A Q&A guide to dispute resolution in Ukraine.
Types of dispute resolution
1. Please give a brief overview of the main dispute resolution methods used in your jurisdiction to settle large commercial disputes, identifying any recent trends.
The main methods used to resolve large commercial disputes are:
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Court litigation.
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International commercial arbitration.
Court litigation
Large commercial disputes are most likely to be brought before a commercial or civil court.
Commercial courts have jurisdiction over business disputes between companies. The Codes of Commercial and of Civil Procedures set out the legal framework for court litigation in commercial disputes. An individual registered as a private entrepreneur may also have standing before this court. Following the recent statutory developments, commercial courts' jurisdiction now encompasses corporate disputes, including disputes between the company and a current or former shareholder, or between the shareholders, regarding establishment, management or dissolution of the company.
While commercial courts resolve the majority of large commercial disputes, they generally have no jurisdiction over non-corporate disputes involving a least one individual (non-entrepreneur).
If the case involves a state or municipal authority exerting its public powers, the case may fall within the jurisdiction of administrative courts, regulated by the Code of Administrative Justice. These courts can consider, among others:
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Tax disputes.
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Certain land disputes.
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Claims for compensation for damage incurred as a result of the state/municipal authority's actions.
International commercial arbitration
Commercial disputes involving a foreign or international element may be brought before international arbitration tribunals subject to the relevant arbitration clause. Ukrainian legislation establishes two arbitration bodies having exclusive competence to deal with international commercial disputes:
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International Commercial Arbitration Court (ICAC), which deals with general commercial disputes.
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Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry, dealing with merchant shipping disputes.
International commercial arbitration is generally regarded as the best option if foreign parties are involved because of its speed, confidentiality, impartiality and expertise.
Ukraine is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention) and the European Convention on International Arbitration 1961 (Geneva Convention).
The internal domestic arbitral bodies are prohibited by law from considering cases involving foreign elements and have, so far, gained little trust among large businesses in Ukraine. Therefore, they are rarely entrusted to deal with serious commercial disputes.
Court litigation - general
2. What limitation periods apply to bringing a claim and what triggers a limitation period? Please briefly set out any different rules for particular areas of law relevant to large commercial disputes, for example contract, tort and land disputes.
The law provides for a general three-year limitation period. The period starts running after the aggrieved party discovers, or should have discovered, that its rights have been breached.
Specific limitation periods apply in respect of the following actions:
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For invalidation of a contract on grounds of duress or fraud: five years (starting from the date when duress ended).
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For application of effects of a contract invalid ab initio: ten years (starting from the date of the failure of its fulfilment).
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Arising from defects in goods sold: one year.
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For collection of contract penalties: one year.
The limitation period must be invoked by the defaulting party as a defence during the court proceedings. The court cannot apply a limitation period at its own motion.
The limitation period is interrupted if the claim cannot be filed due to force majeure or a statutory moratorium.
3. Please give a brief overview of the structure of the court where large commercial disputes are usually brought. Are certain types of dispute allocated to particular divisions of this court (for example, IP, competition or maritime disputes)?
Commercial and administrative courts have the following four-tier, hierarchical system:
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The Supreme Court of Ukraine (reserved for extraordinary cases).
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The Higher Commercial/Administrative Court of Ukraine (court of cassation).
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Appellate commercial/administrative courts.
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Local commercial courts/circuit administrative courts (or local courts acting as administrative courts of first instance.
Civil courts have a three-tier, hierarchical system, consisting of:
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The Supreme Court of Ukraine (court of cassation).
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Appellate courts.
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Local courts.
Commercial, civil and administrative courts usually have divisions specialising in particular disputes, namely corporate, IP, land, tax and so on. The number, specialisation of divisions, allocation of judges and cases in a specific court is decided by the President of the relevant court on a more or less informal basis.
The answers in this chapter relate to procedures applicable in commercial courts.
4. Which types of lawyers have rights of audience to conduct cases in courts where large commercial disputes are usually brought and what requirements must they meet? Can foreign lawyers conduct cases in these courts?
There are no specific restrictions on a representative appearing before a commercial court. The only requirement for the representative is to have a duly formalised power of attorney. Even the absence of legal education does not prevent an individual from enjoying rights of audience.
A foreign lawyer also has rights of audience before the commercial court.
Fees and funding
5. What legal fee structures can be used? For example, hourly rates, task-based billing, and conditional or contingency fees? Are fees fixed by law?
Legal fees can be based on hourly rates or be task-based. Other arrangements are possible, including agreements setting fixed, flat or contingent fees. Hourly and fixed fees can also be combined with bonuses, contingent on results.
Legal fees are not fixed by law.
6. How is litigation usually funded? Can third parties fund it? Is insurance available for litigation costs?
Funding
Litigation is usually funded by the parties to the proceedings. There are no restrictions on third parties funding litigation, unless there is a conflict of interests. However, as a practical matter and as a matter of professional ethics this funding is only possible based on a three-party legal representation agreement, whereby the represented party authorises the lawyer to represent it and the contributing party agrees to pay for it. It is virtually impossible to reimburse funds provided by third parties.
Insurance
There are no statutory restrictions on insuring for litigation costs. In practice, this insurance remains rare. However, the professional indemnity insurance for lawyers is gradually becoming more common.
Court proceedings
7. Are court proceedings confidential or public? If public, are the proceedings or any information kept confidential in certain circumstances?
Generally, proceedings in commercial courts are open to the public, unless it is incompatible with the requirements of state protection, or commercial or bank secrets.
A party can request that proceedings be held in private, on one of these or other reasonable grounds. This request must be filed by the party and considered by the court before the hearing commences.
If commercial court proceedings are public, any person is entitled to attend the hearing (in theory). However, in practice, the access to the courtroom can be restricted, to only allow persons representing the parties.
8. Does the court impose any rules on the parties in relation to pre-action conduct? If yes, are there penalties for failing to comply?
The commercial courts cannot impose any rules on the parties regarding pre-action conduct. The parties can agree on pre-action conduct, including mediation, in the underlying contract or otherwise. In addition, rules of pre-action conduct may be provided by law in relation to certain types of disputes please provide an example.
9. Please briefly set out the main stages of typical court proceedings, including the time limits (if any) for each stage, any penalties for non-compliance and the role of the courts in progressing the case. In particular:
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How a claim is started.
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How the defendant is given notice of the claim and when the defence must be served.
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Subsequent stages.
Starting proceedings
Proceedings are started by depositing a statement of claim with the competent commercial court, following the payment of court fees. The statement of claim must:
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Comply with certain formal requirements.
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Be accompanied by:
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documents supporting the claim and confirmation that copies of these documents have been sent to the defendant;
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evidence that the court fees have been paid.
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Notice to the defendant and defence
The claimant must send a statement of claim and adjoining documents to the defendant. The court must send the ruling to both parties.
After receiving the ruling, the defendant can submit a statement of defence together with necessary documents to the court, provided that a copy had been sent to other parties involved. In addition, the defendant can submit a counterclaim under the general rules of submission of claims.
Subsequent stages
Subsequent stages are not clearly defined by the Code of Commercial Procedure. However, these necessarily include hearings and delivery of the judgment.
There are no time limits for each stage of proceedings. However, the law sets out an overall two-month time limit for completion of the first instance proceedings. The proceedings can last longer on the parties' mutual request. In exceptional circumstances, this time limit may also be extended by the President of the relevant court.
Interim remedies
10. What actions can a party bring for a case to be dismissed before a full trial (for example, summary judgment or for a claim to be struck out)? On what grounds must such a claim be brought? Please briefly outline the procedure that applies.
The Code of Commercial Procedure does not provide for summary dismissal or summary judgment.
The court can, at the request of a party or at its own motion, strike out the case if during the proceedings it establishes that:
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The dispute falls outside the commercial courts' jurisdiction.
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The dispute lacks subject matter, that is, there is no genuine dispute.
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There has already been a final judgment, which is not subject to appeal (the case is res judicata).
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The claimant withdraws its claim.
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The parties agreed to refer the case to arbitration.
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A legal entity, which was a party to the proceedings, has been liquidated.
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The parties reached an out-of-court settlement.
11. Can a defendant apply for an order for the claimant to provide security for its costs? If yes, on what grounds?
A defendant can apply for an interim injunction (zakhody do zabezpechennia pozovu) to freeze the funds in the claimant's bank account to secure the defendant's costs. In practice, however, these applications are not used and are unlikely to be successful.
12. In relation to interim injunctions granted before a full trial:
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Are they available and on what grounds are they granted?
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Can they be obtained without prior notice to the defendant and on the same day in urgent cases?
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Are mandatory interim injunctions to compel a party to do something available in addition to prohibitory interim injunctions to stop a party from doing something?
Availability
Before filing a statement of claim (see Question 9, Starting proceedings) a party can request preventative measures (zapobizhni zakhody), if it considers that the delay in presenting of evidence may render its production impossible or that its rights are being violated or are at immediate risk of being violated.
The court can order the following measures:
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Order for the production of documents.
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Inspection of premises.
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Attachment of property.
The preventative measure is lifted automatically if either:
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The requesting party fails to file a statement of claim within ten days after the issuance of the decision on its application.
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The court dismisses the statement as inadmissible.
Notice to the defendant and urgency
The request for a preventative measure must be filed with the court that has territorial jurisdiction (based on where the measure will be applied). The request is considered within two days after the court receives the request and in the presence of both parties. However, the requesting party may ask the court on reasonable grounds to consider its request in the absence of the other party if it believes that any delay in the application of the measures sought may inflict irreparable damage on the applicant or that the evidence of the wrongdoing may be destroyed or lost. If this request is granted and the court orders a preventative measure, the party subjected to the measure can, within ten days of receiving the court decision, seek cancellation of the measure before the court that ordered the measure. The decision granting, refusing or cancelling a preventative measure is subject to appeal.
13. In relation to interim attachment orders to preserve assets pending judgment or a final order (or equivalent):
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Are they available and on what grounds must they be brought?
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Can they be obtained without prior notice to the defendant and on the same day in urgent cases?
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Do the main proceedings have to be in the same jurisdiction?
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Does attachment create any preferential right or lien in favour of the claimant over the seized assets?
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Is the claimant liable for damages suffered as a result of the attachment?
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Does the claimant have to provide security?
Availability
After filing a statement of claim, the claimant can request interim injunctions (see Question 12) at any time pending the proceedings, that is:
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Before the full trial.
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During the hearings at first instance, appellate or cassation courts.
An interim attachment order to preserve a defendant's assets is one of the interim injunctions (zakhody do zabezpechennia pozovu) which can be granted by a court at any stage of the proceedings if failure to do so may impede or make impossible the enforcement of the final judgment.
Notice to the defendant and urgency
The court does not have to notify the defendant of the hearing regarding an interim injunction, and there is no specific time limit for consideration of the relevant request. nor are there any requirements, such as urgency or any other, that would limit the judge's discretion in matter. In practice, orders are usually obtained without prior notice to the defendant and can be obtained on the same day.
Jurisdiction
Requests for interim injunctions are dealt with by the court considering the underlying case (Code of Commercial Procedure). Therefore, filing of a request with any other court, including the one with jurisdiction over the relevant property's location, is prohibited.
Preferential right or lien
Attachments do not create preferential rights or liens in the claimant's favour over the attached assets.
Damages suffered and security
The rules for interim injunctions, unlike those regulating preventative measures, do not allow parties to sue claimants for damages incurred as the result of their application. There is also no obligation on the claimant to provide security for interim attachment ordered in this context.
14. Are any other interim remedies commonly available and obtained? If yes, please give brief details.
The following interim remedies are also available:
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Prohibitory injunctions barring:
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the defendant from taking certain actions;
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third party individuals or entities from taking certain actions.
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Suspension of enforcement of an extrajudicial writ of execution.
Final remedies
15. What remedies are available at the full trial stage (for example, damages and injunctions)? Are damages just compensatory or can they also be punitive?
The compensatory remedies available in commercial courts include:
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Recognition of a right.
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Compensatory damages.
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Debt recovery.
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Property recovery.
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Specific performance, including prohibition of actions that violate the right and compulsory fulfilment of obligations.
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Invalidation, termination or amendment of a contract.
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Other statutory or contractual remedies.
Penalties are payable if a contract or law so provides. They are payable irrespective of whether the non-performance or undue performance of contractual obligations caused any damage to the aggrieved party. However, if the penalties due under the contract are manifestly disproportionate to the incurred damage, the court can decrease the amount of penalties at its discretion.
Evidence
16. What documents must the parties disclose to the other parties and/or the court? Are there any detailed rules governing this procedure?
In commercial courts, the defendant must be provided with a copy of the statement of claim and all adjoining documents (see Question 9). The claimant must be provided with the statement of defence, if the defendant filed it. Proof of sending copies of documents to the required parties must be attached to the statement of claim and defence respectively. The proof is normally a postal receipt or bill proving the dispatch of the letters to other parties, or a document issued by a courier company proving the dispatch and delivery of the letter.
Apart from this, there is no formal discovery procedure. A party discloses only those documents that it believes to be relevant to the case. The courts can order a party to disclose specific documents. In practice, this type of disclosure is usually triggered by the counterparty's request to the court. Failure to comply with a request can result in financial penalties.
17. Are any documents privileged (that is, they do not need to be shown to the other party)? In particular:
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Would documents written by an in-house lawyer (local or foreign) be privileged in any circumstances?
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If privilege is not recognised, are there any other rules allowing a party not to disclose a document (for example, confidentiality)?
Privileged documents
Generally, privilege is not recognised under the Code of Commercial Procedure. Parties normally decide themselves which documents to provide to the commercial court (see Question 16). However, if the court, at the party's request or at its own motion, orders from the party a physical document, it must be produced at the risk of financial sanctions.
Documents written by an in-house lawyer (local or foreign) are not privileged. The attorney-client privilege is recognised in the Law on Advocacy and certain other information is exempt from this rule.
Other non-disclosure situations
In practice, there are no other non-disclosure situations. If a requested document constitutes a commercial or banking secret, a party can request the court to hold proceedings in private, but cannot refuse to produce the document.
18. Do witnesses of fact give oral evidence or do they just submit written evidence? Is there a right to cross-examine witnesses of fact?
The Code of Commercial Procedure does not specifically provide for hearing or questioning witnesses. However, officials and other employees of legal entities that are non-parties to the proceedings can give evidence through oral or written statements before commercial courts (Code of Commercial Procedure). The testimony of employees of the entities that are participating in the proceedings can be formulated as written statements and produced to the commercial courts as documentary evidence.
19. In relation to third party experts:
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How are they appointed (for example, are they appointed by the court or by the parties)?
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Do they represent the interests of one party or provide independent advice to the court?
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Is there a right to cross-examine (or reply to) expert evidence?
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Who pays the experts' fees?
Appointment procedure
The court appoints experts to provide specialist knowledge if the dispute so requires. The courts tend to regard expert opinions arranged by the parties as ordinary written submissions of the parties, rather than expert opinions. Opinions of the court-appointed experts are formally given the same weight as other evidence. However, the courts rely heavily on these opinions.
Role of experts
The court-appointed experts must provide independent advice to the court.
Right to cross-examine
The cross-examination of experts is not provided for by the Code of Commercial Procedure. However, the parties are entitled to comment on and challenge the experts' findings and, in practice the cross-examination of experts may take place during the hearing.
Fees
Generally, expert fees are paid by the unsuccessful party. In a split decision, each party pays the fees pro rata to the amount of awarded claims.
Appeals
20. In relation to appeals of first instance judgments in large commercial disputes:
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To which courts can appeals be made?
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What are the grounds for appeal?
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Please briefly outline the typical procedure and timetable.
Commercial Court of Appeal
A statement of appeal is made to the Commercial Court of Appeal through the local commercial court that has issued the judgment. A copy of the appeal and related documents must be provided by the appellant to other parties in the dispute.
Grounds for appeal
An appeal can succeed on the following grounds:
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The lower court's failure to establish all relevant facts.
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The lower court's failure to prove the circumstances it treated as established.
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Inconsistency between the lower court's conclusions and the circumstances of the case.
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Violation or erroneous interpretation by the lower court of substantive or procedural law.
Procedure and time frame
Judgment can be appealed within ten days from the date of its adoption or, if the court pronounced only the heading and operative part of the judgment, from the date of the issuance of the full text. Request for leave to appeal out of time can be filed within three months after the adoption of the judgment. A request is allowed if the court discovers that the reason for failing to appeal on time was valid. For example, if the text of the challenged judgment has been sent by the trial court to the parties with delay, a request for leave to appeal usually succeeds. No further extension is available.
The appellate proceedings must be completed within two months of the Commercial Court of Appeal receiving the statement of appeal. The other parties have the right to:
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Comment, in writing, on the statement of appeal.
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Be present at the hearing.
Generally, the appellate proceedings are similar to local commercial court proceedings. The scope of appellate review covers the issues of facts and law, provided they were raised in the statement of appeal.
Costs
21. Does the unsuccessful party have to pay the successful party's costs and how does the court usually calculate any costs award? What factors does the court consider when awarding costs (for example, any pre-trial offers to settle)?
Generally, the unsuccessful party pays the successful party's costs. If a claim is only partially awarded, expenses are paid pro rata. The court usually calculates costs at its own discretion, except for the court fees paid by the claimant, which are determined by law. The court fees are not prohibitive and constitute 1% of either:
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The amount of the claim.
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The price of the property claimed.
However, the fees cannot be less than EUR10 (about US$13.50) and more than EUR2,550 (about US$3,065). If the claimant adduces claims of a non-pecuniary nature (for example, application for bankruptcy) or seeks the avoidance of a contract, the fee is EUR8 (about US$11).
In addition, under established court practice, a claim for reimbursement of legal fees can be filed only during the first instance proceedings.
The court does not take into account pre-trial offers to settle when awarding costs.
22. Is interest awarded on costs? If yes, how is it calculated?
Interest on legal costs is not awarded.
Enforcement
23. What are the procedures to enforce a local judgment in the local courts?
Enforcement of judgments is only possible after they have entered into force (that is, after the expiry of the ten-day limit for appeal or after the judgment is upheld on appeal). If the appellate court renders a new judgment, it enters into force immediately.
Enforcement proceedings start with filing an application, requesting a writ of execution to be issued, with the court that gave the judgment. The writ of execution, along with supporting documents, is then submitted to the State Enforcement Service, which follows certain steps to enforce judgments (for example, collection of funds and seizure of property).
Cross-border litigation
24. Do local courts respect the choice of law in a contract (that is, if the parties agree that the law of a foreign jurisdiction will govern the contract)? If yes, are there any areas of law in your jurisdiction that apply to the contract despite the choice of law?
Local courts must respect the choice of law in a contract. In practice, they rarely do so, but recently there were several notable exceptions to this approach in large cross-border disputes.
The mandatory rules of Ukrainian law apply by the courts irrespective of the choice of law.
The Higher Commercial Court and the Supreme Court of Ukraine issued recommendations to the lower courts on application of corporate law rules in 2007 and 2008 respectively. Both recommendations require the courts to treat any shareholder agreements that submit disputes arising out of corporate relations in joint-stock companies registered in Ukraine to foreign law as contrary to public order and "circumvention of law", and, therefore, void ab initio. Although these recommendations are not mandatory, they are normally followed by the lower courts.
25. Do local courts respect the choice of jurisdiction in a contract (that is, if the parties agree that claims will be brought in the courts of a foreign jurisdiction)? Do local courts claim jurisdiction over a dispute in some circumstances, despite the choice of jurisdiction?
Ukrainian courts have an exclusive jurisdiction over disputes concerning the following:
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Immovable property situated in Ukraine.
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Execution of intellectual property rights, which are subject to registration or issuance of certificate (patent) in Ukraine.
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Registration or liquidation of foreign legal persons or private entrepreneurs in Ukraine.
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Validity of the entries in state registries, including the land registry.
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Bankruptcy of a debtor established under Ukrainian law.
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Issuance or annulment of securities registered in Ukraine.
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Claims for annulment of acts by state and municipal authorities.
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Disputes over state procurement (although this provision may contradict the Washington Convention and BITs, as some supplies for state needs can comprise foreign investment falling under the investment tribunals' jurisdiction).
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Corporate disputes.
If a dispute does not fall within one of the above categories, the courts respect the choice of jurisdiction clause, provided it does not contradict either:
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International and domestic conflict of jurisdiction rules.
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Public policy.
26. If a foreign party obtains permission from its local courts to serve proceedings on a party in your jurisdiction, please briefly outline the procedure to effect service in your jurisdiction. Is your jurisdiction party to any international agreements affecting this process?
Ukraine is party to the Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil and Commercial Matters 1965 (Hague Service Convention). However, Ukraine opposes the service by post under this Convention and the service in Ukraine through foreign diplomatic or consular agents, unless the proceedings are served on a national of the state in which the documents originated.
Persons requesting service of process of documents in Ukraine should submit the request, with the Ukrainian translations of the documents, to the Ministry of Justice, which arranges the service.
If the state where the permission was obtained is not a party to the Hague Service Convention, there is no procedure for a formal service of these proceedings.
27. Please briefly outline the procedure to take evidence from a witness in your jurisdiction for use in proceedings in another jurisdiction. Is your jurisdiction party to an international convention on this issue?
Ukraine is party to the Convention on the Taking of Evidence Abroad in Civil and Commercial Matters 1970 (Hague Evidence Convention).
Permission from the Department of Criminal, Civil and Administrative Law of the Ministry of Justice is required to take depositions of willing witnesses who are Ukrainian nationals or third country nationals.
28. What are the procedures to enforce a foreign judgment in the local courts?
Foreign court judgments are recognised and enforced in Ukraine if subject to an international treaty between Ukraine and the relevant foreign state. The law provides for a possibility of recognition of foreign judgments rendered in the jurisdictions with which there is no treaty, including England and Wales, on a reciprocal basis. However, in practice this remains almost impossible.
Ukraine has entered into a number of agreements on legal assistance in civil matters mainly with ex-USSR (for example, Georgia, Lithuania and Latvia) and post-Soviet states (for example, Hungary, Poland and Mongolia). It also participates in the Commonwealth of Independent States 1993 Minsk Convention on Legal Assistance and Legal Relationships in Civil, Family and Criminal Matters and the 2002 Kishinev Convention on Legal Assistance and Legal Relationships in Civil, Family and Criminal Matters (the latter is yet to be ratified).
Ukraine is not party to the Brussels Convention 1969 or the Lugano Convention 1988.
Generally, requests for enforcement should be submitted within three years from adoption of the judgment. The request must be lodged with a local civil court with territorial jurisdiction over the debtor's place of residence or the location of the debtor's property if the debtor does not reside in Ukraine. The debtor is allowed to participate in the proceedings. A local court's decision to recognise or to refuse recognition of the judgment is subject to appeal and cassation appeal.
Alternative dispute resolution
29. What are the main alternative dispute resolution (ADR) methods used in your jurisdiction to settle large commercial disputes? Please briefly outline the procedures that are typically followed and any rules that apply.
The main ADR method used to settle large commercial disputes is international commercial arbitration (see Question 1).
Domestic arbitral institutions are prohibited by law to consider cases involving foreign elements. They are rarely involved in large disputes.
There has been growing interest in other ADR methods, primarily mediation. However, due to lack of regulation and recognition by courts of the binding force of mediation results, or the compulsory nature of the mediation agreements (see Question 8), its application has been infrequent to date.
30. Does ADR form part of court procedures or does it only apply if the parties agree? Can courts compel the use of ADR?
ADR is not part of court procedures and applies only if the parties agree to it.
Bringing proceedings before an arbitral tribunal is considered a right, not an obligation of the parties. Therefore, if a dispute arising out of the contract containing an arbitration clause is brought before a commercial court by one of the parties and another party does not oppose this, the court must start the proceedings and consider the case on its merits.
The courts cannot force an unwilling party to participate in ADR unless there is a prior agreement on referral of the relevant dispute to the arbitration or another ADR method.
31. Is ADR confidential?
ADR is confidential unless the parties agree otherwise.
32. How is evidence given in ADR? Can documents produced or admissions made during (or for the purposes of) the ADR later be protected from disclosure by privilege?
The parties to arbitration proceedings have equal rights in the production of evidence. The arbitral institutions accept in evidence written documents, expert opinions and oral statements. Any piece of written evidence should be provided in three copies, one of which is forwarded by the arbitration tribunal to the other party.
The law allows the parties to determine the rules on disclosure at their discretion. However, the scope of disclosure in arbitration is more strictly regulated than in litigation.
Generally, the privilege of documents disclosed during arbitration is not recognised (except for advocate-client communications (see Question 17)).
33. How are costs dealt with in ADR?
In arbitration, the losing party pays the successful party's costs. The court usually calculates the costs at its own discretion.
In other ADR methods, the costs are calculated and apportioned either based on the parties' agreement or by an ADR institution.
34. Is ADR used more in certain industries? If yes, please give examples.
Recourse to arbitration is most frequently used by the businesses involved in foreign trade. This is partly due to the fact that the ICAC received semi-public powers under currency legislation. The law provides for financial liability of a Ukrainian company for a failure to obtain payment in foreign currency in its account within 180 days after the supply of goods/services abroad unless an action against the defaulting foreign counterpart is filed with a court of law or the ICAC (no other arbitration institution qualifies). Therefore, Ukrainian companies involved in international trade often insist on including an arbitration clause, referring disputes to the ICAC. This is because the application to the court against a foreign company without representations or property in Ukraine is barred by procedural law.
35. Please give brief details of the main bodies that offer ADR services in your jurisdiction.
In arbitration, large international commercial disputes are resolved at the International Arbitration Court (general commercial and investment disputes) or Maritime Arbitration Commission (merchant shipping) at the Ukrainian Chamber of Commerce and Industry.
There are numerous domestic arbitration institutions, which advertise the provisions of other ADR services (mediation in particular). However, they are prohibited by law from considering arbitration cases involving foreign elements (this restriction does not apply to other types of ADR available). The domestic arbitration institutions are rarely involved in settling large commercial disputes.
Reform
36. Please summarise any proposals for dispute resolution reform and state whether they are likely to come into force and, if so, when.
The Verkhovna Rada (Parliament) of Ukraine is considering judicial reform. The project provides for reorganisation of the judicial system, splitting it into four specialised branches of civil, criminal, commercial and administrative courts. Each of these would include first instance, appellate and cassation instance courts. The Supreme Court would consider cases in exceptional circumstances and be responsible for ensuring uniformity of the application of law by the four branches of judiciary. Although the Bill is in the closest stage to adoption, the political situation in Ukraine and the notorious slowness of the Verkhovna Rada in dealing with the bills make it difficult to predict with any degree of certainty when the Bill is likely to be passed, if at all. In addition, this bill has not acquired unilateral support from legal scholars and practitioners.
31.05.2010
