LCIA Arbitration Through the Lens of Georgian Law
The LCIA — the London Court of International Arbitration — is one of the best-known arbitral institutions in international business, and parties to major transactions often choose it in their contracts. The Georgian Law on Arbitration deals with this choice expressly: an agreement of the parties on a specific arbitral institution comprises an agreement on the rules of that same institution. Naming the LCIA in a contract therefore determines not only the institution but also its rules — the clause itself incorporates those rules, and the parties do not need to draft a separate procedural regulation.
The law at the same time provides that parties may agree on the rules of arbitral proceedings, and such an agreement covers the rules the parties indicate in the arbitration agreement. For Georgian counterparties this means that choosing the LCIA works fully within the framework of Georgian law: the hearing proceeds under the chosen institution’s rules, while the general framework of the arbitral relationship — including the seat of the arbitration and the language of the proceedings — is resolved in the manner the law prescribes.
Seat of the Arbitration: Who Determines It and Why It Matters
Under the law, the place of the arbitral proceedings is determined by agreement of the parties. In an LCIA clause you may designate the seat directly — including Georgia — and thereby know in advance which legal environment surrounds the hearing. Where there is no agreement of the parties, the seat is determined by the arbitration, taking into account the circumstances of the case and how convenient that place is for the parties.
It is important to distinguish the legal seat of the arbitration from the physical location of sittings: the arbitration may convene a meeting at any place for consultations among the arbitrators, for hearing witnesses, experts or the parties, or for examining evidence, unless the parties have agreed otherwise. The legal “seat” is therefore fixed by the clause, while hearings may be held in different cities according to the parties’ convenience.
Language of the Proceedings: How It Is Chosen and What It Covers
The parties may determine the language or languages of the arbitral proceedings — and in an international transaction this is one of the first decisions worth making deliberately. Absent an agreement, the language of the proceedings is determined by the arbitration, taking due account of all relevant circumstances, including the language of the contract. For a dispute arising from a Georgian-language contract this means that the contract language will necessarily be taken into account when the decision is made.
An agreement of the parties or a decision of the arbitration on language also applies to any written statement of the parties, oral hearings, the final arbitral award, determinations and any other document used in the proceedings. The arbitration may further decide that any documentary evidence must be accompanied by a translation into the language of the proceedings. A party submitting Georgian documents should plan for this in advance — translation time and cost are part of preparing the case.
How an LCIA Clause Works Together with Georgian Law
In international practice an LCIA hearing proceeds under the institution’s rules, and Georgian law respects that choice: as noted above, an agreement on a specific institution is in itself an agreement on its rules. What matters for the parties is therefore clarity of drafting: the name of the institution must be stated precisely, because it is this reference that attaches the rules under which the hearing will be conducted.
An arbitral award issued in Georgia is enforced under the enforcement procedure established by law, while the recognition and enforcement of an award made outside Georgia follow their own statutory route. A party choosing the LCIA should think this final stage through in advance: enforcement of the award moves under the law of the country where performance will be needed, and at that stage parties often need the assistance of a legal professional.
Frequently Asked Questions
Below are answers to the questions that arise most often for Georgian businesses using an LCIA clause.
Does an LCIA clause make sense if the contract is governed by Georgian law?
Yes. Naming the institution is an agreement in the eyes of the law and it comprises that institution’s rules. The substantive law of the contract and the procedural rules of the hearing do not exclude each other — these are two different decisions, both of which the clause may freely set.
What happens if the parties do not determine the seat?
Absent an agreement, the seat is determined by the arbitration, taking into account the circumstances of the case and its convenience for the parties. Stating the seat directly in the clause removes this uncertainty in advance.
May a sitting be held outside the seat of the arbitration?
Yes. The arbitration may convene a meeting at any place — for consultations, for hearing witnesses, experts or the parties, or for examining evidence — unless the parties have agreed otherwise.
In which language does the hearing proceed, and what happens to Georgian documents?
The parties determine the language; absent an agreement it is set by the arbitration, taking the contract language into account among other circumstances. The arbitration may require documentary evidence to be accompanied by a translation into the language of the proceedings, so plan the translation of Georgian documents in advance.
How We Help on Legal.ge
The Legal.ge team helps Georgian businesses make deliberate use of an LCIA clause: we advise on the wording that, in the eyes of the law, unambiguously incorporates the chosen institution’s rules, discuss the appropriate choice of seat and language of the proceedings, and guide the preparation of documents, including planning for translations. If your existing contract contains an LCIA clause or you are considering adding one, contact us — we will review your situation and propose concrete decisions.