Georgia Wins Court Battle Over Contract for Anaklia Port Project
THE COUNTRY NOT THE STATE
The Georgian government has gotten new impetus to proceed with the construction of its Anaklia deep sea port project after winning a court battle with a previous consortium, whose contract it terminated.
The International Court of Arbitration (ICA) has now settled the controversy surrounding the Anaklia project after ruling against the Anaklia Development Consortium (ADC), whose contract was terminated in 2020 over delays and an alleged failure to meet the terms of the contract.
ADC, a consortium consisting of Georgian company TBC Holding, Dutch firm Van Oord, Asia’s British Wondernet Express, G-Star from Bulgaria and Conti International from the U.S., had sued the Georgian government seeking compensation to the tune of $1.5 billion. The consortium, which had been awarded the contract in 2016, argued that it had invested nearly $80 million in the project and that the government acted illegally in terminating the contract.
Now that it has won the case, the Georgian government is focused on the implementation of the project with new Chinese partners. In late May, the government brought on board a Chinese consortium led by state-owned China Communications Construction Company (CCCC) to undertake the project in the Black Sea port of Anaklia.
The Chinese consortium was granted a 49 percent stake in the project. When complete, the port will serve as a western terminus for the Middle Corridor, a rail-based trade route between China and Europe. Georgia believes it will have significant opportunities due to widespread sanctions against Russia.
Georgian state company Anaklia Deep Sea Port will control a 51 percent share in the project.
ADC issued a statement expressing “disappointment” in the ICA ruling and maintained the Georgian government acted illegally in terminating the contract. “ADC believes that the Georgian government should have been equally committed to helping to make the project happen for the benefit of its citizens, rather than undermining our collective efforts to succeed,” said the company in a statement.
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