Alternative dispute resolution: representation in international arbitration courts

A case may be brought before an international arbitral tribunal if there is an arbitration agreement or an arbitration clause in the contract between the parties. International arbitration deals with disputes arising from contractual and other civil law relationships in the field of international economic relations, provided that at least one of the parties is a commercial enterprise based abroad or has foreign investments. The scope of such disputes is broad: the sale and purchase of goods, the provision of services, transport, leasing, investment, credit and settlement transactions, insurance, joint ventures and other forms of international economic cooperation.

An international arbitration tribunal is a specialised body that hears commercial and business disputes between companies and entrepreneurs outside the national court system, including disputes between Ukrainian and foreign companies or between foreign business entities. Unlike a state court, cases here are decided by independent arbitrators whom the parties may choose themselves, as well as the venue and the applicable law. This provides the parties with greater flexibility and control over the process. The award is final and, as a rule, not subject to appeal on the merits.

Yes. Provided that the arbitration agreement is valid and the party has been duly notified of the proceedings, a refusal or failure to participate does not prevent the proceedings from continuing. The arbitral tribunal may conduct the proceedings and render an award even in the absence of one of the parties.

Yes. Arbitration awards are final and binding on the parties. Under the 1958 New York Convention, arbitral awards are recognised and enforced in more than 170 countries worldwide, making international arbitration one of the most effective tools for protecting rights in cross-border disputes.

Before applying to the court for recognition of an arbitral award, it is important to ensure that it is enforceable in Ukraine. Recognition is possible if the award was made in a state that is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, is final and has become legally binding, no more than three years have elapsed since it was made, and the debtor resides or registered in Ukraine or owns property within its territory. With regard to states that are not parties to the Convention, the principle of reciprocity applies – the award is enforceable unless the contrary is proven.

The duration depends on the complexity of the case, the chosen rules of procedure and the parties’ cooperation. On average, proceedings take between one and three years. Some arbitration institutions offer expedited procedures for less complex disputes, which can significantly reduce the duration of the proceedings.

Yes. At any stage of the proceedings concerning an application for recognition of an arbitral award, the applicant has the right to file a motion for interim measures – most commonly in the form of a seizure of the debtor’s movable or immovable property or funds in bank accounts. To have such a motion granted, it is necessary to demonstrate the risk that, without such measures, enforcement of the award in the future will be impeded or rendered impossible.

Under Article 478 of the Civil Procedural Code of Ukraine, a court may refuse to recognise an arbitral award in several instances. Firstly, if a party lacked legal capacity at the time of concluding the arbitration agreement or if the agreement itself is invalid. Secondly, if a party was not duly notified of the appointment of the arbitrator or the conduct of the proceedings and, for valid reasons, was unable to present its explanations on case. Thirdly, if the award concerns a dispute that goes beyond the scope of the arbitration agreement, or if the composition of the tribunal or the procedure did not comply with the parties’ agreement. Other grounds for refusal include the setting aside of the award or the suspension of its enforcement by a court of the seat of arbitration, the impossibility of referring the dispute to arbitration under the law, and the award’s violation of public policy in Ukraine.

If the debtor has transferred or concealed assets with the aim of evading the enforcement of the judgment, there are several ways to protect the creditor’s interests. Firstly, bankruptcy proceedings may be initiated against the debtor – within these proceedings, owners and directors may be held liable for the company’s debts if their culpability in causing the bankruptcy is proven. Secondly, the creditor has the right to seek a court order to set aside the transactions on the basis of which the assets were transferred. As a rule, such transactions bear the hallmarks of fraud: assets are transferred at an undervalued price to relatives or related parties, or are not paid for by the buyer at all.