Georgian Dream leader, Bidzina Ivanishvili, is seeking compensation from Georgia through arbitration at a World Bank tribunal, saying his investments, mainly in Tbilisi-based Cartu Bank, “became the target of a blatant political attack coordinated across all arms of the Georgian state” following his decision to go into politics in October.
Ivanishvili, who is a French citizen, commenced arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID), claiming that Georgia violated 1997 bilateral investments protection treaty with France.
A 24-page final notice of dispute (pdf), sent to the Georgian government by law firm Skadden, Arps, Slate, Meagher & Flom on behalf of Ivanishvili, two weeks before arbitration proceedings were launched on August 15, details the billionaire opposition politician’s complaints, arguing that the Georgian government’s actions against him resulted into financial damage of at least USD 186 million.
“Mr. Ivanishvili requests full reparation for Georgia's unlawful conduct, consistent with Georgia's obligations under the [investments protection] Treaty [with France] and customary international law,” the final notice of dispute reads. “In this case, reparation must include damages for all losses caused to Mr. Ivanishvili as a result of Georgia's violation of the Treaty as well as moral damages.”
One of the key complaints concerns actions taken against Cartu Bank in which Ivanishvili was the beneficial owner till April 30, 2012.
In particular, Ivanishvili argues that controversial legislative amendments passed in October-November, which gave the tax authorities priority over the secured claims of financial institutions, were designed specifically for targeting Cartu Bank, which eventually resulted into loss of bank’s assets worth USD 114.6 million, which it had acquired as security for its commercial loans. The controversial legislative amendments were not applied to any of other eighteen commercial banks operating in Georgia. The regulations were in force till late April, 2012.
Other allegations include: coercing “many” customers, holding accounts with Cartu Bank, to close them, which resulted in “an unprecedented capital flight” from the bank in an amount of USD 27 million during the last two weeks of October, 2011; imposing “unjustified” USD 500,000 fine on Cartu Bank for alleged illegal political donations, as well as “unlawful” fine imposed on Ivanishvili in an amount of about USD 44.8 million.
Ivanishvili says that all these actions were part of “Georgia's efforts to prevent him from exercising his rights as an opposition candidate to President Saakashvili.”