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Editorial

Ukraine enables itself to furnish procedural orders of foreign judicial and arbitral authorities

August 2012 - Corporate & Commercial. Legal Developments by ARBITRADE.

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The Cabinet of Ministers of Ukraine at its meeting on August 29 resolved [1] to amend its Resolution "On approval of the Order for the use of funds allocated in the state budget for payments related to implementation of judgments of foreign jurisdictional authorities rendered upon consideration of matters against Ukraine" (the "Government Resolution").[2] Appropriate amendments were prepared by the Ministry of Justice (responsible for protecting the state's interests in foreign courts and arbitral tribunals) in order to improve mechanisms to protect the rights and interests of Ukraine in foreign judicial and arbitral proceedings.


[1] Ministry news available in Ukrainian at: http://www.minjust.gov.ua/0/41295 (last visited 29 August 2012).

[2] Available in Ukrainian here: http://zakon3.rada.gov.ua/laws/show/408-2007-%D0%BF (last visited 30 August 2012).

 

The intent of the Ministry is to envisage a mechanism in the Government Resolution for implementation of procedural orders by foreign courts and arbitral tribunals concerning security for costs and security for the claim.

Presently, the Government Resolution allows paying out only judgments or awards of foreign jurisdictional bodies, procedural orders are not envisaged as one of the grounds for making payments from state budget (Clause 3 of the Government Resolution).

According to the Ministry, absence of the mechanism for furnishing security for costs or security for the claim could potentially create obstacles, for example, in investment disputes as regards challenging procedural orders and awards. The amendments are intended to bolster Ukraine's right to challenge procedural orders or apply for annulment of judgments and awards of foreign courts and arbitral tribunals issued against the state.

With this in mind, the Cabinet of Ministers resolved to amend the Government Resolution and create legal grounds for the implementation of procedural orders of foreign courts and arbitral tribunals relating to security for costs and security for the claim. It remains to be seen how these amendments would be introduced and what their practical effect would be as presently the proposed amendments have not been registered with any of the official registries, and the present comment is based on the official news of the Ministry of Justice of Ukraine.

This decision by the Cabinet of Ministers of Ukraine, coupled with the recent allocation of budgetary funds for the implementation of investment arbitration awards rendered against Ukraine, [1] is aimed at improving the international arbitration climate in Ukraine and serves as a strong proof that Ukraine earnestly seeks to implement arbitral awards and procedural orders of international arbitral tribunals though unfavourable.


[1] Law on the Amendment to the Law on the State Budget 2012 (4647-VI), April 12 2012, available in Ukrainian at: http://zakon1.rada.gov.ua/laws/show/4647-17 (last visited 30 August 2012).


For more information please visit www.arbitrade.com.ua

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