Georgia will appeal US decision ordering it to pay Turkish firm over failed hydropower project

Georgia announced on Wednesday it would appeal against a U.S. arbitral court decision that ordered the Georgian government to compensate Enka, a Turkish construction firm, for the 'abandoned' construction of a hydropower station in South Caucasus.

In a decision handed down by the U.S. District Court for the District of Columbia last week, the court found that the Georgian Government had violated its obligations towards?Enka Renewables owned by the parent company Enka Insaat based in Istanbul.

Beka Dzamashvili - the deputy minister of justice in Georgia - confirmed to Georgian media on Wednesday that Tbilisi will appeal this decision.

The Turkish company terminated the agreement with the Georgian government to build the $800m Namakhvani?Hydropower plant in western Georgia by 2021 citing breach of terms and force majeure.

The construction of the plant, which was to be one the largest energy projects undertaken in Georgia post-Soviet, was stopped by a large protest movement led primarily by local residents and environmental activists who claimed that the dam would destroy the regional ecosystems, displace the villagers, and the deal with Enka lacks transparency.

The Paris Court of Appeal in 2024 ruled that Georgia must pay Enka $400 million. However, the court granted Tbilisi’s request earlier this year to suspend the enforcement of the ruling on the basis that an immediate payment would stifle?Georgia’s economy.

Dzamashvili said that Georgia had asked for an annulment of Paris' ruling, and they were not expecting to hear a decision until the end of this year.

In a report released in June, the State Audit Office warned that Georgia was facing up to $1.7 Billion in arbitration claims pending as of last summer.

(source: Reuters)