Blue Tropic Ltd & Anor v Chkhartishvili

A person who controls property under managerial authority acts unlawfully if that authority is used to appropriate the property for personal benefit. Article 992 of the Civil Code of Georgia creates a freestanding delict. It does not require a criminal conviction, breach of another legal provision, or misconduct by an intermediary. Article 1008 requires actual knowledge of damage and the person liable. Article 130 does not supplement that specific tort limitation period with constructive knowledge. An amendment adding further particulars of the same Article 992 claim is not a new claim; alternatively, it may be allowed under CPR 17.4(2) where it arises from substantially the same facts.

Two BVI companies claimed damages under Georgian law from Ivane Chkhartishvili for directing the transfer of Georgian real estate and company shares to entities owned or controlled by him. He contended that oral arrangements with Arkadi Patarkatsishvili made him beneficial owner, or entitled him to deal with the assets, and pleaded limitation.

The trial concerned liability only. The central issues were ownership entitlement, liability under Article 992 of the Civil Code of Georgia, limitation, and whether the amended direct claim could be maintained.

1. Liability. The assets were held by the companies and their shares ultimately belonged to Arkadi Patarkatsishvili through the Nile Trust. The defendant had authority to direct dealings with the assets, but that authority was managerial and did not confer beneficial ownership. His appropriation of the assets for his own benefit was wrongful.
2. Article 992. Article 992 creates a freestanding delict. The requirements were a person who causes damage, damage, unlawfulness, and intentional or negligent conduct. The defendant’s instructions caused the transactions. The intermediary’s authority or state of mind did not prevent the defendant’s conduct from being unlawful. No criminal offence, breach of another provision, or breach of duty by the intermediary was required.
3. Limitation. Article 1008 provides a three-year period from actual knowledge of the damage or the person liable. The intermediary and trustee knew of the transactions but not of the defendant’s intended appropriation. Transfers for no consideration did not establish knowledge of damage in the circumstances. Article 130 did not alter the self-contained tort limitation regime.
4. Amendment. The April 2015 amendment supplied an additional way of alleging breach of Article 992 and did not introduce a new claim. Alternatively, it arose from substantially the same facts and could be allowed under CPR 17.4(2).
5. Disposition. Judgment was entered for the claimants on liability. The defendant was liable to pay damages, to be assessed, and his counterclaim was dismissed.