Minister of Justice Rati Bregadze stated that international arbitration confirmed the Georgian government legally terminated the investment agreement with the Anaklia Development Consortium and did not prevent the consortium from implementing the project, either directly or indirectly.
News
Trending stories
- 1 Search Ongoing for Czech Hiker Missing 13 Days in Egrisi Range
- 2 Kaladze Closes Accounts in European Banks, Saying He No Longer Trusts Them
- 3 Archbishop Iakob of Bodbe to Meet Jim O'Brien in Washington
- 4 Gakharia: Under What Conditions Does Ivanishvili Consider Restoring Territorial Integrity?
- 5 Dvalishvili to Donate Entire State Awards to Charity
- 6 Court Fines Mtavari, Pirveli, and Formula TVs for Not Airing Georgian Dream Clip
On July 29, 2024, the Paris arbitration delivered a decision regarding the dispute between the Government of Georgia and Anaklia Development Consortium LLC, ruling in favor of Georgia. The dispute centered around the investment agreement signed on October 3, 2016, between the Government of Georgia and Anaklia Development Consortium LLC for the construction, operation, and transfer of the Black Sea deep-water port in Anaklia.
Due to multiple violations of investment obligations by the investor, the Government of Georgia was compelled to terminate the investment agreement. The claimant in the arbitration challenged the legality of this termination and sought damages amounting to approximately one and a half billion dollars.
The arbitration fully accepted the legal arguments and evidence presented by the Ministry of Justice of Georgia. It determined that, despite numerous extensions granted by the Government of Georgia for securing financing for the construction, the investor failed to fulfill the obligation entirely due to its own fault.
The responsibility for financing the project rested entirely with the investor, who was unable to secure the necessary funds for its own reasons. The investor also bore the commercial risk of the project. The government neither directly nor indirectly obstructed the investor from implementing the project.
Considering all the above, the arbitration confirmed that the Georgian government legally terminated the investment agreement, rejected the claimant's request for compensation of one and a half billion dollars, and instead, ordered the claimant to pay 650 thousand dollars to the Georgian government,” Rati Bregadze stated at the briefing held today.
The Minister of Justice stated that Mamuka Khazaradze demanded one and a half billion dollars from the Georgian state, which was "25% of the consolidated budget of Georgia, or a quarter," as of 2020.
"I think it is clear to everyone what catastrophic economic and financial consequences his victory would have had for the country. It is also incomprehensible and unimaginable how a person who wants to be in politics and serve the country could unfairly demand a quarter of its budget from his own state and put the population in such danger," said Bregadze.
Mamuka Khazaradze, founder of the Anaklia Development Consortium and chairman of the Lelo party, called the arbitration court's decision "disappointing."
In a statement issued by the consortium, it was noted that investors had invested about 80 million US dollars in the project.
"We initiated the arbitration case because we had a fiduciary duty to protect the financial interests of our investors... We continue to believe that the Government of Georgia acted improperly, to the detriment of the interests of Georgian citizens, when it tried to harm the Anaklia Port project. This interference resulted in the project being delayed for almost a decade, causing the loss of thousands of jobs and income for Georgia," said the Anaklia Development Consortium.
In 2016, an investment agreement for the construction and operation of the Anaklia deep-water port was signed between the Government of Georgia and the Anaklia Development Consortium. The port, considered a strategic project, had its foundation stone laid by then-Prime Minister Giorgi Kvirikashvili and the founder of the consortium, Mamuka Khazaradze. The consortium included TBC Holding (Georgia) and Conti International (USA).
In 2019, the General Prosecutor's Office launched an investigation against the founders of TBC Holding, Mamuka Khazaradze and Badri Japaridze, charging them with the legalization of illegal income amounting to 16 664 000 US dollars. Mamuka Khazaradze stated that the charges were filed to halt the Anaklia deep-water port project. In 2020, the government terminated the contract with the consortium on the grounds of non-fulfillment of obligations.
The Anaklia Development Consortium and one of the main investors, Dutch businessman Bob Meyer, filed two arbitration claims against Georgia in 2020. The lawsuits sought compensation for damages allegedly caused by the state, which, according to the plaintiff's calculations, exceeded 1 billion dollars. The consortium claimed that this amount included losses suffered by the consortium and Bob Meyer as a direct result of "the Georgian government's campaign to undermine the Anaklia Port Project." The consortium submitted its claim to the International Court of Arbitration of the International Chamber of Commerce (ICC), while Bob Meyer submitted his claim to the International Center for Settlement of Investment Disputes (ICSID).
On May 29, 2024, Georgia's Minister of Economy, Levan Davitashvili, announced that a Chinese consortium would be the private investor in the strategic project of the Anaklia deep-water port.
