Ukraine: New ICAC Rules

By Tatyana Slipachuk
Vasil Kisil & Partners

This year the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry celebrated the fifteenth birthday of its activities with new rules. The fast development of Ukrainian arbitration has attracted lots of attention.

Within the last 15 years, the ICAC resolved 5,124 cases which, according to the On International Commercial Arbitration Act of 1994, are only international. The parties of the said disputes were from 102 countries. The ICAC has now entered a period of stability.

The new rules were adopted in April 2007 and came into force on 1 June. They replace the previous version from 1994 and reflect many of the same trends as reflected in the latest rules of other institutions of arbitration. The readability of the new rules was improved by sections and articles with headings, which lead to consolidation of related provisions.

The rules on jurisdiction have not been changed. It is now clear that the issue as to whether there are legal grounds for referring a claim to the ICAC initially is to be decided by its president. At this early stage, the ICAC president needs to decide whether an appropriate arbitration clause exists. If it is evident that the court has no jurisdiction, the documents filed with it are simply returned. Neither the law nor the rules provide for any communication with the other party at this stage. However, the claimant can continue sending the claim to the respondent and in this situation the ICAC president can, without prejudice to the acceptability of grounds as to existence, validity or scope of arbitration agreement, accept the case. In this situation the decision on ICAC jurisdiction will be taken by an arbitration tribunal.

The rules provide that the president or the arbitration tribunal, if the latter is already in place, can decide that security must be put up for the claim and remain in force until the final award. The rules specify that a party may also apply to a state court for interim measures of protection. However, the said provisions are not based on a relative provisions of civil procedural law of Ukraine, which makes them declarative by nature in the main.

The most substantial amendments introduced apply to the arbitration procedure. The time limit for rendering an award used to be six months from the date of receipt of the statement of claim and payment of the corresponding fee. However, under the new rules, a period of six months is calculated from the date the complete tribunal was formed.

The rules make clear that the parties may agree that no hearings are requested and that any party may ask for the hearing to be conducted in its absence. The rules also specify that a party may amend or supplement the claim or defence up to the end of the hearing, provided that there is no unjustified delay. This clarification is a valuable one as it calls for more attention from the tribunal to the proper presentation of each party’s case at an early stage. For the first time separate provisions were provided for appointment of an arbitrator in multi-party arbitration. The new rules introduced the institute of reporters that can be appointed at the request of an arbitration tribunal by the ICAC president from the employees of the ICAC secretariat. However, their duties are not clarified in full. Actually the reporter is entitled to provide the arbitrators with certain administrative assistance as to case development and to prepare the draft award on the basis of the arbitrator’s instructions. The rules also distinguish the postponement and interval in the hearings and provide for the staying of arbitral proceedings for an undetermined period.

The rules have opened up the possibility for arbitrators to render a partial arbitral award. For example, if a party accepts the claim partially. Certain changes were introduced in the regulation of the award on agreed terms.

Now the reservation that the arbitration tribunal can fix the amicable agreement of the parties in the form of the award on agreed terms only if there are no objections from its side, is deleted. The rules provide for a more detailed description of the final arbitral award. Taking into account that only brief description of the case is required, it looks inadequate that up till now ICAC rules have not provided for recording of hearings and issuance of protocols in order to ensure that all statements by parties will be taken into account. Many international disputes are of a complicated nature or connected with interlinked contracts or multiple parties. The latter makes the absence of recording unjustified.

However, in general terms it cannot be disputed that the new rules bring ICAC arbitration closer to mainstream international arbitration and provide more guidance on the conduct of arbitration.