GUI cannot handle a file name in UTF-8

The Git GUI app cannot properly handle a file name containing national characters (UTF-8).

Firstly, the display is incorrect. It seems it tries to render the name as if it was ASCII.
Secondly, operations on such files fail - see the attached screenshot.

ProblemType: Bug
DistroRelease: Ubuntu 12.10
Package: git-gui 1:1.7.10.4-1ubuntu1
ProcVersionSignature: Ubuntu 3.5.0-22.34-generic 3.5.7.2
Uname: Linux 3.5.0-22-generic i686
ApportVersion: 2.6.1-0ubuntu9
Architecture: i386
Date: Tue Jan 15 18:18:29 2013
InstallationDate: Installed on 2011-10-06 (466 days ago)
InstallationMedia: Ubuntu 11.10 "Oneiric Ocelot" - Beta i386 (20110921.2)
MarkForUpload: True
PackageArchitecture: all
SourcePackage: git
UpgradeStatus: Upgraded to quantal on 2012-10-19 (87 days ago)