How the Governing Law Is Determined in Contracts with Asian Partners
Trade contracts with Asian countries, wherever their factual circumstances connect the case to a foreign legal system, are governed by Georgia's law on private international law. This law determines which legal order applies when facts connected with foreign law exist, and which norms of procedural law apply to the conduct of such a case. In practice this means that even when a contract is concluded with a partner from China, Japan, South Korea or another Asian jurisdiction, a Georgian court decides — precisely by these norms — which country's law prevails, which court is competent and which form of the transaction is treated as valid. Applying foreign law before a Georgian court is possible, but only within the limits allowed by Georgian legislation, and those limits are drawn by this same law.
International Competence of Georgian Courts
Georgian courts have international competence where the defendant has a place of residence, a domicile or a habitual residence in Georgia. The parties may agree on the international competence of a Georgian court even where, under other norms of the law, it would not be competent. Such an agreement is made in writing or orally with written confirmation, and in international commercial relations — in a form consistent with international trade usages known or ought to have been known to the parties. Georgian courts also acquire competence where the defendant, without protest, agrees to participate in the proceedings — even though the defendant is represented by an advocate and the judge has notified the defendant of the possibility of raising a protest, which is recorded in the minutes of the case. Conversely, the parties may agree on the competence of a foreign court if one of them has a place of residence, domicile or habitual residence abroad; yet agreements on specially protected categories of competence established by the law are void, and in that case a defendant's protest-free participation does not cure the defect.
The Form of Transactions between Parties in Different Countries
The form of a transaction is determined by the law of the country where it was concluded or by the law applicable to its subject matter. Where a contract is concluded between persons present in different countries, the form is considered valid if it satisfies the requirements of either country's law — particularly important for contracts with Asian partners, where signatures are frequently affixed in different states. If the contract is concluded through a representative, the relevant country, for the purposes of the form rule, is the country where the representative is present. For transactions whose subject is a right in land, irrespective of the place of conclusion and of the law of that place, the imperative norms of the country where the land is situated apply to the form; and a transaction creating or disposing of a right in a thing is treated as validly formed if it satisfies the formal requirements of the law governing the underlying relationship.