By the end of World War I some of these territories were occupied by the Ottomans. When they abandoned the region, both Georgians and Armenians claimed control. The dispute degenerated into armed clashes on December 7, 1918. The hostilities continued with varying success until December 31 when the British brokered ceasefire was signed, leaving the disputed part of Borchalo district under the joint Georgian-Armenian administration which lasted until the establishment of the Soviet rule in Armenia in 1920.
During the final stages of World War I, the Armenians and Georgians had been defending against the advance of the Ottoman Empire. In June 1918, in order to forestall an Ottoman advance on Tiflis, the Georgian troops had occupied (temporarily allegedly) the Lori Province which at the time had a 75% Armenian majority. After the Armistice of Mudros and the withdrawal of the Ottomans, the Georgian forces remained. Georgian Menshevik parlementarian Irakli Tsereteli offered that the Armenians would be safer from the Turks as Georgian citizens. The Georgians offered a quadripartite conference including Georgia, Armenia, Azerbaijan, and the Mountainous Republic of the Northern Caucasus in order to resolve the issue which the Armenians rejected. In December 1918, the Georgians were confronting a rebellion chiefly in the village of Uzunlar in the Lori region. Within days, hostilities commenced between the two republics.
On December 5, 1918 the Armenians sent troops to take over the Borchalo and Akhalkalaki districts. The first military clashes occurred on December 9. Three days later, the Armenians scored a victory in the village of Sanahin in the Lori district and took over the village. Their advance in the Tiflis direction was eventually halted and Georgians mounted a counteroffensive, winning a battle at Shulaveri on December 29. The hostilities ended at the village of Sadakhlo on the night of December 31, when the parties agreed to a British-brokered ceasefire.
Both parties signed a peace agreement in January 1919 brokered by the British. The Armenian government officially dropped their claims over Ardahan and Akhalkalaki districts, while Georgia agreed to the mutual governance over Lori canton of Borchalo district. The agreement left both parties dissatisfied and there was mutual distrust going forward and severe transportation problems between the two republics. The war also proved costly for both countries politically. Both countries had suffered together under Ottoman rule yet had turned on each other during independence from the Ottomans while the rest of the world was healing its wounds from World War I.