THE ISSUE OF SECURING COMPENSATION FOR ANTICIPATED LOSSES AS A COUNTERBALANCING TOOL OF PROVISIONAL REMEDY

Indemnification of incurred damages does not depend on its advance securement, although the law provides the possibility of securing compensation for potential losses in advance. The institution of guaranteeing compensation for anticipated losses is one of the tools for protecting the defendant’s rights in the procedural guarantees system. Procedural law doctrine and practice some-times shift the emphasis to already incurred damages and, thus, call it the institution of compensation for damages caused by an unjustified provisional remedy. The law of civil procedure defines the rule for securing the anticipated losses and not already existing or proven damage. The misperception of the concepts of loss and damage causes the wrong approach to the essence of the mentioned institution. The criteria and rules for securing compensation for anticipated losses and incurred damages require different approaches. In relation to the incurred or expected damages, it would be more appropriate to talk not only about the compensation of damages caused to the defendant through an unjustified provisional remedy but also through the dismissed claimant’s claim. Considering all that, securing compensation for anticipated losses should include not only expected losses incurred because of unjustified provisional remedy


THE ISSUE OF SECURING COMPENSATION FOR ANTICIPATED LOSSES AS A COUNTERBALANCING TOOL OF PROVISIONAL REMEDY
Khatuna Skhirtladze Doctoral Candidate of Law, Davit Aghmashenebeli University of Georgia, Georgia Indemnification of incurred damages does not depend on its advance securement, although the law provides the possibility of securing compensation for potential losses in advance.The institution of guaranteeing compensation for anticipated losses is one of the tools for protecting the defendant's rights in the procedural guarantees system.Procedural law doctrine and practice sometimes shift the emphasis to already incurred damages and, thus, call it the institution of compensation for damages caused by an unjustified provisional remedy.The law of civil procedure defines the rule for securing the anticipated losses and not already existing or proven damage.The misperception of the concepts of loss and damage causes the wrong approach to the essence of the mentioned institution.
The criteria and rules for securing compensation for anticipated losses and incurred damages require different approaches.In relation to the incurred or expected damages, it would be more appropriate to talk not only about the compensation of damages caused to the defendant through an unjustified provisional remedy but also through the dismissed claimant's claim.Considering all that, securing compensation for anticipated losses should include not only expected losses incurred because of unjustified provisional remedy

INTRODUCTION
The institution of provisional remedy should not only be considered as a mechanism for protecting the claimant's rights.In this regard, the law provides a number of procedural actions of the court (a system of procedural actions) for the protection of the defendant's rights as well.Therefore, the issue of provisional remedy is at the same time closely linked to the issue of securing compensation for anticipated losses (which can be called a reversed provisional measure), 1 since the application of the provisional remedy may harm the interests of the defendant. 2Accordingly, the issue of provisional remedy is resolved through consideration of the rights and interests of both parties (by securing the rights and interests). 3he defendant should not be harmed by provi- sional remedy or by a claim brought in bad faith, and if so happens, he must be compensated. 4A claim for damages should always exist when the measure of provisional remedy is found unjustified. 5Accordingly, in the event of revoking the provisional remedy or not satisfying the claim of the claimant, compensation for the loss caused to the defendant would be impossible without securing it in advance. 6ny provisional measure used by the court must comply with the objectives of Article 191 of the Code of Civil Procedure and, in addition, the restriction imposed on the defendant must be reasonable and justified, considering the nature of the claim. 7The institution of provisional rem- 4  Qurdadze, Sh., Khunashvili, N., Tskitishvili, M., Akhaladze, M., Kublashvili, M., Qurdadze, G., (2022).Commentary on the Code of Civil Procedure (Book I).Tbilisi: "Meridian" publishing house, p. 256-25.5 Schnittger, H., (2020).Claim for damages arising from unjustified security, N.10.German Society for International Cooperation -GIZ, p. 13. <http://lawlibrary.info/ge/books/CLS-2020.pdf>[Last accessed: 23.11.2023].6  Qurdadze, Sh., Khunashvili N., (2015).Civil Procedure Law of Georgia (second edition).Tbilisi: "Meridian" publishing house, p. 352.7  Liluashvili, T., Khrustali, V., (2007).Commentary on the Civil Procedure Code of Georgia (second edition).Tbilisi: edy protects defendant from the very start, while resolving the issue of application of the remedy, first of all, through requiring the court to apply the proportionality test. 8Securing compensation for anticipated losses in favour of the defendant cannot replace the court's obligation to ensure proportionality during deciding the issue of provisional remedy.In other words, proportionality must be observed in any case, even if the claimant voluntarily provided the defendant with security for the anticipated losses on the basis of Article 199 of the Code of Civil Procedure.Therefore, the measure of provisional measure must be proportionate to the claim in any case. 9iolation of proportionality is a test of the reasonableness of a provisional remedy and the basis for its full or partial revocation, same view is provided in legal doctrine as well. 10The violator of the requirement of proportionality is the court, not the defendant.The latter cannot be held liable in the future for violating the imperative of proportionality but rather for the fact that the provisional measure used in his favour turned out to be unjustified. 11espite the importance of the institution of counter provisional measure, the existing Georgian law literature and practice on this issue is scarce. 12ategories of losses and damages are subject to research, so it is necessary to determine the criterion regarding the amount of anticipated losses, compliance of principle of disposition to counter security measure and the threat of procedural chicane during the application of counter provision-"Samartali" publishing house, p. 351.8 Ruling of the Supreme Court of Georgia (Chamber of Civil Cases) of December 16, 2019 on the case: N as-1609-2019.9  Dzlierishvili, Z., (2018 al measure.In addition, international practice in relation to the mentioned issue will also be discussed.All the above defines the significance of the present research.The regulatory norm for using the counter provisional mechanism (Article 199 of the Code of Civil Procedure) leaves the impression that the mentioned mechanism is used only at the initiative of the court or at the request of the defendant.It should be further researched whether the claimant can offer the counter provisional measure for securing compensation for anticipated losses for the defendant at his initiative.

GUARANTEES TO PROTECT THE INTERESTS OF THE PARTIES IN THE MECHANISM OF PROVISIONAL REMEDY
For the analysis of the research legal institution, it is essential to have a comprehensive understanding of Part 1 of Article 57 and Article 199 of the Code of Civil Code since the right of the party (claimant) to use a measure of provisional remedy is opposed by the defendant's interest -to protect himself from a harmful provisional remedy. 13hus, the legitimate interests of both parties are taken into consideration, 14 reasonable balancing is the main constitutional duty of the court.In cases provided by the law, the party asking the court for the provisional remedy may be required to secure compensation for the anticipated losses for the defendant. 15The restriction must take into account the interests of both parties involved in the process -the defendant must be able to insure damage resulting from the provisional remedy, and the requirements set for the claimant should be reasonable and should give him a real opportunity to ensure compensation for anticipated losses.Thus, Article 199 of the Civil Procedure Code of Georgia explains in detail the procedure for using this mechanism, ensuring an additional guarantee of proportionality. 16

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Ruling of the Supreme Court of Georgia (Chamber of Civil The provisional remedy is linked to the restriction of the rights of the defendant, the interests of the latter is at risk of harm.It's about potential damage.This problem is especially aggravated if the defendant is an entrepreneur.Application of provisional remedy by the court should not interfere with the normal functioning of such entity.Taking this into account and based on the principle of procedural equality of the parties, the law provides guarantees to protect the interests of the defendant; in this way, the principle of equality of parties before the court is balanced. 17ccording to Clause 1 of Article 11 and Clause 5 of Article 62 of the Constitution of Georgia, everyone is equal before the law, which includes equality before the court as well, although the Constitution does not contain a direct provision on the equality of the parties before the court. 18The resolution of the cases in court is carried out on the basis of equality and competition of the parties. 19In accordance with Clause 2 of Article 4 of the Constitution, universally recognized human rights and freedoms (meaning the rights and principles recognized by international law) are directly applicable law in Georgia.This means that they are not mediated by any act, do not require the adoption of additional acts by the state.Provisions similar to these constitutional norms are reflected in Articles 7, 8 and 10 of the Universal Declaration of Human Rights, 20 in Clause 1 of Article It is the above-mentioned constitutional and international norms that provide claimant and the defendant with an equal right before court while applying the provisional remedy.This means that the defendant, as an equal party to the claimant, must be guaranteed the opportunity to protect his rights in the event of application of provisional measures in civil proceedings.In other cases, i.e. if the defendant does not have the opportunity to defend himself against an unreasonable provisional remedy, he will be in a disadvantageous position compared to the claimant; accordingly, the damage will be caused even before the court decides about the claim.Although the legislator aims to legitimately restrict the defendant's right by introducing a mechanism for provisional remedy, this circumstance does not mean that interference with the right is always justified.The restriction must comply with the standards of proportionality. 23

OPTIONAL NATURE OF COUNTER PROVISIONAL MEASURE
The use of the counter provisional mechanism (at the stage of provisional remedy) is explained by the fact that at this stage, there is still no definite prospect of the case, and it is not known whether the claim is justified or not. 24In addition, it should be borne in mind that securing compensation for the anticipated losses is not an obligation of the court, but a right. 25The court may also use provisional guarantee based on the application of the opposing party. 26he said right is used by the court in conjunction with the application of a provisional remedy.If the court fails to exercise this discretionary right, the defendant may file an application and ask for securing compensation for anticipated losses. 28In both cases, securing compensation for anticipated losses are provided if there is a reasonable expectation that the claimant will not be able to compensate for the damage caused in case if the claim is not satisfied. 29Thus, indemnification for harm (provision of compensation) can be carried out both simultaneously with application of provisional remedy, or after that. 30he institution of provisional remedy equally protects the interests of both the claimant and the defendant.Accordingly, if the measures taken to secure provisional remedy turn out to be unreasonable due to the fact that the claimant was denied satisfaction of the claim and the decision entered into legal force, or the court revoked the provisional measure before the filing of the claim in accordance with Part two of Article 192 or in accordance with Part two of Article 363, 30 31 the defendant has the right to demand compensation from the claimant for the loss caused by the adoption of provisional remedy (Part 3 of Article 199).The law does not imperatively require the court to secure compensation for anticipated losses in favour of the defendant; 32 it is discretion of the court. 33It would be more expedient if the court, on its initiative, would not have the right to impose on the claimant the obligation to secure counter provisional measure.The point is that securing compensation for anticipated losses to the defendant is in fact, "securing of such a claim which the defendant may bring against the claimant for the provisional remedy as a result of which he suffered damages". 34Whether or not a party initiates a complaint and claims compensation for loss or damages is entirely up to the claimant to be.Therefore, the possibility of imposing counter provisional measure on the court's initiative contradicts the principle of disposition.The question of whether the defendant is obliged to prove a probable amount of anticipated loss that may be caused by provisional measure is also subject to research.The law ignores this issue.To the extent that the provisional remedy is based on presumed facts, based on the principle of equality of parties, the defendant should not bear the burden of proving anticipated losses that do not yet exist.Proof of actual losses must be made in the future.At the stage of provisional remedy, asserting a loss should be the defendant's dispositional right. 35hen applying a provisional measure, the other party is not obliged to secure its claim with money or securities in accordance with Article 57 of the Civil Code. 36The implementation of the provision provided for by the norm in this form will be necessary only if the court, in accordance with Part 1 of Article 199 of the Code of Civil Procedure, deems it necessary to implement a provisional measure from the other party. 37When applying counter provisional measure, several issues of both practical and theoretical importance have to be taken into account, which are discussed below.

THE THREAT OF PROCEDURAL CHICANE IN THE MECHANISM OF COUNTER PROVISIONAL MEASURE
First, it is necessary to consider the problem of the claimant's fair use of substantive and procedural rights.As stated in the German doctrine, un-fairness in the process is the abuse of a claim and any other procedural rights, which arises in the event of a discrepancy between the goals set by the person entitled and the goals of the right granted by law (which correspond to the goals of the civil proceedings). 38The same opinion is upheld in the Georgian legal doctrine as well. 39For comparison, the civil procedural law of Germany, as well as the civil procedural law of Georgia, does not contain a general norm establishing the obligation to exercise procedural rights and obligations in good faith, in connection with which there is an opinion in the German doctrine that Section 242 of the German Civil Code 40 (similar to Article 361 of the Civil Code of Georgia 41 ) should be used by analogy in German procedural law. 42The principle of acting in good faith is a general legal principle.Although it is not directly mentioned in the Constitution of Georgia, Article 34 confirms it. 43This principle, due to its universal nature, is the basis of the entire legal order, including civil procedural law.Accordingly, this is a principle of civil procedural law and, therefore, its use according to the rules of interdisciplinary analogy is not allowed since this principle is also characteristic of the civil process. 44According to the ruling of the German Federal Court of Justice, a clear sign of the abuse of the right is the intention to cause harm (typical of procedural chicane), as well as the exercise the right aimlessly, wastefully, or to achieve unworthy goals. 45Complaints initiated for the purpose of harming another are considered a clear manifestation of procedural chicane (abuse of rights) in German doctrine. 46hen considering the implementation of counter provisional measure through the prism of the principle of good faith, it is necessary to balance the interests of the parties fairly. 47The amount requested from the claimant through the use of counter security may be insignificant for that person in view of his assets, but, for example, a provisional measure applied in the form of prohibiting use of funds may be highly restrictive for another person (the defendant), especially when that person is entrepreneur/subject of entrepreneurial activity.Applying provisional remedies may lead to the actual paralysis of the defendant's economic activity.Sometimes, there may be unfair competition from the claimant's side, for example, to gain a monopoly position in the market by seizing the assets of the defendant, who has a small market share.Considering that the following issue arises: is the court obliged to unconditionally apply a provisional measure if the claimant presents a counter provisional measure?The law does not provide a direct answer to this question.
The provision of the norm under Article 199 of the Code of Civil Procedure gives the impression that securing compensation for anticipated can be established only at the court's initiative or at the defendant's request.In fact, it is not excluded that the plaintiff provides security in advance.So, the claimant may not wait for the court and secure compensation for anticipated losses in favour of the defendant (counter provisional measure).This deduction is derived from a reasonable interpretation of the law.In practice, claimants do not behave so because they are not interested in the preliminary provision of security since courts usually order provisional remedies without it as well.Based on the provisions of the Code of Civil Procedure and the analysis of judicial practice, 48 the following conclusion can be drawn: a refusal to apply provisional remedies is permissible, even if the initiator of the claim submits the counter security in advance.
Even if the claimant provides a counter provisional measure, the court is not obliged to issue a provisional remedy, which is a progressive solution of the issue by the Georgian law. 49The fact is that in the above cases when the claimant pursues the goal of unfair use of a monopoly position in the market, there is practically no harm (even if he presents counter provisional measure along with the petition for the use of provisional remedy) to his economic activity.And if it were enough to prove counter provisional measure in advance for the unconditional use of provisional remedy, the court would be forced to apply the law literally, thereby potentially bringing a bona fide defendant to the brink of bankruptcy.In the absence of an obligation, Georgian law gives the court more freedom to decide cases based on the principle of good faith and the balance of interests of the parties.

RELATIONSHIP BETWEEN THE CATEGORIES OF LOSS AND DAMAGE
Understanding of the essence of counter provisional measure should be sought in categories of loss and damage.The difference between these categories provides an opportunity to correctly define the scope (volume) and criterion of anticipated losses secured for compensation.The law refers to securing compensation for anticipated losses and not for advance compensation for loss or damages since the outcome of the case determines whether damages will be awarded.Accordingly, the defendant has the right to demand compensation for damages from the claimant after the

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In judicial practice, it is always outlined that use of provisional remedies limits the rights of the defendant, which is why it is necessary to avoid anticipated losses to the defendant.
claim is rejected by the court decision and it enters into legal force. 50The right to such a request arises even if the claim is partially satisfied: the defendant will have the right to demand proportionate compensation for damages for that part of the claim that was not satisfied by the court.If the defendant asks for securing compensation for anticipated losses after a court decision in his favour (which is not yet into legal force), this can be done by way of securing the enforcement of the decision and can be expressed at least in the costs incurred by the claimant in favour of the defendant.
As mentioned, the Code of Civil Procedure establishes the possibility of securing compensation only for anticipated loss and not for the damages since it is impossible to determine the amount in advance.The determination of such damage, in addition to impossibility, would not be right since the determination of the causal link between the application of provisional remedy and the existing damage can only be relevant if the provisional remedy turns out to be unjustified, which is manifested in the dismissal of the claim by the court or in the revocation of the provisional remedy.A legally binding decision must determine such a result and, so, after the conclusion of the case.Therefore, in a case, it is not allowed to measure the size and criterion of compensation for anticipated loss by the standard of compensation for damage already incurred.
There is no coincidence that the Code of Civil Procedure refers to securing compensation for the anticipated loss (and not damage).Thus, it can be concluded that at the stage of application of the provisional measure, the imposition of security of compensation for the anticipated loss and the amount of compensation to be charged depends only on the discretion of the court.An analysis of the Civil Procedure Code of Georgia makes it possible to draw such a conclusion.It does not contain and should not reflect a special rule (rules) on determining the nature of the damage caused to the defendant and the amount of compensation.The nature and extent/amount of damage cannot be confirmed in advance. 51It should be proven after 50 Liluashvili, T., Khrustali, V., (2007).Commentary on the Civil Procedure Code of Georgia (second edition).Tbilisi: "Samartali" publishing house, p. 355.

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For example, the defendant must apply to the court for the compensation of the damages incurred as a result of the completion of the case and not at the stage of ensuring provisional remedy or at the stage of applying for counter provisional measure.Therefore, using Articles 408-415 of the Civil Code of Georgia in systematic connection with Article 199 of the Civil Procedure Code of Georgia in determining the amount of anticipated loss for the defendant and imposing it on the claimant would be inappropriate.
Based on the literal meaning of the content of Article 199 of the Code of Civil Procedure, it does not mean the possibility of securing compensation for anticipated losses in case of termination of proceedings on any of the grounds provided for in Article 272 of the Civil Code.At the same time, based on the operation of the principles of disposition, competition, and equality of parties in civil proceedings, the rule on compensation for damages caused as a result of provisional remedy should be applied even in the event of termination of the case.Such a solution to the issue is determined by the unreasonable will of the claimant through a groundless claim.
As for losses (and not damages), which are often not differentiated from each other, they do not mean losses caused by a temporary restriction of a right since the purpose of the provisional measure itself is a temporary limitation of a right. 52nticipated losses refer to actual costs (attorney's fees, other costs related to proceedings) and not unearned income as implied in the concept of damages.Damage is a broader concept, including factual costs and unearned income, and that is why procedural law focuses on the category of loss and only anticipated loss.Therefore, when the issue of securing compensation for anticipated loss is positively resolved, it is not allowed to give the concept of loss the meaning of damage and to demand such a guarantee from the claimant, that will burden him and make it impossible for the claimant to present a guarantee, because in such a case, the provisional measure will be revoked, which means that it will lose its practical meaning.
On the other hand, when filing a claim for damages, the full satisfaction of the defendant's interests 53 cannot be affected by the scope of securing compensation for anticipated losses.In other words, the defendant will be compensated for the full damages, the damages he proves to have been incurred, not just the losses for which compensation was previously secured.
The fact that the concept of loss is not identical to the concept of damage can be seen from the following aspect as well: provisional remedy is issued by a court decision. 54In this case, the parties are not in a civil procedural relationship with each other.They are only in substantive civil law relationship with each other.The use of provisional remedy only affirms procedural relations between the claimant and the court.According to substantive, material law, damage can result from a breach of contract or a tort. 55In any case, the damage must be caused by the debtor's actions.The adoption of a judicial act in the form of a provisional remedy cannot be regarded as causing damage to the defendant by the claimant.

INTERNATIONAL PRACTICE
Section 945 of the German Code of Civil Procedure deals with the mechanism of securing compensation for anticipated losses. 56Similar to Georgian legislation, this section covers cases of compensation of expected losses when the measure of provisional remedy turns out to be unjustified or is terminated later on.According to the ruling of the German Federal Court of Justice, the provision of securing compensation for anticipated losses, as provided in section 945 of the Code of Procedure, gives rise to the risk-related responsibility for the person who applied to the court with the request of provisional remedy.German judicial practice does not equate anticipated losses with already incurred/proven damages, since, according to the Federal Court of Justice, damage is the result of a violation of law, at which point the person is guilty, and at the stage of securing compensation for expected losses, proof of guilt cannot be justified. 58The provision of German Code of Civil Procedure implies the obligation on the person requesting a provisional remedy to take the risk of expected losses, he must bear the risk of actions that may later turn out to be unwarranted. 59ccording to the German judicial practice, to impose the obligation of securing compensation for anticipated losses on the claimant, it is sufficient to prove that enforcement of provisional remedy may/is likely to harm the defendant 60 (in which case the defendant should not abuse its right), this does not concern the burden of proving the future actual damage that it will subsequently cause.In relation to this issue, French judicial practice emphasizes the incurred damage and in one of its rulings, the court highlights that the defendant, against whom the provisional remedy has been issued, can request the court to take measures proportionate to provisional remedy. 61He may request to the executive judge to order the claimant to compensate him damages in case of abuse of right.In the event that the defendant incurred damages as a result of provisional remedy, the claimant will be ordered to compensate for such damages. 62nder English law, when the order of injuction 63 is granted (provisional remedy), the person applying the court with such request is at the same time required to pay compensation, if the court later finds that the injunction was unjustified and the defendant was prejudiced by it. 64In one of its decisions, the court has pointed out that obligation to pay compensation implies the establishment of causal link between the incurred damage and unjustified provisional remedy. 65Unlike the civil procedural codes of Georgia and Germany, as the English judicial practice shows, anticipated loss has the meaning of incurred damages, which is decided by the court on case-by-case basis.Under English law, the above mentioned rule regarding the order of injunction is more preventative in nature so that the claimant does not bring an unjustified claim before the court or does not abuse the temporary measure against the defendant.

CONCLUSION/ RECOMMENDATIONS
As a result of the research, the following conclusions can be drawn: the provision of Article 199 of the Code of Civil Procedure has a self-contained, independent character and procedural significance, which is not affected by substantive civil law.Determining the amount of anticipated losses secured for compensation should be done at the discretion of the court.Material norms can become effective only when the issue deals with compensation of already incurred damages, that is if the causal link between the fact of the damage and the unjustification of the provisional remedy or the groundlessness of the claim is established.
The criterion for determining the amount of anticipated losses secured for compensation should be the principle of equality of the parties themselves, which, on the one hand, should not impose an unjustifiably heavy burden on the claimant, which is a danger in the case when the anticipated loss is equated with material-legal damage.On the other hand, it must ensure the protection of the defendant and the prevention of damages expected by an unjustified claim or its securement.
The use of counter provisional measure is allowed both at the initiative of the court and at the request of the defendant and also by claimant through submitting counter provisional measure beforehand.In addition, due to the need to prevent the threat of procedural chicane (abuse of rights), the court should not always grant provisional remedy when the claimant offers the security in advance.
Based on the conclusions, the following recommendations can be drawn: the title of Article 199 of the Code of Civil Procedure requires a change of wording.It is appropriate to formulate it in the following way: "Securing compensation for anticipated losses by groundless claim and unjustified provisional remedy".The third and fourth sentences with the following content should be added to the first part of the mentioned article: "The type and amount of the guarantee required for the claimant in favour of the defendant is determined based on the discretion of the court, taking into account the principle of equality of the parties.While applying the court for provisional remedy or for securing the court decision, the claimant has the right to offer the court, on its initiative, a guarantee of anticipated losses to the defendant, which does not constitute an unconditional basis for granting the provisional remedy".
14 of the International Covenant on Civil and Political Rights 21 and in Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms. 22 20 Universal Declaration of Human Rights (10/12/1948), UN General Assembly.21 International Covenant on Civil and Political Rights (16/12/1966), UN General Assembly.22 Convention for the Protection of Human Rights and Fundamental Freedoms (4/11/1950), Council of Europe, Rome.