From reform to reliability – Strengthening arbitration in Georgia

As Georgia continues to promote itself as a gateway for foreign investment and cross-border business, one pillar remains essential to investor confidence: a reliable and effective dispute resolution system. Arbitration, often considered a gold standard for commercial conflict resolution, has made consistent progress in Georgia. Yet, despite an encouraging legislative foundation and active engagement from the private sector, arbitration still faces certain challenges in practice. Recent court decisions, mounting business concerns, and a growing necessity for further reform are converging to bring long-needed attention to the issue.

Legal framework and ongoing progress

The 2009 Law on Arbitration, based on the UNCITRAL Model Law, established a modern legal framework for arbitration in Georgia. It emphasizes party autonomy, limits excessive judicial interference, and offers procedural flexibility in line with international standards. This framework has helped earn Georgia a reputation as an arbitration-friendly jurisdiction in the region.

Over the years, professional associations such as the Georgian Association of Arbitrators (GAA) and arbitration institutions such as the Georgian International Arbitration Centre (GIAC)—along with legal practitioners—have worked to promote arbitration by publishing case materials, offering training programs, and organizing high-level conferences. These initiatives have drawn the attention of both regional and international audiences and aimed to raise the profile of Georgia as a venue capable of handling cross-border disputes. In a landmark achievement aimed at developing and promoting Georgia as a regional hub for dispute resolution, Georgia signed a special Memorandum of Understanding with the ICC International Court of Arbitration—the world’s leading arbitral institution—in 2018. This cooperation culminated in the first-ever publication of the ICC’s arbitration and mediation rules in the Georgian language last year.

Practical barriers and business concerns

Despite improvements to the legal framework, arbitration remains underutilized in the Georgian business environment. A key issue is enforcement. Several recent court decisions have raised concerns within the legal and business communities due to the courts’ broad scope of review and departure from internationally accepted principles.

One recent court ruling raised concerns by finding that simply including someone on a list of potential arbitrators—an accepted practice in both Georgia and internationally—constituted a conflict of interest if that person was affiliated with one of the parties. This ruling contradicts international norms, which view such lists as a means to enhance transparency without compromising impartiality. As a result, the court deemed the arbitration institution unfit to oversee the case, sparking concern among legal and business stakeholders

“Uncertainty in court enforcement can seriously undermine trust in arbitration that has been rebuilt in the past 15 years,” says Managing Partner at Gvinadze and Partners Nick Gvinadze, a member of the AmCham Commercial Law and Tax Committee and Chair of ICC Georgia Arbitration and the ADR Commission. “Even when arbitration is conducted professionally, a single erratic court decision can undo the process and damage investor confidence.”

This uncertainty has led many businesses, particularly small and medium-sized enterprises, to avoid arbitration altogether. In addition to enforcement issues, concerns persist about costs, complexity, and a general lack of familiarity with how arbitration can serve as an efficient alternative to court proceedings.

AmCham’s advocacy and reform agenda

AmCham Georgia has played a pivotal role in bringing these challenges to the forefront. Through its Commercial Law and Tax Committee, AmCham has actively gathered feedback from legal professionals and businesses, drafted position papers, and participated in consultations to highlight shortcomings in how arbitration is currently applied.

These advocacy efforts have spurred broader public-private engagement, leading to the formation of a working group under the Investors Council to explore proposed amendments by the GAA to the Law on Arbitration. The Investors Council, a dialogue platform established by the Georgian government and the EBRD, brings together key ministries and business associations—including AmCham, a founding and active member—to improve the country’s business and investment environment. The working group’s aim is not to overhaul the law but to refine it, focusing on judicial review, enforcement mechanisms, and procedural clarity.

“Much of the law is solid in structure,” says Chair of the GAA and Partner at BLC Rusa Tchkuaseli, a legal advisor contributing to the reform process. “But key areas need to be reinforced to ensure that arbitration is respected in both theory and application.”

Early discussions have focused on aligning the domestic framework more closely with international arbitration practice, reducing grounds for court interference, and clarifying the role of courts as supportive institutions in the arbitration process.

Capacity building and awareness

Alongside legal reform, there is growing recognition that the development of arbitration in Georgia also depends on institutional and professional capacity. The GAA continues to offer arbitration training programs, publish explanatory materials, and foster knowledge-sharing forums. Yet a notable awareness gap remains—particularly among regional businesses and professionals outside Tbilisi.

“The idea that arbitration is reserved for large corporations is outdated,” notes Senior Partner and Head of Dispute Resolution at Andersen in Georgia George Svanadze, who is also a member of the AmCham Commercial Law and Tax Committee and a legal practitioner with experience advising SMEs. “We need to do more to show that arbitration is accessible, cost-effective, and adaptable to the needs of smaller businesses.”

Judicial training is also a key area of focus. While some courts show a solid grasp of arbitration-related cases, decisions still vary widely. Many arbitration practitioners view more structured capacity-building for judges as essential to improving consistency and reliability in enforcement. Stakeholders have emphasized the need to expand continuing legal education programs, with a focus on practical content covering arbitration principles, procedural standards, and international best practices.

Outlook and opportunities

Georgia enjoys several advantages that support its ambition to become a credible regional arbitration venue. These include its geographic location, business-friendly legal reforms, and a network of bilateral investment treaties. The current reform momentum, driven in part by private sector advocacy, offers a window of opportunity to close the gap between legislative promise and operational delivery.

“We already have a good legal foundation, but it must function in practice,” says former GAA chair and Managing Partner at Gvelebiani Law Jaba Gvelebiani. “Parties need assurance that arbitral awards will be respected and enforced in line with international standards.”

Georgia appears to be approaching a turning point in the development of its arbitration system. While the law provides a modern structure, its full potential remains unrealized due to inconsistencies in enforcement and limited awareness among key actors. The growing attention to reform, sparked by private sector advocacy and policy engagement, marks a critical opportunity to build a dispute resolution system that businesses can trust.

If the current reform process delivers concrete results and addresses capacity gaps, Georgia could indeed emerge as the most competitive and reliable hub for commercial dispute resolution in the region. However, continued political instability, as well as concerns around the speed and inconsistency of the judicial system, pose a significant threat to Georgia’s attractiveness as an arbitration hub. Realizing the full potential of arbitration in Georgia will require ongoing collaboration among legal professionals, the judiciary, business associations, and policymakers—particularly until these issues are meaningfully addressed.