23 February, 2012


Judge  Lasha  Kalandadze  is today answering our questions on the details of Arbitration:



NBR – What is the Alternative Dispute Resolution (ADR)? As I understand, it is what we call the Arbitration, isn’t it?

L.K. – Yes, to a certain extent. Arbitration is just one part of it. Briefly explaining, ADR is a set of methods and ways of resolving disputes outside the judicial process. It may be said it is an alternative to a formal court hearing or litigation. The main

purpose of ADR, with a rare exception, is to help disagreeing parties to come to an agreement. ADR has proven very helpful and fruitful in many different types of legal disputes. These include family matters, professional liability cases, personal injury situations, insurance issues, business, commerce, etc. These are mediation, arbitration, negotiation and collaborative law. Conciliation is sometimes included as a fifth category. In Georgia more popular is arbitration, but it should be noted that mediation is about to go into effect in our homeland.

NBR – Could you please explain the meaning and role of arbitration?

L.K. – Arbitration is used for the consideration and resolution of civil cases. It depends on the goodwill and cooperation of parties. Arbitration offers the parties a unique opportunity to select and nominate an arbitrator or a panel of arbitrators in order to submit their dispute for legally binding ruling. According to the functioning law, an arbitrator is independent and free from all sorts of direct or indirect interference or influences while fulfilling his or her duties.

NBR – How about an arbitration agreement?

L.K. – An arbitration agreement is a contract by which parties (two or more persons) agree to submit a dispute to arbitration that has arisen or may arise between them. In compliance with our legislation, an arbitration agreement shall be in writing. It may be concluded in the form of an arbitration clause in a contract or in the form of a separate arbitration agreement.

NBR – Can you briefly provide us with information on arbitration proceedings?

L.K. – I certainly can. The parties before arbitration are treated equally. They are free to agree on the procedure, applicable law, place and language or languages of arbitration. Failing such agreement, arbitration has the power to determine the rules of procedure, the place and the language of arbitration as well as the admissibility, relevance and weight of evidences. I simply wanted to add that the content of statement of a claim and defense are directly determined by law. For example, claimant can state the facts supporting the claim, the points at issue, demands, relief or remedy sought, legal grounds and arguments. Respondent may present his or her defense and position in respect to the claimant’s statements, proposals and claims. In arbitration, cases are usually deliberated on by way of oral hearing, but in the event of agreement between the parties, arbitral proceedings may be conducted on the basis of presented documents and other materials. Thereupon, an arbitral consideration is confidential – not public – unless parties have agreed upon otherwise.

NBR – How about a decision-making process?

L.K. – An arbitrator makes a decision solely. As for a panel of arbitrators, it makes decision by majority of votes of all members. An arbitrator has no capacity to abstain from voting. Parties have opportunity to reach amicable settlement during consideration of a case. An arbitration award shall be made in writing and has to be reasonably corroborated. An award must be signed by the sole arbitrator or all members of the panel of arbitrators. Separate opinion must be attached to the case. Our legislation determines in more details other issues related to additional award, correction and interpretation of award, decision on costs, termination of the proceedings, amicable settlement, etc.

NBR – Are arbitration awards final and binding?

L.K. – No, they are not. According to our legislation in force, an arbitration award may be final and binding after recognition and enforcement by appellate courts of Georgia. This was not the case before January 1st of 2010. Only the introduction of this new law has provided for keeping the arbitration awards within the framework of justice and legality. As a result, recognition and enforcement of an arbitration award shall be refused if appellate court finds out that arbitrator or a panel of arbitrators made ruling through the breach of procedural rule, which had triggered the erroneous award or award is contrary to the public order.

NBR – How about awards of foreign arbitration?

L.K. – Grounds and procedures of recognition and enforcement of foreign arbitration awards are similar. The only difference is that Supreme Court of Georgia is authorized to recognize and enforce these awards. Finely, I want to emphasize that arbitration is a fast, quick, easy and less expensive legal process. Surely, further development and improvement of arbitration in Georgia will help disagreed parties to actively participate in considering their dispute by selecting arbitrators and determining arbitral procedures.


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