On March 25, a review panel at the World Bank upheld a 2008 arbitration verdict in favour of a pair of shareholders who suffered an expropriation of their stake in Kazakh mobile phone venture KaR-Tel.

International business lawyers are now watching anxiously to see whether the government will respect the ruling or dig in its heels – as Kazakhstan did in an earlier arbitration fight with insurance giant AIG in 2005.

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In the latter case, Kazakhstan was slow to pay a much smaller arbitration verdict rendered in favour of AIG. Only after further battles in the UK courts, over AIG’s attempts to seize certain state-controlled bank accounts, did the government ultimately relent and pay the ruling.

The latest skirmish with Turkish telecoms investors Telsim and Rumeli is for much higher financial stakes. With interest, the arbitration verdict could reach more than $170m.

Under the World Bank’s rules of arbitrations, awards are to be paid promptly if they are not overturned during a so-called annulment process. But, now that the annulment panel has reviewed – and signed off on – the Kazakh ruling, it remains to be seen whether the government will break out its cheque book.

The government has some reason to be disenchanted with the arbitration outcome.

For starters, Telsim and Rumeli were a part of the now-dismantled Uzan business empire. When the business crumbled amid a global fraud investigation, the Turkish state assumed control of dozens upon dozens of Uzan companies, including Telsim and Rumeli.

Kazakhstan long insisted that the two Turkish telecoms firms had mismanaged their investments in KaR-Tel and that they had no basis for complaining when they were sent packing by the Kazakh authorities. So, these same authorities were chagrined when Telsim and Rumeli – now owned by the Turkish state – filed an arbitration lawsuit in 2005, seeking hundreds of millions of dollars for their losses in Kazakhstan.

An arbitration tribunal tasked with resolving the claim acknowledged that the Turkish telecoms firms had not performed well in their stewardship of KaR-Tel. Indeed, the company was balance-sheet insolvent around the time the Kazakh authorities showed Telsim and Rumeli the exit.

However, arbitrators also found KaR-Tel held a valuable asset: a GSM mobile licence that runs until 2013.

In light of the sums injected into Kazakhstan by the two Turkish investors – and the value of KaR-Tel’s licence – arbitrators determined that the losses incurred by Telsim and Rumeli amounted to $125m plus interest.

Now that the ruling has been upheld by a second panel, the government has a choice: pay up, or endure a cat-and-mouse game as its new creditors chase state assets held outside of Kazakhstan.

It is no secret that the legal climate for Western investors in central Asia has deteriorated in recent years. As disputes proliferate – over lucrative gas and oil projects in Kazakhstan, for instance – foreign investors are increasingly eager to know whether arbitration verdicts will be paid or openly flouted.