11 Август 2020

The State Property Management Fund under the Government of the Kyrgyz Republic violates the rights of tenants of the shopping center "Karavan"

The State Property Management Fund under the Government of the Kyrgyz Republic and the Directorate for Property Management under the State Property Management Fund under the Government of the Kyrgyz Republic have committed illegal actions and continue to violate the rights and legitimate interests of the Karavan shopping center’s tenants. This conclusion was made by the Business Ombudsman, Mr. Robin Ord-Smith, following a thorough investigation of a complaint of the tenants of the Karavan shopping center. The tenants of the Karavan shopping center filed a complaint to the Business Ombudsman against the actions of the Fund and the Directorate in March 2020: tenants have been using premises in the Karavan shopping center since 2019 without legal lease agreements, despite repeated requests from the tenants to either extend the terms of the previous lease agreements or sign new lease agreements. Although tenants continue to conduct entrepreneurial activities in the "Karavan" shopping center and pay rent, the Fund has decided to illegally include the premises of the shopping center "Karavan" in an online auction of leases. The premises of the shopping center "Karavan" were included by the Fund in the register of an online auction of leases based on its own interpretation of the legislation of the Kyrgyz Republic - the Civil Code of the Kyrgyz Republic, the Regulation No. 507 on the Procedure for conducting Pilot Auctions for the Right to Conclude a Lease Agreement for State Property in Electronic Format, approved by the Government of the Kyrgyz Republic from August 18, 2017, Regulations on the Procedure for the Provision of State Property for Rent No. 374, approved by the Government of the Kyrgyz Republic on June 17, 2015. The Fund also violated the main principle of the entrepreneurial activity, stated in the Law of the Kyrgyz Republic "On the Protection of Entrepreneurs' Rights”. According to the Law, contradictions, gaps, and ambiguities of the legislation of the Kyrgyz Republic establishing mandatory requirements cannot be used by public authorities and local authorities against business entities. After conducting an independent and impartial investigation of the complaint, the Business Ombudsman upheld the complaint of the tenants of the Karavan shopping center and issued a Response Act - a Recommendation to eliminate violations of the rights and legitimate interests of tenants. The Recommendation was sent to the Fund and the Directorate on May 29, 2020. However, the Fund has refused to eliminate the identified violations of the legislation of the Kyrgyz Republic. The Directorate sent to tenants a notice to vacate the rented premises by August 15, 2020. The Business Ombudsman calls on the Fund and Directorate to eliminate the identified violations of the legislation of the Kyrgyz Republic and restore the rights and legitimate interests of the tenants who have the right to conclude new lease agreements and continue their business activities in the Karavan shopping center. The Business Ombudsman also calls on the Government of the Kyrgyz Republic ensure the implementation of the recommendations in order to eliminate the violations of the legitimate rights of entrepreneurs if the Fund and the Directorate show further unwillingness to perform their functions within the legal framework of the Kyrgyz Republic and continue the practice of illegal actions against entrepreneurs. In today’s difficult economic situation, when entrepreneurs need help and support from the state, such illegal actions of the state bodies put additional pressure on businesses. Entrepreneurs and businesses now than ever require the “easy doing business” conditions, zero barriers policy, systemic reforms streamlining public and municipal services aimed at transparency, accountability, and consistency of decisions made by the state bodies