International arbitration law and rules in Ukraine

The two permanent arbitral institutions in Ukraine – the International Commercial Arbitration Court and the Maritime Arbitration Commission – fall under the auspices of the Ukrainian Chamber of Commerce and Industry. Foreign arbitral institutions can administer arbitrations seated in Ukraine. In 2017, the Ukrainian Arbitration Act (based largely on the UNCITRAL Model Law), Civil Procedure Code and Commercial Procedure Code of Ukraine underwent significant reform. These reforms included grants of additional powers to arbitral tribunals, for example powers to order a cross-undertaking to pay damages where interim measures are ordered, and provisions deeming arbitration agreements to be validly concluded if contained in an exchange of data messages.

1.1 A right of incorporated and unincorporated businesses to resolve their disputes by way of arbitration is enshrined both at the level of Ukraine’s national legislation on arbitration and in a number of bilateral and multilateral treaties.

1.2 Ukraine agreed to be bound by the following major international treaties on arbitration: the New York Convention, 1 For the full text of the New York Convention (1958), see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. the 1961 European Convention 2 For the full text of the 1961 European Convention, see https://treaties.un.org/doc/Treaties/1964/01/19640107%2002-01%20AM/Ch_XXII_02p.pdf. and the Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters. 3 The Minsk Convention was signed by the Commonwealth of Independent States (CIS) member states on 22 January 1993 and entered into force in Ukraine on 3 December 1994 by Law of Ukraine “On Ratification of the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Cases”, Law No 240/94-VR, 10 November 1994. It is also a party to a number of bilateral treaties on mutual legal assistance in civil and commercial matters, which contain provisions related to arbitration.

1.3 With regards to Ukraine’s national legislation on arbitration, it is important to note that international and domestic arbitration tribunals seated in Ukraine operate within a distinct legal framework. The Law of Ukraine “On International Commercial Arbitration” (Ukrainian Arbitration Act) applies to international commercial arbitration proceedings if the seat of arbitration is in the territory of Ukraine. 4 Law No 4002-XII, 24 February 1994, ch I, art 1(1). Domestic arbitral proceedings, in turn, are governed by the provisions of the Law of Ukraine “On Courts of Arbitration” (Law on Domestic Arbitration). 5 Law No 1701-IV, 11 May 2004.

1.4 The Civil Procedure Code of Ukraine (CPC) complements the Ukrainian Arbitration Act and the Law on Domestic Arbitration. 6 Law No 1618-IV, 18 March 2004. Among other things, the CPC regulates the procedure for the recognition and enforcement of foreign court decisions, foreign and domestic arbitral awards. 7 Ibid, s IX. Other relevant legislation includes the Commercial Procedure Code of Ukraine (CoPC), 8 Law No 1798-XII, 6 November 1991. which sets forth that more than 20 categories of disputes that cannot be referred to domestic and international commercial arbitration, 9 Ibid, ch II, arts 22(1) and (2). It should be noted, however, that the question of whether the legislator is entitled to limit the scope of arbitrable disputes is subject to a debate among Ukrainian legal scholars and legal practitioners.  and a number of other legislative acts, which positively assert that certain categories of disputes are capable of being settled by international arbitration. 10 Law of Ukraine “On Foreign Economic Activity”, Law No 959-XII, 16 April 1991, s VII, art 38; Law of Ukraine “On Investment Activity”, Law No 1560-XII, 18 September 1991, s IV, art 19(3); Law of Ukraine “On Concessions”, Law No 155-IV, 30 October 2019, s X, art 45(2); Law of Ukraine “On Public and Private Partnership”, Law No 2404-VI, 1 July 2010, s V, art 19(2); Law of Ukraine “On the Creation of the Free Economic Zone “Crimea” and on Peculiarities of Exercising Economic Activity in the Temporarily Occupied Territories of Ukraine, Law No 1636-VII, 12 August 2014, s II, art 12(11)(b); Law of Ukraine “On the Financial Restructuring”, Law No 1414-VIII, 14 June 2016, art 16(2); Law of Ukraine “On the Privatisation of the State and Municipal Property”, No 2269-VIII, 18 January 2018, s IV, art 26(12) and 30(1).

1.5 A useful analysis of court practice in Ukraine on the recognition and enforcement of foreign arbitral awards can be found in an outdated, yet still effective, Resolution of the Plenum of the Supreme Court of Ukraine “On the Court Practice of Consideration of Applications for the Recognition and Enforcement of the Judgements of Foreign Courts and Foreign Arbitral Awards Rendered in the Course of International Commercial Arbitration in Ukraine” (Resolution No 12). 11 Resolution No 12, 24 December 1999. Other notable clarifications in relation to international arbitration summarised by Ukrainian courts include:

1. the Information Letter of the Higher Arbitrazh Court of Ukraine “On Certain Questions of Practical Application of Particular Norms of the Effective Legislation in Dispute Resolution”; 12 No 01-8/91, 10 March 1998, para 10.
2. the Clarifications of the Higher Commercial Court of Ukraine (HCCU) “On Certain Questions of Practice on Resolving Cases to Which Foreign Companies and Organizations are Parties” (Clarifications No 04-5/608); 13 No 04-5/608, 31 May 2002, paras 5-6.
3. the Summary of the HCCU “On Court Practice on Resolving Cases to Which Foreign Companies and Organisations are Parties by Commercial Courts”; 14 1 January 2009.
4. the Information Letter of the HCCU “On Certain Questions Posed by Commercial Courts in Activities Reports for the Second Half of 2008 in Relation to the Application of the Norms of the Commercial Procedure Code of Ukraine” (Letter No 01-08/163); 15 No 01-08/163, 12 March 2009, para 18.
5. the Information Letter of the HCCU “On Certain Questions Posed by Commercial Courts in Activities Reports for the First Half of 2009 in Relation to the Application of the Norms of the Commercial Procedure Code of Ukraine”; 16 No 01-08/530, 29 September 2009, para 29.
6. the Resolution of the Plenum of the HCCU “On Certain Questions of Practice of the Application of the Commercial Procedure Code of Ukraine by Courts of First Instance”; 17 No 18, 26 December 2011, paras 4.1 to 4.2.3. and
7. the Letter of the Plenum of the High Specialised Court of Ukraine for Civil and Criminal Cases (High Specialised Court) “On the Summary of Court Practice for the Consideration of Cases on the Setting Aside of Awards of the International Commercial Arbitration Court of Ukraine at the Ukrainian Chamber of Commerce and Industry of Ukraine and Consideration of Applications on Their Recognition and Enforcement” (Letter of the High Specialised Court). 18 No 11, 11 December 2015.

1.6 It is notable that the Ukrainian Arbitration Act, as well as the provisions of the CPC and CoPC regulating arbitration-related matters, have recently undergone significant changes. On 3 October 2017, the Verkhovna Rada, the parliament of Ukraine, adopted the Law “On Amendment of the Commercial Procedure Code of Ukraine, Civil Procedure Code of Ukraine, Code of Administrative Procedure of Ukraine and Other Legislative Acts” (Law No 2147-VIII), which alongside restating, in full, three procedural codes (i.e., the CoPC, the CPC, and the Code of Administrative Procedure of Ukraine (СAP)), also introduced significant changes to more than 20 other legislative acts, including the Ukrainian Arbitration Act. 19 Law No 2147-VIII, 03 October 2017, which became effective on 15 December 2017.

1.7 In particular, the following major changes were introduced to the Ukrainian Arbitration Act by the Law No 2147-VIII:

1. trial courts were stripped of powers to conduct functions on arbitration assistance and supervision and such functions were handed over to appellate courts at the legal seat of arbitration; 20 Ukrainian Arbitration Act, ch I, art 6(2); Law No 2147-VIII, s 4, para 10(1).
2. requirements as to the form of an arbitration agreement were amended to provide that such agreement is deemed to be validly concluded if it is contained in an exchange of data messages, provided the information contained therein is accessible for subsequent reference; 21 Ukrainian Arbitration Act, ch II, art 7(2); Law No 2147-VIII, s 4, para 10(2).
3. the procedural model of referral to arbitration is changed from the termination of the proceedings with prejudice to the termination of the proceedings without prejudice; 22 Ukrainian Arbitration Act, ch II, art 8(1); Law No 2147-VIII, s 4, para 10(3).
4. arbitral tribunals are granted express powers to request the parties in the arbitration proceedings to pay a provisional advance amount intended to cover the costs of arbitration or certain procedural action; 23 Ukrainian Arbitration Act, ch IV, art 17(2); Law No 2147-VIII, s 4, para 10(4).
5. arbitral tribunals are granted express powers to order a cross-undertaking to pay damages to the respondent if it transpires that the applicant was not entitled to interim measures and the respondent suffered a loss as a consequence; 24 Ukrainian Arbitration Act, ch VI, art 17(1); Law No 2147-VIII, s 4, para 10(4).  
6. arbitral tribunals are granted express powers to draw adverse inferences should any party to the arbitration proceedings fail to provide evidence at their request; 25 Ukrainian Arbitration Act, ch V, art 25; Law No 2147-VIII, s 4, para 10(5). and
7. an arbitral tribunal or a party (subject to leave of the tribunal) is granted the right to apply to an appellate court at the place where evidence is located or a witness resides, with a plea to examine such witness, discover evidence or inspect them at the place of their location. 26 Ukrainian Arbitration Act, ch V, art 27(1); Law No 2147-VIII, s 4, para 10(6).

2.1.1 The Ukrainian Arbitration Act is based on the Model Law (1985) 27 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. and its current edition provides for the allocation of the authority for functions of arbitration assistance and supervision between the President of the Ukrainian Chamber of Commerce and Industry (UCCI President) and Ukrainian appellate courts at the legal seat of arbitration. 28 Ukrainian Arbitration Act, ch I, art 6.

2.1.2 The Ukrainian Arbitration Act contains references to two permanent arbitral institutions under the auspices of the Ukrainian Chamber of Commerce and Industry (UCCI), namely the International Commercial Arbitration Court (ICAC) and the Maritime Arbitration Commission (MAC). The regulations of these regional arbitral institutions are set forth in two appendices to the Ukrainian Arbitration Act. 29 Ibid, Annexes 1 and 2.

2.1.3 The ICAC and the MAC are presently the only two permanent arbitral institutions established in Ukraine that are competent to administer international commercial arbitration proceedings. However, this does not mean that foreign arbitral institutions (eg, the London Court of International Arbitration, the International Court of Arbitration, or the Arbitration Institute of the Stockholm Chamber of Commerce) cannot administer arbitrations seated in Ukraine.

2.2.1 Although, as noted above, the Ukrainian Arbitration Act is mainly based on the Model Law (1985) and therefore generally follows its structure, 30 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. there are also a number of notable differences. In particular, the scope of application of the Ukrainian Arbitration Act differs from the scope of application outlined in the Model Law (1985). 31 The provisions of the Model Law (1985), ch I, art 1(3) (b) and 1(3) (c) are not reflected in the Ukrainian Arbitration Act. For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. The former, for example, provides that disputes involving Ukrainian enterprises with foreign investment (with at least 10% foreign shareholding) 32 Commercial Code of Ukraine (Commercial Code), Law No 436-IV, 16 January 2003, ch II, art 116(1). or involving participants of such entities may be referred to international commercial arbitration. 33 Ukrainian Arbitration Act, ch I, art 1(2).

2.2.2 Another difference is that, unlike the Model Law (1985), the Ukrainian Arbitration Act provides that any conflict between a provision of the national legislation on arbitration and a corresponding provision of an international treaty shall be resolved in favour of the latter. 34 Ibid, art 1(5). Thus, one may logically infer that any conflict between provisions of the Ukrainian Arbitration Act and, on the other side, provisions of an international treaty (ie, the New York Convention 35 For the full text of the New York Convention (1958) see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. and/or the 1961 European Convention 36 For the full text of the 1961 European Convention, see https://treaties.un.org/doc/Treaties/1964/01/19640107%2002-01%20AM/Ch_XXII_02p.pdf. or any other bilateral or multilateral treaty) shall be resolved in favour of the latter.

2.2.3 The Ukrainian Arbitration Act also contains a definition of the term “commercial” which is referred to in the Model Law (1985) only as a guidance for interpretation. 37 Ukrainian Arbitration Act, ch I, art 2. For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. Under the Ukrainian Arbitration Act, the term “commercial” is to be interpreted broadly to include trade relations, which can be either of a contractual or non-contractual nature. Further, it contains a non-exhaustive list of examples of such trade relations (eg, sale of goods and services, leasing, financing and transportation of goods and passengers). 38 Ukrainian Arbitration Act, Ibid.

2.2.4 The other provisions of the Ukrainian Arbitration Act generally follow the wording of the Model Law (1985) 39 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. and, but for the exceptions noted above, 40 See para 1.7 above. have only been modified in order to fit in the general drafting language and practicalities of Ukrainian law.

2.3.1 Following the wording of the Model Law (1985), 41 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. the Ukrainian Arbitration Act stipulates a general rule that it shall apply to all international commercial arbitral proceedings where the seat of arbitration is located in the territory of Ukraine. 42 Ukrainian Arbitration Act, ch I, art 1(1). The Ukrainian Arbitration Act does not include most of the amendments made to the Model Law in 2006 (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/07-86998_Ebook.pdf. Some provisions of the Ukrainian Arbitration Act, however, apply even if the arbitral proceedings do not take place in Ukraine, for example, those provisions which are:

• related to enforcement of arbitration agreements; 43 Ukrainian Arbitration Act, ch II, art 8.  
• governing the interim measures granted by the court in support of arbitral proceedings; 44 Ibid, art 9. and
• related to the recognition and enforcement of awards. 45 Ibid, ch VIII, arts 35–36.  

2.3.2 As mentioned above, the Ukrainian Arbitration Act applies exclusively to international commercial arbitration. 46 See para 1.3 above. This is why the range of disputes expressly recognised by the Ukrainian Arbitration Act as those which are capable of being settled by arbitration, includes:

• disputes which arise out of contractual and other civil law relationships in the course of foreign trade and other types of international relations, provided that one of the parties is a commercial entity located outside Ukraine; and
• disputes between entities with foreign investment and/or international associations and organisations established in the territory of Ukraine and disputes between their participants/shareholders as well as their disputes with other subjects of Ukrainian law. 47 Ukrainian Arbitration Act, ch I, art 1(2).

2.3.3 Thus, in contrast to the Model Law (1985), 48 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. the Ukrainian Arbitration Act allows arbitrating essentially domestic disputes between Ukrainian entities, where at least one of them has foreign investment. 49 Ukrainian Arbitration Act, ch I, art 1(2). In practice, the “foreign investment” requirement has been interpreted to imply that the company in question has at least 10% of foreign shareholders. 50 See para 2.2.1 above for more detail.  

3.1.1 The Ukrainian Arbitration Act defines an arbitration agreement as:

"[An] agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not." 51 Ukrainian Arbitration Act, ch II, art 7(1).

3.2.1 The arbitration agreement must be in writing. It may be concluded in the form of a separate agreement, exchange of letters, data messages or in the form of a clause in a contract. An arbitration agreement is also deemed to have been validly concluded if the parties exchange a written claim and a written defence in which one of the parties asserts and the other party does not deny the existence of an arbitration agreement. 52 Ibid, art 7(2).

3.2.2 An arbitration agreement may also be incorporated into the parties’ contract by reference. According to the Ukrainian Arbitration Act, a reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement provided that the contract is executed in writing and the reference is such as to make the clause a part of the contract. 53 Ibid. The parties should include a clear and express reference to ensure that the respective provisions of, for example, the general terms and conditions constitute an integral part of the contract.

3.3.1 While Ukrainian law does not provide a consolidated list of disputes that can or cannot be submitted to arbitration, some commentators argue that in addition to the categories of disputes outlined by the CoPC, 54 See para 1.4 above. the disputes that fall within the exclusive jurisdiction of the Ukrainian courts, for example, those as set forth by the Law of Ukraine “On Private International Law” (Law on Private International Law), 55 Law No 2709-IV, 23 June 2005. are not capable of being settled by arbitration. The list of disputes, which some commentators believe to be non-arbitrable, set out in the said Law, inter alia, includes disputes:

• concerning real estate property located in the territory of Ukraine;
• relating to the formalisation of intellectual property rights (eg, registration or certification (patent) issues);
• relating to the registration or dissolution of foreign legal entities or individual entrepreneurs in the territory of Ukraine;
• relating to the validity of information contained in state registries in Ukraine;
• relating to the issuance or cancellation of securities in Ukraine; and
• arising out of the bankruptcy of an entity that is established in Ukraine. 56 Ibid, art 77.  

3.3.2 Although the prevailing view is that these provisions of the Law on Private International Law were intended to vest Ukrainian courts with exclusive jurisdiction over the disputes listed above even if a court in another state is also competent to consider such dispute, in practice Ukrainian courts occasionally interpret them as prohibiting parties from resolving certain categories of disputes listed above by way of domestic or international arbitration.

3.3.3 It should also be noted that there are divergent views as to the possibility of referral of a dispute between essentially two Ukrainian subjects to an arbitration seated outside of Ukraine. 57 See para 2.3.2 above. The reason for such debate is that a provision of the Ukrainian Arbitration Act, which provides for a right of Ukrainian entities with foreign investment to submit their disputes to international arbitration, 58 Ukrainian Arbitration Act, ch I, art 1(2). is not one of the articles applicable to arbitration both in Ukraine and abroad. 59 See para 2.3.1 above. This, in turn, gives some commentators an opportunity to argue that businesses registered under the laws of Ukraine or residing in the territory of Ukraine may not submit their disputes to arbitration institutions or ad hoc tribunals based outside the territory of Ukraine. Although there is no established jurisprudence which could put an end to this long-standing debate, as a matter of practice, it is not uncommon for Ukrainian companies with foreign shareholding to agree on arbitration seated outside of Ukraine.

3.4.1 The Ukrainian Arbitration Act provides that an arbitration clause that forms part of a contract shall be treated as an agreement independent of the other terms of the contract for the purposes of determining the jurisdiction of the arbitral tribunal and the validity thereof. The fact that the main contract may be null and void does not invalidate the arbitration clause as a matter of law. 60 Ukrainian Arbitration Act, ch IV, art 16(1).  

3.5.1 The Ukrainian Arbitration Act, like the New York Convention, sets forth that in the event of an action being brought before a state court in a matter which falls within the scope of an arbitration agreement, it shall refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed. 61 Ibid, ch II, art 8(1). However, in practice, a court before which an action is brought in a matter which is the subject of an arbitration agreement, does not actually refer the parties to arbitration. 62 New York Convention (1958), art II(3) see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. Instead, the Ukrainian Arbitration Act prescribes that where an action falling within the ambit of an arbitration agreement is brought before a state court, a party wishing to enforce an arbitration agreement is entitled to request, before the presentation of the substantial defence, that the court terminates the proceedings without prejudice. 63 Ukrainian Arbitration Act, ch II, art 8(1). Also, see further at section 7.5. The termination of proceedings without prejudice is discussed in more detail at section 8.2 below.  

3.5.2 The Ukrainian Arbitration Act also provides that an action brought before a state court should not delay arbitral proceedings, which may be started or continued, and an award may be made, while the issue is pending before the court. 64 Ibid, art 8(2).

4.1.1 The Ukrainian Arbitration Act provides that an arbitral tribunal shall comprise of three members, unless otherwise agreed by the parties to the dispute. 65 Ibid, ch III, art 10(2). Also, it envisages that the parties are free to agree on the procedure of appointing the arbitrator or arbitrators and, failing such agreement, each party appoints one arbitrator, and the two appointed arbitrators then appoint the third arbitrator. 66 Ibid, arts 11(2) and (3).

4.1.2 The ICAC Rules (2018) and the MAC Rules (2018) further supplement the above-mentioned provisions of the Ukrainian Arbitration Act and, in addition to expressly setting out that the number of arbitrators cannot be even, 67 ICAC Rules (2018), s VI, art 30(1); MAC Rules (2018), s VI, art 30(1). they further say that in the absence of an agreement regarding the procedure for constitution of the arbitral tribunal, the arbitrator appointed by party-appointed arbitrators shall act as a presiding arbitrator. 68 ICAC Rules (2018), s VI, art 31(1); MAC Rules (2018), s VI, art 31(1).

4.1.3 Moreover, the ICAC Rules (2018) and the MAC Rules (2018) state that where the parties do not agree upon the procedure for appointing the arbitrators or if, for example, one of the parties does not appoint an arbitrator, then the arbitrator(s) shall be appointed by the UCCI President. 69 ICAC Rules (2018), s VI, art 31(1); MAC Rules (2018), s VI, art 31(1). Such order of the UCCI President on the appointment of an arbitrator shall be final and cannot be appealed. 70  ICAC Rules (2018), s VI, art 31(5); MAC Rules (2018), s VI, art 31(5).

Challenge of arbitrators

4.2.1 An arbitrator may only be challenged if he or she lacks the qualifications required by the parties in their arbitration agreement or if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence. 71 Ukrainian Arbitration Act, ch III, art 12(2).

4.2.2 To limit the need for future challenges, the Ukrainian Arbitration Act requires an arbitrator, prior to his or her appointment, to disclose any circumstances, which could give rise to justifiable doubts as to his or her impartiality and independence. 72 Ibid, art 12(1). This duty of disclosure is a continuing duty with the consequence that arbitrators must disclose any circumstances that arise during the course of the arbitral proceedings that could bring their impartiality or independence into doubt. 73 Ibid.  

Procedure for challenging an arbitrator

4.2.3 Each of the parties may challenge the appointment of the arbitrator(s) within 15 days from the date on which they have been notified of the constitution of the arbitral tribunal or from the date on which they become aware of the circumstances allegedly giving rise to doubts as to the arbitrator’s impartiality or independence. 74 Ibid, art 13(2). If the arbitral tribunal rejects the challenge, the challenging party may, within 30 days of receipt of the rejection of the challenge, request the UCCI President to rule on the challenge. The UCCI President’s decision on challenges is final and is not subject to appeal. 75 Ibid, art 13(3).

4.2.4 The ICAC Rules (2018) and the MAC Rules (2018), like the Ukrainian Arbitration Act, do not provide for guidance as to the test which the arbitral tribunal or the UCCI President should apply while ruling on challenges to arbitrators.

Substitution of arbitrators

4.2.5 If an arbitrator becomes de jure or de facto unable to perform his or her functions or for other reasons fails to act without undue delay, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced, as set out above. 76 Ibid, art 15; Law on Domestic Arbitration, ch III, art 23.

4.3.1 The Ukrainian Arbitration Act is silent on the issue of responsibility of arbitrators. The Law on Domestic Arbitration, on the other hand, provides that arbitrators may be held accountable for the failure to comply with their obligations assumed in accordance with the applicable rules of procedure or the contract entered into between the parties and the arbitrator(s). 77 Law on Domestic Arbitration, ch III, art 22.

4.3.2 Under the Penal Code of Ukraine, arbitrators may, for example, be held liable for a criminal offence for abuse of their powers, 78 Penal Code of Ukraine, Law No 2341-III, 5 April 2001 (Penal Code), s XVII, art 364. issuing false documents or misrepresentation in such documents, 79 Ibid, art 366. gross negligence, 80 Ibid, art 367. extortion of a bribe, 81 Ibid, art 370. and receipt of other improper advantages. 82 Ibid, art 368.

4.4.1 The Ukrainian Arbitration Act is silent on how to calculate a fee to be paid to cover the costs of the arbitration tribunal incurred in connection with the arbitration of a case. At the same time, the Ukrainian Arbitration Act vests the arbitration tribunal with powers to order the parties to the arbitration to pay the provisional advance on costs of the arbitration for examination and settlement of a dispute or making a particular action in the arbitration proceedings. 83 Ukrainian Arbitration Act, ch IV, art 17(2).

4.4.2 The ICAC Rules (2018) and the MAC Rules (2018), in turn, provide that arbitration fees shall be calculated based on an ad valorem basis and includes arbitrators’ fees for examination and settlement of a dispute and an administration fee payable to cover the costs of organisation and conduct of the arbitral proceedings, including general business expenses made by the ICAC and the MAC. 84  ICAC Rules (2018), Schedule of Arbitration Fees and Costs, s I(2), III; MAC Rules (2018), Schedule of Arbitration Fees and Costs, s I(2), III. Moreover, both the ICAC Rules (2018) and the MAC Rules (2018) provide that the payment of the arbitration fee is the sole responsibility of the claimant. 85 ICAC Rules (2018), s IV, arts 16(1) and (2), Schedule of Arbitration Fees and Costs, s III(7); MAC Rules (2018), s IV, arts 16(1) and (2), Schedule of Arbitration Fees and Costs, s III(7).  

4.4.3 In ad hoc arbitrations seated in Ukraine, the amount of fees and expenses payable to the arbitrator(s) shall be determined based on the agreement between the parties and the arbitrator(s).

4.5.1 Ukrainian legislation does not provide for legal rules regulating the immunity of arbitrators. At the same time, the ICAC Rules (2018) and the MAC Rules (2018) provide that the arbitrator(s), reporter(s), arbitral-appointed expert(s), the ICAC, UCCI and their employees shall not be liable for any act or omission in connection to the arbitral proceedings. 86 ICAC Rules (2018), s IX, art 69(1); MAC Rules (2018), s IX, art 69(1).

5.1.1 Article 16 of the Ukrainian Arbitration Act provides that the arbitral tribunal is competent to rule on its own jurisdiction (including the existence and validity of the arbitration agreement). 87 Ukrainian Arbitration Act, ch VI, art 16(1). Any objection to the jurisdiction of the arbitral tribunal shall be raised before the arbitral tribunal no later than the filing of the statement of defence. 88 Ibid, art 16(2). Any objection that the arbitral tribunal exceeded its jurisdiction should be raised as soon as the facts underpinning such an objection arise in the course of the arbitral proceedings. 89 Ibid.

5.1.2 The arbitral tribunal may rule on the challenge to its jurisdiction either as a preliminary issue (by rendering an award on jurisdiction) or as part of its final award on the merits. If the arbitral tribunal determines the issue of jurisdiction in the award on jurisdiction, either party may challenge such award before the competent national court, within 30 days of its receipt. 90 Ibid, art 16(3). The decision of a national court shall not be subject to any further appeal. Pending the outcome of the application to the national court, the arbitral tribunal may continue the arbitral proceedings and issue an award, which may subsequently be set aside if the court finds that the arbitral tribunal lacked or exceeded its jurisdiction. 91 Ibid.

5.2.1 The Ukrainian Arbitration Act, the ICAC Rules (2018) and the MAC Rules (2018) empower arbitrators to grant interim measures related to subject matter of the dispute. Such interim measures may be obtained at a party’s request at any stage of the arbitral proceedings, as well as before they commence. 92 Ibid, ch VI, art 17; ICAC Rules (2018), s V, art 25(1); MAC Rules (2018), s V, art 25(1). For example, the ICAC President or the MAC President are authorised to grant interim measures at the party’s request even before the arbitral tribunal is constituted. After the constitution of the arbitral tribunal, it may grant interim measures. 93 Ukrainian Arbitration Act, ch VI, art 17; ICAC Rules (2018), s V, art 25(1); MAC Rules (2018), s V, art 25(1).

5.2.2 Tribunal-ordered interim measures can take any form the arbitral tribunal may deem appropriate, including, asset-freezing orders, anti-suit injunctions and orders for disclosure of documents. The MAC President can even grant interim measures in the form of attachment orders against ships or cargo currently located in a Ukrainian port. 94 Code of Merchant Navigation, Law No 176/95-VR, 23 May 1995, ch 4, arts 41–42; MAC Rules (2018), s V, art 25(5).

5.2.3 At the same time, it should be noted that tribunal-ordered interim measures are difficult to enforce, not least because Ukrainian law does not provide for the procedural mechanism enabling parties to apply to local courts to enforce such measures similar to the one provided for under the Model Law (2006). 95  See further at section 8.4.5 below.

6.1.1 According to the Ukrainian Arbitration Act, arbitral proceedings (whether institutional or ad hoc) are deemed to commence on the date when the request to submit a particular dispute to arbitration has been received by the respondent. 96 Ukrainian Arbitration Act, ch V, art 21. However, the ICAC Rules (2018) and the MAC Rules (2018) are somewhat different in that respect, stipulating that the arbitral proceedings are not deemed to have commenced until the claim has been filed and the registration fee has been paid in full. 97 ICAC Rules (2018), s IV, art 18(1); MAC Rules (2018), s IV, art 18(1).  

6.2.1 The main principles of Ukrainian arbitration legislation are as follows:

• independence and impartiality of the arbitrators;
• equal rights of the parties to participate in the arbitral proceedings and to provide the arbitral tribunal with their evidence; and
• party autonomy.

6.2.2 The arbitral tribunal is entitled to conduct the arbitral proceedings in the manner that it deems appropriate, unless the parties have determined the procedure for the arbitration otherwise. 98 Ukrainian Arbitration Act, ch V, art 19.

6.3.1 Unless otherwise agreed by the parties, the seat of the arbitration is determined by the arbitral tribunal, taking into account the circumstances of the case and the interests of the parties. 99 Ibid, art 20(1). The arbitral tribunal is, nevertheless, at all times free to meet for consultation among the arbitrators and examine evidence (including witnesses) at a location other than the seat of arbitration. 100 Ibid, art 20(2).

6.3.2 In the absence of an express agreement between the parties, the arbitral tribunal shall choose the language of the arbitration and impose requirements on the parties relating to the translation of documents relevant to the arbitral proceedings. 101 Ibid, art 22.

6.4.1 The Ukrainian Arbitration Act is silent on the issue of multi-party arbitral proceedings. The ICAC Rules (2018) and the MAC Rules (2018), however, contain a number of provisions regulating such issue of arbitral proceedings. 102 For example, ICAC Rules (2018), s IV, art 13(3); MAC Rules (2018), s IV, art 13(3) (the statement of claim may be filed by multiple claimants or against multiple respondents); ICAC Rules (2018), s VI, art 31(2); MAC Rules (2018), s VI, art 31(2) (multiple claimants or multiple respondents shall jointly nominate an arbitrator). In particular, although the powers of arbitrator(s) to order consolidation of arbitral proceedings are not expressly addressed in the Ukrainian Arbitration Act, the ICAC Rules (2018) and the MAC Rules (2018) indirectly recognise such possibility by mentioning it in the Schedules of Arbitration Fees and Costs. 103 ICAC Rules (2018), Schedule of Arbitration Fees and Costs, s III, para 9; MAC Rules (2018), Schedule of Arbitration Fees and Costs, s III, para 9.

6.4.2 Also, in multi-claim arbitral proceedings, the ICAC Rules (2018) and the MAC Rules (2018) provide that where a statement of claim contains demands arising out of several contracts, it shall be accepted for arbitration, provided that there is an arbitration agreement covering all such claims and that the fulfillment of obligations under these contracts cannot be separated under several claims. Where these prerequisites are not met, the ICAC will propose that the claimant separates his claims and submits independent statements of claim under each contract. 104 ICAC Rules (2018), s IV, art 17(2); MAC Rules (2018), s IV, art 17(2).  

6.4.3 Furthermore, it is worth noting that under the ICAC Rules (2018) and the MAC Rules (2018) the joinder of a third party is allowed, provided all parties and a third party are bound by one arbitration agreement, or all parties and a third party have agreed to conduct the arbitral proceedings with the participation of such third party. 105 ICAC Rules (2018), s IV, art 22(1); MAC Rules (2018), s IV, art 22(1). As a general rule, the parties may apply for joining a third party only before the statement of defence is submitted to the arbitral tribunal. 106 ICAC Rules (2018), s IV, art 22(2); MAC Rules (2018), s IV, art 22(2).  

6.5.1 Where the parties have not explicitly decided on the issue of an oral hearing, the decision is made by the arbitral tribunal, subject to a request of one of the parties. 107 Ukrainian Arbitration Act, ch V, art 24(1). If the parties have not agreed to an oral hearing and no request is made to the arbitral tribunal, it may decide whether to have an oral hearing for the parties to present their evidence and pleadings, or to decide the case based on the written evidence and other materials submitted by the parties. 108 Ibid.  

6.5.2 The Ukrainian Arbitration Act states that all declarations, documents and other information to be submitted to the arbitral tribunal shall be delivered simultaneously to the other party. Both parties shall also receive any other expert reports, opinions or other documents, which may be decisive for the arbitral tribunal. 109 Ibid, art 24(3).  

6.5.3 The format and content of the parties’ submissions to the arbitral institutions, as well as the timetable for filing such submissions, shall be determined by the respective rules of procedure. For example, the ICAC Rules (2018) require all documents and other evidence to be submitted to the secretariat of the ICAC (ICAC Secretariat) or to the arbitration tribunal in no fewer than three copies (with a corresponding increase in the number of copies if several claimants, respondents or third parties participate in the dispute). 110 ICAC Rules (2018), s III, art 11(1). The ICAC Secretariat is responsible for dispatching all the documents in a timely manner. 111 Ibid, art 11(3). Copies of the statement of claim or the statement of defence and other important documents shall be delivered or handed to the parties against receipt of delivery. 112 Ibid, art 11(4).

6.5.4 Unless the parties agreed otherwise, the Ukrainian Arbitration Act also allows the parties to change or amend their statements of case during the course of the arbitral proceedings unless the arbitral tribunal considers such changes or amendments to be late. 113 Ukrainian Arbitration Act, s V, art 23(2).

6.6.1 Unless otherwise agreed by the parties and in line with the Model Law (1985), 114 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. the Ukrainian Arbitration Act provides as follows:

• where the claimant fails to communicate his or her statement of claim (with sufficient detail as required by the Ukrainian Arbitration Act), 115 Ukrainian Arbitration Act, ch V, art 23(1). the arbitral tribunal shall terminate the arbitral proceedings; 116 Ibid, art 25.  
• where the respondent fails to communicate his statement of defence (with sufficient detail as required by the Ukrainian Arbitration Act), 117 Ibid, art 23(1).  the arbitral tribunal shall continue the proceedings without treating such failure in itself as an admission of the claimant’s allegations; 118 Ibid, art 25.  
• where any party fails to appear at a hearing or to produce documentary evidence, the arbitral tribunal may continue the arbitral proceedings and make the award based on the evidence before it; 119 Ibid. and
• where any party fails to produce evidence at the request of an arbitral tribunal, it may draw adverse inferences from parties’ non-production of discoverable evidence, or refuse to acknowledge an allegation of fact, or it may continue the arbitral proceedings and make an award on the merits based on the evidence available before it. 120 Ibid.  

6.7.1 The Ukrainian Arbitration Act contains only limited provisions on the submission of evidence. 121 Ibid, arts 19(2) and 22(2). Each party bears the burden of providing evidence sufficient to prove the facts upon which it seeks to rely in support of its claims or defences. The Ukrainian Arbitration Act further requires that any information provided by one party to the arbitral tribunal shall be shared with all other parties to the arbitral proceedings. 122 Ibid, art 24(3).  

6.8.1 Unless otherwise agreed by the parties, the arbitral tribunal is free to appoint an expert to clarify issues arising out of the consideration of a case requiring specialised knowledge. 123 Ibid, art 26(1); ICAC Rules (2018), s VII, art 55(1). The arbitral tribunal may at its discretion or at the request of either of the parties, order an expert to report on specific issues to be determined by the arbitral tribunal. 124 ICAC Rules (2018), s VII, art 55(1) (1). The tribunal-appointed expert does not necessarily need to be an expert certified according to the Law of Ukraine “On Forensic Expertise”. 125 Law No 4038-XII, 25 February 1994.  

6.8.2 The parties may also seek from an arbitral tribunal leave to produce an expert report in support of their claims or defences in order to clarify issues requiring specialised knowledge. An expert may submit his written report if the arbitral tribunal grants such leave. 126 ICAC Rules (2018), s VII, art 54(2). The parties may at their discretion choose an expert to deliver an expert opinion that will further be submitted to the arbitral tribunal. The arbitral tribunal usually requests the party-appointed expert to provide his or her written opinion in advance.

6.8.3 Unless otherwise agreed by the parties, if a party requests so, or if the arbitral tribunal considers it necessary, a tribunal-appointed expert shall, after the delivery of his or her written or oral report, participate in a hearing where the parties have the opportunity to examine him or her and to present party-appointed expert witnesses in order to testify on the points at issue. 127 Ukrainian Arbitration Act, ch V, art 26(2); ICAC Rules (2018), s VII, art 55(6).  

6.8.4 The ICAC Rules (2018) state that the arbitrators are free to decide on the admissibility, relevance, credibility and significance of each piece of evidence, including those given by an expert witness. The arbitrators thus are not bound by the findings of an expert (either tribunal or party-appointed) and shall evaluate the evidence before them. 128 ICAC Rules (2018), s IX, art 52(7).  

6.8.5 Unless the parties agreed otherwise, it is within the ambit of the arbitral tribunal’s powers to define the questions that will need to be reported upon by a tribunal-appointed expert. 129 Ibid, s VII, art 55(2). The ICAC Secretariat will share any reports prepared by such experts with the parties. 130 Ibid, art 55(5).

6.9.1 The Ukrainian Arbitration Act does not address the issue of confidentiality. In practice, however, arbitral proceedings seated in Ukraine are deemed confidential and arbitral awards are not published in full in the same way as court judgements are. For example, the ICAC Rules (2018) provides that unless otherwise agreed by the parties, the consideration of cases, and other activities of the ICAC related to the consideration of cases, is confidential. 131 Ibid, s IX, art 68(1).  Moreover, the arbitral tribunal and parties shall observe the confidentiality of any document submitted by a person or a party which is not a party to the arbitration proceedings and which is not available in the public domain. 132 Ibid, s IV, art 68(2).  

6.9.2 It should be also noted that the ICAC Presidium may take a decision on the publication of a summary or excerpt from arbitral awards and orders, providing none of the parties to the arbitral proceedings objects within 30 days after the receipt of such order or award. Provided no objections arise, the publication shall be made in a manner that does not permit the identification of the parties to the proceedings. 133 Ibid, s IX, art 71.

7.1.1 The arbitral tribunal must resolve the dispute in accordance with the law chosen by the parties. Unless otherwise agreed, the parties’ agreement on the governing law refers only to the substantive law of the chosen country and not to its conflict of laws rules. 137 Ukrainian Arbitration Act, ch VI, art 28(1). In the absence of an agreement between the parties on the choice of governing law, the arbitral tribunal shall apply the law determined by the conflict of laws rules that it considers to be appropriate. 135 Ibid, art 28(2).  

7.2.1 The Ukrainian Arbitration Act provides that an award must comply with the following formal requirements:

• it shall be made in writing and shall be signed by the arbitrator(s); 136 Ibid, art 31(1). and
• it shall contain the date and seat of the arbitration, the reasons upon which it is based, the arbitral tribunal’s findings on the issues submitted for consideration and the allocation of costs between the parties. 137 Ibid, arts 31(2) and (3).

7.2.2 In addition to the above, the ICAC Rules (2018) and MAC Rules (2018) require that the award should contain:

• the name of the arbitral institution;
• the case registration number;
• the composition of the arbitral tribunal and the procedure of its constitution;
• the names of the parties to dispute and other persons participating in the arbitral proceedings;
• the substantiation of the competence;
• the subject matter of the dispute and a summary of the circumstances of the case; and
• conclusion on the granting or dismissal of the claim. 138 ICAC Rules (2018), s VIII, art 60(6); MAC Rules (2018), s VIII, art 60(6).  

7.2.3 An important innovation introduced in the ICAC Rules (2018) and MAC Rules (2018), which was not present in their previous edition, is that before signing any arbitral award, the arbitral tribunal shall submit the draft of the award to the Secretary General of ICAC (or the Secretary General of MAC, respectively), who may draw attention of the arbitral tribunal to any identified non-compliance of the draft award with the requirements set forth by the respective rules of procedure. Although the above-mentioned provision does not vest the Secretary General with powers to review awards on the merits, he or she may draw attention of the arbitrator(s) to the form of the award, errors, omissions or typos. 139 ICAC Rules (2018), s VIII, art 60(7); MAC Rules (2018), s VIII, art 60(7).  

7.2.4 Dissenting opinions of arbitrators may be set forth in a separate document, which shall be attached to the award. 140 ICAC Rules (2018), s VIII, art 60(2); MAC Rules (2018), s VIII, art 60(2).  

7.2.5 After the award has been made, each party should receive a copy thereof signed by the composition of the arbitration tribunal. 141 Ukrainian Arbitration Act, ch VI, art 31(4); ICAC Rules (2018), s VIII, art 63(1); MAC Rules (2018), s VIII, art 63(1). In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated. 142 Ukrainian Arbitration Act, ch VI, art 31(1).  The ICAC Rules (2018) and MAC Rules (2018) further clarify the said provision of the Ukrainian Arbitration Act, establishing that the person responsible for specifying the reasons of the absence of any signatures at the arbitral award is the ICAC President or the MAC President, respectively. 143 ICAC Rules (2018), s VIII, art 60(5); MAC Rules (2018), s VIII, art 60(5).

7.2.6 The ICAC Rules (2018) and MAC Rules (2018) also provide that after all circumstances of the case have been sufficiently clarified, the arbitral tribunal shall proceed to the rendering of an arbitral award. 144 ICAC Rules (2018), s VIII, art 60(1); MAC Rules (2018), s VIII, art 60(1). No operative part (ie disposition) is announced to the parties or their representatives at the end of the oral hearings.

7.2.7 The arbitral tribunal shall render the award within 30 days from the date of completion of the hearing. In exceptional circumstances, the ICAC President or MAC President may extend the period for rendering of the arbitral award. 145 ICAC Rules (2018), s VIII, art 60(3); MAC Rules (2018), s VIII, art 60(3).  

7.3.1 The parties are free to settle their dispute during the course of arbitral proceedings. A settlement by the parties will result in the termination of the arbitral proceedings. 146 Ukrainian Arbitration Act, ch VI, art 30(1). In the event that the parties do not wish to have their settlement in the form of an award, they may notify the arbitral tribunal that they have reached the settlement and request that the arbitral tribunal terminates the arbitral proceedings. 147 Ibid, art 32(2).

7.3.2 The arbitral tribunal may, at the request of the parties, record a settlement in the form of an award on the agreed terms. 148 Ibid, art 30(1). Such an award shall indicate that it is an award. Moreover, such an award will be subject to the same requirements – and will have the same status and effect – as any other award rendered by the arbitral tribunal. 149 Ibid, art 30(2).  

Interest

7.4.1 Under Ukrainian law, arbitral tribunals are empowered to award interest upon the claimant’s request. Such interest is generally determined in accordance with the law applicable to the dispute at hand. Ukrainian law also permits awarding liquidated damages according to the rates (if any) stipulated in the contract between the parties. 150 Commercial Code, ch 35, art 343. However, Ukrainian legislation prohibits ordering penalties exceeding double the key policy rate of the National Bank of Ukraine for the relevant period, unless otherwise agreed by parties to a contract. 151 Ibid, ch 26, art 231.

Costs

7.4.2 The Ukrainian Arbitration Act does not offer guidance as to how costs of the arbitration should be allocated between the parties. This issue is left to either the agreement of the parties, if any, or in the absence of any agreement, to the discretion of the arbitral tribunal. 152 Ukrainian Arbitration Act, ch VI, art 31(2).  

7.4.3 The Schedule on Arbitration Fees and Costs to the ICAC Rules (2018) establishes the general rule that the arbitration fee shall be apportioned to the party against which the award has been rendered, unless otherwise agreed by the parties. 153 s VI(1). The Schedule further provides that the expenses incurred by the successful party or parties in connection with the protection of their interests may be charged to the other party or parties to the extent that arbitral tribunal determines that the amount of such costs is reasonable. 154 s VIII(2).

7.5.1 Arbitral proceedings may be terminated or result in a final award on the merits. The Ukrainian Arbitration Act provides that the arbitral tribunal may terminate the proceedings where:

1. the claimant withdraws its claim and the respondent does not object thereto or the arbitral tribunal does not recognise such objections to be reasonable;
2. the parties agree to terminate the proceedings; or
3. for any other reason, the arbitral tribunal considers that continuation of the proceedings would be unnecessary or impossible. 155 Ukrainian Arbitration Act, ch VI, art 32(2).

7.6.1 The award is considered to be final and binding upon the parties and is not subject to an appeal on points of law or fact. 156 It however may be set aside by the local courts on certain limited grounds. See further at section 9.3 below. However, the effect of an award on the same disputes involving the same parties, in particular, the res judicata, as well as what is its scope, remains debated.

7.6.2 Under Ukrainian law, the res judicata effect of an award is that a commercial court shall refuse to open the proceedings or shall terminate them if it is established that an award has been rendered in a case between the same parties, on the same issue and arising out of the same grounds. 157  CoPC, s III, arts 175(1) (4) and 231(1)(3).

7.6.3 Where at least one of the parties is an individual, the case shall to be heard by the general (civil) courts. In contrast with commercial courts, the civil courts adopt a different view as to the scope of the res judicata effect of arbitral awards since the CPC envisages that a civil court shall refuse to open the proceedings or shall terminate them only when the award has been rendered by a domestic arbitration tribunal. 158 CPC, s III, arts 186(1) (4) and 255(1)(6). This means, in all likelihood, that only awards issued by domestic arbitration courts (as opposed to international commercial tribunals) shall be given a res judicata effect, since, as noted above, 159 See para 1.3 above. Ukraine has two different legal frameworks for international and domestic arbitration.

7.6.4 As to the circumstances established in an award of international or domestic arbitration tribunal, they shall not be given a preclusive effect and shall be proven in accordance with the general evidentiary rules. 160 Law on Domestic Arbitration, s V, art 38(10); CoPC, s I, art 75(8); CPC, s I, art 82(8); CAP, s I, art 78(8).  

7.7.1 The Ukrainian Arbitration Act allows an arbitral tribunal (on a party’s request or on its own initiative) to correct any errors (misprints, errors of calculations, etc.) in the award. 161 Ukrainian Arbitration Act, ch VI, art 33. The parties have 30 days to apply for such corrections from the date the award has been received by the parties. 162 Ibid, art 33(1). The arbitral tribunal may also clarify anything that is unclear in the award (subject to the parties’ consent). Such corrections or clarifications shall become integral parts of the award. 163 Ibid, art 33(2).

7.7.2 The parties may also request the arbitral tribunal to make an additional award. Such awards may cover issues that were submitted to the arbitral tribunal for consideration but were not resolved in the “main” award. If such requests are considered by the arbitral tribunal to be proper, it has a further 60 days to make an additional award. 164 Ibid, art 33(3).

8.1.1 The Ukrainian Arbitration Act prohibits national courts from intervening in arbitral proceedings except in the circumstances expressly prescribed by the Ukrainian Arbitration Act. 165 Ibid, ch I, art 5. The circumstances in which national courts are entitled to intervene include:

1. referral of parties to arbitration; 166 Ibid, art 8(1).  
2. granting interim measures in support of arbitration; 167 Ibid, art 9.
3. ruling on the jurisdiction of the arbitral tribunal; 168 Ibid, ch IV, art 16(3).  
4. court assistance in taking evidence in support of arbitration; 169 Ibid, ch V, art 27.  
5. ruling on applications for setting aside arbitral awards; 170 Ibid, ch VII, art 34.  and
6. enforcement and recognition of arbitral awards. 171 Ibid, ch VIII, arts 35 and 36.  

8.2.1 In line with the provisions of the Model Law (1985) 172 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. and the New York Convention, 173 For the full text of the New York Convention (1958) see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf.  Article 8 of the Ukrainian Arbitration Act provides that the court shall terminate its proceedings without prejudice as soon as it becomes aware 174 The court will become so aware if an application contesting the court’s jurisdiction is made by the respondent. The application should be made no later than the submission of the statement of defence. of the existence of a binding arbitration agreement. 175 Ukrainian Arbitration Act, ch II, art 8(1). However, if both parties waive their right to arbitration, the court may proceed to hear the case on the merits.

8.2.2 The legal effect of the termination of the court proceedings without prejudice is that the claimant’s claim is left without consideration, thereby a dispute which falls within the scope of an arbitration agreement is effectively precluded from being litigated before a state court. 176 Ibid; CPC, s III, ch 8, art 257(2); CoPC, s III, ch 8, art 226(1) (7).

8.2.3 At the same time, the court will hear a case unless it finds that the arbitration agreement is invalid, inoperative or incapable of being performed under the law applicable to that agreement. 177 Ukrainian Arbitration Act, s II, art 8(1). Unlike other less interventionist jurisdictions, in Ukraine, a question of whether an arbitration agreement is invalid, inoperative or incapable of being performed shall be decided by a court following a full hearing. 178 Letter No 01-08/163, para 18. Therefore, Ukrainian courts are not required to give any deference to an arbitral tribunal’s competence to rule on their own jurisdiction (competence-competence). It follows that regardless of the determination of the issue of enforceability, validity or effect of an arbitration agreement by the arbitral tribunal in question, the court seized to rule on the same issues is required to do so independently.

8.2.4 The level of scrutiny of arbitration agreements may be different where its parties originate from countries, which are parties to the 1961 European Convention. If either of such parties has initiated arbitration proceedings before any recourse is had to a court, Ukrainian state courts subsequently asked to deal with the same subject matter between the same parties or with the question of whether the arbitration agreement was non-existent or null and void or had lapsed, shall stay their ruling on the arbitral jurisdiction. 179 1961 European Convention, art VI (3) see https://treaties.un.org/doc/Treaties/1964/01/19640107%2002-01%20AM/Ch_XXII_02p.pdf.  In case the arbitral tribunal finds that it is competent to hear a dispute before it, then the Ukrainian state court must defer its determination on a plea that the arbitral tribunal does not have jurisdiction until after a final award on the merits is made.

8.2.5 The above, however, does not preclude either party from challenging the arbitral tribunal’s assumption of jurisdiction at the post-award stage by filing an application for setting aside an arbitral award for lack of jurisdiction. 180 Further details are set out at section 9.1 below.  

8.3.1 As noted above, 181 See para 2.1.2 above. the Ukrainian Arbitration Act provides that appellate courts at the seat of arbitration are vested with certain functions of arbitration assistance and supervision. Such supervisory functions may, among other things, be realised by an appellate court if any of the parties to the arbitration proceedings requests it to decide on the jurisdiction of the arbitral tribunal. The Ukrainian Arbitration Act also provides that any party to arbitral proceedings may challenge the ruling of the arbitral tribunal on its jurisdiction if it ruled so as a preliminary question within 30 days from the date when the parties have learned about such ruling. 182 Ukrainian Arbitration Act, ch IV, art 16(3).  

8.3.2 Ukrainian law does not provide for the possibility of obtaining declaratory relief in support of international arbitration.

8.4.1 CPC provides for a possibility of obtaining court-ordered interim measures in support of arbitration. Such protective measures may be sought by a party in respect to a dispute, which has been referred to international or domestic arbitration. 183 CPC, s I, ch 10, art 149(3).

8.4.2 The application for interim measures should be filed with an appellate court at the seat of arbitration, the registered place of a defendant or the location of his or her assets and should be accompanied with:

1. a copy of the statement of claim;
2. a proof that the statement of claim has been filed with an arbitration court in accordance with the respective rules of procedure; and
3. a copy of the arbitration agreement. 184 Ibid, arts 151(6) and 152(3).  

8.4.3 The court where the interim measures are sought, may, at its discretion, order the party requesting interim measures to provide appropriate security. The purpose of this is to reimburse a party against which such measures are taken for any costs and damages it may have incurred, should the measures or the order not be granted. 185 Ibid, art 154.  

8.4.4 The CPC also allows for the possibility to request interim measures in the course of recognition and enforcement proceedings with respect to foreign arbitral awards. 186 Ibid, s IX, ch 3, art 477(3). Such interim measures may be granted by a state court at any time during consideration of the enforcement application if it considers the absence of certain interim measures of protection may significantly complicate future enforcement of an award or make it impossible. 187 Ibid, s I, ch 10, art 149(2).

8.4.5 It should be also noted that although the Ukrainian Arbitration Act vests arbitrators with express powers to grant interim measures at a party’s request, 188 Ukrainian Arbitration Act, ch IV, art 17(1). it remains silent when it comes to court powers to enforce such tribunal-ordered interim measures. In the same vein, neither CPC nor CoPC vest a Ukrainian court with such powers. Thus, in the absence of legislative framework providing for the recognition and enforcement of interim measures ordered by arbitral tribunals similar to those contained in the Model Law (2006), tribunal-ordered interim measures are enforced under the same procedure as final arbitral awards on the merits.

8.5.1 The Ukrainian Arbitration Act ensures that the arbitral tribunal or a party to an arbitration with the permission of the arbitral tribunal, may address a competent court of Ukraine with a request for assistance in collecting evidence, in particular to examine a witness, discover evidence or inspect them at the place of their location. 189 Ukrainian Arbitration Act, ch V, art 27. The procedural framework for consideration of respective applications is envisaged in the CPC. 190 CPC, s I, ch 5, arts 84(11), 85(9), 94, 116(7) and (8), 117(5), ch 10, arts 149(3), 151(6), 152(3), 158(14).  

9.1.1 Ukrainian law does not vest parties to arbitration proceedings with a right to appeal against an award issued by institutional or ad hoc arbitrations seated in Ukraine on a point of law or fact. However, even though awards cannot be appealed on the merits, they may still be subject to challenge to a court of appeal at the seat of the arbitration. 191 CPC, s VIII; Ukrainian Arbitration Act, ch I, art 6(2), ch VII, art 34; Law on Domestic Arbitration, s VI, art 51. This means that all awards rendered by an arbitral tribunal constituted under the auspices of the ICAC or MAC may only be challenged in the Kyiv City Court of Appeals.

9.2.1 Although, as mentioned above, awards are not subject to appeal on the merits, a decision of an appellate court setting aside an award, or refusing to set it aside, may be challenged in the Supreme Court. 192 CPC, s VIII, art 460(3).  

9.3.1 The CPC and the Ukrainian Arbitration Act contain an exhaustive list of the grounds for setting aside an award, which mirrors the grounds contained in the Model Law (1985), 193 For the full text of the Model Law (1985) see http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf. namely:

(i) if the party making the application furnishes proof that:

• a party to the arbitration agreement had some incapacity; or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication of the law, under Ukrainian law; or
• the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present its case; or
• the award deals with a dispute that was 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. However, if the decisions on matters submitted to arbitration can be separated from those not submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or
• 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 mandatory provision of the Ukrainian Arbitration Act or, failing such agreement, was not in accordance with the Ukrainian Arbitration Act; or

(ii) if the court finds that:

• the subject-matter of the dispute is not capable of settlement by arbitration; or
• the award is in conflict with the public policy of Ukraine.

9.3.2 Since at least 1999, when, in Resolution No. 12, the term “public policy” was interpreted in a broad and non-specific way, 194 Resolution No 12, para 12. the alleged conflict of the award with the public policy of Ukraine has been an argument frequently invoked by parties to arbitration proceedings unsatisfied with their outcome. In some previous high-profile cases, the courts exercised their broad discretion in deciding whether the award contradicts the vaguely defined concept of “public policy” and set aside those awards that were felt to be contrary to Ukrainian national interests. In order to put to an end to this practice, in 2015, the High Specialised Court clarified that the public policy exception for challenging arbitral awards is of “extraordinary character”, 195 Letter of the High Specialized Court, para 21. and, therefore, one may logically infer it should be used by the supervisory courts as a ground for setting aside arbitral awards only in extreme cases.

9.3.3 The application to set aside an award must be submitted to the appellate court at the seat of arbitration within three months from the date of the receipt of the award by the award debtor or, if a party requested the arbitral tribunal to make corrections in or interpretation of the award, starting from the date on which the arbitral tribunal made the decision based on such request. 196  Ukrainian Arbitration Act, ch VII, art 34(3); CPC, s VIII, art 454(6).

9.3.4 Upon the application of a party to arbitration proceedings, a court considering an application to set aside the award, may suspend the proceedings and provide the arbitration tribunal with an opportunity to take actions which it deems necessary in order to remedy grounds for setting aside the award. 197  CPC, s VIII, art 457(7).

9.3.5 If the award is set aside by the competent court, the dispute may be re-submitted to another arbitral tribunal, unless this is expressly forbidden by law. 198 Ibid, arts 458(3) and 459(3).  

9.4.1 The CPC and the Law on Domestic Arbitration set out the same five grounds on which a domestic award may be challenged:

1. the subject matter of the dispute is not capable of settlement by arbitration;
2. the award is rendered in a dispute that was not covered by the respective arbitration agreement, or on matters beyond the scope of competence of the arbitral tribunal;
3. the arbitration agreement is declared invalid by the competent court;
4. the arbitral tribunal was not composed in accordance with the relevant provisions of the Law on Domestic Arbitration; or
5. the arbitral tribunal decided on rights and obligations of parties which did not participate in the arbitration proceedings. 199 CPC, s VIII, art 458(2); Law on Domestic Arbitration, ch VI, art 51.  

10.1.1 If an award issued by a domestic arbitration tribunal is not complied with voluntarily, an award creditor may file with an appellate court of the seat of arbitration an application seeking the issuance of a writ of executions. The procedure for considering such applications and issuance of writs is governed by the CPC and the Law on Domestic Arbitration. 200 CPC, s IX, ch 4; Law on Domestic Arbitration, s VII.  

10.1.2 Should the appellate court grant the application and issue the writ, then, by submitting an application with a state enforcement office or a private bailiff, the latter can be brought for enforcement as provided by the Law of Ukraine “On Enforcement Proceedings” (Enforcement Law). 201 Law No 1404-VIII, 02 June 2016.  

General Overview

10.2.1 Foreign awards may be enforced in Ukraine only after being recognised by a Ukrainian court pursuant to the New York Convention, which is the most important treaty concerning recognition and enforcement of foreign arbitral awards, 202 For the full text of the New York Convention (1958) see https://www.uncitral.org/pdf/english/texts/arbitration/NY-conv/New-York-Convention-E.pdf. or any other applicable international instrument. 203 CPC, s IX, ch 3, art 474(1). In the absence of a treaty providing for recognition and enforcement, foreign awards will be recognised and enforced based upon the principle of reciprocity, 204 Ibid.  which is presumed unless proved otherwise by a party resisting enforcement. 205 Ibid, art 474(2).

10.2.2 Awards may be submitted to enforcement within three years from the date on which they became effective, 206 CPC, s IX, ch 3, art 475(3). although this term may be extended by the courts on the basis of valid excuses. 207 Ibid, art 475(4).

Grounds for refusing recognition and enforcement

10.2.3 The Ukrainian Arbitration Act and the CPC set out the grounds upon which a Ukrainian court may refuse recognition and enforcement of a foreign award. 208 Ukrainian Arbitration Act, ch VIII, art 36; CPC, s IX, ch 3, art 478. In summary, the grounds for refusing recognition and enforcement are the same as those for setting aside an award. 209 As listed at paragraph 9.3.1 above. However, an additional ground is provided by the Ukrainian Arbitration Act and the CPC in that the Ukrainian courts may refuse recognition and enforcement if the award has not yet become binding on the parties, or if it was annulled or terminated by the courts of the country where, or under which law, it was made. 210 Ukrainian Arbitration Act, ch VIII, art 36(1); CPC, s IX, ch 3, art 478(1) (g).  

10.2.4 If an application for setting aside or suspension of an award has been made to a competent court, the court where recognition or enforcement is sought may, at its discretion, adjourn its decision. 211 CPC, s IX, ch 3, art 482(2); Arbitration Act, ch VIII, art 36(2). It may also order the other party to provide appropriate security. 212 The court will be able to do so by an application of the party claiming recognition or enforcement of the award. Ukrainian Arbitration Act, ch VIII, art 36(2).  

10.2.5 Also, before the enforcement court hands down a decision on an application to enforce the award, any party to the arbitration proceedings has a right to file with such court an application to set aside the award together with a petition to consider both applications in a single proceeding. 213  CPC, s IX, ch 3, art 482(3).

Enforcement procedure

10.2.6 In Ukraine, foreign awards are enforced under the “partial” control of the supervisory courts (ie, the award is considered to be binding on the parties from the date upon which it was issued, 214 See, for example, ICAC Rules (2018), s VIII, art 66(1); MAC Rules (2018), s VIII, art 66(1). but may be enforced only upon application in writing to the competent court). 215 Ukrainian Arbitration Act, ch VIII, art 35. Decisions of arbitral tribunals seated outside Ukraine shall be recognised and enforced in Ukraine by the Kyiv City Court of Appeals. 216 CPC, s IX, ch 3, art 475(3). The decision of the Kyiv City Court of Appeals may be appealed to the Supreme Court. 217 Ibid, art 479(7) and s V, ch 1, art 351(2).

10.2.7 When making an application to recognise and enforce an award, a party must submit an original or a duly certified copy of the award. If the award is in a language other than Ukrainian, the party must also produce a translation of the above-mentioned documents certified by an official or sworn translator, or by a diplomatic or consular agent. 218 Ibid, s IX, ch 3, art 476(4). In addition to these documents, and likewise the New York Convention, 219 New York Convention, art IV (2) see https://www.uncitral.org/pdf/english/texts/arbitration/NY- conv/New-York-Convention-E.pdf  the CPC also requires parties in the context of a foreign award to produce the original or a copy of the arbitration agreement and its translation into Ukrainian or other language if such possibility is provided for under an international treaty. 220 Ibid, s IX, ch 3, art 476(4) (4).

10.2.8 If the application is filed by a representative of a party in addition to documents listed, that representative must file a power of attorney certifying his or her power to represent the party in question and a translation thereof into the Ukrainian language. 221 Ibid, art 476(4) (5).

11.1.1 CoPC provides that any discrepancies in the text of an arbitration agreement – irrespective of whether it provides for the referral of a dispute or disputes to domestic or international arbitration tribunals – as well as any doubts as to its validity, viability and capacity to be performed, shall be resolved by a court in favour of its validity, viability and capacity to be performed. 222 CoPC, s I, ch 2, art 22(3). CPC also contains a similar provision with the exception that it applies only to domestic arbitration. 223 CPC, s I, ch 2, art 21(2).

11.1.2 Before the above-mentioned pro-arbitration approach to interpretation of arbitration agreements was introduced to the CoPC and CPC by the Law No 2147-VIII, Ukrainian courts used to take a formalistic approach to the interpretation agreements and on a number of occasions they have held an arbitration agreement to be invalid or inoperative as a result of a mere misspelling of the name of the arbitral institution or where the arbitration clause refers to the rules of the arbitral institution without naming it expressly. Thus, in order to avoid any potential risk that a Ukrainian court may refuse to recognise an arbitration agreement, it is advisable that the arbitration agreement expressly indicates the full name of an arbitral institution and the precise range of disputes that the parties have agreed to submit to arbitration. 224 Clarifications No 04-5/608, para 5.  

11.2.1 In international arbitration, a situation where there is a significant interval between the time when a final award is issued by the arbitrators and when such award is enforced is not that uncommon. Thus, an award on interest until the date of payment may play an important role in compensating a party for the loss of opportunity to use money to which it is entitled and, at the same time, to prevent the counterparty from being unjustly enriched as a consequence of wrongfully withholding money that did not belong to it.

11.2.2 However, until recently Ukrainian legislation did not address the issue of whether awards ordering interest until the date of payment are enforceable in Ukraine. In the absence of express legislative framework providing for the possibility of enforcing such arbitral awards, there was a significant degree of uncertainty over the possibility of their recognition and enforcement. In particular, while some enforcement courts considered such awards unenforceable for the reason of the alleged violation of the Ukraine’s public policy, other courts found no issues with their recognition and enforcement.

11.2.3 Alongside other changes in the legislative landscape, the Law No 2147-VIII introduced a rule providing that since 1 January 2019 an enforcement court shall indicate in its judgement enforcing the award that post-award interest, if any, shall accrue until the day of payment. 225 CPC, s IX, ch 3, art 479(4) and s XII, para 2.  Final calculations as to the interest due in such case shall be made by a state enforcement office or a private bailiff according to rules set out in the judgement of a state court enforcing an arbitral award. 226 By the ruling dated 15 May 2018 in Case No 759/162016/14-ts, the Supreme Court decided that even before 1 January 2019, enforcement of an arbitral award providing for post-award interest cannot be deemed a violation of public policy of Ukraine.