The Essence and Scope of Private Arbitration
Private arbitration is a form of dispute resolution outside the courts, before an arbitral tribunal created by agreement of the parties. Under the first article of the Georgian Law on Arbitration, it establishes the rules for the creation of arbitration in Georgia, for arbitral proceedings and awards, and for the recognition and enforcement of awards made outside Georgia. Arbitration is competent to consider a property dispute of a private nature, based on the equality of persons, which the parties can settle between themselves, and a dispute connected with a public and private partnership agreement. Such proceedings give the parties flexibility: they may determine the procedural rules themselves and take part in appointing the arbitrators.
The Arbitration Agreement: Concept and Form
The basis of arbitration is the arbitration agreement — an agreement by which the parties submit to arbitration all or some disputes arisen or that may arise between them out of a contractual or other legal relationship. The agreement may be concluded as an arbitration clause in a contract or as a separate agreement, and must be in written form. It is deemed concluded in writing where its content is recorded in any form, irrespective of the form of the conclusion of the contract. The written form is also fulfilled by an electronic communication accessible for subsequent use and by an exchange of a claim and a defence where one party asserts and the other does not deny the agreement. Special requirements apply where a party is a natural person: where both parties are natural persons, the agreement must also be signed by the parties' advocates or certified by a notary.
The Number, Appointment and Challenge of Arbitrators
The arbitration consists of one or several arbitrators; their number and the procedure of appointment are determined by the parties, who appoint an equal number of arbitrators unless otherwise agreed. Where an even number is agreed, the appointed arbitrators must appoint one more arbitrator within ten days of the appointment, and where the number is not determined, the arbitration must be composed of three arbitrators. Appointing a person as arbitrator without that person's consent is inadmissible, and the consent must be declared in writing. Where no agreement exists or the agreed procedure cannot be carried out, in a three-arbitrator tribunal each party appoints one arbitrator and those two appoint the chairman; failing this within the thirty-day periods, the court appoints an arbitrator upon a party's request. The law also sets grounds for challenge: a party may request it where the arbitrator does not meet the agreed qualifications or where circumstances give rise to justifiable doubts as to independence and impartiality.