Tbilisi City Court Granted Our Claim Contracts — Former Director Held Fully Liable for Damages

Tbilisi City Court — Tbilisi City Court

The Civil Cases Panel of Tbilisi City Court fully granted the claim of the client of Pkhaladze and Partners Law Firm.

Substance of the Case

During the period of managing the company, the former director of Le.L.S. LLC imposed a tax liability on the company in violation of legal requirements. Based on an audit conducted at the company, the tax authority issued an order, and the Revenue Service fined the company GEL 71,266.67.

The new management of the company, with the assistance of attorney Nikoloz Pkhaladze, filed a lawsuit against the former director — S.L. —, seeking compensation for damages pursuant to Articles 992 and 408.1 of the Civil Code.

Court Decision

The Panel fully shared the legal position of the plaintiff. The Court established that:

1. The former director owed a duty of care and was obligated to act in the best interests of the company;
2. The breach of tax legislation by the defendant constituted an unlawful act;
3. There was a causal link between the defendant's action and the damage incurred by the company;
4. Accordingly, the defendant is obligated to fully compensate the company in the amount of GEL 71,266.67.

The Court also ordered the defendant to fully cover the court fees and legal expenses.

Legal Significance

The Panel explained that a director of a company owes a duty of care — they are obligated to act in the best interests of the company, comply with legal requirements, and prevent damage to the company. A breach of this duty entails personal property liability.

This decision is significant regarding the liability of corporate officers — confirming that a director is personally liable for damages caused by their decisions.

Civil Law · Administrative Law · Dispute Resolution · Tax Law · Litigation