A Mareva injunction — the common-law freezing order that bars a respondent from dissipating assets before judgment — does not exist under that name in Georgian law. Georgia's Civil Procedure Code performs the same function through security-of-claim measures, above all seizure of the respondent's property, securities and monetary funds wherever they are held, including with third persons. This page explains how that mechanism works under Articles 191, 192, 198 and 199 of the Code.
Grounds for applying the measure
Under the first part of Article 191, the claimant applies to the court with a statement indicating the circumstances by which the failure to apply a security measure will impede or make impossible the enforcement of the judgment or the exercise of the violated or disputed right, or will cause irreparable and direct damage, or damage that cannot be compensated by imposing compensation on the respondent. The application must also justify which specific measure the claimant considers necessary.
The application of the measure rests on the court's presumption that the claim may be satisfied — a presumption that does not pre-decide the merits and has no effect on the final decision. Where seizure of immovable property is requested, the application must be accompanied by a public-registry extract or a document confirming the respondent's ownership; if it is missing, or the state fee unpaid, the court grants a cure deadline and otherwise leaves the application unexamined.
The catalogue of freezing measures
Under the second part of Article 198, the court chooses the measure according to the claimant's request: seizure of the respondent's property, securities or monetary funds, wherever held — with the respondent or with third persons; prohibition of defined acts by the respondent; sequestration — compulsory administration of property; a prohibition addressed to third persons to transfer property to the respondent or perform obligations towards him; suspension of realisation where a claim for release from seizure has been brought; and suspension of the operation of a disputed act of a state or municipal organ.
For sequestration, the Constitutional Court's decision of 30 September 2016 declared unconstitutional the normative content that allowed the measure where the protected good did not exceed the damage inflicted on the opposing party. Where necessary, the court may apply other measures too and allow several types of security simultaneously. There are statutory boundaries: the measures do not extend to financial collateral, to certain prize funds and to other protected assets, and, on the basis of a National Bank directive, they are not applied against a bank in a resolution regime and applied measures are suspended for a period not exceeding 90 days.
Application before the claim is filed
Article 192 contemplates the urgent case: an application for security of claim may be filed with the court before the claim itself is brought. If the court grants it, the claim must be filed within 10 days of the ruling. If the applicant does not bring the claim within that period, the court — on its own initiative or on the motion of the opposing party — issues a ruling annulling the measures taken. This is how the law balances the speed of freezing with the respondent's interests.
The respondent's damage and the security guarantee
Article 199 supplies the counterweight known in common-law practice as the cross-undertaking in damages. If the court considers that the measure may cause the respondent damage, it may apply the measure and simultaneously require the applicant to secure compensation of the respondent's expected damage; the guarantee may also be applied at the opposing party's request. The applicant must then provide that security within a period fixed by the court, not exceeding 30 days — otherwise the court immediately issues a ruling annulling the measure.
The annulment ruling is appealed in the form of a complaint within 5 days, a deadline that cannot be extended. And where the measure proves unjustified — for instance, the claim was refused and the decision entered into force — the party in whose favour the security was applied must compensate the other party for the damage the measure caused.
Frequently Asked Questions
Below we answer the key questions about freezing measures.
Does a Mareva injunction exist in Georgian law?
Not as a named institution. Its function is performed by security-of-claim measures: seizure of property, securities and monetary funds, including those held with third persons.
What must the claimant show?
That without the measure enforcement will be impeded or impossible, or that irreparable damage will follow; the court's presumption that the claim may be satisfied is a sufficient basis.
When can one apply before filing the claim?
In urgent cases; the claim must then be filed within 10 days of the ruling, failing which the measures are annulled.
Who compensates the respondent's damage?
The applicant must secure the expected damage within the court's deadline; damage from an unjustified measure is compensated by the party that benefited from the security.
How We Help on Legal.ge
The Legal.ge team prepares security-of-claim applications, selects the appropriate measure and frames the circumstances to be proven, so that the freezing holds up in court at the first request.
If the respondent is dissipating assets — or you face a measure applied against you — write to us on Legal.ge: we will plan both the freezing and the defence against damage.