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What Is Yours Is Mine, Or How to Seize Strange Property

10.03.2009
Eka Kevanishvili

Today, private property owners unsuccessfully tried to protect their properties from the predatory plans of the government. These people are shareholders, private persons and legal entities; the seized property had been their own for many years. Our investigation will expose one script of the Government written for the court – how to seize the property of people?

Multi-storied building in Vazha-Pshavela Aveneu # 16 is known among residents of Tbilisi as the building of Ministry of Construction or Ministry of Refugees because these governmental agencies worked in this building at different times. Our investigation deals with the argument between the owners of this building. The parties to the conflict are JSC “Kalakmsheni” and Ministry of Economic Development. On December 19, 2008 Tbilisi City Court made decision in favor of the state and five stories of the building was assigned to it. “Kalakmsheni” considers that the court did not pass fair judgment and appealed against it at the Appeal Court.

The Court Is Accused for…

Nino Tabatadze, attorney of “Kalakmsheni” asserts that the judge did not study the claimings in the case material properly. Judge Gvritishvili did not attend the discussion of the evidences and neither had he got interested in them afterwards. He was satisfied by listening to the parties and then passed illegal and groundless decision.

Nino Andriashvili, lawyer for the Human Rights Center, blames the court for not having used the right of protecting private legal entity as it is envisaged in the law. In accordance to the Article 19 of the Administrative Procedural Code of Georgia the court could collect evidence based on its initiative if it considered provided evidence insufficient. It must be mentioned that only Administrative Court can enjoy this right and it is considered to be one of the most important achievements of the Georgian Legislation; it is guarantee for the protection of the private property envisaged under the Article 21 of the Constitution of Georgia. Dimitri Gabunia, attorney of “Kalakmsheni” blames the court for one more violation. He thinks that issuing of the administrative protocol at the court was violation of their right because they did not attend the process. The reply of the court to their protest regarding this case was also absurd; the court claimed that their presence at the trial could not have changed the decision. The court was cynic when it tried to prove that Article 21 of the Constitution of Georgia protected only those property-owners whose legality does not cast any doubt. The court acted as it should have acted: based on the data of the Public Registry the court did not consider that “Kalakmsheni” was owner of the property and assigned it to the state.

Our investigation team asked several questions to Tbilisi City Court. We requested them to explain the activities of the Judge Gvritishvili. The court considered that we requested a report from them and reminded Article 84 of the Constitution of Georgia according to which private person does not have right to request explanations from the court about the activities of the judge. They suggested us to read the case discussed by Tbilisi City Court that we had already done.

Which Facts Did the Court Study?

Aleksandre Tateishvili, present chairman of the Council of Supervisors of the JSC “Kalakmsheni”, reported to the investigation team that everything started from the visit of two investigators of the prosecutor’s office. It happened in autumn 2005. They delivered a letter signed by City Prosecutor to the board of the JSC based on which they requested the documentation on founding the “Kalakmsheni” and some legal protocols. The board of the “Kalakmsheni” was explained that they wanted to investigate the privatization process of the building that had taken place years before and Joint Stock Company had office now. Representatives of the prosecutor’s office explained that criminal case was launched against former high-ranking officials of the Construction Ministry regarding this fact.

Nugzar Petelava was the chairperson of the Council of Supervisors of the JSC at that time; Lili Arobelidze was the director of the company. The investigators gave one day to them to collect all documents. The board provided the prosecutor’s office with the documents on time. Despite that, before the prosecutor’s office started the investigation the JSC was demanded to leave the building immediately and to assign it to the state.

Nugzar Petelava died with heart attack next day of one of his visits at the prosecutor’s office.

Lili Arobelidze, director (the style is not changed): “The prosecutor’s office directly demanded us: “Give up the property”. We tried to explain to them we could not give up the property because it belonged to much more people than two of us… Who enjoys visiting the prosecutor’s office, particularly when they are arguing about your property? Nugzari and I used to visit them; one day, after a visit at the prosecutor’s office I called Nugzari at his office and learned he was not in. I called him at home and I was told he had died with heart attack… Of course everybody gets very nervous when somebody is seizing final income of your family. It is the only income I have now and you can judge how can give up the property you have collected during your life. Then, somebody comes and takes it from you.”

Two weeks after the death of Nugzar Petelava representatives of the Prosecutor’s Office visited the “Kalakmsheni”. One of them was Vakhtang Samkhtuashvili. They requested the director to go to the prosecutor’s office. Aleksandre Tateishvili was member of Council of Supervisors of the JSC then and he appeared to the prosecutor’s office too. He recalled his visit to the prosecutor’s office.

“Samkhtuashvili told us the state is in difficulties and it needs reinforcement. So, we had to give up our property. Furthermore, they demanded the entire building. I own 8 percent of the shares. According to the documents the building had 105 shareholders. So I told the investigator I could not make decision about the property instead other shareholders. In reply to my words he started threatening “we will act in other way then.” I said we had not committed anything illegal and they could study the case and look for violations. I was sure they would not find anything and even if they could find anything we would have only to pay fine. It did not mean seizure of property.”

When Tateishvili was called to the prosecutor’s office, MPs, representatives of opposition parties and media involved the investigation. The case became famous. Prosecutor’s Office was changing its positions. They gave up fighting for entire building and now argued for five floors of the building. They offered Tateishvili: JSC could keep one floor in their ownership out of 5 floors they had owned for last 13 years. The rest was to be assigned to the state. Tateishvili directly replied: “If we have done anything illegal you can take all five floors but if we are right than all five floors will be ours.”

The prosecutor’s office checked all the details in privatization and could not find any violation. Later, the Law on Legalization of Property was enacted. The prosecutor’s office called “Kalakmsheni” and reported the criminal investigation was dropped against the JSC and they could take the resolution. However, the JSC could not get the resolution yet; nobody gave it to them.

Maybe, “Kalaksheni” would never have learned what was going on about their five floor if one occasion had not happened. According to Tateishvili, one of the organizations located in the building decided to register small part of the space at Public Registry. He received agreement from all owners of the rest of the space. The representatives of this organization got a new data from the Public Registry where the document stated that the five floors were registered on the state. The transfer document is dated by April 4, 2007.

Economics to Public Registry; Pubic Registry to Economics

Or Free Interpretation of the State Program “What Is Mine Is Mine”

While JSC “Kalakmsheni” thought everything was calm about their property the Ministry of Economical Development was registering the disputable building officially. The Minisntry applied to the Public Registry in written form and requested to abolish the decision on registration the floors from III to VII in the building in Vazha Pshavela Ave. # 16 in Tbilisi and requested to register it on the state. The letter is signed by Kakha Damenia, Deputy Minister of Economical Development.

The Public Registry satisfied the application of the Ministry of Economical Development and canceled the former decision of the state registrator though the changes were not reported to “Kalakmsheni”.

“We learned about the decision of the Public Registry on April 30. We hired an attorney and appealed to the court on the final day; we requested the abolishment of the administrative protocol. We requested abolishment of those recordings of the Public Registry where our five floor were registered on the state. As it turned out the state stole the property because they failed to extort it from us,” said Aleksandre Tateishvili.

Government and Unfair Witnesses Hired by the Government

Certain Otar Jghamadze was introduced as a defender of the interests of the government in the case on “Kalakmsheni”. He worked at the scientific-industrial center of informatics and computer technique at the Ministry of Construction of Georgia. Jghamadze wrote in his letters to the Ministry of Economics and Prosecutor’s Office that privatization of the building was conducted illegally. He blamed "Kalakmsheni" for some violations. The board of the JSC replied all accusations of Jghamadze in their letter and reinforced their claimings by corresponding law.

 Aleksandre Tateishvili
Aleksandre Tateishvili: “Jghamadze provided the court with documents like resolution of the Ministry of Property Management and division register. The court relied on this document and did not check it. However, Jghamadze wrote in his letters that those documents were signed by earlier date that means the documents were false! The court should have request the expertise of these documents?!”

Privatization-Why Conclusion of Chamber of Control Was Not Envisaged?

Since the parties have not agreed yet on the disputable issues, we decided to study the documents and laws dated back in several years. We met Otar Jghamadze who still occupies his position and asked why he blamed “Kalakmsheni” for the violation and asserts that the JSC appropriated the building illegally. Furthermore, there is a conclusion of the Chamber of Control issued in 1997 where violation during the privatization is not mentioned at all. Jghamadze told us that the JSC privatized those floors where Ministry of Construction was located; so legal entity “Sakkalakmsheni” could not become an owner of the space.

Otar Jghamadze reminded us that according to that time legislation administrative building could not be privatized; however, neither we nor Mr. Otari could find a law that could confirm his assertion.

Mr. Otari said that he had complaints about the floor where his center was located. However, his application to the Ministry of Economics demonstrates completely different attitude where the applicant requested the ministry: to confirm that floors I-VIII and XII-XIV belong to the Ministry of Economics.

This letter demonstrates that Jghamadze is an interested party and he does not care about the fate of the second floor. The Ministry of Economics tries to extort the private property with his support. The law authorized the court to conduct independent investigation to find out legal owner of the space. If the court were independent it could get hold of evidence against the executive government, more precisely the Ministry of Economics which tried to extort the property of legal entity with the support of dishonest witness. Jghamadze’s effort in favor of the Ministry of Economics can be explained as follows: The violations he had discovered in the privatization process based on which he demanded abolishment of the privatization and assignment of the property to the state. Aleksandre Tateishvili stated: “I wonder how Public Registry could manage in one day to find out, estimate and work out conclusion on which the financial group of the Chamber of Control was working for several months?”

Lili Arobelidze stated that “Kalakmsheni” had all documents in order. “247 000 USD was paid for the privatization through my personal particpation. Initially there were 105 shareholders of the JSC. Everybody received his/her shares; part of them was for free according to that time legislation. Another part of them was discounted but we paid most sum. I do not know who could assign the JSC to other owner without agreeing the issue with the rest of owners.”

One more shareholder, Valeri Kambarashvili, stated in his interview with us that the privatization was conducted under oppression as the resolution of the government claimed. “Initially we were state institution, then we were granted with the status of enterprise and this property was allowed to be privatized. People had worked in the enterprise for over 40 years and the state envisaged the deed of the personnel and allowed them to enjoy some advantages during privatization. We hold documents to prove it. This property was purchased by the collective and we made a large effort to purchase it. Some of us sold a flat, others sold cars and we privatized the building after investing our last sources in it. Many people could not believe that formation was changing and people could have private property…”

All in all, “Kalakmsheni” with its personnel-150 people-purchased 52, 8 % of the entire capital; that was more than half property. The rest of the property could not be sold because the personnel could not collect entire sum. Then, state sold the remaining 47 % at the auction (the auction was public). “Kalakmsheni” paid 247 000 USD for the upper building that was not small sum for the state budget.

Everything was done according to the law. The information about the privatization was announced in the newspapers “Mesakutre” and “Matsne”. The process was not closed as Jghamadze claimed in his letters.

There is one more document which is very interesting in the case materials: the reply of the Ministry of Property Management of Georgia to Guram Korkashvili, former chairman of the Council of Supervisors of “Kalakmsheni” which stated that 100 % of the JSC “Sakkalakmsheni” was sold by the state and it was owned by private person. It is strange why the court did not pay attention to this fact.

Gift or Lend?

As a result of privatization the state sold the upper building though requested the board of the “Sakkalakmsheni” to assign five floors of the building to the state for temporary usage; these floors are now topic for the disagreement. Aleksandre Tateishvili and Valeri Kambarashvili stated that space was assigned and it was kind will of the shareholders. However, when they agreed to grant the property for temporary usage none of the shareholder imagined that they were returning the purchased property to the state. However, Kambarashvili states that this resolution was not legal because the state obliged the private legal entity to assign the property to the state at least for operative management. The price of the five floors was completely expressed in the statute capital of the JSC and nobody doubted that they would lose the property.

In addition to that, the Chamber of Control worked in the organization for many months, studied the privatization process and its legality; the chamber wrote in the conclusion that entire building was purchased by “Kalakmsheni” and there were no violations in it.

But there is one document which raises many questions and which acted as a basis for the court decision; it is the resolution of the Ministry of Property Management passed on August 25, 1994. There are three variants of the document. Only one of them, a document kept in the archive of the “Kalakmsheni” has signature of Avtandil Silagadze, former Minister of Property Management. The second and third variants of the document are corrected and does not coincide each other; one of them does not have signature of Silagadze. It is astonishing that the court relied on one of these unsigned documents while passing the decision. The signed resolution states that Committee of the Construction Cases shall use the five floors owned by “Kalakmsheni” for operative management. One of the unsigned documents, the one from the archive of the Ministry of Economics states: “Five floors (III-VII) owned by “Kalakmsheni” was assigned to the Committee of the Architect and Construction Cases for operative management without any payment.” The final phrase is also crossed.

Former Minister Avtandil Silagadze confirmed in his conversation with us the validity of the signature on the resolution of the Collegium. We showed him the rest two variants of the document withdrawn from Public Registry and Ministry of Economics which do not have his signature though he could not explain anything about the validity of the documents.

One disputable document relies on the resolution of the Collegium; it is so called division register which states that Guram Korkashvili, former head of “Sakkalakmsheni” assigned “his own five floors of the upper building” to Mirianashvili, former chairman of the committee of the architect and construction cases.

Today, Ministry of Economics states that assignment from one to another balance meant giving the property as a present; however, the ministry cannot produce the corresponding law to confirm it. “Kalakmsheni” asserts that it is absurd. First of all, not a single variant of the resolution of the Collegium obliged the JSC to assign its property to another; besides that, the price of the entire building is very well expressed in the statute capital of the Kalakmsheni” and it contains the price of the five floors as well (the entire price was paid) and finally, if similar property was assigned, at least meeting of shareholders should have been held. The division register is signed by Guram Korkashvili and it causes even more suspicion who requested the Chamber of Control to assist him to regain the five floors from the Ministry of Construction several years later. We could not check the information with Korkashvili because he died.

We visited Davit Gelashvili, former deputy of Avtandil Silagadze whom we asked if the space indicated in the statute capital could be granted as a present and he replied: No, it cannot be.

Ministry of Economics Is Calm

The Ministry of Economics explained to us that state gained its property back and has not breached the rights of property owners: Karlo Laferadze, head of legal department of the ministry, stated: “JSC “Sakkalakmsheni” assigned five floors to the committee of architect and construction for free. It was free assignment of the property and the most important is that it was obligatory act to assign the five floors. If we discuss the issue according to the law these five floors are state property. As for registration at the Public Registry as soon as the state discovered the mistake tried to correct it. As for the payment for the property it is interesting why they paid the tax for the property which was not registered on them. Or, I mean how they could pay the tax when the five floors were assigned to the state?”

There can be only one reply to this situation: if the state had decided to keep the space then, it had to introduce corresponding changes in the documents which will be apart from those five floors; that means state and private properties should have been isolated.

At least, the state should not have sold the rest 47 % of the building at the auction but only 10 % of it; as for the shares of the 5 floors that was 37 % was not to be sold.

Thus, the state sold everything and then borrowed the space from “Kalakmsheni” and requested it for free. Now the state claims that although the space was sold they did not want to sell it and it is state property again,” said Aleksandre Tateishvili.

***

The case was being discussed for over one year at the court and three judges were changed meanwhile. Initially Lela Tsanava was judge who prohibited the public registry to introduce amendments to the resolutions regarding the five floors. Tateishvili states that it was his request because there was a doubt the floors were supposed to be sold. The court did not satisfy the request. Tsanava led the case discussion to the main discussion and then she was appointed in Batumi court and Ilona Todua replaced her. She also conducted several discussions though when the parties were called to be introduced with the decisions the judge was changed again and Dimitri Gvritishvili read the judgment without main discussion. Dimitri Gabunia, lawyer for “Kalakmsheni” stated that Gvritishvili in fact did not know the case materials; because he involved the process only at the final stage.

Aleksandre Tateishvili: “We know that we are right and we will appeal to the European Court too if it is necessary. There we will not demand only 5 floors but reimbursement of the damage we have received since the state occupied the space and we have not received any income from it. Believe me, it will not be a small sum and although the state budget will afford to pay it, every citizen of our country will have to pay it because budget is filled with our money.”

If “Kalakmsheni” wins the case in Strasbourg what will happen with us? That means the Georgian judiciary system has passed verdict against each citizen of Georgia.

Lia Toklikishvili, Leader of Journalistic Investigation

Investigation was conducted within the Project “Monitoring of Judiciary System in Georgia” implemented by the Human Rights Center and Magazine “Sitkva”

The project is supported by Eurasian Partnership Foundation

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