The Dispute Resolution Review: Ukraine
Introduction to the dispute resolution framework
Ukraine has a civil law system with all its major features such as a written Constitution and codified legislation. Ratified international treaties constitute part of Ukrainian law, and generally prevail over the national legislation.
Court precedent is not recognised as a source of law in Ukraine. However, decisions of the European Court of Human Rights (ECHR) constitute an exception. Ukrainian courts should apply those decisions as a source of law. In addition, conclusions of the Supreme Court on the application of a particular legal provision are binding for public authorities of Ukraine and should be taken into account by the lower instance courts.
Ukraine has a three-tiered court system based on the principles of territoriality and specialisation. It is composed of local courts (first instance courts), courts of appeal and the Supreme Court. In addition, the High Anti-Corruption Court and the High Intellectual Property Court2 are vested with the jurisdiction to consider particular types of cases as the courts of the first and appellate instances.
The local courts consist of general courts (dealing with civil and criminal matters and administrative offences), commercial courts (dealing with commercial cases and bankruptcy proceedings) and administrative courts (dealing with claims against state bodies and officials). The courts of appeal are based on the same principle of specialisation. The Supreme Court is composed of four separate chambers dealing with civil, commercial, administrative and criminal cases respectively. In addition, the Supreme Court includes the Grand Chamber, tasked with the resolution of the most important and complicated cases.
There is also the Constitutional Court of Ukraine, which operates separately from other courts. It has the principal task of deciding whether the laws of Ukraine comply with the Constitution of Ukraine, as well as providing an official interpretation of the Constitution. In addition, following a recent judicial reform in Ukraine, the Constitutional Court decides upon a separate application by a party to a court case (after exhaustion of all available domestic appeal procedures) whether a legislative act applied by a court in a particular case contradicts the principles laid down in the Constitution.
In relation to alternative dispute resolution (ADR), both international and domestic arbitration are recognised in Ukraine. Ukrainian law allows both institutional and ad hoc arbitrations. The International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC) and the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry (UMAC) are two major international arbitration institutions operating in Ukraine.
Agreements to mediate are not legally binding and enforceable in Ukraine. There is no legal framework concerning mediation proceedings. However, parties can conduct mediations in practice and sign the resulting mediation settlement agreements, which are enforceable as a matter of contract.
The year in review
In recent years, Ukrainian legislation and court practice have significantly developed. The courts often apply broadly accepted principles and rules (for example, the principle of venire contra factum proprium (estoppel), the contra proferentem rule), and follow ECHR practice. In 2020, the courts continued moving in the same direction.
In a number of cases, the Supreme Court has confirmed the possibility to invalidate fraudulent transactions (in particular, those aimed at evading debt collection or the enforcement of the court decision) by relying on the general duty to act in good faith.3
In another case, the Supreme Court emphasised that piercing the corporate veil or disregarding a company's legal personality are justified only in exceptional circumstances. The Court found, in line with consistent ECHR practice, that in a situation where a company has already been liquidated and struck off the register (which leads to the impossibility of its officers to apply to the court), the former shareholders are entitled to apply to the court on behalf of such company.4
i Overview of court procedure
The Civil Procedure Code of Ukraine (Civil Procedure Code), the Commercial Procedure Code of Ukraine (Commercial Procedure Code) and the Administrative Procedure Code of Ukraine (Administrative Procedure Code) govern civil, commercial and administrative proceedings respectively.
Bankruptcy proceedings are governed by the Bankruptcy Code of Ukraine.
Each lawsuit should be filed with a proper court following the procedural rules of territorial and subject matter jurisdiction. Choice of court clauses in favour of a particular Ukrainian court are not yet enforceable in Ukraine. At the same time, the general submission to the jurisdiction of Ukrainian courts in a contract with one or several non-Ukrainian parties confers jurisdiction to the competent Ukrainian court.
The general courts have jurisdiction over civil cases. These usually concern disputes between private individuals or disputes between a company and a private individual. Commercial courts handle commercial cases – that is, disputes between companies arising out of business contracts, corporate disputes, bankruptcy proceedings, etc. In relation to administrative courts, their jurisdiction covers claims against state bodies and public officials.
The procedural legislation prescribes adversarial proceedings. However, in administrative cases the burden of proof is reversed and lies with the public authorities whose actions or decisions are challenged. The courts resolve cases based on the evidence presented by the parties and have limited powers to gather evidence.
A party has a right to lodge an appeal with the competent appellate court against any court decision on the merits if such a party believes that a decision is unlawful or unfounded. Further cassation appeal with the Supreme Court is limited to particular types of court decisions, and may concern only questions of law, not questions of fact. In relation to the challenge of courts' procedural rulings, procedural law limits the types of rulings that can be challenged.
There are certain categories of cases where the courts of appeal consider cases as the courts of the first instance, and the Supreme Court hears appeals against respective court decisions as a court of appeal. In particular, this concerns cases on recognition and enforcement of foreign arbitral awards, as well as proceedings regarding setting aside of arbitral awards.
Ukrainian procedural law also prescribes the possibility of reconsidering a case under newly discovered or exceptional circumstances. For example, these may be significant facts that neither party to a dispute nor the court knew or could have been aware of at the moment of the hearing of the case by the court.
At the enforcement stage, the court may also become involved. For example, upon the request of an enforcement officer or judgment creditor, a court may change the method of enforcement of the court's decision.
ii Procedures and time frames5
There are three types of procedures for hearing cases under the Commercial Procedure Code: general, expedited (summary) and writ proceedings. The Code prescribes defined time limits for each of them.
Most cases are tried within the general procedure, which should take 125 days in the first instance court. Expedited proceedings are generally applied to small-claim cases, and may not require parties' participation in court hearings. In those circumstances, the first instance court shall consider a case within 65 days. However, certain types of cases cannot be considered in expedited proceedings (for instance, corporate disputes and bankruptcy proceedings). In relation to writ proceedings, they are aimed at the collection of minor debts and are possible only if no dispute on merits exists (i.e., debts arising out of written contracts). The first instance court has 25 days to issue a writ of execution.
The law also prescribes time limits for the review of court decisions. The whole procedure in general proceedings, including appeal courts and the Supreme Court, should take no longer than 300 days.
In practice, due to case overloads, the courts often do not meet these time requirements. For example, it may take around six to 12 months for a first instance court to consider a case in general proceedings.
General proceedings are commenced once a statement of claim is submitted with the court and the court issues a procedural ruling on its acceptance of the statement of claim and the opening of the proceedings. Further, the court starts considering the case at the preparatory hearing. At that hearing the court, in particular, identifies the facts of the case and the evidence the parties intend to present to prove their positions. Once the preparatory stage is over, the court moves to hearing the case on merits. Usually, it takes several court hearings for the court to hear a case and render a final decision.
The time frames in civil cases are slightly different. The Civil Procedure Code also prescribes for additional types of procedures such as proceedings in absentia and separate proceedings used to establish the existence of facts.
The courts, both commercial and general, may grant injunctive relief either prior to or after the commencement of the proceedings in a case. In particular, the courts may freeze a respondent's assets, order the respondent to refrain from taking certain actions and order third parties to refrain from taking actions with regard to the property in dispute.
The party seeking injunctive relief shall apply to the court with the motion and provide the court with sufficient explanation why a certain interim measure is necessary. The motion shall be considered by the court within two days following its submission. Upon the request of the opposite party or in its own discretion, the court may also order the applicant to provide security to cover potential damage that might be caused by unjustified interim measures.
iii Class actions
Ukrainian law does not prescribe for either opt-in or opt-out models of class actions. The closest equivalent exists under the consumer protection laws. Public consumer associations have the right to file lawsuits in the interest of an unidentified number of consumers against the sellers or producers of goods seeking to recognise their actions as unlawful. However, from a practical standpoint, decisions rendered against sellers or producers in such cases may not be an unconditional ground for granting each particular consumer's claim. Hence, each consumer should further initiate litigation against the seller or producer of certain goods to protect their infringed right.
In addition, although strictly not a class action, there is a special procedure for consideration of typical cases in administrative courts. These are cases against the same public authority, based on the same grounds and claims regulated by the same legal rules. The Supreme Court is entitled to consider one of the typical cases and render a decision. That will constitute a model case being the 'guidelines' for the lower instance courts in the rest of such typical cases.
iv Representation in proceedings
Both private individuals and companies are entitled to represent themselves before the courts in civil and commercial cases. A company may participate in the case through its CEO, a member of the executive board or another employee authorised to act on behalf of such company in accordance with the law, an employment agreement or constituent documents.
Alternatively, a party can engage legal counsel for representation in a case. Currently, only licensed attorneys may represent parties before Ukrainian courts. The only exceptions are small-claim and labour cases in which any person may act as a representative.
v Service out of the jurisdiction
Ukraine is a party to the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Convention). In addition, certain issues of document service are regulated by regional treaties, namely the 1993 Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters (Minsk Convention) and the 1992 Kiev Treaty on Settlement of Disputes Related to Commercial Activity (Kiev Treaty), as well as bilateral treaties with particular states. At the level of Ukrainian law, the rules of service out of jurisdiction are found in the Civil Procedure Code and in the Law of Ukraine on Private International Law.
The Hague Convention applies to all cases in civil and commercial matters where there is an occasion to transmit a judicial or extrajudicial document for service abroad. The Ministry of Justice of Ukraine is the central authority responsible for dealing with requests for service coming from the contracting states. At the same time, if a Ukrainian court needs to serve a document abroad, it should forward the request for service of documents directly to the central authority of the respective foreign state.
Ukraine has made several reservations under Article 10 of the Hague Convention. In particular, Ukraine does not accept the service of documents to judicial officers or other competent persons directly by mail or through interested persons.
The Minsk Convention and the Kiev Treaty, in which the issue of service of documents is regulated as well, are of regional character and apply only to post-Soviet states. Those Conventions contain rather limited rules on document service but formally prevail over the Hague Convention.
The Civil Procedure Code regulates the situation when it is necessary to serve documents or conduct other procedural actions in a foreign state that is not a party to the Hague Convention or other applicable treaty. In this event, the request should be communicated through diplomatic channels. The procedure is the same for both companies and private individuals.
vi Enforcement of foreign judgments
In Ukraine, the enforcement of foreign judgments takes place either on the basis of an international treaty with a particular state or states that is ratified by the Ukrainian parliament and provides for the recognition and enforcement of court judgments or, in the absence of such treaty, under the reciprocity principle.
If there is an international treaty in place, the conditions for a foreign judgment's enforcement as well as the grounds for refusal of the enforcement are usually stated in such treaty. If there is no international treaty between Ukraine and the country where the respective judgment is rendered, the applicable legal framework is set out in the Civil Procedure Code.
In particular, under the Civil Procedure Code, the reciprocity between Ukraine and the respective country is deemed to exist, unless proven otherwise by the opposing party. However, the Civil Procedure Code does not provide for any clear rules on the application of the principle of reciprocity. In practice, Ukrainian courts would enforce a foreign judgment if there is no evidence that the national courts of the country where the respective foreign judgment was rendered refuse to recognise and enforce judgments of Ukrainian courts on similar legal matters.
The Civil Procedure Code also establishes an exhaustive list of grounds on which Ukrainian courts can refuse the enforcement of a foreign judgment. These are, for instance, if a judgment concerns matters that fall within the exclusive jurisdiction of Ukrainian courts or if a party against which a judgment was rendered has not been properly served regarding the proceedings.
Upon consideration of an application for enforcement of a foreign judgment, the competent Ukrainian court issues a writ of execution, which is a ground for initiating enforcement proceedings in competent enforcement authorities of Ukraine. The judgment of the Ukrainian court on recognition and enforcement of a foreign judgment is subject to appellate and cassation review.
vii Assistance to foreign courts
In Ukraine, assistance to foreign courts is mainly regulated by the Hague Convention and the 1970 Hague Convention on Taking of Evidence Abroad in Civil or Commercial Matters (Hague Evidence Convention). The regional treaties, namely the Minsk Convention and the Kiev Treaty, as well as bilateral treaties with particular states, also regulate certain aspects of assistance to foreign courts.
In particular, according to the Hague Evidence Convention, a foreign judicial authority is entitled to send a request to the Ministry of Justice of Ukraine, which is a designated body responsible for receiving requests from foreign competent authorities to obtain evidence and perform certain other judicial acts in Ukraine. The letter of request is then forwarded by the Ministry of Justice for execution to the Ukrainian court within the jurisdiction in which the requested judicial act should be performed.
The Minsk Convention and the Kiev Treaty state that the contracting parties provide each other with assistance by performing procedural actions, namely compiling and sending documents, conducting searches, conducting expert examination, and sending and delivering exhibits.
On the national level, the Civil Procedure Code establishes that Ukrainian courts may assist foreign courts with, inter alia, witness examination and the conducting of expert examination. However, such assistance should be denied if it may cause the infringement of Ukraine's sovereignty or threaten its national security, or if it is outside the jurisdiction of the court.
viii Access to court files
Each party to a case has full access to court files. In particular, a party may file a motion with the court requesting the review and photocopying of court files.
Members of the public who are not parties to the particular case do not have a right to access the files of that case unless they prove that respective case directly relates to their rights, interests, freedoms or obligations. Basic information about pending cases in various courts can be accessed online by the general public. Such information concerns identities of the parties to a dispute, the subject matter of the dispute and court hearing dates. The court hearings are public unless the court decides to hear a case in camera to protect confidential or other sensitive information.
At the same time, final court decisions on merits as well as various procedural rulings are publicly accessible online in the Unified State Register for Court Decisions. This database contains electronic versions of all decisions rendered by the Ukrainian courts of all levels starting from approximately mid-2006.
However, owing to the data protection rules, the mentioned electronic versions of court decisions hide names and another personal data of individuals, such as information on bank accounts, addresses and vehicle registration numbers. Persons seeking to obtain an undisclosed court decision must prove to the court that such decision directly relates to their rights, interests, freedoms or obligations.
ix Litigation funding
Third-party funding is not regulated in Ukraine. Accordingly, there are no limitations or prohibitions on funding claims in civil and commercial proceedings before the Ukrainian courts and in arbitration proceedings seated in Ukraine. However, in practice third-party funding is not actively used in Ukraine.
In the event that a party wishes to use third-party funding in Ukraine, the Rules of Professional Conduct contain a requirement that an attorney practising in Ukraine when representing a client may not take into account instructions from other parties. Furthermore, an attorney intending to share any privileged documents or information with a third party (i.e., funder) shall obtain the client's consent.
Although strictly not third-party funding, there is a rather common practice in Ukraine for lawyers to handle cases under conditional fee agreements. The Rules of Professional Conduct expressly allow such way of structuring payments to an attorney.
Recently, the Supreme Court confirmed that a conditional fee is a part of an attorney's remuneration and constitutes a litigant's expenses.6 However, the Supreme Court noted that courts shall not be simply bound by the private arrangements between a client and an attorney with respect to payment of a success fee, and shall in any event evaluate whether such success fee (as any other litigation expense) was necessary; reasonable; proportional to the value of the claim, the complexity of the case and its importance to the relevant party; and is actually paid by a party claiming its compensation.
Ukrainian procedural rules for civil and commercial litigation, as well as the Arbitration Rules of the ICAC, provide for the standard rule of costs follow the event, which can help reduce the financial burden suffered by a party to a dispute.
i Conflicts of interest and Chinese walls
The Rules of Professional Conduct emphasise that attorneys shall follow the principles of confidentiality and avoid conflicts of interest.
Under the Rules of Professional Conduct and rules of procedure, an attorney cannot represent two or more clients if there is, or potentially may be, a conflict of their interests. A conflict of interest also exists if the attorney has a personal interest in or owns information obtained from one of the clients that could be used for the benefit of another client.
In all these circumstances attorneys have to inform their clients of the conflict of interest. An attorney would be allowed to proceed with legal assistance only upon a client's written consent.
Ukrainian law firms often apply Chinese walls in the event of parallel instructions from different clients who are parties to the same or related cases. Normally, however, a firm would be allowed to proceed with both instructions only if there were written consent from each of the involved clients. It also depends on the particular status of each client in the case. For instance, it would be rather questionable if clients of a firm were opposite parties to the same case, even though the attorneys working on each case are separated by a Chinese wall.
ii Money laundering, proceeds of crime and funds related to terrorism
In Ukraine, the legal framework against money laundering and terrorism financing is mainly imposed by the Law of Ukraine 'On Preventing and Counteracting Legalisation (Laundering) of the Proceeds of Crime, Terrorist Financing, and Financing Proliferation of Weapons of Mass Destruction', the restated version of which came into force on 28 April 2020. The Law requires attorneys to identify and verify their clients as well as detect and keep records of suspicious financial transactions providing state authorities with information thereof.
The above obligation is, however, imposed upon attorneys only if they provide certain specific types of services, for instance, those concerning purchasing and selling real estate, managing a client's assets or a bank account, incorporating companies as well as selling and purchasing shares. In all other cases, attorneys are not allowed to disclose any information about their clients to third parties.
iii Data protection
The protection of personal data is governed, in particular, by the Constitution, the Law of Ukraine 'On Personal Data Protection', Model Rules on Personal Data Processing, the Law of Ukraine 'On Information' and the Law of Ukraine 'On Access to Public Information'.
Personal data usually constitutes confidential information, and may be processed or transferred only if the particular conditions prescribed for by the law are fulfilled. These are, inter alia, the consent of the personal data subject and a requirement to protect the vital interests of the personal data subject. The controller of the personal data shall ensure its protection.
International transfers of personal data are allowed to countries that provide adequate state protection of said personal data. Under the general rule, personal data shall not be transferred and shared internationally for any other purpose than that for which it was initially collected.
Documents and the protection of privilege
The Law of Ukraine 'On Attorneys' Activity', as well as the Rules of Professional Conduct, determine that any information or documents an attorney obtains from a client, the facts of any communication with a client, the substance of a client's advice as well as any document created by an attorney at a client's request are protected by attorney–client privilege. Attorneys, their assistants and any other attorneys' employees shall keep the respective information secret.
Generally, attorneys may not testify regarding the information constituting privilege or disclose it any other way unless they have obtained the client's permission for such disclosure. The courts may not order examination or seizure of any documents containing privileged information. Attorney–client privilege also applies to foreign attorneys, but only if they have become members of the bar association at their place of residence in Ukraine. The rules of privilege equally apply to in-house lawyers provided that they are licensed attorneys and have entered into legal services agreements with their employers.
ii Production of documents
Generally, parties are obligated to prove the facts they rely upon, and submit the respective evidence together with the first pleading on the merits of the dispute. The standard of proof of the balance of probabilities applies in civil and commercial cases.
If a party does not have the required evidence in its possession, such party may request the court to order production of this evidence. The motion on production should include reference to particular evidence the disclosure of which is sought, its relevance to the case, as well as measures the party took by itself to obtain the respective evidence. Either before or after the first statement on the merits of a dispute, a party may also ask the court to take measures aimed at securing evidence. In particular, the court can grant the production of documents if there is a risk that the evidence will be lost, or that its production will be impossible or difficult in future.
In commercial and civil procedures, the court may gather evidence only if it has doubts about the good faith exercised by the parties in performance of their procedural rights or the compliance of the parties with their duty to prove their case.
Alternatives to litigation
i Overview of alternatives to litigation
International and domestic arbitrations are recognised ADR methods in Ukraine. Mediation, expert determination and other ADR procedures are less common in Ukraine, although they can be used in practice in relation to certain types of transactions.
In Ukraine, international commercial arbitrations with their seat in Ukraine are mainly governed by the 1994 Law of Ukraine 'On International Commercial Arbitration' (based on the original 1985 version of the UNCITRAL Model Law, without all amendments introduced in 2006). Domestic arbitrations are regulated by the 2004 Law of Ukraine 'On Arbitral Courts'.
The ICAC and the UMAC are the only international arbitration institutions established in Ukraine. There are also numerous domestic arbitration institutions.
Overall, Ukraine is an arbitration-friendly jurisdiction. Resolving disputes through arbitration is quite common in commercial transactions involving a foreign party. At the same time, domestic arbitration is not widely popular in Ukraine.
Ukraine is a party to the 1958 New York Convention. Hence, recognition and enforcement of foreign arbitral awards in Ukraine is conducted under its provisions. In relation to the setting aside of awards issued by tribunals seated in Ukraine, this is possible only based on an exhaustive list of grounds established in the Law of Ukraine 'On International Commercial Arbitration'. Such grounds basically mirror those provided in the UNCITRAL Model Law.
Any application on recognition and enforcement of a foreign arbitral award in Ukraine should be submitted to the Kiev Court of Appeal. Its ruling on granting or denying recognition and enforcement of the foreign award can only be challenged before the Supreme Court.
There were a number of notable and important rulings regarding recognition and enforcement of foreign arbitral awards under the 1958 New York Convention issued by the Supreme Court over the past year. The most notable group of cases concerned the interpretation by the Supreme Court of public policy in the context of military conflict between Ukraine and the Russian Federation and sanctions imposed by Ukraine on certain Russian military industry companies. In 2020, the Supreme Court in fact changed its previously established pro-enforcement position in such kind of cases.
In particular, in the Avia FED Service v. SJSHC Artem case, the Supreme Court initially reached a conclusion that the fact that the recognition and enforcement of a foreign arbitral award was sought by a sanctioned military industry company incorporated in the Russian Federation, which is recognised by Ukraine as an aggressor state, cannot amount to a public policy violation under the 1958 New York Convention since private law legal relations are independent from the events that happened in Ukraine starting in 2014, as well as recognition by Ukraine of the Russian Federation as an aggressor state.7
However, the Supreme Court came to a completely opposite conclusion in subsequent similar cases, including between the same parties. On 13 February 2020, the Supreme Court rendered a decision in a case concerning the recognition and enforcement of another foreign arbitral award rendered between the same companies (Avia FED Service and SJSHC Artem).8 In this case, the Supreme Court refused recognition and enforcement of the award based on public policy grounds concluding that the Ukrainian sanctions regime is part of public policy. The same approach was further reaffirmed by the Supreme Court in at least several other cases in 2020.9
Mediation is not extensively regulated in Ukraine. In particular, there is no legal framework to enforce agreements to mediate. Parties, however, can take part in mediation procedures voluntarily, and subsequently enter into mediation settlement agreements. Such agreements, if properly executed, can be enforced as ordinary commercial contracts.
At the same time, Ukraine is taking steps aimed at the promotion and expansion of mediation. For instance, the Strategy for Reforming of the Judiciary, the System of Justice, and Ancillary Legal Institutions for 2015–2020 provides for the development of ADR, including mediation.
On 7 August 2019, Ukraine signed the Singapore Convention on International Settlement Agreements Resulting from Mediation. The Convention promotes mediation as an alternative and effective method of resolving trade disputes. To implement the provisions of the Convention, the Ministry of Justice of Ukraine established a working group on developing steps towards the ratification of the Convention and introducing relevant amendments to the national legislation. One such step was the preparation of draft Law No. 3504 'On Mediation', which was approved by the Parliament of Ukraine on first reading on 15 July 2020. The draft Law provides a mediation option for various types of disputes at any stage of the dispute resolution process. The further consideration and adoption of the draft Law, as well as ratification of the Convention, is pending.
Separately, a concept of judicial mediation was introduced into the Ukrainian procedural codes at the end of 2017. Under such judicial mediation procedure, parties can reach an amicable settlement of a dispute with the assistance of a judge. The parties, however, do not have an obligation to attempt to engage in the judicial mediation procedure.
If requested by either party, the mediation is carried out before the start of a trial on merits. If the settlement is successful, the respective agreement between the parties is approved by the judge and becomes binding.
iv Other forms of alternative dispute resolution
In Ukraine, there is no specific legislation dealing with other forms of ADR methods such as expert determination or adjudication. Currently there are no rules governing the process and the enforceability of expert determinations or alternative adjudication procedures in Ukraine. Nevertheless, expert determination is frequently included in contracts for the construction of large infrastructure objects or for providing complex consultancy services, as well as in public–private procurement agreements. For instance, the FIDIC forms of contracts that are commonly used in large infrastructure projects implemented in Ukraine provide for a multi-stage dispute resolution process that includes amicable settlement attempts, dispute adjudication or avoidance board decisions (DAB or DAAB) and finally arbitration.
In Ukraine, however, a DAB decision may be unenforceable in the event that one of the parties wishes to challenge it. Even if the parties have agreed that the expert determination will be final and binding, it may be possible to overturn a DAB decision in court or arbitration, unless the parties duly sign the amendments to their contract reflecting the relevant DAB decision.
The concept of referees is virtually unknown to the Ukrainian legal system. The closest procedure to the referee option in Ukraine is a pretrial settlement of a dispute with the participation of a judge, as discussed above. The same applies to other procedures of alternative dispute settlement. Early neutral evaluation, adjudication, conciliation and facilitation are unregulated in Ukraine and hence are rarely used by parties in practice.
Outlook and conclusions
The quarantine caused by the covid-19 pandemic has accelerated the introduction of remote dispute resolution in Ukraine.
In many cases, parties may use the electronic court system to file documents and track their status, as well as to receive court decisions and other procedural documents. In addition, during the quarantine, parties may file documents via email. Litigants may also receive case files by email and take part in court hearings using videoconference platforms such as Skype or Microsoft Teams (provided the relevant court has the necessary technical capability).
The Ukrainian Chamber of Commerce and Industry also introduced amendments to the Rules of the ICAC and the UMAC that came into force on 1 November 2020. The amendments are aimed at the facilitation of arbitral proceedings during the pandemic. The newly introduced rules provide for a wider use of videoconferencing for oral hearings and require parties to submit documents in electronic form.
The recent examples of jurisprudence produced by the Supreme Court show that the Ukrainian judiciary continues to overcome the previously predominantly restrictive and formalistic approaches in the application and interpretation of the law. Courts have become accustomed to applying internationally recognised principles of public and private law, as well as relying upon the practice of the ECHR.
In relation to the significant pending cases, the Ukrainian legal community is awaiting the result of the case related to a squeeze-out. In November 2020, the Grand Chamber of the Supreme Court ordered the retrial of a case on challenge by the minority shareholders of a joint-stock company regarding transactions ordering them to sell their shares to the majority shareholder in a squeeze-out scenario.
1 Olexander Droug and Olena Sukmanova are partners and Oleksiy Koltok is a counsel at Sayenko Kharenko. The authors would like to thank Andriy Stetsenko, Olena Solonska, Sergey Protyven, Vadym Slesarchuk, Alina Danyleiko, Vladlena Lavrushyna, associates at Sayenko Kharenko, and Iryna Ostashuk, junior associate at the firm, for their contribution to this chapter.
2 Formation of the High Intellectual Property Court is still in process. The Court is expected to commence its work in 2021.
3 Resolution of the Supreme Court dated 11 November 2020 in case No. 619/82/19 is one of the examples of such court practice.
4 Resolution of the Supreme Court dated 1 July 2020 in case No. 910/15925/18.
5 In this section, we limit the information provided to commercial and civil procedures. The administrative procedure has its distinct features and is not covered within this section.
6 Resolution of the Grand Chamber of the Supreme Court dated 12 May 2020 in case No. 904/4507/18.
7 Resolution of the Supreme Court dated 9 January 2020 in case No. 761/46285/16-ц.
8 Resolution of the Supreme Court dated 13 February 2020 in case No. 824/100/19.
9 Resolution of the Supreme Court dated 25 June 2020 in case No. 824/174/19; Resolution of the Supreme Court dated 2 July 2020 in case No. 824/101/2019.