Южнокавказский Юридический Журнал # 03/2012 Субъекты предпринимательства и право South Caucasus Law Journal Vol. 03/2012 Entrepreneurs and Law
Vakhtang Menabde 1 The Substance of the Right to Own Shares In Accordance with the Case-Law of the Constitutional Court of Georgia I. Introduction In order to determine the constitutionality of the mandatory redemption of shares, five independent claims were filed with the Constitutional Court of Georgia 2, which the Court ultimately joined under one active case and issued a final judgment on May 18, 2007. This was one of the landmark decisions in the practice of the Constitutional Court concerning the right to property. On July 11, 2007, the Parliament of Georgia amended the provision, and subsequently, on March 14, 2008, following several textual changes, it was finally passed. It is essential to identify the extent to which the legislature took into consideration the shortcomings due to which the provision was declared unconstitutional, and whether we are dealing with the so-called phenomenon of overcoming the ruling of the Constitutional Court. The following article is an attempt to provide answers to these queries. II. The Initial Content of Mandatory Purchase/ Sale and the Rulings of the Constitutional Court On May 25, 2005, the Law of Georgia On Entrepreneurs was amended to include a provision, according to which a shareholder, who owned over 95% of the shares in a joint stock company, shall be entitled to ac- 1 Lecturer of Public Law at Ilia State University, Lawyer at the Georgian Young Lawyers Association (GYLA) 2 I. On March 16, 2006, citizens of Georgia D. Mtvarelishvili, E. Peradze, N. Kalandadze, I. Natsvlishvili and Z. Natroshvili (shareholders of JSC Telenet ) filed their constitutional complaint (Registration #370) with the Constitutional Court of Georgia. II. Citizen of Georgia, Z. Elashvili filed a constitutional complaint (Registration #382) with the Constitutional Court of Georgia on April 25, 2006. The plaintiff was a shareholder of JSC David Sarajishvili & Eniseli. III. On June 1, 2006, citizens of Georgia, S. Mashia and R. Gogia (minority shareholders of JSC Ekrani ) filed their constitutional complaint (Registration #390) with the Constitutional Court of Georgia. IV. On August 15, 2006, citizen of Georgia, A. Mandzulashvili filed a constitutional complaint (Registration #402) with the Constitutional Court of Georgia. The plaintiff was a shareholder of JSC Kaspicementi. V. On August 18, 2006, a constitutional complaint (Registration #405) was filed with the Constitutional Court of Georgia by the Public Defender of Georgia. quire shares from the remaining holders in spite of their consent. The redemption shall take place at a fair price. The shareowner who owns less than 5% of the equity stake is known as the minority shareholder, while the individual holding over 95% of the shares is the majority shareholder. Herewith, the specified amount should be in the hands of a single shareholder. This article may not be employed when a group of shareowners includes more than one minority shareholder. 3 1. Right of Ownership of Shares and Grounds for its Limitation In order for the Constitutional Court to discuss the constitutionality of the provision, it was necessary, for the purposes of Article 21 of the Constitution, to determine, prima facie, whether a share constituted property. 4 The Court decided this question in the affirmative, stating that a share has a very specific legal nature; [inter alia] a share is a document that reflects a proprietor s ownership stake in the property of a joint stock company and confirms the holder s right to the share. [ ] the property on the share is realized in case of disposal of the share as well as during the liquidation of the corporation, since it allows the shareholder to receive property of the liquidated joint stock company in accordance with his or her share. Moreover, the stock grants its owner the right to receive a share of the company s profit. Thus, a share is not a form of presumptively acceptable virtual income, even in the case when it comes to dividends. A share is a legally authenticated document certifying the right of 3 Compare: Law of Georgia On Entrepreneurs, Art. 533 (May 24, 2005 version) 4 Article 21 (1995 version, which was in force at the time of the ruling) 1. The Right to Property and Inheritance is recognized and guaranteed. It is prohibited to abolish the right to property, its purchase, alienation or inheritance. 2. For the purpose of urgent public necessity, the restriction of these rights is permissible in cases determined by and in accordance with the procedures established by law. 3. For the purposes of urgent public necessity, the expropriation of property is permissible in cases expressly determined by law, in accordance with a decision of a Court, or in keeping with urgent necessity stipulated by organic law and only with appropriate compensation. Article 21 (October 15, 2010. #3710 entered into force starting January 1, 2011) 1. The Right to Property and Inheritance is recognized and inviolable. It is prohibited to abolish the universal right to property, its acquisition, alienation or inheritance. 2. For the purposes of urgent public necessity, the restriction of rights stipulated in Paragraph 1 of this Article is permissible in cases determined by and in accordance with the procedures established by the law in such a way that would not violate the essence of the right to property. 3. For the purposes of urgent public necessity, the expropriation of property is permissible in cases expressly determined by law, in accordance with a decision of a Court, or in keeping with urgent necessity stipulated by organic law, on the condition of advance, full and fair compensation. The compensation is exempted from all taxes and fees.
Вахтанг Менабде SCLJ 3/2012 253 ownership and status of the shareholder, which is well protected by Article 21 of the Constitution. 5 After classifying shares as an area protected by the right to property, the Constitutional Court proceeded to inspect the extent to which the restriction of this right corresponds to the standards established by the Constitution. There are two types of limitations provided for in Article 21 of the Constitution. In the version of the Constitution in force at the time of the ruling, these limitations were expropriation (confiscation of property by the state), and restriction of rights. In this case, the issue referred to the restriction of rights, the principles of which are stipulated by Paragraph 2 of Article 21 of the Constitution. Under Paragraph 2 of Article 21, restriction shall be applied in cases prescribed by law and in accordance with the established rule. The case of mandatory sale of shares, the transfer of more than 95% of voting shares of a joint stock company into the ownership of one of the shareholders, which grants him or her the right to acquire shares from other holders, is established by Article 533 of the Law On Entrepreneurs. The Article also regulates the mandatory sale of shares from the minority to the majority shareholders. 6 Taking this into consideration, the Court brought the case in question into compliance with Paragraph 2 of Article 21 of the Constitution. This signifies that we are dealing not with expropriation, but rather with the restriction of rights. 2. Urgent Public Necessity The restriction of the right to ownership according to Paragraph 2 of Article 21 of the Constitution should be carried out in the case of urgent public necessity. Thus, the Constitutional Court attempted to clarify, within the given dispute: (1) what is signified by urgent public necessity, and (2) whether the expropriation of property (mandatory sale of shares) within the circumstances of existing regulation was implemented under conditions of urgent public necessity. When referring to urgent public necessity, the Constitutional Court stressed the relativity of this concept, noting that it [ ] is neither concrete, nor universally suitable for all societies. It is variable in time and space, taking into account political, economic, and/or social givens. Therefore, that which is considered urgent public necessity in one society may not be treated as such in another. Moreover, that which is understood at a given moment as urgent public necessity may not be seen as such in the future, or vice versa. An existing concept which cannot be currently la- 5 Decision N2/1-370,382,390,402,405 of the Second Chamber of May 18, 2007 of the Constitutional Court of Georgia; on the case Citizens of Georgia, Zaur Elashvili and Suliko Mashia, Rusudan Gogia and others, and the Public Defender of Georgia v. Parliament of Georgia, P. II.9; 6 Ibid: P. II.12; belled as urgent public necessity may assume such significance in the future. While defining urgent public necessity, it is greatly essential to identify the object of property rights, its nature and social significance. In this context, the circumstances that constitute urgent public necessity in relation to one object of property may not constitute such necessity with regards to another. 7 In specific cases, the substance of urgent public necessity is defined by the legislature. An action undertaken for the purposes of urgent public necessity does not signify that it is directed at the avoidance of specific and inevitable negative consequences for the public. For the purposes of urgent public necessity, the legislature may act when driven by positive consequences for the public or its part. In addition, it is not necessary for the legislature to indicate the urgent public necessity in accordance to which the provision is being adopted. The existence of urgent public necessity may be determined as a result of the analysis and interpretation of the provision. 8 In determining urgent public necessity, the Court proposed a type of ranking system, according to which a particular adjudicator would determine whether, in a specific case, we are dealing with statutory urgent public need. In its turn, the Constitutional Court establishes how adequately the legislature, and the particular law, understand urgent public necessity. 9 The Court concluded that the mandatory sale of the shares by minority shareholders to majority shareholders may not be considered to be a legitimate purpose in the context of urgent public necessity, since it is a restriction. This is contrary to Paragraph 2 of Article 21, which reviews restriction not as a purpose, but as a means of achieving it. The aim of the Constitutional Court is to determine whether there is a legitimate objective seen by the legislature, and subsequently assess whether the mandatory sale of shares is a proportional means of achieving this objective. 10 Following the analysis of the mandatory sale of shares, the Constitutional Court established the basic postulates which the legislature shall rely on during the introduction of this regulation, so as not to violate the minority shareholders right to property. The legislature must determine the provision that regulates mandatory sale of shares in such a way that would maintain a balance between the parties, and exclude the possibility of abuse of economic power. The minority shareholder is fully entitled to know why his or her shares are transitioned into the ownership of the majority shareholder. The minority shareholder shall have the legal means to express his or her position. The majority shareholder s desire to hold the full stake of shares is indeed understandable and natural; however, it is not a 7 Ibid: P. II.12; 8 Ibid :P. II.15; 9 Compare, ibid: P. II.15; 10 Ibid: P. II.17;
254 SCLJ 3/2012 Вахтанг Менабде justification for restricting property rights. The existence of 95% or more of shares in the possession of one shareholder shall not in itself mean the emergence of public necessity for mandatory sale of shares. The mandatory sale of shares may be exercised only in cases where it is a necessary tool to ensure the normal functioning and development of the enterprise. 11 When the Parliament of Georgia, following the said decision, returned the same provision to the realm of Georgian law, it should have implemented its modification on the basis of the principles described above. When clearly summarized, these principles are as follows: The existence of 95% or more of shares in the possession of one shareholder shall not in itself mean the emergence of public necessity for mandatory sale of shares; The mechanism shall be a necessary tool to ensure the normal functioning and development of the enterprise; The minority shareholder is fully entitled to know why his or her shares are transitioned into the ownership of the majority shareholder; The minority shareholder shall have the legal means to express his or her position; The legal means shall be so effective as to exclude the possibility of abuse of economic power by the majority shareholder (a fair balance should be struck between the parties). 3. Proportionality In discussing proportionality, the Court divided the issue of the constitutionality of the disputed provision in two; the Court discussed [...] firstly, the extent to which the decision-making and enforcement procedures of the mandatory sale of shares are in compliance with the requirements listed above, and, secondly, the extent to which the procedure for determining the price of the mandatory sale of shares provides fair reimbursement of minority shareholders. 12 3.1 Decision-making and enforcement procedure The Court stated that [...] a regulation adopted with the motif of economic effectiveness may not be imposed upon one party as a unilateral burden; otherwise, in addition to the legal problems, there is a risk of market disruption, and the imbalance of supply and demand. The regulation established by Article 533 of the Law On Entrepreneurs does not meet these requirements. It clearly violates the fair balance in favour of the majority shareholder. From the disputed provision, [...] does not outline the purposefulness of the mandatory sale of shares. This, in 11 Ibid: P. II.26; 12 Ibid: P. II.26; turn, allows the majority shareholder to buy out the shares of the minority stockholder even in the case where there is no necessity for the enterprise. [...] 13 The Court has established several issues in connection with the Mandatory Sale of Shares in Georgia, due to which the provision is inconsistent with the right to property protected by the Constitution of Georgia: The minority shareholder has no legal means for protection against the abuse of economic power by the majority shareholder; The minority shareholder has no means to obtain adequate information on the reasons for the mandatory sale of shares and determine his or her position in this regard; The procedure envisaged by the provision is nontransparent; during the mandatory sale of shares, the minority shareholder is effectively submerged in an information vacuum and is in a far less advantageous position than the majority; The legal system is unable to ensure the protection of the minority shareholders or the determination of their rights. 3.2 The procedure for determining the fair value of shares The disputed provision provided for several mechanisms for determining the fair value of shares. However, [...] the term fair value is not legally defined. [...As the Court expounds...] particular importance should be given to the determination of legal procedures for establishing fair value that are unambiguous, clear, and allow no party to manipulate others. 14 [...] The mechanisms for the determination of fair value were as follows: Mandatory tender offer (which the Court has considered as being in accordance with the Constitution); 15 In cases when at the time of the enactment of Article 532 of the Law On Entrepreneurs the majority shareholder is in possession of over ½ of the voting shares of the joint stock company, the Law envisages two mechanisms for the determination of fair value: 16 o The determination of fair value through the assistance of an independent expert or a brokerage company (legal control) the Constitutional Court has also considered this method as being in compliance with the Constitution; o The determination of fair value by the regulations prescribed by the statute of the joint stock company. In the first instance, the legislature establishes the 13 Ibid: P. II.28; 14 Compare, ibid: P. II.29; 15 Compare, ibid: P. II.29; 16 Compare, ibid: P. II.30;
Вахтанг Менабде SCLJ 3/2012 255 lower limit of the fair value the fair value must not be less than the highest price, which the shareholder implementing the redemption has paid for the shares of the company during the last 12 months. However, this provision only applies in those cases where a sale/procurement of shares of the joint stock company has taken place during the specified period. Nevertheless, the lower limit of the fair value is unclear in those cases where over the last 12 months the shareholder implementing the redemption has not purchased any company stock or trade in these shares has not been carried out at all. 17 When the procedure for the establishment of fair value is determined by a statute of the company, the balance is yet again violated to the detriment of the minority shareholder, allowing him or her no means for legal protection. 18 Thus, the Constitutional Court has assessed the constitutionality of the procedure for the establishment of fair value stock, and considered its one aspect to be compliant with the constitution, while the second was found noncompliant. III. The Reaction of the Parliament: Overcoming the Ruling of the Constitutional Court? It can be said that the following two issues became the basis for the above discussed decision of the Constitutional Court to recognize the disputed provision as unconstitutional: Within the framework of the given provision, during the mandatory redemption of stock by the majority shareholder, urgent public need was not established; In some cases, there was no relevant procedure for the determination of fair value of shares. The Constitutional Court s consideration of a provision as unconstitutional essentially does not signify the annihilation of the capability of the Parliament. In accordance with the Court s ruling, it enables the Parliament to bring the unconstitutional provision within the frames of the Constitution with the aim to eliminate the highlighted shortcomings, and re-enact it following the required modifications. Moreover, this procedure is useful in terms of constitutionalism. In this case, the Parliament of Georgia could correct the deficiencies and re-adopt the provision, which it intended to do. On March 14, 2008, the Parliament of Georgia amended the Law On Entrepreneurs with Article 534 On Mandatory Sale of Shares. The first paragraph of the Article expounds on the right of the shareholder to redeem stock from other shareholders at a fair value. 17 Compare, ibid: P. II.30; 18 Ibid: P. II.32; The second paragraph illustrates the right of the Court to render a decision with regards to the mandatory sale of shares. This practice is set out in the Civil Procedure Code of Georgia. Accordingly, the fair value and date of the redemption of stock are determined by the Court ruling on the mandatory sale of shares taken in accordance with regulations prescribed by the Civil Procedure Code of Georgia. According to Law, no later than one month prior to addressing the Court, the buyer shall publish an application through the Government Printing Office with regards to the mandatory redemption of shares. The application shall contain information on the reasons for, and the terms and procedures of the redemption. As can be seen above, the Law provides for regulations, according to which decisions on the mandatory sale of shares are made by the Court. The fair value of stock is also determined by the Court. As for the reasons for redemption, their determination is the prerogative of the majority shareholder. The Law On Entrepreneurs also stipulates the right of the Court to render a decision on the mandatory sale of shares. In order to assess the extent to which the given entry is consistent with the standard established by the Constitutional Court of Georgia, the possible bases for the Court s ruling should be examined. This requires a proper analysis of the Civil Procedure Code of Georgia. On July 11, 2007, Chapter XXXIV2 on the proceedings for cases on the mandatory sale of shares in the Civil Procedure Code of Georgia was amended. Article 30913 of the Civil Procedure Code 19 deals with the consideration of the application on the mandatory sale of shares. Paragraph 4 of the Article indicates that the application on the mandatory sale of shares is discussed at the Court hearing. The Court verifies the compliance of the procedures of the mandatory sale of shares with the requirements of the Law. This issue is more broadly regu- 19 Article 309 13 1. In its ruling on the acceptance of the application on the mandatory sale of shares, the Court shall determine the appropriate time for an oral hearing and immediately notify the parties of the time and place of the hearing. Then together with a subpoena, the shareholder the redemption of whose stock is required by the buyer (hereinafter referred to as interested party ) shall be sent copies of the application and accompanying materials and notified on a deadline for the presentation of his/her viewpoints. 2. If the number of interested parties is more than two, they are required to appoint a representative. 3. The Court shall consider the application and render an appropriate decision no later than one month from the receipt of the application. 4. The application shall be reviewed at a Court hearing. The Court shall verify the compliance of the procedures of the mandatory sale of shares with the requirements of the Law. The failure of any party to appear in court does not prevent the resolution of the issue. (July 11, 2007. N5286)
256 SCLJ 3/2012 Вахтанг Менабде lated by Article 309 14 20. The first paragraph of the Article states that, If the Court establishes the compliance of the procedures of the mandatory sale of shares with the requirements of the Law, and it issues a ruling on the mandatory sale of shares. Otherwise, the Court makes a decision rejecting the requirements of the application. According to Paragraph 2, the Court s decision on the mandatory sale of shares establishes the concepts of fair value and date (appropriate time at the end of the workday) of the redemption of stock, in compliance with which the buyer shall redeem shares from beneficiary shareholders (registration date of redemption). In establishing the fair value for the redemption of shares, the Court shall take into account the following three issues: a) The value of these shares on the securities market; b) Estimated future revenue to be collected by the company; c) The company s assets and liabilities. As seen from the analysis, the Court determines two issues and reflects them in its decision: (1) the compliance of procedure for the mandatory sale of shares with the requirements of the Law, and (2) fair value and date of the redemption of shares. With regards to the provision on entrepreneurs, the application published by the majority shareholder on the mandatory sale of stock, among other things, should contain information on the reasons of the redemption. The validity of these reasons, or their compliance with the Constitution, is not verified by the Court which is not granted a right to do so by the legislation. IV. The Third Wave of Lawsuits. The Plaintiffs Errors Following the above, a number of suits were filed with the Constitutional Court in two sets. However, the Court recognized neither case as valid. The reason for the Court s decision was the action of the Parliament. According to Paragraph 2 of Article 13 of the Law of Georgia On Constitutional Proceedings, the rescission of the contested act or the nullification thereof 20 Article 309 14 : The Court ruling in relation to the application on the mandatory sale of shares. 1. If the Court establishes the compliance of the procedures for the mandatory sale of shares with the requirements of the Law, and it issues a ruling on the mandatory sale of shares. Otherwise, the Court renders a decision rejecting to meet the requirements of the application. 2. According to the decision of the Court on the mandatory sale of shares, the date and the fair value of the redemption of the stock shall be set (appropriate time at the end of the workday), in compliance with which the buyer shall redeem shares from beneficiary shareholders (registration date of redemption). 3. In determining fair value for the redemption of shares, the Court shall consider the following: a) The value of these shares on the securities market; b) Estimated future revenue to be collected by the company; c) The company s assets (including reserves of the enterprise, business reputation, experience, prospects, and business contacts of the enterprise), and liabilities. (July 11, 2007. N5286) at the moment of the proceedings causes the termination of the Constitutional Court case, except when the constitutional complaint is essentially pending and it deals with human rights and freedoms. At this point, three different claims were filed with the Constitutional Court: 1) by the Ombudsman - on September 3, 2007 21 ; 2) by Ms Suliko Mashia on November 19, 2007 22 ; and 3) by Mr. Zaur Elashvili on January 9, 2008. On March 14, 2008, the Parliament of Georgia adopted a new version of the Law On Entrepreneurs, after Amendment #5913. The amendment was made to the Law during the period between the filing of the suit by the plaintiff and the case passing the test for admissibility. This formally signified that the Law contested by the claimants was abolished by the Parliament and replaced with a different provision, due to which none of the cases were received by the Constitutional Court. Subsequently, the plaintiffs filed repeated suits against the now existing provisions. On July 21, 2008, a constitutional complaint was filed with the Constitutional Court by Mr. Zaur Elashvili, citizen of Georgia 23 ; on August 1, 2008 by Ms Suliko Mashia, citizen of Georgia 24 ; on December 5, 2008 by the Public Defender of Georgia 25. The plaintiffs considered that the impugned provision had the same content as Article 533 of the Law of Georgia On Entrepreneurs, which was recognized by the Constitutional Court of Georgia as unconstitutional. Therefore the contested provision is contrary to Paragraph 4 of Article 25 of the Organic Law of Georgia On the Constitutional Court of Georgia, according to which the Parliament is not entitled to adopt a provision with similar content to that of an unconstitutional provision. The plaintiffs stated that if the Court would arrive at this conclusion at the hearing on preliminary issues, the impugned provision would be rendered null and void as per Paragraph 41 of the Article. The plaintiffs had filed suits against the appropriate Articles of the Law On Entrepreneurs and considered that the existing amendments did not clarify the specific cases where urgent public necessity could be applied. The Court stated that this was [...] connected to the issue of appropriate legal protection of the minority shareholder. The requirement of the complaint itself did not allow for discussion on this issue. Instead, it was limited to the first Paragraph of Article 534 of the Law On Entrepreneurs, which determines the essence, rather than the legal procedure, of the mandatory sale of shares and the position of 21 Ruling of the Constitutional Court #2/5/433 of June 23, 2008 on the case Public Defender of Georgia v. Parliament of Georgia. P.I.1; 22 Ruling of the Constitutional Court #2/7/446 of June 24, 2008 on the case Citizen of Georgia, Suliko Mashia v. Parliament of Georgia. P.I.1; 23 Ruling of the Constitutional Court #2/2/457 of May 4, 2009 on the case Citizen of Georgia, Zaur Elashvili v. Parliament of Georgia. P.I.1; 24 Ruling of the Constitutional Court #2/3/460 of May 5, 2009 on the case Citizen of Georgia, Suliko Mashia v. Parliament of Georgia. P.I.1; 25 Ruling of the Constitutional Court #2/5/467 of June 8, 2009 on the case Public Defender of Georgia v. Parliament of Georgia. P.I.1;
Вахтанг Менабде SCLJ 3/2012 257 the minority shareholder in this process. 26 Under the conditions of applicable regulation, the complaint requirements also do not allow for the assessment of whether there is a possibility of abuse of economic power by the majority shareholder. The reason for this is, as noted above, the plaintiff had not appealed against the provisions regulating the rules of mandatory sale of shares. 27 Accordingly, we were dealing with a case where the substance of the arguments presented by the plaintiffs was unrelated to the contested provision. This constitutes a violation of the requirements stipulated by sub-paragraph e of the first Paragraph of Article 16 of the Law of Georgia On Constitutional Jurisprudence, as well as a valid reason for the Court to deny consideration of the merits of the claim, which is provided for by sub-paragraph a of Article 18 of the same Law. It can be said that the mistake of the plaintiffs saved the Parliament of Georgia. If not for this factor, no one can predict how the dispute may have ended. The Court advised the claimants to search for the problem within the provisions that determine the procedure. However, following the failed contest, no plaintiffs have since re-applied to the Constitutional Court. V. Existing reality and challenges - the prospects of constitutional complaints Taking the above into consideration, a brief summary of the disputes that have been raised in Georgia pertaining to the procedures of mandatory sale of shares can be made. Moreover, it is also possible to discuss the prospects of new constitutional complaints. The Constitutional Court considered the provision on the mandatory redemption of shares unconstitutional due to two principal reasons: 1. During the process of determination of the mandatory redemption of shares, urgent public necessity was not being established; 2. In some cases, there was no procedure compatible with the Constitution for the determination of fair value of shares. As a result of the amendments proposed by the Parliament of Georgia, the following situation emerged: 1. The Court verifies the compliance of the procedures of mandatory sale of shares with the relevant requirements of the Law; 2. The Court establishes fair value and date of the mandatory redemption of shares. However, the Court has no authority to inspect whether the mandatory redemption of shares by the majority shareholder takes place consequent to urgent public need. It seems, of the two reasons that resulted in the recognition of the provision as unconstitutional, one is still present. It should be noted that the existence of either of these reasons alone points to the unconstitutionality of the provision; their cumulative existence is not necessary. Once it has been determined that the existing regulations are unconstitutional, the possibilities for the restoration of the violated provision shall be considered. The plaintiffs have appealed to the Constitutional Court several times to no avail. The final claim was rejected by the Court due to the fact that the relevant disputed provisions (the Law On Entrepreneurs ) did not create the problem which the plaintiffs indicated as the reason to be, which is discussed above. The case concerns a flawed judicial procedure, according to which the establishment of urgent public necessity does not take place during mandatory redemption of shares; the procedure itself is determined by relevant provisions of the Civil Procedure Code. Thus, it would be appropriate if, in the course of the dispute, the plaintiffs appealed with their constitutional complaints to the relevant provisions of the Civil Procedure Code, which would increase the effectiveness of their disputes. However, until the Constitutional Court renders a decision on such an appeal, there is a reality, according to which, despite the decision of the Court, the Parliament of Georgia has yet to develop adequate safeguards for the protection of the property rights. It has overcome the ruling of the Constitutional Court. This fact requires appropriate legal action. However, the Constitutional Court is powerless until an individual whose rights have been violated deems it necessary to appeal to the authority of constitutional review in order to protect his or her rights. 26 Ibid: P. II.5; 27 Ibid: P. II.6;