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Georgian President Pardons Jailed Israeli Businessmen
Civil Georgia, Tbilisi / 2 Dec.'11 / 15:49

After reaching a settlement on a long-standing multi-million dispute, President Saakashvili on December 2 pardoned an Israeli businessman Ron Fuchs, who was jailed by Georgia in October, 2010 on bribery attempt charges.

An associate of Fuchs, also an Israeli citizen, Zeev Frenkel, who was arrested together with Fuchs on the same charges, was also pardoned, the Georgian President’s spokesperson, Manana Manjgaladze, said on Friday.

“Upon the request from the Israeli government and personally from the Israeli President, taking into consideration convicts’ age and their health conditions the Georgian President decided to pardon them,” Manjgaladze said.

The two arrested Israeli citizens have been insisting on their innocence, saying that charges against them were fabricated and that they became victims of the Georgian government’s “plot” aimed at forcing Fuchs to reject his USD 98.1 million claim against Georgia, which he had won in the international arbitration.

Also on December 2 the Georgian Justice Ministry announced about reaching a settlement on that long-standing dispute.

The case with its subsequent long-running arbitration proceedings originated back in 1991, when a company, Tramex, represented with its two shareholders, one of them Fuchs, started looking for investment opportunities in Georgia’s energy sector. In 1992 Tramex established a joint venture with the Georgian state oil company and obtained concession on oil pipeline network development, which was revoked in 1996 when the Georgian government established Georgian International Oil Corporation, which eventually contracted with a major international consortium on construction of east-west oil pipeline to transport Azerbaijani oil to the western market via Georgia and Turkey. Since then Tramex and the Georgian authorities were for years trying in vain to settle dispute, involving possible compensation for the company. In March, 2010 London-based international tribunal ruled that Georgia unlawfully expropriated investments from Tramex and ordered Georgia to pay USD 98.1 million.

Georgian Deputy Justice Minister, Tina Burjaliani, said that since March, 2010 the total sum to be paid by Georgia increased up to USD 110 million – apparently adding fines for non-payment.

She said that the deal reached with Tramex helped Georgia “to save about USD 70 million.” Later the Justice Ministry specified that Georgia will have to pay USD 37 million.

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