Legal Hotline | Digest of the main legislative changes in Ukraine 11.11.2021

Easier enforcement of foreign judgments: Draft Law No. 0132

The text of Draft Law No. 0132 “On Ratification of the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters” has been published on the official website of the Ukrainian Parliament.

According to the explanatory note to the Draft Law, ratification of the Convention and its further entry into force will allow Ukraine to use the universal mechanism of uniform rules created for the recognition and enforcement of judgments in civil or commercial cases. This will facilitate access to justice for the parties to the respective legal relations, create certainty and predictability for them, reduce costs and risks in commercial legal relations.

It should be noted that the Convention applies to the recognition and enforcement in a Contracting State of a judgment given by a court of another Contracting State, but shall not extend to tax, customs or administrative matters.

The Convention was adopted on 2 July 2019, as a result of the 22nd Diplomatic Session of The Hague Conference on Private International Law. Ukraine signed the Convention on 5 March 2020. At the present moment, apart from Ukraine, the Convention has been also signed by Israel and Uruguay.

Amendments to the Law “On Accounting”: what is planned?

The text of Draft Law “On Amendments to Article 9 of the Law of Ukraine ‘On Accounting and Financial Reporting in Ukraine’” has been published on the website of the Ukrainian Parliament.

The Draft Law stipulates that those enterprises which must provide public authorities with accounting and financial information in an electronic form as required by law must keep the accounting register in an electronic form.

Furthermore, according to the Draft Law, accounting registers completed in an electronic form must have the same details as those in a paper form and meet the requirements of Laws of Ukraine “On Electronic Documents and Electronic Documents Circulation” and “On Electronic Trust Services”.

The Draft Law is related to the provisions of Draft Law No. 6255 “On Amendments to the Tax Code of Ukraine in Terms of Implementing Electronic Audits (E-Audit)”. These two legislative initiatives in combination will create a mechanism for businesses to submit a standard SAF-T audit file and introduce electronic audits.

GOLAW analysed Draft Law No. 6225 in Tax Alert at the link.

Who is responsible for the accidental destruction of, or damage to, the property? The position of the Supreme Court

In its judgment in Case No. 207/3254/18, the Supreme Court declared unlawful recovering from the tenant any damages caused by the destruction of the property which the tenant was obliged to insure under the lease agreement.

The landlord filed a lawsuit against the tenant for damages for the leased premises destructed by the fire. The claims were based on the fact that under the lease agreement the tenant had been obliged to insure the leased property, but had failed to fulfill his obligation. The plaintiff also stressed that if the tenant would have fulfilled the obligation to insure the leased property, he could apply to the insurance company for compensation of the loss caused to the property by the third parties. Therefore, according to the plaintiff, it is the tenant, not the perpetrators of the fire, who must recover the damages.

The Supreme Court cancelled the appellate court’s resolution and upheld the first instance court’s decision on the dismissal of a claim.

The Court has noted that the provisions of the Civil Code of Ukraine do not establish the legal consequences in case if the contractual obligation to insure a leased property has not been fulfilled.

Although, as a general rule, the risk of the accidental destruction of, and accidental damage to, the property shall be borne by its owner, the parties to the lease agreement are not deprived of the opportunity to agree that such risk shall be borne by the tenant during the lease.

In the case under consideration, the parties to the lease agreement did not provide any legal consequences for the non-conclusion of an insurance contract by the tenant and did not impose on the tenant the risk of accidental destruction of, or damage to, the leased property, and therefore, such a risk shall borne by the owner.

Thus, according to the Supreme Court, the breach by the tenant of the contractual obligation to enter into an insurance contract, with the absence of a relevant legal consequence in the lease agreement, and the absence of redistribution of the risk of accidental destruction of property, shall not be the cause for the damage recovery.