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Negotiations on KazTransGas-Tbilisi Deadlocked

After the ultimatum statement of the Kazakh side to demand a compensation for damages in an amount not less than the amount, Deputy Energy Minister Ilya Eloshvili has to admit that the negotiations were actually frozen.

According to him, at a certain stage, the parties almost agreed, but then there were problems, that cannot be solved so far.

“Unfortunately there were problems because the parliament must approve certain actions from the Kazakh side. This issue has reached a deadlock, but on the other hand, a special group was created to resolve contentious issues at the negotiating table,” he states.

In his words, the Georgian government hopes that the partnership  relations between Tbilisi and Astana will not be sacrificed because of  this problem, and a decision that satisfies all will be taken.

“Kazakhstan is  a friendly country, our strategic partner and long-term Kazakh investments are very important for us , including for the energy sector. We believe that this issue should be resolved at the negotiating table and not in international arbitration,” the deputy minister notes.

The other day it was announced the creation of an ad hoc group with the participation of the Georgian and Kazakh sides, which will work towards the adoption of mutually beneficial solutions. It is expected that the Kazakh part will arrive in Tbilisi in November. Recently, the management of JSC KazTransGas issued a statement which says that JSC KazTransGas hopes within pre-arbitration  procedures to settle a dispute with the government of Georgia regarding the subsidiary KazTransGas – Tbilisi.

The international law firm Baker & McKenzie on behalf of JSC KazTransGas directed against the Georgian side a pre-arbitration  letter with a proposal to start negotiations on the settlement of investment disputes arising in connection with investments of JSC KazTransGas in KazTransGas – Tbilisi. As the company claims, these  actions of the authorized bodies of Georgia violate the rights of a foreign investor  established by the national legislation of Georgia and international agreements on protection of investments.

JSC KazTransGas hopes  for a constructive position of the Georgian side and the early settlement of the dispute within pre-arbitration procedures. If pre-arbitration settlement does  not lead to resolution of the dispute, KazTransGas will start investment arbitration and will demand the return of control over KazTransGas -Tbilisi company and  compensation for damages in an amount not less than the amount of investments”, the statement  says.