FlyOne arbitration case escalates after state intervention
FlyOne has officially confirmed that its shareholders have initiated international arbitration proceedings against the Republic of Moldova over a decision by the Council for the Examination of Investments of Importance to State Security (CEIISS). Unofficial reports have put the value of the claim at more than $500 million, although the airline itself has declined to disclose either the amount sought or the detailed grounds for the case.
On 22 June 2026, CEIISS adopted a decision effectively requiring FlyOne’s shareholders to change control of the company within 90 days, citing alleged “risks to state security”. The council also withdrew its previous approval of the investment, pushing the dispute beyond Moldova’s domestic institutions and into international arbitration.
“At this stage, we can confirm that FlyOne’s shareholders have initiated an investment dispute settlement procedure against the authorities of the Republic of Moldova through international arbitration,” the airline told journalists.
The review lasted almost 11 months. During that period, the authorities requested information on investments, beneficiaries and transactions between FlyOne Moldova and its Armenian subsidiary FlyOne Armenia, before ultimately ordering a change of control. The shareholders strongly rejected the decision and said they were prepared to defend their commercial interests.
Legal flaw raises questions over CEIISS decision
Representatives of FlyOne have also questioned the legal basis on which the council acted. The CEIISS decision relied on Article 6(b) of Law No. 174/2021, which referred to State Security Law No. 618/1995. That legislation had already ceased to be in force in October 2025, when the new National Security Law No. 249/2025 took effect.
Infrastructure Minister Vladimir Bolea acknowledged that the decision contained a reference to legislation that was no longer valid. He nevertheless argued that the decision itself remained in force because, in his view, the new national security legislation covered the same area.
Opposition representatives and experts have described the issue as a serious legal error. FlyOne’s lawyers have already relied on the argument in domestic proceedings, with the airline filing a lawsuit on 24 July seeking the annulment of the CEIISS decision.
Attention has also focused on the speed with which Parliament moved to amend the legislation. Party of Action and Solidarity (PAS) MP Radu Marian introduced an amendment on 17 July to an unrelated bill dealing with photovoltaic systems, removing the reference to the repealed state security law.
In the explanatory note, Marian explicitly said the amendment was necessary “in view of the repeal of State Security Law No. 618/1995”. The change was approved on 23 July and promulgated by the president on 5 August.
Critics argue that the sequence of events looks like an attempt to repair retrospectively the legal basis for a decision already taken. The amended wording also removed the word “special”, meaning that the authorities now need only cite “actions posing a danger”, potentially giving state bodies considerably wider room for interpretation.
Polaris allegations add political dimension
The FlyOne arbitration case has taken on an additional political dimension following allegations that the pressure on the airline is intended to clear space in the market for a new carrier, Polaris Aviation Group SRL, which critics have linked to former Prime Minister Dorin Recean.
National Moldovan Party leader Dragoș Galbur said: “He [Recean] has ambitions in aviation… It is no longer a secret that they are behind Polaris Aviation Group SRL, founded at the beginning of 2026. At the same time, we can see attempts, using state instruments and rather questionable ones at that, to remove another airline FlyOne.”
Recean has denied the allegations, describing them as “complete fabrications”.
“All my assets are exactly those listed in my declaration of assets. I do not own, directly or indirectly, any other assets or property,” he wrote on social media.
Adding to the controversy, Infrastructure Minister Vladimir Bolea, whose ministry is represented within CEIISS, said he had no knowledge of Polaris, despite the company already being in the process of obtaining an air operator certificate.
“This is the first time I have heard of this company,” Bolea told a briefing.
Chișinău Mayor Ion Ceban went further, describing the situation as a form of corporate raiding carried out under legal cover.
“Today, in an EU candidate country, we are seeing the corporate raiding of the 1990s. The only difference is that it has been legalised by the authorities. Through serious abuses, businesses are being taken away from some people to make room for people from PAS,” Ceban said.
He added: “Attacks of this kind send a signal to investors. Things have never been worse than they are now.”
Investment climate comes under scrutiny
Former Finance Minister Mariana Durleșteanu has warned that such actions could damage Moldova’s investment climate and deter companies considering entering the market.
“Instability and corruption risks will scare off potential investors, who may decide not to invest in the country,” she said.
FlyOne, meanwhile, rejects the argument that its activities fall within sectors relevant to state security.
“FLYONE does not carry out investment activity in areas of importance to state security and did not submit an application for approval to CEIISS. FLYONE does not own, purchase or obtain under concession facilities, assets or services related to the security sector,” the company said.
The dispute is now proceeding along two parallel tracks. In Moldova, FlyOne filed a lawsuit on 24 July challenging decisions by CEIISS and the Public Services Agency Moldova, with the reference to repealed legislation among its central arguments. Internationally, the shareholders are seeking compensation for alleged losses to their investments.
The FlyOne arbitration case is therefore becoming a wider test of Moldova’s treatment of private investors. While the authorities continue to promote the country’s “European path”, critics argue that pressure on businesses, opaque decision-making and hurried legislative amendments risk undermining the very legal predictability and investor confidence that closer integration with the European Union is supposed to strengthen.
With the potential claim unofficially estimated at $500 million, the cost of the dispute may extend well beyond any eventual compensation. At stake is also Moldova’s reputation as a state in which investors can expect stable rules and protection from politically driven interference.
