The Story of Iconia Capital - American Victims of Corruption in Georgia for Four Years and Counting

The Republic of Georgia is a small country bordered by Russia and Turkey in the Caucasus region. It has long been an ally of the U.S. and received billions of dollars in taxpayer funded aid since its independence from the Soviet Union. Additionally, it received military and political support from the U.S. during the 2008 invasion of Georgia by Russia.
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Despite the positive relationship between the two countries, American investors such as ourselves have suffered extreme financial losses, damages, and even threats to personal safety due to the current government's unwillingness to uphold basic rule of law and protections.

For over four years, we, the American investors of Iconia Capital LLC, have had our legitimate construction business stopped by powerful extra-legal and corrupt influences in the country of Georgia. Since officially starting the development of our first construction project in Tbilisi in 2015, we have been confronted by a small, but powerful group of opponents who have sought to illegally take over our land plot in order to use it for their personal interests and private use.

These opponents, who live in the neighboring building, include the former Georgian Supreme Court Judge Giorgi Shavliashvili, and his wife, Iako Goletiani, who is a career court employee. Giorgi Shavliashvili has been censured for judicial misconduct in the past by the Public Defender's office of Georgia, and is a known associate of the notorious Judge Levan Murusidze, who is himself accused of protecting the murderers of a young bank employee in 2006. In addition, Shavliashvili personally threatened the CEO of Iconia Capital LLC during a 2015 hearing at Tbilisi City Hall, promising that the "[Americans] would never be allowed to build on [their] land." He issued a threat to former Deputy Chief Architect of Tbilisi, Mr. Levan Dzagnidze, informing him that he would "pay a price" if he helped [the Americans] receive a construction permit for their project.

Since 2015, Iconia Capital LLC has had its project delayed and stopped by the actions of the opponents, with the Georgian government failing to explain the reasons why under the law. In addition, official complaints and requests for help from the authorities were either ignored or met with ineffective and minimal responses. From 2016 to present day, the project was ordered to be frozen by the Georgian courts in response to a complaint from our opponents. In every instance of the court, despite our counsel submitting overwhelming evidence and conclusions from the semi-governmental Levan Samkharauli Forensics Bureau, the freeze on our business was extended again and again by the courts, despite offering no official explanation as to why, or what, we did wrong. In fact, several of the judges wrote that our business should be further stopped due to their "personal feelings" about the case, rather than citing evidence, arguments, or precedents under prescribed Georgian law. All attempts to change the court's mind, or to counter-sue our opponents for harassing us with lawsuits, were denied.

Our four years of terror have not been limited to denial of justice and outrageous, biased behavior by the courts. In fact, we have experienced and recorded multiple incidents of harassment and security threats on our own territory by our opponents and their affiliates. Notable examples include a Dec. 16 2016 confrontation wherein our opponents attempted a hostile takeover of our land by performing illegal construction of their own project: on our property. Despite police being called to the site multiple times, no arrests were made and Georgian law enforcement did not investigate the perpetrators further.

Even more threateningly, on Dec. 1 2017, one of our opponents and his affiliate physically confronted myself and my staff on our private property. During this exchange, which was recorded on video, one of the individuals issued a death threat, promising that "blood would be spilled" if we were to perform our construction duties on our own land. This incident was reported to the Tbilisi police, and the video evidence was presented. The individuals clearly seen and heard in the video clip were not arrested, interrogated, or prosecuted.

Lastly, while our opponents have trampled on our legal rights and threatened our physical security, they have also utilized contacts in the Georgian government itself to support their positions while sabotaging ours. Former Chief Architect of Tbilisi, Nino Ghoghoberidze, admitted to our staff during a City Hall meeting that she had personally communicated with our opponents and had sympathies with their antics; she also directly stated her personal opposition to the project. After this revelation was made, Ghoghoberidze harmed our investors by breaking several key promises, agreements, and representations with our company. In addition, in August 2015, she and her staff violated Georgian law by refusing to render decisions on our construction permit within published official deadlines. Multiple attempts to contact her directly were ignored for months until communication was re-established through another division of City Hall months later.

In 1994, a bilateral investment treaty was signed between the United States and Georgia, which guarantees the rights and protections of American investors operating in Georgia. Under this international agreement, Georgia has an obligation to treat American investors fairly, if not favorably, as well as offer security for the investors and their projects in the country. Should these guarantees be broken by Georgia, the treaty clearly makes provisions for demanding financial compensation from Georgia via the forum of the international courts.

With devastating financial damages already suffered by our investors, who risked their life savings to invest in Georgia, and with no hope of ever receiving justice or protection locally, we were forced to take a final step to protect ourselves. Therefore, on Monday, Nov. 5 2018, we officially initiated legal proceedings against the government of Georgia by submitting a Notice of Arbitration against them under the UNCITRAL Arbitration Rules. Our complaint, which is clearly articulated and backed by over 500 pages of official documents, evidence, photography, videos, and exhibits, demands financial compensation of 10 million USD.

We are represented by one of the most experienced American international arbitration law firms in the world. While we cannot get back the four years of our lives that we lost in fighting the intensive battle for our rights in Georgia, we are confident that we will receive the full amount of financial compensation, plus penalties and interest, that we are due.

Let this story be a warning for American investors, or any foreign investors for that matter, who are thinking of risking their hard earned money in Georgia. Like many things fabled too good to be true, the hard reality on the ground in Georgia is often a devastating disappointment for any investor expecting a clean and fair environment to operate in.