Source: https://www.kinstellar.com/insights/detail/764/ukraine-revises-its-arbitration-law-introduces-new-arbitration-rules
Timestamp: 2020-07-08 07:23:58
Document Index: 544449856

Matched Legal Cases: ['Art. 22', 'Art. 84', 'Art. 85', 'Art. 94', 'Art. 116', 'Art. 149', 'Art. 159', 'Art. 479', 'Art. 479', 'Art. 226', 'Art. 231']

﻿ Ukraine revises its arbitration law, introduces new arbitration rules (Detail) - Legal Services Kinstellar
The Law ensures that arbitration clauses will be enforced by Ukrainian courts by introducing presumption in favour of the validity and enforceability of arbitration agreements (i.e., it provides that any inaccuracies in the text of the arbitration agreement or doubts regarding its operability, validity and possibility of performance will be interpreted in its favour) (Art. 22 of the Commercial Procedure Code).
It broadens the meaning of the arbitration agreement and brings it into compliance with the amended 2006 Model Law by stipulating that the “writing requirement” is met by an electronic communication if the information contained therein is accessible so as to be useable for subsequent reference (i.e., is capable of being reproduced and read).
It identifies the list of non-arbitrable disputes and to some extent resolves the problem with non-arbitrability of corporate and public procurement disputes. In particular, Article 22(1)(2) of the Commercial Procedure Code provides that disputes arising from corporate relations, including disputes between business entity participants (founders, shareholders, members) or between a business entity and its participant (founder, shareholder, member), including former a participant, regarding the business entity’s establishment, activity, management and liquidation, cannot be referred to arbitration. However, if such a dispute arises from a contract, it can be arbitrated if there is an arbitration agreement between the business entity and all of its participants. Similarly, the civil law aspects of the disputes arising from execution, modification, termination and performance of the public procurement agreements can be arbitrated.
The Law transfers competence on setting aside and enforcement proceedings from the first instance courts to Kyiv Appellate Court.
The Law introduces judicial support to international arbitration undertaken by the Ukrainian courts. The courts may order the provision of evidence (Art. 84 of the Civil Procedure Code); inspect evidence (Art. 85 of the Civil Procedure Code); examine a witness (Art. 94 of the Civil Procedure Code); preserve evidence (Art. 116 of the Civil Procedure Code); order other interim measures (Art. 149 of the Civil Procedure Code). The Law also provides for a cross-undertaking in damages if the arbitral tribunal rejects the claim in full or in part (Art. 159 of the Civil Procedure Code).
It also resolves certain long-standing problems of recognition and enforcement of foreign arbitral awards by determining how the post-award interest shall be calculated and recovered (Art. 479(4)(5) of the Civil Procedure Code) and allowing Ukrainian courts upon application of the party seeking enforcement to determine an equivalent sum of recovery in Ukrainian currency (Art. 479(6) of the Civil Procedure Code). In January 2018, it will be three years that NIBULON SA is unsuccessfully seeking enforcement of its USD 17,536,000 GAFTA award and interest before Ukrainian courts against PJSC Company Rise. One of the stumbling blocks is the courts’ continuous refusal to calculate the post-award interest for the period between the arbitral award and its execution.
The Law changes the consequences of raising arbitration defence in court proceedings from terminating court proceedings to dismissing a case without hearing its merits (i.e., the parties preserve a right to submit the case to the court if the arbitral tribunal denies jurisdiction) (Art. 226 of the Commercial Procedure Code). At the same time if the parties at the start of court proceedings have concluded an arbitration agreement, the court closes arbitration proceedings. In such cases, repeated legal action is prohibited (Art. 231 of the Commercial Procedure Code).
The Law establishes some additional arbitration incentives. For instance, during a preparatory meeting the court shall inquire whether the parties wish to submit their dispute to arbitration.
For further information please contact: Kostiantyn Likarchuk, Partner, at
, Mykyta Nota, Managing Associate, at