INTERNATIONAL COMMERCIAL ARBITRATION COURT AT THE UKRAINIAN CHAMBER OF COMMERCE AND INDUSTRY REPORT of the activities 2012

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1 INTERNATIONAL COMMERCIAL ARBITRATION COURT AT THE UKRAINIAN CHAMBER OF COMMERCE AND INDUSTRY REPORT of the activities Measures as to the improvement of the activities of the arbitration institution In 2012 the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (hereinafter the ICAC ) celebrated its 20 th anniversary, and on this occasion the international research and practice conference entitled «International Commercial Arbitration in Ukraine and the World: Yesterday, Today, Tomorrow» was held on May 2012 in Kyiv. The anniversary conference brought together about 190 participants from 21 countries. During the reporting period a working group, set up at the ICAC last year, proceeded with work on preparation of proposals on amendments to the Law of Ukraine On International Commercial Arbitration and the ICAC and MAC Rules determined by the most recent experience of the arbitration institutions of the world and implementation into the above regulatory acts of innovations of the UNCITRAL Model Law on International Commercial Arbitration and its Arbitration Rules. Some amendments to the ICAC and MAC Rules were approved by the Decision of the UCCI Presidium of 25 October It stands to mention as a positive moment that in September 2012 Articles 394, 395 of the Civil Procedure Code of Ukraine were amended. Those amendments, in particular, are as follows: «The court upon application of the party filing a petition for the permission to enforcement of the foreign court judgment may order interim measures provided for by this Code. The interim measures may be granted at any stage of the consideration of the petition, if failure to order such interim measures may complicate or make the enforcement of the court judgment impossible». Currently a working group of the ICAC prepares proposals on enforcement of rulings (decisions) on security for the claim, which are issued upon application of a party by the ICAC President or the Arbitral Tribunal if already composed. At the end of the year 2012 the ICAC began to implement an electronic document management system, which, in addition to ensuring the registration of incoming and outgoing documents, parties to a dispute, status of arbitral proceedings as of specific date and for particular case and control of the duration of such proceedings, will eventually enable putting into operation electronic version of an arbitral case (by agreement of the parties). 1

2 2. Number of cases registered in 2012 During the period from 1 January till 31 December 2012 the ICAC registered 306 cases. The dynamics of cases registered in the ICAC from the year 2000 till the year 2012 is as follows: Dynamics of the number of cases of the ICAC for Consideration of cases in 2012 During the year 2012 the ICAC considered and rendered awards in 299 cases, of which 177 cases (59.2%) were considered by the Arbitral Tribunal composed of three arbitrators and 122 cases (40.8%) - by the Arbitral Tribunal composed of a sole arbitrator. From the general amount of cases that have been considered, 166 cases were registered in 2011 and 133 cases in The arbitral proceedings in 56 cases were terminated without consideration (mainly for non-payment of the arbitration fee by the Claimant or upon the Claimant s application) by the Orders of the ICAC President, including 3 cases registered in 2010, 34 cases registered in 2011 and 19 cases registered in the year cases are scheduled for the oral hearing in January-March 2013, 2 cases have been suspended and 105 cases are at the stage of the preliminary preparation for consideration, including 1 case registered in 2010, 7 cases registered in 2011 and 97 cases registered in the year In 2012 the consideration of cases of the ICAC has been conducted with the participation of foreign arbitrators from Germany, Norway, Belarus, Russian Federation, Moldova and Sweden. 2

3 4. Origin of the parties Parties to the cases, which were registered by the ICAC in 2012, were from 53 countries, including 45 far-abroad countries, 7 CIS (Commonwealth of Independent States) countries and Ukraine. The Ukrainian residents were the Respondents in 71 cases (23.2% of the total amount of cases) and the Claimants in 227 cases (74.18%). 7 disputes between foreign parties were referred to the ICAC as to international arbitration of a neutral state, including: disputes between Belize and Poland, Belize and United Kingdom, Estonia and USA (2 cases), China and China (2 cases), Austria and United Kingdom/ Belarus. There were two cases, both parties to which were the Ukrainian enterprises with foreign investments. Respondents from 41 far-abroad countries were the parties to 134 cases, including: Germany - 14 cases; Turkey 10 cases; United Kingdom - 9 cases; China 8 cases; Georgia and Cyprus 7 cases each; Italy and Poland 6 cases each; Hungary and USA 5 cases each; Austria and Czech Republic 4 cases each; British Virgin Islands, Denmark, France and Switzerland 3 cases each; Belize, Estonia, Greece, India, Iran, Latvia, Lithuania, Panama, Romania, Seychelles, Slovak Republic and United Arab Emirates 2 cases each; Afghanistan, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Columbia, Israel, Madagascar, Malta, Netherlands, New Zealand, Serbia and Spain 1 case each. Respondents from 7 CIS countries were the parties to 95 cases, including: Russian Federation 37 cases; Belarus 25 cases; Kazakhstan 16 cases; Moldova 11 cases; Armenia, Azerbaijan and Kyrgyzstan 2 cases each. 43 actions were brought against the Ukrainian residents by the claimants from 22 far-abroad countries, including: Belgium 9 cases; Switzerland 4 cases; China, Poland and USA 3 cases, France, Germany, Serbia and United Kingdom 2 cases; Austria, Commonwealth of Dominica, Cyprus, Czech Republic, Estonia, Gibraltar, India, Iceland, Lichtenstein, Malta, Slovak Republic, Turkey and United Arab Emirates 1 case each. 28 actions were brought against the Ukrainian residents by the claimants from the following CIS countries: Russian Federation 12 cases; Kazakhstan 9 cases; Moldova 5 cases; Belarus 2 cases. 3

4 Involvement of foreign parties in the cases of the ICAC Middle East 2% South and North America 5% Asia 5% Other 3% Europe 44% CIS (except Ukraine) 41% 5. Types of contracts In the majority of cases, disputes submitted to the ICAC in 2012, as well as in previous years, arose in the course of international purchase and sale (delivery) of goods, and concerned the breach of contractual obligations as to the opportune payment or delivery of goods. A lot of disputes relate to the quality of delivered goods and provision of services. To a lesser extent, submitted disputes deal with construction contracts, transportation and carriage of goods, leasing and insurance. In comparison with the preceding years a number of disputes concerning the bank services has increased. From the total amount of cases registered by the ICAC in 2012 (306 cases) 264 cases (i.e. 86%) related to the contracts international purchase and sale (delivery) of goods, 9 cases related to the contracts of provision of services (including bank services), 7 cases to work and labour contracts (including tolling contracts), 6 cases to contract of transport expedition, 3 cases to contract of loan, 2 cases to lease-purchase contacts, 2 cases to contracts of commission agency, 2 cases to contracts of guarantee, 1 case to a contract of lease, 1 case to a contract of insurance, etc. 4

5 transport expedition 2% loan 1% other 6% Types of contracts w ork and labour 2% provision of services 3% international purchase and sale/delivery provision of services w ork and labour transport expedition loan other international purchase and sale/delivery 86% 6. Duration of arbitral proceedings In 2012 the ICAC considered 299 cases, the duration of which (from the date of initiation of the proceedings in a case till rendering of the award in the case) was as follows: from 2 till 6 months 225 cases; from 7 till 9 months 60 cases; from 10 till 12 months 9 cases; over 12 months 5 cases. Duration of arbitral proceedings 3% 2% 20% from 2 till 6 months from 7 till 9 months from 10 till 12 months over 12 months 75% In 2012 in order to expedite arbitral proceedings the ICAC sent documents in the case (claim documents, notices, rulings on postponement, arbitral awards) to respondents in the majority of cases by means of courier mail. 5

6 7. Publications, international forums and seminars In the reporting period the work on popularization of the activities of the international arbitration institutions at the UCCI has been performed. In May 2012, on the occasion of the 20th anniversary of the ICAC, two publications were prepared by the ICAC at the UCCI (under the general editorship of Igor Pobirchenko, Honorary President of the ICAC, and Mykola Selivon, President of the ICAC), namely: - a collection of regulatory acts governing the activities of international commercial arbitration in Ukraine; and - a collection of articles of the arbitrators of the ICAC at the UCCI titled «International Commercial Arbitration in Ukraine and the World: yesterday, today tomorrow». The Ukrainian mass media permanently publishes the articles on activities of the ICAC and complex issues of arbitration practice. In particular, in April 2012 the journal of the Verkhovna Rada of Ukraine «The Viche» published the article of Mykola Selivon, President of the ICAC, titled «Ukrainian arbitration: 20 years of the activity conforming to the world standards». The Russian journal «The Arbitration» (No. 3/2012) published the information of Tetyana Zakharchenko, a member of the ICAC Presidium, on the international research and practice conference «International Commercial Arbitration in Ukraine and the World: Yesterday, Today, Tomorrow», dedicated to the 20 th anniversary of the ICAC. The aforesaid information of Ms. Zakharchenko was also published by the scientifically-practical legal journal «The Judiciary Practice» (No. 3/2012). In addition, the journal «The Judiciary Practice» almost in each of its monthly issues publishes separate awards of the ICAC and MAC at the UCCI, prepared by Tetyana Zakharchenko. During the reporting period the ICAC President, Vice Presidents and arbitrators took part in a number of the international conferences, which have been held in Ukraine and abroad. In particular, on 16 March 2012 the ICAC President Mykola Selivon and the ICAC arbitrator Kseniya Datsenko took part in the international conference «Unification trends in the ADR and diversity of national legal systems» in Nowy Tomyśl (Poland), organized by the Court of Arbitration at Nowy Tomysl Chamber of Commerce. On 3-4 April 2012 the ICAC President Mykola Selivon and the ICAC arbitrator Andrii Klymchuk took part in the international conference «Activity of the international arbitration in development of the legal settlement» in Yerevan (Armenia), organized by the Armenian Chamber of Commerce and Industry. 6

7 Mr. Selivon made a speech «Development of national arbitration institutions in the context of unification trends». On May 2012 the ICAC held the international research and practice conference «International Commercial Arbitration in Ukraine and the World: Yesterday, Today, Tomorrow» in Kyiv, dedicated to its 20 th anniversary. Extensive information about the Conference is stated in Para. 1 of this Report. On the day of the anniversary conference the ICAC and the Belgian Center for Arbitration and Mediation (CEPANI/CEPINA) signed a cooperation agreement. On 30 September 3 October 2012 the ICAC President Mykola Selivon took part in work of the 11 th International Legal Forum that was held in Sevastopol (Ukraine). On 10 October 2012 the ICAC President Mykola Selivon participated in the seminar «Protection of rights and interests of entities engaged in foreign economic actovities in the international arbitration» at the Zaporizhzhia Chamber of Commerce and Industry, and on 16 October 2012 in the similar seminar at the Cherkassy Chamber of Commerce and Industry. On October 2012 the ICAC President Mykola Selivon, the ICAC Vice Presidents Liudmyla Vynokurova and Evdokiya Pashchenko and also the ICAC arbitrator Yuriy Prytyka took part in the international conference «Actual problems of the international commercial arbitration» in Odessa. On 19 October 2012 the ICAC President Mykola Selivon participated in the annual meeting of the ICC European Arbitration Group, which was held in Paris (France). On 14 November 2012 the ICAC President Mykola Selivon made a speech «Foreign economic dispute resolution practice of the International Commercial Arbitration Court at the UCCI» at the international conference «International commercial transactions: fiscal and customs considerations» in Kyiv. On November 2012 the ICAC President Mykola Selivon took part in the international conference «Kyiv Arbitration Days 2012: Think big!» organized in Kyiv by the Ukrainian Bar Association. On 30 November 2012 the ICAC President Mykola Selivon, the ICAC Vice President Liudmyla Vynokurova and the ICAC arbitrator Olexander Krouptchan took part in the international research and practice conference «International Commercial Arbitration in the Russian Federation and the World: trends of development and modern practice» in Moscow, dedicated to the 80 th anniversary of the ICAC at the RF CCI. Mr. Selivon made a speech «National arbitration institutions in context of modern trends (through the example of Ukraine)». 7

8 MARITIME ARBITRATION COMMISSION AT THE UKRAINIAN CHAMBER OF COMMERCE AND INDUSTRY REPORT of the activities Number of cases registered in 2012 In 2012 there were 10 cases in the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry (hereinafter called the "MAC"), including 4 cases registered during the reporting period and 6 cases left from the year Among them 8 cases have been considered, 1 case is at the stage of the preliminary preparation for consideration and one case is scheduled for the oral hearing in February Out of the 4 cases registered by the MAC at the UCCI in 2012, the price of claim in one case amounted up to US Dollar 10,000; in two cases from US Dollar 10,001 to US Dollar 50,000; and in one case - from US Dollar 50,001 to US Dollar 100, Category of disputes Claims registered by the MAC in 2012 arise out of relationships concerning the following matters: affreightment 3 cases; agency 1 case. 3. Origin of the parties Respondents from abroad countries in the cases registered in 2012 were parties including: Panama 2 cases, Saint Vincent and the Grenadines 1 case; Estonia 2 case. Mykola SELIVON President of the ICAC and MAC at the Ukrainian CCI 14 February