The Paris Court of Appeal has suspended the enforcement of a $400 million compensation award against the Georgian government in favor of Turkish developer Enka. The sum was originally awarded by an international arbitration tribunal following the cancellation of the Namakhvani hydropower plant project. The court ruled that an immediate payment would cause significant damage to the national budget and carry risks for the recovery of funds if a final appeal is successful.
The Namakhvani project on the Rioni River was planned as an $800 million investment to increase Georgia’s domestic electricity production. Construction was halted in 2021 after sustained protests by local communities and environmental activists who cited concerns over the plant’s safety and ecological impact. Enka terminated the contract in late 2021, alleging that the government had failed to fulfill its contractual obligations.
The developer initiated international arbitration in 2022. In late 2024, the tribunal ruled in favor of the company, with the total compensation eventually set at approximately $400 million. Georgia subsequently filed multiple motions in the French jurisdiction seeking to annul the decision and freeze any related payments while the legal challenge continues.
In its decision, the French court noted the scale of the financial demand relative to Georgia’s national finances. The $400 million figure represents approximately 60 percent of the country’s defense budget – or 250 percent of the annual budget of the Ministry of Justice. The court concluded that withdrawing such a volume of liquidity would directly interfere with the state’s ability to manage its finances.
The judges also took into account that the Enka subsidiary was a special purpose vehicle created solely for the Namakhvani project. Since the termination of the contract, the company has not conducted further economic activity and lacks substantial assets. The court agreed with the Georgian government that recovering the funds would be technically impossible if the arbitration award is eventually overturned. The capital will remain in the state treasury until a final verdict is reached.
