Ukraine joins a system of uniform rules on jurisdiction and cross-border enforcement of foreign judgments

On 21 March 2016, Ukraine signed the Hague Convention of 30 June 2005 on Choice of Court Agreements. The Convention declares as its main aim the promotion of international trade and investment through judicial co-operation.

The key provisions of the Convention address:

Exclusive choice of court agreements

According to the Convention, parties to international transactions dealing with civil or commercial matters can agree to have their dispute settled in the courts of one particular Contracting State. Thus, the Convention enables the parties to conclude an exclusive choice of court agreement (also known as “jurisdiction clause” or “forum-selection clause”). The Convention has, however, a number of exceptions. It is inapplicable, inter alia, to family law matters, rights in rem in immovable property and tenancies of immovable property, insolvency matters, anti-trust (competition) matters and others.

If the exclusive choice of court agreement is made, then only the chosen court has jurisdiction to consider this case. All other courts will in principal decline to consider the case. Exceptions include those cases where, for example, the exclusive choice of court agreement is null and void or a party lacked the capacity to conclude such an agreement.

Recognition and enforcement of judgments

Under the Convention, the judgments given by the court of any Contracting State chosen by the parties shall be recognised and enforced in other Contracting States. Such judgments include any decisions on the merits, including judicial settlements. The Convention is, however, not applicable to the interim measures of protection.

The Convention clearly states that there shall be no review of the merits of the judgment during the process by which judgments are recognised and enforced. Moreover, recognition and enforcement of the judgment may be refused only on the grounds determined in the Convention. For example, the judgment may not be recognised and enforced if the exclusive choice of court agreement was null and void, a party lacked the capacity to conclude the agreement, a defendant was not notified of the institution of the proceedings, etc.

In addition, the Convention specifies the documents that the party who is willing to recognise and enforce the judgment should produce. Those documents forwarded or delivered under the Convention are exempt from legalisation and any other formalities.

Ukraine’s accession to the Hague Convention is a huge and important step towards creating legal certainty for parties in dispute. The Convention creates a uniform set of rules governing cross-border enforcement of judgments, just as the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards does in cases of arbitral awards.

The Hague Convention will require further ratification by the Parliament of Ukraine. It will enter into force for Ukraine on the first day of the month following a three-month period after Ukraine has deposited its instrument of ratification with the Ministry of Foreign Affairs of the Kingdom of the Netherlands.