Final Judgment on Irakli Rukhadze

On not appreciating the nature of one's responsibilities, the four cases, and Georgia's Imedi TV

In mid-March, the Supreme Court of the UK rejected the appeal of Irakli Rukhadze and his partners, against an earlier judgment that had him and his associates pay damages of more than $170m. This decision is a blow to one of Bidzina Ivanishvili's most important associates, and has political implications for Georgia.

It’s a complicated case — in fact four cases across more than seven years — which is why people interested in Georgia may find an overview useful. This post offers this summary and relevant links, if you want to dive deeper.

Following this judgment, there are claims that Mr Rukhadze borrowed money to set aside the liquidity for the damages — and that he is now fully on the hook. Whatever the merits of that claim, he seems intent on selling some of his assets at this moment.

How did we get here?

On Rukhadze and Hunnewell

Hunnewell Partners, the entity controlled by Irakli Rukhadze, is not just a company. It exercises a significant hold on the Georgian economy, having major or even controlling shares across various sectors, in media, banking, metallurgy and cement. By its own account, Hunnewell employ more than 6.000 people, but its power goes beyond these sheer numbers, as the company owns Imedi TV, the country's main TV channel, which puts out messaging fully aligned with the Georgian Dream.

Below is a chart of Mr Rukhadze’s hold across businesses, via Lynx Strategic Advisory. I have not verified all the details, and there seem to be some issues on which public information is not consistent, for example on how much of MagtiCom Mr Rukhadze and his Hunnewell partners own.

From Lynx Stragetic Advisory

At first glance, public reporting from 2021 suggests that Mr Rukhadze and his wife hold about 3% of Magticom shares, through a complicated arrangement. A closer look shows that his mother, Natela Sakhokia, owns another 3%, and another 4% are controlled by Igor Alekseev and family, as well as one additional Hunnewell partner. Together, that puts Hunnewell at having a 10% stake in Georgia’s biggest telecoms provider.

At least in some contexts, Mr Rukhadze has spoken of his engagement and even control of Borjomi Mineral Waters, too. There likely is some real estate that is not listed above.

As a company, Hunnewell could only operate with the blessing of Bidzina Ivanishvili. In some cases, as in taking over the local branch of Heidelberg Cement from its German parent company in 2023 (under odd circumstances, including the sudden departure of an earlier manager), Hunnewell Partners directly collaborated with Ivanishvili in business ventures also. While Hunnewell Partners presents itself as a dynamic business entity, it is hard not to see it as a major political player.

The Four Cases on Recovery Services

The case that was decided now is complicated, involving the estate of Badri Patarkatsishvili. When Patarkatsishvili died in London in early 2008, things slipped into disarray. As the court put it, “the need for the family to engage the parties to provide Recovery Services in the first place arose because Badri had given many millions of dollars of his assets to individuals whom he clearly trusted to act as his informal ‘treasurers’.”

Mr Rukhadze, who was already working for the family, got engaged as part of this recovery together with some Hunnewell partners.

As far as I can make out, the case moved through four stages.

• An England and Wales High Court (Commercial Court) Decision, in November 2018, here, mostly on the merits of the case, as Phase 1.

• A second England and Wales High Court (Commercial Court) Decision, with determination of the value, as the business opportunity had mostly been used/ concluded, in March 2022, as Phase 2, here.

• England and Wales Court of Appeal, in March 2023, here.

• Supreme Court of the UK, judgment given in March 2025, here.

It is possible that I mixed aspects up — it is a complicated case. If so, please comment and I will adjust. (For a glimpse into some of Mr Rukhadze’s previous conflict with the UNM authorities in 2007-2008, neither come out looking great, see Wikileaks here. Even the shortest glimpse suggests massive overreach by the authorities under President Mikheil Saakashvili. On the other side, Lado Gurgenidze, Prime Minister at the time, is cited in Wikileaks as telling “the Ambassador he had reviewed the file on Rukhadze, and that as a banker himself, he felt that Rukhadze was at a minimum involved in unethical practices.”)

On the Patarkatsishvili case, here is one plausible-enough Gemini AI summary of the original 2018 findings, with Salford/“SCPI” being the company that Mr Rukhadze was formally working for, and that had the formal task of recovery of the assets.

“Rukhadze, along with other defendants, breached their fiduciary duties to SCPI by disloyally carrying out preparatory steps to compete with SCPI while still working for them. They resigned with the intention of providing Recovery Services to the [Patarkatsishvili] Family themselves, effectively appropriating a business opportunity that belonged to SCPI. This included actively aligning themselves with the Family and signaling their willingness to take over the Recovery Services if the Family severed ties with SCPI, all while still employed by SCPI.

The core issue was that the defendants prioritized their own interests over their duties to SCPI. They engaged in actions that undermined SCPI's ability to secure a deal with the Family, demonstrating a clear conflict of interest and a breach of the trust placed in them as fiduciaries. Their actions facilitated their own venture, Hunnewell Partners, at the expense of their fiduciary obligations.

Ultimately, the court's decision hinged on the principle that fiduciaries must not profit from their position at the expense of those they serve. Rukhadze and the defendants were found to have done just that, by setting the stage to take over the Recovery Services opportunity while still owing their loyalty to SCPI. This disloyalty and self-serving behavior constituted the crux of their wrongdoing.”

This first judgment is an extraordinary read, outlining the unraveling of a business relationship. The judge, Sara Cockerill, does not seem to be a fan of the main parties in the case. Here is what she had to say, back in 2018.

“This case has been heard over four court weeks. During that time, I have heard extensive factual evidence from some of the main participants in the events which were in issue. I wish I could say that this extensive witness evidence was extremely useful. However, despite […] skilled and diligent cross-examination […], I cannot say that it was.

Much of this is to do with the fact that the majority of the witnesses called were very intelligent and motivated and had plainly worked extensively to prepare for their evidence; firstly, with the legal teams in the preparation of their lengthy witness statements and secondly with the documents in preparation for their cross-examination.

However what sounds like a virtue is when pursued to this extent actually a vice; the result of this was that I could have very little confidence that the evidence which I was getting was their unclouded recollection rather than a heavily overwritten version based on their reconstruction of events in the light of their microscopic review of the documents – and their own view of their own case.”

Mr Rukhadze comes in for particular disapproval. Justice Cockerill says about Rukhade that he

“…tended to discursiveness, preferring to give speeches rather than answering questions. He was particularly irked by the role of witness; he was quite often insistent about points which he wished to make, focussing on those, interrupting questions to make his points and trying to insist on being directed to documents which he wanted to highlight.

Mr Rukhadze struck me over the course of his lengthy cross examination as an unusually focussed man with a strong sense of self belief. He considered himself a key person from the outset of his encounters with the Family and his estimation of most of his co-workers was a low one. His reactions to events appeared relatively unclouded by emotion. He focussed on the physical effects of difficult times rather than his reactions and upon the goal rather than the technicalities. While it was obviously his case that he owed no duty to SCPI at the critical points in time, this attitude seemed to be one which pervaded his relationship with SCPI more generally, with his evidence at times indicating a willingness to operate independently of SCPI if it suited him. So too his attitude to the company structures: ‘structures are there to serve us …and not the other way around.’

I received the impression that he would not be overly concerned about lying in what he considered a good cause; and indeed, in some respects I have concluded that his evidence was not truthful but constructed (sometimes on the hoof and inconsistently with the case put by his legal team) on the basis that he perceived that this would be most helpful to his case.”

This is not exactly a ringing endorsement. The entire judgment draws a fascinating portrayal of Mr Rukhadze’s character in a completion that no journalistic feature so far has achieved.

There are other curious bits, too. Here is one excerpt, referring to a SCPI lead partner, Mr Jaffe, and Patarkatsishvili’s widow, Mrs Inna Gudavadze:

“Another ill-tempered meeting occurred in early September in which Mr Jaffe understood Mr Rukhadze to be asserting his primacy with Mrs Gudavadze (‘Inna is mine’ was how he recalled it being put), and that he might join the Family to help them negotiate against Mr Jaffe.”

This wording connects to some swirling rumours that also can be read into one of the first lines of the 2018 judgment. “Mr Rukhadze knew Badri's family also before Badri's death, and came to know them very much better in the years which were to follow.” (My emphasis.) Make of that what you will.

The Appeal under Consideration

Part of the appeal that was under consideration most recently, with hearings in the summer of 2024, centered on Mr Rukhadze's and his partners’ view that they had done the actual work, and that from this perspective, agreements were not particularly binding. They had, in effect, asked the Supreme Court to reconsider the law.

In this regard, the finding of the Supreme Court is withering. As one judge put it:

“Although the appellants’ [i.e. Rukhadze et. al.] indignation at result of these proceedings is clearly strong & genuinely felt, there are in my judgment insuperable obstacles in the way of a judicial development of the law along the lines suggested by the appellants.”

A close reading suggests almost disbelief by the judges, about the care- and reckless disregard shown by Mr Rukhadze and his colleagues. As English legal prose goes, this bafflement is couched in understated terms. As Lady Rose, one of the judges in this recent appeal before the Supreme Court of the UK, puts it in her concurring statement:

“Mr Rukhadze has made the same mistake of not appreciating the nature of the responsibilities he took on when, for whatever reason, he accepted appointment as a director of one of the claimant companies.”

Not appreciating the nature of responsibilities could also be said of Mr Rukhadze’s massively destructive role in Georgia in recent years. Imedi TV is a station that continues to spew hate, creating division, and attacking Georgia’s Western partners. It massively obscures the human rights violations that are happening in Georgia now on an almost daily basis, to the point where Imedi TV has become a tool of these violations, too. Imedi’s TV coverage insinuates to perpertrators that they are merely defending themselves against an existential threat — one that is made up, but still serving as a carte blanche. None of this is surprising when you study the court documents.

Throughout, Irakli Rukhadze does not come across as a business partner one would want to engage with, nor as someone who has higher values in mind. Here is what one judge has to say about the loyalty of the circles she has been asked to assess: “Their alliances last as long as they are mutually convenient and no longer.”

This perhaps serves a good summary judgment on how the Georgian Dream succeeded so far — and how it may well fail: at the heart of it is sheer opportunistic behaviour. For now, that is “mutually convenient”, but the regime’s foundations may unravel rather more quickly when they are fundamentally challenged.

[More on this to follow soon.]