Litigation in Ukraine
15 February, 2007
271
Ukraine made attempts to reform its judicial system not once but only the enactment of the Act On Judicial System of 7 February 2002 became a substantial element of judicial reforms which have taken place over a 10-year period. The court is divided into the Constitutional Court with its first task to enforce and interpret the Constitution and the laws of Ukraine, and the Courts of General Jurisdiction.
The Courts of General Jurisdiction include:
- (i) local courts,
- (ii) courts of appeal,
- (iii) The Court of Appeal of Ukraine,
- (iv) Court of Cassation,
- (v) High specialized courts,
- (vi) The Supreme Court of Ukraine.
Local courts represent the lowest level of the system. Although the Court of Appeal of Ukraine, the Court of Cassation and the High Administrative Court were recently created they have not been opened yet.
Local courts hear when at least one of the parties is a natural person. They also involve claims of illegal actions by state officials and notary publics. Cases are initiated by filing a written application or complaint. As a rule, applications are filed with the court where the respondent is situated. The claim shall include certain details. The case is heard in an open session in the Ukrainian language.
The party not satisfied with the judgment of the local court may file an appeal based on reason of fact or law with the corresponding territorial court of appeal.
Courts of appeal are established for each region (oblast’) of Ukraine. There are also courts of appeal for the cities of Kiev (Kyiv) and Sevastopol and for the Crimea Autonomous Republic. The written appeal should be sent to the local court that passed a judgment.
The party not satisfied with the judgment of the court of appeal or the local court may file a cassation to the Supreme Court of Ukraine. A cassation may be filed only for reasons of law.
Verkhovna Rada of Ukraine (Parliament) adopted the new Civil Procedural Code on 18 March 2004 which will come into force as of 1 January 2005 but only if the corresponding Administrative Procedural Code will become effective. So, these new codes must make courts function more effectively and the corresponding process is to be improved.
The specialized courts are commercial and administrative. The majority of commercial disputes are considered by commercial courts of Ukraine. According to the Commercial Procedural Code of 21 June 2001 these are various disputes that arise in relation to conclusion and performance of contracts, as well as disputes regarding foundation, liquidation, reorganization, bankruptcy of enterprises, and disputes that relate to declaration of acts of government bodies as invalid.
The system of commercial courts in Ukraine has a four level structure. These are:
- (i) first instance courts – all regional courts, the commercial court of Kiev (Kyiv), the commercial court of Sevastopol, the commercial court of the Crimea Autonomous Republic;
- (ii) appellate instance courts – commercial appellate courts of Dnepropetrovsk, Donetsk, Zhitomir, Zaporozhie, Kiev, Lugansk, Lvov, Odessa, Sevastopol, Kharkov, as well as Kiev interregional commercial court of appeal,
- (iii) the cassation instance court – the High Commercial Court of Ukraine, and
- (iv) the court of repeated cassation – the Court Chamber for Commercial Disputes of the Supreme Court of Ukraine.
First instance courts consider the dispute merits, oblige the litigant parties to perform certain actions necessary to find the case facts, demand necessary documents or information, appoint examinations, etc. The general term for the dispute consideration is two months from the date when the court receives the claim statement. The dispute may be resolved for a longer period of time under the plea of a party.
The party to the dispute that does not agree with the first instance court judgment, as well as the public prosecutor, has the right to lodge an appeal petition on the first instance court judgment. The petition for appeal is to be filed with the corresponding appellate court through the commercial court which considered the merits of the case. The appeal must be filed before the judgment enters into force, i.e. within 10 days from the date of declaration of the first instance judgment.
Revising the case, the appellate court reconsiders the case under available files and complementary evidence in accordance with the procedural law of the first instance court. However, the appellate court may accept complementary evidence in the case only if the person who presents such evidence proves it was impossible to present the evidence to the court of first instance. The reason is certain circumstances which are beyond the control of such a person. The term for consideration of a petition for appeal is two months from the date of receipt of the case files by the appellate court.
The appellate instance court is empowered to affirm the first instance court judgment and dismiss the appeal, or to disaffirm the first instance court judgment entirely or partially and to deliver a new judgment, or to disaffirm the first instance court judgment entirely or partially and to halt proceedings in the case, etc. According to the result of consideration of the appeal, the appellate instance court passes its resolution which enters into force from the time of its declaration.
The resolution of the appeal instance court may be challenged in the cassation instance, that is, the High Commercial Court of Ukraine. The right to plead for cassation may be exercised by the parties to the dispute, public prosecutor and persons who did not take part in the proceedings (but only if the court touched upon their rights and obligations).
The High Commercial Court of Ukraine examines only the validity of the rulings of lower courts from the point of view of observance of substantive and procedural law. In cassation proceedings the court is not empowered to establish new facts, to enroll new evidence and to examine it, etc. The court only examines the accuracy of application of substantive and procedural law on the basis of previously established facts of the case. A petition for cassation should be lodged to the High Commercial Court of Ukraine through the court that delivered the challenged judgment or resolution within one month after the corresponding judgment or resolution entered into force. The term for cassation proceedings makes two months from the date of receipt of the petition. According to the results of cassation proceedings, the court delivers a resolution which enters into force from the time of its declaration.
The last level in the system of specialized courts is the Court Chamber for Commercial Disputes of the Supreme Court of Ukraine. At this instance the resolutions and decisions of the High Commercial Court of Ukraine are challenged.
The right to cassation at the Supreme Court of Ukraine may be exercised by the parties to the dispute and Attorney General of Ukraine within one month after delivery of the resolution or decision of the High Commercial Court of Ukraine. The Supreme Court of Ukraine disaffirms the resolutions or decisions of the High Commercial Court of Ukraine, if in cassation proceedings the Supreme Commercial Court of Ukraine applies a regulatory act that contradicts the Constitution of Ukraine or international treaties ratified by the Parliament, or prior judgments of the Supreme Court of Ukraine as to the matters of application of substantive law, etc.
In accordance with the results of reconsideration of the case, the Supreme Court passes a resolution which is final and cannot be challenged. On 11 May 2004 the Parliament adopted the new Act On Arbitration tribunals which are established ad hoc or on a constant basis. These tribunals consider cases where the parties are residents of Ukraine. So, they do not rule international arbitration cases. Arbitration tribunals have not been popular before because of some difficulties in execution of their awards. Probably now the situation will be changed.
The well-known arbitration tribunals in Ukraine are the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry which operate in accordance with the International Commercial Arbitration Act of Ukraine of 24 February 1994.
In keeping with the agreement of the parties the following disputes can be submitted for consideration to the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry:
- disputes from contractual and other civil law relationships arising in the course of foreign trade and other forms of international economic relations, provided that the place of business of at least one of the parties is abroad, as well as
- disputes arising between enterprises with the foreign investments, international associations and organizations established in the territory of Ukraine, disputes between their participants, as well as their disputes with other legal entities in Ukraine.
The Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry settle disputes arising from contractual and other civil law relationships in the field of merchant shipping without regard are there parties of such relations subjects of Ukrainian and foreign laws or only foreign or Ukrainian law separately.
Ukraine is a party to the 1958 New York Convention On Recognition and Enforcement of Foreign Arbitration Judgments as well as to other multilateral agreements in this field. Judgments of these arbitration courts may be set aside by Appellate Courts of general jurisdiction if these courts find the subject of the dispute is not arbitrable under the Ukrainian legislation, or that the arbitration judgment contradicts public policy, etc.
The enforcement of court judgments in Ukraine is performed as a rule by local departments of the State Enforcement Office acting on the basis of the Act of Ukraine On Enforcement Process of 21 April 1999.
