Turkish firm secures US court order for $350M from Georgia
A Turkish construction firm has won a U.S. court order compelling Georgia to pay a $350 million arbitration award tied to the abandoned Namakhvani hydropower project. The ruling adds legal and financial pressure on Tbilisi after years of disputes over a major energy investment halted amid public protests.
The conflict originated from a build-own-operate contract between ENKA Renewables, a subsidiary of Istanbul-based ENKA Insaat, and Georgia’s government for an $800 million hydropower facility in western Georgia. Opposition from environmental groups, local communities, and civil society organizations stalled the project, with critics warning of ecological damage and lack of transparency.
ENKA terminated its agreement with the Georgian state in 2021, citing material contractual breaches and force majeure. The dispute was settled through International Chamber of Commerce arbitration in Paris, where a tribunal determined in November 2024 that Georgia had violated the contract. The award included $350 million in damages plus interest.
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The U.S. District Court for the District of Columbia ruled on September 11 that ENKA could enforce the award against Georgia under the New York Convention, which governs recognition and enforcement of foreign arbitral awards. Under the Washington court’s ruling, interest will continue to accrue at the Secured Overnight Financing Rate, or SOFR, plus 4%, calculated daily and compounded monthly. That could lift Georgia’s eventual payment obligation materially above the original award amount.
Georgia has filed an appeal, arguing that the Washington proceedings only address enforcement, not the substance of the arbitration case. Tbilisi is also challenging the underlying ICC award before the Paris Court of Appeal. That court previously ordered Georgia to pay ENKA about $400 million, but temporarily suspended enforcement after Georgia argued that an immediate payment could severely harm the national economy. A final ruling on that appeal is expected before the end of the year.
ENKA’s victory follows years of negotiations and legal battles, with the company initially seeking compensation through diplomatic channels before turning to arbitration. The arbitration tribunal’s decision in November 2024 marked a turning point, as it rejected Georgia’s claims that the project’s delays were beyond its control. The tribunal emphasized that the contract required cooperation regardless of external pressures.
