Introduction
The development of arbitration in Georgia has always depended less on legislative symbolism and more on whether arbitral awards can, in practice, be recognized, enforced, and protected from undue judicial interference. In formal terms, Georgia has long appeared to be a jurisdiction aligned with modern arbitration standards. It is a party to the 1958 New York Convention, its arbitration law reflects the architecture of the UNCITRAL Model Law, and the statutory grounds for setting aside and refusing recognition and enforcement are narrowly structured and, at least on paper, exhaustive (Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), art V; UNCITRAL Model Law on International Commercial Arbitration, arts 34, 36; Law of Georgia on Arbitration, arts 42, 45). Yet the decisive question has never been whether the text of the law is modern. The decisive question has been how Georgian courts interpret and operationalize that framework in real cases.
Recent developments make this inquiry more urgent than ever. On the one hand, some Georgian court decisions reveal a more disciplined and internationally credible understanding of enforcement law. These decisions emphasize the finality of arbitral awards, insist that the statutory grounds for review be interpreted narrowly, refuse to convert annulment or enforcement proceedings into appellate review on the merits, and display a more commercially realistic approach to arbitration agreements and jurisdictional objections (case №2ბ/3472-14; case №2ბ/4963-12; case №2ბ/3782-17; case №ა-3151-შ-83-2016).
On the other hand, there are persistent and serious problems: intrusive use of public policy, distortions in the treatment of penalty clauses, delays in recognition and enforcement far beyond statutory timelines, uncertainty regarding the court competent to secure enforcement of awards, and the most recent controversy concerning the requirement of an “original” wet-signed arbitration agreement (Law of Georgia on Arbitration, arts 8, 44; Civil Procedure Code of Georgia, art 35621; Supreme Court decision №ას-497-497-2018; Georgian Arbitration Association statement on appellate practice). These are not isolated technical issues, but symptom of a larger instability in Georgian enforcement law.
Taken together, these developments show that the central challenge in Georgia is no longer simply whether arbitration is legally recognized. The deeper problem is whether the enforcement regime is becoming coherent, predictable, and compatible with commercial reality. The answer remains mixed. Georgian case law contains important pro-arbitration elements, but it also reflects unresolved tensions between finality and supervision, between statutory text and judicial practice, and between modern contracting methods and outdated formal expectations.
This article argues that Georgian enforcement law is presently marked by two parallel and conflicting trends. The first trend is positive: the emergence of a line of decisions that interpret annulment and enforcement grounds narrowly and resist disguised merits review.
The second is deeply problematic: a continuing judicial tendency, in some contexts, to impose unnecessary barriers to enforcement and to develop practice that sits uneasily with both the Law on Arbitration and the broader logic of the New York Convention.
The Centrality of Enforcement and the Georgian Context
Georgia joined the New York Convention in 1994, at an early stage in its post-independence legal development, and its current arbitration legislation was designed to harmonize domestic law with internationally accepted standards. In theory, this should have produced an enforcement regime shaped by narrow refusal grounds, procedural efficiency, and judicial restraint. Yet the effective functioning of this framework has been hampered by legislative gaps, inconsistent court practice, and broader distrust rooted in the country’s earlier arbitration experience. That distrust was not abstract. Under the 1997 Law on Private Arbitration, enforcement writs could be issued directly by arbitral institutions without meaningful court control, which contributed to abuse and the creation of so-called “pocket arbitrations” (Arbitration Blog, “10 Years in Practice! (Part 2),” contextual note [1]; Davit Abesadze, “Exclusion of the Right to Appeal Arbitral Awards by Prior Agreement of the Parties,” Georgian Business Law Review VI (2017) 39).
This history matters because it helps explain why Georgian courts have sometimes oscillated between under-control and over-control. Too little judicial supervision can enable abuse. Too much, or the wrong kind, can destroy finality and make arbitration functionally indistinguishable from litigation. The key problem for Georgia is therefore not whether courts should supervise arbitral awards, but how they should do so.
The Statutory Framework: Modern in Form, Fragile in Application
The legal architecture is familiar. Article 44 of the Law on Arbitration establishes that arbitral awards, regardless of the country in which they were rendered, are binding and enforceable upon written application to the competent court, subject to Article 45 (Law of Georgia on Arbitration, art 44.1). Domestic awards are enforced through the Courts of Appeals, while foreign awards fall within the jurisdiction of the Supreme Court of Georgia (Law of Georgia on Arbitration, art 44.1). The grounds for refusing recognition and enforcement track the New York Convention model and include incapacity, invalidity of the arbitration agreement, lack of proper notice, inability to present one’s case, decisions beyond the scope of the submission to arbitration, irregularity in the composition of the tribunal or procedure, non-binding or suspended awards, non-arbitrability, and public policy (Law of Georgia on Arbitration, art 45.1; Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), art V).
At the doctrinal level, this framework is accompanied by several propositions that should be uncontroversial. The grounds are exhaustive. They are to be interpreted narrowly. They are not intended to authorize review of the merits. And the statutory design reflects the New York Convention’s enforcement bias (UNCITRAL Model Law, art 36; Law of Georgia on Arbitration, arts 42, 45; Liana Kartsivadze et al, Guide to Arbitration for Judges of the Georgian Courts of Appeals 117).
Yet the application has often been uneven. In some instances, the courts have adhered to those principles with considerable sophistication. In others, they have drifted toward intrusive review, especially through public policy or formalistic objections that function as obstacles to enforcement rather than as genuine expressions of the Convention framework.
The Best Line of Georgian Case Law
One of the most valuable recent developments in Georgia is the emergence of a line of decisions in which the courts clearly state that they are not sitting as appellate tribunals over arbitral awards.
Tbilisi Court of Appeals, 28 February 2013: recognition without merits revision
A particularly important early decision is the Tbilisi Court of Appeals ruling of 28 February 2013, case №2ბ/3472-14. The successful party sought recognition and enforcement, and the opposing party, despite notification, did not submit objections. What makes the case significant is that the appellate court itself noticed a potential weakness in the arbitral award: it was not entirely clear from the text of the award how the arbitral tribunal had derived a damage figure of GEL 14,661.50. Yet the court expressly refused to review that issue on its own initiative, stating that it could not revisit the basis of the tribunal’s substantive reasoning merely because aspects of the award appeared unclear (case №2ბ/3472-14).
This was not judicial indifference; it was judicial restraint. The court still examined the two matters it could consider ex officio under Article 45.1(b): whether the dispute was arbitrable and whether enforcement would violate public policy. Having found no such obstacle, it recognized and enforced the award (Law of Georgia on Arbitration, art 45.1(b); case №2ბ/3472-14). The significance of this decision lies in its refusal to transform uncertainty about the tribunal’s reasoning into a merits inquiry. In other words, the court accepted that an award need not satisfy a judge’s own standard of explanatory completeness in order to be enforceable.
Tbilisi Court of Appeals, 25 March 2014: public policy is not an appellate mechanism
The 25 March 2014 decision of the Tbilisi Court of Appeals, case №2ბ/4963-12, is even more important because it articulates a general standard for annulment review. The applicant sought to set aside the award on the ground that it was based on contradictory evidence and forged documents and therefore violated public policy (case №2ბ/4963-12).
The court began by identifying the proper function of a setting-aside proceeding. It stated that, within annulment proceedings, the court does not determine the facts anew, does not reassess the evidence, and does not hear the case on the merits. Its inquiry is limited to whether one of the grounds listed in Article 42 exists (Law of Georgia on Arbitration, art 42; case №2ბ/4963-12). This methodological point is crucial. It defines the proceeding as one of limited legality-control, not appeal.
The court then turned to public policy and made one of the clearest pro-arbitration statements in Georgian jurisprudence. Public policy, it explained, does not authorize courts to revisit contractual interpretation, evidence assessment, or legal qualification simply because a party disagrees with the award. Public policy concerns disregard for fundamental legal principles. To justify annulment, the award must conflict with values of a higher order. Otherwise, public policy would become an appellate mechanism for arbitral awards, contrary to the very purpose of the arbitration law, which is to preserve finality (case №2ბ/4963-12).
That reasoning is of enduring significance. It establishes that Georgian public policy review is not supposed to function as an open gateway for dissatisfaction with arbitral reasoning. It also aligns Georgian law with a comparative consensus that public policy is exceptional, narrow, and tied to fundamental principles rather than ordinary legal error (Sophie Tkemaladze, “Public Policy as a Ground for Setting Aside or Refusing Recognition and Enforcement of Arbitral Awards,” Georgian Business Law Review II (2013) 16–17).
Tbilisi Court of Appeals, 14 September 2017: procedural rulings are not automatically public policy violations
The 14 September 2017 decision, case №2ბ/3782-17, refines this line of authority. The applicant argued that it had been denied a proper opportunity to present its case because the arbitral tribunal refused to request witness testimony from the file of a criminal case. The applicant framed this both as a denial of the right to present one’s position under Article 42.2(a.b) and as a public policy violation under Article 42.2(b.b) (Law of Georgia on Arbitration, art 42.2(a.b), (b.b); case №2ბ/3782-17).
The court again stated that a setting-aside proceeding is not a mechanism for merits-based reconsideration, even if one assumes that the arbitral tribunal might have erred in fact or law. If the court were to do that, annulment would become appeal by another name, contrary both to the New York Convention and to the Law on Arbitration (Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958); Law of Georgia on Arbitration; case №2ბ/3782-17).
The court then paid close attention to what the tribunal had actually done. It noted that the tribunal had addressed the evidentiary request, found that the parties had not sufficiently demonstrated the relevance of the requested witness testimony to the arbitration, and had even suggested an alternative route for obtaining the same evidence. The party did not use that route. In those circumstances, the appellate court refused to re-evaluate the tribunal’s evidentiary judgment and held that not every procedural decision, not every contractual interpretation, and not every factual or legal assessment that displeases a party rises to the level of public policy (case №2ბ/3782-17).
This decision matters because it protects arbitral procedural autonomy. If every contested evidentiary ruling could later be reframed as a denial of the right to present one’s case or a public policy violation, arbitral proceedings would remain permanently vulnerable to judicial second-guessing.
Supreme Court of Georgia, 1 February 2017: broad clause construction and commercially realistic arbitrability
The Supreme Court’s decision of 1 February 2017, case №ა-3151-შ-83-2016, is especially important because it addresses both enforcement and the interpretation of arbitration agreements in a sophisticated way. The case concerned recognition and enforcement of an award rendered by the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. The award ordered the return of an unused contractual advance of USD 760,682.88 on the basis of unjust enrichment under Russian law (case №ა-3151-შ-83-2016).
The resisting party argued, first, that the arbitration clause covered only disputes arising during the performance of the contract and did not extend to unjust enrichment claims, and, second, that the dispute was non-arbitrable under Georgian law (Law of Georgia on Arbitration, art 45.1(a.g), (b.a); Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), art V(1)(c), V(2)(a)).
The Supreme Court began by reaffirming that at the recognition and enforcement stage it does not examine the award on the merits and that the burden of proving refusal grounds lies with the party opposing enforcement (case №ა-3151-შ-83-2016). It then undertook a careful analysis of the arbitration clause, but did so through the law most closely connected to the agreement: Russian law. That choice was rooted in the fact that the arbitration was seated in Russia, the clause referred disputes to the Russian institution, and the contract itself indicated Russian law as the governing substantive law. The Supreme Court therefore looked to Russian judicial practice and to the approach already taken by Russian courts when considering attempts to set aside the same award. Those courts had concluded that a claim for return of an unutilized contractual advance remained directly connected to the contract and fell within the clause (case №ა-3151-შ-83-2016).
The Georgian Supreme Court also relied on the arbitral tribunal’s finding that the contract remained in force, at least for financial obligations, until full performance. From this it concluded that a restitutionary claim framed in unjust enrichment terms could still constitute a dispute arising from contractual performance. This reasoning is significant because it rejects a formalistic tendency to classify claims by doctrinal label rather than by commercial substance. The court did not say, “this is unjust enrichment, therefore non-contractual, therefore outside the clause.” Instead, it asked whether the dispute was in substance linked to the contract. It answered yes.
That is particularly important in light of the Supreme Court’s earlier 26 August 2016 decision, case №ა-887-შ-21-2016, which had taken a narrower and more formalistic view of clause scope, excluding a damages claim arising from termination from a clause covering disputes “related to performance” (case №ა-887-შ-21-2016). The 2017 judgment therefore marks a real jurisprudential improvement.
On arbitrability, the Court also adopted a broad and commercially sensible reading of Article 1.2 of the Law on Arbitration, holding that the dispute concerned a private-law property dispute between equal parties and was therefore arbitrable (Law of Georgia on Arbitration, art 1.2; case №ა-3151-შ-83-2016). This too is significant, because it avoids restricting arbitrability on the basis of doctrinal categorization where the substance of the dispute plainly lies within the commercial sphere.
Serious Structural Problems in Enforcement
If the cases above represented the whole story, one could confidently describe Georgia’s enforcement regime as stable and pro-arbitration. But this would be misleading. Alongside these positive decisions, there are serious problems that continue to undermine effective enforcement.
Delay and inefficiency
One of the most persistent problems is delay. The Civil Procedure Code provides relatively short timeframes for the handling of recognition and enforcement applications, yet practice often departs from those timelines considerably (Civil Procedure Code of Georgia, art 35621). As has been noted in Georgian scholarship, in practice the recognition and enforcement stage may take three to six months, even though the law contemplates significantly shorter resolution (Supreme Court decision №ა-1133-შ-29-2020, 22 February 2021; Otar Machaidze, article on securing enforcement of arbitral awards). During that period, the award debtor may dissipate assets, rendering the award practically useless.
This is not a minor administrative inconvenience. It strikes at the heart of arbitration’s promise of effectiveness. Arbitration loses much of its attraction if a creditor obtains a final award only to face prolonged court procedures before it can enforce it.
The judicial creation of post-award enforcement-securing measures and its limits
A major innovation in Georgian law has been the recognition by the Supreme Court that courts may secure the enforcement of arbitral awards even after the award has been rendered, despite the absence of explicit legislative regulation. In its 20 April 2018 decision, case №ას-497-497-2018, the Supreme Court rejected the narrow view that security measures are available only before judgment. It reasoned that the purpose of interim protection is to facilitate the enforcement of final decisions and that obstacles to enforcement may arise after the award has been rendered as well as during the proceedings (Supreme Court decision №ას-497-497-2018, 20 April 2018; Civil Procedure Code of Georgia, arts 191, 271; Law of Georgia on Arbitration, art 23).
This was an important and welcome development.
Public policy and the reduction of penalty clauses
Another enduring problem is the use of public policy to justify intervention in the substance of arbitral awards, particularly in cases involving penalty clauses. Georgian scholarship and commentary repeatedly note that courts have sometimes reduced arbitral penalty awards at the recognition and enforcement stage on the basis that the agreed penalty is “excessive” and therefore contrary to public policy (Tbilisi Court of Appeals, case №2ბ/227-11, 28 February 2011; Giorgi Titberidze, Law of Georgia on Arbitration: Commentary (2017) 25–26; Tkemaladze, “Public Policy,” 2013).
This is highly problematic. The power to reduce a contractual penalty under Article 420 of the Civil Code is not a general invitation to rewrite arbitral awards whenever a judge finds the result too harsh. The Civil Code requires a contextual evaluation of whether the penalty is disproportionately high in light of the circumstances, and even then this judicial power operates within specific limits (Civil Code of Georgia, art 420; Tbilisi Court of Appeals, case №2ბ/3112-14, 24 February 2015). When courts simply invoke public policy to alter the economic content of an arbitral award, they risk converting enforcement review into substantive revision. That is precisely what the better case law warns against.
Lack of transparency and unpublished practice
A further structural problem is the lack of publication and transparency of arbitral-related court decisions, particularly at the appellate level. The recent statement of the Georgian Arbitration Association rightly emphasizes that the development of quality justice, legal certainty, predictability, and uniform practice requires publicity and access to judicial decisions. Without publication, problematic reasoning can take hold without scrutiny, and good reasoning cannot stabilize into predictable doctrine (Georgian Arbitration Association statement on appellate practice).
This is not merely an institutional preference. In arbitration, predictability of enforcement practice is itself part of the legal infrastructure. Commercial actors need to know not only what the statute says, but how the courts are actually applying it.
The Most Recent and Most Troubling Development: the “Wet Original” Problem
The newest and perhaps most serious concern is the one regarding the recent practice of the Tbilisi Court of Appeals, where the Court has refused to admit a recognition and enforcement application where the arbitration agreement was not submitted in “original (wet)” form, even though the agreement had been concluded through exchange of scanned copies.
If that practice is indeed taking hold, it is extremely problematic.
The first problem is statutory. Article 8 of the Law on Arbitration expressly recognizes that an arbitration agreement may be concluded through exchange of electronic communications, provided that the information contained in those communications is accessible for subsequent use (Law of Georgia on Arbitration, art 8.5). More than that, Article 8.6 recognizes that an arbitration agreement may be deemed concluded even where no conventional written agreement exists, if the claimant and respondent exchange the statement of claim and response in such a way that the respondent does not deny the existence of the arbitration agreement (Law of Georgia on Arbitration, art 8.6). These provisions were plainly designed to align Georgian law with modern commercial practice and with the reality that arbitration agreements are often formed and evidenced in flexible ways.
Against that background, Article 44.2 of the Law on Arbitration requires the applicant for recognition and enforcement to submit the original arbitration agreement or a duly certified copy, if such exists. The phrase “if such exists” is decisive. It means that the statute itself contemplates situations in which no wet-ink original exists and in which enforcement cannot be conditioned on production of a document that the law knows may never have existed (Law of Georgia on Arbitration, arts 8, 44.2).
The second problem is conceptual. If the law recognizes electronic formation of arbitration agreements, and even recognizes agreement through pleadings, then a judicial insistence on a physical “wet” original fundamentally misreads the statute. It replaces a functional inquiry into whether a valid arbitration agreement existed with a rigid documentary requirement that the legislation was designed to avoid. It therefore does not merely add a formality. It contradicts the regulatory logic of Article 8 itself.
The third problem is procedural. Recognition and enforcement proceedings are not supposed to re-litigate the entire jurisdictional history of the arbitration in a formalistic vacuum. Where a resisting party raises an objection to the arbitration agreement, the court should consider, among other things, whether the objection was raised before the tribunal, whether the tribunal reasoned through it, and whether the resisting party has discharged the burden of proving invalidity under the statutory refusal grounds. But refusing even to admit the application because no wet-ink original is produced collapses that inquiry into a threshold documentary barrier that the law does not support (Law of Georgia on Arbitration, arts 44, 45; Georgian Arbitration Association statement on appellate practice).
The fourth problem is systemic. Modern commerce is built on electronic communication, scanned execution, and digital document circulation. To insist on a wet original in this context is not just doctrinally incorrect; it is commercially regressive. It creates an artificial obstacle to enforcement and threatens to make Georgia appear formally out of step with contemporary international practice.
For these reasons, the concern should not be understood as a narrow disagreement about filing requirements. It raises a much broader issue: whether Georgian enforcement practice will remain faithful to the modern and flexible concept of arbitration agreements embedded in its own legislation, or whether courts will revert to formalism in ways that undermine enforcement and arbitration alike.
Georgia’s Enforcement Law Is Moving in Opposite Directions
Based on the foregoing, the real picture is not one of simple progress or simple regression. It is a picture of competing tendencies.
One tendency is visible in the better appellate and Supreme Court decisions. It is characterized by narrow construction of refusal grounds, rejection of merits review, disciplined treatment of public policy, respect for party autonomy, and commercially sensible interpretation of arbitration clauses (case №2ბ/3472-14; case №2ბ/4963-12; case №2ბ/3782-17; case №ა-3151-შ-83-2016).
The other tendency appears in the broader enforcement environment. It is visible in prolonged enforcement timelines, judicial modification of awards through public policy rhetoric, unresolved inconsistencies regarding competent courts for post-award security measures, and now a troubling willingness to impose documentary demands that disregard the statutory recognition of electronic arbitration agreements (Civil Procedure Code of Georgia, art 35621; case №2ბ/227-11; case №ას-497-497-2018; Georgian Arbitration Association statement).
This means that “new developments” in Georgia cannot honestly be described as uniformly arbitration-friendly. The more accurate conclusion is that Georgian law is at a crossroads. It contains the doctrinal resources to become a genuinely reliable enforcement jurisdiction, but its practice remains vulnerable to formalism, inconsistency, and judicial overreach.
Conclusion
The current state of enforcement law in Georgia is marked by both important progress and serious instability. On the positive side, several key decisions of the Tbilisi Court of Appeals and the Supreme Court of Georgia have articulated a modern understanding of the court’s role in recognition, enforcement, and annulment proceedings.
At the same time, there are still serious problems when it comes to enforcement. Delay remains a practical threat to effectiveness. Public policy continues to be used, at times, as an intrusive tool. The judicially created mechanism for securing enforcement of awards, while welcome in principle, remains doctrinally uneven in its allocation of jurisdiction and its consequences for appeal rights. Most troublingly, the reported insistence on a wet-ink original arbitration agreement at the enforcement stage suggests a judicial move back toward formalism that is incompatible with Articles 8 and 44 of the Law on Arbitration and with the realities of modern commercial contracting (Law of Georgia on Arbitration, arts 8, 44; Georgian Arbitration Association statement).
The true new development in Georgia is therefore not that enforcement law has fully matured. Rather, it is that the conflict between modern arbitration principles and residual formalist tendencies has become more visible. The future direction of Georgian arbitration will depend on which line prevails. If the better case law becomes dominant, and if legislative reform clarifies the remaining gaps, Georgia can consolidate itself as a serious enforcement jurisdiction. If, however, documentary formalism, inconsistent court allocation, and expansive intervention continue to spread, the country risks undermining the very arbitral framework its legislation was designed to support.
The issue is not merely doctrinal. It is institutional. Enforcement law is the point at which party autonomy, judicial authority, and commercial certainty meet. In Georgia today, that meeting point remains unsettled.
