Ukrainian Parliament passes ambitious court reform bill introducing amendments to the judicial procedures in the first reading

On 20 June 2017, the Ukrainian Parliament passed the first reading of draft Law No. 6232 "On Amendments to the Code of Commercial Procedure, Code of Civil Procedure, Code of Administrative Justice and other legislative acts" (hereinafter, the "Court Procedure Reform Bill").

The Court Procedure Reform Bill purports to amend more than 25 Laws of Ukraine governing the organisation and operation of the judicial system. When adopted, it will simultaneously restate three major procedural codes, i.e. the Code of Commercial Procedure, Code of Civil Procedure, and Code of Administrative Justice.

The Court Procedure Reform Bill is by far the most ambitious and far-reaching piece of legislation aimed at improving the judiciary introduced since Ukraine gained its independence in 1991. Below is a short overview of the most important changes that the Court Procedure Reform Bill introduces.

Electronic Court System

The Court Procedure Reform Bill introduces on Electronic Court System, which will allow uploading and downloading parties’ submissions, digitalised evidence and court rulings. It will also facilitate communications between parties and the court via encrypted electronic channels. The Electronic Court System will eventually dispense with almost all of the paperwork in Ukrainian courts.

New forms of Evidence

The Court Procedure Reform Bill also allows electronic documents and web-pages to the admitted as evidence in the Commercial Courts on a par with documentary evidence. Previously, only hard copies were admissible. Witnesses are also introduced to the procedure of the commercial courts for the first time, to provide auxiliary evidence where allegations cannot be proved by other sources of evidence. Previously, witness testimony could not be taken into account as evidence in commercial courts.

Interaction between State Courts and Arbitration

The Court Procedure Reform Bill provides for the powers of the state courts to issue injunctions in support of international arbitration, e.g. by ordering conservatory measures or preserving evidence.

The procedure of enforcement and setting aside of arbitral awards will be streamlined as all such applications will have to be submitted to the Kyiv City Court of Appeal. Rulings of the Kyiv City Court of Appeal shall be appealable to the Supreme Court only. Moreover, applications for recognition and enforcement of arbitral awards and for setting aside thereof can be considered in consolidated proceedings.

Alienation of Subject Matter Jurisdiction

According to the Court Procedure Reform Bill, the jurisdiction of the courts will be determined predominantly by the subject matter of the dispute in question. In particular, commercial courts shall resolve disputes which arise from commercial agreements, privatisation of property, protection of competition, as well as corporate disputes, whereas general courts shall consider labour, family and housing disputes.

Disputes concerning intellectual property rights (expressly provided in the amended Commercial Procedural Code of Ukraine) shall be considered by the newly-established Higher Intellectual Property Court, the judgments of which will be appealable to the Supreme Court.

The Court Procedure Reform Bill introduces a summary procedure for recovery of debt not exceeding approximately € 5,500 in a commercial proceeding. Insignificant cases (as determined by the court) may be resolved through a simplified procedure.

The Court Procedure Reform Bill may be subject to further modifications in the second reading prior to its final approval.

If you would like to receive further information in connection with the above, please contact Sergiy Gryshko and Andriy Grebonkin.