В статье рассматриваются актуальные вопросы, связанные с признанием и приведением в исполнение в Украине решения иностранного арбитража. В частности, вопрос об исчерпывающем перечне документов, которые должны быть приложены к ходатайству о признании и исполнении решения иностранного арбитража, а также о распределении бремени доказывания в подобных делах, в особенности, об обязанности должника доказывать наличие оснований для отказа в признании и исполнении решения иностранного арбитража. Особый интерес настоящая публикация вызывает рассмотренной в ней судебной практикой.
The issue of recognition and enforcement of international arbitral awards is not new for Ukrainian courts. The procedure is established in chapter VIII of the Civil Procedural Code of Ukraine (hereinafter — the Code), and in several places makes references to the provisions of international treaties to which Ukraine is a party.
The main problem in application of the Code arises in practice when local courts (and sometimes appellate and cassation courts as well), which are authorized to consider applications for the recognition and enforcement of arbitral awards, disregard the obligatory rules of the international agreements and groundlessly apply irrelevant provisions of the Code. As a result, the courts de facto prevent Ukraine from being recognized as an “arbitration friendly” jurisdiction.
Groundless application
According to Article 394 of the Code, when applying to the court with a request for recognition and enforcement of an arbitral award, an applicant (as a rule, the creditor under the award) is obliged to submit a number of documents to the court. At the same time, according to Paragraph 2 of Article 394 of the Code, in order to identify what documents need to be submitted, the applicant should first check the provisions of the international agreements ratified by the Verkhovna Rada of Ukraine (Ukrainian Parliament). In its turn. Paragraph 3 of Article 394 of the Code sets the list of documents that should be submitted with the application (1) in the absence of such international agreement(s), or (2) should the existing agreement(s) fail to specify which documents are required.
Ukraine is a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958, the Convention), which became effective for Ukraine (initially for the USSR) on 10 January 1961.
Given this, in view of the obligatory application of the Convention by Ukrainian courts and according to Paragraph 2 of Article 394 of the Code, when applying to the state court with a request for recognition and enforcement of an arbitral award, an applicant should submit to the court only originals or certified copies of (1) the arbitral award itself and (2) the arbitration agreement (along with certified translations thereof into Ukrainian).
When applying to the state court with a request for recognition and enforcement of an arbitral award, an submit to the court originals or certified copies of (1)the award itself and (2)the arbitration agreement
This notwithstanding, Ukrainian courts have established a widespread practice of requesting the applicants to submit additional documents, in particular, confirming proper notification of the debtor as to the time and place of arbitration proceedings. The courts often dismiss applications on recognition and enforcement of arbitral awards on the grounds of improper notification of the debtor because the applicant does not provide the court with evidence that the debtor was properly notified (which under Article 4 of the Convention and Paragraph 2 of Article 394 of the Code is not required at all).
It remains unclear why the courts ignore the direct provisions of the Convention, as well as the rule set forth in Paragraph 2 of Article 394 of the Code, and in fact review the legality of arbitration proceedings.
The burden of proof
Another problem relates to the application of the provisions of Article 394 of the Code, which concern the enforcement for an award. There is a tendency for Ukrainian courts to shift the burden of proof as to the non-existence of grounds for dismissal of the application for recognition and enforcement of an arbitral award from the debtor to the creditor.
At the same time, Paragraph 1 of Article 396 of the Code states that the international agreements ratified by Ukraine should determine the list of grounds for dismissal of an application for recognition and enforcement of arbitral awards. Paragraph 2 of this article provides a separate list of grounds for dismissal of an application, which shall be applied only (1) in the absence of such international agreement(s). or (2) should the existing agreement(s) fail to determine such grounds.
Article V of the Convention foresees that an application on recognition and enforcement may be dismissed at the request of the debtor if the debtor provides evidence of grounds for such dismissal from the exhaustive list.
Given this, the burden of proof as to the existence of such grounds and. inter alia, improper notification of the debtor about the arbitration proceedings, rests with the debtor.
Surprisingly, court practice on this matter is not uniform. Thus, in a number of court rulings the cassation court applied the provisions of Paragraph 1 of Article 396 of the Code incorrectly, mistakenly referring to Paragraph 2 of Article 396 and shifted the burden of proof as to existence of grounds for refusal to recognize and enforce the award to the creditor. As a result, the creditor was obliged to confirm (provide evidence) that there were no such grounds. Such an approach contradicts the principle of the obligatory character of awards and the enforceability thereof and therefore violates the Convention and the Code.
The only official instrument (although not binding for courts), which is in some way recognized by the courts when dealing with the recognition and enforcement of arbitral awards, is Resolution of the Plenary Session of the Supreme Court of Ukraine No. 12 of 24 December 1999 On i’ii’ Practice of the Consideration by the Courts of Applications on Recognition and Enforcement of Decisions of Foreign Courts and Arbitration Institutions and on the Cancellation of Decisions. Rendered in International Commercial Arbitration in Ukraine. This Resolution, however, does not contain direct clarifications that might serve to eliminate situations in which court decisions are issued in violation of the Convention.
At the same time, back in 2010. the Supreme Court of Ukraine, when reviewing an appellate court’s decision in a case at an application of (eg. of 18 November 2008 in case N&2-K-1/2008 I6-21496CB08). of 15 June 2011 in case No 2-3058 10 l6-463tol0l. of 17 August 2011 in case No 22q-373 2010 (6-15286« 111. of 30 November 2011 In case No. 22U-4091 11 (6-18499CB11) RosUkrEnergo AG on recognition and enforcement of awards of the Arbitration Institute of the Stockholm Chamber of Commerce of 30 March 2010 and 8 June 2010 against NJSC Naftogaz of Ukraine, staled that “given that the obligatory character of the arbitration agreement and enforceability thereof are presumed under the international and national legislation, the burden of proof as to existence of such grounds |for refusal to recognize and enforce the arbitral award] shall be borne by the party objecting to the recognition and enforcement of the arbitral award”.
As a result, the Supreme Court of Ukraine reached the conclusion that “it was NJSC Naftogaz of Ukraine (the debtor), who was obliged to prove the existence of grounds for refusal to satisfy the application for recognition and enforcement of the arbitral award”.
Additionally, on 23 April 2014, when reviewing a cassation court’s decision due to inconsistent application of the same provisions of substantive law, the Supreme Court of Ukraine indicated that in view of the fact that the recognition and enforcement of arbitral awards in Ukraine are governed, in particular, by Article V of the Convention “the burden of proof as to the existence of grounds for refusal to recognize and enforce an arbitral award shall be borne by the party objecting to such application, moreover, there are no grounds for the application of Paragraph 2 of Article 396 of the Code”.
As under Article 360-7 of the Code, conclusions reached by the Supreme Court of Ukraine are “binding for all state authorities, which in course of their activity apply the legal act. containing the indicated rule of law, as well as for all courts in Ukraine”, today we can clearly see the possibility of unification and harmonization of the practice of Ukrainian courts in resolving the issue of which party to arbitration proceedings bears the burden of proof as to the existence of grounds for refusal to recognize and enforce an arbitral award in contrast, the question of the legality of the courts extending the list of documents to be submitted with such applications remains unresolved due to the absence of applicable official explanations.
Today we can dearly see the possibility of unification and harmonization of the practice of Ukrainian courts in resolving the issue of which a party to arbitration proceedings bears the burden of proof as to the existence of grounds for refusal to recognize and enforce an arbitral award
Автор: Kseniia V. Pogruzhalska
The Ukrainian Journal of Business Law. – 2014. – № 10. – Р. 16 – 17.