Koziakov & Partners

Koziakov & Partners advised the respondent, the construction company, in commercial litigation against a state authority, who acted as the claimant. The claim concerned an unreasonable delay in completing the project, resulting in a substantial fine under the contract. The legal strategy, arguments and evidence introduced by our legal team were of great assistance to the client during the litigation. Following consideration of the dispute by the court of first instance and the appeal court, the penalty for the delay initially claimed by the claimant was substantially reduced, saving the client more than UAH 10 million. Our team advises various construction companies on infrastructure project implementation, contractual procedures, and post-contractual disputes.

Ukraine’s sanctions regime was established in the 2014 Law of Ukraine “On Sanctions” (No. 1644-VII) as a decisive legal response to Russia’s aggression. The law sets out a national legal framework for imposing restrictive measures on natural persons and legal entities whose conduct puts Ukraine’s sovereignty, national interests, security, and territorial integrity in danger. Since its adoption, the law has been evolving to address new concerns. Subsequent amendments expanded the scope of sanctions, streamlined the designation procedure, and provided for confiscation of assets through specialized judicial proceedings. A clear understanding of the sanctions process is important for any business or individual planning to invest in Ukraine or already having assets under its jurisdiction. Nature of sanctions Under Ukrainian law, sanctions are defined as special economic and other restrictive measures, applied to safeguard the national interests, security, sovereignty and territorial integrity of Ukraine. As the Grand Chamber of the Supreme Court of Ukraine explained in its decision dated 6 July 2023 in case No. 9901/376/21, «Sanctions under Law No. 1644-VII are not a form of punishment or legal liability.” Rather, “[t]hey serve as restrictive economic measures targeting individuals and entities that pose a threat to Ukraine’s national interests, national security, sovereignty, or territorial integrity». Grounds for sanctions Grounds for sanctions are set out in Article 3 of the Law of Ukraine «On Sanctions». It provides that sanctions may be applied to foreign states, legal entities, and individuals, entities under their control as well as other persons if their actions: Threaten national interests, security, sovereignty, or territorial integrity; Contribute to terrorist activities and/or violate human rights and freedoms, the interests of the society, or the State; Violate international law, facilitating the occupation of Ukrainian territories, expropriation or restriction of property rights; Misuse vessels or aircraft in activities creating actual or potential threats to Ukraine`s national interests, national security, sovereignty or territorial integrity. Sanctions may also be imposed pursuant to resolutions of the United Nations General Assembly and Security Council, or in accordance with decisions and regulations of the Council of the European Union. One of the most common reasons for imposing sanctions is the threat to Ukraine's national interests, security, sovereignty and territorial integrity through direct or indirect support for Russian aggression against Ukraine. (e.g. financing or supplying resources to Russian army), economic collaboration with entities in occupied territories, etc. Procedure for imposing sanction In Ukraine, sanctions are imposed by decisions of the National Security and Defence Council of Ukraine (NSDC) as a result of the following procedure: Initiation of proposal: The procedure begins with a formal proposal to the National Security and Defense Council of Ukraine (NSDC) from the Verkhovna Rada of Ukraine, the President of Ukraine, the Cabinet of Ministers of Ukraine, the National Bank of Ukraine, or the Security Service of Ukraine. NSDC Consideration and Decision: the NSDC reviews the proposal and evaluates its factual and legal bases. If the NSDC supports the proposed measures, it decides to impose sanctions - either personal or sectoral. Enactment: an NSDC decision must be enacted by a Decree of the President of Ukraine. Decisions on personal sanctions - measures applied against a person or legal entity - take effect immediately upon the enactment by a Presidential Decree. Decisions on sectoral sanctions – measures of a non-individualized character applied against a foreign state or industry in that state – must be both enacted by a Presidential Decree and approved within 48 hours by the Verkhovna Rada. They enter into force upon the parliamentary resolution. For example, in 2023 sectoral sanctions were imposed on some financial institutions of the Russian Federation and on defense industry entities of the Russian Federation and the Republic of Belarus. After being enacted, decisions on sanctions are published at the State Registry of Sanctions accessible at (https://drs.nsdc.gov.ua/), which is maintained by the NSDC. Legal Consequences and Remedies Article 4 of the Law of Ukraine «On Sanctions» sets out the following non-exhaustive list of restrictive measures that may apply individually or in combination: Asset freezing; Suspending economic and financial obligations; Preventing capital transfer from Ukraine. Cancelling or suspending licenses and permits; Banning entry into the territory of Ukraine (for individuals); or Confiscating assets. The Grand Chamber of the Supreme Court of Ukraine affirmed in its decision dated 6 October 2021 in case No. 9901/26/21 that only sanctioned persons or entities «whose rights, freedoms, or legitimate interests are directly affected», may challenge a sanctions decision before courts. Such challenges may be brought under the administrative proceedings before the Supreme Court of Ukraine, which acts as the first-instance court to hear such cases. Judgments of the Supreme Court may be appealed to the Grand Chamber of the Supreme Court, whose decision is final. Confiscation of assets as a sanction under Ukrainian law While some sanctions may be temporary, confiscation of assets is not. The Ukrainian law 'On Sanctions' defines confiscation as an 'exceptional measure' that may be applied to individuals or entities whose conduct has: Created a significant threat to the national security, sovereignty, or territorial integrity of Ukraine; or Substantially contributed, financed, or otherwise assisted third persons posing such threat, including through such action as: Paying taxes and fees to the state budget of the aggressor state, where the total of payments (excluding customs duties) over the last four consecutive tax quarters exceed the equivalent of UAH 40 million for a legal entity and UAH 3 million for an individual; Providing donations, charitable contributions, sponsorship assistance, or other gratuitous transfers of funds or other assets to state authorities or military administrations of the aggressor state, or persons engaged in the prohibited activities, where the total value of contribution in a year is not less than UAH 750,000. For confiscation process to commence, two requirements must be present: (1) a person or entity has been already subjected to an NSDC sanction in the form of asset freezing and (2) a confiscation claim has been filed during martial law or after its termination, provided that the claim was initiated while martial law was in effect. A confiscation claim is filed by the Ministry of Justice of Ukraine before the High Anti-Corruption Court (HACC), which has exclusive jurisdiction over such cases. If the claim is upheld, HACC issues a judgment ordering the transfer of assets to the state. The judgment does not take effect immediately and can be appealed to the HACC Appeals Chamber within 5 days. Following a review of the appeal, the HACC Appeals Chamber issues a judgment that becomes final and effective immediately. Assets following Confiscation Once the asset of a sanctioned entity has been confiscated, the state may auction them to the highest bidder that meets mandatory auction requirements. Article 388 of the Civil Code of Ukraine provides that state property sold to a bona fide purchaser cannot be reclaimed by a previous owner. At Koziakov & Partners, our team, experienced in Ukrainian and international law, provides legal support on matters related to sanctions and asset confiscation.

Ukraine`s public procurement market presents significant opportunities for international businesses, especially in light of the country`s current need for recovery and its integration with the European Union. The procurement system is designated to ensure transparency, competition and equal access for both domestic and foreign bidders. Public tenders in Ukraine can be broadly divided into 2 categories: Those financed by state and municipal budgets, which are regulated by national legislation and conducted through the electronic procurement system ProZorro, and Those financed by international financial institutions (IFIs), such as the European Investment Bank, IBRD, EBRD, which are governed by the procurement rules of these institutions. This article provides an overview of the legal framework and practical aspects of both procurement regimes in Ukraine, addressing state-powered tenders and those governed by IFI rules. State-financed public procurements State-financed procurement in Ukraine is regulated by the Law of Ukraine «On Public Procurement», which governs the acquisition of goods, works, and services funded from state and local budgets, as well as by the state-owned enterprises. This law, harmonized with EU public procurement standards under the EU – Ukraine Association Agreement, enshrines the principles of fair competition, transparency, non-discrimination, and the efficient use of public resources. ProZorro electronic procurement system As defined by the law, all state-financed procurements are carried out through the electronic procurement system ProZorro, which operates on the principle «so that everyone sees everything» and guarantees open access to all tender-related information at every stage of the process. The system is built around a central state-owned database, ProZorro, which collects and publishes all procurement data. Access to this database for the bidders is provided exclusively through 12 accredited electronic marketplaces, where bidders can register, search for tenders, submit proposals, and communicate with contracting authorities in a fully transparent and competitive environment. Types of procurement procedures The law provides for several procurement procedures, applied depending on the value of the contract, complexity and specific circumstances. One can distinguish the following types: Open tender: the primary and most competitive procedure provide by the law. It requires public announcement through the ProZorro system and unrestricted participation of all interested bidders, with proposals evaluated against predefined criteria. Restricted tendering: the two-stage procedure, applied when a prior qualification of bidders is necessary. At the first stage, the contracting authority conducts a qualification selection to identify candidates meeting predefined criteria, and only those shortlisted are invited to submit full tenders at the second stage. Simplified procedure: is a streamlined procedure, applied to purchases below the statutory threshold. Competitive dialogue: another two-stage procurement procedure used when the contracting authority cannot clearly define the technical specifications or the nature of the required services and has to consult potential suppliers to develop optimal solution. At the first stage, participants submit proposals without price, enabling structured negotiations with the authority, after which all qualified bidders are invited to submit final priced offers at the second stage. Negotiated procedure: the exceptional procedure, applied specifically in strictly defined cases, such as urgent needs, protection of intellectual property rights, defending rights and interests of the state etc. Under this procedure, the contracting authority conducts direct negotiations on price and contract terms with one or several suppliers. Note: during the period of martial law, the scope of situations in which the negotiated procedure may be applied has been significantly expanded under the Special rules for public procurement during wartime. All this procurement procedures are fully accessible to foreign businesses, allowing them to compete on equal terms with local companies in Ukraine`s public procurement market. Typical requirements for participation Ukrainian legislation defines that foreign businesses can fully participate in Ukrainian public procurement; however, they must meet qualification and compliance requirements, which may differ depending on the contracting authority and the specific tender. Typical requirements include: Proof of eligibility: absence of sanctions, bankruptcy, criminal convictions or affiliated relations with other bidders or the contracting authority officials. Bid security in the form of a bank guarantee. In addition to these typical requirements, contracting authorities may set specific qualification criteria (one or few). They may include the need to prove: Technical capacity: availability of equipment, material and technical base, and technologies. Availability of qualified personnel: staff with appropriate expertise and existence. Relevant experience: documented performance of similar contracts. Financial capacity: confirmed by financial statements. Also, Ukrainian public procurement law allows for the involvement of subcontractors (also referred to as co-executors), but only where the subject of the contract is the procurement of works or services, not goods. If a bidder plans to engage one or more subcontractors whose share of work equals or exceeds 20% of the contract value, the tender proposal must indicate their full name and location. Note: In case a bidder believes that the tender discrimination contains discriminatory requirements, it may file a complaint with the Antimonopoly Committee of Ukraine, which acts as the designated appeal body in public procurement and has the authority to order the contracting authority to amend the documentation. Internationally financed public procurements Procurements financed by international financial institutions (IFIs), such as the International Bank for Reconstruction and Development (IBRD), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and others are carried out in accordance with the procurement rules of the respective institution, while also taking into account the principles of public procurement set forth in the Law of Ukraine «On public procurements». The information about IFI-funded procurement opportunities is publicly available on the procurement portals of the respective institutions, such as the EBRD`s Client e-Procurement Portal (ECEPP) at https://ecepp.ebrd.com/. Contract terms are usually based on internationally accepted standards (e.g., FIDIC for construction projects), and disputes are resolved under international mechanisms. Types of procurement procedures International financial institutions apply procurement procedures that are harmonized with international standards and tailored to the specific needs of the financed project. While terminology may vary across institutions, the following types are commonly used: Open competitive bidding: is the primary method, allowing all eligible bidders to participate under equal conditions. Competitive selection procedure: is applied in cases, where selection is based not only on price but also on the quality of the proposed approach, methodology and team expertise. Direct contracting: is used only in exceptional cases – such as when only one supplier is capable of delivering the goods and services, or in cases of unforeseeable events or circumstances. The choice of procedure is determined by the project`s complexity, financing terms, and procurement strategy approved by the IFI. Typical requirements for participation The qualification requirements for bidders in IFI procurements are often more rigorous and internationally aligned. Common criteria include: Proven experience in similar projects. Financial and technical capacity. Compliance with environmental, social, health, and safety (ESHS) requirements. Absence of restrictive measures or sanctions, as well as of unfair competitive advantage or conflicts of interest. IFI procurements also permit the participation of joint ventures or consortium. These partnerships allow multiple companies to combine technical expertise, financial capacity, and knowledge to successfully perform under complex contracts. How to participate in public procurement in Ukraine? As was mentioned before, participation in Ukrainian public procurements is open to both domestic and foreign businesses, provided they follow the procedural steps set out by the relevant regulations. The process varies slightly depending on whether the procurement is state-financed or funded by international financial institutions, but the core requirements remain similar. State-financed procurements Announcements for all state-financed tenders are published on the Prozorro system. In order to participate, a bidder has to: Choose one of the 12 accredited marketplaces connected to Prozorro (depending on your personal preferences of the platform`s interface and terms of use) and register an account. Prepare and submit all the required documents in accordance with the tender specifications, including qualification documents and a bid security (if required). Pay a participation fee, the amount of which varies depending on the tender value (for tenders with a budget exceeding UAH 4 million, the fee is approximately EUR 85). Submit the bid electronically within the set deadline and monitor communications through the platform. Internationally financed public procurements For procurements financed by IFIs, announcements are published on the official procurement portals of the respective institutions. Participation generally involves: Creating an account on the respective IFI portal. Submitting expressions of interest or full proposals depending on each specific procedure. Providing all supporting documentation, which shows the compliance with the qualification criteria set by the institution. Following the institution`s specific instructions regarding bid submission, evaluation, and contract award. By following these steps, foreign companies can successfully access and compete in both ProZorro-based and IFI-funded procurement markets in Ukraine. At Koziakov & Partners, we have extensive experience guiding international businesses through procurement processes in Ukraine. Our team provides full support at every stage – from assessing tender opportunities and preparing compliant bids to representing clients before contracting authorities and ensuring smooth implementation of awarded contracts. With our extensive expertise, foreign companies can confidently navigate the procurement landscape and maximize their chances of success in Ukraine.

On 19 June 2025, the Verkhovna Rada of Ukraine enacted Draft Law № 7508 – a major revision to the country`s Public-Private Partnership (PPP) framework. This reform is aimed at accelerating private investment in post-conflict reconstruction and the development of strategic sectors of the economy, including the defense industry. What has changed? Special regime for recovery projects: A simplified procedure for preparing PPP projects will apply to the reconstruction of war-damaged infrastructure in key sectors such as healthcare, transport, energy, and education. The regime will be determined by the Government of Ukraine and remain in effect during martial law and for 7 years thereafter. Defense sector inclusion: The new law enables, for the first time, joint PPP projects between state and private defense companies. This legal breakthrough allows private investment in Ukraine’s military-industrial sector to support modernization and innovation. It also expands PPP opportunities across reconstruction, infrastructure, and broader economic development. Digitalization of PPP procedures: The new law introduces a two-tier electronic trading system for PPP projects. The entire PPP process – from publishing announcements to disclosing signed agreements – will be conducted online, ensuring transparency and alignment with EU practices. Enhanced investor protections: The new law introduces strengthened guarantees for private partners and creditors, including protection of rights, contractual stability, and non-discriminatory treatment throughout the lifecycle of PPP projects. Legislative changes will not affect the terms of already signed agreements. Expanded list of public partners: Under the new law, state-owned companies such as Ukrzaliznytsia and Ukrenergo can now initiate PPP projects directly, without excessive bureaucracy. This will enable them to attract private investment for the restoration of critical infrastructure, including train stations and power grids. Streamlined process for smaller PPP initiatives: For projects valued under € 38 million that involve only private financing, design, and construction of municipal facilities, the updated law allows decisions to proceed based solely on a concept note – eliminating the need for a full feasibility study. This fast-track approach will enable local communities to swiftly engage private partners in building essential infrastructure, from local roads to social facilities. What this means for businesses The updated PPP legislation creates a significantly more accessible and investor-friendly environment for businesses looking to participate in Ukraine`s recovery and long-term development. With simplified entry points for smaller projects, digitalized procedures, and expanded rights for state-owned enterprises to initiate partnerships, businesses across different sectors – from infrastructure and utilities to defense and social services – can now engage in PPPs with greater speed and certainty. Legal guarantees of contractual stability and non-discriminatory treatment further enhance the attractiveness of such ventures. At Koziakov and Partners, we are ready to support businesses at every stage of their PPP journey – from legal due diligence and regulatory compliance to strategic structuring and risk mitigation. With deep experience in public infrastructure and investment projects, we are committed to helping our clients unlock the full potential of the new PPP opportunities in Ukraine.

A team of lawyers from Koziakov & Partners has successfully defended the interests of a leading Ukrainian industrial group in a series of court disputes initiated by a competitor. The total value of the disputed procurement was approximately USD 50 million. The disputes concerned the interconnectedness of certain public procurements, discriminatory requirements in the tender documents, abuse of the right of appeal and inconsistent behaviour. One of the cases was finally resolved by the Supreme Court, which upheld the lower courts' findings that four procurements won by the client were justified and legal. In the other case, the opposing party withdrew the complaint during the appeal process, thereby acknowledging the unfoundedness of the claims regarding the illegality of the public procurement won by the client. The project was led by partners Andrii Pylypenko and Mykola Podpalov with support from associates Yevheniia Zhelezniakova and Myron Golovachov.

In its 2013 decision, the Antimonopoly Committee of Ukraine imposed a fine of UAH 34 million on leading dairy producer for allegedly misleading consumers of dairy products sold on the Ukrainian market. The case, which was initiated in 2013, went through two circles of review before it was finally resolved. In the second circle, the Supreme Court, in its decision of 18 March 2025, upheld the decision of the Court of Appeal to annul the decision of the Antimonopoly Committee. In the course of the case, the lawyers successfully applied the rules of Ukrainian competition law while implementing a comprehensive defence strategy involving industry experts and statements from the national standardisation agency. The project was led by partners Mykola Podpalov, Andriy Karnaukhov and Andriy Pylypenko, and senior associate Mikhailo Kuznietsov.

After a favourable outcome in arbitration, many foreign companies face another challenge - the debtor's refusal to comply with an arbitral award. In this case, it may be necessary to enforce the award. One of the key decisions is selecting the appropriate jurisdiction to recognize the award and ultimately recover funds from the debtor. In Ukraine, the enforcement of a final and binding arbitral award is only possible if the debtor: 1) is a Ukrainian resident, or 2) has assets within Ukraine’s jurisdiction. The Kyiv Court of Appeal conducts enforcement proceedings as a court of first instance, while the Supreme Court considers appeals as an appellate body. As a signatory to the 1959 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Ukraine has incorporated its uniform procedures into the Civil Procedure Code, which provides a clear and structured enforcement procedure. Article 478 of the Civil Procedure Code of Ukraine lists the grounds derived from Article 5 of the New York Convention that allow a court to refuse recognition and enforcement of an arbitral award. One of these grounds is public policy. The Supreme Court of Ukraine defines the concept of public policy broadly, demonstrating a flexible and pragmatic approach to ensure the resilience and adaptability of the legal system to emerging issues, and consistently holds that national courts must examine ex officio whether the recognition and enforcement of an award would be contrary to public policy. This duty exists regardless of whether public policy is invoked by a party opposing the recognition and enforcement of the award. One of the most recent issues is the enforcement of arbitral awards in favour of a sanctioned party or a party related to it. The Supreme Court made clear in its decisions that recognizing and enforcing an award would violate public policy if doing so results in the recovery of funds for the benefit of a sanctioned legal entity or if enforcement is sought for unlawful purposes, such as circumventing sanctions. Case № 824/100/19 was the first in which the Supreme Court, by its decision of February 2020, refused to enforce the arbitral award on the application of the sanctioned entity. In a most recent Case 824/107/23, a British Company sought enforcement of an arbitral award dated May 2023 and an additional arbitral award dated June 2023 in a contract dispute against a Ukrainian pipe plant. The dispute arose when the Ukrainian plant entered into an agreement with the Cypriot company to substitute the debtor — a trading house — for the monetary obligation related to the delivered goods, which was subsequently not fulfilled. The Cypriot company initiated arbitration against Ukrainian plant, however, while the arbitration was ongoing, it became subject to Ukrainian sanctions in May 2023. The claimant then, pursuant to Article 39 of the UNCITRAL Arbitration Rules, initiated its substitution by the new creditor (a British company) as the legal successor to the disputed obligation. As a result, the arbitrator issued an additional award on the change of Claimant in the case. During the enforcement proceedings, the Kyiv Court of Appeal granted the enforcement request. Its ruling was subsequently appealed to the Supreme Court. In its December 2024 decision, the Supreme Court overturned the Court of Appeal's decision and ultimately refused the enforcement. The Supreme Court reiterated that one of the new aspects of public order in Ukraine is the sanctions regime created by the adoption of the Law of Ukraine "On Sanctions" and that participants in civil transactions often try to use civil equity instruments (in particular, applications for recognition and enforcement of arbitral awards) for an unlawful purpose, not to ensure certainty in private relations or to protect rights and interests, but to create conditions for protecting assets from sanctions and/or their "circumvention". After reviewing the facts of the case, the Supreme Court concluded that the replacement of the claimant with the British Company in the arbitration took place after the sanctions were imposed on the Cypriot company as the original creditor. The sanctions included, inter alia, a temporary ban on the disposal of certain assets, the prevention of capital outflows from Ukraine, the suspension of economic and financial obligations and restrictions on commercial transactions. Thus, the Supreme Court found that the parties had 'circumvented' the sanctions. Specifically, the application for recognition and enforcement of the arbitral awards—issued in a dispute based on the claims of the sanctioned company—was filed by a British company, which had become the new creditor after the original creditor, a Cypriot company, got sanctioned. It is worth noting that in all such cases, the Supreme Court emphasizes that sanctions imposed by Ukraine against a creditor or a person associated with it do not terminate the debtor's obligations, nor do they make it impossible to enforce the arbitral award within the territory of Ukraine once the sanctions are lifted.