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Georgian Gov’t spent GEL 135 mln on legal services of arbitration disputes

Georgian state agencies signed 96 big contracts for GEL 135 million between 2017 and 2021, primarily with foreign enterprises for the procurement of legal services related to international arbitration issues. Expenses for legal services were substantially lower until 2017; the total value of 32 big contracts signed between 2011 and 2016 was less than GEL 5 million, according to a report published by Transparency International Georgia.

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Georgian state agencies signed 96 big contracts for GEL 135 million between 2017 and 2021, primarily with foreign enterprises for the procurement of legal services related to international arbitration issues. Expenses for legal services were substantially lower until 2017; the total value of 32 big contracts signed between 2011 and 2016 was less than GEL 5 million, according to a report published by Transparency International Georgia.

Since 2017, the procurement of legal services has risen dramatically. Legal services were purchased through simplified (direct) public procurement by the Ministry of Justice, the Roads Department, the Ministry of Economy and Sustainable Development, JSC Georgian Oil and Gas Corporation, JSC Georgian State Electro System, and LEPL Anaklia Deep Sea Port Development Agency. The majority of the contracts have been related to international arbitration conflicts. Electronic tenders have not been used to sign such large contracts.

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Between 2017 and 2021, the largest amount of money spent was about GEL 82.4 million- in 2020.

The Ministry of Justice of Georgia spent most of the money on legal services in the previous five years, signing 14 big simplified public procurement contracts for a total of GEL 82.2 million. Then came the Ministry of Regional Development and Infrastructure of Georgia’s Road Department, which signed 19 big contracts with a total value of GEL 22.5 million. JSC Georgian Oil and Gas Corporation came in third, with four contracts for GEL 21.3 million in total.

The majority of the legal service providers were foreign enterprises. 85% of the GEL 135 million contracts were signed with three foreign companies: an American company, White & Case (total value of the contracts – GEL 81 million), an English company, Hogan Lovells International (GEL 23 million), and an American-English company, Gaillard Banifatemi Shelbaya (GEL 11.5 million).

Since 2020, Hogan Lovells International has been a lobbying firm for the Georgian Dream party.

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