GILS Dispute Resolution: Georgia

GEORGIA

CASE №1:

Decision #AS-186-2020 of the Supreme Court of Georgia from December 2022 

GRATA International client (hereinafter "Appellant" or "Company") is a locally incorporated entity with participation by foreign citizens R.W. holding 89% shares in the Company and H.G. (hereinafter "Defendant") holding 11% shares in the Company. 

Defendant filed a motion on 05.03.2015 with the City Court of Tbilisi for applying interim measures prior filing the claim against R.W. With effect from 06.03.2015, the said motion was satisfied, the Company was banned to alienate its immovable property and R.W. was restricted to execute his shareholder rights on the General Meeting of shareholders. 

As there was a shareholder agreement with an arbitration clause in it, the Tbilisi City Court suspended the dispute due to lack of jurisdiction. 

Later the Company filed the claim against the Defendant to compensate the damages caused by the interim measures applied to the Company immovable property. 

The case was precedential for the Supreme Court of Georgia as it interpreted Article 199.3 of the Civil Procedural Code of Georgia widely providing a ground not only to the claims on compensation of damage caused by dismissal of those claims under which the interim measures were introduced, but also to the following cases: 

• Suspension of a case due to lack of jurisdiction as parties agreed on arbitration.
• Dismissal of claim by a claimant.
• Withdrawal of claim by a claimant. 

The Supreme Court of Georgia also indicated that in case of "procedural good faith" violation a ground for claim for compensation of damage caused by an interim measure is Article 992 of the Civil Code of Georgia stating that "a person who unlawfully, intentionally or negligently causes damage to another person shall compensate the damage to the injured party".

GRATA International Georgia.