GTS Appeals Court of Arbitration over Disputed Tbilisi Airport Deal

The Luxembourg-based Gestion en Technique Sp?ciale (GTS) has appealed to the International Court of Arbitration at the International Chamber of Commerce (ICC) to consider a dispute between the company and the Georgian authorities over the Tbilisi International Airport deal.

Managing Director of the GTS Jean-Marc Demoulin informed the authorities at the Tbilisi airport and the Georgian Economic Ministry in a letter sent on September 16 that ?several actions taken by your side have created an obstacle for us to realize our contract.?

GTS was part of a consortium, also involving the U.S. A&G and Turkish ?elebi Holding companies, which won a tender announced by the Georgian government for reconstruction of the Tbilisi International Airport in May, 2005 and signed a ?Build-Operate-Transfer? contract with the Georgian side. A&J and GTS were responsible for financing and construction and ?elebi for operating the airport.
 
In June the Georgian side announced that a contract with this consortium was cancelled, citing GTS’ failure to provide a performance bond. But according to GTS, provision of this performance bond was impossible without receiving all the necessary documentations regarding the airport, including the status of land and financial information, from the Georgian side, which the latter failed to deliver.

The consortium planned to invest USD 62 million for reconstruction of the airport. In its appeal to the ICC International Court of Arbitration GTS is seeking 10% of the investment cost ? USD 6.2 million.

Another member of the consortium, the Turkish ?elebi Holding company, also plans to resort to international legal action.

After cancellation of the contract with the consortium, the ?elebi Holding undertook the resonsibility to continue the project alone and signed a separate agreement with the Georgian side on July 1. But the latter cancelled this contract with ?elebi Holding in September, citing that the company failed to provide financial guarantees due by a certain deadline.

The Georgian authorities contracted a new consortium of Turkish companies TAV and Urban on September 6, following this same model of “Build-Operate-Transfer.” The new consortium plans to start reconstruction of the Tbilisi airport in November.

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