Georgian Gov’t to Appeal Stockholm Court Decision over Omega Group Case

The Government of Georgia is going to appeal the decision of International Arbitration Institute of Stockholm Chamber of Commerce made over the Omega Group Tobacco (OGT) case, which reads that Georgian government has been banned from selling the OGT property.

The Stockholm court was applied by Zaza Okuashvili, the founder of Omega Group. The Ministry of Justice of Georgia was a respondent in the case.

In addition, Georgia was ordered to compensate Zaza Okuashvili for the court-related expenses.

The Omega Group claims Georgia is obliged to enforce the decision of the International Arbitration Court of Stockholm Chamber of Commerce.

The Ministry of Justice of Georgia released a statement and explained that Georgia will not pay the imposed compensation.

The ministry noted they informed the Stockholm Arbitration that it is going to appeal against the decision made by the arbitrator regarding Zaza Okuashvili's case.

“Georgia will not pay the imposed compensation either, even though the special arbitrator has only partially satisfied Okuashvili's demand in this part,” the ministry said.

The statement reads that the arbitrator rejected Zaza Okuashvili's main demand concerning the restriction of ownership or prohibition of realization of the applicant’s 11 companies by the state and said that Okuashvili could not prove that the Georgian side took or planned to take any measures against the applicant’s companies and property.

“The arbitrator partially satisfied the applicant's claim and established the necessity of taking temporary measures. However, it is not clear why the arbitrator prohibited the enforcement of Tbilisi City Court’s decision of 4 October 2018, since it has not been enforced by the National Enforcement Bureau,” the ministry added.

In March 2018, the Revenue Service (RS) appealed to Tbilisi City Court to obtain a permit for the sale of seized property of OGT as it had accumulated unpaid GEL 51 million tax to the state budget.

In June, the Tbilisi City Court satisfied the request of the Revenue Service, which was appealed by the company. On the decision of the Appeals Court on 25 July 2018, the company's complaint was not satisfied and the Revenue Service was granted permission to sell the sequestered property of Omega Group., in case the company did not cover the debt.

The Revenue Service says Omega Group paid 1 million GEL on October 26, 2018, and asked for a renewal of production to "maintain jobs and continue production” so the company was granted such rights.

The factory resumed functioning and worked until January when its work was again suspended for not fulfilling the obligations undertaken under the new schedule.

Omega and its founder Zaza Okuashvili say that under the Georgian Dream leadership its cigarette company OGT suffered $100 million loss after multinational company British American Tobacco “violated the laws on competition and tobacco control with the help of the Georgian Dream government members.”

The corporation says that they had to take loans from banks to cover their necessary expenses, pay the staff and the state budget but they failed to do so.