Litigation

1 What is the structure of the civil court system?

Ukraine is a civil law country of the continental legal system. The judicial system of Ukraine consists of: courts of general jurisdiction and a court of constitutional jurisdiction (the Constitutional Court of Ukraine). 

Courts of general jurisdiction include general courts and specialised (commercial and administrative) courts. General courts consider civil, criminal, administrative and some specific matters (eg, recognition or enforcement of the foreign judgments and arbitral awards, setting aside the arbitral wards rendered in Ukraine, establishment of facts), while commercial and administrative courts consider only commercial and administrative disputes.

The procedures of the above courts differ, since they are regulated by specific procedural codes for each type of court jurisdiction. In particular, the 2004 Civil Procedural Code governs civil procedure (ie, private disputes involving individuals), the 1991 Commercial Procedural Code – any private, mostly commercial, disputes involving legal entities or individual entrepreneurs, and the 2005 Code on Administrative Proceedings – disputes arising out of public legal relations involving an official or a state body (eg, tax authorities).

Civil, commercial and administrative proceedings may include four levels: first instance (local) courts; courts of appeals (regional); courts of cassation (the Superior Court of Ukraine on Civil and Criminal Matters, the Superior Administrative Court of Ukraine or the Superior Commercial Court of Ukraine, accordingly) and the Supreme Court of Ukraine. 

The decisions of local (first instance) courts may be appealed to the administrative, commercial and general courts of appeal accordingly. The decisions of the courts of appeal may be further appealed (via ‘cassation complaint’) to the relevant superior court. The last appeal option (on verylimited grounds) may be filed to the Supreme Court of Ukraine.

Under a general rule, cases in the courts of first instance are heard by the sole judge, except for specific circumstances (eg, owing to an extraordinary complexity of the case) when a case be referred to a panel consisting of a judge and two people’s assessors (in general courts) or a panel consisting of three judges (in commercial and administrative courts). Courts of appeal hear cases by a panel of three judges, the courts of cassation – from three up to five judges, and the Supreme Court of Ukraine – by a collegium of not less than seven judges.

2 What is the role of the judge and the jury in civil proceedings?

In practice, irrespective of the type of proceeding, the judge’s role is rather inquisitorial, and the judge is obliged to take certain steps for comprehensive consideration of the case having in this respect not only a duty to make sure that the substantive and procedural laws are respected, but also full powers to request any evidence and to call experts and witnesses. 

In civil actions people’s assessors (jurors) may be involved under the Civil Procedural Code in the following cases only:

  • restriction of individual’s civil capacity; recognition of an individual to lack dispositive legal capacity and renewal of civil capacity;
  • recognition of an individual missing or a declaration of death;
  • adoption;
  • compulsory psychiatric treatment; and
  • compulsory hospitalisation in a TB dispensary.

However, when involved in proceedings, people’s assessors have the same powers as a judge.

3 What are the time limits for bringing civil claims?

The statute of limitations is generally treated as a substantive law issue. The general limitation period is three years from the time when a claimant learned or could have learned of the infringement of its rights or when a claimant learned who infringed on its rights.

Specific limitation period in one year apply to the claims arising out of delivery and quality of goods, recovery of penalty (fine), for defamation in the media, termination of a gift contact, etc. In some circumstances, a limitation period may be suspended for a certain period or discontinued and then restart. There are also a few specific areas where no limitation period is applicable.

Extension of the statutory limitation period by an agreement of the parties is permitted. However, it is forbidden to reduce the statutory limitation period. Importantly, the limitation period does not prevent the claim from being accepted for consideration. The court will consider the case on the merits; however, if the limitation period has expired and a party makes a motion for application of the limitation period, the court should apply the limitation period and dismiss the claim on that ground. 

In administrative proceedings, special terms for filing an administrative claim apply depending on nature of a dispute (from one to six months).

4 Are there any pre-action considerations the parties should take into account?

No specific action is required for referring a dispute directly to the competent court for consideration. However, there are several kinds of disputes (in commercial proceedings only) that may be directed to court only after completion of a specific pre-litigation procedure, which includes sending the purported defendant a claim (complaint) and receiving a reply therefrom within a definite period of time. Furthermore, other formalities may also be provided under a respective contract (eg, filing a formal request, negotiation or mediation).

And also prior to bringing an action, the parties may request interim measures (see below).

5 How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? 

The civil proceedings are commenced by filing a statement of claim to be accompanied by:

  • documents supporting the claim and confirming the authority of a person signing the statement of claim, if applicable;
  • evidence of court fees’ payment; and
  • copies of the statement of claim for a defendant and third parties, if any (in civil proceedings), or documents certifying that the statement of claim and attachments thereto have been duly sent upon defendants and third parties (in the commercial proceedings).

Within three days of the receipt of the statement of claim and documents in support thereof, a judge renders a ruling on commencement of the proceedings and schedules a preliminary court session. The court must serve all parties through means of communication providing a record of the notification, such as: registered mail; facsimile notification; electronic notification (e-mail); telephone notification; or telegram. The courts prefer using registered mail as a communication method, but on some occasions (though rather rare), they also use other methods. The deemed date of service is the day when a party receives a communication from the court.

International service (both service abroad of court proceedings in Ukraine and service in Ukraine of overseas court proceedings) is effected pursuant to the applicable international treaties of Ukraine: the Hague Conventions on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1965), on Civil Procedure (1954), and the Minsk CIS Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Cases, as well as number of bilateral agreements on legal assistance in civil and criminal cases. Depending on the applicable treaty, service abroad and from abroad may be arranged through the Ministry of Justice of Ukraine or directly through relevant courts.

6 What is the typical procedure and timetable for a civil claim?

There are no clear statutory time limits for exchanging documents further to the statement of claim. Normally, in his ruling on commencement proceeding a judge invites defendants and third parties, if any, to file a statement of defence or objections or comments to the claim, and claimant to provide any specific documents in support of the claim which a judge considers appropriate or necessary. Usually, the term for filing the above documents is set until the first hearings’ date (15–30 days after the date of ruling on commencement proceeding). Such documents will also be accepted by a judge on date of the hearing.

Furthermore, all participants in the proceedings may substantiate their case by additional explanations, comments or motions within consideration of the case by a first-instance court, which lasts approximately two to two-and-a-half months. However, in practice first-instance courts often fail to adhere to the procedural terms. 

The procedural timetable is more strictly applied by judges in the appellate and cassation courts where consideration of the case should take between one and two months and between 15 days and one month, respectively.

7 Can the parties control the procedure and the timetable?

The parties do not have a sufficient influence on the procedure and the timetable, as they are determined by the judge or presiding judge (in case of a panel) solely. The procedure and the timetable may be affected by the parties to the certain extend by filing various interim applications (eg, motions for engagement of third parties, preliminary injunctions or orders, request for evidence, request for expert examination or opinion, summoning witnesses or motions for adjourning hearing or extending the time for the hearing for review the case materials, new submissions and provide additional comments thereto). However, such motions of the parties are decided by the judge’s sole discretion. 

8 Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

Since the burden of proof rests with the claimant under a general rule, namely he shall have a duty to obtain and provide all relevant and admissible evidence in support of his or her claim or facts referred to therein. There is no particular obligation under Ukrainian law to preserve documents which may be of any relevance in court proceedings or to share documents with an opponent unless they are required to do so by the court or by law. 

The parties may also request to provide particular documents directly or through the court as a pretrial remedy. A request for evidence can beconsidered ex parte, and a court may compel any person, notwithstanding whether it is a participant to the case or not, to produce necessary evidence. The interested party must specify the piece of evidence, substantiate why such piece of evidence is essential, and must inform the court who or what entity or institution most probably possesses such piece of evidence.

Although the court’s order on providing the evidence is binding upon a respective party, there are no particular negative consequences for a party failing to provide such documents, if such party properly notifies the court on inability or impossibility to access or provide the documents. However, if a party is obliged to keep a particular document or evidence by law and intentionally refuses to provide it, this can be regarded as a breach of the court decision with all that implies (penalties and sanctions).

9 Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Certain pieces of evidence cannot be requested from a party or a third party (eg those falling under the attorney-client privilege). Advice or correspondence given by an in-house lawyer is not privileged, unless it is defined and marked as classified or secret. 

However, any piece of evidence filed with the court has no privilege.Any party is entitled to review the case file; any piece of evidence is stored in the case file.

10 Do parties exchange written evidence from witnesses and experts prior to trial?

There is no duty to provide any evidence prior to trial under Ukrainian procedural laws, so the parties would rarely exchange by any evidence, including witness or expert statements, unless it is required for pretrial negotiations or settlement.

11 How is evidence presented at trial? Do witnesses and experts give oral evidence?

In civil proceedings, the courts accept documentary and material evidence, including written explanations regarding the merits of the case submitted by the parties’ representatives and other persons participating in court proceedings, witness statements and expert evidence as well as sound and video recordings.

In civil and administrative proceedings, a witness is obliged to testify unless such testimony is directly related to his or her person and interests, as well as to that of his or her relatives. The procedural rules permit interrogation and cross-examination of witnesses in court sessions. Representatives of the parties are allowed to interrogate the witness under the supervision of the court, who may dismiss some of the questions if they are not permissible or relevant. The court may also interrogate the witness. As a rule, only oral witness statements in the court session are permissible. Written witness depositions regarding the facts of the case as a rule are usually dismissed by the court.

Though witness evidence as such is not allowed in commercial proceedings, officers of legal entities, state and municipal bodies may appear before the court in order to provide explanations regarding the facts of the case.

Expert evidence is allowed in civil proceedings as written expert reports submitted by the experts appointed by the court. The report should answer the questions determined by the court. The parties are allowed to submit suggestions to the court regarding the experts to be appointed and the questions to be addressed to the experts. In civil proceedings, the parties may agree on the expert or experts who will provide the report. The court may upon the motion of the parties or upon its own discretion request the expert to orally explain his or her conclusions.

12 What interim remedies are available?

Depending on a particular type if proceedings, interim remedies are available as a pre-action remedy or as a provisional injunction within court proceedings.

The Commercial Procedural Code provides for the exhaustive list of interim measures available in a commercial case as follows:

  • attachment of the defendant’s assets (funds or other property);
  • prohibition of certain actions by the defendant;
  • prohibition of certain actions in relation to the subject of the dispute by other persons; and
  • suspension of recovery under the writ of execution or other documents in uncontested proceedings.

Apart from the above, the Ukraine’s Civil Procedural Code provides for the following interim remedies available in civil proceedings:

  • imposition of the duty to take certain actions for preventing damage or deterioration of the disputed property;
  • prohibition for other persons to make payments or make a property over to defendant or exercise other obligations for him;
  • suspension of the sale of the property if a claim for the release of such property from the attachment is filed; and
  • transfer of the disputed property into the safe keeping of other persons. 

Furthermore, in commercial proceedings, the available pre-action interim remedies include:

  • request for evidence;
  • search of premises relating to the infringement upon claimant’s rights; and
  • attachment of property or seizure of monetary funds.

In order to obtain for interim remedies, the interested party should file a motion with the commercial court. The above pre-action interim remedies may be granted by a court ruling where there are grounds to suppose that unless such remedies are granted, the evidence may be complicated or impossible to produce or the rights of the interested party are or may be infringed upon. A claimant must file a statement of claim within five days following the court ruling to grant pre-action interim remedies. If the claimant fails to do so, pre-action remedies shall be terminated by the court.

In civil cases, pre-action interim remedies are limited to preserving the evidence and measures aimed at preventing the intellectually property rights’ violation. Interim remedies in support of foreign proceedings are not practically available in Ukraine.

13 What substantive remedies are available?

Ukrainian law provides for the following substantive remedies available for a claimant:

  • recognition of the right;
  • rescission, invalidation, change or termination of a contract, transaction, or act;
  • restitutio in integrum;
  • enforcement of obligations in kind;
  • debt and damages recovery;
  • compensation of moral damages; and
  • recognition of a decision, action or inactivity of state authorities as unlawful.

The above list is not exhaustive. Generally, the claimant is obliged to clearly indicate particular substantive remedies sought in his statement of claim. However, he may (before the court commences consideration of the case on the merits) amend its pleadings by either changing the request for relief or the cause of action.

A court may grant only compensatory damages in the amount of actual loss or lost profit, provided that those are confirmed by proper evidence. Ukrainian jurisprudence has very strict standards of proof in relation to damages. In particular, the court would grant damages only if there is evidence of the direct causation link between those damages and the defendant’s violation of law and infringement upon the rights or interests of the claimant. Ukrainian law does not recognise a concept of punitive damages. 

All issues concerning the claim, including the compensation of court expenses, must be resolved in the judgment on the merits. The courts may not award post-judgment interest on the awarded damages.

14 What means of enforcement are available?

As a rule, on the basis of a final judgment the court issued a writ of execution or an order which actually triggers the enforcement procedure. A final judgment is enforced through the state enforcement (bailiff ) service in accordance with to the Act of Ukraine ‘On Enforcement Proceedings’ (Enforcement Proceedings Act). 

Should the judgment not be voluntary executed by the debtor, the state enforcement officer would take coercive measures to enforce the judgment and recover a debt, including, but not limited to seizure of the debtor’s funds or other assets, sale of the debtor’s assets at a public auction, collection of any regular payments (eg, salary, profits, pension, etc) as well as other measures set forth in the judgment. Any difficulties in the enforcement procedure can be referred to a judge. 

Disobedience of court orders or resistance to the state enforcement officer exercising his duties may entail fines and criminal responsibility in the form of fine or arrest for a period of three to six months, or, in some instances, imprisonment for a period of up to two years.

15 Are court hearings held in public? Are court documents available to the public?

Generally, all court proceedings are public in Ukraine. Thus, a court session may be attended by any person; court decisions are, in general, public as well. Court decisions and other procedural ruling are available also at the online unified state register of court decision (http://reyestr.court.gov. ua).

In civil proceedings, the court at the well-founded request of the interested party may rule to consider the case within closed proceedings. Closed court proceedings are allowed to protect state, commercial or bank secrets, and adoption secrets, etc. However, in practice, even the public court sessions might not be easily accessible.

16 Does the court have power to order costs?

The costs of civil proceedings consist of the state fee and other costs incurred in relation to a court hearing. As a general rule, there is no obligation of the claimant to provide security for the defendant’s costs, however, where the court decides on interim measures, the court may require the party seeking such relief to provide a security. 

Usually, the court orders the losing party to cover the court expenses of the winning one, including the court fees. Other expenses such as travel costs, witness travel costs, expert fees, lawyers’ fees are rarely fully compensated.

All issues concerning the claim, including the compensation of court expenses, must be resolved in the judgment on the merits. The courts may not award post-judgment interest on the awarded damages.

17 Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

Any fee structure, including hourly rates, task-based billing, ‘no win, no fee’ arrangements, conditional or contingency fees is permitted in Ukraine. All these fee structures are used in practice. The law does not stipulate any particular amount of the fees or limit on the fees. However, it is impossible to have the legal fees and other litigation-related expenses compensated unless they are actually paid namely by the party to the proceedings and no later than the date of the court decision. 

Ukrainian law provides no specific rules in respect of a third-party funding or other risk-sharing arrangements for investing the claims, and thus, the above practice is not prohibited as such. As rule, it is enough for the court that necessary fees were paid by the party to the proceedings and the acceptable evidence proving this fact was filed with the court. Furthermore, Ukrainian substantive law allows assigning of their claims except for certain, mostly personal, claims, and such assignment can be done even in the course of proceedings.

18 Is insurance available to cover all or part of a party’s legal costs?

Ukrainian laws do not restrict insurance companies in providing insurance covering of litigation costs and potential liability for an opponent’s costs. To our best knowledge, such insurances are available in Ukraine on a voluntary basis.

19 May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The class action in Ukraine may be realised through the institute of joinder, according to which the claim can be jointly filed by a group of claimants. Each claimant acts independently to the defendant. Possibility to file a collective claim in civil proceedings is determined by the subject matter of a dispute which is homogeneous joint rights or duties of the claimants which have emerged of the same circumstance.

20 On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

Decisions of administrative, commercial or general courts of first instance may be appealed to a competent court of appeals within 10 days since issuing; rulings (if separate appeal thereof is permitted) must be appealed within five days. The above terms may be renewed by the court of appeals at the request of the appellant if a failure to meet the above terms was attributable to a good reason.

The grounds for appeal usually include:

  • violation of substantive or procedural law by the courts when resolving the dispute;
  • incomplete findings regarding facts of the case; and 
  • incorrect findings regarding facts of the case.

Should any of the parties be unsatisfied with the decision of the court of appeals, such decision (if necessary, together with the first instance court decision) may be further challenged by filing a cassation complaint to the competent Superior Specialised Court within 20 days from the announcement of the court of appeals judgment or ruling. 

The grounds for cassation complaint are infringement of substantive or procedural law by lower courts in the given case. 

The party who is not satisfied with the outcome of the case after it has been considered by the Superior Specialised Court may file a complaint on exceptional grounds with the Supreme Court of Ukraine. The grounds for such complaint are very limited; the usual ground is different application or interpretation of the substantive law by the Superior Courts in analogous cases leading to rendering different judgments in similar legal relationships.

21 What procedures exist for recognition and enforcement of foreign judgments?

Foreign court decisions are recognised and enforced in Ukraine if a duly ratified treaty of Ukraine provides so or on the principle of reciprocity, which is assumed to exist unless proven otherwise. 

Ukraine is a party to both international (eg, the Minsk Convention on Legal Assistance and Legal Relations in Civil, Matrimonial and Criminal Cases of 1993 and the Kiev Convention on Settlement of Commercial Disputes of 1992) and bilateral treaties governing the issues of recognition and enforcement of foreign judgments, in particular with China, Lithuania, Moldova, Poland, Estonia, Georgia, Latvia, Mongolia, Uzbekistan, Vietnam, the Czech Republic, Hungary, Macedonia, Turkey, Republic of Korea, Bulgaria, Cyprus, Romania, Greece, etc. 

If there is no treaty setting forth the procedure and requirements for recognition and enforcement of a foreign court decision, the procedure and requirements, which are stipulated in the Civil Procedural Code, shall apply.

A party seeking recognition and enforcement of the foreign judgment shall file a respective motion with local general courts at the place of residence or location of the debtor. If the debtor does not have place of residence or location in Ukraine, then a court at the location of the debtor’s property in Ukraine will have jurisdiction. The said motion shall be accompanied by the following documents:

  • a duly certified copy of foreign judgment;
  • an official document certifying that the foreign judgment has entered into force (if the judgment itself does not expressly provide this);
  • a document certifying that the party, against whom the foreign court judgment is rendered and who did not participate in the proceedings, was duly notified about the place and time of the hearings;
  • a document identifying the portion or the time following which the foreign court judgment or decision is subject to enforcement (if it has previously been enforced);
  • a document certifying powers of the applicant’s representative; and
  • a duly certified translation of the above documents into Ukrainian or other language as applicable under international treaty.

Having considered the motion for granting enforcement and objections thereto, if any, and heard the parties’ arguments, a judge delivers a ruling on granting or refusing the permit for enforcement of the foreign judgment. Under the Civil Procedural Code enforcement of a foreign judgment can be rejected only on one of the following grounds:

  • if the foreign court decision has not become effective in accordance with legislation of the country where it was rendered;
  • if the defendant was deprived of the possibility to take part in the proceedings in the foreign court because it was not properly served;
  • if the award was rendered in a matter that is exclusively under the jurisdiction of Ukrainian court or another competent body according to the laws of Ukraine;
  • if there is an already rendered judgment of the Ukrainian court in the case between the same parties, with the same subject matter and cause of action, which have become effective, or if the judicial proceedings in the case between the same parties, with the same subject matter and cause of action were already commenced in the Ukrainian court before initiation of the case in the foreign court;
  • if the term for applying for the enforcement as provided for by the international treaties of Ukraine and the Civil Procedural Code (usually three years) has lapsed;
  • if under the laws of Ukraine the dispute given its subject matter could not be decided within the judicial proceedings;
  • if the execution of the award would threaten the interests of Ukraine; and
  • in other cases envisaged by Ukrainian law.

The court order can be appealed to the appellate and cassation courts. After the enforcement is granted, the court issues a respective writ of execution triggering the enforcement procedure as mentioned in question 14.

22 Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions? 

Should in the course of civil proceedings there appear a necessity to obtain evidence from abroad the court shall issue a legal assistance court order to be sent to a competent court of the state where such evidence shall be obtained. The procedural matters related to such court orders are governed by the Hague Convention on the taking of evidence abroad in civil or commercial matters (1970), the Kiev (CIS) Agreement on settlement of disputes related to the commercial activity (1992), the (1993) Minsk Convention on legal assistance and legal relations in civil family and criminal matters, as well as by respective legal assistance bilateral treaties of Ukraine. 

Arbitration

23 Is the arbitration law based on the UNCITRAL Model Law?

The Act of Ukraine in International Commercial Arbitration (the ICA Act) is almost completely based on the 1985 UNCITRAL Model Law, with only a few differences. 

The major difference is that instead of the definition of ‘international arbitration’ as provided in article 1(3) of the UNCITRAL Model Law, the ICA Act defines the particular disputes that may be referred to international commercial arbitration pursuant to an agreement  ofthe parties (article 1(2) of the ICA Act), 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; as well as disputes between such entities and other subjects of the law of Ukraine, except for the dispute referred to the exclusive jurisdiction of Ukrainian courts (article 4 of the ICA Act).

24 What are the formal requirements for an enforceable arbitration agreement?

An arbitration agreement must be in writing, whether in the form of an arbitration clause in the 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, telex, telegrams or of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. 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 shall provide the correct name of the particular arbitration institution or a precise reference to ad hoc arbitration, since any defects in this respect (for example, mistakes, omissions, typographical errors or differences between bilingual versions etc) may result in the arbitration agreement being recognised as invalid or not concluded,as well as in setting aside the arbitral award by Ukrainian courts.

25 If the arbitration agreement and any relevant rules are silenton the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

Under Ukrainian law, the parties are free to decide on the number of arbitrators. Should the parties fail to determine the number of and procedure for appointing the arbitrators, three arbitrators shall be appointed in the following way: each party appoints one arbitrator and these two partyappointed arbitrators shall appoint the third (presiding) arbitrator. If a party fails to appoint an arbitrator or if the two party-appointed arbitrators fail to agree on the third arbitrator, the arbitrator is appointed by the president of Ukrainian Chamber of Commerce and Industry (the UCCI).

In international arbitration with a sole arbitrator, the president of the UCCI is also authorised to appoint the arbitrator, if the parties fail to agree on the sole arbitrator. The decisions of the president of the UCCI are not subject to any appeal.

The ICA Act provides for two main grounds for challenging or replacing an arbitrator:

  • if there are any circumstances giving rise to justifiable doubts as to the arbitrator’s impartiality or independence; or
  • if the arbitrator does not possess the qualifications agreed by the parties.

The parties may agree on the challenge procedure, otherwise the party challenging an appointment shall send a written notice providing for the reasons of the challenge to the arbitral tribunal within 15 days after being notified of the composition of the arbitral tribunal, or having become aware of the circumstances that can serve as a reason for a challenge.

26 Does the domestic law contain substantive requirements for the procedure to be followed?

Ukrainian law allows the parties to agree upon any procedure to be followed. In the absence of such agreement, the tribunal shall establish such procedure as it considers appropriate provided that both parties are treated equally and have a full opportunity to present their cases. 

Under Ukrainian law arbitral proceedings shall commence on the date of the receipt of a request for arbitration by the respondent, unless the parties have agreed otherwise. Rules of the permanent arbitration institutions in Ukraine (International Commercial Arbitration Court and Maritime Arbitration Commission at the UCCI) provide that the arbitration proceeding is initiated by the order of their President.

27 On what grounds can the court intervene during an arbitration?

Under the general rule, a national court may not intervene in the arbitral proceedings, except for a very few exceptions provided by Ukrainian law. Generally, the arbitral tribunals may not request assistance from Ukrainian courts, except to request assistance in taking evidence. 

In return, the parties may approach the courts only in the following matters:

  • to request a state court to stay its proceedings and refer the parties to arbitration in disputes that are covered by an arbitration agreement;
  • to request a competent court to decide the issue of arbitral tribunal jurisdiction;
  • to request a court, before or during arbitral proceedings, to order interim measures of protection and for a court to take a decision granting such measures;
  • upon approval by the arbitral tribunal to request from a competent court the assistance in taking evidence;
  • to request a competent court to enforce the arbitral award in Ukraine; or
  • to request a competent court to set aside the arbitral award rendered in Ukraine.

The above list is considered to be exhaustive, and the parties are not entitled to limit or override the above court’s powers.

28 Do arbitrators have powers to grant interim relief? 

The ICA Act empowers the arbitral tribunal to order interim measures at the request of a party, unless otherwise agreed by the parties. The arbitration rules of the International Commercial Arbitration Court (ICAC) and Maritime Arbitration Commission (MAC) at the UCCI vest the arbitral tribunal with the powers to determine the amount and the form of the security for the claim (eg, to preserve assets). 

Although the arbitration rules of ICAC and MAC directly provide that arbitral order for security of the claim is binding upon the parties and shall be in force until a final arbitral award is made, the enforcement of such arbitral order for the security of the claim is rather doubtful and practically impossible under the current Ukrainian procedural legislation. As an exception from the above rule, the Merchant Shipping Code allows a vessel to be arrested in Ukraine under the decision of the MAC president.

29 When and in what form must the award be delivered? 

The arbitral award shall be made in writing and signed by the majority of the arbitral tribunal. The award shall state the reasons for the decision, whether the claim is granted or rejected, the amount of the arbitration fee and costs and their apportioning, and also the date and the place of arbitration.

In arbitration proceedings with more than one arbitrator any decision of the arbitral tribunal is made by a majority of all its members, unless otherwise agreed by the parties. If any signature is omitted, the arbitral award shall state the reasons for the omission, which does not affect the validity of the award.

The ICA Act sets forth only a general rule providing that the award being dated and signed by the arbitrators shall be delivered to each party, while the exact time limits for the delivery of the award are not provided.

30 On what grounds can an award be appealed to the court? 

Both international and domestic arbitral awards rendered in Ukraine may be set aside by the local (first instance) court at the place of arbitration if the respective motion for setting aside is filed within three months from the date of award or receipt of the award and if any of the following grounds exist:

  • grounds for setting aside of international arbitral awards:
  • a party to the arbitration agreement was under some incapacity, 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 Act from which the parties cannot deviate, or failing such agreement, was not in accordance with the ICA Act;
  • the subject matter of the dispute is not capable of settlement by arbitration under the law of Ukraine; or
  • the award is in conflict with the public policy of Ukraine; and
  • grounds for setting aside domestic arbitral awards:
  • the dispute resolved by the domestic arbitral tribunal is not arbitrable under Ukrainian law; 
  • the award of the arbitral tribunal was made regarding a dispute not contemplated in the arbitration agreement or contains decisions on matters beyond the scope of the arbitration agreement;
  • the arbitration agreement is recognised by the court as invalid;
  • the composition of the arbitral tribunal was not in accordance with the Ukrainian law; or
  • the arbitral tribunal decided on the rights and obligations of parties that did not participate in the arbitration case.

There are following levels of appeal for the international arbitral award rendered in Ukraine:

  • arbitral awards may be challenged by the first instance court of general jurisdiction at the place of arbitration;
  • the ruling of the court of first instance whether setting aside the arbitral award or rejecting the challenge, may be further appealed in the respective appellate court;
  • the appellate court’s ruling may be subject to cassation appeal to the Superior Specialised Court of Ukraine on Civil and Criminal Matters; and
  • the last appeal option is a review on very limited grounds of a ruling of the Superior Specialised Court of Ukraine by the Supreme Court of Ukraine.

31 What procedures exist for enforcement of foreign and domestic awards?

Foreign and international arbitral awards rendered in Ukraine are enforced under by the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), the 1961 European Convention on International Commercial Arbitration, the ICA Act and the Civil Procedural Code under the procedure almost identical to the one for the foreign judgments’ enforcement as detailed in question 21. A motion for enforcement may only be considered within the specific limits as set forth by the New York Convention and the ICA Act providing that the competent courts may not examine correctness of the award, nor may they introduce any changes therein. 

Domestic arbitration awards are enforced under a simplified procedure set forth by the Domestic Arbitration Act and respective provisions of the Civil and Commercial Procedural Codes, depending on the status of parties involved into the disputes (ie, legal entities or individuals).

32 Can a successful party recover its costs?

Unless the parties have agreed on a particular allocation of costs or respective arbitration rules provides otherwise, the tribunal shall decide on the allocation of costs related to arbitration. As a rule, arbitration fees are charged to the losing party. However, if the claim is granted partially, the arbitration fees shall be allocated between the parties by relevant proportions of the granted claims. As regards the costs and expenses of the winning party, they may be charged to the losing party to the extent that the arbitral tribunal finds the amount of such costs reasonable and confirmed.

Alternative dispute resolution

33 What types of ADR process are commonly used? Is a particular ADR process popular?

Apart from arbitration, other alternative dispute resolution methods are practically out of use in Ukraine. Mediation is emerging in Ukraine, but is rarely used. While negotiations are generally recognised as a helpful means of informal dispute resolution, Ukrainian businesses are mostly reluctant to involve a third person (a mediator) into the negotiations process.

34 Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings?Can the court or tribunal compel the parties to participate in an ADR process?

The court may only invite the parties to consider options for amicable settlement of the dispute, but is not entitled to refer the parties to ADR, except for arbitration. The arbitral tribunal would not refer parties to any ADR methods unless it is provided under the respective agreement between the parties.

Miscellaneous

35 Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

Litigation remains the most common and prevailing method of dispute resolution in Ukraine remedy for dispute resolution, while though arbitration both in Ukraine and abroad is also widely used, especially, in the field of international trade. 

Court decisions (jurisprudence) are generally not recognised as source of law, except the judgments of the Constitutional Court of Ukraine interpreting the law and recognising certain pieces of legislation as constitutional or unconstitutional, and the decisions of the Supreme Court of Ukraine on the unified application of law by the courts.

However, in practice Ukrainian courts usually tend to consider the jurisprudence of higher courts as guidelines. Moreover, the superior courts rom time to time prepare and make public overviews of their jurisprudence (‘overview letters’) and recommendations as to proper application and interpretation of law in certain types of cases to be followed by the lower courts. Such overview letters and recommendations are often quoted in the lower courts judgments.

Update and trends

On 29 March 2015 New Judicial Reform in Ukraine has been initiated after the Act of Ukraine On Ensuring the Right to a Fair Trial became effective. This Act provides for new rules of functioning the Ukrainian court system, in general, and improving accessibility to the Supreme Court of Ukraine, in particular. Furthermore, the Act is intended to implement transparent legislation procedures for the selection and appointment of judges, to strengthen the independence of the judiciary and to improve access to the courts’ decisions. 

The Act of Ukraine On Ensuring the Right to a Fair Trial minimises any external influence on the judiciary, which has been achieved through the new system of judicial self-governance and a public and transparent mechanism for selecting the High Council of Justice and the High Qualification Commission of Judges. Measures on the disciplinary liability of judges have also been strengthened and developed. Further amendments to the advocacy law and procedural codes are expected under the auspices of the New Judicial Reform during 2015-2016. 

On 9 April 2015 a new draft Act of Ukraine ‘On Mediation’ (No. 2480-1) was submitted to the Verkhovna Rada of Ukraine (Parliament) for consideration. The said Act, if adopted, will establish the legal conditions and provide regulations for mediation procedures in Ukraine.