The Nature and Legal Basis of Pre-Litigation Negotiation
Pre-litigation negotiation is a form of amicable dispute resolution defined by the Georgian Law on Mediation. Under this law, mediation is a process which, irrespective of its name, enables two or more parties, with a mediator's assistance, to attempt to settle a dispute by mutual agreement, whether started by the parties' initiative or on a basis provided for by law. The law distinguishes private mediation from court-connected mediation: private mediation is carried out on the initiative of the parties, on the basis of an agreement on mediation, without a court transferring the case to a mediator, whereas court mediation takes place after a statement of claim has been filed, in the manner established by the Civil Procedure Code of Georgia, where the court transfers the case to a mediator.
The Circle of Participants and the Status of the Mediator
The law defines the participants precisely: the mediator, the parties, their representatives and the third person. A party may be a natural person, a legal person, or an organisation without legal personality, provided it participates in order to settle the dispute with the other party by mutual agreement. A third person participates under the agreement on mediation or in cases provided for by law. Only a natural person registered in the unified registry of mediators, who meets the requirements of the law and agrees to conduct the mediation may act as a mediator. The unified registry of mediators is maintained by the Georgian Association of Mediators, a public-law legal entity established on the basis of this very law.
Starting Mediation and the Legal Effect of the Agreement
The precondition for starting mediation is an agreement on mediation — the parties' written agreement to resort to mediation when a dispute arises — or a basis provided for by law, or the transfer of the case to a mediator by a court or authorised body at the parties' request. The process starts upon a party's or the parties' application to the mediator and is deemed to have started from that moment; at a party's request the mediator issues a document confirming the start. Where the parties have agreed not to apply to a court or arbitration until a defined period expires or a defined circumstance occurs, the dispute will not be examined until those conditions are fulfilled — unless the claimant confirms that irreparable damage will otherwise be caused. A defendant must invoke the agreement on mediation before the time limit for submitting the response to the claim expires. A party's application to a court or arbitration is not regarded as refusal of the agreement or termination of the mediation already started. Finally, a party may refuse to participate in the mediation at any stage, unless the law or the agreement provides otherwise.
The Mediated Settlement and Its Binding Force
When the negotiation succeeds, the outcome is recorded in a mediated settlement — a written document terminating the dispute by mutual agreement, the performance of which is mandatory. For commercial disputes the law adds an instrument: an international mediated settlement is a written agreement concluded for the purpose of settling a commercial dispute which, under the relevant United Nations convention on settlement agreements resulting from mediation, constitutes an international agreement.
Suspension of the Limitation Period
The law links mediation to limitation of claims. From the moment private mediation starts, the running of the limitation period provided for by the Civil Code of Georgia is suspended, so the party does not lose the right to apply to a court. The suspension lasts until the private mediation ends, but no longer than two years from its start. If the mediation ends without result, the suspended time is not counted within the period.
Frequently Asked Questions About Pre-Litigation Negotiation
What is the difference between private and court mediation?
Private mediation is carried out on the initiative of the parties, on the basis of an agreement on mediation, without a court transferring the case to a mediator. Court mediation takes place after the statement of claim has been filed, in the manner established by the Civil Procedure Code of Georgia, where the court transfers the case to a mediator. Both pursue one aim: ending the dispute by mutual agreement with a mediator's assistance.
May a party apply to a court while mediation is ongoing?
Yes. Such an application is not considered a refusal of the agreement on mediation or a termination of the mediation that has started. Even where the agreement postpones litigation until a defined period or circumstance, the claimant retains an exception where irreparable damage threatens without court or arbitral examination.
For how long does the limitation period remain suspended?
From the moment private mediation starts, the running of the limitation period is suspended and remains suspended until the mediation ends, but for no longer than two years from the start of the private mediation. If the mediation ends without result, the suspended period is not counted within the limitation period.
Who may be a party and who participates in mediation?
A party is a natural person, a legal person or an organisation without legal personality participating in order to settle the dispute by mutual agreement. The participants are the mediator, the parties, their representatives and any third person. The mediator may only be a natural person registered in the unified registry of mediators.
How We Help on Legal.ge
The team of Legal.ge will assist you at every stage of pre-litigation negotiation: we will assess your dispute and the suitability of mediation, draft the agreement on mediation, help you select a mediator, and formulate the terms of the mediated settlement so that its performance is binding and reliable. Contact us so that your dispute is resolved amicably, saving time and resources.