Ukraine takes one step closer towards ratification of 2005 Hague Convention on Choice of Court Agreements

Ukraine

On 9 September 2021, the Ukrainian parliament passed the Draft Law “On amendments to certain Ukrainian laws due to ratification of Convention on Choice of Court Agreements” in the first reading, and in the process Ukraine has finally reached the last milestone on the road to ratification of the Hague Convention of 30 June 2005 on Choice of Court Agreements.

The law to be adopted will make the notion of “choice of court agreements” fully operational under Ukrainian legislation and amends:

  • the Civil Procedural Code of Ukraine;

  • the Commercial Procedural Code of Ukraine; and

  • the Law of Ukraine “On International Private Law”.

The Hague Convention

The Hague Convention ensures the judicial co-operation of states and the rights of parties to agree on a court of foreign jurisdiction, which considers disputes under international commercial and civil contracts.

In particular, the Hague Convention allows parties under international commercial and civil contracts to agree on resolving their disputes in a specific court located in the territory of any state that is a party to the Hague Convention.

The ratification process

On 21 March 2016, Ukraine signed the Hague Convention.

On 15 June 2021, the Ukrainian Parliament ratified the Hague Convention by having adopted the Law “On ratification of Convention on Choice of Court Agreements”. This law will enter into force upon enactment of the Draft Law.

On 9 September 2021, the Ukrainian parliament passed the Draft Law in the first reading.

The most significant amendments proposed in the Draft Law include the following:

  • explicit provisions in the Civil Procedural Code of Ukraine and Commercial Procedural Code of Ukraine to reflect the parties’ right to agree on a specific court or state where their disputes will be resolved;

  • a separate clause explicitly allowing parties to choose foreign courts as a venue for consideration of any private disputes arising between parties in the Law of Ukraine “On International Private Law”, which establishes that:

  • parties have a right to agree on one or several defined courts of a specific state as venues for consideration of their disputes arising from private relations, provided that such relations include a foreign element;

  • the choice of court agreement will be in writing;

  • the invalidity of the contract does not lead to the invalidity of the choice of court agreement (i.e. the separability of the choice of court agreement);

  • exclusive jurisdiction of Ukrainian courts over certain disputes with a foreign element set by the law cannot be changed under choice of court agreements.

The Draft Law is now being prepared for its second reading in the Ukrainian parliament. To enter into force, the Draft Law must be approved in its totality by the Ukrainian parliament in the second reading, signed by the President of Ukraine, and published.

CMS will continue monitoring the status of the Draft Law and will keep you updated on any developments. Our previous update on this topic can be found here.

For more information on the Hague Convention and choice of court agreements, contact your regular CMS advisor or local CMS expert: Olga Shenk and Maria Orlyk.

Legislation:

  1. Hague Convention of 30 June 2005 on Choice of Court Agreements;

  2. Law No. 1544-IX “On ratification of Convention of Choice of Court Agreements ” dd. 15 June 2021;

  3. Draft Law No. 5120 “On amendments to certain Ukrainian laws due to ratification of Convention of Choice of Court Agreements” dd. 19.02.2021.

Authors: Olga Shenk, Maria Orlyk, Viktoriia Tolochko, Oleksandr Protsiuk, Diana Valyeyeva.