The U.S. District Court for the District of Columbia has issued a ruling in the arbitration dispute between Turkish company ENKA Renewables and Georgia, granting the company’s petition to recognize and enforce an arbitral tribunal award that ordered Georgia to pay approximately $350 million plus accrued interest.
In a decision dated September 11, Judge Amit Mehta denied Georgia’s motion to dismiss, refuse enforcement of the arbitral award, or stay the proceedings.
Under the court’s ruling, interest will accrue on the amount owed to ENKA at the SOFR (Secured Overnight Financing Rate) plus 4%. The interest accrues daily and is compounded monthly.
The total sum has not yet been finalized at this stage. The court ordered ENKA to submit a proposed final judgment by September 18, accounting for interest accrued after the September 11 decision.
The dispute between ENKA and Georgia stems from a project to construct a cascade of hydroelectric power plants. The project’s implementation was repeatedly suspended amid public protests over environmental and social concerns. Ultimately, the Turkish company terminated the contract, stating that Georgia had committed material breaches of its contractual obligations, including a failure to secure access to the project site.
The Georgian state contested this assessment. Following the termination of the agreement, ENKA transferred the project-related assets to Georgia and appraised their fair market value. The parties failed to reach an agreement on the valuation of the assets, and Georgia refused to make the payment.
As a result, the company turned to international arbitration. The case was heard by an arbitral tribunal of the International Chamber of Commerce (ICC), which began hearings in Paris in May 2022. Following roughly two years of proceedings, the tribunal ruled that Georgia had materially breached the BOO (Build, Own, Operate) agreement concluded with ENKA. The tribunal also affirmed the company’s right to terminate the contract and ruled that Georgia must compensate ENKA for the fair market value of the assets transferred to the country.
The tribunal awarded ENKA approximately $350 million plus interest.
Following the issuance of the arbitral award, Georgia sought its annulment before the Paris Court of Appeal. Concurrently, ENKA filed a petition in a U.S. court to recognize and enforce the arbitration award. The petition was brought under the 1958 New York Convention, which governs the recognition and enforcement of foreign arbitral awards among contracting states. In the United States, the convention is implemented through the provisions of the Federal Arbitration Act.
Before the American court, Georgia argued that the case should be dismissed or at least stayed pending the conclusion of the proceedings in Paris. However, the District of Columbia court denied the motion.
While the arbitral tribunal’s initial award in favor of ENKA was roughly $350 million, the final amount will be higher. The U.S. court ruled that the contractual accrual of interest must continue through the judgment-enforcement stage.
The court determined that rather than the standard statutory rate, the SOFR plus 4% rate must be applied. Interest accrues daily and compounds monthly. The final amount payable is to be specified in the court’s final order by September 18, taking into account interest accrued between September 11 and that date.
With this ruling, the U.S. District Court for the District of Columbia fully rejected Georgia’s motion and granted ENKA Renewables’ petition to enforce the arbitral award.
Meanwhile, Deputy Minister of Justice Beka Dzamashvili stated that “the Washington court’s decision pertained exclusively to the procedural aspect, as the opposing party chose not to await the conclusion of the proceedings in Paris and simultaneously attempted to initiate procedures for the recognition and enforcement of that award.”
“Today, certain television networks circulated inaccurate reports claiming that a U.S. court had ordered the government of Georgia to pay $400 million to ENKA in the Namakhvani HPP case. In reality, the Washington court is not conducting any proceedings that address this matter on the merits. The case concerns the well-known arbitral award rendered in 2024 by the Paris arbitration tribunal, which the Georgian authorities have already challenged before the Paris Court of Appeal. It is in Paris where the key proceedings are taking place that will ultimately determine whether this decision stands.”
According to Dzamashvili, Tbilisi is seeking to overturn the verdict, and no decision in that proceeding is expected before the end of the year. As for the ruling in Washington, the U.S. court was deciding whether to await the conclusion of the Paris proceedings, “and the ruling reported by certain television companies is purely procedural in nature,” the deputy minister added.
“I want to stress once again: this is not a final decision, and in the Washington jurisdiction, it is also subject to appeal. The Government of Georgia will certainly exercise this legal remedy, and we will defend state interests to the end across all jurisdictions,” Beka Dzamashvili stated.