Israeli President, Shimon Peres, has phoned his Georgian counterpart, Mikheil Saakashvili, to make sure the two Israeli businessmen, arrested by Georgia on bribery charges, are treated well, according to the Israeli media reports.

"The president has such conversations once a month. He responds to requests by families of Israelis arrested abroad and tries to help them. It is not an attempt to release the businessmen but a request for humanitarian aid and a meeting with a doctor," the Israeli daily, Haaretz, reported quoting Shimon Peres’ aide.

The Georgian President’s administration has declined to give details, citing ongoing investigation into case.

“On behalf of the President I can only state at this stage, that investigation is ongoing and it would only be appropriate to make comments when the investigation is over; there is law and everyone must abide by the law,” Manana Manjgaladze, the Georgian President’s spokesperson, told Civil.ge on October 19.

Israeli businessman, Ron Fuchs, having a long-standing multi-million dispute with Georgia was arrested together with an associate, also an Israeli citizen, Zeev Frenkiel, in Georgia’s Black Sea town of Batumi on October 14 and charged with an attempt to bribe Georgian Deputy Finance Minister Avtandil Kharaidze.

Tbilisi City Court on October 16 denied bail to the both men and sent them to two-month pre-trial detention.

According to the Georgian prosecutors Ron Fuchs and his Greek partner from company, Tramex, Ioannis Kardassopoulos, with the assistance of Zeev Frenkiel were trying to bribe the Georgian Deputy Finance Minister, offering him USD 7 million in exchange for “convincing the Georgian government” not to challenge a decision of an international arbitration, which earlier this year awarded Fuchs and Kardassopoulos to total of USD 98.1 million to be paid by the Georgian state.

The Georgian side, however, challenged the decision – adjudication of this challenge may take from 12 to 18 more months in the dispute, which started in 1996, when Georgia revoked a deal with Tramex, which in 1992 obtained rights on development of the country’s pipeline network and other energy infrastructure.

The Tbilisi City Court also ruled two-month pre-trial detention in respect of Kardassopoulos in absentia and he is now wanted by the Georgian law enforcement agencies in connection to the same case.

Fuchs and his partners deny the charges. Archil Kbilashvili, who acts as Fuchs’ defense lawyer in Georgia, said that the defense linked the arrest with the case, which Fuchs won against Georgia in the International Centre for Settlement of Investment Disputes (ICSID), an institution of the World Bank group.

He said that after the ICSID rendered award in favor of Fuchs and Kardassopoulos, negotiations had been ongoing with the Georgian authorities in an attempt to achieve a prompt payment of the sum. Kbilashvili says that Fuchs arrived in Georgia as part of those negotiations, only after receiving an invitation from Georgian PM Nika Gilauri on October 12.

The letter, sent by the PM to Fuchs and Kardassopoulos and shown by the lawyer to journalists, reads: “I firmly believe that the meeting in the nearest future can greatly contribute to the finalization of the agreement. Such a meeting will avail us of the opportunity to discuss all the details and will undoubtedly positively affect amicable solution of the matter.”

“In this regard, in the line with the already achieved agreements, allow me to extend an official invitation to you to visit Batumi on October 14, 2010 in order to finalize the settlement and sign the dea[l],” the letter reads.

The Georgian PM’s office did not immediately respond to a request for comment.

The lawyer claims that prior to this letter, negotiations were underway on a settlement according to which Fuchs and his business partner would have received from Georgia USD 98.1 million – the sum awarded by ICSID – on the condition that portion of this sum, about USD 26.1 million, would have been invested back to Georgia; this portion intended for investment, according to the lawyer, is now portrayed by the Georgian authorities as a bribe.

“[Claimants] agreed to receive sum, lower than [awarded by ICSID] because in that case the dispute would have been over and they would have received sum much sooner than in case of further prolongation of the dispute,” the defense lawyer of Fuchs told Tbilisi-based Maestro TV on October 18.

The Georgian authorities released extracts from covertly recorded footage showing a meeting between Fuchs and the Georgian Deputy Finance Minister in Istanbul in mid-September. The meeting, according to the Georgian authorities, was one among others, which aimed at finding settlement between the sides and in which the Deputy Finance Minister was authorized to represent the government. In the released extracts from the footage, Fuchs tells the Georgian official about his proposal of settlement through a scheme resembling a kickback paying.  

Asked about the arrest of the two Israeli businessmen, Vera Kobalia, the Georgian economy minister, who is currently visiting Israel, told the Haaretz: “Everyone is equal before the law and an attempt to give a bribe will be handled in keeping with the law. Of course Frenkiel and Fuchs are presumed innocent as long as it hasn't been proven otherwise. They will receive proper defense, in order to prove their innocence."

Speaking at a news conference on October 18, the Georgian Deputy Foreign Minister, Nino Kalandadze, said it was “regretful” that such fact occurred and added that the case against the two Israeli citizens was “flawless” from the legal point of view. She also said that a meeting between representatives of law enforcement agencies of the two countries, as well as a meeting with Israeli ambassador to Georgia was held on the matter.

“This issue was discussed in details. Our friendly state [Israel] was provided with all the documents and evidence available,” Kalandadze said.