Georgia
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
Yes. In Georgia there are means of resolving commercial disputes without litigating, namely (1) dispute resolution in the National Bureau of Enforcement, (2) mediation by a notary and (3) for tax disputes, review in the system of the Ministry of Finance of Georgia.
Dispute resolution in the National Bureau of Enforcement
The National Bureau of Enforcement conducts simplified proceedings in relation to claims for payment of monetary debts.
Simplified proceedings are not allowed if the filing of the claim depends on an unfulfilled counter-obligation.
Simplified proceedings in the National Bureau of Enforcement are available, even when the parties have agreed and stipulated different rules for the consideration and resolution of the dispute by contract, except in cases where the contract provides for the consideration of the dispute by arbitration.
To use the simplified proceedings service, the applicant must submit an application to the National Bureau of Enforcement with documentation proving the existence of the debt.
After accepting the application for consideration, the National Bureau of Enforcement will directly forward the notification to the debtor party (respondent).
Within 10 calendar days of receiving the notification, the respondent may take one of the following actions:
- to fully cover the debt owed to the applicant;
- to cover part of the debt if it considers the claim to be partially valid;
- to file a written protest against the applicant’s claim if it does not agree with the claim;
- to acknowledge the claim in full in writing if it considers the claim to be valid;
- to acknowledge part of the claim in writing if it considers the claim to be partially valid;
- to submit a statement of settlement offer if it wishes to agree with the applicant on the terms of payment.
The fee for an application submitted on one legal basis is fixed and amounts to 200 (two hundred) GEL.
In the event of a written protest by the respondent against the applicant’s claim, the proceedings will not continue and the applicant is entitled to apply to the General Court to resolve the dispute.
The legal basis for the simplified dispute resolution procedure in the National Bureau of Enforcement is the Law of Georgia on Enforcement Proceedings.
Notary mediation
A notary may act as a mediator between disputing parties:\
(a) in family legal disputes (except for adoption, annulment of adoption, restriction of parental rights and deprivation of parental rights);
(b) in inheritance legal disputes;
(c) in neighborhood legal disputes;
(d) in any other dispute, unless the Georgian legislation provides for a special procedure for conducting mediation in such a dispute.
Mediation with the participation of a notary may be carried out with the consent of the disputing parties.
The mediation process may be conducted both in a notary office and outside it.
In the event of a party’s failure to fulfill an obligation established by the settlement concluded within the framework of notarial mediation, compulsory enforcement shall be carried out on the basis of an enforcement order issued by a notary, in accordance with the procedure established by the Law of Georgia on Enforcement Proceedings.
The legal basis for the consideration of a dispute through notarial mediation is the Law of Georgia on Notaries.
Tax dispute review
A tax dispute may be reviewed in the system of the Ministry of Finance of Georgia and in court.
At any stage of a tax dispute reviewed in the system of the Ministry of Finance of Georgia, the complainant has the right to appeal to court.
In the system of the Ministry of Finance of Georgia, the tax dispute review bodies are the Revenue Service and the Dispute Review Board under the Ministry of Finance of Georgia (hereinafter referred to as the Dispute Review Bodies).
In the system of the Ministry of Finance of Georgia, a tax dispute is a two stage process and begins with the submission of a complaint to the Revenue Service.
The decision of the Revenue Service Dispute Review Board may be appealed to the Dispute Review Board of the Ministry of Finance or directly to the court, while the decision of the Dispute Review Board of the Ministry of Finance may be appealed only to the court.
The legal basis for the consideration of tax disputes within the Ministry of Finance system is the Tax Code of Georgia.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
Engaging in ADR does have an effect on the litigation as it is not permissible to simultaneously litigate a dispute on the same subject in court and out of court. If that happens, the court, upon the application of a party or on its own initiative, will leave the claim unconsidered. In the event that the parties have concluded an agreement, or there is an agreement between the parties to refer the dispute to arbitration for resolution, the court shall terminate the proceedings on the basis of an application by one of the parties.
The National Bureau of Enforcement will return the application for payment of the debt to the applicant if:
(a) the case is pending in court between the same parties, on the same subject and on the same grounds;
(b) there is a court decision in relation to the same case, as well as a decision or ruling on the renouncement of the claim by the plaintiff, recognition of the claim by the defendant or approval of the settlement of the parties;
(c) there is an order of the Chairman of the National Bureau of Enforcement on the payment of the debt or on the approval of the terms of the settlement or a decision on the refusal to issue an order on the payment of the debt in relation to the same case.
The use of an alternative dispute resolution procedure interrupts the running of the limitation period, since that process is considered as an attempt to satisfy the claim by another, alternative means and the implementation of an enforcement action for this purpose. Accordingly, the running of the limitation period will be interrupted from the date of acceptance of the application for proceedings.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
The use of ADR is not mandatory. As far as we are aware, there are no plans to change this..
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes but only in the case of an agreement to arbitrate is it mandatory. Agreements in relation to other alternative dispute resolution mechanisms depend on the consent of both parties, since despite a contractual stipulation, an interested party can always apply to the court.
When does ADR generally take place?
Alternative dispute resolution is used when the disputing parties express their consent.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
The process of resolving disputes through alternative dispute means is not public. For example, the progress of a dispute reviewed by the Enforcement Bureau is reflected in the electronic register of this body, but access to it is generally only available to the parties involved in the dispute and the Bureau itself. Similarly, access to the data of the archive of the Notary Bureau, (where notarial mediation materials are reflected), is limited and can only be accessed by the parties involved in the case.
Does the output from ADR create precedents?
Alternative dispute resolution decisions do not have precedential value.
Who bears the costs of ADR?
The initial costs of the ADR process are borne by the applying party. Ultimately, the costs are borne by the party against whom the decision is made in proportion to the unsatisfied claim.
Is your jurisdiction subject to any specific rules for cross border ADR?
There are no special rules for cross border ADR in Georgian jurisdiction.
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
There are certain qualification requirements for the person conducting the alternative dispute resolution process. For example, a notary must have a higher legal education, must have passed the notary qualification exam and must have completed an internship at the Training Center of the Chamber of Notaries.
The dispute resolution process in the National Bureau of Enforcement is carried out under the leadership of the Chairman of the Bureau and, after completing the procedures established by law, provides for the issuance of an order by the Chairman of the Bureau on the payment of the debt.
The composition of the Dispute Resolution Board at the Ministry of Finance of Georgia is determined by the Government of Georgia.
The dispute resolution bodies have regulations approved by the Government of Georgia, which determine the procedure for reviewing complaints and interacting with the authors of complaints.
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