12 from the investigative authorities. So the

13 Bar Association acts as a conduit, a verifying agency,

14 to confirm those powers.

15 So if you want to see it, and if there's no

16 objections --

17 THE PRESIDENT: Is it in the file?

18 MR ALEKHIN: It's not in the file.

19 THE PRESIDENT: Then I think you should move on to other

20 questions.

21 MR ALEKHIN: No problem.

22 MR BAYANDIN: Mr Mieliauskas, is this your testimony, that

23 you never authorised anyone to act on your behalf in the

24 Kyrgyz Republic?

25 A. I don't remember myself authorising anybody to react

[Page 149]

1 on -- to act on my -- on my name in Kyrgyzstan.

2 Ω. So essentially, Mr Zhumashev, who is asking GKNB on your

3 behalf to send questions to you in writing instead of

4 you showing up in Bishkek, that would be on his own

5 initiative; is that your testimony?

6 A. I think so.

7 Ω. And for the abundance of caution, you have never

8 received GKNB's reply to this letter, which is

9 exhibit R-059, which will appear on the screen

10 momentarily.

11 Apologies, it's exhibit R-062.

12 Can you just read it and confirm that you have never

13 seen this document either?

14 A. I have never received that document.

15 Ω. And during the Kyrgyz scandal in April 2019, you

16 followed the press? Did you follow the Kyrgyz press on

17 what's going on?

18 A. Honestly, I can't say it for sure because end of March,

19 beginning of April, I would say it was kind of break --

20 break point when we decided that it's impossible to --

21 to expect any justice in Kyrgyz, especially when we were

22 warned by our Ministry of Foreign Affairs that: stay

23 away of Kyrgyzstan, don't go to Kyrgyzstan, we can't

24 ensure your safety in Kyrgyzstan now. That was --

25 I don't remember by heart now, but again it's public,

[Page 150]

1 I think you can find it in internet, but I think in

2 March 2019 Lithuanian government delegation was in

3 Kyrgyzstan, and before going there, they called company

4 and they asked: we hear that something is going on. Do

5 you need any help? Do you need government delegation,

6 official government delegation to -- to clarify

7 anything? What's going on? We just explained that, you

8 know, we are just waiting, waiting, waiting for solution

9 of the situation, and we said that we have nothing --

10 nothing to ask in particular. Just -- just clarify

11 what's going on, what is the status of the situation.

12 And on their return they said that, yes, we asked.

13 They replied that, yes, Garsu Pasaulis is participating

14 and procedures are ongoing. Nothing about any claims or

15 whatever.

16 But later the same diplomat called us and said

17 that: we have information that for you it's not safe,

18 and we don't have embassy, we have only honourable

19 consul, and please avoid visits to the country.

20 So it was absolutely clear that there is no other

21 way how to raise it up to international level and to try

22 to find justice there.

23 And I don't remember exact date, but it was,

24 I think, either very last days of March or beginning of

25 April when we approached the lawyers, when the company

[Page 151]

1 approached the lawyers, and after that we lost a bit

2 interest in what's going on.

3 At least myself.

4 Ω. Earlier, Mr Mieliauskas, you said that if at the time

5 you saw if you received actually personally the letter

6 from GKNB, that would have caused you to react correct?

7 A. Yes, at least to call and to ask: how can we proceed?

8 Ω. The letter asked you to arrive to the GKNB offices to

9 give explanations. So if you had seen this letter at

10 the time, would you comply?

11 A. It depends. If it was -- if it happened before we

12 received this warning from Minister of Foreign Affairs,

13 most likely we would go. But after -- after we got

14 instructions from Minister of Foreign Affairs to avoid

15 the country, of course we can't do it.

16 Ω. If today you received a letter from GKNB asking you to

17 come and give explanations, would you comply?

18 A. Of course not.

19 Ω. Thank you. For the last part of the examination, I will

20 hand back the floor to Mr Alekhin.

21 Cross-examination by MR ALEKHIN (continued)

22 MR ALEKHIN: Mr Mieliauskas, thank you for your indulgence

23 and bearing with us during musical chairs in

24 cross-examination.

25 If I can take you to your first witness statement,

[Page 152]

1 paragraph 67, I will show it on the screen momentarily.

2 Paragraph 67.

3 Let's start with the first sentence, which is:

4 "Major commercial banks, whom Garsu Pasaulis has

5 worked with for tens of years, requested Garsu Pasaulis

6 to immediately close its accounts and refused to provide

7 credit services or issue guarantees to Garsu Pasaulis

8 specifically indicating the Kyrgyz allegations."

9 Do you maintain this statement?

10 A. Yes.

11 Ω. Okay. I will now take you to the evidence you've

12 provided to support this assertion in your witness

13 statement. So we will start with an exhibit. So it's

14 CWS-AL-137. I will show it on the screen now.

15 There are several documents in this exhibit. There

16 is this letter which we're going to start our discussion

17 with. So that is a letter from Luminor bank dated

18 25 April 2019 to Garsu. Do you recognise this letter?

19 A. No, I am not in the company.

20 Ω. Right?

21 A. I know the fact, but I'm not in the company, I'm not CEO

22 in 2019.

23 Ω. Right. But you've relied on specifically --

24 A. Yes, I know this information, but I have never seen this

25 letter. This letter is not addressed to myself.

[Page 153]

1 Ω. Right. So just for me to get this straight, in your

2 witness statement, your first witness statement, at

3 paragraph 67 there's a footnote, footnote 50, and it

4 says "Communications with banks" and it's an exhibit.

5 And it's this exhibit. So am I getting this right, that

6 you, before signing your witness statement, confirming

7 that it's an all accurate, never --

8 A. So please understand me correctly. I'm out of the

9 company. Of course I know what's going on. By the way,

10 I have background in banking. So many colleagues --

11 many our account managers in the banks are my previous

12 colleagues 20 years plus ago. So I have a lot of

13 personal connections and I know what's going on.

14 But when you ask if this letter, this letter is not

15 for me. Of course, to justify my witnessing

16 information, I provided in my witness, I asked a lot of

17 things from the company. I talked a lot to

18 Ms Janauskiene, and I talked a lot to Simonas Naujikas,

19 packaging director of Garsu Pasaulis.

20 So of course I know, but if you ask me "Do you

21 remember this particular letter?", so of course I don't

22 remember it. I may find it, asking company to give me.

23 I know what's going on, I know what's going on with

24 Luminor, SEB, or Swedbank, but these letters are not

25 addressed to me.

[Page 154]

1 Ω. Right, so then the proper course of action for the

2 witness statement that you signed would be just to

3 remove that document from your witness statement?

4 A. Why?

5 Ω. I'm sorry?

6 A. Why? I said that this scandal had an impact on banking

7 in -- how banking institutions look at Garsu Pasaulis.

8 I stated it, and I still say it.

9 So of course to confirm that, I requested documents

10 from the company and I attached it.

11 Ω. By a letter that you haven't seen?

12 A. So I know that -- I say that Luminor, for example,

13 asked -- forced GP to close account. So I don't need to

14 see the letter because I know because I'm in contact

15 with management. But no problem, I can ask the letter

16 from current general manager of the company and she

17 provides me.

18 I don't speak to Carlsberg myself, especially on

19 that level of procurement level, but I speak to let's

20 say local managers, CEOs of local companies and senior.

21 I know the moods. I know what's going on.

22 When you need evidence, okay, I may collect that

23 evidence, asking GP.

24 Ω. So the evidence is the mood, okay. That I get for

25 a second. But the question really is: you make

[Page 155]

1 a statement that those problems with the banks were

2 caused by the Kyrgyz allegations, so that was

3 specifically indicated to you. You attach a document,

4 which is a letter from Luminor, which says:

5 "... customer risk re-assessment, a decision was

6 made to terminate the business relationship due to

7 a level of risk unacceptable to the Bank ..."

8 Can you point me anywhere in this letter that

9 mentions the Kyrgyz allegations or any other specific

10 allegations?

11 A. As you see, bank is not disclosing their internal risk

12 assessment, you know, results.

13 Ω. Why?

14 A. Why?

15 Ω. Yes?

16 A. Have you ever seen that? Risk management, if he decides

17 to participate in any business, decides to go to one or

18 another market, normally it's internal decision.

19 Ω. But they felt somehow comfortable somehow disclosing it

20 to you orally; is that how I understand it?

21 A. Yes, absolutely. Yes.

22 Yes, because again it's not -- we are not talking

23 about noise, which used to be -- which used to present.

24 Noise about Vainikonis, noise about Karaziwan. It's not

25 the same thing. Here we are talking about information

[Page 156]

1 which is published in media channels saying that

2 company, with me in front, I guess, we were bribing

3 somebody.

4 So feel the difference. One thing is to say that

5 you have problems somewhere, or your owner or friend of

6 your owner, another thing is the company itself is

7 involved in some corruption. And that is -- that was

8 escalated by media. Of course, with information fed

9 from institutions in Kyrgyzstan.

10 Ω. So then do I get it correctly that there is a certain

11 disconnect between what you say in your witness

12 statement and the documents you produced yourself?

13 I mean, I hope --

14 A. No, I don't see this disconnection. Please explain

15 where is this disconnection?

16 Ω. Where does it state in this letter, or any other

17 documents that I will refer you to in a second, that the

18 Kyrgyz scandal, or any other specific scandal, was the

19 reason for Luminor to close the accounts?

20 A. Yes.

21 Ω. It doesn't; can we agree on this?

22 A. What changed in Garsu Pasaulis? Name me, list me what

23 changes happened to Garsu Pasaulis to change position of

24 Luminor?

25 Ω. Well, I believe --

[Page 157]

1 A. Other than Kyrgyz scandal?

2 No, don't try to think, because there is nothing.

3 Just scandal in Kyrgyzstan. And very serious, you know,

4 statements that we were bribing somebody, that there is

5 a corruption, and suddenly we have an outcome of that.

6 Ω. Mr Mieliauskas, sorry, but my job is to think. So if

7 you don't mind, I would continue doing that.

8 The same document, and we go several pages down.

9 And again, if you haven't seen this before, or you don't

10 feel comfortable talking about it because you don't

11 remember or something, do let me know. But it is part

12 of your witness statement. So that's a why I'm asking

13 questions to you about it.

14 If we go a bit further, so again:

15 "Major commercial banks whom Garsu worked with for

16 tens of years requested Garsu to immediately close its

17 accounts and refused to provide credit services or issue

18 guarantees."

19 Now, credit services, I assume, is a reference to,

20 for instance, foreign currency exchange services;

21 correct?

22 A. Credit services for currency exchange?

23 Ω. Well, I mean --

24 A. It's called FOREX. Credit services is letter of credit.

25 Ω. Okay. But part of this document are several exchanges

[Page 158]

1 with foreign currency exchange services, FOREX, that

2 discuss whether or not they're willing to work with

3 Garsu. You again adduced that specific letter, for

4 instance, in support of the proposition at paragraph 67

5 of your witness statement that major commercial banks

6 and credit services and issue guarantees -- I'm trying

7 to understand. We can clarify your witness statement by

8 saying major commercial banks and foreign exchange

9 services if that would be more accurate. Would that be

10 more accurate?

11 A. I don't remember that we -- you should better ask

12 Garsu Pasaulis because I don't remember that, let's say,

13 end of 2018, we were using any dedicated foreign

14 exchange service provider. Because there was no need

15 for that.

16 Yes, I know there are companies who are just doing

17 FOREX. But I don't remember that end of 2018, by the

18 time when I was leaving the company, we used any of

19 that.

20 Ω. Which is --

21 A. Type of service.

22 Ω. Which is accurate --

23 A. So mainly it was related to banks.

24 Ω. Right. Not using FOREX, that would be accurate,

25 because, for instance, again, that exchange that's on

[Page 159]

the screen, and that forms part of the document you refer to, that's why I'm asking you questions about it, is in fact from 2017 and talks about AFEX not willing to do business with you because of an ownership of Garsu Pasaulis, and that being a compliance department risk or issue.

So, you know, I think we can agree with you that, for instance, has nothing with the Kyrgyz scandal, the timing is wrong here; right?

A. For AFEX I don't remember, but -- I don't remember that we ever worked with AFEX. Maybe it was attempt to open -- open a service account, most likely, and it wasn't opened. But it wasn't closed. I mean, it ...

Q. Okay. Let's move on.

I want to talk about Mozambique, if I may.

So Garsu Pasaulis had participated in a tender for passport manufacturing, opposing Mühlbauer, in around August 2017 in Mozambique; correct?

A. Yes.

Q. Okay. And Mühlbauer won that tender; correct?

A. I know that we didn't win, so most likely Mühlbauer won, yes.

Q. Okay. And then that required, I think it's not really contested, that required some prep work to be done, so Mühlbauer won, but parties may disagree on the reasons

[Page 160]

they didn't start immediately, but that required some time to do whatever they had to do. That's not my question.

Meanwhile, am I correct to understand and recollect that Mozambique entered into an agreement with Garsu in around late 2017 for a supply of 100,000 passports?

A. You are right. Most likely Mühlbauer won a contract, got to work, and didn't deliver. That happens. And Garsu Pasaulis started to supply booklets. So that's why I explained it already that it was absolutely independent from Semlex and not related to Semlex delivery.

Q. I'm not asking questions about Semlex, Mr Mieliauskas. Thank you. The question was: did GP, Garsu Pasaulis, enter into a contract with Mozambique in end 2017 for 100,000 passports?

A. It would be better to check the document, but as far as I remember, it was orders for batch of 100,000 -- just placing the order to deliver 100,000 booklets, and they kept doing that for some time until it stopped.

Q. And by "some time", at paragraph 69 of your first statement, you refer to "profitable contractual relationships", and talking about Mozambique, "for years". That's a quote. So I just want to establish, when you say years, is that, you know, a year and

[Page 161]

a couple of months, or is it many, many years, I just want to clarify this?

A. Production of Mozambique passport is more years because, as I said, Semlex had it on its own, sourced booklets from some French producers, later from GP, and then GP took it over different scope, just supply of booklets. And that -- that was really good margin business, and it ended up after -- after the Kyrgyz scandal.

Q. So Garsu Pasaulis did supply passports to Mozambique under a Semlex arrangement at the late stage of that arrangement or --

A. Yes, late stage.

Q. Late stage?

A. We didn't begin with them because at that time we didn't know each other.

Q. How many years? Several years? Four, five, six?

A. I don't remember.

Q. You don't remember?

A. Because it -- we met Semlex -- I don't want to mislead -- maybe 2014, 2013. Something like that.

Q. But then Mühlbauer won the tender, the one in Mozambique -- or sorry, you said you didn't win, to which I would probably imply they won, and of course there are press reports saying they have started working -- I haven't asked my question.

[Page 162]

A. I'm just not sure about entity who won, but probably Mühlbauer.

Q. Someone else won?

A. Yes.

Q. And then there's this assertion in this arbitration that, you know, but for the Kyrgyz scandal, Garsu would have kept on supplying Mozambique with passports, you know, going beyond whatever contract we have on the record, which is for 100,000 passports only, signed in December 2017, and I'm trying to understand the logic here, because, you know, in early 2019 Mühlbauer -- or you don't remember whom, but someone else started actually producing and delivering passports to Mozambique under a contract which was entered into based on a tender that they won.

So Garsu stopped delivering those passports because someone else came in and, you know, started doing that.

So the question is: I really don't see how, you know, that could be projected into the future, as in what expectation or right did Garsu have with respect to their Mozambique arrangements if the only thing that we have on the record is a short form supply contract for 100,000 passports?

A. So I don't think that we should project for forever, but what I know, because I was in contact with our general

[Page 163]

consul or -- in Mozambique who knew situation very well, and our local agent who in fact helped us to manage this project, that there was a significant gap and there was a real demand in Mozambique for the booklets, because let's say Mühlbauer, once they signed the contract, it doesn't mean that they start to deliver the same day. It takes time, and sometimes -- very often it takes longer than expected.

The passport we were delivering was kind of old style from technology point of view. That means that you have full capacity ready -- infrastructure for full capacity ready for old style passport.

For new style passport, of course, you have very limited, even if you start -- starting get capacity. So it takes time to grow it up.

So what I'm trying to say, that of course most likely it wouldn't last for 10 or 20 years, but I'm sure that for few more hundred thousand booklets, it was -- there was a real demand, because we knew it from -- from information we received from local people in Mozambique. And there was shortage of passports.

Q. Irrespective of the fact that another company has won the tender and effectively started delivering those passports in early 2019; is this your testimony?

A. My testimony is that there was a demand from Mozambique

[Page 164]

for passports produced by GP. But due to the situation which happened in Kyrgyzstan, nobody wanted to take a risk and to continue with a company which was accused in corruption in Kyrgyzstan. And that is exactly the information I was receiving from Mr Levara(?) and other local guys in Mozambique, as well as Mindoas Paulukas(?) who was managing as a local agent in Lithuania.

Q. And again, all that was obviously oral, no one thought about putting this on paper, just explaining, you know, why this allegedly profitable long-term contractual relationship was abruptly terminated, it was just unspoken; is that your testimony?

A. So I'm not pushing long-term, I'm saying that definitely for one or two or three more orders we could receive. GP could receive as a producer of the current at that time Mozambique e-passport booklet.

Q. All right, that's it.

If we can just briefly talk about Baltic Tobacco.

So as you probably recall, there was a very long-term relationship with Baltic and then I also understand that your testimony is that that contractual relationship was terminated for the sole reason of the Kyrgyz scandal.

Again, there's no evidence of that on the record aside from your statement that that is the case. Just a couple of questions here.

[Page 165]

You know, since Garsu in this arbitration is seeking a substantial sum of money, claiming that the sole reason for the non-continuation or termination of the Baltic Tobacco relationship is the Kyrgyz scandal, it didn't come to you as, you know, a useful idea to reach out to Baltic and say: can you please confirm that this is why we're no longer working together, because the company is seeking compensation based on that?

A. First of all, I'm not account manager for Baltic Tobacco. Baltic Tobacco was really a huge client of GP packaging division, and what is important to say, that Baltic Tobacco plant is in Kaliningrad. So Kaliningrad, as you know, is surrounded by Lithuania and Poland. In Poland there are a lot of producers for Tobacco packaging. And during our cooperation history with Baltic Tobacco, they made a lot of attempts to have alternative supplier either from Poland or from St Petersburg in Russia. But every time they came back to us because of logistics, because of quality of production, and delivery time.

So there is -- there was absolutely no question about GP as -- GP reliability as a supplier for tobacco plant.

Even when political situation was changing, and tensions appeared between Lithuania and EU and Russia,

[Page 166]

even during that time Baltiyskaya Tabachnaya Fabrika, that is Baltic Tobacco plant, was always kept buying packaging from us, overcoming all customs issues, political issues, payment issues. They were looking how to pay us, because it's always a problem if you have roubles. So it's not convertible easy to euros or dollars.

We were very reliable partners with them, with no doubt. We had a dedicated account manager who had just one client in his portfolio. And he was the man who talks to the owner, who talks to the general manager of the company, and he has all that information.

Q. Mr Mieliauskas, I apologise, under the Tribunal's control, I appreciate the ex post history of your corporate relationships with Baltic Tobacco, but the question was completely different and very straightforward: have you sought, and have you obtained, if you have sought, any written confirmation or proof that Baltic Tobacco terminated or did not continue a contractual relationship with Garsu exclusively and solely due to the Kyrgyz scandal; yes or no?

A. To my knowledge in written, no.

Q. Thank you.

A. Because you asked if we obtain it in written. No.

Q. The same would go for Carlsberg. You have not sought,

[Page 167]

or you did not obtain if you have sought, any written confirmation from Carlsberg that the sole reason for their non-continuation or termination of their contractual relationship with Garsu was solely the Kyrgyz scandal; correct?

A. Again, I think I attached information I received from Simonas Naujikas, our manager of packaging division, so you can see the wording how it was worded. But I'm pretty sure that all private companies, they try to escape wording saying: we can't allow a relationship because there is an article that you bribed somebody. So no, they choose some polite -- polite form to state that.

Q. One last point on this.

So lawyers for Garsu may have shown you a letter, or actually two letters, one is a letter from myself actually, us, to the Baltic Tobacco Factory -- it's R-137 on the screen -- where we succinctly set out the claims made in this arbitration with respect to the termination of the contractual relationship between Garsu and the Baltic Tobacco Factory, and at the end of this letter we say: that is what Garsu are saying. We call them Garsu allegations. And then I'm going to zoom in here:

"We would be grateful if you could confirm or deny

[Page 168]

Garsu's allegations set out and quoted above."

Have you seen this letter before in preparing for this arbitration?

A. No.

Q. You haven't. Then have you seen --

A. I beg your pardon. This letter was sent by GP?

Q. The letter was sent by me, by us.

A. Sorry, now I've got it.

Q. You haven't seen this letter?

A. Okay, okay.

Q. And we received a response from the Baltic Tobacco Factory which says:

"In 2020, the Baltic Tobacco Factory switched to Russian printing house, given the break-out of the COVID-19 pandemic, the closure of borders and cross-border logistical difficulties."

There's no mention of the Kyrgyz scandal or of any reputational issues that Garsu may have had.

So the question is, first of all, have you seen this letter?

A. No.

Q. No you haven't, okay.

Why would it have been problematic for Garsu in now claiming a substantial amount of money for the termination of the Baltic Tobacco Factory contract

[Page 169]

allegedly due to solely the Kyrgyz scandal to actually seek out a similar letter or a confirmation that would, you know, substantiate whatever you were saying in your witness statement, this theory that the real reasons were the Kyrgyz scandal, if Baltic Factory responded easily to a letter some time ago setting out what they think are the reasons for the termination of this contractual relationship?

A. But don't you find the reasoning for termination really, you know, like a joke? COVID pandemic. So tell me how it's easier to follow up pandemic procedures and import organised production in St Petersburg and then import by trucks through -- I don't know, Estonia, Latvia, Lithuania, and then enter Kaliningrad, rather than just get the stuff from GP? GP didn't shut down -- didn't shut down GP for one day during pandemic time. So it's a joke. It's just polite response: we don't want to get into the details, it's pandemic and closure of the borders.

Q. Mr Mieliauskas, if I put to you that the reasoning for termination of the Baltic Tobacco Factory as the Kyrgyz scandal is a joke, would you agree or disagree?

A. I disagree.

MR ALEKHIN: Thank you. No further questions.

THE PRESIDENT: Thank you.

[Page 170]

Redirect, please.

MR DAUJOTAS: I don't think we have any questions for the redirect.

THE PRESIDENT: Thank you.

Colleagues, Nina, do you have any questions?

Questions from THE TRIBUNAL

PROFESSOR VILKOVA: I have one small question to you, Mr Mieliauskas.

In your statement, first statement --

A. I beg your pardon. Thank you.

PROFESSOR VILKOVA: You say that you worked as a general director of GP from 2008 up to 2019.

A. Yes.

PROFESSOR VILKOVA: So what time, just what month, maybe, in 1990 did you leave the firm?

A. In fact I left at the end of 2018.

So formal date, I don't remember. 2 January, 3 January. But end of the year was my end as a CEO.

PROFESSOR VILKOVA: End of?

A. 2018.

PROFESSOR VILKOVA: 2018?

A. 2018.

PROFESSOR VILKOVA: Thank you.

MR LAIRD: Just one question. You mentioned in your earlier testimony that you did receive a call from the state

[Page 171]

security people in Kyrgyzstan, or you had a conversation on the telephone.

A. I made the call to them. I was asked by Marat to call them because Marat said that they want to talk to me. So I called them and he gave me the number.

MR LAIRD: So when you called them, can you tell us about the conversation? What occurred in the conversation?

A. So the conversation was that I was talking to the guy -- sorry, he didn't introduce, I don't know what is his position or even name. But maybe Marat knows who he is. So we may ask him. But I call him and I said: look, I received a call from our partner, Marat, and he says that you want to talk to us. You want us to come or you want somehow remote session. What do you want? Tell us. Inform us. And basically that was the end. Nothing more. He didn't explain what kind of investigation they are having against me our company or any officials or whatever.

So it was just my question: please tell us how can we help? How can we participate? Because so far we received nothing. The only thing I know is press, plus that Marat asked me to call you.

I don't know. Maybe they are saving budget, but they don't call. Even tax authorities, they don't send taxes. They ask either to send them something or ...

[Page 172]

MR LAIRD: Did you ask you for your telephone number or contact details?

A. I think that he even didn't ask about it. But I don't remember in so details. It was, you know, a long time ago.

MR LAIRD: Four years ago.

A. But the main idea is that it was -- Marat told me: Vytas, they like to talk to you. I said: okay, give me the phone number. He give me the phone number. I called them, I said: guys, how can I help you? If you need, send me invitation, we will look for the chance to go. Because at that moment we didn't get this warning from Minister of Foreign Affairs, that no, no-go to this country.

So I think that if he would say that: okay, please try find a way to come here, this is invitation, apply for visa, come and -- so most likely we would go.

MR LAIRD: At the time of that call, though, you were aware that there were corruption allegations floating around in the media at the very least with regard to Garsu, were you, or were you not at that point?

A. Yes, we were aware, and that was driving me crazy because, you know, we received nothing, and only talks. But not just simple noise, but very serious noise which is damaging noise, saying that we are involved in

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corruption and so on. But, you know ...

MR LAIRD: Okay. That's an all my questions on that point.

Thank you.

THE PRESIDENT: Thank you. Just to follow up on that conversation you had, how did the two of you conclude that conversation? Did the gentleman in question say that "we'll get back to you", or what was the -- how did the --

A. Again, I don't remember the wording specifically, but the idea was that the guy, he also wasn't decision-maker, you know, it was driven from the top. And he -- you know, I call him, I say, "Okay, tell us what to do", and he has nothing to tell because he doesn't know. He needs to go upstairs and to discuss what to do. But in the end they didn't come.

THE PRESIDENT: Thank you very much. That concludes your testimony. Thank you very much for spending time with us. Thank you.

You may leave or you may sit in if you want to.

It's up to you. We're going to close very soon.

So that brings this second day to an end. And tomorrow we're going to hear from Mr Sagyndykov. Will he testify in Russian or in English?

MR DAUJOTAS: He will testify in Russian. That's the plan, and there will be also a translation online.

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THE PRESIDENT: Okay. And Ms Alenkina and Davletbayeva will also testify in Russian, I suppose?

MR DAUJOTAS: Yes.

THE PRESIDENT: So we will have translation all day. So if we could or you could somehow try to avoid the problems we had today with translation. I don't know how to do it, but talk to the technical guy here.

MR DAUJOTAS: Yes.

THE PRESIDENT: So we don't have those kinds of interruption. It's a challenge anyway with translation, so the less problems we have, needless to say, the better.

MR DAUJOTAS: Of course.

THE PRESIDENT: Very good.

So anything else we need to address before we close for today?

MR DAUJOTAS: Yes, we just noted the request to send the Prayer for Relief, the sort of clarified Prayer for Relief.

THE PRESIDENT: I suggest we take that towards the end of the hearing.

MR DAUJOTAS: Okay. That was our question.

THE PRESIDENT: Because we may have other comments and questions at that point. So I think we'll save that for that.

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MR ALEKHIN: Sorry, as a follow-up, there was a question from Mr Laird yesterday about the details of the independent commissions. There are a lot of footnotes and references. Would it be acceptable if a short written answer is given, or do you prefer just an oral?

We can do both. We've prepared -- we're preparing a short written one.

MR LAIRD: If you have a short note, that would be great.

MR ALEKHIN: Several paragraphs. Thank you so much, we will submit that shortly.

THE PRESIDENT: Very good. Thank you then and see you tomorrow at 9.30. Thanks.

(4.41 pm)

(The hearing adjourned until
Wednesday, 14 June 2023 at 9.30 am)