• Iryna Serbin

    Partner, Ario Law Firm. Attorney at law. Insolvency practitioner.Legal practice since 2007. Chairman of the Committee on Competitive Law of the Ukrainian Bar Association. Successfully implemented more than 10 large-scale projects in the area of ​​bankruptcy regarding large and leading enterprises of Ukraine. Was at the root of the organization of the e-commerce market property of bankrupt companies and liquidated banks. A member of the working groups at the Ministry of Justice on conducting reforms in the areas of bankruptcy and enforcement proceedings. Vice-president of public not governmental organization “All-Ukrainian Self-regulatory Association  of Insolvency Practitioners”. A graduate of the educational project of Agency for Legislative Initiatives and the Council of Europe’s Ukrainian School of Political Studies. Iryna was also a participant of the All-Ukrainian program Attorney of the Future. Specializes in the following practice areas: bankruptcy/restructuring, GR, commercial law, employment law, litigation

     

ARIO Law Firm

Address: 7 Panasa Myrnogo Street,
Kyiv, 01011, Ukraine
Tel.: +380 44 537 2290
E-mail: office@ario.law
Web-site: www.ario.law

ARIO began in 2013 under the brand of Ario Capital Group. Oleksii Voronko (Managing Partner), Julian Khorunzhyi (Senior Partner), Iryna Serbin (Partner) and Serhii Kyrychenko (Partner) were among the first founders. Bankruptcy and restructuring were the main areas of practice at that time. Rebranding took place in 2015, and in 2015-2016 the ARIO LAW FIRM team was strengthened by new partners (Dmytro Boyko, Yevhen Hrushovets), powerful counsels (Vladyslav Hryshchenko, Olha Reshetnyk, Andrii Fylyk, Oleksii Malovichko) and lawyers. We became known as Ario Law Firm. In 2017 Kyrylo Yukhno (L.L.M), who is a counsel, joined our team.

Since 2016 ARIO LAW FIRM has been unique and effective in litigation, corporate, commercial, banking law, bankruptcy and restructuring, enforcement proceedings, criminal practice, government relations, business protection and tax and legal consulting services. The main drivers of the ARIO LAW FIRM used to be and still are litigation, criminal practice, bankruptcy and enforcement proceedings and corporate law. ARIO LAW FIRM is also well known for its outstanding success in complex cases in bankruptcy, litigation, dispute resolution, corporate and white-collar crime, which have received considerable resonance both in the legal market and beyond.

ARIO LAW FIRM has a corporate and social responsibility.  Since its existence, ARIO LAW FIRM has been a partner of the Ukrainian Bar Association — all-Ukrainian public organization, founded in 2002, to bring together lawyers for a strong and influential professional community.  We also support the charity fund Promotion and Development, which is responsible for the development of children (in particular, internally displaced, but not limited to) in Ukraine, and is the general partner of the League of Students of the Ukrainian Bar Association.

 

Bankruptcy

As for Enforcement Proceedings

2017 became, without a doubt, the year of practical implementation of reform of the system of implementation of court decisions in Ukraine, by implementing in practice the main provisions of the Law of Ukraine On Bodies and Persons who Enforce the Enforcement of Court Decisions and Decisions of other Bodies and the new wording of the Law of Ukraine On Enforcement Proceedings, which were adopted in October 2016.

The above-mentioned laws changed the procedure of enforcement proceedings, removing excessive bureaucratic obstacles, improving the procedure for enforcement of court decisions and selling the arrested property as a whole, automating the majority of the actions of enforcers, introducing the Unified Register of Debtors as opened, and significantly reducing the corruption components.

From 5 January 2017, a mixed system of enforcement began in Ukraine, which involves the introduction of the institution of private agencies. In order to avoid the risk of abuse, private enforcers have established multi-level control over their activities which, at the same time, should not hinder the implementation of their activities, introduced a self-governing institution of private enforcers. A completely new program complex called Automated System of Enforcing Proceedings was developed and put into operation which, at the moment, has enabled the automation of the majority of daily operations of enforcers.

In the month of September, the first private performers got access to the profession and began to operate. It’s worth noting that the majority of private performers are merely former state officers (bailiffs).

As of now, 80 performers have already been included in the Unified Register of Private Enforcers of Ukraine, and in 2017 there were 3,300 enforcement proceedings for a total of UAH 710 million. Last year, private executives were limited to the amount of up to UAH 6 million per executive document. In 2018, private executives will work with executive documents to no more than
UAH 20 million each. Correspondingly, an increase in recoveries is expected.

At the end of last year, private enforcers created a self-governing body called the Association of Private Enforcers, elected governing bodies, and approved the Code of Professional Ethics. Furthermore, permanent disciplinary and qualification commissions were established that had already begun work and held their first meetings. At the same time, the first complaints by private enforcers have already appeared, the results of which we will see this year.

Among the main obstacles to reform of the enforcement system in Ukraine is the insufficiently regulated process of transferring cases from state to private performers; limiting the range of cases that can be conducted by private enforcers; insurance law; difficulties in private enforcers receiving recompense, limited functionality of the Automated System of Enforcing Proceedings, etc.

Also, for me one of the main obstacles to reforming the system of execution of court decisions in Ukraine is the monopoly position held by the State Enterprise SETAM, which carries out the sale of the arrested property in the proceedings of enforcement proceedings. We hope that the Ministry of Justice of Ukraine will soon take a decision on the introduction of ProZorro principles during the sale of arrested property in the procedures for enforcement proceedings, and thereby eliminate the artificially constructed monopoly. All these and other issues will be challenged by the enforcement system in Ukraine in 2018.

At the same time, it is impossible not to mention that at the end of the year the Grand Chamber of the European Court of Human Rights adopted an unprecedented decision in the Burmich and others v. Ukraine case, thereby bringing together more than 12,000 complaints filed against Ukraine in one case. Complaints relate to the systemic non-enforcement of decisions of national courts. All these complaints were removed from the ECHR register and transferred to the Committee of Ministers of the Council of Europe in order to monitor the execution of the decision in the Burmich v. Ukraine case. All the complainants in these cases must be paid the amounts awarded to them within 3 months, including moral compensation (EUR 2,000). Delay will result in the payment of a penalty by the Committee of Ministers of 3%.

The afore-mentioned decision has clearly demonstrated the systemic problems with enforcement of judgments that we currently have in Ukraine. The fact that the relevant laws were adopted and the implementation of the system of private enforcement clearly contributes to the overall positive implementation of judicial decisions in Ukraine. However, existing problems lie not only in the work of the enforcers, but also in the fact that many artificial barriers were created, as in the legislative and executive levels, that do not provide opportunities for alternative ways to enforce judgments in Ukraine. The absence of incentives for voluntary enforcement of judgments, the possibility for applicants to apply other mechanisms of legal protection in domestic courts that are related to non-enforcement of a court decision or its continued enforcement. As for me, this situation can be essentially resolved by national courts, updated by judicial reform on the general principle of the rule of law.

As for Bankruptcy

As for bankruptcy in 2017, it has not lost its relevance and was under the “watchful eye” of the International Monetary Fund. Passage through Parliament this year of the Draft Law On Amendments to Some Laws of Ukraine on Improving the Effectiveness of Bankruptcy Procedures No. 3132 failed, but for the first time, on the basis of the Ministry of Justice of Ukraine, the article discussed amendments to the bankruptcy law with all interested parties, including among others the Independent Association of Ukrainian Banks, Center for Commercial Law, Association of Lawyers of Ukraine, representatives of professional non-governmental organizations, trade organizations, judges, arbitration administrators, scientists.

The introduction of ProZorro’s principles in the sale of property in bankruptcy procedures, the legalization of remuneration of the arbitrator (remuneration of 5% of the amount of repayment claims paid by creditors is paid out in advance), changes in the sanation procedure are long-standing issues that require immediate implementation and practical application.

There are also a number of very controversial issues, including the automatic termination of the moratorium on satisfaction of creditors’ claims 130 days after bankruptcy proceedings have been initiated, is reduced to 130 days, and the unreal term of the procedure for disposing of property, removes the limitation period of 30 days for the filing of applications by creditors with monetary requirements that misbalances the debtor’s debt, all key credentials of the creditors committee are transferred to the creditors meeting, the procedure for approval of the creditors’ actively abandoning the problem of realization (sale) of property, withdrawing such a stage of the bankruptcy procedure as a world agreement, enabling the sale of state and communal housing stock, which is listed on the debtor’s balance sheet, etc.

Taking into account the foregoing, the elimination of obvious errors in the Law, along with innovations of the discussion can hide positive changes and create quite obvious risks.

At the end of the year, during discussions and negotiations, it was decided to compulsorily introduce into this bill provisions on the legislative regulation of the bankruptcy procedure for individuals.

Obviously, without increasing the efficiency of bankruptcy procedures, achieving more significant results in improving the investment attractiveness of the domestic market and ensuring ease of doing business in Ukraine is impossible and, therefore, changes are simply inevitable.

In turn, judicial practice and the inconsistency of decisions adopted by the High Economic Court of Ukraine with the legal positions of the Supreme Court of Ukraine in 2017 reached its peak. Therefore, one of the most important events of the year was the formation of a new Supreme Court and the great hope of the professional community that proper judicial practice will be established in the near future, which will be formed on the rule of law, legality and justice, which should have a positive effect on the entire legal system of Ukraine as a whole, and particularly the bankruptcy sphere.