GEORGIA Law and Practice Contributed by: Lasha Nodia, Giorgi Kekenadze and Ani Akophashvili, Nodia, Urumashvili and Partners
Nodia, Urumashvili and Partners LLC Office 28 Vazha-Pshavela Avenue Block 4 71 Tbilisi Georgia
Tel: +995 322 207 407 Email: info@nplaw.ge Web: nplaw.ge
1. General 1.1 Prevalence of Arbitration
tion is mostly preferred by non-domestic parties. By way of example, according to one of the prominent arbitration institutes in Georgia, the Georgian Interna - tional Arbitration Centre (GIAC), the majority of cases still involve at least one foreign party ‒ implying that domestic parties regularly refer to state courts, unless international elements are involved under the dispute. 1.2 Key Industries Arbitration is commonly used for a variety of dis - putes, including commercial, construction, interna - tional trade, employment, IP and consumer disputes. According to reports from arbitral institutions, the bulk of cases involve disputes related to consumer loans, leasing and service agreements, and issues stemming from construction and corporate affairs. 1.3 Arbitration Institutions In Georgia, there are more than 35 recognised insti - tutions that facilitate arbitration, but two institutions stand out: the GIAC and the Dispute Resolution Center (DRC). Both institutions enjoy high levels of trust and handle a substantial portion of domestic and international arbitration disputes. In addition to domestic institutions, parties involved in arbitration proceedings in Georgia often turn to well-established foreign arbitral institutions such as the ICC, the LCIA and the SCC (Stockholm Chamber of Commerce) Arbitration Institute. These institutions are often chosen owing to their global recognition, institutional support, comprehensive arbitration rules, and expertise in handling international disputes.
In recent years, Georgia has witnessed a significant transformation in the realm of ADR through the pro - motion and consolidation of arbitration as a pivotal tool. This evolution spans both the domestic and international spheres. Although the integration of arbitration into Georgia’s dispute resolution frame - work can be traced back to 1997, it has undergone substantial development in the past two decades. The watershed moment occurred in 2009 when Georgia adopted a new arbitration law (the “Law of Georgia on Arbitration”), which ‒ with some notable exceptions ‒is based on the UNCITRAL Model Law on International Commercial Arbitration of 1985 as amended in 2006 (the “UNCITRAL Model Law”). Arbitration has emerged as the preferred method for resolving disputes in various sectors, including with regard to commercial and corporate contracts, the construction industry, the banking sector, and interna - tional trade agreements. Arbitration stands as the pre - dominant mechanism in international trade, primar - ily due to the confidentiality of the proceedings, the conclusiveness of arbitral awards, and the efficiency of their recognition and enforcement under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). However, domestic parties tend to prefer litigation before state courts to arbitration for dispute resolu - tion, mostly owing to cost, enforceability, and their familiarity with court proceedings. Meanwhile, arbitra -
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