Navigating corporate disputes in Ukraine through international arbitration

For years, foreign investors, transactional lawyers and even some Ukrainian practitioners assumed that corporate disputes are not arbitrable in Ukraine. Although not entirely correct, that assumption became deeply rooted because Ukrainian legislation historically treated “corporate disputes” as a special category and courts were cautious in their approach to arbitrability. As a result, corporate disputes in Ukraine came to be widely regarded as presumptively non-arbitrable, leading many parties to avoid arbitration even where Ukrainian law would have permitted it.

Conventional wisdom has now shifted. Ukrainian law does not impose a blanket prohibition on arbitration of corporate disputes, but draws technical distinctions that determine whether a dispute may be referred to arbitration and whether the resulting award will be recognised and enforced in Ukraine. Some disputes involving shareholders, participatory interests and corporate rights are readily arbitrable. Others are arbitrable only if strict statutory requirements are satisfied. A third category remains effectively reserved to Ukrainian courts because the requested relief affects public registers, corporate status, insolvency proceedings or the rights of persons who never agreed to arbitrate.

This issue is of particular importance to foreign investors and parties involved in cross-border transactions concerning Ukrainian businesses. Arbitration is often viewed as a neutral and internationally recognised forum for resolving shareholder and investment-related disputes, making the scope of arbitrability a key consideration when structuring investments, negotiating shareholder arrangements and assessing legal risk. 

Understanding where Ukrainian law permits arbitration, and where it does not, is essential for anyone investing in or doing business through Ukrainian corporate structures. 

This leads us to the real question: what disputes that involve a Ukrainian company and Ukrainian and foreign shareholders can safely be arbitrated, and what awards are enforceable in Ukraine?

The answer begins with Articles 20 and 22 of the Commercial Procedure Code of Ukraine.

Article 20 establishes the categories of disputes falling within the jurisdiction of the commercial courts. Inter alia, this comprises: 

• disputes arising from corporate relations between a company and its members, or between members, where the dispute concerns the establishment, activity, management or termination of the company, and
• disputes arising from transactions involving shares, participatory interests, stock, units and other corporate rights.

Article 22 determines the disputes that may or may not be referred to arbitration. Its structure is critical because it creates a distinction that is often overlooked in practice. Notably, corporate-relations disputes are subject to significant restrictions. Conversely, disputes arising from transactions involving corporate rights are not automatically excluded from arbitration.

The practical consequence is that Ukrainian law now distinguishes between three broad categories: 

1. genuine corporate governance disputes, 
2. disputes arising from transactions involving corporate rights, and 
3. ancillary corporate-adjacent claims, such as registration disputes, securities-record claims, derivative actions and insolvency-related proceedings.

The most heavily regulated category consists of disputes arising from corporate relations within the meaning of Article 20(1)(3).

These disputes concern the establishment, operation, management or termination of a company and include many of the conflicts that foreign lawyers traditionally associate with shareholder disputes: voting rights, management deadlocks, information rights, governance arrangements, appointment of directors and the exercise of shareholder powers.

Such disputes are not entirely excluded from arbitration. Article 22 permits arbitration only where the dispute arises from a contract and the arbitration agreement has been concluded by the company and all of its members.

This requirement is central to any arbitration strategy involving a Ukrainian company. A shareholders’ agreement signed by only some shareholders may be sufficient for a bilateral contractual claim. It is far less reliable where the dispute affects the company or the rights of non-signing members.

For that reason, arbitration clauses should be embedded throughout the corporate structure from the outset. The company, all shareholders and any future members should be bound through shareholders’ agreements, accession deeds and, where possible, constitutional documents.

The safest category consists of disputes arising from transactions involving corporate rights.

These claims concern the transaction rather than the governance of the company. Typical examples include share purchase agreements, participatory-interest sale agreements, put-and-call options, earn-out provisions, deferred purchase-price mechanisms, warranties, indemnities and contractual obligations to transfer shares or participatory interests.

The distinction between transaction disputes and governance disputes has become increasingly clear in recent Supreme Court rulings.

In 2023, the Commercial Cassation Court of the Supreme Court in case No. 924/497/22 concluded that a dispute concerning a deed of trust over corporate rights constituted a dispute arising from a transaction involving corporate rights and therefore did not belong to the restricted category of corporate-governance disputes.

In 2025, the Commercial Cassation Court reaffirmed this approach in case No. 910/10001/24 when it held that claims arising from a share purchase transaction, including claims connected with the recovery or transfer of shares following non-payment of deferred consideration, were arbitrable because they lacked the characteristics of a corporate-governance dispute.

These judgments significantly reduce the uncertainty that existed before the 2017 procedural reforms and confirm a principle long advocated by arbitration practitioners: a dispute concerning a transaction in corporate rights should not automatically be treated as a dispute concerning the governance of the company.

Not every dispute fits neatly into one category.

A good example is pre-emption disputes, which may appear both as disputes concerning a transfer transaction and disputes concerning internal shareholder rights. Similarly, deadlock mechanisms, drag-along rights, tag-along rights and call options may operate both as contractual arrangements and governance tools.

In such cases, the way the claim is framed becomes critical. Claims for damages arising from breach of contractual obligations are generally easier to arbitrate than claims seeking direct changes to ownership records or corporate status.

The same distinction applies to securities disputes. Contractual obligations on payment, transfer, warranties or sale arrangements may be arbitrable. Disputes concerning the official registration or accounting of rights to financial instruments are more problematic.

Certain categories should not be entrusted to arbitration as the dispute-resolution mechanism.

Challenges to resolutions of shareholders’ meetings, supervisory boards or executive bodies are risky because they typically concern the validity of internal corporate acts and frequently require consequential changes to public records.

Claims seeking amendment of state registers, cancellation of registration entries, correction of ownership records, invalidation of public acts or recognition of rights requiring registrar action present similar difficulties. Even where an arbitral tribunal grants such relief, implementation will depend upon Ukrainian courts or public registrars.

Derivative claims against directors and officers for allegedly causing losses to the company are expressly placed within a non-arbitrable category. The same is true for insolvency-related disputes and challenges to transactions pursued within insolvency proceedings.

The decisive issue is often not whether a tribunal may hear a dispute but whether the resulting award can be enforced in Ukraine.

Under Article V(2)(a) of the New York Convention and Article 478(1)(2)(a) of the Civil Procedure Code of Ukraine, Ukrainian courts may refuse recognition and enforcement if the subject matter is not capable of settlement by arbitration under Ukrainian law (i.e. non-arbitrable).

An award that is valid at the seat of arbitration may still fail in Ukraine if it decides matters that Ukrainian law reserves to courts.

A foreign award granting damages for breach of a share-purchase agreement will usually be enforceable. An award purporting to annul a Ukrainian shareholders’ resolution, amend a state register, determine rights recorded in securities accounts or alter the legal status of a Ukrainian company may not.

The decisive issue is often not whether a tribunal may hear a dispute but whether the resulting award can be enforced in Ukraine.

Under Article V(2)(a) of the New York Convention and Article 478(1)(2)(a) of the Civil Procedure Code of Ukraine, Ukrainian courts may refuse recognition and enforcement if the subject matter is not capable of settlement by arbitration under Ukrainian law (i.e. non-arbitrable).

An award that is valid at the seat of arbitration may still fail in Ukraine if it decides matters that Ukrainian law reserves to courts.

A foreign award granting damages for breach of a share-purchase agreement will usually be enforceable. An award purporting to annul a Ukrainian shareholders’ resolution, amend a state register, determine rights recorded in securities accounts or alter the legal status of a Ukrainian company may not.