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This article is a general guide to the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC).
ICAC Fundamentals at the Ukrainian Chamber of Commerce and Industry
The ICAC at the Ukrainian Chamber of Commerce and Industry was established in 1992 to resolve international commercial disputes. It operates in accordance with the Law of Ukraine “On International Commercial Arbitration” and its own procedural rules (the Rules).
ICAC provides services for the resolution of disputes arising out of international commercial relations, such as contractual disputes, investment disputes, trade disputes and other disputes arising out of international trade and business. The main condition is that one of the parties must be a non-resident of Ukraine (or the Ukrainian enterprise must have foreign investments)
Although the ICAC is located in Kyiv, it can decide disputes according to any law chosen by the parties. It has 116 arbitrators from 33 countries and brings together academics and practitioners recommended in arbitration by international rankings such as Chambers & Partners, Legal 500 and Who’s Who Legal.
Features of the ICAC:
- The parties may choose the language of the arbitration and the applicable law
- The ICAC has arbitrators from 33 countries
- Arbitrators have the power to take interim measures – seizure orders and other measures designed to preserve the status quo until a final award is rendered.
- Inexpensive compared to other arbitrations (e.g. LCIA)
- Fast resolution of the dispute – 6 months from the date of formation of the Tribunal
The ICAC dispute resolution process
Arbitration commences with the submission of a claim. The claim outlines the specifics of the arbitration clause and proposes an arbitrator. This sets the ICAC apart from the majority of other arbitrations, where the claimant initially submits a notice of arbitration.
The parties have the freedom to determine the number of arbitrators and the method of their appointment. In the absence of an agreement, the dispute is adjudicated by a panel of three arbitrators: each party nominates one, and the two nominated arbitrators then select the tribunal president. If no nominations are made by the parties or the arbitrators cannot reach a consensus, the President of the ICAC shall appoint the arbitrators.
The claim must be filed electronically and in three hard copies. If the claim adheres to the Rules, the ICAC will initiate proceedings and forward a copy of the claim to the respondent. The respondent is then required to submit a response to the claim and nominate an arbitrator within 30 days. The Tribunal may grant the parties an opportunity to provide additional submissions.
The Tribunal will decide whether an oral hearing is necessary. If a party requests a hearing, the Tribunal is obliged to organise one. The hearing can be conducted via video conference.
Following the exchange of clarifications and the hearing, the Tribunal proceeds to deliver its judgment. The decision is rendered within 30 days of the hearing’s conclusion. In exceptional circumstances, this time limit may be extended.
Security measures
The ICAC Rules permit parties to request interim measures (such as the attachment of property) at any point during the proceedings.
The Rules do not restrict the type or scope of interim measures. The primary principle is that interim measures must be proportionate to the claims made and must only be implemented when their necessity is substantiated.
Furthermore, either party may seek an interim measure from a state court. The party applying to the court for interim measures is required to notify the ICAC.
Expedited arbitral proceedings
The parties may agree on an expedited arbitration:
- The time limit for payment of the arbitration fee is 15 days (instead of 30 days)
- Time limit for filing a statement of defence is 10 days (instead of 30 days)
- Parties shall not file explanations other than the statement of claim and defence (with limited exceptions)
- No oral hearing
- Case shall be heard by a single arbitrator
- The arbitrator shall issue an award within 20 days of the end of the hearing (instead of 30 days)
How much does it cost to have a dispute heard by the ICAC at the UCCI?
The primary costs at the ICAC consist of the registration fee and the arbitration fee.
Upon submitting a claim, the claimant is required to pay a filing fee. This fee is fixed at US$600.
Once the case has been admitted for arbitration, the claimant pays an arbitration fee, which is dependent on the value of the claim
If the case is heard by a single arbitrator, the arbitration fee is reduced by 20%. The ICAC website has a calculator for calculating the fees.
The ICAC Presidium may, upon the suggestion of the Tribunal, increase the fee due to the complexity of the case.
Initially, the arbitration costs are borne by the claimant. However, after the award has been issued, the losing party shall bear the costs of the arbitration.
The parties may also recover legal costs if the Tribunal deems them reasonable and justifiable.
How long does it take to resolve a dispute?
The time limit for review shall not exceed 6 months from the date of formation of the Tribunal. However, the ICAC Presidium may extend this time limit at the request of the Tribunal or one of the parties.
Challenging the awards of ICAC at the UCCI
There is no appeal process within the ICAC at the Ukrainian Chamber of Commerce and Industry. However, an arbitral award may be challenged on limited grounds in a court, depending on the country designated as the seat of arbitration under the arbitration clause or the Rules.
Under Ukrainian law, an ICAC award under the Ukrainian Chamber of Commerce and Industry may be set aside in the following cases:
- The party applying for an appeal provides evidence that:
a) One of the parties to the arbitration agreement was incapacitated, or the agreement is invalid under the law to which the parties have subjected the agreement or, in the absence of such indication, under the laws of Ukraine; or
b) It has not been duly notified of the appointment of an arbitrator or of the arbitral proceedings, or for other valid reasons, it has been unable to submit its explanations; or
c) The award is made in respect of a dispute not covered by the arbitration agreement, or one which is not covered by the arbitration agreement, or contains decisions on matters outside the scope of the arbitration agreement. However, if the decisions on matters covered by the arbitration agreement can be separated from those not covered by such agreement, only that part of the award which contains decisions on matters not covered by the arbitration agreement may be set aside; or
d) The constitution of the international commercial arbitration or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement is contrary to a law from which the parties may not derogate, or, in the absence of such an agreement, was not in accordance with the law; or
- The court determines that:
a) The dispute, in light of its subject matter, cannot be submitted to international commercial arbitration in accordance with the law; or
b) The award is contrary to the public policy of Ukraine.
Enforcement of ICAC decisions under the Ukrainian Chamber of Commerce and Industry
The awards of the ICAC shall be final and binding on the parties. It is enforceable in any jurisdiction that has signed the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
More than 160 countries have signed this treaty, including the United States, the United Kingdom, China and most European countries. The Convention provides a simplified process for enforcing foreign arbitral awards, and courts in signatory countries are required to recognise and enforce such awards.
Any questions?
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