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Arbitration Court in Georgia

Arbitration Court in Georgia

The legislation on arbitration in Georgia is given by the Law on Arbitration, a rule of law which became applicable in this country starting with 1st of January 2010, replacing the previous law on this matter. The new legislation on arbitration follows the UNCITRAL (United Nations Commission on International Trade Law) model, and it is applicable to both domestic and international arbitration proceedingsOur team of lawyers in Georgia can offer in-depth legal assistance on this regulation. 

The Arbitration Law in Georgia

Arbitration in Georgia went through important changes in 2010 when a new law was passed. Under it, the creation of the arbitral tribunal was provided for, as well as how arbitration proceedings and awards should be completed.

The new law also provided for the recognition and enforcement of foreign arbitration awards. This way, Georgia became an important European arbitration center.

Under the new rules, the parties involved in proceedings before the Arbitration Court can decide on the rules the litigation will be conducted under. These rules will be set out in an arbitration agreement. The same document will provide on the jurisdiction of specific institutions to be used, if the parties want to.

The main advantage of using such a solution for the resolution of litigation is that the parties will benefit from equal treatment and thus the decision will be made in a way that favors both parties.

If you are interested in resolving a dispute a need legal assistance, our lawyers in Georgia are at your service.

The Georgian International Arbitration Centre 

After the new legislation on arbitration was established, the Georgian authorities have set up in 2013 the Georgian International Arbitration Centre (GIAC), which is seen as the main international arbitration institution of the country. The purposes for which the institution was set up are the following:  

  • promoting arbitration as the main dispute resolution method for both domestic and international disputes;
  • in the situation in which both parties involved in the respective dispute have agreed upon the GIAC Arbitration Rules, the institution will administer the resolution of the case;
  • GIAC is established in order to provide settlements for disputes arising in the country, as well as in the Caucasus and the Black Sea-Caspian regions;
  • it is also set up in order to establish an Alternative Dispute Resolution Training Center and to organize workshops, conferences and other related events in the field of arbitration. 

Cases in which arbitration can be used in Georgia

Arbitration can be used in various situations in Georgia, however, they have become widely employed in commercial disputes, as Georgian companies can have the arbitration agreements drafted before entering any commercial contract with potential business partners.

The fact that Georgia also has its own Arbitration Court helps companies dealing with disputes that require fast resolution.

Our lawyers in Georgia can offer more information on the cases that can use arbitration for fast resolution procedures. We can also help you with legal advice and due dilligence if you need to buy a property in Georgia.  

The arbitration process in Georgia

Before explaining the steps of the arbitration procedure in Georgia, it should be noted the parties participating in the procedure. These are, just like in the case of court trials, the claimant (the party filing a complaint), the defendant (the party against whom the complaint was filed), the arbitrators which is made of a panel of one or more judges.

The arbitration procedure in Georgia will imply the following steps:

  1. the filing of the claim in which the claimant will explain the details of the request;
  2. the notice sent to the respondent (defendant) after being registered by the Arbitration Tribunal;
  3. the statement of defense which must be filed by the defendant;
  4. the dispute settlement procedure during which the parties are heard;
  5. the proposal of settlement for the dispute, also known as the award.

It should be noted that during the arbitration procedure, both parties are required to submit evidence sustaining their case.

Other important aspects to consider in terms of arbitration in Georgia is that the Court will examine the agreement of the parties and decide on the place of the proceedings based on the requests of the parties. Also, the panel can be formed of one to several arbitrators, as the law does not provide for a specific number.

Only based on this evidence can the Georgia Arbitration Court can provide an award for the case.

Our law firm in Georgina can offer legal assistance in various disputes and can advise claimants whether to take the path of arbitration.

What is an arbitration agreement in Georgia?   

As prescribed by the Law on Arbitration, parties involved in arbitration cases in Georgia are required to sign an arbitration agreement. It is necessary to know that this type of contract has to be concluded in writing and our team of Georgian lawyers can offer in-depth advice on its provisions. 

The Georgian legislation on the matter also stipulates that a document qualifies as an arbitration agreement if it is presented as an electronic notification. The agreement can be concluded as an arbitration clause added in a contract or as a separate legal document (as per Article 8.2 of the Law on Arbitration).

Arbitrators in Georgia

When dealing with arbitration, there can be one or several judges who are referred to as arbitrators. Their number and the procedure will be decided by the parties involved in the dispute, however, they must adhere to certain regulations when doing so. Each party has the right to an equal number of arbitrators. Where no decision in this respect is made, the tribunal will appoint 3 arbitrators based on consent.

Once the arbitrators are nominated, they will sign an agreement accepting the office. There will also be a presiding arbitrator who can be appointed in two ways:

  • the first one implies for the arbitrators of the parties to delegate the presiding one;
  • the second one implies the appointment of the presiding arbitrator by the court, if no agreement in this sense was reached.

It should be noted that the arbitrators must be qualified to occupy their functions. Moreover, they must be compatible with their positions within the Georgian Arbitration Court by not having been convicted for any offense.

Arbitration is one of the quickest ways of resolving a dispute, which is why where it can be used it is recommended.

Arbitration proceedings in Georgia

Before commencing the proceedings, the parties must agree on several aspects. Among these:

  • the place where the arbitration will take place;
  • the number and appoint of arbitrators;
  • the date the proceeding will begin.

All these will be written in the agreement created for this purpose. Then, all the parties involved will be notified in writing and summoned in accordance with the provisions of the Civil Code.

It should be noted that the parties can choose to be represented by Georgian lawyers during the proceedings before the Arbitration Court.

Another important aspect about arbitration is that the parties can also decide on the language in which the proceedings will be completed. Should the language by a foreign one, all documents need to be translated into it. Also, certified documents must be submitted with the court.

The procedure related to arbitration will usually resemble that of a civil lawsuit and will imply for the party requesting the settlement of the dispute (the claimant) to file a claim with detailed information on the case and evidence supporting it. The respondent must then reply with a statement of defense. Failure to respond could lead to the rejection of the procedure.

Hearings will be completed just like in other litigation proceedings, and these are usually agreed upon by the parties, but the tribunal can also decide if no request has been made. In most cases, the parties are invited to support their cases orally, however, these can be supported by written evidence.

Compared to a civil law court, arbitration proceedings are usually closed to the public, especially since this is one of the most common ways of settling commercial disputes that may refer to trading secrets. For this purpose and more, the arbitrators can request the services of experts in the field related to the dispute in order to make an award based on conclusive evidence.

It is also possible for the court to issue a decision for one party in case the other one fails to appear for hearings, or even to reply to the summons.

The issuance of the arbitration award will be made in accordance with the terms of the agreement signed by the parties.

If you need more information on how arbitration proceedings are completed in Georgia, our lawyers can provide the necessary details. If you require assistance in solutioning a litigation case, we are at your service. 

Foreign parties involved in arbitration in Georgia

It is possible for foreign citizens or companies to have their cases arbitrated in Georgia, case in which specific attention will be paid to the panel of arbitrators where the president of the panel must be a foreign citizen of other nationality of the any of the parties.

If you have any questions about arbitration in Georgia, our lawyers can help you. We can also assist in the preparation of the claim to be filed with the court.

If you need a review of the arbitration agreement, you can rely on our specialists.

Why choose arbitration over court proceedings in Georgia?

As mentioned above, arbitration is commonly used in commercial disputes which usually take the longest when it comes to court litigation, therefore, the time spent with the proceedings will be reduced significantly. Another reason to consider when it comes to arbitration is related to the costs of the procedure which are lower compared to court proceedings.

Another reason to choose arbitration which is not possible when it comes to court proceedings is the possibility of negotiating the contract for the satisfaction of both parties. Also, the parties involved in arbitration will decide on the method of appointing one or more arbitrators.

Appeals are also possible if one of the parties does not agree with the outcome, however, this is possible only one time.

Considering arbitration is an international procedure and it is also very well regulated all over the world, it is possible for the parties to choose another jurisdiction for resolving their dispute and have the ruling enforced in Georgia under a simpler procedure.

It is also the case of foreign companies or citizens who want to use Georgia as an international dispute resolution destination.

We offer various legal services to both local and foreign citizens and companies with activities in Georgia. You can find us in Tbilisi, Batumi, and Kutaisi.

Facts about arbitration in Georgia

Here are some of the most important facts you can consider about arbitration proceedings and the Arbitration Court in Georgia:

  • once a notice has been sent to the defendant, he or she must respond within 30 days;
  • if there are more that two parties in a dispute, once the Secretariat sends Requests for Joinder, the remaining parties must respond within 10 days;
  • the maximum number of arbitrators in Georgia is 3;
  • if the number of arbitrators is not complete, the panel has 10 days to the start of the proceedings to appoint the missing number of arbitrators.

Businessmen are invited to contact our law firm in Georgia for more information concerning this subject; our attorneys can assist with further details related to the arbitration proceedings applicable here.   

Our law firm in Georgia is also available for any other type of legal services that can be offered to foreigners. For instance, you can rely on us for information on what you need to comply with if you want to buy land in Georgia

The law was modified recently, therefore we invite foreigners to receive legal advice before starting any legal procedure concerning the acquisition of land.