Ministry of Justice: Khazaradze-Japaridze Also Lost Anaklia Port Dispute in Washington Arbitration

According to information released today, July 31, by the Ministry of Justice, the Washington Arbitration (International Centre for Settlement of Investment Disputes - ICSID of the World Bank) has rendered a decision on the Anaklia Port case, fully satisfying the Georgian government's claims.

"This time, it has been confirmed by the Washington Arbitration that the non-implementation of the Anaklia Port project is entirely the responsibility of Mamuka Khazaradze, Badri Japaridze, and their partners, and there was no interference whatsoever from the Government of Georgia," states the Ministry of Justice's announcement.

According to the Ministry, the arbitral tribunal fully accepted their legal arguments and determined the following:

• The obligation to finance the project rested entirely with the investor, who failed to secure the necessary funds due to their reasons.
• The investor alone bore the commercial risk of the project.
• The government's termination of the contract was lawful, as the investor had been granted multiple extensions to secure the necessary funding for construction. It was deemed proven that the state consistently supported the implementation of the Anaklia project throughout the contract's duration.
• The legality of the criminal prosecution against Mamuka Khazaradze and Badri Japaridze regarding money laundering was not questioned.
• The state did not obstruct the Anaklia Development Consortium in attracting investors (including an American investment fund).

According to the Ministry of Justice, within the framework of this dispute, Khazaradze and Japaridze's Dutch partner, Bob Meijer, sought the payment of $64 million. However, the arbitration rejected all his claims and, instead, obliged him to pay $6.5 million to the Georgian government.

"Exactly one year ago, Khazaradze and Japaridze's Anaklia Consortium lost the Anaklia case dispute with the state in Paris Arbitration, where they were demanding the payment of $1.5 billion from the state budget. The Paris Arbitration also fully rejected the claimants' demands and, conversely, they were obliged to pay $650,000 to the state. Khazaradze and Japaridze did not appeal this decision; they also paid the imposed amount, thereby effectively acknowledging that the Anaklia Port project failed due to their fault," reads the Ministry of Justice's statement.

Mamuka Khazaradze and Badri Japaridze are currently in custody for failing to appear before the so-called "investigative commission" in the Georgian Dream-controlled Parliament. Their party, Lelo, has responded to the Ministry of Justice's statement.

"The government and the Ministry of Justice are lying when they mention Mamuka Khazaradze and Badri Japaridze in relation to this arbitration. This was a dispute between investor Bob Meijer and the state. 

However, whatever the arbitration's answer, one fact remains: the government killed the Anaklia project on Russia's orders six years ago and has made no progress since then, despite the country being supposed to receive its first ship in 2020. You will find the rest in the Anaklia Consortium's statement, and the investors themselves will provide explanations," notes the Lelo party.

Bob Meijer describes the arbitration decision as disappointing. The investor stated that the tribunal considered only a narrow issue: whether the Georgian government was authorized to terminate the investment agreement within the framework of the bilateral investment protection agreement between Georgia and the Netherlands.

“I chose to invest in ADC and the Anaklia Port because I saw the enormous potential for Georgia to establish a leading role in the regional economy and in global trade. Likewise, I have always maintained absolute trust in the integrity and vision of my fellow ADC investors, and in our collective ability to develop this port project, if only the Georgian government would play a proper role in facilitating its development,” Meijer’s statement reads.

In 2016, an investment agreement for the construction and operation of the Anaklia deep-water port was signed between the Government of Georgia and the Anaklia Development Consortium. The port, considered a strategic project, had its foundation-laying ceremony attended by then Prime Minister Giorgi Kvirikashvili and the consortium's founder, Mamuka Khazaradze. The Anaklia Development Consortium included TBC Holding (Georgia) and Conti International (USA).

In 2019, the General Prosecutor's Office launched an investigation against the founders of TBC Holding, Mamuka Khazaradze and Badri Japaridze, accusing them of laundering $16,664,000. The case concerned a transaction carried out at TBC Bank in 2007.

After a three-year dispute, the court found Mamuka Khazaradze, Badri Japaridze, and businessman Avtandil Tsereteli guilty and sentenced them to seven years in prison. However, the money laundering charge was reclassified as fraud, and due to the statute of limitations, the accused were exempted from criminal liability.

Mamuka Khazaradze claimed that these charges were intended to halt the Anaklia deep-water port project. In 2020, the government terminated the contract with the consortium due to the alleged failure to fulfill its obligations.

The Anaklia Development Consortium, along with one of the main investors, Dutch businessman Bob Meijer, filed two arbitration claims against Georgia in 2020. The lawsuits sought compensation for damages, which, according to the plaintiffs, exceeded $1 billion. The consortium argued that this amount reflected losses suffered by the consortium and Bob Meijer as a direct result of "the Georgian government's campaign to undermine the Anaklia Port Project." The consortium submitted their arbitration claim to the International Court of Arbitration of the International Chamber of Commerce (ICC), while Bob Meijer filed his claim with the International Centre for Settlement of Investment Disputes (ICSID).