A new Digest of the Ukrainian Supreme Court’s case law: anything of interest arbitration-wise?
18. 10. 2023
The Ukrainian Supreme Court has recently released a Digest of its case law in arbitration-related cases for the period of January 2018 – June 2023 (the “Digest“). This is the first Digest that covers arbitration-related disputes resolved within all divisions of the Supreme Court, dealing with such cases, in particular, the Grand Chamber, the Civil and Commercial Cassation Courts.
The Digest is structured in a new unique way. Its first part (Section A) briefly summarises the Supreme Court’s legal opinions and contains references and links to the corresponding Resolutions. In the second part (Section B) the relevant extracts from the court decisions are gathered by jurisdiction in chronological order.
Below are some Supreme Court conclusions that in our view are of the most interest among those included in the Digest, including the ones related to sanctions issues.
- In case No. 756/618/14-ts, the Civil Cassation Court decided not to apply the principle of autonomy of the arbitration agreement since the bank guarantee containing the arbitration clause was recognised a forged official document. It held that in this case, the principle of autonomy of the arbitration clause has no legal effect, as the entire document is forged (Resolution dated 26 February 2020).
- By concluding an arbitration agreement, the parties have determined another binding procedure for exercising their rights to apply for remedies, namely in a particular international commercial arbitration court/s. A party to an arbitration agreement may not ignore such terms and instead of the chosen arbitration forum apply to a state court that would be competent to resolve the dispute if the parties had not entered into such an arbitration agreement (Resolution of the Commercial Cassation Court dated 3 March 2020 in case No. 920/241/19).
- In case No. 824/65/19, the Civil Cassation Court held that an arbitration clause that does not contain an agreed location of the arbitration, the composition of the arbitrators, the place of the arbitral tribunal, or the language of the arbitration proceedings shall not be void by virtue of the Ukrainian law (Resolution dated 13 February 2020).
- The public policy clause prevents the recognition of an arbitral award if its enforcement would result in actions that are expressly prohibited by law or would harm the sovereignty or security of the State. Refusal to recognise and enforce an award on the grounds of public policy should be used as an exceptional measure (Resolution of the Civil Cassation Court Resolution dated 28 April 2022 in case No. 824/204/21).
- Enforcement of the ICAC award in favour of a person against which sanctions are imposed would violate Ukraine’s public policy rules (Resolution of the Civil Cassation Court dated 22 December 2022 in case No. 824/138/21).
- In case No. 824/87/22, the Civil Cassation Court held that the mere possibility of an arbitral award affecting the solvency of a strategically important state-owned enterprise cannot be considered a violation of the public policy of Ukraine. The collection of debt from a defence industry enterprise by an ICAC award during martial law is not a ground for refusing to recognise and enforce the award in Ukraine. However, such an award is temporarily not enforceable due to the suspension of enforcement actions until the end of martial law (Resolution dated 9 February 2023).
Since the Supreme Court is the highest body in the judicial system of Ukraine all lower courts are obliged to take into account its conclusions when resolving similar disputes. The Digest systematised the Supreme Court’s legal opinions which will ease the search and analysis of the Supreme Court’s case law for the practitioners as well.