International Commercial Arbitration in Ukraine

Author: Sam Noshadha

Doctor of Juridical Science (International Law)

(Arbitrator at the Ukraine and American

International Commercial Arbitration Courts )

 

March 31, 2017 – Kiev

 

International Commercial Arbitration is a way of dispute resolution in commercial law which it is technique for the resolution of dispute in context of international commercial transactions outside the national courts.

The parties to dispute refer to international commercial court of arbitration according to agreement of arbitration or, annex to commercial contract (for instance sell, buy, servicing or etc) or, clause in their commercial contract which agreed before between the parties. The parties may agree about language, state law of arbitration and also, they specify quantity of arbitrator(s). Case may be heard by “solo Arbitrator” or “three Arbitrators”. In fact all these points must be agreed by the parties.

Arbitrator(s) review the evidence in the case and imposes a decision that is legally binding on both sides and enforceable in their states.

The parties are granted concerning enforcement of commercial arbitration court award in their state by:

  • The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958);
  • The European Convention on International Commercial Arbitration (Geneva, 1961).

In territory of Ukraine by:

  • The Ukrainian Law titled «On the International Commercial Arbitration» dated February 24, 1994;
  • The Statute on the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, which is Application 1 to the aforesaid legislation;
  • The Rules of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry.

Some other relevant international instruments are:

  • The Washington Convention of 1965 (governing settlement of international investment disputes);
  • The Washington Convention (ICSID) of 1996 for investment arbitration;
  • The UNCITRAL Model Law on International Commercial Arbitration of 1985, (revised in 2006);
  • The UNCITRAL Arbitration Rules (providing a set of rules for an ad hoc arbitration).

International commercial arbitration is not the same as:

  • National commercial judicial proceedings;
  • Alternative dispute resolution (ADR);
  • Expert determination;
  • Mediation as a form of settlement negotiation facilitated by a neutral third party.

 

› Advantages of applying commercial arbitration court:

Parties often seek to resolve disputes through arbitration because of a number of perceived potential advantages over judicial proceedings:

  • In contrast to litigation, where one cannot "choose the judge", arbitration allows the parties to choose their own tribunal. This is especially useful when the subject matter of the dispute is highly technical: arbitrators with an appropriate degree of expertise (for example, quantity surveying expertise, in the case of a construction dispute, or expertise in commercial property law, in the case of a real estate dispute) can be chosen.
  • Arbitration is often faster than litigation in court.
  • Arbitral proceedings and an arbitral award are generally non-public, and can be made confidential.
  • In arbitral proceedings the language of arbitration may be chosen, whereas in judicial proceedings the official language of the country of the competent court will be automatically applied.
  • Because of the provisions of the New York Convention 1958, arbitration awards are generally easier to enforce in other nations than court verdicts.
  • In most legal systems there are very limited avenues for appeal of an arbitral award, which is sometimes an advantage because it limits the duration of the dispute and any associated liability.

› International enforcement:

It is often easier to enforce arbitration awards in a foreign country than court judgments. Under the New York Convention 1958, an award issued in a contracting state can generally be freely enforced in any other contracting state, only subject to certain, limited defenses. Only international arbitration awards are enforced pursuant to the New York Convention. An arbitral decision is international where the award was made in a state other than the state of recognition or where foreign procedural law was used. In most cases, these disputes are settled with no public record of their existence as the loser complies voluntarily, although in 2014 UNCITRAL promulgated a rule for public disclosure of investor-state disputes.

Article V of the New York Convention provides an exhaustive list of grounds on which enforcement can be challenged. These are generally narrowly construed to uphold the pro-enforcement bias of the Convention.

 

International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry:

On 1960 Ukraine as a member of the United Nations signed and ratified two fundamental international treaties in the field of international commercial arbitration:

  • The UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (August 22, 1960);
  • European Convention on the International Commercial Arbitration (January 25, 1963).

while no international arbitration institutions were established, and could not actually be established, in the course of over 30 years in Ukraine. This was caused by the USSR central monopoly for foreign trade operations as only the special central/federal associations and institutions for foreign trade formed by the central/federal government were actually authorized to perform foreign trade operations. This was the reason why arbitration institutions were also established at the central level only.

On June 10, 1992; the Presidium of the Ukrainian Chamber of Commerce and Industry established the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (hereafter, the Court) and adopted its rules of procedure. The practical work to organize the operations of the Court was commenced on August 11, 1992, Mr. Igor Pobirchenko was appointed as the Chairperson of the Court.

Year by year the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry is moving forward more professional and improved to provide the Parties best ideals of commercial arbitration according to highest international standards.

Follow we have dynamics of the Court cases from 2000 till 2016 and, you may consider while there is worldwide economy crises and in many institutions case quantity decrease, on 2015 the Court heard 922 cases (highest quantity of the Court case hearing), it shows more trust of the Parties to apply the Court, top level of servicing and, professionalism of the Court administration management. 

icac

 

According to statistics of the Court on 2016 , there are 112 recomendatory Arbitrators from 31 countries that half of them are Ukrainian citizens.

During 2016, the Court registered a total of 553 cases, where the Parties to the cases were represented by 51countries, including 42 from far-abroad countries, 8 CIS (Commonwealth of Independent States) countries and Ukraine.

The duration of considered cases (from the date of initiation of the arbitral proceedings till rendering of the award in the case) was as follows:

  • up to 3 months - 368 cases;
  • from 3 till 6 months - 89 cases;
  • from 6 till 9 months - 9 cases;
  • from 9 till 12 months - 4 cases;
  • over 12 months - 2 cases.

The Court entered into the bilateral agreements on cooperation in the field of international arbitration with the arbitration institutions in 17 countries worldwide.

Considering to the Court follow factors:

  • recommendatory list of professional Arbitrators as they are elites of law fields;
  • low cost of arbitration comparing many other countries;
  • short duration of case studying till reward issuing;
  • providing facilities by the Court,

the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry may be called one of the best institutions to apply for international commercial arbitration disputes.

 

Back