Russian energy firm InterRAO, which owns a majority of shares in Georgia’s energy firmTelasi, has launched arbitration proceedings in Stockholm against Georgia over electricity tariffs.
Russian Energy Company starts law suit against Georgia
By Tea Mariamidze
Tuesday, June 13
The information was confirmed by the Deputy Energy Minister of Georgia, Mariam Valishvili.
In her interview with Reuters, Valishvili says that they have received a notification from the arbitration court and Georgian side is ready to defend its position.
“InterRAO wants to raise its electricity tariffs as well as seek compensation for losses stemming from Georgia's currency devaluation…InterRAO did not make any investment in Telasi and even got bigger dividends than expected. Why should we pay compensation? Our position is strong and I am confident that we can prove it in court,” Valishvili told the news agency.
InterRAO also confirmed that it had started judicial proceedings.
"The InterRAO Group confirms that its two Dutch subsidiaries have filed two lawsuits against the Georgian government with the International Court of Arbitration," the company's press department said.
However, the company has not specified yet how much it is seeking in compensation.
The Russian TASS media agency reported in April thatInterRAO structures, the Netherlands-incorporated Silk Road Holding B.V. and Gardabani Holdings B.V own a 75% stake in TELASI and 100% stakes in Khrami 1 and Khrami 2 HPPs and they are protected by a Georgia-Netherlands agreement on the mutual protection of investments.
“Based on this and other agreements, Georgia has to compensate losses inflicted to the company after GEL exchange rate volatility”, the media agency reports.
InterRAO started operating in Georgia in 2011.
In 2016 the company addressed the Authorities of Georgia to correct tariffs, as the national currency Gel depreciated the most against the US dollar, but the regulator refused to increase tariffs.
The company claims it lost tens of millions USD and requests compensation from the Georgian authorities.
Georgian experts believe that now as the case has come to arbitration, the government might lose the dispute and might be charged to pay the compensation.
Paata Tsintsadze, an expert says that if Georgia’s energy Ministry loses the dispute, this will be reflected on the budget of ordinary citizens, as the tariffs will increase.
“The increase of tariffs will directly affect the ordinary people, because they will have to pay more,” the expert said.