GEORGIA Law and Practice Contributed by: Lasha Nodia, Giorgi Kekenadze and Ani Akophashvili, Nodia, Urumashvili and Partners
Furthermore, specialised laws provide that specif - ic disputes are also arbitrable. By way of example, employment disputes are arbitrable under the Labour Code of Georgia and disputes arising from or in con - nection with PPP agreements are also arbitrable under the Law of Georgia on Public Private Partnership (the “PPP Law”). Therefore, in addition to the Law of Geor - gia on Arbitration, one must look into specialised laws as well in order to identify whether a dispute can be arbitrable within the jurisdiction of Georgia. Based on court practice, it is generally understood that disputes involving non-pecuniary claims – for example, child custody matters, divorce-related mat - ters (in certain cases), administrative matters, and tax matters ‒ and disputes involving criminal liability will not be arbitrable. Regardless of the foregoing, considering the fact that the Law of Georgia on Arbitration was based on the UNCITRAL Model Law (thereby making Georgia a “Model Law country”), the overall policy and the general approach regarding arbitrability in Georgia is pro-arbitration in nature, unless a public interest is involved. By way of example, even though employ - ment disputes are generally arbitrable, courts have found that disputes in which termination of the employment agreement is challenged based on dis - crimination – which is regulated under a special law (one that favours the person making allegations and shifts the burden of proof onto the defence) – will not be arbitrable. 3.3 National Courts’ Approach When determining the law governing the arbitration agreement, courts rely upon party agreement. Pro - vided that parties have explicitly agreed on such gov - erning law, the court will apply it, unless both parties deviate from it either explicitly or in the course of the proceedings (for instance, if both parties base their reasoning on a law other than that already agreed). In the absence of any explicit agreement on the governing law of the arbitration agreement, Geor - gian courts may consider various factors ‒ such as the governing law of the main contract or the seat of arbitration, as well as any applicable international conventions or treaties ‒ to identify the implied agree -
ment of the parties. In the absence of any such implied agreement, the courts will apply the law of the seat of arbitration. However, in practice, courts may also consider Geor - gian legislation when determining whether the dispute falls under the scope of the arbitration clause. In one case, while deciding whether the dispute fell under the scope of the arbitration agreement, the Supreme Court of Georgia invoked legal principles established under Georgian legislation and established that ‒ as, under Georgian law, a claim for damages is a sec - ondary recourse (ie, can be claimed in the absence or after the termination of the agreement) and as the agreement provided that the claims arising out of the agreement were subject to arbitration – the dispute concerning the claim of damages after termination of the agreement did not fall under the scope of the arbi - tration agreement in accordance with Georgian law. Therefore, it is advisable for parties to clearly specify the governing law of the arbitration agreement in their contracts, in order to avoid any ambiguity or potential disputes in this regard. As a general rule, courts in Georgia uphold arbitration agreements, provided that these agreements comply with the requirements outlined in the Law of Geor - gia on Arbitration in terms of their content and their form. Notably, a 2018 ruling by the Supreme Court of Georgia established that an arbitration agreement can still be enforceable even if it provides that a party “may” apply for arbitration – namely, such choice shall become binding on the parties once one of the parties exercises this option. Moreover, in court proceedings concerning the request of the counterparty to stay court proceedings in favour of arbitration, various district courts have recently relied upon a prima facie review of the arbi - tration agreements and stayed proceedings. However, various district courts may still conduct a de novo review of arbitration agreements and court practice in this regard (ie, as to which standard to apply) currently is not aligned. When it comes to consumer arbitration or arbitration involving a natural person, courts tend to apply stricter standards, both in terms of the agreement’s content
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