Anaklia Development Consortium Ordered to Pay $650,000 to Georgian Government, Confirms Justice Minister Rati Bregadze

In a recent briefing, Rati Bregadze, the Minister of Justice of Georgia, announced a pivotal arbitration decision concerning the Anaklia Development Consortium. The Paris arbitration ruled in favor of the Georgian government, mandating the consortium to pay $650,000. This decision validates the government's legal termination of an investment agreement with the consortium for the Anaklia deep-water port project.

"The arbitration held on July 29, 2024, concluded with Georgia emerging victorious," Bregadze explained. "This dispute arose from an investment agreement signed on October 3, 2016, between the Georgian government and the Anaklia Development Consortium, regarding the construction, operation, and eventual transfer of the Black Sea deep-water port at Anaklia."

The government had terminated the agreement due to the investor's repeated failures to meet investment obligations. "Despite the government granting multiple extensions for the consortium to secure necessary funding for the project, the investor was unable to meet these obligations due to their own shortcomings. The responsibility to finance the project was solely on the investor, who also bore the commercial risks. The government did not hinder the project’s execution in any direct or indirect way," Bregadze stated.

He further detailed that the consortium had challenged the termination’s legality, claiming damages of about $1.5 billion. However, the arbitration tribunal fully supported the legal arguments and evidence presented by the Ministry of Justice, affirming the government's legal standing in terminating the contract. Consequently, the tribunal rejected the consortium's claim for damages and instead ordered them to compensate the government.

This ruling follows a series of disputes and legal challenges surrounding the Anaklia port project. Previously, the International Arbitration Court had dismissed claims made by Mamuka Khazaradze and Badri Japaridze related to the project. Following the government's decision to terminate the investment agreement on January 9, 2020, Levan Akhvlediani, head of the Anaklia Development Consortium, had declared the government’s actions as baseless and indicated plans to seek arbitration.