Management of „Caucasus Online“ Should Run the Company Without Interference of Special Manager - ICSID Order

Management of „Caucasus Online“ Should Run the Company Without Interference of Special Manager - ICSID Order

The International Arbitration Tribunal (ICSID) in the case of ‘Nasib Hasanov v. Georgia’ has issued an interim order. The ICSID has been studying this case since October 2020.

In a ruling of April 15, the Arbitration Tribunal shared the arguments presented by ‘Neqsol Holding’ and ordered that the special manager appointed by Caucasus Online should not interfere in the management of the company until further hearing. The Arbitration Tribunal also ordered Georgia that the Georgian Communications Commission could not use suspension of the authorization of Caucasus Online as a mechanism of sanction.

The interim decision of the International Arbitration Tribunal will be in force until the next hearing, scheduled on May 12.

ICSID notes in its ruling, that its decision has been based on the April 7 decision of Tbilisi Court of appeals, because the Georgian court made a decision to reverse its decision on suspension of Special Manager of ‘Caucasus Online’.

By letter of April 8, 2021, the Claimant informed the Tribunal that the Tbilisi Court of Appeals had reversed its interim measures decision based on the evidence that had been presented by GNCC. The Claimant therefore renewed his Application and asks that the Tribunal “urgently reconvene to hear Claimant’s Request for Provisional Measures.”- reads the order.

The Tribunal directs that the Respondent (Georgia) to refrain from taking any of the steps listed in para. 143.1-.3 of the Claimant’s submissions of January 12, 2021, including, in particular:

a) an undertaking that the GNCC will not suspend Caucasus Online’s authorization to operate; and

b) an undertaking to allow that the governing bodies of Caucasus Online exercise, without the Special Manager’s further approval, the list of activities requested by Mr. Teymur Taghiyev in his letter of January 11, 2021,”- reads the order of ICSID.

The Communications Commission appointed a special manager at Caucasus Online in October 2020, after the company was fined several times by the commission.

NEQSOL Holding, which owns 100% of the company, has appealed the appointment of a special manager at Caucasus Online. On March 1, 2021, the Tbilisi Court of Appeals issued a ruling suspending the authority of scepcial manager. However, this decision was reversed after the appeal by the Communications Commission, after which the Court of Appeals restored the authority of Mariam Sulaberidze on April 7, 2021.

Neqsol Holding, currently owns a 100% stake in the parent company of Caucasus Online. The company notes that in 2019 when they bought the shares of the company Georgian government was informed about this transaction and they have received blessings from them. But as Georgian communications regulator states this transaction was not agreed with them, thus it should be recognized as “illegal”.

NEQSOL Holding also states that as the transaction happened outside Georgian jurisdiction in BVI, no formal approval from the GNCC was actually required. Teymur Taghiev, the Head of Strategy at NEQSOL Holding’s stated this to BMG. In the interview Taghiev also noted that NEQSOL Holding in 2019 paid $61 mln for the whole 100% of the shares of Caucasus Online, with immediate acquisition of 49% and a call option for the remaining 51%. According to the head of strategy at NEQSOL, Teymur Taghiyev, the call option for this 51% was exercised in August 2020, following the unpreceded attack launched by the GNCC on the company and resulting in the heavily criticized amendments to the Communication Law pushed by the GNCC and allowing the regulator to appoint a Special Manager with almost unlimited authorities.

The process is currently being studied by an international arbitration tribunal of the World Bank (ICSID).

According to the materials published on the ICSID website, the Georgian side in the process is represented by the Ministry of Justice and the international law firm Dechert. Neqsol and Mr. Hasanov are represented by law firms DLA Piper and Quinn Emanuel Urvan.

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