Azerbaijan

An Azerbaijani development company, FLAX, has reportedly sued the Azerbaijani government and President Ilham Aliyev’s administration for failing to fully pay it for the development of a hotel in Kyrgyzstan.

According to RFE/RL, FLAX’s claims were dismissed by an Azerbaijani court, which ruled that ‘the company failed to prove the existence of any obligations on the part of the other party under these contracts’.

Aliyev attended the opening of the luxury hotel, which also boasts a golf course, on the shores of Lake Issyk-Kul in Kyrgyzstan on 31 July. The hotel was reportedly built with funds from the Azerbaijani and Kyrgyz state budgets, although the exact amount is unknown.

Talantbek Dzhunushev, the Deputy Head of the Property Management Department under the Kyrgyz President, said in 2023 that ‘the value of the hotel complex was approximately ₼155–₼200 million ($91-$120 million)’.

RFE/RL cited an employee of FLAX LLC on the condition of anonymity as saying ‘it has not been paid, despite having already completed its work’. According to RFE/RL, the Presidential Administration contracted FLAX LLC to build the hotel in 2023, with ₼228,000 ($130,000) allocated ‘solely for the design phase of the hotel complex’.

The company operates primarily in architectural design and urban planning, and has collaborated with government agencies in the past.

According to RFE/RL, Azerbaijani funds for the project were sourced from the Presidential Administration.

FLAX claimed that ‘it completed the work stipulated’ in the contract and even ‘reworked several parts of the overall complex project’ at the administration’s request.

The company had previously sued the Azerbaijani government over a similar lack of payment for a project in Azerbaijan’s Zangilan. A copy of the contract seen by RFE/RL indicated that FLAX estimated the value of the work at more ₼1.1 million ($650,000), but that only 30% of it, ₼335,000 ($200,000), had been paid.

Azerbaijan has on numerous occasions been accused of failing to pay debts to companies — both domestically and internationally. In July, reports emerged suggesting that the Presidential Administration and subsidiaries of SOCAR, the state-run oil company, racked up almost $500,000 in debts related to the purchase of high-value carpets ordered from the state agency Azerkhalcha OJSC.

In December 2025, the Kyrgyz construction company Meadi LLC sued Azerbaijan’s Foreign Ministry over claims that they are still owed more than $3 million for the development of the Azerbaijan–Kyrgyzstan Friendship Park in Bishkek.