Commercial Arbitration

Last verified on Sunday 4th April 2021

Commercial Arbitration: Ukraine

Pavlo Byelousov and Ksenia Koruikalova

Aequo Law Firm

Infrastructure

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Ukraine

Ukraine is the Contracting State of the New York Convention. The Convention has been in force for Ukraine since 1961.

According to the reservation made at the time of ratification of the New York Convention, Ukraine would apply the treaty's provisions to arbitral awards made in non-contracting states only under the reciprocity principle.

In October 2015, the Secretary-General of the United Nations, acting as Depository of the New York Convention, received the communication from the Ministry of Foreign Affairs of Ukraine. In its communication, Ukraine stated that:

"from 20 February 2014 and for the period of temporary occupation by the Russian Federation of a part of the territory of Ukraine – the Autonomous Republic of Crimea and the city of Sevastopol – as a result of the armed aggression of the Russian Federation committed against Ukraine and until the complete restoration of the constitutional law and order and effective control by Ukraine over such occupied territory, as well as over certain districts of the Donetsk and Luhansk oblasts of Ukraine, which are temporarily not under control of Ukraine as a result of the aggression of the Russian Federation, the application and implementation by Ukraine of the obligations under the above [Convention], as applied to the aforementioned occupied and uncontrolled territory of Ukraine, is limited and is not guaranteed."

(C.N.597.2015.TREATIES-XXII.1 of 20 October 2015).

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Ukraine

Ukraine signed and ratified the 1966 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (in force for Ukraine since 2000), and the 1961 European Convention on International Commercial Arbitration (in force for Ukraine since 1964). No reservations or declarations were made in regard of these treaties. 

According to the UNCTAD Investment Policy Hub, Ukraine is a contracting party to 65 bilateral investment treaties currently in force, and to eight more BITs that were signed but are not in force.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Ukraine

Ukrainian legislation provides for two separate sets of regulations for domestic arbitration proceedings and international commercial arbitrations in Ukraine.

The domestic arbitration regime applicable to disputes between Ukrainian parties (legal entities and/or individuals) is primarily governed by the 2004 Law of Ukraine On Arbitral (Treteyski) Courts. The rules governing domestic arbitration differ significantly from the provisions of the UNCITRAL Model Law.  

Disputes involving a foreign party do not fall within the jurisdiction of Ukrainian domestic arbitration courts. They may be referred to either national courts or international arbitration. The main national legislation rules applicable to international arbitrations with the seat in Ukraine are set forth by the 1994 Law of Ukraine On International Commercial Arbitration (the ICA Law), as well as by the Civil Procedural Code of Ukraine (the CPCU) providing for procedural rules for challenging and enforcing arbitral awards by Ukrainian courts. 

The ICA Law is based on the UNCITRAL Model Law with only a few differences. One of the major differences between the UNCITRAL Model Law and the ICA Law is that instead of defining “international arbitration” as provided in article 1(3) of the Model Law, the ICA Law in its article 1(2) lists particular types of disputes that may be referred to international commercial arbitration pursuant to an agreement of the parties, namely:

  • disputes arising out of contractual and other civil matters in the course of foreign trade and other forms of international economic relations, provided that the place of business of at least one of the parties is situated abroad; and
  • disputes arising between enterprises with foreign investment, international associations and organisations established in the territory of Ukraine, disputes between the participants of such entities, and disputes between such entities and other subjects of the law of Ukraine.

Just as the Model Law in article 1(5), the ICA Law is without prejudice to any other Ukrainian law establishing exclusive jurisdiction of Ukrainian courts over certain types of disputes or providing that certain disputes may only be referred to arbitration pursuant to provisions different from those of the ICA Law (article 1(4) of the ICA Law).

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Ukraine

The International Commercial Arbitration Court (ICAC) and the Maritime Arbitration Commission (MAC) at the Ukrainian Chamber of Commerce and Industry (UCCI) are currently the only permanent international commercial arbitration institutions in Ukraine. Both bodies are operating in accordance with the ICA Law. The Regulations on the ICAC and the MAC are incorporated into the ICA Law as Annexes 1 and 2, respectively.

Under articles 6(1) and 11 of the ICA Law, article 31 of the ICAC Rules and article 31 of MAC Rules, the President of the UCCI acts as the appointing authority to appoint a sole arbitrator, a presiding arbitrator, or a party-appointed arbitrator, if so requested or if a party or both parties fail to do so.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

5. Can foreign arbitral providers operate in your jurisdiction?

Ukraine

Ukrainian law contains no restrictions for operation of foreign arbitral providers in Ukraine.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Ukraine

There is no specialist arbitration court in Ukraine. As a result of the recent judicial reform, the two-tier structure of the court proceedings for setting aside and recognition and enforcement of arbitral awards in Ukraine has been established. According to the CPCU as amended in 2017, applications for setting aside international commercial arbitration awards are considered by general appellate courts in the place of arbitration as first instance courts. The same rule applies to recognition and enforcement cases if the place of arbitration was in Ukraine. If the place of arbitration was outside Ukraine, Kyiv Court of Appeal has exclusive jurisdiction to hear the relevant recognition and enforcement cases. Court decisions rendered in set-aside and recognition and enforcement litigations can be appealed to the Supreme Court. The Supreme Court as established in the context of the judicial reform includes several notable former arbitration practitioners.

Ukrainian judiciary is generally pro-arbitration. Ukrainian courts are inclined to grant applications for recognition and enforcement of the foreign arbitral awards in Ukraine provided that all the requirements to the relevant application are met. Ukrainian arbitration-related legislation has recently been improved and adopted many positive developments in the field worldwide in Ukraine.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Ukraine

Under Ukrainian law, namely article 7 of the ICA Law, an arbitration agreement must be in writing, whether in the form of an arbitration clause in a contract or in the form of a separate agreement. An arbitration agreement is considered to be in writing if it is contained in a document signed by the parties or in an exchange of letters, electronic messages (if the information contained therein is accessible for further use), telegrams or other means that provide for recording of such agreement. The requirement of the written form of an arbitration agreement is also met if such agreement is contained in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. The reference in a contract to a document containing an arbitration clause also constitutes an arbitration agreement, provided that the contract is in writing and the reference is such as to make that clause part of the contract. An arbitration agreement is deemed to cover future disputes, unless otherwise provided by the parties.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

8. Are any types of dispute non-arbitrable? If so, which?

Ukraine

A simplified list of non-arbitrable disputes can be deduced from articles 20 and 22 of the Commercial Procedural Code of Ukraine (ComPCU) as amended in 2017:

  • disputes arising during the conclusion, modification, termination and execution of contracts for public procurement, except for civil law aspects of such public procurement contracts;
  • disputes related to domestic arbitration;
  • corporate disputes, except for the dispute is referred to international arbitration under arbitration agreement concluded by a respective legal entity and all of its shareholders;
  • non-civil aspects of competition and privatisation disputes;
  • disputes concerning validity of acts or records in the register of real estate, IP rights and a title to security instruments; and
  • bankruptcy disputes and claims against a debtor being in bankruptcy proceedings.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Ukraine

Ukrainian law is silent on whether a third party can be bound by an arbitration clause, and on the issue of the third party’s participation in international arbitration proceedings.

In the context of the ICAC arbitration, article 22 of the ICAC Rules stipulates that a third party may join in the arbitral proceedings only under the arbitration agreement between all parties and such third party, or upon the consent of all parties to the dispute and such third party. Joinder or involvement of a third party may only be requested prior to submission of the statement of defence, which deadline may be extended under certain circumstances.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Ukraine

The consolidation of arbitral proceedings is not expressly dealt with in the ICA Law. In practice, it is possible to consolidate separate arbitral proceedings provided that parties thereto remain unchanged and there are similar factual circumstances underlying dispute(s). But it will be highly unlikely to do without the consent of all parties involving in disputes under multiple contracts.

The ICAC Rules refer to the possibility of consolidation, but do not stipulate for the exact procedure thereof.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

11. Is the "group of companies doctrine" recognised in your jurisdiction?

Ukraine

The "group of companies" doctrine is not expressly recognised by Ukrainian legislation. Ukrainian courts and arbitral tribunals usually follow the formal approach that does not allow the extension of the arbitration agreement to a non-signatory parent or subsidiary companies of a signatory company.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

12. Are arbitration clauses considered separable from the main contract?

Ukraine

The ICA Law provides for the separability of arbitration clauses in its article 16(1) which is identical to the relevant provision of the UNCITRAL Model Law.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?

Ukraine

Competence-competence principle is recognised in Ukraine. Pursuant to the ICA Law (article 16(1)), arbitrators may rule on their own jurisdiction, including any objections as to the existence or validity of the arbitration agreement.

A court may address the issue of the jurisdiction and competence of the arbitral tribunal seated in Ukraine, in the following cases:

  • Under article 16(3) of the ICA Law, if the arbitral tribunal renders a preliminary ruling that it has jurisdiction, this decision may be then appealed to an appellate general court at the place of arbitration, which shall finally decide on the issue of jurisdiction. Such decision of the appellate general court is not subject to any further appeal.  
  • Pursuant to article 8(1) of the ICA Law, if an action is initiated before the national court that is covered by an arbitration agreement, such national court shall, upon the request of either party, stay the proceedings and refer the parties to arbitration having ensured that such arbitration agreement is enforceable. Such determination by the national court directly affects the tribunal’s competence and jurisdiction.  
  • National courts also deal with the issue where a party argues that an arbitral tribunal lacked competence and jurisdiction as a basis for setting aside or refusal in enforcement of the final award.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Ukraine

Ukrainian law does not provide for any specific requirements as to the content of an arbitration agreement. But since an arbitration agreement is a separate agreement independent of terms and conditions of the contract(s) covered by such arbitration agreement (clause), it should contain the parties’ consent to refer disputes between them to arbitration.

From the practical perspective, one of the most essential elements of an arbitration agreement is the correct name of the particular arbitral institution or a precise reference to ad hoc arbitration, since any defects in this respect (mistakes, omissions, typos, conflicts between bilingual versions, etc) may result in an arbitration agreement being recognised as invalid, non-enforceable or not concluded, as well as in setting aside the arbitral award by Ukrainian courts.

In addition, an arbitration agreement shall contain a description of the parties and legal relationships covered thereby, the scope of issues (disputes) to be referred to arbitration, reference to the particular rules of arbitration and other procedural details agreed upon by the parties (number of arbitrators, language and place of arbitration, terms of arbitral proceedings, etc). 

Besides, under the Ukrainian procedural rules, any inaccuracies in the text, doubts as to validity and enforceability of an arbitration agreement shall be interpreted by a court in favour of its validity, operability and enforceability. Recent jurisprudence of the Ukraine’s Supreme Court confirms the above principle.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Ukraine

Institutional international arbitration is by far more common than ad hoc international arbitration. Ad hoc arbitration is extremely rare in Ukraine.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Ukraine

Ukrainian arbitration law is silent on the issue of multi-party proceedings.

As a general rule, the parties have to define the exact number of arbitrators as well as the procedure of their appointment in their multi-party arbitration agreement. If they have failed to do so, the President of the UCCI can appoint the arbitrators by default.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Ukraine

Under article 21 of the ICA Law, absent parties' agreement, arbitration commences from the day the respondent receives the request for arbitration. Since the limitation periods are a part of the material law in Ukraine, this issue is considered based on the law chosen by the parties. The general period of limitation is three years as of the date when a person becomes aware of or ought to become aware of the violation of her or his rights. Specific limitation periods are set for certain types of claims by the Ukrainian national law, as well as certain international treaties to which Ukraine is a party.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Ukraine

Ukrainian arbitration law leaves it to the parties to choose the applicable substantive law. If there is no such agreement, the tribunal determines applicable law based on the conflict of laws rules.

The conflict of laws rules applicable to private legal relations involving a foreign element in Ukraine (including contractual relations) are set forth in the Law of Ukraine On Private International Law (the PIL Law).

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Ukraine

Ukrainian law contains no restrictions as to a party’s choice of arbitrator, provided that such arbitrator possesses qualifications agreed upon by the parties, and is impartial and independent. Justifiable doubts as to the arbitrator's impartiality or independence, or lack of qualifications on which the parties have agreed create grounds for challenge of the arbitrator pursuant to article 12(2) of the ICA Law.

Certain limits to the parties’ autonomy to select arbitrators are provided by the international arbitration institutions. In particular, under the ICAC Rules, the parties may appoint only those arbitrators who are listed in the Recommendatory List of Arbitrators as approved by the Presidium of the UCCI. Such Recommendatory List of Arbitrators includes arbitrators possessing the requisite specialised knowledge in settling disputes within the jurisdiction of the ICAC at the UCCI.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Ukraine

There are neither procedural, nor immigration restrictions for foreigners to act as arbitrators, except for common visa requirements. Under article 11(1) of the ICA Law, no person shall be precluded from acting as an arbitrator by reason of his or her nationality, unless otherwise agreed by the parties.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Ukraine

If parties cannot nominate an arbitrator, one is chosen by the President of UCCI. The UCCI President's decision is not subject to any appeal.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Ukraine

The ICA Law, just like the UNCITRAL Model Law, does not specifically address the issue of arbitrators' immunity from suit.

Under the Ukrainian Criminal Code, foreign and in some instances domestic arbitrators are recognised as public officials, who can be held responsible ex officio, for example, for abuse of authority and corruption. At the same time, we are unaware of any cases where a person would actually be held liable for his or her actions in the capacity of an arbitrator.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Ukraine

This issue is not regulated by Ukrainian law. Under the ICAC Rules, ICAC can stay the proceedings until the arbitration fees are paid. In addition, the ICAC Rules entitle the ICAC President and the tribunal to order security of claim.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Ukraine

As in the UNCITRAL Model Law, according to article 12 (2) of the ICA Law challenge of an arbitrator is possible only if there are ‘justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties’. If not otherwise agreed by the parties, the challenges are dealt with by the arbitral tribunal. The President of the UCCI can also be requested to decide on the challenge, if the arbitral tribunal did not grant the initial challenge. The UCCI President's decision is not subject to appeal. The IBA Guidelines on Conflicts of Interest in International Arbitration are often referred to by the parties and the arbitrators in Ukraine.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Ukraine

The ICA Law from the outset adopted the wording of article 17 of the original UNCITRAL Model Law, authorising arbitral tribunals seated in Ukraine to "order any party to take such interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute", and to "require any party to provide appropriate security in connection with such measure".

In 2017, the ICA Law was amended to also allow tribunals seated in Ukraine to:

  • order a party to provide security for arbitration costs related to consideration of the case or to a particular procedural action; and  
  • draw an adverse inference in case a party fails to produce (documentary) evidence.

In addition, either party may apply to Ukrainian state courts for interim measures in support of international arbitration once the relevant arbitral proceedings have been initiated. The respective application may be filed to the appellate general court either at the place of arbitration, or at the location of respondent or his or her property. A recent positive court practice whereby Ukrainian courts have granted such measures confirms the commitment to apply such measures when they are deemed necessary.

Ukrainian procedural rules do not expressly provide a possibility of an anti-suit injunction.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Ukraine

Under the ICA Law, the tribunal can order a party to provide security for arbitration costs in relation to case consideration or a certain procedural action (eg, interim measures).

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Ukraine

The ICA Law provides for only a few mandatory rules on international arbitration proceedings in Ukraine:

  • the arbitration agreement shall be in writing;
  • the arbitration tribunal must treat the parties equally and provide them with a full opportunity to present their cases;
  • the arbitral award shall be made in writing and shall be signed by the sole arbitrator or by a majority of the arbitral tribunal;
  • the arbitral award must be reasoned; and
  • the parties may not derogate from the procedure applicable under the Ukrainian law for setting aside the arbitral awards.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Ukraine

Non-participation of a party does not preclude the tribunal from commencing arbitration and issuing the award. The tribunals are often extra careful with proper notice in order to ensure future enforceability of such awards.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Ukraine

There is no exhaustive list of evidence which is permitted in arbitration under Ukrainian law.

The ICAC Rules only require the written and electronic evidence to be duly certified by the parties and gives clear guidelines on what it means by it and how it should be conducted.

The IBA Rules on Taking of Evidence in International Commercial Arbitration are routinely used in the arbitral proceedings seated in Ukraine. At the same time, the detailed approach outlined in the ICAC Rules seems more than enough for both arbitrators and parties to deal with all issues arising in connection to document production.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Ukraine

Article 27 of the ICA Law permits an arbitral tribunal or a party (with the permission of the tribunal) to ask a court of appeal of general jurisdiction in the place of evidence location or witness residence to assist with the obtaining witness testimony and/or other necessary evidence. The provision as it currently stands is much more precise than its original version, as the result of amendments introduced to the ICA Law in 2017. 

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Ukraine

The ICA Law provides for the full autonomy of parties and tribunal on how or whether to conduct the document production. Ukrainian state courts are entitled to assist with this issue.

The ICAC Rules support the full autonomy of parties in this regard as well. Article 52 of ICAC Rules has the only relevant requirement: submission to the tribunal of “all documents available to it and/or other evidence that this party relies on, including official documents and those in the public domain, except for any documents that have already been submitted by the other party”.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

32. Is it mandatory to have a final hearing on the merits?

Ukraine

Unless both parties have agreed otherwise or one party has requested a hearing, the arbitral tribunal has the power to conduct the arbitration in such a manner as it considers appropriate, including the power to decide whether to hold oral hearings or proceed with consideration of the case based upon the evidence and arguments submitted by parties.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Ukraine

The ICA Law permits the holding of hearings and procedural meetings at any location at the tribunal’s discretion, absent parties' agreement to the contrary.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Award

34. Can the tribunal decide by majority?

Ukraine

Under the ICA Law, when there is more than one arbitrator, any award or other decision of the arbitral tribunal shall be made by a majority of the arbitrators.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Ukraine

Apart from the usual public policy restrictions, there are no limitations as to what the tribunal can grant.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Ukraine

Ukrainian arbitration law does not contain any special provisions regarding the dissenting opinions. The dissenting opinions are permitted under the ICAC Rules and do occasionally occur in the ICAC practice.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Ukraine

The arbitral award shall be made in writing and shall be signed by the majority of the arbitral tribunal. The award shall state the reasons for the decision, state whether the claim is granted or rejected, state the amount of the arbitration fee and costs, and their allocation, and also state the date of the award and the place of arbitration. The ICA Law sets forth that the award, having been dated and signed by the arbitrators, shall be delivered to each party, while the exact time limits for delivery of the award are not provided therein.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Ukraine

Ukrainian law does not prescribe any time limits for consideration of the case in arbitration.

The ICAC Rules set strict time frames, under which a standard case has to be considered within six months of the arbitral tribunal constitution. Overall, under 2020 statistics, the ICAC considered more than 90 per cent of its cases within six months from the date of the arbitral tribunal constitution. Two cases were resolved under the expedited procedure (within two month of the statement of claim filing).

Under the ICA Law, a party can request to correct and/or interpret the award or ask the arbitral tribunal to issue an additional award within 30 days after receiving it, if the parties have not agreed otherwise. The tribunal can do the same on its own initiative within the 30 days after it issued the award. The tribunal can extend these time frames if it deems such an action necessary.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Ukraine

The ICA Law sets forth only a general rule pursuant to which, in the final award, the arbitral tribunal shall state the total amount of the arbitration fee and costs and their allocation, but does not provide any specific rules for such allocation. Parties are free to agree on allocation of the arbitration fee in the arbitration agreement.

The tribunals usually rule on the issue of fees and costs paid in the final award. Under the ICAC Rules, "loser pays" is the guiding principle, but the tribunals always check the reasonableness of the costs incurred, before ruling on the costs.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Ukraine

Ukrainian law provides a possibility to recover both pre-award and post-award interest from the debtor. Under the Civil Code of Ukraine, the default interest rate is 3 per cent per annum.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Ukraine

The merits of the case cannot be pondered on by the courts and the judicial appellate review of arbitral awards as such is not possible.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

42. Are there any other bases on which an award may be challenged, and if so what?

Ukraine

International arbitral awards rendered in Ukraine may be set aside by a court of appeals of general jurisdiction at the place of arbitration if any of the following grounds exists:

  • a party to the arbitration agreement was under some incapacity to enter into it, or the said agreement is not valid under the law to which the parties have subjected it, or, failing any indication thereon, under the law of Ukraine;
  • the party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case;
  • the award was made regarding a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration;
  • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the ICA Law from which the parties cannot derogate, or, failing such agreement, was not in accordance with the ICA Law;
  • the subject matter of the dispute cannot be settled by arbitration under the law of Ukraine; or
  • the award is in conflict with the public policy of Ukraine.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Ukraine

Parties may not agree to waive the right to set aside an arbitral award. Ukrainian legislation does not provide for any other default recourse. Furthermore, under article 34 (4) of ICA Law, the court, when asked to set aside an award, can, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunal’s opinion would eliminate the grounds for setting aside.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Ukraine

Overall, arbitral awards that were set aside are not generally enforced. However, since Ukraine is a party to the European Convention on International Commercial Arbitration, the reasons to refuse recognition and enforcement of an arbitral award set aside in the member state are limited, as stated in article IX of that Convention. Since ‘public order’ is not listed in article IX, a Ukrainian court may potentially still enforce an award set aside in another member state of the European Convention based on public policy grounds. 

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Ukraine

Cumulatively, the recent justice reforms and court practice in arbitration-related cases in Ukraine set out several trends:

  • Ukrainian courts are following the letter and the spirit of the recent pro-arbitration amendments to the arbitration legislation and, inter alia, more favourably interpret defective arbitration clauses and move away from their previously quite formalistic approach regarding the documents that need to be filed with the application for enforcement;
  • Kyiv Court of Appeals, which is now considering most of the enforcement cases as the first instance court, and several judges from the Supreme Court (second and final instance) are building and expanding their specialisation in arbitration-related matters and are much more open to dialogue with arbitration community and the public;
  • A previously strong regime of absolute state immunity has started to crack. In particular, in January 2019, the Supreme Court granted enforcement of the PCA award in arbitration case Everest et al v Russia – one of the few investment arbitration awards granting compensation for the expropriation of Ukrainian nationals’ property in Crimea by Russia’s annexation – against Russia’s assets in Ukraine (Case No. 796/165/18). In July 2019, Kyiv Court of Appeal granted enforcement of another Crimea-related PCA award – the one rendered in the arbitration initiated by Oshchadbank against the Russian Federation (Case No. 824/66/19); and  
  • Ukrainian courts are dealing with increasingly complex and unique arbitration-related cases (eg, emergency award in JKX et al v Ukraine case and enforcement of Everest et al v Russian Federation and Oshchadbank v Russian Federation awards) and may become trendsetters in the region.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Ukraine

Under article 79 of the PIL Law, states enjoy absolute court immunity unless otherwise provided for by an international treaty of Ukraine or by Ukrainian law. In Case No. 796/165/2018 (Everest et al vs Russia, re: recognition and enforcement of the PCA arbitral award) the Supreme Court suggested in January 2019 that the agreement to arbitrate inherent in most bilateral investment treaties can constitute a waiver of state immunity. The Court also suggested that limited state immunity is now an international legal custom recognised, inter alia, by the ECHR case law.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Ukraine

The ICA Law does not deal with confidentiality. Under the ICAC Rules, the consideration of cases and other related activities is confidential, unless otherwise agreed by the parties. Absent parties' agreement, the tribunal and the parties observe the confidentiality of any document submitted by a party or a person being not a party to the arbitration and not available in public sources.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Ukraine

Ukrainian laws do not contain any restrictions as to the use of such information in subsequent proceedings.

Furthermore, the confidentiality of information disclosed in arbitration is affected by the court proceedings in respect of enforcement and setting aside procedures that are, as a general rule, public in Ukraine and require disclosure of the arbitral award. In the case of setting aside, transfer of the arbitration case files to the court may also be required to prove grounds for setting aside sought.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Ukraine

There are no particular rules in the ICA Law governing the conduct of counsel in arbitral proceedings seated in Ukraine. The rules of permanent arbitration institutions in Ukraine set forth general obligation towards both parties’ counsels from Ukraine or abroad to make fair use of their procedural rights, refrain from abusing such rights, and observe the time limits established by the tribunal. In 2020, the respective rules were supplemented by the provisions allowing tribunals to take a party's and/or its representative's misconduct (bad faith behaviour, breach of the rules, abuse of procedural rights) into account in distribution of arbitration costs, and also to issue warnings and to invite a party to change its representative. The IBA Guidelines on Party Representation in International Arbitration are often used by the parties. Party representatives admitted to the Bar in Ukraine are also bound by the ethics rules applicable to all Ukrainian attorneys.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Ukraine

Ukraine is a civil law country, which has traditionally been pro-arbitration. A body of new pro-arbitration court practice is emerging, whereby the jurisprudence sets out clearer guidelines for the parties and the practitioners. The adoption of the 2017 amendments to the ICA Law and the CPCU, as well as of the 2020 edition of the ICAC Rules is another development attesting to this positive trend.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Ukraine

Ukrainian law does not expressly govern third-party funding. At the same time, the practice is already more or less common at the ICAC. Usually, the parties being funded and the funders are affiliated to each other.

Answer contributed by Pavlo Byelousov and Ksenia Koruikalova

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