A. Applicable Ukrainian and International Treaties
Article 390 of the Code of Civil Procedure of Ukraine provides that the procedure for enforcement in Ukraine of foreign court judgments and foreign arbitration awards is determined by the corresponding international treaties of Ukraine and the laws of Ukraine. In the absence of an international treaty, such judgments or awards may be enforced on the principle of reciprocity.
The succession of Ukraine in respect of the rights and duties of the USSR under its various treaties is governed by the Law of Ukraine "On Legal Succession of Ukraine." Under Article 7 of this Law, Ukraine became a legal successor under any international agreements to which the USSR was a party so long as these agreements were not inconsistent with the Ukrainian Constitution and interests of Ukraine. Further, Article 6 of the Law provides for succession of Ukraine under any agreements signed by the Ukrainian Soviet Socialist Republic prior to proclamation of independence.
On August 10, 1960, both the USSR and Ukraine, in a separate capacity, became a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards (subject to the proviso that awards issuing from a state not a party would be enforced only in the event of reciprocity), and on September 17, 1966, to the 1954 Hague Convention on Civil Procedure. Further, the Ukrainian Soviet Socialist Republic became a party on January 25, 1964, to the 1961 European Convention on International Commercial Arbitration.
The USSR also concluded bilateral agreements providing for the recognition and enforcement of arbitration awards with Afghanistan (1974); Albania (1958); Austria (1955); Bulgaria (1948); China (1958); Cyprus (1976); Czechoslovakia (1947); Democratic People's Republic of Korea (1960); Federal Republic of Germany (1958); Finland (1947); Hungary (1947); Iraq (1973); Italy (1948); Japan (1957); Laos (1976); Mongolia (1957); Norway (1925); Poland (1945); Rumania (1947); Sweden (1940); Switzerland (1948); Syria (1965); Vietnam (1958); and Yugoslavia (1940).
With reference to the enforcement of foreign court judgments, the only treaties concluded by the USSR were (i) those concluded with the Communist states of Eastern Europe and Asia; (ii) an agreement on assistance and service of court documents and letters rogatory with the Federal Republic of Germany; (iii) a treaty on judicial assistance and extradition with Iraq; and (iv) treaties on judicial assistance with Algeria, Greece, Cyprus and Italy.
In addition to the above-mentioned multi- and bilateral agreements of the USSR, on May 16, 1995, Ukraine ratified the Stockholm Convention on Reconciliation and Arbitration within the Council on Security and Cooperation in Europe.
After 1991, Ukraine concluded a number of bilateral agreements providing for the recognition and enforcement of foreign judgments and arbitration awards which can be classified into two groups:
- agreements on providing legal assistance in civil, criminal, family, etc. cases entered into between Ukraine and Azerbaijan (1993); Russia (1993); Kirgisia (1993); China (1993); Belarus (1993); Lithuania (1993); Moldavia (1994); Poland (1994; 1998); Estonia (1995); Georgia (1995); Latvia (1995); Mongolia (1995); Greece (1996); Turkmenistan (1996); and Turkey (2000); and
- agreements on mutual encouragement of investments which provide for mutual recognition and enforcement of court/arbitration judgments as far as investments are concerned. Such agreements were concluded with Denmark (1992); Egypt (1992); Poland (1993); Germany (1993); United Kingdom (1993); Vietnam (1994); Armenia (1994); Lithuania (1994); U.S.A. (1994); Slovak Republic (1994); the Netherlands (1994); Argentina (1995); Bulgaria (1995); Estonia (1995); France (1995); Georgia (1995);Canada (1995); Kazakhstan (1995); Korea (1995); Czech Republic (1995); Sweden (1995); Austria (1996); Benelux (1996); Belarus (1996); Lebanon (1996); Chile (1996); Cuba (1996); Greece (1996); Hungary (1996); Israel (1996); Italy (1996); Moldavia (1996); Switzerland (1996); Turkey (1996); Azerbaijan (1997); Croatia (1997); Latvia (1997); Indonesia (1997); Iran (1997); Spain (1998); Macedonia (1998).
In line with the aforementioned multilateral and bilateral agreements, Ukraine signed a number of multilateral agreements providing for the enforcement mechanism within the Commonwealth of Independent States. Among them is the Agreement on the Formation of the Commonwealth of Independent States, which was ratified by Ukrainian Parliament on December 10, 1991. Article 12 of this Agreement provides that the High Contracting parties will guarantee, in accordance with their national legislation, performance of international obligations, which are binding on them under treaties of the former USSR.
Ukraine is also a signatory to the 1992 Agreement on Procedure of Settling Disputes with Regard to Carrying out Business Activities (also known as the Kiev Agreement of March 20, 1992). On November 10, 1994, Ukraine became a party to the 1993 CIS Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Cases (the Minsk Convention). These two documents provide the enforcement procedure of foreign judgments and arbitral awards between the CIS member states that are parties to the Convention.
Finally, in line with Ukraine's goal of shoring up its national legislation with respect to foreign investment, the enforcement of foreign judgments is touched upon in the Civil Procedure Code of Ukraine, Articles 35 and 36 of the Law of Ukraine No. 4002-12 "On International Commercial Arbitration, dated February 24, 1994 and in the Law of Ukraine No. 606-XIV "On Enforcement Procedure," dated April 21, 1999. The Ukrainian Parliament also passed Law No. 1701-IV "On Arbitration Courts," dated May 11, 2004 (as lastly amended on April 7, 2011, which covers arbitration proceedings within Ukraine, but does not cover international commercial arbitration).
As a result of the above treaties, conventions and laws, Ukrainian courts recognize and enforce judgments only of courts of foreign nations that have concluded international agreements with Ukraine regarding recognition and enforcement of such judgments. Foreign money judgments may also be enforced on the principle of reciprocity if an international agreement is not available.
The 1958 New York Convention, to which Ukraine is a signatory, requires courts of member states to recognize that written arbitration agreements take precedence over normal rules of jurisdiction, and to enforce arbitral awards rendered abroad. Moreover, according to the New York Convention, arbitral awards are enforced according to the procedure provided by legislation of the country where the enforcement is requested. In Ukraine, foreign arbitration decisions are enforced according to the procedure described above in accordance with the Civil Procedure Code of Ukraine (see discussion regarding executive enforcement procedure below).
B. Related Ukrainian Case Law
While the decisions of arbitration cases involving foreign money judgments are not publicly published, the Judicial Collegium on Civil Matters of the Supreme Court of Ukraine has released several examples of efforts to enforce foreign money judgments in Ukraine. According to the decision of the International Commercial Arbitration Court of the Chamber of Commerce and Trade of the Russian Federation, the Institute of Ethereal Oil and Medicinal Plants (hereinafter the "Institute") was obliged to pay a judgment of 663,252 USD to "Akvacoop" (Czech Republic) and 3,324 USD in compensation to "Akvacoop" for arbitration expenses. The Supreme Court of the Autonomous Republic of Crimea decided to enforce the petition of "Akvacoop" regarding recognition and enforcement of the decision of the International Commercial Arbitration Court of the Chamber of Commerce and Trade of the Russian Federation on the territory of Ukraine.
The Institute appealed the decision of the Supreme Court of the Autonomous Republic of Crimea with the Supreme Court of Ukraine. Using the arguments that the International Commercial Arbitration Court of the Chamber of Commerce and Trade of the Russian Federation lacked jurisdiction and that notice on the forum and time of consideration of the case was improperly served, the Appellant requested to cancel the decision of the Supreme Court of the Autonomous Republic of Crimea as unlawful. In the end result, the Judicial Collegium on Civil Matters of the Supreme Court of Ukraine upheld the Institute's appeal.
Another example involved a petition to the Kiev City Court, which was submitted by a company called "Carlsbad Enterprises Limited," requesting compulsory enforcement of a decision of the International Commercial Arbitration Court of the Chamber of Trade and Industry of Ukraine, which allowed the collection of a debt incurred by the Public Bureau (Embassy) of the Great Socialist Libyan Arab Republic in the amount of 779,341.82 USD.
The Kiev City Court refused to consideration the petition of "Carlsbad Enterprises Limited," forcing them to appeal to the Supreme Court of Ukraine to cancel the Kiev City Court's decision and review the case matter in hand. The Judicial Collegium on Civil Matters of the Supreme Court of Ukraine declined to hear the appeal based on the following grounds:
"According to Article 425 of the [former] Civil Procedure Code of Ukraine, the submission of a claim against a foreign government, its enforcement and the levying of execution on the property of such government, which is located on the territory of Ukraine, may be permitted only with the consent of the competent bodies of the corresponding government (sovereign immunity) In the decision of the International Commercial Arbitration Court of the Chamber of Trade and Industry, the subject matter of the case is the levying of execution on the property of a foreign government (the Great Socialist Libyan Arab Republic), represented by its Embassy. Therefore, the collection of the debt could only be enforced according to the norms of Article 425 of the [former] Civil Procedure Code of Ukraine and the relevant international agreement."
Based on this reasoning the Judicial Collegium on Civil Matters of the Supreme Court of Ukraine upheld the decision of the Kiev City Court
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