Court-Free Handling of Credit Disputes Poses Swindle Risks
26 July, 2012
Court-Free Handling of Credit Disputes Poses Swindle Risks

The recently adopted time-and-cost-saving summary proceedings of the National Bureau of Enforcement (NBE) mandating the NBE to solve the unpaid credit disputes bypassing court procedures is supposed to discharge the overloaded courts but pose swindle risks.  

 

“Is anybody facing monetary commitment to you? A new service launched by the NBE of Georgia - summary proceedings - enables citizens to solve the disputes referring to monetary commitment without any legal procedure swiftly and cost savingly,” the NBE web-site elaborates the essence

of its new service enforced since May 22, 2012.

The sector pundits say the summery proceedings was adopted in  order to help financial institutions  to levy unpaid loans as well as discharge the overloaded court from minor and less complicated cases. Some experts fear swift settling of financial disputes bypassing long-term court procedures may unleash cheating schemes thanks to legislative loopholes rather than be helpful to discomforted creditors and courts.

The new service gives an opportunity to solve the insolvency cases without any court procedures within 10 calendar days [or a little bit more] after the NBE hands in the notification to the defendant that its creditor registered an application on the debt clearance at NBE thus sparing creditors from expensive and long-term court litigations. This form of proceedings is applicable to the monetary commitments with obvious evidence of the debt namely, an agreement, a receipt or a compare act not obliged to fulfill any responsive liability.

The NBG is responsible for handing a notification to a debtor informing about the feasible negative impacts of ignoring to pay the due and possible legal actions. After handing in the notification the countdown start ticking and within 10 days the defendant must either acknowledge the due in which case the summery proceedings start and the NBE swiftly draws its decision, or disclaim the liability in which case the summary proceedings stop and the case can be solved only through court. If a defendant keeps silence it will be assessed as consent and the summary proceedings will go ahead. The proceeding mandates the NBE to arrest the debtor’s property/banking accounts if required in pursuance with Georgian law without court decision.

According to Beka Dochviri, a lawyer with Georgian Young Lawyers’ Association, this mechanism seems to be a solution to both legal and physical entities to raise unpaid loans from swindlers who take loans and disappear ultimately abroad – this kind of practice is quite familiar in Georgia especially after the financial crisis of 2008 when insolvency increased.

“Court can be discharged from these kinds of cases and creditors be able to get their money back at last without chasing hidden debtors all around and bypassing tiresome and expensive court procedures,” Dochviri said in the interview with Georgian Journal. Although he fears that the inexperienced NBE judges unlike court judges can be less competent and draw out irrelevant decisions.

Ditrikh Muller, a legal and economic analyst with Georgian Investment Group, fears that the much trumpeted swiftness of summary proceedings may give a carte-blanche to cheating and black raid [misappropriation of others property through faked paper-work and machinations].

The point is that law includes a certain loophole: according to law, the notification is assessed handed for sure if either the defendant itself or his/her family member signs the notification receipt [that is sent back to court]. Therefore if a swindler knows that the defendant is not at home it may crackdown on family members to sign the notification thus depriving the opposite side to attend the hearing. However court delays hearings at least three times in case if defendant does not show up while the NBE simple proceedings settle the case immediately even if the other side is absent.

Muller presumes that this swift proceeding may lead to following scheming: a black raider may target on a certain wealthy person who is in prison or abroad, draw a fake liability note on loan or stake at company and appeal the NBE summary proceedings. Since the targeted victim is not at home a swindler may crackdown on the family members, or just deceive them to sign the NBE notification and since the unaware defendant cannot appear at the hearing the NBE will settle for the swindler and deprive the victim of its property consequently.

“The court delays for several times if the defendant does not appear and other procedures may take approximately 3-4 months that is a protective mechanism within itself, while the NBE decision drawn in about 10 days makes people vulnerable to swindling.  A swindler can sell out the misappropriated property/money and run abroad in a blink of the eye till the scheme is transcripted,” Muller elaborated and exemplified one case from his practice when court saved one person whose companion planned to seize the client’s company stakes. To mislead the court that companion gave incorrect address of that person in order to prevent him to appear at court, but court delayed hearings several times and at last found out the real address and that guy escaped the swindling.

The NBE explains that summary proceedings have been successfully implemented in many countries worldwide and that the Georgian version is based on the Swedish and French experiences and the interests of Georgian society are taken into account. But Muller argues that the mentality of Georgian and developed European countries differ very much and expects swindlers will take an advantage out of the novelty.

“This so called time-cost-saving summary proceedings is a disastrous thing to me that will deteriorate the investment climate and beget black raid leading to economic holocaust,” Muller said. “Maybe the simpler proceedings will help financial institutions to levy money from few debtors but not from key cheaters who are already safe abroad. I believe more innocent people will suffer and more cheaters will proliferate eventually,” Muller regrets.

Print
Other Stories
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
PHOTO OF THE DAY

Exchange Rates
GEL Exchange Rate
Convertor
20.01.2019
21.01.2019
USD
1
USD
2.6629
2.6629
EUR
1
EUR
3.0368
3.0368
GBP
1
GBP
3.4463
3.4463
RUB
100
RUB
4.0103
4.0103
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6629
EUR
1
EUR
3.0368
GBP
1
GBP
3.4463
RUB
100
RUB
4.0103
January 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31