Arbitrage Court on Agenda
21 March, 2013
Arbitrage Court on Agenda
Creation of arbitrage court and business house is initiated by the Chamber of Trade and Commerce of Georgia. Kakha Baindurashvili, Head of the Chamber trumpeted the idea during his meeting with the government and business community on March 15, 2013.
According to Baindurashvili, this year the Chamber undertakes a new strategy of cooperation with business and plans to set up kind of “business house” and business-incubatories. The business house is expected to provide each Georgian company by full package of
necessary services. On the other hand, the Chamber will cooperate with the justice ministry to set up the court of arbitrage anxiously desired by Georgian business for a long time. There was an attempt to create a court of arbitrage with the Revenue Service handling with taxation disputes after Rose-revolution, however as soon as the court settled several cases in favor of business the ex-power canceled the court as found it dangerous to the state interests. As a consequence, the state used to win the majority of tax-related disputes through the Dispute Council of Revenue Service as well as other business-related cases discussed by civil courts been completely controlled by the ex-power.
Soso Archcadze, an economic analyst greets the idea to set up a separate court of arbitrage handling with all kinds of business-related disputes as far as this mechanism is more flexible and respectful form of business relationship probated worldwide as the best practice shows. On the other hand it discharges court from piling business cases.
Ditrikh Muller, a co-founder of Georgian Investment Group, finds the idea of creation of the court of arbitrage in Georgia a little bit premature unless the entire court system is reformed and a trust toward the court restored.
“The court of arbitrage will not work in Georgia before the trust toward the court system is regained. Besides, it will be only for local companies as far as foreign businessmen operating in Georgia will never go to Georgian court of arbitrage. They always put in contracts a provision that in case of disputes sides should go to international court of arbitrage in London mainly as they have no trust to Georgian judiciary system. Besides, the arbitrage is more vulnerable to the corruption deals and outside pressure than civil courts,” Muller elaborated. “Let’s restore the trust toward the court system first and adopt the arbitrage court only afterwards.”
Archvadze plays down the risks of the possible corruption deals at the arbitrage court as disputing companies go there based only on mutual agreement. He finds arbitrage completely realistic to Georgian reality at the moment due to changed political situation. Besides, this system is more profitable to business.
“Court of arbitrage saves time and commensurately money to business as far as time is one of the most important things to companies. Cases that may linger for a year at civil courts may be settled within a month and earlier or end up by agreement without any court procedures if businesses come to consensus,” Archvadze said. “This enables business to use the saved money for reinvestment and growth.”
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