Ukraine: A Dispute Resolution: Domestic Overview

Dispute Resolution and Investment Protection in Ukraine

Ukraine enters the fourth year of Russia’s full‑scale armed aggression with its legal landscape shaped by several concurrent processes: recovery and reconstruction, EU integration, alignment with the acquis communautaire, and the maintenance of macroeconomic stability under wartime constraints. Despite ongoing challenges, these transformations continue to create meaningful opportunities for both domestic and international businesses. Legal practitioners remain central to this environment, protecting property rights, resolving disputes, and guiding clients through increasingly complex regulatory requirements.

Ukraine’s accession to EU membership negotiations is the defining legal and political development of 2025–2026. Legislative reforms aimed at compliance with EU standards are underway across antitrust regulation, corporate governance, data protection, public procurement, and the judiciary. Martial law, in force since February 2022, imposes certain procedural limitations and affects enforcement of court decisions involving state‑owned enterprises and some energy‑sector entities. Nonetheless, courts continue to operate, and the adaptability of legal practice has become a hallmark of the Ukrainian market.

Ongoing financial support from the IMF, World Bank, EU, and the USA is closely tied to progress in anti‑corruption, judicial independence, and privatisation. As a result, transactional activity tends to grow where reforms yield measurable institutional improvements.

Trends in asset protection against state claims

Recent years have seen intensified prosecutorial efforts to return assets to state or municipal ownership, particularly land. Nearly 5,000 such disputes were pending before Ukrainian courts in 2025, with about 4,000 involving land. This surge was driven largely by Supreme Court jurisprudence that permitted asset recovery without compensation and, for certain land categories (water fund, nature reserve, cultural heritage), regardless of how many years had passed since their transfer – creating systemic risks for long‑term investors.

A significant shift occurred following several European Court of Human Rights judgments in late 2024 (Drozdik and Mikula v. Ukraine, Odeska Buterbrodna Kompaniia LLC v Ukraine). The Court found violations of the “good governance” principle and highlighted the absence of compensation mechanisms when the state reclaims property due to its own errors. In response, Ukraine adopted legislation in March 2025 that:

• introduced a strict ten‑year limit for reclaiming assets from state or municipal ownership;
• clarified the rules for determining limitation periods; and
• established a state compensation mechanism when property is reclaimed from bona fide purchasers.

Additionally, a Constitutional Court decision of 3 December 2025 (No 6‑r(II)/2025) will, starting in 2027, prevent prosecutors from representing state bodies that are legally responsible for protecting their own interests.

Together, these changes mark a transition toward a more predictable and investor‑oriented property rights regime.

Opportunities for reimbursement of damages caused by military aggression

The legal community continues to develop mechanisms for effective compensation of war‑related damages suffered by the state, businesses, and individuals. This process is uniquely complex due to the lack of modern precedents and the need to comply strictly with international law, including the protection of property rights.

Ukrainian courts are actively considering claims against the Russian Federation, gradually shaping jurisprudence in this category. Courts emphasise:

• rigorous standards for evidence documenting damage; and
• procedural safeguards protecting the defendant’s right to defense.

Given limitations of the eRecovery (eVidnovlennia) programme and the current mandate of the Register of Damage for Ukraine (RD4U) – which presently only accepts claims within open categories – national court proceedings remain an important route for establishing legal grounds for future compensation for war-related damages.

Positive developments are also emerging in the enforcement of arbitral awards related to damages from expropriated assets, including a notable decision of the US Court of Appeals for the DC Circuit on 13 February 2026.

Interaction with regulatory authorities: AMCU, tax authorities, and others

Ukraine’s regulatory environment in 2025–2026 is marked by heightened enforcement driven by EU integration requirements and the fiscal demands of wartime.

The Antimonopoly Committee of Ukraine (AMCU) has significantly expanded enforcement activities, particularly in public procurement, and has scrutinised pharmaceutical and fuel markets. Cases involving anti‑competitive conduct, abuse of dominance, and unapproved concentrations have increased. The AMCU is also actively pursuing informational violations. Notably, in 2025 the Supreme Court reinforced the need for AMCU to adhere to the principle of good governance.

Tax authorities have intensified audits of large taxpayers and businesses with high cash turnover. At the same time, wartime tax deferrals and administrative simplifications remain in force, creating uncertainty for both taxpayers and regulators. Administrative courts continue to critically assess the reasoning behind tax decisions, offering meaningful judicial oversight.

Protection within the banking and financial system

Ukraine’s banking system has shown resilience during wartime, supported by strict oversight from the National Bank of Ukraine (NBU). The moratorium on external debt payments, in place since 2022, continues to complicate creditor positions, though restructuring efforts are ongoing within the IMF‑coordinated framework.

Currency controls remain stringent. Restrictions on capital movement, currency conversion, and profit repatriation directly affect foreign investors, though they have also encouraged domestic reinvestment. The NBU is gradually easing some measures, though full liberalisation is unlikely before 2026–2027.

Banks are additionally constrained by restrictions on debt recovery from military personnel and enforcement of certain mortgages during martial law. The NBU has promoted out‑of‑court resolutions and strengthened regulation of specialised collection companies, significantly increasing transparency in the sector.

Conclusion

Ukraine’s dispute resolution and investment protection landscape in 2025–2026 is defined by wartime resilience, accelerating EU‑driven reforms, and a rapidly evolving regulatory environment. Courts continue to operate effectively under martial law, while legislative alignment with the acquis communautaire reshapes key areas including competition, corporate governance, procurement, and judicial processes. These shifts, combined with extensive IMF and EU conditionality, are driving both institutional reform and transactional activity.

Asset protection has undergone a major recalibration following landmark ECHR judgments and subsequent national legislative updates that strengthen the rights of bona fide purchasers, impose a clear ten‑year limitation period for reclaiming state assets, and introduce compensation mechanisms. A Constitutional Court ruling further restricts prosecutorial standing from 2027, contributing to a more predictable investment climate.

War‑related damage compensation remains a central focus for both claimants and practitioners. National courts are shaping early jurisprudence in claims against the Russian Federation, with strict evidentiary requirements and procedural safeguards. With the eRecovery programme and the international Damage Register operating within limited mandates, domestic litigation continues to serve as a crucial pathway for establishing enforceable entitlements.

Regulatory enforcement is intensifying across competition and tax. The AMCU demonstrates heightened scrutiny – particularly in public procurement and highly regulated markets – while administrative courts maintain a robust check on tax authority decisions. Within the financial sector, NBU oversight and ongoing currency controls continue to stabilise the system, even as moratoria and wartime borrower protections constrain creditor remedies.

Overall, Ukraine offers a uniquely dynamic legal environment: high‑stakes disputes, evolving compensation frameworks, active regulators, and a reform trajectory tied to EU accession. Effective navigation requires deep local insight combined with strong international dispute resolution expertise.