ENKA v. Georgia: Recognition, Enforcement and the Next Stage of the Dispute

29.09.2026

The ongoing dispute between ENKA and the State of Georgia has probably reached its most interesting stage.

The enforcement of the same arbitral award is currently stayed in Paris, while in the United States it has already been recognized and confirmed for enforcement. But recognition of an award against a State and actually collecting it are two very different things.

On 9 December 2025, the Paris Court of Appeal (Cour d'appel de Paris, Pôle 5 – Chambre 16) granted enforceability in France to the Final Award rendered in favor of ENKA and its Addendum, but stayed their enforcement until the court decides on Georgia’s applications to set aside the arbitral award.

Things developed differently in the United States.

On 11 September 2026, the U.S. District Court for the District of Columbia rejected Georgia’s request to refuse recognition and enforcement of the award, as well as its alternative request to stay the U.S. proceedings until the completion of the annulment proceedings in Paris. The Court also granted ENKA’s Cross-Motion for Summary Judgment. On 18 September, the Court entered its Order and Final Judgment, recognizing the arbitral award in the United States and confirming its enforceability.

What is the dispute about?

The dispute arises out of a Build-Own-Operate Agreement (BOO Agreement) between Georgia and ENKA concerning the development of the Namakhvani hydropower complex in Georgia. Following delays in the implementation of the project, ENKA terminated the agreement, alleging material breaches of contractual obligations by Georgia, which Georgia denied.

On 1 March 2022, ENKA commenced arbitration before the ICC International Court of Arbitration. On 13 November 2024, the arbitral tribunal found that ENKA had lawfully terminated the BOO Agreement and ordered Georgia to pay USD 297 million, representing the fair market value of the transferred assets, together with interest. The award provides for interest at SOFR + 4%, accruing daily and compounded monthly until full payment.

Why not Georgia?

Another interesting question is why ENKA has not sought recognition and enforcement of the arbitral award in Georgia. In the U.S. proceedings, Georgia itself argued that Georgia was the more appropriate forum. The U.S. court rejected this argument, explaining that measures against foreign sovereign commercial assets located in the United States fall within the competence of U.S. courts.

Recognition and enforcement of foreign arbitral awards is legally available in Georgia, and the case law of the Supreme Court of Georgia includes a number of international commercial arbitral awards that have been recognized and declared enforceable. However, the actual enforcement of an award of this magnitude against the State itself is a different matter. Based on publicly available information, there appears to be no directly comparable case in which an amount of a similar scale has actually been recovered from the Georgian State on the basis of a foreign arbitral award.

Accordingly, one possible explanation may lie in enforcement strategy. In proceedings against a State, the relevant question is not only where an award can be recognized, but also where State assets that may lawfully be subject to enforcement are located.

Why Paris and why Washington, D.C?

Paris matters because it is the seat of arbitration. Accordingly, the French courts have jurisdiction to consider Georgia’s application to set aside the arbitral award. ENKA, on the other hand, approached the U.S. courts seeking recognition and enforcement of the award under the New York Convention and the U.S. Federal Arbitration Act (FAA).

As a result, the same arbitral award is now subject to different legal proceedings in two jurisdictions: its annulment is being considered in Paris, while in the United States it has already been recognized and confirmed for enforcement.

Why did Paris stay enforcement?

Importantly, under French law, filing an application to set aside an arbitral award does not automatically stay its enforcement.

Under the French Code of Civil Procedure, the court may stay or adjust enforcement where enforcement could seriously prejudice the rights of one of the parties.

In this case, the Paris court considered that immediate enforcement could seriously prejudice Georgia’s rights. According to the court, Georgia would have to mobilize a significant amount of public funds, while ENKA, as a project company, had not demonstrated continuing economic activity, sufficient assets, solvency or economic viability following termination of the project.

One comparison made by the court is particularly interesting: as of 5 June 2025, the principal amount together with accrued interest represented almost 60% of Georgia’s defence budget and approximately 250% of the budget of the Ministry of Justice.

Why did Washington, D.C not wait for Paris?

Georgia requested that the U.S. proceedings be stayed until the annulment proceedings in France were completed. The U.S. District Court for the District of Columbia, however, rejected this request.

This demonstrates an important feature of the New York Convention: the existence of pending annulment proceedings at the seat of arbitration does not automatically prevent recognition and enforcement in another Contracting State.

The Court focused on one of the main objectives of arbitration, the expeditious resolution of disputes and the avoidance of prolonged and expensive litigation. It also considered that almost four years had passed since the arbitration proceedings began, while it remained uncertain when the Paris Court of Appeal would issue its decision. The Court therefore concluded that indefinitely delaying enforcement based on the possibility that Georgia might later succeed in setting aside the award in Paris would be inconsistent with the objectives of the New York Convention.

This raises an important question: to what extent should an enforcement court wait for the decision of the courts at the seat of arbitration when proceedings to set aside the same award remain pending there?

The next stage is no less interesting.

Recognition of an arbitral award and obtaining a court judgment based on it does not automatically mean that the awarded amount can actually be recovered  particularly when the debtor is a sovereign State.

Under the U.S. Foreign Sovereign Immunities Act (FSIA), property of a foreign State is generally protected from attachment and execution, although the Act provides for specific exceptions.

For example, assets held by a central bank for its own account benefit from particular protection, as does property used for diplomatic purposes. Assets of State-owned enterprises are not automatically treated as assets of the State itself, and their legal status requires a separate assessment. Particularly relevant is State property used for commercial activity in the United States. Execution against such assets may be possible where the requirements established under the FSIA are satisfied.

So, recognition of the award is an important first step, but identifying State assets that are actually subject to execution and establishing the legal basis to enforce against them  is a different matter altogether.

At this stage, several issues are developing in parallel for Georgia: the continuation of the annulment proceedings in Paris, the possible appeal and stay mechanisms in the United States, as well as preparation for potential post-judgment discovery and questions relating to execution against State assets and sovereign immunity.

At the same time, together with the legal strategy, there is also an economic dimension that cannot be ignored.

The amount continues to accrue interest at SOFR + 4%, calculated daily and compounded monthly. This means that the duration of the proceedings itself has direct financial consequences, as the potential financial obligation continues to increase over time. By 18 September 2026, the amount reflected in the U.S. court’s final judgment had reached USD 443,258,952, approximately USD 60 million more than the original USD 383.2 million award

Therefore, the issue is not limited only to how strong Georgia’s legal position may be in Paris or Washington, D.C. Alongside the legal prospects, the economic cost of continuing the dispute also needs to be assessed, particularly when interest continues to accrue on the amount due.

This raises another practical question: when the financial obligation continues to increase together with the duration of the dispute, at what point does evaluating the possibility of settlement become as important as continuing the legal battle and seeking to set aside the arbitral award?

Sources

• https://law.justia.com/cases/federal/district-courts/district-of-columbia/dcdce/1:2025cv00125/276529/42/
• https://www.iareporter.com/articles/pdfdownloads/enka-v-georgia-judgment-paris-court-of-appeal-december-9-2025/
• https://www.newyorkconvention.org/court-decisions/united-states-11-september-2026-enka-renewables
• https://www.iareporter.com/articles/paris-court-grants-exequatur-to-enka-v-georgia-award-but-stays-awards-enforcement-pending-resolution-of-states-set-aside-request-in-light-of-impact-of-400-million-usd-award-on-geo/
• https://jusmundi.com/en/document/decision/fr-enka-renewables-llc-v-georgia-ordonnance-de-la-cour-d-appel-de-paris-pole-5-chambre-16-25-01855-tuesday-9th-december-2025?