TBILISI -- An international arbitration court has ruled in favor of the Georgian government in a high-profile case over the construction of the Caucasian country’s first-ever deep-sea port on its Black Sea coast.
The International Court of Arbitration of the International Chamber of Commerce (ICC) in Paris on July 29 denied a claim brought by the supervisory board of the Anaklia Development Consortium (ADC) that sought to recover its investment after the Georgian government terminated the contract in 2020.
The 2-1 ruling removes a legal obstacle against the megaproject, which was thrust back into the headlines in Georgia in late May when the country’s Minister of Economy and Sustainable Development Levan Davitashvili announced that a consortium of Chinese state-owned companies would be awarded a new deal to build the deep-sea port as part of a recently revived bid.
SEE ALSO: Chinese-Led Consortium To Build Massive Port Project On Georgia's Black Sea Coast“We are naturally disappointed in this outcome of the ICC tribunal as we continue to believe that the Georgian Government acted inappropriately to the detriment of all Georgians in its campaign to undermine the Anaklia Port Project,” the ADC said in a statement following the ruling.
The previous attempt to build the port in Anaklia, a coastal town in northwest Georgia, was led by Mamuka Khazaradze and Badri Japaridze, co-founders of Georgia’s TBC Bank, and a collection of other investors from the Netherlands, the United States, Britain, and Bulgaria. After the government canceled the contract with the ADC, the consortium filed a request for arbitration in an attempt to recover the value of its investment and rights in the multibillion dollar port project.
Even before the contract was canceled there were signs of political pressure on the leaders of the consortium. Various charges were brought against Khazaradze and Japaridze in what outside observers and some rights groups said was a politically motivated campaign, which the ADC said violated the initial investment agreement.
Georgian government officials, meanwhile, claimed that the ICC's ruling shows that they behaved appropriately.
“Taking into account all the above, the arbitration confirmed that the Georgian government terminated the investment agreement legally,” Georgian Justice Minister Rati Bregadze said on July 29 at a press briefing.
After terminating the contract with the ADC, the state promised to build the Anaklia port in part with its own funds and announced a bidding process where it would hold a 51 percent stake and an outside investor would maintain 49 percent control.
While the ruling ends the ADC’s main challenge, a Dutch investor with a stake in the consortium also filed his own claim to a separate court. That claim is still pending.
Few details have emerged since late May about the structure of the deal involving the Chinese consortium.
A deep-sea port in Anaklia is seen as a strategic investment as it would allow larger ships to transport increased volumes at a more efficient rate and is linked to various infrastructure projects backed by the European Union and China that are looking to boost regional and global trade.