GEORGIAN LEGAL SCIENCE ABOUT BANK GUARANTEE

European Scientific Journal November 2014 /SPECIAL/ edition vol.1 ISSN: 1857 - 7881 (Print) e GEORGIAN LEGAL SCIENCE ABOUT BANK GUARANTEE Nino Chipashvili 0 Student 0 0 Grigol Robakidze University Tbilisi , Georgia Representation of European Union in Georgia says that, Since 2004 trade between Georgia and European Union has been developing fast, European Union has become the main trade partner of Georgia and the share of trade with it became equal to one third of the annual trade balance [4]. Georgia was actively involved in the international commerce and bank relations. The geographic location of the country contributed to it as the short way from Asia to Europe passes through Georgia South corridor, as specified in the agreement of association of Georgia with European Union (AA) signed on June 27, 2014. According to the Appendix XV-A of the mentioned agreement, Georgia undertook the obligation to gradually draw its legislation nearer to the legislation of European Union and international legal instruments in the banking sphere. One of the objectives of the association agreement is integration of Georgian economy to European Union through deep and comprehensive free trade area (DCFTA). In this new reality bank guarantee acquires great significance, as quickly executable and strong security of performance of monetary obligations at the international market. It will perfectly facilitate this integration. This article is dedicated to the views and scientific opinions of Georgian well-known doctors and professors of law, related to the legal side of the bank guarantee that is reflected in their monographs. This article shows, according to the opinions of Georgian scientists, how ready Georgian law is for new challenges. Uniform Rules for Demand Guarantees (URDG); Bank guarantee; Beneficiary; DCFTA - Introduction On June 27, 2014, the agreement of association of Georgia with European Union was signed. The issue of trade acquired even more importance in the context of deep and comprehensive free trade area (DCFTA) between Georgia and European Union. At present, all states of European Union should ratify the agreement concluded with Georgia which will turn customs, bank and trade relations into new mode. In order to make the stages of development of Georgian legal science in the scientific study of legal status of bank guarantee clearer, let us follow chronology from the time when this term was used for the first time in the legislation of independent Georgia. Bank guarantee has established in free and independent Georgia since June 26, 1997. For the first time this term was used in Georgian civil code and its main definitions remained almost unchanged until today. Legal regulations of the bank guarantee in the private part of Georgian civil code are given in chapter 21 of contractual law, which is called bank service, and twelve articles are dedicated to it - from 879 to 890 inclusive [7]. By the time, when the legislator has adopted a new civil code, Georgian independent bank system was very young. Some legal relations, which were offered to the country and monetary-credit system by the new civil code, were unexpected by their innovations and at the same time offered freedom of transactions and comprised many types of agreements. The banking sector to work without hindrances, according to the Article 1517 of transitional provisions of Georgian civil code, the National Bank of Georgia was assigned to ensure cancellation of restrictions related to opening of bank accounts for physical persons. This happened in order all physical and legal persons to be able to open accounts and enter into bank service agreements stipulated by Georgian civil code. Obviously, it concerned bank guarantees as well [7]. Prior to entering of the new code into force, physical persons had the right to conclude only deposit agreements. Obviously, the legal regulation, defined by twelve articles of new civil code was not enough for detalization that required the banking sector. By this time, ICC publication No 458 for demand guarantees has been in force for only three years. However, it was an international unified rule and the banks were careful about transfer of its norms by direct analogue into the internal regulations of the country. Now it is clear that ICC publication No 458 comprised many vague norms and could not ensure deepening of confidence towards bank guarantee, although in comparison with its forerunner - ICC publication No 325, it was undoubtedly high quality act. In order the legal nature of bank guarantee, as securing of performance the monetary obligation, was clear for business, scientific explanations, study of foreign experience and court practice were required. But at the time when Georgian civil code came into force, court reform was just starting in the country; its objective was selection of candidates for the positions of qualified judges, further training and creation of fair court. A large group of Georgian lawyer-scientists started to work at creation of comments of civil code of independent Georgia and conducted high-volume work. Civil code comments were issued in five volumes and acquired high popularity. The editorial board, under the guidance of Professor Lado Chanturia, composed of Besarion Zoidze, Tedo Ninidze, Roman Shengelia and Jonny Khetsuriani, created comments on Georgian civil code for the private part of obligatory law, including the relevant articles of the bank guarantee. Along with the professors, comprising the editorial board, famous Georgian lawyer-scientists - M. Kakhadze, T. Chitoshvili, Z. Dzlierishvili, T. Zambakhidze, D. Sukhitashvili and Sh. Chikvashvili worked on this issue. The comments on twelve articles, related to the bank guarantee, belong to the Professor of the Faculty of Law of Tbilisi State University, Roman Shengelia, a prominent scientist in Financial Law [3]. These comments were the first scientific explanation that were dedicated to the bank guarantee and were issued in 2001[5]. The content of the articles, related to the bank guarantee is explained in the comments. He made clear rights and obligations of the parties of the transaction and indicated the legal status which characterizes the bank guarantee as a unilateral and non-accessory transaction, which means that it does not depend on the main obligations, nor the order, that the principal gave to the guarantor for certain payment. The irrevocability of the bank guarantee, entering of the guarantee into force, the form of submission of demand for payment to the guarantor, the obligations and rights, performed by the guarantor, which were explained in comments, served to clear expression of legal essence and objective of this financial instrument. Georgian civil code and its comments deal only with local bank guarantees that are issued within Georgian territorial framework. These comments are scientific explanation of Georgian civil code. They do not have the oblig (...truncated)