MG Law Office Celebrates Tamar Jikia’s Legal Milestones and Return as Legal Director

MG Law Office is proud to announce that after graduating from Columbia Law School, Tamar Jikia has successfully passed the New York State bar exam. Tamar’s remarkable achievement not only qualifies her for admission in any UBE jurisdiction across the United States but also serves as a testament to her dedication and unwavering commitment to legal excellence.

After these successful milestones, we are delighted to welcome back Tamar in her new role as a legal director. Having been an integral part of the MG Law team from its inception, Tamar has consistently displayed a profound passion for delivering exceptional client service. Her recent promotion is a testament to her exceptional skills and dedication, embodying the very essence of MG Law’s commitment to nurturing and fostering young legal talent.

Tamar Jikia’s remarkable journey is a reflection of the dedication and commitment to excellence that defines MG Law’s core values. Her expertise and leadership will undoubtedly shape the future of our legal practice, reinforcing our commitment to delivering unparalleled legal services and fostering a culture of excellence and growth within our firm. MG Law looks forward to the continued success and contributions of Tamar Jikia as she takes on this new and significant role within our team.

A message from managing partner Archil Giorgadze: “At MG Law, we have always strived to cultivate the growth and development of our legal professionals. We are immensely proud to welcome Tamar back in her new role as Legal Director, following her enriching academic journey at Columbia and her successful passage of the New York bar exam. With her return, we are confident that Tamar will continue to elevate our practice and contribute significantly to our ongoing success.”

MG Law Office Celebrates Growth and Promotions

MG Law Office is thrilled to announce the promotion of two outstanding associates and the addition of a new, highly talented associate to its team. These developments mark a significant milestone in the firm’s journey, showcasing its commitment to growth and excellence.


We are proud to recognize the dedication and exceptional work of Lasha Machavariani who has been promoted to Senior Associate and Elene Kutaladze, who has been promoted to Associate. Their hard work, legal acumen, and unwavering commitment to our clients and the firm have made them invaluable assets. Their promotions are a testament to their outstanding contributions and the faith we have in their continued success.

Lasha Machavariani joined our firm in 2019 and has shown remarkable growth in a short span of time. Lasha’s journey from joining as legal intern to his current role as Senior Associate is a testament to his exceptional legal skills, strategic thinking, and dedication to upholding our firm’s values. Lasha has played a pivotal role in numerous successful cases and has earned the trust and respect of clients and colleagues alike.

Elene Kutaladze, with us since 2022, has exhibited remarkable legal expertise, and a tireless work ethic. Her contributions have not only strengthened our firm’s reputation but have also delivered favorable outcomes for our clients

New Addition:

We are excited to welcome Giorgi Tsagareishvili to the MG family. Giorgi brings with him a wealth of experience and a fresh perspective that will undoubtedly enrich our practice areas.

Giorgi graduated with honors from Free University of Tbilisi and prior to joining MG Law, Giorgi was an intern at JSC Liberty Bank and from the beginning of 2021 till September 2023, he held different positions at BGI Legal, including, during the last year of his employment, a position as a Junior Associate and an Associate. We are confident that his skills and dedication will contribute significantly to our firm’s continued growth and success.

A Message from Managing Partner Archil Giorgadze:

“MG Law has always been committed to providing exceptional legal services to our clients. The promotions of Lasha Machavariani and Elene Kutaladze, as well as the addition of Giorgi Tsagareishvili, exemplify our dedication to nurturing talent and delivering the best possible results for our clients. This further strengthens our joint efforts to grow Andersen Georgia and MG Law as a one firm with diversified professional services. We look forward to the exciting journey ahead as our firm continues to expand and evolve.”

As we celebrate these achievements, we want to express our gratitude to our clients, colleagues, and friends who have supported us on this journey. We remain dedicated to delivering top-tier legal representation and are excited about the future.

For more information about MG Law Office and our legal services, please visit

MG Law Office Becomes Thought Leader and Contributor of Chambers Expert Focus

We are also delighted to share that Chambers Expert Focus has featured our latest article on their website, titled “Government Incentives to Drive Renewable Energy Investments in Georgia.”

The Government of Georgia (GOG) has made the development of a renewable energy (RE) market a top priority. To incentivise investments, the GOG has actively worked on creating a favourable legal framework for investors. In line with the Energy Community Treaty and the EU/Georgia Association Agreement, the GOG has implemented several reforms for establishing a competitive energy market to foster the growth of clean energy supply in Georgia.

By growing the number of RE projects, Georgia is directing its focus towards self-sufficiency and exporting electricity to neighbouring countries and Europe. To facilitate this endeavour, plans are underway to establish a Black Sea submarine cable connecting Georgia with Romania.

A significant milestone was achieved in 2022, when Georgia recorded its highest-ever income from electricity exports, totalling around USD85 million. Currently, most electricity exports are directed towards Turkey, where a surge in demand drove the approximate tariff per kWh up to 14.1 US cents in 2022.

Moreover, starting from 1 July 2023, operators in Georgia’s RE market will have the opportunity to trade on the Georgian Energy Exchange. This will foster market competition and create accurate price signals for both existing and potential market participants, thereby enhancing the overall efficiency of the electricity markets.

To ensure price stability and encourage investments in RE projects, the GOG recently approved the Support Scheme for Generation and Consumption of Energy from Renewable Sources and Capacity Auction Rules through Ordinance No 556 (the “Ordinance”). The Ordinance introduces a new support scheme for individuals/companies interested in investing in Georgia’s RE market. It includes the option to enter into a contract for difference (CfD) with the GOG.

On 10 February 2023, the Ministry of Economy and Sustainable Development of Georgia (the “Ministry”) announced its first CfD auction for a capacity of 300 MW. This led to the selection of 24 investment projects involving hydro, wind and solar energy, which are currently undergoing development.

What is a CfD?

A CfD is an agreement between a participant chosen in the capacity auction and the Electricity System Commercial Operator (ESCO). Under the CfD, ESCO is responsible for reimbursing the selected participant the difference between the tariff proposed by the selected participant and the price established in the day-ahead market if the proposed tariff is lower. Conversely, if the price in the day-ahead market is higher than the proposed tariff, the selected participant must compensate ESCO for the difference.

The execution of the CfD relies on the implementation of a feasibility agreement, which aims to assess the technical and economic viability of the project (the “Feasibility Agreement”).

Support Period

The support scheme covers a period of 15 years, and thus facilitates long-term financing agreements for investors, starting from the date of a power plant’s commencement of operation, for various renewable energy sources, and covering the subsequent months:

  • for a hydro power plant – 8 months (from September to April);
  • for a wind power plant – 9 months (from August to April);
  • for a solar power plant – 12 months; and
  • for other renewable energy plants – 12 months.

Terms of Payment of the Difference

Both ESCO and the selected participant are responsible for covering the difference between the proposed tariff and the price determined in the day-ahead market only during the Support Period.

The reimbursement amount will be calculated daily using the hourly data from the day ahead market, in accordance with the official exchange rate set by the National Bank of Georgia. The total reimbursement will be paid by the end of each reporting month.

CfD Auctions

CfD auctions are announced by the Ministry.

Participants willing to participate in the auction should submit the following documents to the Ministry:

• general information about the participant;

• prior technical and economic study of the potential project;

• proposed tariff;

• presumed schedule for implementation of the project;

• bank guarantee in the amount of GEL10,000 per MW;

• location and main parameters of the plant;

• topographic map of the location (scale 1:25,000);

• short geological information and map of the location;

• seismic information and map of the location;

• hydrological and meteorological information;

• energetical model;

• initial information regarding the environmental impact;

• potential scheme and possibility to connect the network;

• information regarding infrastructure;

• potential cost estimate;

• economic report;

• financial model;

• information about registration in the debtors’ registry; and

• confirmation that the company is not subject to liquidation or insolvency/rehabilitation processes.

The Capacity Auction Commission (the “Commission”) examines the participants’ applications. If any deficiencies are found in the submitted documents, the Commission allows additional time for the participants to make corrections. The Commission’s review process for applications usually lasts one to three months.

If there are several applications for the same project area, the project with the lower tariff will be selected.

Execution of the Feasibility Agreement and CfD

Once the project is selected, the Commission prepares a report which will be submitted to the GOG for approval. If the project is approved by the GOG, both the GOG and the selected participant will proceed to enter into the Feasibility Agreement. If the participant fully complies with the terms specified in the Feasibility Agreement, the GOG will then proceed to enter into the CfD with the selected participant.

Following the execution of the CfD, the selected participant is required to engage in trading activities on Georgia’s day-ahead market. After a period of five years from the start of the plant’s operations, the selected participant has the option to terminate the CfD by providing a written notice at least six months in advance.


In conclusion, the newly introduced legal framework by the GOG for CfDs is anticipated to offer positive prospects by ensuring price stability and long-term revenue certainty for RE projects. This, in turn, is expected to attract investments and foster the development of such projects.

Should you require further information, reach out to MG Law (Andersen Global Member Firm) at

Georgia Introduces Amendments to Gambling Law to Regulate Online Gaming

The Government of Georgia recently submitted a legislative package to the Parliament of Georgia with the aim of implementing new regulations for the organization of gambling and winning games through an online format. The legislative package encompasses amendments to various legislative acts, including but not limited to the following acts: the Law of Georgia on Lotteries, Gambling and Winning Games (the Law on Gambling), the Law of Georgia on Licenses and Permits, the Law of Georgia on License and Permit Fees, and the Law of Georgia on Gambling Business Fees (the Legislative Package). The proposed amendments seek to introduce a separate permit system, enabling effective control and oversight of the industry.

The Legislative Package underwent an accelerated parliamentary process, with the first and second hearings held in December 2022. Subsequently, on 10 February 2023, the final hearing took place, and the package was sent to the President of Georgia for signature and publication.

Defining Systemic-Electronic Games and Persons Affected

The Legislative Package introduced a novel definition for “organizing gambling and/or winning games in a systemic-electronic form.” This definition covers games conducted through the internet, telephone, and specially designed electronic platforms. The Legislative Package also includes provisions regarding “Persons Addicted to Gambling” and “Restricted Persons,” explicitly considering those addicted to systemic-electronic games as well.

Permit Requirements and Restrictions

Under the amendments, obtaining permits for organizing systemic-electronic gambling is mandatory. Separate permits are required for organizing casinos, totalizators, and slot saloons in a systemic-electronic form. The Legislative Package states that a permit for a systemic-electronic casino can be issued either with or without an existing permit for a land-based casino, and the same applies to slot saloons and totalizators, thus, permit for slot saloons and permit for totalizators can be issued either with or without an existing permit for a land-based slot saloon and an existing permit for a land-based totalizator. Additionally, the Legislative Package specifies that each permit for a slot saloon, totalizator, or casino can only cover a single website under a unique internet domain.

Restrictions on Land-Based Establishments

To comply with the new regulations, land-based gambling establishments, such as slot saloons and casinos, are prohibited from hosting computers or electronic devices for participation in systemic-electronic games. This provision aims to emphasize the requirement for a separate permit for systemic-electronic games.

Fines and Fees

The Legislative Package outlined the fines imposed for violations related to the permits for the gambling games in a systemic-electronic form. Persons found in violation of permit requirements under the Law on Gambling face a fine of GEL7,000, while those failing to meet permit fee deadlines may be fined GEL20,000. The Legislative Package also introduced annual fees and quarterly gambling business fees, varying based on the type of game and whether the person already holds permit for land-based gambling game. In particular, the Legislative Package established following annual fees:

(1) permit for organizing casino in a systemic-electronic form – GEL5,000,000;

(2) permit for organizing casino in a systemic-electronic form on the basis of the permit for organizing casino (land based) – GEL100,000;

(3) permit for organizing slot saloon in a systemic-electronic form – GEL1,000,000;

(4) permit for organizing slot saloon in a systemic-electronic form on the basis of the permit for organizing slot saloon (land based) – GEL100,000; and

(5) permit for organizing totalizator in a systemic-electronic form – GEL100,000.

Effective Date and Compliance

The proposed amendments will come into force on 1 June 2024. Thus, entities involved in systemic-electronic games must ensure compliance with the new regulatory framework before 1 June 2024. The Legislative Package further mandated the Government and Ministry of Finance of Georgia, and local municipalities to develop subordinate legislative packages related to the amendments by the same date.

The Legislative Package represents a significant step towards regulating online gaming activities in the country. By implementing a separate permit system, the Government of Georgia aims to exercise effective control over the industry. As the Legislative Package has already been approved, industry participants must prepare for compliance with the new regulations by June 2024.

News: Novel Regulations on Virtual Asset Service Providers

We would like to inform you that the Rules for Registration, Deregistration, and Regulation of Virtual Asset Service Providers (VASPs) have been approved.

MG LAW actively participated in consultations held by the National Bank of Georgia with specialists and stakeholders in this field. As a result, on June 13, 2023, the President of the National Bank of Georgia approved Order No. 94/04 (available here), which fulfills and clarifies the existing legislative amendments in relation to VASPs (please see our earlier publication).

This order sets out the information required for VASP registration with the National Bank, anti money laundering and counter-terrorist financing procedures, as well as other requirements, for example, the head office specifications and logging requirements. Additionally, the order establishes regulations governing VASP activities. For instance, it prohibits lending virtual assets to individuals and offering virtual asset services through agents, among other restrictions.

The order and associated regulations will come into effect on July 1, 2023. However, existing VASPs have specific timelines to comply with the regulations. Some of these timelines are as follows:

  • VASPs who exchange virtual assets in national or foreign currency through self-service kiosks must ensure proper video surveillance of these kiosks by January 1, 2024.
  • VASPs have a period of 1 year after registration, but no later than July 1, 2024, to implement a control system against money laundering and terrorist financing.
  • Persons who, prior to July 1, 2023, provided virtual asset services for the benefit of another person, have 3 months to implement a software (electronic) system that utilizes distributed ledger technology (DLT) to automatically detect suspicious or unusual transactions by processing existing information.

MG Law will provide a detailed overview of the rules for registration, deregistration, and regulation of VASPs in the following publications.

Introducing Microbanks – New Financial Institution in Georgia

Earlier this year the Parliament of Georgia adopted the Law of Georgia on Microbanks (hereinafter the “Law”) establishing a new financial institute in Georgia.

The main reason for the adoption of the Law was the institutional development and strengthening of the non-banking financial sector by the National Bank of Georgia (“NBG”). Moreover, compared to microfinance organizations, the microbanks will substantially reduce costs and enhance access to local and international financial markets. This will consequently contribute to reducing the cost of credit products and fostering increased competition.

Microbanks will be an addition to the Georgian non-banking sector which now encompasses microfinance organizations and lending entities. Given their crucial role in providing financial support to businesses and the population in Georgia’s regions, it became imperative to establish a distinct regulatory and supervisory framework for business models with varying contents, despite their similar status. This resolution is also in line with the need to enhance oversight over the non-banking institutions.

Under the Law, a microbank is a legal entity established in the form of a joint stock company which is licensed by NBG and is carrying out the banking activities as set out in the Law. Microbanks operate as financial institutions and serve as intermediaries between microfinance organizations and commercial banks. Their primary focus lies in lending to individuals who generate income through entrepreneurial endeavors, including agricultural activities. To maintain their distinct business model, at least 70% of the microbank’s credit portfolio consists of loans issued for entrepreneurial loans and/or the loans whose source of repayment is income from entrepreneurial activity.

It is noteworthy that the regulatory framework for microbanks will be different from other banking or non-banking institutions in terms of obtaining a license. In particular, while a commercial bank requires a capital of GEL 50 million, and a microfinance institution requires GEL 1 million, microbanks are mandated to have a charter capital of GEL 10 million to obtain a license. Additionally, microbanks shall not issue a loan exceeding GEL 1 million.

The Law limits the banking activities of the microbanks to the following:

  • issuance of loans, guarantees, letters of credit and leasing, carrying out factoring operations within the limit established by the Law;
  • attracting interest-bearing and interest-free demand and time deposits only within the limit established under the Law of Georgia on Deposit Insurance System as well as above the limit, servicing of current accounts in compliance with the liquidity requirements determined by NBG; as well as raising other repayable funds, including from individuals (including individual entrepreneurs) in accordance with the Law;
  • opening and servicing of correspondent accounts;
  • implementation of cash and non-cash payment operations and cash-collection services;
  • issuance of payment cards and organizing their circulation;
  • implementation of payment services, operation of the payment system, performance of settlement agent functions;
  • provision of interest-free banking services;
  • placement of derivatives, selling and purchasing of securities with own funds, except for the cases where the said activity requires a brokerage activity license;
  • sale and purchase of foreign currency with own and clients’ funds;
  • lease of property only for micro banking activities;
  • provision of virtual asset services in favor of another person in accordance with the Law of Georgia on the National Bank of Georgia; and
  • other services related to each of the above activities.

Microbanks will also be authorized, with the approval of NBG, to carry out the activities allowed for the brokerage company under the Law of Georgia on the Securities Market in accordance with the requirements established by the laws of Georgia.

The Law, among others, sets out the requirements for licensing of microbanks, the capital and reserves of the microbanks, the manner and limits of investments, the issues of transformation of the microbanks into a commercial bank, merger with the microbanks and division of the microbanks. The Law further regulates the issues of corporate governance, both the compatibility of the organizational structure and the criteria of the suitability of the governing bodies, the main issues of the formation and responsibility of the supervisory board, the directorate, and the issues of protection of bank secrecy and access to it.

As the Law regulates, a microfinance organization is authorized to apply for a microbank license. Under the Law of Georgia on Microfinance Organizations, a microfinance organization is generally authorized to provide various types of microloans, issue credit cards, invest in securities, handle remittances, act as an insurance agent, etc. However, after the introduction of the Law, applying for a microbank license shall also grant the microfinance organizations the authority to issue loans to individuals earning income from entrepreneurial activities (for example, agricultural activities) and combine other authorities granted to microbanks under the Law.

In case a microfinance organization applies for a microbank license, it is required to refrain from accumulating pledged assets for a period of two years from the date of receiving the microbank license, except for the monetary instruments of the NBG, which is necessary to ensure liquidity support. Moreover, during this period microbanks will have different individual requirements with respect to the liquidity coefficient. The Law shall enter into full force on 1 July 2023 and NBG shall issue acts stipulated by the Law by the said date.

The implementation of the Law is highly anticipated to have a significant positive impact on the country’s financial sector and overall economy. The expected effects include fostering healthy competition, enabling the provision of better quality and diverse financial services to customers, stimulating investments, enhancing organizational capacity and business assets, and supporting the growth of small and medium-sized businesses. These outcomes hold the potential to increase profitability, generate more employment opportunities, particularly in the regions, and contribute to the overall economic prosperity of the country.

As we look ahead, the Law presents a promising framework for fostering a robust and vibrant financial landscape that benefits both businesses and consumers alike.

Empowering Secured Transactions: Exploring Blockchain Arbitration and Smart Contracts

Smart contracts have evolved as a game-changing option for safe and automated transactions in the dynamic world of blockchain technology. These self-executing contracts that are stored on the blockchain offer increased efficiency, transparency, and mutual trust. But even in the world of smart contracts, disagreements can occur as with any contract. This is when a novel approach comes into play: blockchain arbitration. This cutting-edge domain offers a decentralized and effective means for settling disputes within blockchain networks, protecting the reliability of smart contract interactions, and offering an equitable path forward. This note investigates the nexus of blockchain arbitration and smart contracts, delving into the underlying principles that allow for secured transactions, looking at actual scenarios, and illuminating the transformational potential of this combined approach in forming the future.

As defined by Techopedia dictionary, smart contracts, a self-executing agreements, use distributed ledgers like blockchain to document and validate contract transactions in a secure, transparent manner without the need for oversight by a central authority. [1] They enable efficient and secured transactions without the need for middlemen by using if-then expressions and computer code. Smart contracts use cryptography to protect transactions and guarantee the confidentiality and integrity of data inside the contract. In order to validate and verify transactions, avoid double-spending, and ensure network participant agreement, they also use consensus methods like proof-of-work or proof-of-stake. Additionally, as the distributed ledger requires network-wide consensus to amend or tamper with transactions or contracts, the decentralized structure of blockchain networks offers an additional degree of protection.

A network of computers will execute the activities if certain conditions have been met. These can entail examples such as paying out money to appropriate parties, registering a vehicle, sending out notices, or issuing penalties. [2] In essence, blockchain technology replaces the need for escrow accounts, notarizing and/or certifying the documents and minimizes the involvement of third parties.

Smart contracts utilize oracles as trusted intermediaries, connecting them to external data sources and enabling the acquisition of real-world information for decision-making. Oracles locate and validate off-chain data, like market prices, environmental conditions, sporting event outcomes, or any other relevant information before delivering it to the blockchain’s smart contracts. As a result, smart contracts may decide what to do and when to do it depending on current facts.

International trade and supply chain management are two areas where smart contracts and blockchain technology have had a profoundly positive impact. Smart contracts simplify and secured global transactions by digitizing and automating procedures including customs declarations, shipment documents, and payment settlements. This lessens the administrative load and associated costs, as well as delays, increases transparency, and settles disagreements. It is becoming more and more clear that blockchain technology and smart contracts have the ability to change conventional cross-border trade and get rid of trade obstacles. Following the transaction’s completion, the blockchain is updated. Therefore, the transaction cannot be altered and only parties are given permission see the results. [3]

When a dispute arises out of or in connection with smart contracts, traditional methods of resolution may lack efficiency and transparency. In such cases, due to ability to provide verifiable and immutable records of contract execution, impartiality, and faster dispute resolution, blockchain arbitration offers an appealing alternative. As observed in Journal of International Dispute Settlement, blockchain arbitration enshrines the representation of delocalized arbitration, but simultaneously leaves room for a new representation of arbitration: decentralized arbitration. [4]

Blockchain arbitration differs from conventional arbitration in a number of ways. First and foremost, blockchain arbitration relies on the immutability and transparency of the blockchain to operate in a decentralized setting. As a result, there is less reliance on centralized authorities, and participant trust is increased. Second, the execution of arbitral awards can be automated thanks to the inclusion of smart contracts in the arbitration process. An award can be recorded on the blockchain once it has been rendered, creating a tamper-proof and legally binding record. The effective execution of arbitral decisions is guaranteed by this self-execution feature, which also eliminates the need for external enforcement measures such as national courts. Unlike traditional arbitration, where parties may face challenges in enforcing an award due to potential jurisdictional barriers and the need for court intervention, blockchain arbitration offers a streamlined and automated process. [5] By leveraging smart contracts and blockchain technology, the execution of the award is inherently tied to the contract terms, triggering automatic fulfillment of the agreed-upon outcome.

Blockchain technology’s automation, transparency, and reduced administrative overhead make blockchain arbitration an even more effective and affordable method of dispute settlement. The selection of arbitrators in blockchain arbitration can differ depending on the chosen arbitration rules or the established procedure. The arbitrator(s) will typically be chosen and agreed upon by the parties to the dispute themselves. They have the option of selecting a single arbitrator or a panel of arbitrators with pertinent subject-matter knowledge. As an alternative, certain blockchain arbitration platforms may use algorithmic or automated procedures to choose arbitrators based on specified criteria like reputation, credentials, or expertise. [6] In order to facilitate the resolution of conflicts within the blockchain ecosystem, it is important to ensure objectivity, expertise, and justice in the appointment of arbitrators.

The parties may commence the arbitration procedure by presenting their claims and supporting documentation to the appointed arbitral institution when a disagreement occurs. Depending on the particular arbitration platform or protocol being used in blockchain arbitration, the format and conduct of proceedings might vary. Though oral sessions can still be held virtually, blockchain arbitration primarily takes place in a digital setting. [7] Virtual hearings imitate the style of an oral hearing by allowing parties to present their arguments, show evidence, and have live conversations. In order to streamline witness hearings, blockchain arbitration platforms might provide tools like video conferencing or recorded video testimony. Remote witnesses may present their evidence by virtually appearing before the arbitral panel. Blockchain arbitration platforms may include features like secure document sharing, digital signatures, or other cryptographic methods to guarantee the accuracy and legitimacy of witness testimony. No matter where they are physically located, participants can communicate remotely, which increases accessibility and convenience. The arbitrator(s) will then evaluate the situation and come to a fair and enforceable conclusion by taking into account the conditions of the smart contract, any pertinent evidence, and relevant legal precedents. The blockchain can be used to store the arbitral award once it has been rendered, creating a permanent and irreversible record of the judgment.

Similar to this, the parties may decide to submit their disagreement to blockchain arbitration if it results from a regular contract dispute. However, the arbitration procedure might not be directly incorporated because the contract is not carried out in blockchain. Instead, the parties would have to concur to resolve their issue through blockchain arbitration. They can choose to adopt blockchain arbitration by including an arbitration clause in their contract or by signing a separate agreement. The procedure would then proceed according to the standard processes of arbitration, in which the parties would submit their arguments and supporting evidence and the arbitrator(s) would ultimately issue an award. To ensure transparency, immutability, and potential enforcement of the arbitral award, the blockchain aspect may be relevant for documenting the arbitration procedure and the final judgment on the blockchain.

It’s vital to remember that depending on the arbitral institution selected and the relevant jurisdiction, the specific processes and standards for blockchain arbitration may change. To ensure compliance with and knowledge of the arbitration process, parties should review the rules and guidelines of the chosen institution and seek legal counsel.

In conclusion, the integration of blockchain arbitration, smart contracts, and oracles has the ability to completely change how business is done. Smart contracts speed and secured transactions with their ability to self-execute, and oracles give users access to real-world data so they may make informed decisions. Furthermore, blockchain arbitration offers a quick and decentralized way to settle disputes within blockchain networks. The future of domestic and international transactions has the potential to change as the usage of these technologies increases, promoting more efficiency, transparency, and trust in our global economy.

[1]Margaret Rouse, Smart Contract Definition, Techopedia dictionary.

[2]Alfred Daniel John William, Santhosh Rajendran, Pradish Pranam,, Blockchain Technologies: Smart Contracts for Consumer Electronics Data Sharing and Secure Payment, Published in the special issue of Advances in Cryptography and Blockchain for Securing Modern Smart Communications, 2022

[3] Ibd.

[4] Maxime Chevalier, ‘From Smart Contract Litigation to Blockchain Arbitration, a New Decentralized Approach Leading Towards the Blockchain Arbitral Order’, in Thomas Schultz (ed), Journal of International Dispute Settlement, (© The Author(s); Oxford University Press 2021, Volume 12 Issue 4), pp.558-584

[5]Fox Mandal, Blockchain Arbitration: The Future of Dispute Resolution, Lexology, November 22 2021

[6] Thalia Kruger, Can Blockchain Arbitration become a proper ‘International Arbitration’? Jurors vs. arbitrators, May 22, 2022.

[7] Nevena Jevremović, 2018 In Review: Blockchain Technology and Arbitration, Kluwer Arbitration Blog, 2019

MG Law Firm Rises to Band 2 in Latest Chambers Europe Release

MG Law is proud to announce that we have moved up the ranks in the latest Chambers Europe release, now standing strong in Band 2. We are thrilled to share this incredible achievement with our Managing Partner, Archil Giorgadze, who has received exceptional feedback from Chambers. Archil has been praised for his extensive experience, client-oriented approach, and keen insights that keep him ahead of the game.

We would also like to extend our congratulations to our partner George Svanadze for his excellent ranking in this year’s release. Together, our team’s hard work, dedication, and exceptional service to our clients have led us to achieve this significant milestone.

We couldn’t have done it without the support of our valued clients and partners. We remain committed to providing outstanding service and achieving even greater success in the future.

Thank you for being a part of our journey!

MG Law advised Tbilvino on transaction based on which agreement was signed by the European Bank for Reconstruction and Development, TBC and Tbilvino.

We are pleased to announce that MG Law advised Tbilvino on transaction based on which agreement was signed by the European Bank for Reconstruction and Development, TBC and Tbilvino. With the trust and support of these financial organizations, a loan of 12 million GEL was allocated for the further development of Tbilvino.

Funding will be used for 3 different directions:

• Building a Qvevri wine cellar by a unique approach, which implies compatibility with the EBRD’s environmental policy, construction with natural materials and traditional methods;

• Purchasing high-performance, high-tech and at the same time energy-efficient bottling line;

• Cultivating vineyards of indigenous Georgian grape varieties with drip irrigation system.

New Regulatory Regime for Virtual Asset Industry of Georgia to Become Effective from 2023

On 9 September 2022, the Parliament of Georgia announced the framework of a new regulatory regime for virtual assets and associated services that will be effective from 1 January 2023 (the Amendments). The package of the Amendments will bring more clarity to the digital asset industry in Georgia. Mainly, the Amendments were made to the Organic Law of Georgia on National Bank of Georgia (the NBG Law Amendments) and the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism (the AML/CFT Law Amendments).
Before the Amendments were adopted, the only piece of legislation making a reference to digital assets was the Public Decision №201 of the Ministry of Finance of Georgia on Taxation of Crypto Assets and Services of Transmission of the Computing Speed (Power) for Mining, dated 28 June 2019 (the Public Decision). However, the Public Decision was designed to provide guidance for taxation purposes and left some legal aspects of digital assets ambiguous and subject to interpretation.
Notably, no amendments were made to the Tax Code of Georgia which means that the businesses operating in digital asset industry in Georgia shall continue taxation practice in the same manner. However, since the industry is constantly growing and in light of the recent legislative developments which clearly show that the Georgian Government plans to regulate the sector, constant monitoring of applicable legal and regulatory framework would be advisable to be carried out.

For the purposes of the Amendments, the virtual asset is digital representation of value that is interchangeable and is not unique, which can be digitally traded or transferred and used for investment and/or payment purposes. Virtual assets do not include digital representations of fiat currencies, securities and other financial instruments (the Virtual Asset).
From the definition of the Virtual Asset, it is clear that the Parliament of Georgia chose not to follow several jurisdictions’ approach according to which the virtual asset can be treated as the securities. Notably, NFTs are also excluded from the legal definition of Virtual Asset.
According to the Amendments, the Virtual Asset is not a legal means of payment, and it is prohibited to make payments with Virtual Asset. This prohibition does not apply to exceptional cases when such payment is necessary for providing the virtual asset services. The list of such exceptional cases will be determined by the National Bank of Georgia (the NBG) later. It is ambiguous how the prohibition of making payments with Virtual Asset will work or will be interpreted by the relevant authorities. However, such prohibition will be impractical and illogical to apply to exchange of Virtual Asset for some services or goods.
The Amendments specifically define the convertible virtual asset which is a Virtual Asset that has an equivalent value on the market in national or foreign currency, in other virtual asset or financial instruments in which it can be exchanged.
The Amendments will apply to the virtual asset services providers. According to the NBG Law Amendments, virtual asset services include: (1) exchange (including via kiosks) between convertible virtual assets and national or foreign currencies or one or more forms of virtual assets or financial instrument; (2) transfer of convertible virtual assets; (3) safekeeping and/or administration of convertible virtual assets or instruments necessary for using the convertible virtual asset enabling to control them; (4) management of portfolio consisting of convertible virtual assets (except management of collective portfolio); (5) administration of the trading platform of the convertible virtual assets; (6) borrowing of convertible virtual assets; or (7) initial offering of such assets and the service related to initial offering (the Virtual Asset Services).
All persons/entities providing the Virtual Asset Services for or on behalf of another person are deemed to be virtual asset service providers (VASPs) and, thus, shall comply with the Amendments.

Before the Amendments were introduced, VASPs had no obligation to comply with Georgian AML/CTF regulations. However, according to the AML/CTF Law Amendments, VASPs are added to the list of accountable entities which are obliged to observe the AML/CTF requirements. Obligation to act in accordance with the AML/CTF regulations will apply to VASPs only if they are involved in the management of convertible virtual assets or convertible virtual assets accounts.
After 1 January 2023, VASPs will be obliged to evaluate and manage the risks of money laundering and the financing of terrorism associated with their activities and adopt an effective system for that purpose. While assessing the risks, VASPs shall identify a client and its beneficial owner, the essence of their activities and location, product, service or the means of their provision, transactions and other risk factors and implement the following preventive measures:
a) identify and verify a client based on a reliable and independent source;
b) identify a beneficial owner and take reasonable measures for verification thereof based on a reliable source;
c) identify essence of the client’s business and acquire information about nature, volume and frequency of the prospect transactions; and
d) examine the transaction prepared, made or executed within the business relationship in order to determine whether such transaction complies with the information about the client, commercial or professional activities of the client or its risk level. If necessary, the VASPs shall also examine the origin of the client’s property, funds and convertible virtual assets.
VASPs shall implement these preventive measures in the following cases:
a) establishment of a business relationship;
b) concluding a single transaction associated with the Virtual Asset Services if the value of such transaction exceeds USD 1,000, EUR 1,000 or GEL 3,000;
c) single transfer of monetary funds if the value of such transfer exceeds GEL 3,000 or its equivalent in foreign currency;
d) there is a doubt that the identification data of the client is not correct.
VASPs shall ensure that before transfer and/or receipt of convertible virtual assets the required identification information about the client and the transfer is obtained.
VASPs shall retain the information obtained within the scope of the Georgian AML/CTF regulations for 5 years from the termination of business relationship with the client or conclusion of a single transaction.
The entity which is supervising compliance with the AMl/CTF regulations is LEPL Financial Monitoring Service of Georgia.

VASPs are obliged to register at the NBG and comply with the registration requirements which are yet to be adopted by the NBG. It is prohibited to provide Virtual Asset Services without such registration.
VASPs are prohibited to carry out any activity other than providing Virtual Asset Services or other related services.
The NBG may terminate or restrict operations of VASPs if such operations involve increased risks of money laundering and terrorism financing or avoiding the financial sanctions, hinder traceability of a transaction or supervision.
In case VASPs violate the normative acts of the NGB, they might be subject to monetary penalties.
The fee for registration as a VASP amounts to GEL 5,000.

The exhaustive list of activities that Georgian commercial banks are allowed to carry out is determined by the Law of Georgian on Commercial Bank Activities. New package of the Amendments also envisages addition of the following activity to such list:
“Provision of the Virtual Asset Services for the benefit of other person, particularly, exchange (including via kiosks) between convertible virtual assets and national or foreign currencies, other virtual currency or financial instrument, transfer or storing virtual assets or other assets necessary for their use enabling to exercise overall control over the virtual assets and auxiliary services.”
Due to addition of the above services within the scope of the permitted activities of the commercial banks, it is ambiguous whether the commercial banks are still required to register as a VASP. This addition might be interpreted as an automatic inclusion of the above services to the banking activities which will most likely give a leverage to the commercial banks over the entities involved only in the provision of the Virtual Asset Services which will be required to comply with the registration requirements. Continue reading “New Regulatory Regime for Virtual Asset Industry of Georgia to Become Effective from 2023”