LAW OF GEORGIA
ON PRIVATE ARBITRATION
Chapter I
General Provisions
Article 1.
A civil dispute which has arisen between persons shall, in agreement of the parties proper,
be submitted for the consideration to the permanent or created for this dispute temporary
private arbitration (hereinafter arbitration).
An agreement for submitting a dispute to the arbitration (the arbitration agreement) shall
be made in writing.
Article 2.
The arbitration agreement shall include: the names, the places of residence or legal
addresses of the parties; the subject-matter of the dispute; the date and place of the
agreement.
Article 3.
If during the arbitrage proceedings a criminal case has been initiated on the matter which
is the subject of the dispute and which may influence the outcome of the proceedings, on
the basis of the Court's decision arbitration shall not be deemed to be conducted.
Article 4.
If an arbitration agreement is the part of the agreement concluded between the parties, the
arbitrage award on invalidation of the agreement shall not invalidate the arbitration
agreement by force of law.
Article 5.
The death or liquidation of a party shall not cause the termination of the arbitration
agreement or replacement of the already appointed arbitrator, unless the parties have
agreed otherwise.
Article 6.
A party's claim or a request of the arbitration, on matters defined by this Law, shall be
considered by a district (city) court on whose territory the arbitrage proceedings are taking
place.
Article 7.
The permanent arbitration shall conduct its activities after registration according to the
rules established by the Law of Georgia On Entrepreneurs.
Each permanent arbitration shall before commencing its activity adopt and publish through
the Mass Media statute containing the rules of appointment of the arbitration and conduct
of the arbitrage proceedings.
Chapter II
Establishment of Arbitration
Article 8.
A citizen of Georgia, a stateless person or a foreign national may be appointed as an
arbitrator. A person shall not be appointed as arbitrator if he/she is: a person with lack
of dispositive legal capacity or with a limited dispositive legal capacity; a political
official or state employee; a person convicted for committing a deliberate crime; one
of the party's or his/her representative's spouse, child, mother, father, sister or brother.
A person's shall give consent to his appointment to the office of arbitration in writing.
Article 9.
Arbitration shall be composed of one or several arbitrators. The number of arbitrators and
the rules of their appointment shall be defined by the parties. The parties shall appoint an
equal number of arbitrators. An arbitration agreement shall not be valid if it gives one of
the parties a privileged position with regard to the appointment of arbitrators. The number
of arbitrators shall not be even. If the arbitration agreement provides for an even number of
arbitrators, an additional arbitrator shall be appointed within five days of the establishment
of arbitration. If the parties have not settled the number of arbitrators themselves, the
arbitration shall be composed of three arbitrators.
If the parties do not specify the procedure of appointment of arbitrators themselves, the
parties shall under the rule defined in this Law appoint an equal number of arbitrators, and
an additional arbitrator shall be appointed by already appointed arbitrators.
If the parties and the permanent arbitration do not agree otherwise, the number of
arbitrators and a method of their appointment shall be defined by the permanent arbitration
in accordance with its statute.
Article 10
A party may delegate the right to appoint an arbitrator to a third person.
Article 11
Each party shall appoint an arbitrator within the period defined in the agreement. Where
the period has not been defined, the party shall appoint an arbitrator within ten days after
the receiving of the demand of other party.
If the party or arbitration has not appointed the arbitrator within the period defined by the
agreement or law, at the request of either party the judicial authority shall appoint an
arbitrator within five days. The judicial authority's decision on the appointment of
arbitrator shall be final and shall not be subject to appeal.
Article 12
A party has no right to replace an arbitrator appointed by him, unless the parties have
agreed otherwise.
Article 13
Where the appointed arbitrators are more that one in number, they shall appoint one of
themselves to be chairman of arbitrator.
The arbitration shall appoint the chairman of arbitration within five days after the
establishment of the arbitration or at the first meeting of the arbitration, unless the parties
have agreed otherwise.
Article 14
If the arbitrator is replaced, a new arbitrator shall be appointed in accordance with the
same procedure governing the appointment of the replaced arbitrator.
Article 15
A party has the right to demand replacement of an arbitrator if there exists the grounds
indicated in paragraph 2 of Article 8 of this Law or other grounds which give rise to
reasonable doubts with regard to the arbitrator's impartiality or independence, or if the
arbitrator does not know the language of the proceedings or lacks competence defined by
the parties by the agreement. A party has the right to challenge an arbitrator appointed by
him only on a ground of which the party becomes aware after the appointment.
A person appointed as an arbitrator shall give notice to the parties and the arbitration on
the existence of the circumstances which may give rise doubt on his impartiality and
independence. The challenge procedure shall be defined by the agreement of the parties.
Unless there is not an appropriate agreement between the parties, the party who intends
challenging of an arbitrator shall submit a statement of challenge in writing within 10 days
from the appointment of this arbitrator or from the date on which he/she becomes aware of
the ground of challenge. The statement shall state the reasons of challenge.
If the arbitrator, on whom the matter of challenge has been arisen, has not resigned, or if
the other party objects his/her resignation, the matter of challenge shall be decided by the
arbitration.
Article 16
If an arbitrator cannot perform his office, he/she may be replaced at his own or either
party's request by the arbitration or by mutual agreement of the parties.
The arbitration shall at the arbitrator's request decide on his/her resignation only if
there is any reasonable ground.
The award of arbitration envisaged in paragraphs I and 2 of this Article may be recoursed
before the Judiciary.
The judicial authority's decision on the arbitrator's removal from office shall be final and
shall not be subject to recourse.
Chapter III
Arbitrage Proceedings
Article 17
The ground for commencing the consideration of a dispute between the parties (the
arbitrage proceedings) is a party's arbitrage claim, which shall be delivered to the other
party and the chairman of the arbitration, or to all the appointed arbitrators where the
chairman of the arbitration has not been appointed yet. The arbitrage proceedings shall
commence within 10 days after the arbitrage claim has been presented before the
arbitration. If, in presenting the arbitrage claim, the composition of the arbitration has not
been yet formed, the arbitrage proceedings shall commence within 10 days after all the
arbitrators have been appointed, unless the parties have agreed otherwise.
Article 18
The rules of the arbitrage procedure shall be defined by the parties. If the parties
disagree on the rules of the arbitrage procedure, the dispute shall be decided under the
procedure established by the arbitration.
A dispute in the permanent arbitration shall be decided in accordance with its statute,
unless the parties and the permanent arbitration have agreed otherwise.
Article 19
Each party shall have the right to be represented by a defender (an advocate) at any stage
of the arbitrage proceedings.
Article 20
The arbitration shall notify the parties in writing on the date and place of each meeting in
advance of 5 days at least, unless the parties established otherwise.
The written notice shall be deemed to be received if handed to the addressee personally or
at his/her permanent place of residence or at his/her legal address. The arbitration shall
deliver to the party the copies of all statements, documents, requests and other information
of another party within two days of their receipt, unless the parties have agreed otherwise.
Article 21
The arbitration may voluntarily interrogate witnesses and request the presentation of
evidence, unless the parties have provided otherwise. If a witness's voluntary appearance
or presenting of evidence is impossible, the arbitration shall be authorized to refer to the
judicial authority on the appearance of the witness or requesting of evidence. The rights
and duties of a witness summoned shall be specified in accordance with the legislation of
Georgia on Civil Procedure.
Article 22
The arbitration may at a party's request appoint one or several experts on specific issues of
the case, unless the parties have provided otherwise. The refusal of arbitration to appoint
an expert shall be substantiated. The arbitration shall appoint an expert if so requested by
the parties. A party shall, where appropriate decision of arbitration exists, present the
expert all available information, objects and documents relating to the case, unless the
parties have agreed otherwise. The expert's report shall not be binding upon the arbitration,
unless the parties have agreed otherwise.
Article 23
The arbitration shall on own initiative or at a party's request appeal to the judiciary
authority to make decision for providing of evidence.
Article 24
The arbitrage meetings shall be closed, unless the parties have agreed otherwise.
The arbitrage proceedings shall be conducted orally, unless the parties have agreed
otherwise.
Article 25
The arbitrage proceedings shall be conducted on the basis of equality of the parties. The
arbitration shall not decide a dispute without having heard the explanations of the parties,
except the case where a party evades the appearance before the arbitration for giving the
explanations, unless the parties have agreed otherwise.
Article 26
If without a justified reason, a party does not appear or does not present his case within the
period defined by the parties, the arbitration may consider the dispute and make an award,
unless the other party requests postponement of the examination of the case.
Article 27
An arbitrator shall keep information obtained during the arbitrage proceedings
confidential, unless the parties have agreed otherwise.
Article 28
If any provision of this Law, from which the parties may deviate, or any requirement of the
arbitration agreement were not observed, and yet the party continues to participate in the
arbitrage proceedings without immediately objecting in writing or within the defined
period, if any, the party shall be deemed to challenge his/her right to object.
Article 29
The place of the arbitrage proceedings shall be defined by an agreement of the parties. In
there is no such agreement of parties, the place of the arbitration proceeding shall be the
place of the arbitrage agreement.
Unless the parties have agreed otherwise, the arbitration may meet at any place for holding
consultations with the members, hearing out the witnesses, experts or the parties, for
examining evidence.
Article 30
The judicial authority shall have no right to consider a dispute on the issue that is the
subject of an arbitration agreement, except the case where the parties request the dispute to
be considered by judicial authority, or if the judicial authority finds that the arbitration
agreement is not valid or has terminated. A appeal to the judicial authority for invalidation
of the arbitrage agreement shall not imply termination of the arbitrage proceedings or
enforcement of an arbitrage award.
Article 31
The date on which the arbitrage award is made shall be defined under agreement of the
parties. If the parties do not define the date on which the award is made, the arbitrage
award shall be made within one month from the date of the commencement of arbitrage
proceedings.
If the award is not made within the defined period, the arbitrator shall resign, unless the
parties have agreed otherwise. In such case the parties shall within 10 days appoint new
arbitrators. If the arbitration established on the basis of paragraph three of this Article fails
to make an award within the defined period, the arbitration agreement shall be annulled,
unless the parties have agreed otherwise.
Article 32
The arbitration or a party may request the judicial authority for the assistance in
gathering of evidence. The judicial authority shall comply with this request within its
jurisdiction and in accordance with the rules established for gathering of evidence.
Article 33
The parties shall be entitled to settle the dispute at any stage of the arbitrage proceedings.
The arbitration shall make a decision on the termination of the arbitrage proceedings
within 3 days from the date on which the parties have applied for a settlement.
Article 34
The arbitration composed of more than one arbitrators shall make awards by a majority of
the arbitrators voting, unless the parties have agreed otherwise. An arbitrator may not
abstain from voting, unless the parties have agreed otherwise.
Article 35
An arbitrage award shall be set down in writing and shall contain: the date and place of
making the award and the composition of the arbitration; the arbitration agreement on
which basis the arbitration was acted; all the parties of the dispute; the subject-matter of
the dispute; the motivation part stating the opinions on the basis of which the arbitration
has made an award, except the case where the arbitration agreement directly defines non -
existence of such a motivation part; the arbitrage award; the term of the enforcement of
award.
Article 36
An arbitrage award shall be signed by all the arbitrators. If an arbitrator refuses to sign the
arbitration agreement, this fact shall be recorded in the award. An arbitrage award shall be
notarized.
A copy of the arbitrage award shall be given to each party and the district (city) court
within whose jurisdiction the arbitration took place.
An arbitrage award shall be binding upon the parties; An arbitrage award shall not put any
liability to a third person.
Article 37
A decision on the distribution of the expenses of the arbitrage proceedings between the
parties shall be made by the arbitration, unless the parties have agreed otherwise.
Article 38
The parties may agree the case to be reviewed by other arbitration. The review shall be
made within 30 days, unless the parties have provided otherwise.
Article 39
The permanent arbitration shall keep the award within 20 years from the date of its
making. After the temporary arbitration has completed the conduct of the proceedings, the
entire arbitrage proceedings shall be given for keeping to the district (city) court within
whose jurisdiction the arbitration took place.
Chapter IV
Recourse Against Award and Enforcement of award
Article 40
In the case of existence of an appropriate agreement between the parties, a party may, for
the purpose of a more precise definition of the contents of any provision of the award,
request the arbitration to interpret any part of the award.
The arbitration shall, within 30 days from receipt of a request for interpretation, give an
interpretation or make a decision to refuse interpreting. An arbitrage award's interpretation
shall form part of the award, unless the parties have agreed otherwise.
Article 41
A party shall be authorized to request the arbitration to correct a mistake made in the
calculation given in arbitrage award, as well as its written, printed or any similar mistake,
unless the parties have provided otherwise.
Article 42
An arbitrage award which has not been executed voluntarily shall be enforced on
the basis of the enforcement inscription on the coming into force of arbitrage award
made by the chairman of the arbitration.
The chairman of arbitration shall make the enforcement inscription either on his/her own
initiative or on the basis of the request of the arbitration or a party within 5 days from
submission of such a request to him/her.
Upon making of an enforcement inscription, an arbitrage award shall be enforced
according to the rules defined by the legislation of civil procedure.
Article 43
An arbitrage award may be contested before a judicial authority and may be changed only
if: it contradicts the Code of administrative Offences and the criminal legislation; the
arbitration has violated the rules of the arbitrage procedure established under agreement of
the parties and the present Law;
an arbitrator has committed an act provided for in Article 189 of the Criminal Code of
Georgia that is decided by the judgement entered into legal force, except the case where it
has not influenced the making of the arbitrage award.
Article 44
In the case of recourse against the award the enforcement of arbitrage award shall not be
suspended. A district (city) court shall be authorized to suspend enforcement of the
recourse arbitrage award if it may cause an irremediable damage to a party.
Chapter V
Final Provisions
Article 45
This Law shall be come into force upon its publication.
President of Georgia
Eduard Shevardnadze
Tbilisi,
17 April ,1997