ENKA seeks US court enforcement of $383 million arbitration award against Georgia

Turkish construction company ENKA has filed a request in a US court to enforce a $383.2 million arbitration ruling against the Georgian government, stemming from the halted Namakhvani hydropower plant (HPP) project in the Rioni Valley.

According to the filing submitted to the US District Court for the District of Columbia, ENKA is asking the court to recognize and enforce the December 2024 award issued by the Paris-based International Court of Arbitration. The company is also seeking interest on the awarded sum for each day of delay in payment. As of now, the total amount Georgia owes ENKA exceeds 1 billion GEL (over $350 million).

The arbitration dispute arose after ENKA terminated its contract with the Georgian government in September 2021. The company had been developing the Namakhvani HPP project, which envisioned the construction of two hydropower plants with a combined capacity of 433 MW and an estimated cost of $830 million.

The project faced significant backlash from environmental activists and local residents, who formed the "Guardians of the Rioni Valley" movement and organized large-scale protests. In June 2021, then-Prime Minister Irakli Garibashvili announced that the project, in its existing form, would not proceed. Three months later, ENKA officially terminated the contract, and in October 2021, filed for arbitration.

The contract reportedly placed a disproportionate burden of responsibility on the Georgian government, compared to the investor. In the event of early termination, the terms favored the company with extensive compensation clauses.

At the time, the Georgian government expressed its intention to avoid arbitration and sought a negotiated settlement, but those efforts failed. The arbitration ruling in favor of ENKA now places Georgia under financial and political pressure as it faces international enforcement proceedings.