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Inter RAO Sues Georgia to Arbitration Court for Compensating Losses after GEL Exchange Rate Plunge

Russian Inter RAO has launched an investment dispute against Georgian Authorities to claim compensation for losses after GEL exchange rate depreciation. The company claims for tens of millions of USD.

According to TASS media agency, Inter RAO structures, the Netherlands-incorporated Silk Road Holding B.V. and Gardabani Holdings B.V own a 75% stake in TELASI and 100% stakes in Khrami 1 and Khrami 2 HPPs and they are protected by Georgia-Netherlands agreement on  mutual protection of investments.

Based on this and other agreements, Georgia has to compensate losses inflicted to the company after GEL exchange rate volatility, the media agency reports.

Georgia has not provided due guarantees, including on electricity tariffs, the TASS writes.

“Silk Road and Gardabani have forwarded notification to President of Georgia, Foreign Minister, Justice Minister and Energy Minister, in compliance with agreement on mutual protection of investments signed by the companies and Government of Georgia, as well as other agreements”, the article reads.

The company letter reads that government decisions, including decision on determination of tariffs by the regulator, have been inflecting losses to them since 2014.

In 2016 the companies addressed the Authorities to correct tariffs, but the regulator refused the proposal.

We preserve the right to continue dispute at arbitration court, Silk Road and Gardabani representatives noted.