Enforcement of foreign court interim decisions in Ukraine not so simple

• Litigation & arbitration

Enforcement of foreign court interim decisions in Ukraine: not so simple!

http://www.forwarderlaw.com/library/view.php?article_id=889

by O. Chebotarenko, K. Gorova (Interlegal Law Offices)

Recognition and enforcement of foreign court decisions and arbitration awards in Ukraine has recently been quite interesting and hot issue. The court practice in Ukraine that has been formed during last few years proves that norms regulating the process of recognition and enforcement of foreign court decisions in Ukraine is not at all a declaration, but is actively used in practice.

Not so long ago we illustrated in one of our articles the unprecedented decision made by the Golosiivskii District Court of Kyiv regarding recognition of the decision (Order) of the High Court of Justice of England at the territory of Ukraine which imposed arrest on the respondents’ assets in Ukraine.

It was not so much the recognition itself of the foreign court decision that caught the lawyers’ eye, but the circumstances under which for the first time in Ukraine not a final court decision (on merits) was recognized, but an interim judicial writ issued to provide security for further enforcement.

While making the decision on recognition of the foreign interim judicial act Ukrainian court applied a wider interpretation of the term “foreign court decision”, referring to “decisions” not only the final court decision which settled the dispute on merits, but an interim writ which may be passed as court proceeding security. Moreover the principle of mutuality between the United Kingdom and Ukraine served as the grounds for positive decision of the Golosiivskii District Court of Kyiv.

Progressive position of the Golosiivskii District Court of Kyiv not only allowed to obvert the procedural legislation of Ukraine, but opened quite rosy prospects for the parties of foreign court proceedings, as the possibility to secure enforcement of the future decision yet at the stage of case hearing plays quite an important role in the proceedings.

However, lacking any official comments on the present issue from the high instance courts as well as other similar precedents, we asked ourselves whether the decision of the Golosiivskii District Court of Kiev would become a basis for further practice of recognition and enforcement of interim procedural decisions of foreign courts in Ukraine.

Although the decision of the Golosiivskii District Court of Kyiv arose interest among lawyers it was quite clear that the position taken by the court could not satisfy all the participants of the abovementioned proceeding. The appeal claim was filed against the ruling of the Golosiivskii District Court of Kyiv. The appellant stated absence of the principle of mutuality between the United Kingdom and Ukraine as one of the arguments for the appeal.

Having studied the facts of the case, arguments and objections of the parties, the court of appeal came to a conclusion that the claim had to be satisfied due to violation of the Ukrainian procedural provisions by the first instance court and revoked the ruling of the Golosiivskii District Court of Kyiv.

Without going into details of some procedural violations committed by the court, the court of appeal among others stated the following as the argument for its position: ‘the first instance court did not pay attention to the fact that the appellant filed an application on recognition of the foreign court decision which was not subject to enforcement. However the court made a ruling on imposing an arrest on the assets that provides for enforcement, which is contradictory to the provisions of the Article 400 of the Civil Procedural Code of Ukraine’.

The core of the appellate court’s remark is that the procedural law of Ukraine distinguishes between the foreign court decisions which are subject to enforcement and those which are not, and to be only recognized at the territory of Ukraine (e.g. decisions on marriage dissolution, on adoption etc.)

In the present case the Golosiivskii District Court of Kyiv referred to the procedural provisions regulating recognition of foreign court decisions which are not subject to enforcement, although to our opinion the spirit of the High Court’s order on imposing arrest on the respondent’s assets can not but provide for its enforcement, and not only its recognition in Ukraine. Otherwise it is useless.

Due to detected procedural violations the file was returned to the first instance court for new examination on merits. So we have yet to now whether the initial and key position of the first instance court on the possibility to recognize and enforce the interim foreign court act will stand up.

But the remarkable fact is that despite the arguments of the court of appeal and the ambiguous judicial practice the appellate court did not agree to the appellant’s arguments on absence of the principle of mutuality between the United Kingdom and Ukraine. Moreover progressive approach of the Golosiivskii District Court of Kyiv to interpretation of the term foreign court decision was not negated by the court of appeal, and therefore agreed to.

None the less, whether there is a firm basis for recognition and enforcement of the foreign court’s interim decisions in Ukraine we will be able to answer after the abovementioned case is reconsidered by the court and the corresponding decision comes in force.

April 9, 2013

Alexander Chebotarenko

chebotarenko@interlegal.com.ua

Karyna Gorovaya

gorovaya@interlegal.com.ua