In this paper, arbitrability of disputes and respective Ukrainian laws and jurisprudence will be analyzed. As Ukrainian laws distinguish international commercial arbitration (foreign arbitration and commercial arbitration having the seat of arbitration in Ukraine) and domestic arbitration (arbitration between Ukrainian entities and individuals), in this paper only the matters related to enforcement of international commercial arbitration will be considered. This paper contains the results of the research conducted as a part of the comparative study of the concept of ‘arbitrability’, carried out under auspices of the International Bar Association Subcommittee on Recognition and Enforcement of Arbitral Awards.
- Ukrainian courts usually consider arbitrability in the context of validity of an arbitration agreement.
- Ukrainian law defines persons capable of being a party to an arbitration (‘subjective arbitrability’) and specifies disputes which are not capable of being resolved by arbitration (‘objective arbitrability’). Rules related to subjective arbitrability are part of lex arbitri. The specific restrictions of objective arbitrability are part of lex fori, they are applied by the competent court irrespective of the seat of arbitration or the law governing the arbitration agreement.
- After 2011 legislative amendments, Ukrainian courts still have not adopted a clear approach to the matter of arbitrability of corporate disputes and disputes out of public procurement contracts. Courts still mostly consider corporate disputes and disputes out of public procurement contracts non-arbitrable. Controversial jurisprudence only allows to come to a conclusion that disputes out of or in connection with agreements of alienation of participation interests might be considered not corporate and thus arbitrable.
By Konstantin Pilkov, Cai & Lenard
Ukraine has a reputation of a country with an imperfect justice system. No wonder that the country is also pictured by many arbitration practitioners as one unfriendly to arbitration, though refusals to grant the leave for enforcement of arbitral awards in Ukraine are relatively rare – 10% and 18% of all requests considered in 2013 and 2014 respectively, according to the Statistical Report “Ukraine. Arbitration-friendly jurisdiction: 2013-2014” prepared by Cai & Lenard.
Assignment of benefits of arbitral awards is a standard business practice worldwide, undertaken by companies involved in international trade and supported by credit insurers. However, this practice may face some obstacles in Ukraine considering contradictory and poorly developed court practice of granting leave for enforcement upon an application submitted by any person other than a person who was the party to arbitration. Courts are rather formalistic in deciding on that matter as Ukrainian laws do not directly envisage the possibility to an application for leave to enforce an international arbitration award to be submitted by any person other than a creditor (the meaning of this term is sometimes narrow, so that it is understood as a synonym to a party to arbitration). Actually, until recently there are not so many court cases, if any at all, in which the matter of assignment of benefits of arbitral award was clearly addressed.
According to “Ukraine. Arbitration-friendly jurisdiction: 2011-2012 statistical report” the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC at the UCCI) holds the leadership position in terms of enforcement of arbitral awards in Ukraine.
Arbitration practitioners often put Ukraine below the average ranking of countries in terms of recognition of arbitration. Ukraine’s image of a not entirely arbitration-friendly jurisdiction is “promoted” with common thought about problematic enforcement of arbitral awards in Ukraine.
However, in recent years Ukrainian legal system demonstrated significant progress in adherence to the arbitration-friendly approach. That progress had been measured during the study resulted in the research paper “Ukraine. Arbitration-friendly jurisdiction: 2011-2012statistical report”.
What is the statistics of setting aside and recognition and enforcement of arbitral awards in Ukraine?
How often do Ukrainian courts grant the leave for enforcement of arbitral awards?
What are the reasons for refusing the enforcement of arbitral awards?
Do Ukrainian economic courts recognize arbitration agreements?
Are the courts inclined to "restore" arbitration agreements?
Is there any connection between international commercial arbitration and administrative court proceedings?
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