5 Reasons Why Nika Gvaramia's Verdict is Unfounded - საერთაშორისო გამჭვირვალობა - საქართველო

5 Reasons Why Nika Gvaramia's Verdict is Unfounded

08 June, 2022

Transparency International Georgia has studied the guilty verdict delivered against Nika Gvaramia, a former director of Rustavi 2 TV company and the founder of Mtavari Arkhi, on May 16, 2022, which fails to meet the criteria of lawfulness, substantiation and fairness. Judge Lasha Chkhikvadze of the Tbilisi City Court found Nika Gvaramia guilty of abuse of powers (on two counts) under Article 220 of the Criminal Code of Georgia and sentenced him to three years and six months of imprisonment.

Considering the neglect of legitimate questions regarding the impartiality and objectivity of the judge, poor legal reasoning in determining the guilt and sentencing of Nika Gvaramia, dearth of systemic analysis of facts presented in the form of evidence and lack of use of corresponding court practice, legal literature or academic materials, we can conclude that the decision delivered against Nika Gvaramia is unsubstantiated.

1. The Issue of Recusal of Judge

The decision does not fully reflect the issues concerning the recusal of the judge. On 15 December 2021, the defense made a request for the recusal of the judge as one of the individuals on the witness list was a close friend of the judge and a person interested in the outcome of the case. According to the judge, his friend was merely a witness in the case, which could not constitute the grounds for the recusal. Furthermore, the ruling reads that the issue of recusal should not depend on a desire, opinion or hypothetical assumption of the defense. It goes on to say that the defense should have presented a factual circumstance casting doubt on the impartiality and objectivity of the judge.

However, the judge has ignored the fact that his close friend is the incumbent director of the media holding that manages Rustavi 2. Consistently, the director of the holding could have had a direct financial interest in the delivery of a guilty verdict against Nika Gvaramia. Although the judge did not deny the fact of having a close friendship and regular communication with that person, the motion for the recusal of the judge was denied.

According to the Criminal Procedure Code of Georgia[1] and the Bangalore Principles of Judicial Conduct,[2]  a judge may not participate in the hearing of a case if there are circumstances that question his/her objectivity and impartiality. A close friendship with an individual interested in the outcome of the matter is one of the circumstances that should have constituted the grounds for the recusal of the judge.

 2. The Episode of 2015 (the So-called Commercial Airtime Sale Case)

The court changed the qualification of the embezzlement charge leveled by the prosecution, found Nika Gvaramia guilty of abuse of official duties and sentenced him to a fine worth GEL 50 000. The court considered it established that by modifying the rule of sale of commercial airtime on 16 January 2015 and receiving less revenues over the period between September to December 2015, as compared to the previous year, Nika Gvaramia acted against the interests of the company and deliberately caused damages to the company.

The court disregarded a number of amicus curiae briefs submitted to it,[3] which clearly stated that the lawfulness of managerial decisions taken by a director of a company must be primarily assessed from the perspective of corporate law and in light of the duties and responsibilities of a director.

Holding a director liable for a decision, taken in the process of corporate management, which did not bring a company as much income as in the previous year contravenes the business judgment rule. Guided by the interests of the company, a director may take risky decisions. A director must not be held liable only because his decision did not prove profitable for a company. A director’s decision may not earn profit for a company but be justified to carry on the company’s efficient operation. Criminal liability of Nika Gvaramia could have only arisen had it been established that his action was based solely on his personal decision, pursued personal interests, and involved fraud, corruption or other crime.

Furthermore, the judge ignored the fact that the partner (owner) of Rustavi 2 expressed consent to the amending of the rule of sale of commercial airtime. We believe that a number of conclusions provided in the decision are either of general nature or lack the reasoning that would show how, based on what evidence were such conclusions reached by the court.

3. The episode of 2019 (the So-called Vehicle Case)

In this episode, the court found Nika Gvaramia guilty of abuse of powers and sentenced him to three years and six months of imprisonment. The court considered it established that in 2019, Nika Gvaramia sold the commercial airtime of Rustavi 2 at a price lower than the market price in order to then barter it for a motor car in actual ownership of Gvaramia’s family, with the intermediary company (Proesco Media Ltd.). Furthermore, according to the ruling, the intermediary company, upon agreement from Nika Gvaramia, intentionally reduced the amount to be paid to Rustavi 2 during three months, which resulted in the TV company sustaining losses amounting to GEL 66 271 over the period between April and July 2019.

Much like in the event of the first episode, the judge did not deliberate on the issue of whether the action of the company’s director was of a category that should be examined under the business judgment rule. In particular, the judge had to establish whether the director acted in accordance with the business judgment rule and whether the fiduciary duties of directors (duty of care, duty of honesty and duty of loyalty) were breached. Only after examining the aforementioned matters and in case of finding any breach it would be possible to assess whether there existed relevant grounds for criminal liability of the director to arise.

It should also be taken into account that the court made a conflicting conclusion with regard to receiving the car in Gvaramia’s actual ownership. The judge explains that Nika Gvaramia could have received the car in the form of a bonus, but instead, he chose an illegal scheme that was damaging to the company. It is incomprehensible why would a person develop an intention to commit a crime to achieve a result which could be achieved in a lawful way. According to the judge, the act of receiving the car through the award of a bonus would have been a lawful act, whereas the signing of the agreement caused material damage to Rustavi 2. It is incomprehensible how the court arrived at this conclusion, especially considering that in the event of awarding the bonus, the TV company might have received less income. Furthermore, the court did not deliberate over Nika Gvaramia’s motivation and the element of intention and the ruling lacks a sound and sufficient substantiation of this matter.

4. Sentencing

Nika Gvaramia was found guilty of abuse of powers. With regard to the episode of the year 2015, where the loss, according to the prosecution, comprised GEL 6 763 509, the judge imposed a fine worth GEL 50 000.  But with regard to the episode of the year 2019, where the loss sustained by the company, according to the prosecution, comprised GEL 66 271, Nika Gvaramia was sentenced to three years and six months of imprisonment.

The reasoning of the judge in imposing the sentence is general and abstract while the decision taken by him is unsubstantiated and disproportionate. While passing a sentence, a judge must be guided by the principles of lawfulness, fairness and individualization of a sentence. A custodial sentence can be imposed only when a less severe one cannot ensure the realization of the aim of sentencing. Apart from imprisonment, abuse of powers is punishable by a fine, corrective labor or house arrest.

The court dedicated only one paragraph of the decision to substantiate the imposed sentence. The judge explained that it was not suitable to impose a fine on Nika Gvaramia because he openly declared his refusal to pay it, whereas the imposition of house arrest would not insure against a risk of committing a new crime. This explanation cannot be considered a plausible substantiation because the judge imposed the fine with regard to the 2015 episode. It is incomprehensible how Gvaramia’s explanation influenced sentencing only in one episode. Moreover, in the 2015 episode, where, according to the prosecution, the losses sustained by the TV company were almost 100 times higher, the judge imposed a fine. It should also be taken into consideration that the fine been imposed on Nika Gvaramia and had he failed to pay it, a legal grounds would have arisen to pass a more severe sentence in the future.[4]

As regards the unsuitability of house arrest, it is also not clear what the judge implied by mentioning the risk of committing a crime. The judge limited himself to general statements alone, which cannot be regarded as a sufficient and plausible substantiation. As a matter of fact, Nika Gvaramia never violated the terms of the bail throughout an almost three-year-long hearing of the case. 

5. Criticism of the Amicus Curiae Brief

During the hearing of the case on the merits, the court was presented with a number of amicus curiae briefs. In the court’s view, they fell short of the criterion of impartiality because the defense applied with a proposal to submit amicus curiae (except for the Public Defender) and the case materials were also supplied by them. Considering the fact that the materials of the case can only be supplied to an author of amicus curiae either by the defense or by the prosecution, every amicus curiae, following the logic of the judge, will always be biased. Furthermore, in the court’s view, separate conclusions formed in the amicus curiae were subjective and aimed to support the defense. However, the decision was limited to the general statements as it did not specify which conclusions were biased.

It should be also taken into consideration that the court had the authority to summon the authors of amicus curiae to the court for oral explanations. By doing so the parties and the court would have had an opportunity to ask questions regarding the content of amicus curiae and to dispel doubts concerning the subjectivity therein. Although a motion to summon the authors of amicus curiae was even made by the party, the judge dismissed the request. In the ruling, the judge explained that he did not deem it suitable to summon the authors of amicus curiae to the court, though he did not specify the reason behind his motivation.

[1] Subparagraph E of Article 59 of the Criminal Procedure Code of Georgia.

[2] Paragraph 2.5 of the Bangalore Principles of Judicial Conduct.

[3] See, Transparency International Georgia, The Analysis of the Criminal Case: The Prosecution of Nika Gvaramia, available at  https://bit.ly/3Qbt9Xq [accessed on 07.06.2022]

The Public Defender, Amicus Curiae Brief, available at https://bit.ly/3x8aFy4 [accessed on 07.06.2022].

[4] Paragraph 6 of Article 42 of the Criminal Code of Georgia.