The FINANCIAL — Since the adoption of a model legal framework ten years ago, Georgia has set the precedents and trained the skilled cadre needed to make arbitration a viable means for commercial dispute resolution. The challenge now is to win the confidence of the business sector. These were the conclusions of a discussion organised by the Georgian Association of Arbitrators (GAA) with the support of the United Nations Development Programme (UNDP) and the European Union (EU).
In adopting its Law on Arbitration in 2010, Georgia followed international best practices. The legislation is based on the Model Law on International Commercial Arbitration, which was designed by the UN Commission on International Trade Law (UNCITRAL).
“Since establishing a legal framework for arbitration, Georgia has made steady progress in establishing arbitration as a profession,” said UNDP Head Louisa Vinton. “Now it is important to build on these reforms by showing businesses that arbitration is an efficient and fair way to settle commercial disputes.”
“Arbitration has come a long way since 2010,” said GAA Chair Sophie Tkemaladze. “The next step is to increase the professional qualifications of Georgian arbitrators, raise awareness and trust of the private sector in this mechanism and promote Georgia as a seat for regional and international dispute resolution.”
The GAA was established in 2013 to accelerate the development of both international and domestic arbitration in Georgia. The GAA adopted a Code of Ethics in 2014; rules for disciplinary proceedings took force in 2018; and four leading arbitration institutions signed a memorandum earlier in 2020 agreeing to adhere to professional standards and norms of ethical behaviour.
With the EU and UNDP support, Georgian arbitration centres resolved more business-to-business (B2B) cases and universities introduced academic programmes in arbitration, allowing students to take part in international educational initiatives, including international arbitration moot courts.
Since 2015, Georgia has hosted an annual international conference – GIAC Arbitration Days in Tbilisi – aiming to provide an exchange and networking forum for arbitrators from all over the world.
“Providing credible alternatives for resolving disputes helps to improve the business environment and encourage foreign investment,” said Catalin Gherman, Deputy Head of Cooperation at the EU Delegation to Georgia. “The EU is supporting the development of Alternative Dispute Resolution – arbitration and mediation – in Georgia to ensure easy and diverse access to justice for citizens and commercial companies and protect their civil and economic interests.”
The anniversary discussion was also attended by UNCITRAL Secretary Anna Joubin-Bret, Supreme Court Justice Mzia Todua and Head of the Legislative Department of Georgia’s Ministry of Justice Irina Tsakadze.
Despite evident progress, Georgian businesses still lack awareness about arbitration as a form of alternative dispute resolution. A recent survey commissioned by the EU and UNDP shows that over 50 percent of Georgian companies have never heard of arbitration. However, 90 percent of those who have used arbitration assess it positively. And once the concept of arbitration was explained to them, more than half of the companies surveyed said that they would choose arbitration over going to court.
The EU and UNDP have been supporting mediation and arbitration in Georgia since 2016. This assistance is part of the EU’s wider programmes, EU4Justice and EU4Business, contributing to justice reforms and private sector development in Georgia.