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On 21 February 2014, at the plenary session of the Georgian Parliament, Member of the Parliamentary Majority, Zviad Dzidziguri, stated:  “Ninety-nine percent of lawsuits between business and the state were decided in favour of the state. Over the last year, however, 70% of such disputes were resolved in favour of business. Furthermore, currently, at the Council of Appeals at the Ministry of Finance of Georgia more disputes are resolved in favour of business than the government.

FactCheck

took interest in the statement of the MP and decided to verify its accuracy.

We interviewed Zviad Dzidziguri about the abovementioned statement. Dzidziguri informed FactCheck’s

Parliamentary Representative that he has no specific statistical data on the aforementioned issue with his statement being based upon generally available information disseminated through the press and other media.

Aiming to shed more light on the matter, we addressed the Supreme Court of Georgia with the following questions:

  • How many lawsuits between business and the state have been discussed by the Courts of First Instance throughout Georgia from 1 January 2004 to the present day? How many of the disputes were finalised in favour of the state?
  • How many lawsuits between business and the state have been discussed by the Tbilisi and Kutaisi Courts of Appeals from 1 January 2004 to the present day? How many of the disputes were finalised in favour of the state?
  • How many lawsuits between business and the state have been discussed by the Supreme Court of Georgia from 1 January 2004 to the present day? How many of them were finalised in favour of the state?

The response received from the Supreme Court of Georgia enclosed a general statistical report adopted in the Georgian courts; however, it did not contain a separate sheet describing the disputes between business and the state. Therefore, the Supreme Court could not provide the data according to our requested specifications. Consequently, we cannot discuss the lawsuits between business and the state in concrete terms; that said, however, we are able to analyse the disputes between administrative bodies (governmental) and individuals/legal entities (non-governmental).

The tables below contain the data obtained from the Supreme Court of Georgia and cover the years 2008-2013. They display the administrative cases discussed by the Courts of First Instance, the Courts of Appeals and the Supreme Court.

Administrative lawsuits discussed by the Courts of First Instance:

dzi1

Administrative cases discussed by the Chamber of Administrative Cases of the Court of Appeals:

dz2 Cassation complaints discussed by the Chamber of Administrative Cases of the Supreme Court of Georgia:

dz3

As illustrated in the tables above, the disputes resolved in favour of the administrative units in 2008-2012 by the Courts of First Instance never exceeded 70.6%. The similar data of the Court of Appeals did not exceed 67.3% in 2008-2012. The highest indicator (57.5%) of the lawsuits discussed by the Supreme Court and resolved in favour of administrative units was observed in 2012. The abovementioned statistical data shows that the percentage (99%) Zviad Dzidziguri speaks about is exaggerated. However, herewith it should be pointed out that in 2013, if compared to 2008-2012, the number of lawsuits resolved by the Courts of First Instance in favour of state agencies has, in fact, been reduced while it remains the same as in the previous years in the case of the Court of Appeals and the Supreme Court.

As for the lawsuits won by individuals/legal entities in 2013, they comprised 61.4% in the case of the Courts of First Instance (this indicator is somewhat similar to the number [70%] reported by Dzidziguri) while it comprised 44% in the case of the Court of Appeals and 45.9% in the case of the Supreme Court. Herewith, of note is the fact that as compared to the previous years, the growth in the number of disputes resolved in favour of individuals/legal entities in 2013 was observed only in the case of the Courts of First Instance. In the Court of Appeals and the Supreme Court, the situation remains the same as in 2008-2012.

In addition to the data displayed above, we also decided to review the statistical data pertaining to tax disputes.

Tax disputes discussed by the Courts of First Instance:

dz4

Tax disputes discussed by the Chamber of Administrative Cases of the Court of Appeals:

dz5

Tax disputes discussed by the Chamber of Administrative Cases of the Supreme Court of Georgia:

dz6

The statistical data above shows that in 2008-2012, the number of tax disputes won by administrative agencies in the Courts of First Instance was extremely high but never exceeded 84%. Herewith, it is worth noting that the situation in this respect has also not changed significantly in 2013 with the index of the last year comprising 78%. In 2008-2013 the number of tax disputes won by state agencies in the Court of Appeals never exceeded 70.3%. As for the Supreme Court of Georgia, the highest number (45.6%) of disputes won by state agencies in this instance was observed in 2012.

In 2013 tax disputes resolved in favour of private persons (non-governmental) in the Courts of First Instance comprised 21.9%. This data is similar to the data of 2008-2012 and is largely different to the indicator (70%) identified by the MP. In respect to the Court of Appeals and the Supreme Court, tax disputes won by individuals in 2013 equalled 60.6% and 70.1%, respectively. Of note is the fact that the abovementioned data has increased if compared to the similar indicators of the previous years.

Zviad Dzidziguri also speaks about the Council of Appeals at the Ministry of Finance of Georgia in the second part of his statement. FactCheck

paid attention to this issue earlier; however, we decided to review the statistics of the abovementioned agency here as well.

The Council of Appeals is addressed by individuals/legal entities. The chart below displays the statistical data of the complaints submitted to the Council of Appeals from 2009 to the first three quarters of 2013.

dz7

The statistics show that in the first three quarters of 2013 the number of complaints sustained in favour of individuals was significantly higher although the same situation was observed in 2012 and 2011. Regardless of the fact that in 2009 and 2010 the majority of the complaints were not satisfied, the situation improved in the next two years and, thus, there has been no significant breakthrough in 2013 in this respect.

Conclusion

Our query revealed that in the courts of all three instances, the number of administrative cases won by the state agencies never exceeded 70.6% throughout the period 2008-2012. The statistics of tax disputes, in particular, is somewhat similar as well. In this case the percentage of the cases won by the state agencies in the Courts of First Instance was quite high; however, it never exceeded 84%. Of note is the fact that the situation has remained rather unchanged in 2013 as well with the index of the last year in this respect equalling 78%. As illustrated by the statistics, the number named by the MP (99%) is amplified.

As for 2013, the indicator of administrative lawsuits won by individuals/legal entities in the Courts of First Instance comprised 61.4% (that is close to the number [70%] reported by Dzidziguri), the number of winning cases equalled 44% in the case of the Courts of Appeals and it amounted to 45.9% in the case of the Supreme Court. Herewith, it is worthy of note that if compared to the previous years, the number of disputes resolved in favour of individuals/legal entities in the Courts of First Instance increased in 2013 while the situation remained almost the same as in 2008-2012 in the case of the Courts of Appeals and the Supreme Court of Georgia. In terms of tax disputes the situation is as follows: tax disputes won by individuals in 2012 comprised 21.9% in the Courts of First Instance. This data is similar to that of 2008-2012 and significantly differs from the number (70%) named by the MP. As for the Courts of Appeals and the Supreme Court, tax disputes won by individuals in 2013 equalled 60.6% and 70.1%, respectively. Noteworthy, too, is the fact that these indicators have increased as compared to the same data of the previous years. Therefore, this part of Dzidziguri’s statement is inaccurate.

In order to give a comprehensive picture on the subject, FactCheck

reviewed the statistics of the complaints submitted to the Ministry of Finance. It turned out that in the first three quarters of 2013 the number of complaints upheld in favour of the individuals was much larger, however, the same holds true for 2012 and 2011. It is also true that in 2009 and 2010 most of the complaints were not satisfied but the situation improved in the next two years with no significant breakthrough having been observed in this respect in 2013.

Based upon the evidence discussed in the article, we conclude that Zviad Dzidziguri’s statement:  “Ninety-nine percent of lawsuits between business and the state were decided in favour of the state. Over the last year, however, 70% of such disputes were resolved in favour of business.  Furthermore, currently, at the Council of Appeals at the Ministry of Finance of Georgia more disputes are resolved in favour of business than the government,” is MOSTLY FALSE.

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