In an analysis published last year, the Georgian authors Mgalobishvili and Kiknavelidze concluded that “there is no doubt that Georgia needs a lot of time and efforts in order to be finally established as a country friendly towards arbitration […].” 1)Mgalobishvili/Kiknavelidze, The legal framework of arbitration in Georgia, Arbitrażowe Aktualności – Biuletyn Arbitrażowy, Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej w Warszawie (Eds.), Nr. 9/2009, p. 124 (132). They identified measures which, in their opinion, should be taken by Georgia in order to accomplish this goal. Among these measures, they listed the adoption of legislation based on the 1985 UNCITRAL Model Law.

Less than a year later, it can be announced that Georgia has successfully taken this step: On 19 June 2009, the Parliament of the Republic of Georgia passed a new law “On Arbitration“, which came into force on 1 January 2010 (Official Journal of the Republic of Georgia, 1280-Is). So far, this law – as well as a detailed analysis by a Georgian author 2)Jacobashvili, Analysis of “Arbitration Law” of Georgia, Getsadze & Pateishvili Newsletter 11/2009. – is publicly only available in the Georgian language. It is expected that there will be an official translation of the Law on Arbitration into English on the official internet site of the Parliament soon. 3)www.parliament.ge. Recently, UNCITRAL included Georgia in its list of countries which enacted legislation based on the Model Law. 4)www.uncitral.org.

The previous Georgian legislation, contained in the 1997 Private Arbitration Act and the 1997 Civil Procedure Code, had been critisized for having “quite serious gaps” and for not meeting contemporary requirements. In particular, it was repeatedly stated by Georgian as well as foreign authors that the old legislation seemed to apply only to domestic arbitration, there was no express right of the tribunals to rule on their own jurisdiction, and the provisions on the recognition and enforcement of foreign arbitral awards were uncommon, at best.

The new Law on Arbitration consists of 48 articles, divided into ten chapters, which in their general structure and content follow the Model Law. It covers both domestic and international arbitration. The rules about the composition of the arbitral tribunal at large correspond to the Model Law; the appointing authority is the Rayon Court (Court of First Instance). The parties may be represented by lawyers. The arbitral tribunal may rule on its own jurisdiction. Unless otherwise agreed by the parties, the languages of the proceedings as well as the seat of the tribunal will be determined by the tribunal. Hearings may be held at a place different from the seat. The arbitral tribunal may request evidence from the parties at any stage of the proceedings; it can call witnesses, nominate experts, and request the parties to produce documents.

Probably the most important change from the view of the international arbitration community is that there are now clear provisions on setting aside domestic arbitral awards and on recognition and enforcement of foreign arbitral awards. The reasons why an arbitral award can be set aside and why recognition and enforcement can be refused have been brought into accordance with the Model Law and the New York Convention. Under the old law, the Supreme Court of Georgia examined the issues of recognition and enforcement of foreign arbitral awards, without a provision in any of the laws of Georgia establishing its jurisdiction. 5)Tsertsvadze, Recognition and Enforcement of Foreign Arbitral Awards in Georgia, Max-Planck-Institut für ausländisches und internationales Privatrecht (Eds.), Hamburg 2009, p. 2-3. The 2010 Law on Arbitration now establishes, in its Art. 2 Sec. 1 a) in conjunction with Artt. 42, 43, Artt. 44, 45 respectively, that the jurisdiction for the setting aside of domestic awards lies with the Courts of Appeal, and for the recognition and enforcement of foreign arbitral awards with the Supreme Court of Georgia.

The new Law on Arbitration is a contemporary legislation which reflects international standards, and a significant step for the further development and promotion of international commercial arbitration within the Republic of Georgia and the entire Caucasus region. 6)Further on arbitration within the region Grigoryan & Partners (Eds.), Arbitration of Disputes in the South Caucasus: Armenia, Azerbaijan and Georgia, Grigoryan & Partners Client Note March 2007.


________________________

To make sure you do not miss out on regular updates from the Kluwer Arbitration Blog, please subscribe here. To submit a proposal for a blog post, please consult our Editorial Guidelines.


Kluwer Arbitration
image_pdfimage_print

References   [ + ]

1. Mgalobishvili/Kiknavelidze, The legal framework of arbitration in Georgia, Arbitrażowe Aktualności – Biuletyn Arbitrażowy, Sąd Arbitrażowy przy Krajowej Izbie Gospodarczej w Warszawie (Eds.), Nr. 9/2009, p. 124 (132).
2. Jacobashvili, Analysis of “Arbitration Law” of Georgia, Getsadze & Pateishvili Newsletter 11/2009.
3. www.parliament.ge.
4. www.uncitral.org.
5. Tsertsvadze, Recognition and Enforcement of Foreign Arbitral Awards in Georgia, Max-Planck-Institut für ausländisches und internationales Privatrecht (Eds.), Hamburg 2009, p. 2-3.
6. Further on arbitration within the region Grigoryan & Partners (Eds.), Arbitration of Disputes in the South Caucasus: Armenia, Azerbaijan and Georgia, Grigoryan & Partners Client Note March 2007.

4 comments

  1. Readers may be interested to find out that two years prior to the authors Mgalobishvili and Kiknavelidzes’ recognition that “legislation based on the 1985 UNCITRAL Model Law” was advisable for the Republic of Georgia, the Georgian-European Policy and Legal Advice Centre (GEPLAC) in 2007 liased with the Georgian Ministry of Justice and the Legal Committee of Parliament of the Republic of Georgia. In doing so, GEPLAC’s international law reform consultant Dr. Peter Binder advised on the enactment of legislation based inter alia on the UNCITRAL Model Law, albeit according to the more modern 2006 standards(!).

    Full details can be found on GEPLAC’s website in the document called “Peter Binder. Advice on the implementation of legislation in the area of Commercial Arbitration 09 March 2007” http://www.geplac.ge/eng/Reports.php

    Yours sincerely,

    Dr. Peter Binder, LL.M.
    http://www.international-commercial-arbitration.com

  2. Dear Dr. Binder,

    thank you for this interesting piece of information which I was not aware of when writing the contribution.

    Your comment also triggered me to clarify two aspects:

    Mgalobishvili and Kiknavelidze in fact did not clarify whether they recommend the enactment of legislation based on the 1985 Model Law or on the 1985 Model Law with amendments as adopted in 2006. When I made the statement that you quoted (which was not a direct quote from Mgalobishvili and Kiknavelidze’s analysis – I would have added ” “, a footnote, and a page number), I did not use the year “1985” in order to clarify which version of the Model Law was enacted. I rather followed the practice to quote laws together with the first year of enactment, and not with the year of their last modification. UNCITRAL follows the same practice by referring to the different versions of the Model Law as:

    1985 – UNCITRAL Model Law on International Commercial Arbitration

    and

    1985 – UNCITRAL Model Law on International Commercial Arbitration, with amendments as adopted in 2006

    Thus, please take my apologies for causing confusion.

    Furthermore, I would like to add that the actual Georgian law – according to the “Status” page on http://www.uncitral.com, and according to my own review of an inofficial English translation of the Georgian law (on file with me) – is based on the “1985 – UNCITRAL Model Law on International Commercial Arbitration, with amendments as adopted in 2006”.

    Yours sincerely,
    Michael Wietzorek

  3. Hello Michael, great article!
    Can you please tell me where could I find Georgian court decisions on arbitration in English? You mentioned that The Law is a significant step for the Caucasus region, so can you tell me about arbitration in Armenia and Azerbaijan?
    Thank You.

  4. Dear Lucija,

    thank you for your comment!

    Let me briefly answer your questions:

    From my experience, it seems rather difficult to obtain Georgian court decisions in any other language but Georgian. The Supreme Court of Georgia, on its homepage, has a section called “Judgments of the Supreme Court” and another one called “Pending Cases”, yet both sections contain the explanation “This information is available only in Georgian version.” However, the analysis by Tsertsvadze that I quoted in my contribution to the blog contains a few case summaries and case numbers, so I am thinking that it should not be impossible to obtain these cases at least in the Georgian language and get them translated. The article by Tsertsvadze is available online, free of charge, at http://www.mpipriv.de/gus.

    As for arbitration in Azerbaijan and Armenia, I would like to point you to the paper I quoted in my contribution (Grigoryan & Partners (Eds.), Arbitration of Disputes in the South Caucasus: Armenia, Azerbaijan and Georgia, Grigoryan & Partners Client Note March 2007) for first reference. Besides that, let me give you a short overview as well:

    The governing law in Azerbaijan, to my knowledge, is the “Law of the Republic of Azerbaijan On International Commercial Arbitration”, dated 18 November 1999. The law is available online at http://www.arbitr.az, the Homepage of the Azerbaijan Arbitration and Mediation Center, which also provides for further information. An overview, with reference to cases, is given by Karimov/Movsumova in “The Baker & McKenzie International Arbitration Yearbook” 2009, p. 99 ss.

    In Armenia, the law regulating arbitration is the “Law of the Republic of Armenia on Commercial Arbitration”, dated 22. January 2007 – there is also an English translation of that law available online, at http://www.aua.am/aua/masters/law/arbitration.html. Currently, there are a few projects aimed at strengthening international commercial arbitration; for instance, a conference “Developing Commercial Arbitration in Armenia” was held recently. There is an Arbitration Court at the Chamber of Commerce and Industry of Armenia (www.arbitrage.am) which has some further information available in English and Russian language.

    I hope that this was helpful – for all three jurisdictions, there is a lot more material available in the respective local languages. If you need any further information, please do not hestitate to write again.

    Kind regards,
    Michael Wietzorek

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.