Enforcement of Arbitration Awards in Ukraine Ivan Lishchyna , Counsel

1. Enforcement of Arbitration Awards in Ukraine Ivan Lishchyna, Counsel

2. Enforcement of Arbitration Awards in Ukraine • Legal basis on the enforcement. • Enforcement mechanism. • Refusal of enforcement and recognition. • Ukrainian case law. • Contents of the presentation:

3. Enforcement of Arbitration Awards in Ukraine LEGAL BASIS ON THE ENFORCEMENT

4. Enforcement of Arbitration Awards in Ukraine • Acts governing recognition and enforcement of arbitration awards in Ukraine: • the Code of Civil Procedure; • the Law of Ukraine “On International Commercial Arbitration”, based on the UNCITRAL Model Law; • the Law of Ukraine “On International Private Law”; • the Decree of the Supreme Court of Ukraine On Courts Practice Regarding Recognition and Enforcement of the Decisions of Foreign Courts and Arbitral Tribunals and Setting Aside Arbitral Awards Rendered within the Territory of Ukraine of 24 December 1999, No. 12 (Decree No.12). • Most recent developments took place on 16.02.2010 when the Law of Ukraine № 1837 – VI “On amendments of certain legislative acts of Ukraine with the aim to clarify certain aspects of private international law” came into force establishing common procedure for recognition and enforcement of both foreign court judgments and foreign arbitration awards. • Legal basis

5. Enforcement of Arbitration Awards in Ukraine • After 1991, Ukraineconcluded a numberofbilateralagreementsprovidingfortherecognitionandenforcementofforeignjudgmentsandarbitrationawardswhichcanbeclassifiedintotwogroups: • (1) agreements on providing legal assistance in civil, criminal, family, etc. cases entered into between Ukraine and Azerbaijan (1993); Russia (1993); Kirgisia (1993); China (1993); Belarus (1993); Lithuania (1993); Moldavia (1994); Poland (1994; 1998); Estonia (1995); Georgia (1995); Latvia (1995); Mongolia (1995); Greece (1996); Turkmenistan (1996); and Turkey (2000); and • (2) agreementsonmutualencouragementofinvestmentswhichprovideformutualrecognitionandenforcementofcourt/arbitrationjudgmentsasfarasinvestmentsareconcerned. SuchagreementswereconcludedwithDenmark (1992); Egypt (1992); Poland (1993); Germany (1993); UnitedKingdom (1993); Vietnam (1994); Armenia (1994); Lithuania (1994); U.S.A. (1994); SlovakRepublic (1994); theNetherlands (1994); Argentina(1995); Bulgaria (1995); Estonia (1995); France (1995); Georgia (1995);Canada (1995);Kazakhstan (1995); Korea (1995); CzechRepublic (1995); Sweden (1995); Austria (1996); Benelux (1996); Belarus (1996); Lebanon (1996); Chile (1996); Cuba (1996); Greece(1996); Hungary (1996); Israel (1996); Italy (1996); Moldavia (1996); Switzerland (1996); Turkey (1996); Azerbaijan(1997); Croatia (1997); Latvia (1997); Indonesia (1997); Iran(1997); Spain (1998); Macedonia (1998). • Legal basis

6. Enforcement of Arbitration Awards in Ukraine • Ukraine is a party to • the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; • the 1965 Washington Convention on the Settlement of Investment Disputes Between States and Nationals of Other States; • the 1961 European Convention on International Commercial Arbitration • Also, Ukrainetwo multilateralagreementsprovidingfortheenforcementmechanismwithintheCommonwealthofIndependentStates: • the 1992 AgreementonProcedureofSettlingDisputeswithRegardtoCarryingoutBusinessActivities (theKievAgreementof 20March 1992); • the 1993 CIS ConventiononLegalAssistanceandLegalRelationsinCivil, FamilyandCriminalCases (theMinskConventionof 22 January 1993). • Legal basis

7. Enforcement of Arbitration Awards in Ukraine • Arbitration awards are enforced according to the procedure described in the Code of Civil Procedure. • PursuanttoArticle 390 ofthe CPC, Ukrainiancourtsshallgrantenforcementofarbitration awardsprovidedthat: • recognitionandenforcementarepermittedunderaninternationaltreatyratifiedbytheVerkhovnaRadaofUkraine (Parliament); or • onthebasisofreciprocityprincipleunderanadhocagreementwith a foreigncountry, whosecourtdecisionshallbeenforcedinUkraine. • Enforcement mechanism

8. Enforcement of Arbitration Awards in Ukraine • Procedure: • The party seeking recognition and enforcement of a foreign arbitration award in Ukraine should file an application with the first instance court of general jurisdiction at the location of a person against whom the enforcement is requested (this means, for practical purposes, the registered address of the company or individual) or, if that may not be determined, the location of the said person’s property. • The application must be filed within three years of the effective date of the award (except in the case of an award providing for recovery of periodic payments, which may be presented for enforcement during the entire payment period). • The application must contain the name and address of the applicant, the award creditor, the name and address of the debtor or the location of the debtor’s property, and describe the legal grounds for the application. • The application must be accompanied by documents required by an international treaty. • Enforcement mechanism

9. Enforcement of Arbitration Awards in Ukraine • AccordingtoArticle 394 ofthe CPC,theapplicationforenforcementshallbeaccompaniedwiththedocumentsasprovidedforbytherespectiveinternationaltreaty. • Inparticular, Article IV (1) oftheNewYorkConventionprovidesthatthemotionforenforcementshallbeaccompaniedbythefollowingdocuments: • thedulyauthenticatedoriginalawardor a dulycertifiedcopythereof; • theoriginalagreementreferredtoinArticle II or a dulycertifiedcopythereof. • SimilarrequirementsaresetoutinArticle 35 (2) oftheLaw of Ukraine on International Commercial Arbitration. • AccordingtoArticle 394 ofthe CPC andArticle 35 oftheLaw,allthedocumentssubmittedtogetherwiththeapplicationforenforcementshouldbeaccompaniedwith a translationthereofintoUkrainianoranotherlanguageassetoutintheapplicableinternationaltreaty. • However, the application of this rule is complicated in practice. • Enforcement mechanism

10. Enforcement of Arbitration Awards in Ukraine Procedure (continuation): • Uponreceiptoftheapplication for enforcement, thecompetentcourtsends a writtennotificationtotheopposingpartywithinfivedaysproviding a periodofonemonthtopresentitsobjections. • Afterthedebtorsubmitswrittenobjectionsorrefusestodoso, thecourtdelivers a rulingsettingthetimeanddateofthehearing. • Havingconsideredtheapplicationforenforcementandheardtheargumentsoftheparties, thejudgerenders a rulingongrantingordenyingrecognitionandenforcementofforeignarbitrationaward. Thesaidrulingservesasthebasisforissuingthewritofexecutiontriggeringtheexecutiveprocedure. • In caseofpartialenforcementofthearbitralawardabroadpriortoitsrecognitionandenforcementinUkraine, thecourtdeterminesthepartoftheawardthatremainstobeenforcedinUkraine. • TheapplicationforenforcementmayonlybeconsideredwithinthespecificlimitssetbytheNewYorkConventionandtheLaw on ICAprovidingthatthecompetentcourtsmaynotexaminethecorrectnessofthesaidjudgment, normaytheyintroduceanychangestherein. • Enforcement mechanism

11. REFUSAL OF RECOGNITION AND ENFORCEMENT Enforcement of Arbitration Awards in Ukraine

12. Enforcement of Arbitration Awards in Ukraine • Grounds for refusal of recognition and enforcement are slightly different for foreign court judgments and foreign arbitral awards. • The New-York Convention provides an exhaustive list of grounds for refusal of recognition and enforcement of foreign arbitration awards and it is duplicated in Article 36 of the Law of Ukraine “On international commercial arbitration”. • According to laws of Ukraine some of the disputes cannot be settled by arbitration proceedings and must be referred to courts. They include: • disputes with respect of invalidation of statutory and non-statutory acts; • disputes arising from conclusion, amendment, termination or performance of commercial contracts related to state needs; • where the dispute relates to immovable property located in Ukraine; • disputes arising with respect to IP rights which were registered and/or certified in Ukraine; • disputes related to registration or dissolution of legal entity within the territory of Ukraine; • disputes involving commercial paper officially issued and/or registered in Ukraine. • Refusal of recognition and enforcement

13. Enforcement of Arbitration Awards in Ukraine • Article 36 of the Law on International Commercial arbitration, which is almost identical to the provisions of Article V of the New York Convention, provides that recognition or enforcement of arbitration awards, irrespective of the country in which it was made, may be refused only: if the party opposing enforcement furnishes evidence that: • a party to arbitration agreement was under some incapacity or arbitration agreement was invalid, • that the party was unable to present its case during arbitration, • that the award falls beyond the scope of the arbitration agreement, • that the composition of the arbitral tribunal was undue or • that the award has not become binding upon the parties or has been set aside. • The recognition and enforcement can also be refused if the court itself finds that: • the award contradicts public policy or • the subject matter of the dispute is not abitrable under the laws of Ukraine. Refusal of recognition and enforcement

14. UKRAINIAN CASE LAW Enforcement of Arbitration Awards in Ukraine

15. Ukrainian Case Law • The most frequent ground for refusal of recognition of awards in the Ukrainian courts is the alleged breach of Public Order, the mistakes in the identification of the arbitral institution and failure to duly notify the respondent. • Public Order • the case of Telenor Mobile Communications AS v. Storm, LLC (corporate disputes); • CarlsbadEnterprisesLimitedv. PublicBureau (Embassy) oftheGreatSocialistLibyanArabRepublic(sovereign immunity);

16. Enforcement of Arbitration Awards in Ukraine • The correct identification of the arbitral institution • Explanation by the Higher Commercial Court on certain issues concerning the practice of consideration of cases involving foreign companies and organisations of 31.05.2002: “An arbitration agreement cannot be enforced if the parties incorrectly stated the name of an arbitration court or indicated an arbitral institution, which does not exist”. • LLC Kremenetske Milk v. AGROCOMPLEX Sp.Zо.о.“Arbitration Court of Ukraine at Chamber of Commence in Kyiv” – unenforceable pursuant to Ruling of Shevchenko District Court of Kyiv of 29.11.2012 • ZaporozhieVodokanal v. Dogus“International Economic Arbitration Court at Ukrainian Chamber of Commerce” – invalid under Judgment of the Kyiv City Commercial Court. • Ukrainian Case Law

17. Enforcement of Arbitration Awards in Ukraine • THANK YOU FOR YOUR ATTENTION!

18. Enforcement of Arbitration Awards in Ukraine • Ivan Lishchyna, Counsel • AstapovLawyers International Law Group • Business Center «Sophia», • 6 Rulskyi lane., 6th floor • Kyiv, 01001, Ukraine • T: +38 (044) 490 70 01 • F: +38 (044) 490 70 02 • lishchyna@astapovlawyers.com