Highway robbery

The Ak Keme Hotel, nestled in Bishkek’s mountainous outskirts, is an inoffensive, boilerplate, beige kind of a place. It’s the kind of place where middle managers confer over their ‘success tips and strategies’ and third-rate singers may croon at you over dinner.

It’s also the kind of place where 50 armed men storm in and take over, where decades of under-the-table graft hides, and where anti-Canadian anger boils over. So what is this place?

Ak Keme’s story begins in 1992, a year after the final collapse of the Soviet Union. The Kyrgyz Republic was struggling to stumble up from its former socialist self but weighed down by economic crisis, political devastation and society-wide disorientation. The former elite – both Russian and Kyrgyz – was fleeing en masse for Russia.

And so it seemed like a good time to build a luxury hotel in Bishkek. Kyrgyzstan’s new president, ex-professor of engineering and physics Askar Akaev, made a trip to Turkey. At which point Turkish company Sistem and Kyrgyz company Ak Keme agreed to build a luxury high-rise in the devastated Kyrgyz capital. Sistem would pony up $12.5 million, Ak Keme $6.5 million, and the Turkish government $6 million for the hotel. Construction began in 1993.

Construction finished in 1995, at which point the Kyrgyz government promptly kicked Sistem out of the country. One Mr. Ruslan Sarymsakov – Chairman of the Kyrgyz Ak Keme Company – took over the hotel. The Kyrgyz courts endorsed his ownership, rescinding Sistem’s construction and investment licenses and effectively banishing the Turkish firm from its own joint venture.

Ruslan Sarymsakov, as of 2011.

Ruslan Sarymsakov, as of 2011.

Until 1998, when Sarymsakov and his Ak Keme Company were mysteriously declared bankrupt. The Kyrgyz authorities threw Sarymsakov in jail, for reasons that are far from clear. President Akaev, hat in hand, went back to Turkey and Sistem in 1999, offering them full ownership of the hotel. They accepted, at ridiculously beneficial terms to themselves. And so Sistem remained in control of the hotel from 1999 to 2005, much to the disdain of Sarymsakov and members of Kyrgyz parliament.

Then came revolution. In 2005, protesters chased President Askar Akaev from office, decrying his corruption, cronyism and incompetence. Bishkek burned, riots erupted across the country. Sarymsakov – freed from jail – stormed the Ak Keme Hotel with a group of 50 armed men, kicking out the Turkish personnel and declaring himself sole owner. [Or, if you prefer Sarymsakov’s version, he and his 50 armed men protected the hotel from marauding rioters, while the flighty Turks abandoned their investment of their own accord]. Kurmanbek Bakiyev, Kyrgyzstan’s new president, seems to have agreed with Sarymsakov’s actions. After some initial reluctance from the Kyrgyz prosecutor’s office and courts, the judicial system officially endorsed Sistem’s second ousting and retroactively declared Sarymsakov never to have been bankrupt.

Bakiyev was to be tossed out for his own corruption and incompetence in 2010. More a traditional dictator than his merely corrupt predecessor Akaev, Bakiyev oversaw the murder of prominent political opponents and the mass siphoning of government funds into his family’s personal bank accounts. This was good times for Sarymsakov, who attained full legal title to the hotel through several questionable decisions of the Kyrgyz Constitutional Court. Sarymsakov would serve as a member of parliament during Bakiyev’s 5 years of rule.

Sistem, having failed to regain ownership of Ak Keme Hotel through the Kyrgyz courts, turned to international arbitration in 2005. The international tribunal’s opinion, from which much of the above information was taken, reads like a textbook in lawyerly and governmental incompetence. Kyrgyzstan failed to respond to the tribunal for over 2 years, perhaps believing that if ignored, the problem would go away. Its lawyer, once finally appointed, appears not to have understood the import of international arbitration, nor the nature of any of the financial transactions involved. Her primary defense was that the prior iteration of the Kyrgyz government (namely Akaev) had been corrupt, and therefore the current administration could not be held accountable for its predecessor’s actions. The tribunal, unimpressed, held in 2009 that the Kyrgyz government was liable to pay $8.5 million to Sistem, having taken on Sarymsakov’s guilt by giving his actions the veil of legality through its bogus court opinions.

Kyrgyzstan didn’t pay. And Sistem rummaged around for some way to get its money. And then it landed on a tricky solution: Kyrgyzstan was in a joint venture with a Canadian company that operated a gold mine on Kyrgyz territory [this mine, Kumtor, is one of the most divisive topics in Kyrgyz politics today. But that’s a story for another day]. Kyrgyzstan’s shares in the mine were technically within Canada’s jurisdiction. So Sistem called on the Canadian courts to seize Kyrgyzstan’s shares in the mine, thereby fulfilling the 2009 arbitral decree. Canada’s courts agreed. Counting interest, it ordered that some $11.4 million be seized. [Click here for one of the few English language articles on this mess]. The Kyrgyz press erupted in anti-Canada, anti-foreign, anti-West fury. President Atambaev asserted that “Canada owes us, somehow” for its legal shenanigans. Parliament members shouted to “nationalise the gold mine before the Canadians can get it.” Canadians are not a loved bunch in Kyrgyzstan right now.

Ak Keme Hotel continues in operation under a certain Mr. Sarymsakov, and – ironically – has been the site of a series of conferences on reforming the legal system over 2014. Kyrgyzstan still refuses any obligation to pay Sistem. Kumtor gold mine has not been nationalised, though a certain sect of politicians are continuously threatening to do so.

The hotel itself is isolated, and as you walk through its faux marble entrance, the disaffected, green-vested staff ignore you. No one lingers in the cavernous, unheated entrance hall unless they have to, like the trapped bellhop and check-in clerk. If you’re going to a conference – which is just about the only reason you’d come here – you turn left and walk down a beige yellow hall. Here to the right are the gold elevators, here to the left are the pictures of famous guests (a Russian singer, a Kyrgyz politician in Santa uniform, Miss Montana), now you pass the “Office of Head Administrator”, a little glass door labelled in gold – this must be where the armed men came – and on the left is the “Business Center” in English with computers and faxes and printers. The conference hall looks like a conference hall anywhere: brown, inoffensive, a white projector screen hanging purposelessly behind the podium. Did it look this tedious after the revolution? The dining room is gorgeous, its insides a wasteland of orange-pink drapes and gold tassels but irreplaceable views of snow-capped mountains majestically come through the windows. What was it like to lose this hotel? What was it like to take it back? Is it right that a poor nation has to pay for a place as spiritless as this? That it is today’s taxpayers – not yesterday’s corrupt politicians or the wily Sarymsakov – who will foot the bill? (Kyrgyz politics are still far too corrupt for Sarymsakov to conceivably be prosecuted). On the other hand, would it be right for a nation to get away with highway robbery?

A poster for the movie version of White Ship, filmed in 1975.

A poster for the movie version of White Ship, filmed in 1975.

As a final note, “Ak Keme” is Kyrgyz for “White Ship.” It is the title of a famous novel by the country’s most beloved author, Chingiz Aitmatov. Aitmatov is known for heart wrenching tragedies with a Soviet morale, and “White Ship” is no different. It tells the story of an orphaned boy who imagines himself to be a fish, capable of swimming to the white ship that he believes his long-lost father captains. He drowns trying to escape his life’s grim reality and swim to the ideal of fatherly love. Why on earth anyone would name their hotel after this story is beyond me. Or perhaps Sarymsakov was prescient.

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