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Ukrainian district court allowed attachment of property located in Ukraine on the basis of UK proced

August 2012 - Litigation & Dispute Resolution. Legal Developments by Astapov Lawyers International Law Group .

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On 1 June 2012 Goloseevskiy district court of Kyiv city rendered a decision whereby it recognized and enforced the Order of the High Court of Justice Queen Bench Division Commercial Court (Order). As a result, Ukrainian court allowed attachment of Debtor’s assets located in Ukraine.

The above mentioned decision can be definitely treated as unprecedented one, since neither Conventions ratified by Ukraine [1] nor international bilateral treaties, providing for recognition and enforcement of foreign court decisions, does not directly provide the possibility to recognize and enforce procedural court decisions (orders, rulings etc). The Code of Civil Procedure of Ukraine [2] does not provide for the mechanism of recognition and enforcement of procedural court decisions as well.  

The analysis of the decision gives grounds to highlight the following new trends which previously were not common to Ukrainian court practice:

1) The district court granting enforcement and recognition of UK court order has applied a broad interpretation of the definition of "foreign court decision". In particular, previously Ukrainian courts recognized and enforced final decisions in cases on merits only. In view of above, when an interested party applied with application on recognition and enforcement of interlocutory court decision which was not final in its nature (procedural orders, rulings etc), Ukrainian courts denied in its recognition and enforcement. Thus, Goloseevskiy district court, allowing attachment of assets, has applied a new approach in interpretation of "foreign court decision". Such interpretation can have an important impact since it can be in use not only when reciprocity is applicable to the recognition and enforcement of court decisions, but also when recognition and enforcement takes place on the basis of international treaty.  

2) It should be noted that Goloseevskiy district in allowing a UK court order relied upon a reciprocity principle. It is definitely an innovative approach since the reciprocity principle was incorporated into Ukrainian legislation only in 2010 and it is quite a new in terms of both legal doctrine and court practice. It is also worth to note that the reciprocity is presumed under Ukrainian legislation, unless otherwise is proved by the interested party.

3) The district court has also innovatively approached a "jurisdictional issue". In particular, the court defined its jurisdiction on the basis of "assets location criterion" of Debtor rather than on the criterion of "place of Debtor's location".

Overall, the decision of Goloseevskiy district court may be treated as innovative one, since it reveals the new possibilities for the participants to international disputes, especially when one Party has its place of location in Ukraine or its core assets are located there. At the same time, the mechanisms and approaches which were applied by the district court are likely to be examined by the higher courts as to their compliance with Ukrainian law and international Conventions ratified by Ukraine. So, possibility of their approaches still needs to be tested.

[1]Minsk Convention "On Civil, Family and. Criminal Law Issues Legal Assistance and Legal Relationships of 1993; Treaty on Settlement of Commercial Disputes (the Kiev Treaty) dated 20 March 1992, etc.

[2]Main legislative act which establishes enforcement and recognition proceeding in Ukraine.