Litigation and ADR in Georgia

Nikoloz Melkadze Ketevan Pruidze Giorgi Getia

Judicial System in Georgia

Constitutional Court General Courts

Supreme Court
Court of Appeal (2) District (city) courts (22)

First instance and Magistrates court

District (city) courts are first instance courts Requirements for Judges in First instance courts: 28 years Georgian citizen Legal education At least 5 years of working experience in this field Knowledge of Georgian language Passed the qualification test. Take full course of High Justice School.

Art. 14. Magistrates court is part of first instance court, magistrates hear cases alone. a) Not more than 3000 Litas b) family disputes Generally the fee for the case is 3%, but there are exemptions. The court should hear case during 2 month, for especially difficult categories of cases these period can be prolonged till 5 month.

Parties of dispute in court

Parties in the court can be natural or legal persons. According to law, in some cases party can be organization which is not a legal person. Art 81. Legal capacity Every natural person has capacity to be a party if they turned 18 or they are 16 and married. Legal persons have legal capacity from the moment of their registration. If a person is 7-18 or with mental disorder, their interests should be protected by parents or official representatives.

Appeal court
The judgment can be appealed if the object of dispute worth more than 1500 litas. Terms of appeal judgment should be appealed after 14 days, from the date that judgment was known for the party. First instance court will send whole case to appeal court during 5 days

Supreme court
Proceeding period in Supreme court cannot be more than 6 month. Grounds for Supreme Court claim 1. It only can be based on argument that judgment was made by violating the law. a) Violation of norms is considered: Did not use the law, that should have been used; Used the law that should not have been used; Wrong interpretation of the law. 3. This kind of violation can only be appealed if it lead to wrong judgment.

Arbitration in Georgia
Definiton A form of alternative dispute resolution (ADR), technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more impartial referees(the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the "award") they agree to be bound.

Advantages

Legal basis
The law of Georgia on Private Arbitrage
passed and enacted in 1997 April 17

The law of Georgia on Arbitrage

passed and enacted in 2009 June 19 repealed the law on Private Arbitrage

International instrument-New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958

The law of Georgia on Arbitrage

Scope The law sets forth the rules for: creation of arbitral institutions in Georgia arbitration procedure and ruling rendering arbitral awards recognition and enforcement of foreign arbitral awards Main principles Equality of parties in arbitral proceedings Independence and impartiality of arbiters and prohibition of court intervention within arbitral proceedings( unless referred to by the parties involved) Confidentiality of the process: An arbitrator shall keep information obtained during the arbitrage proceedings confidential, unless the parties have agreed otherwise.

Arbitration agreement

An agreement by which parties agree to submit future disputes arisen from contractual or other type of legal relationships to the arbitration Prerequisite for arbitration proceedings Mandatory written form Can be independent from the contract concluded between parties or enshrined within the contract in the form of arbitration clause

Arbitration agreement and court

Arbitration agreement excludes right of the parties to apply court If one party lodges a claim in court, the court is obliged to reject this claim or terminate proceedings if already commenced, except the cases when the arbitration agreement is void, unenforceable or repealed.

Number of arbiters, rules for appointment

Shall be composed of one or several arbiters The number of arbitrators and the rules of their appointment shall be defined by the parties. If not, then arbitrage must consist of three members The parties shall appoint an equal number of arbitrators. Written consent of a person to be appointed as an arbitrator is needed. If the number of arbiters to be appointed is even then arbiters already appointed shall within 10 days appoint one more arbiter unless otherwise agreed by the parties. In case of absence of parties agreement on the rules of appointment -- For an arbitrage to be composed of three members, one party appoints one arbitrator and these arbitrators appoint the third one-a chairman --For an arbitrage to be composed of one arbiter, if the parties cannot agree on specific person then court based on the claim of one of the parties shall appoint an arbitrator within 30 days of lodgment of a claim.

Avoidance of certain persons to be appointed as an arbiter

Person not having or having limited legal capacity Political figure or a civil servant Person convicted to have committed crime and his conviction is not abolished or annulled

Arbitrage proceedings(common rules)

Parties are free to determine the language of proceedings Parties can be represented by an attorney or any other official representative Parties can agree on applicable law within arbitration agreement or arbitration clause; any indication on the law of a specific jurisdiction implies applying to substantive and not procedural rules of that jurisdiction

Arbitrage proceedings(common rules)

Arbitrage composed of several arbiter shall render decision by a simple majority unless otherwise agreed by the parties; arbiters are not allowed to refrain from voting. The place of the arbitrage proceedings shall be defined by an agreement of the parties. If there is no such agreement of parties, the place of the arbitration proceeding shall be the place of the arbitrage agreement. Commencement of proceedings-after the notice is communicated to the defendant about submission of dispute to arbitrage

Arbitral award
Shall be rendered within 180 days of the commencement of arbitral proceedings unless otherwise agreed by the parties; In case of necessity the time period for rendering award can be prolonged not more than 180 days by an arbiter(arbiters) Binding force upon parties Mandatory written form and requirement to be signed by the arbiters; indication of time and place of rendering Shall contain argumentation indicating grounds upon which the arbiter based his decision Shall come into force upon rendering

Appeal and annulment of arbitral award

Court is entitled to annul arbitral award only in case when: 1. Aggrieved party lodges a claim in court and proves that: the party to the arbitration agreement did not have a legal capacity he was not informed about the commencement of arbitral proceedings or was informed but could not attend the hearing on justifiable grounds Subject matter of a dispute does not fall within the scope of an arbitration agreement Composition of arbitrage was not in compliance with agreement between parties 2. Court rules that: dispute cannot be resolved via arbitration the award is against public order Appeal does not stop enforcement of an award

Recognition and enforcement of (foreign) arbitral awards

Authorised courts: Appeal courts (Tbilisi and Kutaisi) of Georgia-in case the award is rendered within the territory of Georgia Supreme Court of Georgia-when an award is rendered not within the jurisdiction of the country

Grounds for refusal of recognition and enforcement of foreign arbitral awards

According to law of Georgia on arbitrage Article 45 (b) dispute cannot be resolved via arbitration the award is against public order

According to New York Convention Article 2 the subject matter of the difference is not capable of settlement by arbitration under the law of that country the recognition or enforcement of the award would be contrary to the public policy of that country

Mediation in Georgia
1)court mediation 2)notary mediation

3)Medical mediation
4)Mediation based on the agreement of the parties of a dispute

Court Mediation
Court mediation in Georgia is regulated by Georgian code on civil proceedings. According to the article 187 of the civil proceeding a dispute can be addressed to mediator (natural or legal person) with a aim of finishing it with consensus.

Disputes heard by mediator: a) Family law disputes (except for adoption, adoption declared invalid, restriction of parental rights and seizure of parental rights); b) Succession and inheritance related legal disputes; c) Neighborhood legal disputes; d) Any other disputes unless the laws of Georgia define a special procedure for mediation in such disputes.

Consequence of missing mediation meeting

Parties of the dispute have obligation to attend mediation meetings

If party fails to attend mediation meeting without pardonable reason he will be fined with 150 GEL (280 litas) and will be obliged to cover all the expenses of a trial. This rule is not applicable if parties end litigation with conciliation.

Ending mediation
If the parties will finish dispute with consensus through mediation court will render ruling about consolation and the ruling is final and binding. If the parties fail to reach agreement through period of the time defined by law a dispute will be heard by court.

Duty of confidentiality
Mediation proceeding is confidential; mediator is not allowed to disclose any information that became available for him while performing his professional functions, unless otherwise provided by agreement between parties. Same rule is applicable to the parties of mediation

Notary Mediation
1. A notary may be a mediator between the contending parties in:
a) Family law disputes (except for adoption, adoption declared invalid, restriction of parental rights and seizure of parental rights); b) Succession and inheritance related legal disputes; c) Neighborhood legal disputes; d) Any other disputes unless the laws of Georgia define a special procedure for mediation in such disputes.

Notary Mediation
Mediation with the participation of a notary may be carried out with the consent of contending parties. If in the process of mediation the dispute ends with agreement between parties, a notary draws up a deed of agreement to be certified notarially. If any party fails to fulfill the obligations under a deed of agreement drawn up within the scope of notary mediation, enforcement shall be carried out on the basis of a writ of execution issued by a notary in the manner prescribed by the Law of Georgia on Enforcement Proceedings.

Medical mediation
Parties of the mediation 1) Provider of medical service 2) Insurance company 3) Consumer

Body hearing medical mediation

Medical mediation service under minister of health labour and social security is a body entitled to resolve disputes. It makes two types of decision: 1) Decision if parties have indicated in contract or have agreed about medical mediation as a mean of dispute resolution. 2) Recommendation-in other cases. Decision of medical mediation service is binding for the parties of a dispute. However, if one of them disagrees its decision, he can appeal the decision in court. Service is free of charge for natural person, for the legal person fee of the medical mediation is 500 gela (750 lita).

Mediation based on contract

Parties can indicate mediation as mean of dispute resolution. They appoint mediator by agreement and every provision of such mediation is defined by parties.

They also can agree whether decision of mediator will be binding or not.
In Georgia there is no law regulating such mediation. In difference with arbitration, parties agreement about mediation as a method of the resolution of dispute does not exclude opportunity to file claim in court.

Thank you for attention Questions?