The Georgian government plans to reduce funding for hiring foreign legal consultants in international arbitration disputes to GEL 55 million in 2026, which is GEL 15 million less than the allocation for 2025. According to Deputy Minister of Finance Giorgi Kakauridze, the reduction is due to the fact that the state has not yet finalized agreements with the law firms that will handle the upcoming cases. As he explains, payment obligations are tied to specific contracts, and these have not been concluded at this stage.
Despite the budget cut, arbitration-related financial risks remain significant. The fiscal risk report attached to the 2026 budget indicates that the maximum potential exposure from eight ongoing international arbitration disputes amounts to approximately USD 4.8 billion. Of the seven completed disputes involving Georgia, the state won four, while in three cases the arbitration tribunals ruled in favor of the claimants.
One of the most notable ongoing cases involves Inter RAO. On August 21, 2025, ICSID rejected Georgia's appeal and upheld the earlier ruling ordering the state to pay USD 76 million. Due to the interest rate applied to the award—SOFR + 2% until payment, the amount now exceeds USD 94 million, with interest alone adding around USD 18 million over the past three years. The government has publicly stated its disagreement with the ruling, though arbitration bodies have not accepted its arguments.
Georgia also lost a major arbitration case at the end of 2024, when Enka Renewables was awarded USD 383.2 million in damages against the state. Georgia has appealed the decision, and the dispute remains under review. These high-stakes cases, combined with several unresolved disputes, continue to create substantial fiscal risks despite the government’s reduced budget allocation for legal services in 2026.
