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INTRODUCTION TO DISPUTE RESOLUTION FRAMEWORK

 

Ukraine is a civil law country with the Constitution being a principal source of law. The main sources of civil and commercial law are acts promulgated by the legislative and executive branches of the state. International treaties ratified by Parliament become part of national law and prevail in a conflict with domestic law. Judgments issued by courts of general jurisdiction are not recognised as a source of law in Ukraine, but play a significant role in its interpretation. However, since 2010 the status of the Supreme Court’s decision was upgraded from being binding only on the parties involved in a specific case to a source of law that all judges and administrative authorities in Ukraine must follow. There are three branches of government in Ukraine: legislative, executive and judicial. The legislative branch is represented by the Verkhovna Rada of Ukraine (the Parliament). The Cabinet of Ministers of Ukraine is the highest executive body. The judicial system comprises the Constitutional Court of Ukraine and courts of general jurisdiction.

 

The Constitutional Court is the sole body of constitutional jurisdiction in Ukraine, which decides, inter alia, on constitutionality of laws and the official interpretation of the Constitution and laws. The judgments and opinions of the Constitutional Court are final and binding.

The system of courts of general jurisdiction encompasses:

 

a local courts;

b appellate courts;

c specialised high courts; and

d the Supreme Court of Ukraine.

 

Based on the specialisation principle, the courts of general jurisdiction consider the following types of cases: civil, criminal, commercial and administrative and cases on administrative offences.

Local courts are the first instance courts encompassing local general, commercial and administrative courts. Local general courts try civil and criminal cases, as well as certain types of administrative cases (e.g., cases involving local government). Local commercial courts mainly adjudicate in commercial disputes involving individuals registered as ‘private entrepreneurs’ and legal entities, corporate disputes and bankruptcy cases. Local administrative courts handle administrative disputes with the participation of government authorities or officers.

 

Appellate courts consist of appellate general, commercial and administrative courts, which examine appeals in relation to judgments of respective local courts that have not become effective.

The high courts are specialised. These are the highest courts of appeal for most cases. They comprise the High Specialised Court for Civil and Criminal Cases, the High Commercial Court of Ukraine and the High Administrative Court of Ukraine. These courts review cassation (second instance) appeals from judgments of respective lower courts and issue recommendations regarding the application of laws.

The highest judicial institution of general jurisdiction is the Supreme Court. The Supreme Court reviews cassation appeals when they are based on different applications of a legal rule by specialised courts in similar cases, or when determining whether a judgment by an international court, whose jurisdiction is recognised by the Ukraine, violates Ukraine’s international obligations.

Alternative dispute resolution (‘ADR’) in Ukraine is represented by arbitration and mediation. ADR procedures are used upon the agreement of the parties. They are discussed in more detail in Section VI, infra.

 

II THE YEAR IN REVIEW

 

i The High Commercial Court Recommendations on application of the land legislation

The Presidium of the High Commercial Court of Ukraine adopted Recommendations No. 04-06/15 on 2 February 2010 (‘the Recommendations’) to ensure the uniform and proper application of substantive and procedural laws in land disputes. The Recommendations were issued to clarify the exclusive jurisdiction of commercial courts in different types of land disputes (since in many cases their jurisdiction in practice overlaps with that of administrative courts). The Recommendations contain clarifications to the lower courts regarding: jurisdiction matters; application of injunctive relief; liability for violation of land legislation; and the particularities of dispute resolutions with different categories of land and participants involved. The Presidium also provided detailed guidance regarding the use of different forms of pre-judgment relief.

 

ii The High Commercial Court Recommendations regarding amendments to earlier clarifications of this Court

The High Commercial Court Recommendations regarding the numerous abuses of procedural rights by litigants stipulated that litigants should use their procedural rights in a proper fashion. The Recommendations contain the definition of abuse of procedural rights and prohibit certain actions aimed at abuse of procedural rights by third parties to the case. It also concerns the abuse of procedural rights by attorneys. The Recommendations stated that the court can influence an attorney’s procedural behaviour through the disciplinary committee of the Bar. It is also stated that a post office receipt could be used as adequate proof that a submission had been dispatched. The Recommendations state that the absence of the enclosure description could not be grounds for returning the claim.

 

III COURT PROCEDURE

 

i Overview of court procedure

The principal statutes governing court procedure are the Commercial Procedure Code, the Civil Procedure Code, the Code of Administrative Justice, the Criminal Procedure Code and the Law on Enforcement Proceedings. Civil and administrative procedures generally adhere to the same structure, while commercial procedure is somewhat different. An outline of commercial litigation follows, as well as certain peculiarities of civil and administrative proceedings.

 

ii Procedures and time frames

Litigation usually commences after a written statement of a claim is filed with a local commercial court. Unless there are grounds to reject the statement of claim, the court opens proceeding by issuing a respective decree that is served on the parties.

 

A case at a local court is usually heard by a single judge. Witness statements are not accepted as evidence in commercial litigation, but are in civil and administrative proceedings. At the same time, a commercial court may request explanations from parties’ representatives or other participants of a proceeding. According to established practice, most of the evidence comprises written documents.

As a rule, the case trial is completed with issuance of a judgment. The parties, prosecutor, third parties, non-parties to the case affected by a judgment may appeal a judgment as a whole or in part within 10 days of its approval or execution. When that period has lapsed, the judgment becomes effective unless it has been appealed.

 

Appeals hearings are held in nearly the same form as the hearings at the first instance. An appellate court verifies legality and relevance of a judgment within the scope of relief sought from the local court and may examine new evidence not submitted previously for justifiable reasons.

Based on its findings, an appellate court has the authority to (1) uphold a local court judgment, (2) alter the judgment, (3) vacate the judgment and render a new judgment, (4) close the proceedings or (5) reject the claim. The parties, prosecutor, third parties or non-parties affected by a judgment of an appellate commercial court may make a cassation appeal to the High Commercial Court within 20 days of the judgment becoming effective. The same period for cassation appeal is applicable in the scope of civil and administrative proceedings. Cassation appeal may invoke only issues of substantive or procedural law. The cassation procedure does not involve examination of evidence. The hearings are usually very brief, consisting of short speeches by the parties and questions from the court.

 

The parties to a case and the Prosecutor General may appeal a High Commercial Court judgment to the Supreme Court under exceptional circumstances (e.g., different application of a legal rule by the High Commercial Court in similar cases or determination of a judgment as violating Ukraine’s international obligations by an international court whose jurisdiction is recognised by the Ukraine).

 

A commercial court may retry a case based on new facts critical for correct dispute resolution. The list of exclusive grounds for retrial based on new facts is provided by the Code of Commercial Procedure. A party can petition for a retrial based on new facts within one month of their discovery.

Enforcement of judgments is administered by the state enforcement authority pursuant to the Law on Enforcement Proceedings.

 

As a general rule, a case trial in lower courts should be completed within two months of receipt of the claim by the court. Appellate proceedings should be carried out within two months upon rendering a decree on acceptance of the appeal for consideration. Contrary, appellate proceedings with respect to challenging a decree should be carried out within 15 days upon rendering a resolution on acceptance of the appeal for consideration. Cassation proceedings should be carried out within one month for final judgments and 15 days for procedural rulings from the moment a ruling is issued accepting the cassation appeal.

 

At the same time, the law provides for an extension or stay of proceedings in certain cases and enables litigants to employ dilatory tactics (e.g., by challenging the judges). Furthermore, the Supreme Court of Ukraine may send a case for retrial to the cassation court (High Court) and, respectively, the court of cassation may send a case for retrial to the court of appeal.

 

The claimant may petition the court for an interim injunction (e.g., by attaching respondent’s property or enjoining from certain actions). An injunction may be granted if the applicant demonstrates that it will be difficult or impossible to enforce the judgment in absence of the injunction.

 

A simplified ex parte procedure is available in the general courts for, inter alia, undisputed claims based on a written agreement or deed. In this case the court issues an order regarding the relief sought within a three-day term without holding a hearing.

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