On January 15, 2002, foreign investors were provided with another option for settling any disputes with their Ukrainian counterparts with the coming into effect of Law No. 2860-III "On the Recognition and Enforcement of Foreign Court Decisions in Ukraine," dated November 29, 2001.
However, this law subsequently lost force on September 29, 2005,
after its provisions were superceded by the Civil Procedure Code of
Ukraine, which came into effect on September 1, 2005. Law No. 2860
was the first attempt to solve the common problem in Ukraine when
foreign investors (or other holders of valid foreign judgments)
would have to go through the lengthy process of obtaining a foreign
judgment in their favor only to find that enforcement of such
judgment was impossible in Ukraine.
Section VIII of the Civil Procedure Code of Ukraine (No. 1618-IV, dated March 18, 2004, entitled "On Recognition and Enforcement of Foreign Court Judgments in Ukraine") continued the spirit of Law No. 2860 and was further clarified and strengthened by numerous amendments in 2010 and 2011. The Civil Procedure Code broadly encompasses the decisions of most foreign courts involving civil and commercial matters. The Code also applies to the decisions of foreign and international arbitration courts and acts of other bodies of foreign governments empowered to consider civil and commercial matters.
Importantly, the Civil Procedure Code applies to the foreign court judgments only if they have come into force and are subject to mandatory enforcement on the territory of Ukraine in accordance with international agreements to which Ukraine is a party. Conversely, if a judgment is made by a foreign court in a country without an international agreement with Ukraine, such judgment may only be subject to mandatory enforcement based on the principle of reciprocity. In most cases, reciprocity is presumed to exist unless otherwise proven.
With reference to the statute of limitations, a foreign court judgment may be presented for mandatory enforcement in Ukraine within three years from the date when it came into legal force. There is an exception for foreign court judgments that call for the recovery of periodical payments, which may be presented for mandatory enforcement during the entire term for collecting indebtedness that arose over the last three years.
In general, the court at the place of residence or location of the debtor considers requests for the mandatory enforcement of a foreign court judgment in Ukraine. If the place of residence or location of the debtor is unknown, the issue will be considered by the Ukrainian court where the debtor's property is located.
There are two methods for submitting a petition for the mandatory enforcement of a foreign court judgment in Ukraine. The first method is the direct submission of the petition by the judgment creditor or its representative or by another party permitted under an international agreement. The second method is submission via a state authority when an international agreement calls for submission only via a particular state authority.
A petition for the mandatory enforcement of a foreign court judgment must be submitted in writing and contain the name and residence/location of the applicant, the name and residence/location of the debtor or the debtor's property, and the grounds for submission. The foreign judgment holder may also request the court to take measures to secure the claim, and the court may apply such measures at any stage of the consideration of a petition if the failure to take measures will complicate enforcement of the judgment or render it impossible.
Unless an international agreement states otherwise, the foreign judgment holder must submit a petition to enforce the foreign judgment, along with the following documents:
b) an official document confirming that the foreign court decision has come into legal force (if this is not indicated in the decision itself);
c) a document certifying that an absent party (defendant) was timely and duly notified of the time and place of the foreign court proceeding;
d) the document that determines in which part or from what time the foreign court's decision is subject to enforcement (if not earlier enforced);
e) a document certifying the authority of the representative of the foreign judgment holder (if the petition is submitted by a representative); and
f) a duly certified translation of the above documents in the Ukrainian language or other language provided by a relevant international agreement.
Procedurally, the court must inform the debtor in writing
regarding the receipt of a petition to enforce a foreign court
judgment within a five-day term. In its turn, the debtor has a
one-month term to respond with any objections. After the one-month
term has passed, the court will issue a decision on the time and
place of the court's consideration of the petition and inform
the parties in writing no later than ten days prior to
consideration. The parties may request a rescheduling of the court
consideration for valid reasons. The court's decision to
satisfy or refuse the petition to enforce a foreign court judgment
will be sent to the parties within a three-day term from the date
of its issuance.
If security measures are determined necessary by the court based on the judgment holder's request, the court may order individually or a combination of such measures as:
b) a ban on undertaking certain actions;
c) an obligation to undertake certain actions;
d) a ban on other parties from making payments or transferring property to the debtor or performing other obligations in relation to the debtor;
e) the transfer of disputed amounts or property for custody to other parties.
In case the foreign court judgment reflects a debt amount in
foreign currency, the court will determine the amount in Ukrainian
hryvnias pursuant to the exchange rate of the National Bank of
Ukraine on the date of the issuance of the court's decision to
enforce the foreign court judgment. Alternatively, the court may
require compensation in foreign currency as indicated in the
foreign court judgment if the debt obligations arose and should
have been performed in such foreign currency pursuant to the
requirements of Ukrainian legislation (e.g., a foreign economic
agreement between an resident and a non-resident).
Should the court resolve that the foreign court judgment is subject to mandatory enforcement in Ukraine, the court will send an executive order to the state enforcement service on the basis of the foreign court judgment and its decision to grant permission for mandatory enforcement. The state enforcement service is part of the Ukrainian Ministry of Justice with subdivisions in all regional centers, cities, city districts, etc.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.