For foreign creditors and investors with Georgian counterparties, the choice of arbitral seat and institution is rarely a formality. Georgia's arbitration framework — reformed comprehensively in 2009 in alignment with the UNCITRAL Model Law and revised further in subsequent years — creates a coherent legal environment for international commercial arbitration. Yet the practical consequences of seat selection, institutional choice, and enforcement pathway differ meaningfully depending on the counterparty's assets, the governing law of the underlying contract, and the jurisdictions across which recovery may ultimately be pursued. This overview sets out the key decision points in a step-by-step format for creditors and their advisers approaching or renegotiating dispute resolution clauses in Georgian-connected transactions.
What to prepare before drafting your arbitration clause
Before selecting a seat or institution, gather the following:
Georgia's Law on Arbitration, enacted in 2009 and modelled on the UNCITRAL Model Law, governs both domestic and international arbitral proceedings seated in Georgia. The legislation establishes the foundational framework: party autonomy in procedural design, kompetenz-kompetenz, separability of the arbitration agreement, and limited court involvement confined largely to enforcement, interim relief, and setting-aside applications.
For foreign creditors, the starting point is establishing whether the arbitration agreement falls within the scope of Georgian arbitration law at all. Georgia applies the seat theory — the law of the seat governs the arbitral procedure and determines the validity of the award for enforcement purposes in Georgia. An award rendered in a Georgian-seated arbitration is a domestic Georgian arbitral award enforceable in Georgian courts under the same legislation, and is also an award made in a New York Convention signatory state for enforcement abroad.
Georgia has been a signatory to the New York Convention since 1994, meaning Georgian-seated arbitral awards are recognisable in over 170 contracting states. For creditors whose recovery strategy involves assets in multiple jurisdictions — including Russia — this treaty basis is a material practical advantage. Georgian courts have shown a consistent, if still developing, track record of enforcing foreign awards on reciprocal terms.
The practical implication for ICP-4 creditors: if recovery assets are likely to be located in multiple jurisdictions simultaneously, a Georgian seat creates a New York Convention award that is enforcement-ready across the broadest available network of contracting states.
Selecting Georgia as the arbitral seat has a specific set of consequences that differ from choosing a traditional arbitral hub such as London, Paris, Stockholm, or Singapore.
The principal advantages of a Georgian seat for creditors in Georgian-connected transactions are as follows. First, Georgian courts exercise supervisory jurisdiction over Georgian-seated arbitrations — interim measures applications, challenges to arbitrators, and setting-aside proceedings are heard in Tbilisi. Georgian courts have demonstrated willingness to grant interim protective measures in support of arbitral proceedings, including asset freezing orders, though the procedural pathway differs from common law jurisdictions and must be navigated with local counsel. Second, the cost and logistical burden of proceedings seated in Georgia is materially lower than proceedings seated in London or Paris for disputes where the counterparty is Georgian and key witnesses and documents are located in Tbilisi. Third, enforcement of a Georgian-seated award against assets in Georgia is direct and straightforward — no recognition stage is required.
The principal disadvantages are the reverse of these advantages in cross-border contexts. Where the majority of recoverable assets are outside Georgia, enforcement of a Georgian-seated award abroad requires the full New York Convention recognition procedure in each target jurisdiction — no different from enforcing any other foreign award. Where the counterparty is a sophisticated international entity with foreign parent guarantors, a neutral seat in a major arbitral centre may carry greater persuasive weight in multi-jurisdictional enforcement campaigns. Where the governing law is not Georgian, a foreign seat may be more natural.
For ICP-4 creditors assessing a pre-dispute or renegotiation scenario, the determinative question is asset location at enforcement stage — not at the time of contracting. Where Georgian-sited assets predominate, a Georgian seat is rational and efficient. Where recovery will be primarily pursued abroad, a neutral international seat with strong treaty reach and predictable supervisory courts should be evaluated alongside the Georgian option.
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Once the seat decision is made, the choice of institution determines the procedural rules, the panel selection process, the administration of the case, and — in practice — the predictability and enforceability of the proceedings.
The Georgian International Arbitration Centre (GIAC) is the principal institutional arbitration body in Georgia. Established in Tbilisi, GIAC administers proceedings under its own arbitration rules and handles the significant majority of Georgia-seated institutional arbitrations. For creditors whose counterparty is a Georgian entity and whose dispute is primarily Georgian in character, GIAC offers procedural familiarity, local arbitrator availability, and cost efficiency relative to international centres. GIAC arbitrators are predominantly Georgian-qualified, though the rules permit foreign arbitrators. GIAC proceedings are conducted in Georgian or, by agreement, in a foreign language — a material consideration for foreign creditors who will need English-language submissions capability from their Georgian counsel.
International institutions — ICC, LCIA, VIAC, SCC — may also be designated as administering institutions for Georgian-seated arbitrations. The seat and the administering institution are legally distinct: a party may agree to ICC Rules with a Tbilisi seat, or LCIA Rules with a Stockholm seat. Where the counterparty requires the credibility of a major international institution — relevant in investor-state adjacent disputes, large-scale structured finance, or transactions with international lender involvement — international institutional rules combined with a Georgian seat are a workable structure. ICC Rules with a Georgian seat are increasingly used in transactions involving Georgian companies with foreign ownership.
Ad hoc arbitration under UNCITRAL Arbitration Rules is also available and sometimes chosen where the parties are experienced and cost-conscious. Ad hoc proceedings place the administrative burden on the parties and their counsel rather than an institution. For a creditor in a distressed recovery scenario against an uncooperative counterparty, institutional rules are generally preferable — the institution provides the mechanism to constitute the tribunal, fix fees, and administer the process without reliance on counterparty cooperation.
Practical guidance for ICP-4 creditors:
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A deficient arbitration clause can undermine an entire enforcement strategy. Georgian courts and tribunals seated in Georgia apply a broadly pro-arbitration construction to arbitration agreements, but certain drafting failures create genuine risk of the agreement being found pathological — unenforceable or capable of generating competing parallel proceedings.
The minimum content of a valid arbitration clause for Georgian-connected transactions:
Common errors that creditors encounter in Georgian-law contracts or contracts with Georgian counterparties:
Note: An arbitration clause in a contract governed by Georgian law that fails to specify the seat will be interpreted by Georgian courts as implicitly selecting Georgia as the seat — but this default should not be relied upon, as it may be contested by a counterparty seeking to forum-shop. State the seat explicitly.
For ICP-4 creditors, the enforcement pathway should be mapped at the outset — before proceedings commence, not after the award is issued. The enforceability of a Georgian-seated award against assets in specific jurisdictions determines whether the seat choice made at Step 2 was correct, and whether interim asset-preservation steps are available during the arbitral proceedings themselves.
Creditors who delay mapping the enforcement pathway risk discovering — after a multi-year arbitration — that the award structure chosen at contracting stage is sub-optimal for the asset base that actually exists at enforcement time.
Georgia — direct enforcement. A final Georgian-seated arbitral award is enforced in Georgian courts by application for a writ of execution issued by the competent Georgian court. No separate recognition stage is required for Georgian-seated awards against assets in Georgia. The court undertakes a limited procedural review on the New York Convention grounds: incapacity, defective notice, excess of jurisdiction, public policy, and non-arbitrability.
CIS and former Soviet states — variable. For enforcement of Georgian-seated awards in Russia, Kazakhstan, Armenia, Azerbaijan, and Uzbekistan, the New York Convention provides the operative framework. In Russia, recognition of foreign arbitral awards is handled by the competent arbitrazh court at the debtor's location or asset location; the procedural requirements are specific and must be prepared with Russian-qualified counsel. For creditors with Russian-sited assets alongside Georgian-sited assets, the involvement of Russian counsel from the outset — before the award is issued — allows the recognition dossier to be assembled in parallel with the arbitration.
Third-country assets — New York Convention standard. For enforcement in EU member states, the United Kingdom, the United States, or other major financial jurisdictions, a Georgian-seated award travels on the same New York Convention basis as awards from any other signatory state.
Interim measures during arbitration. Georgian courts have the power to grant interim protective measures in support of arbitral proceedings seated in Georgia. Creditors holding Georgian assets at risk of dissipation should consider this avenue immediately upon dispute crystallisation — the window between dispute crystallisation and award issue is the period of highest asset-flight risk.
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Q: Is Georgia a reliable arbitral seat for enforcement of awards in Russia?
A: Georgia-seated arbitral awards are enforceable in Russia under the 1958 New York Convention, to which both Georgia and Russia are signatories. In practice, recognition of foreign awards in Russian arbitrazh courts requires compliance with specific procedural and documentary requirements, including a certified translation of the award and the arbitration agreement, and compliance with the applicable limitation period for recognition applications. Russian courts apply the New York Convention grounds for refusal and have, in practice, recognised awards from various institutional and ad hoc arbitrations seated in Georgia. The process is manageable with experienced Russian counsel — but documentation must be assembled carefully from the moment the award is issued.
Q: Can a foreign creditor choose ICC Rules with a Georgian seat rather than GIAC Rules?
A: Yes. The arbitral seat and the administering institution are legally distinct under Georgian arbitration law. A party may designate ICC, LCIA, VIAC, SCC, or UNCITRAL Rules for proceedings seated in Georgia. The institution administers the case; Georgian courts exercise supervisory jurisdiction as the courts of the seat. This combination is increasingly used in transactions involving Georgian companies where the parties prefer internationally recognised procedural rules but wish to preserve direct enforceability in Georgia and New York Convention reach. The arbitration clause must clearly specify both the seat and the institutional rules.
Q: What language will the arbitration be conducted in if the contract is silent?
A: If the arbitration agreement is silent on language and GIAC Rules apply, proceedings will typically be conducted in Georgian unless the tribunal or institution determines otherwise. For ICC or LCIA proceedings seated in Georgia, the default language provision of the relevant institutional rules applies. Foreign creditors should always specify the language of proceedings — English in most cases — in the arbitration clause itself. Silence on language is one of the most consequential drafting omissions in Georgian-connected commercial contracts, as it may require a foreign creditor to engage Georgian-language counsel for the full duration of proceedings.
Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years and listed as a trusted adviser by the German Consulate General in Novosibirsk.
The firm's cross-border disputes practice advises foreign creditors, institutional investors, and international counterparties on dispute resolution, enforcement, and asset recovery across Russia and the broader CIS region. On Georgian-connected matters, the firm works in collaboration with regional counsel — including Georgian-qualified advisers — to provide coordinated advice across the relevant jurisdictions. With over 1,000 matters handled since inception, the team brings direct partner involvement and English-language capability to every engagement.
We are a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction.
Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom
This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.
— Giorgi Kavtaradze Contributing Regional Analyst — Georgia, Commercial Disputes and Enforcement vetrovpartners.com/contributions/