Ukraine, often called “The Gates of Europe“, has a geographical position that has long enabled it to be a hub of commercial activity. Unsurprisingly, arbitration also has a long history in Ukraine. The independence of Ukraine opened a new page in the history of arbitration, both domestic and international.
Domestic Arbitration in Ukraine: from Inception to Practice
Ukraine has its own peculiarities. As in the whole of the former Soviet Union, the original name “arbitration court” was used only in relation to domestic commercial courts. In general, the Ukrainian system was similar to the French system, in which there is a “Tribunal de commerce“. In one form or another, commercial courts existed before 1917. With the introduction of new economic policies, there was an objective need to establish special bodies to settle disputes between business entities. Therefore, in 1922, with the inception of the Soviet Union, the first arbitration bodies endowed with judicial functions began to emerge throughout Ukraine.
Such courts existed throughout the Soviet era, although they became fully functional courts only in 1991. On 4 June 1991, the first law “On Courts of Arbitration” came into force. On 6 November 1991, the first Code of Arbitration Procedure also took effect.
The next important step in the reform of domestic arbitration proceedings was the adoption of the Act of 21 June 2002, according to which a three-tier system of courts began to be introduced, and appellate and cassation instances were established to consider complaints against decisions of local courts. Thanks to this reform, so-called “commercial arbitration courts” sprang up in most Ukrainian cities.
International Arbitration in Ukraine: Gift of Independence
The Supreme Court plays an important role in the life of international arbitration in Ukraine, thanks to which Ukraine has developed a practice that meets international standards, making Ukraine an attractive jurisdiction for arbitration.
As of today, permanent arbitration courts and arbitration courts to resolve specific disputes (ad hoc courts) operate in Ukraine. However, most arbitrations are carried out by permanent arbitration courts since there is a disregard for the possibility of concluding and enforcing an arbitration agreement to refer the dispute to ad hoc arbitration. With regard to the validity of arbitration agreements, court must decide the issue prima facie, by giving the arbitrators the opportunity to make a full decision on their competence.
In accordance with the Law of Ukraine dated 2 December 1997, there are two permanent arbitral institutions in Ukraine. The International Commercial Arbitration Court (the “ICAC“) and the Maritime Arbitration Commission, both of which fall under the auspices of the Ukrainian Chamber of Commerce and Industry.
Over the past five years, the ICAC has accepted close to 3,000 cases and, in 2020, 341 international cases. Businesses from over 58 countries trust the experience of the ICAC and submit their disputes to this institution. Today, the ICAC considers more than 90% of cases within 6 months. ICAC recognizes its decisions in 119 countries in the world.
The new Procedural Law of Ukraine made it possible for the State courts to support arbitration, in particular, by taking provisional and interim measures for security for evidence, security for claims and security for costs.
- Olha Polishchuk, Aceris Law LLC