“Sometimes a defeat needs to be acknowledged,” BLB Managing Partner Kakha Sharabidze told BMG, commenting on Georgia’s arbitration dispute with ENKA. He said using legal mechanisms to delay enforcement after losing a case could further damage the country’s investment image.
Sharabidze said continued litigation increases both the compensation amount and legal costs. The compensation currently exceeds $400 million and accrues interest annually, while arbitration fees and legal expenses can also reach millions of dollars. He questioned whether prolonged proceedings are economically justified if the chances of reducing or overturning the award are low.
He also said risks often emerge when complex investment agreements are negotiated, as international investors typically have highly experienced teams, while state officials may lack comparable private-sector expertise. According to Sharabidze, insufficient risk analysis and decisions driven by political or emotional considerations can lead to significant costs for the state later.
The US District Court for the District of Columbia has ordered Georgia to pay more than $400 million to ENKA, while the Georgian government says it will appeal. The original ICC arbitration award in December 2024 ordered Georgia to pay $383 million, with interest at SOFR+4% accruing on unpaid amounts. The dispute stems from the termination of the investment agreement for the planned $800 million Namakhvani HPP project.
