According to the report, Ron Fuchs and Zeev Frenkiel were arrested two days ago during a meeting with Georgian Deputy Finance Minister Avtandil Kharadze. A remand hearing will be held at a local court in the coming week.
According to Georgian prosecutors, the two were awarded nearly $100 million in an arbitration process, but the Georgian government had tried to challenge the decision to transfer them the money.
The two businessmen allegedly met with the deputy minister and offered him a bribe in exchange for convincing the government ministers not to oppose the results of the arbitration process.
Fusch's lawyer denied the allegations. "Mr. Fuchs, together with another person, won the $100 million worth case against Georgia at the International Center for Settlement of Investment Disputes. We believe that his arrest is a persecution with a goal to make him say no on the amount he has won against Georgia,” said the defense counsel, Irakli Kbilashvili, after the Tbilisi City Court denied bail to his client on Saturday.
The affair began in 1991, when a company represented by Fuchs started looking for investment opportunities in Georgia’s energy sector. In 1992 the company established a joint venture with the Georgian state oil company and obtained concession on the construction of an oil pipeline to transport Azerbaijani oil to the western market via Georgia and Turkey.
The two had sued the Georgian government after a deal they signed for the development of oil pipelines in the country was revoked.
On March 3, a London-based tribunal ruled that Georgia violated the multilateral Energy Charter Treaty and that each of the investors should be granted tens of millions of dollars in damages.
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