Recognition of foreign judgments in Ukraine.

Ukraine's accession to the Hague Convention of 2 July 2019.

 

In Ukraine, from 1 September 2023, the recognition of foreign judgments is regulated by the Hague Convention of 2 July 2019, in concert with Title VIII of the Code of Civil Procedure of Ukraine (hereinafter - of the Code of Civil Procedure of 'Ukraine).

Specifically, on August 29, 2022, the European Union joined the Hague Convention 2019 on the recognition of foreign judgments. On the same day, Ukraine deposited its instrument of ratification. The Convention will enter into force for the EU (and will bind the Member States pursuant to art. 216 TFEU, with the exception of Denmark) and for Ukraine on 1 September 2023. Therefore, from that date, it will be possible to recognize the Italian and EU sentences in Ukraine directly. 

Article 390 Code of Civil Procedure of Ukraine determines how and when the foreign decision recognized and executed in Ukraine is legalized (becomes effective), whether the recognition represents the execution of an international treaty, an agreement, the obligation to do, not do or give to which is determined by the Verkhovna Rada of Ukraine. Everything is obviously based on the principle of reciprocity and the adhesion of the other State to the aforementioned convention to which Italy has also adhered.

This procedure involves the submission at the location (residence) of the debtor/defendant or his activities (at the times and in the cases provided for. 2, art. 392 Code of Civil Procedure of Ukraine) at the court of general jurisdiction of the application for recognition for the enforcement of a foreign judgment in Ukraine.  Simply put, a Ukrainian company must be seised within the territory of its court.

Before going to court in Ukraine with the request for recognition of the foreign qualification, it is necessary to make sure that the deadline for appeals has expired (decree of finality of the sentence with finalization of the sentence) and that the right inherent in the sentence is not barred. So, as a general Ukrainian rule, this period is three years from the date of the applicable foreign judgment. The legislation does not establish the list of reasons for resuming the term (interruption of the limitation period). That is to say, in the case of failure to comply with the deadline for legalization of a foreign sentence, it is necessary also simultaneously with the request for execution of the decision, it is necessary to contact the Ukrainian judge to represent valid reasons why the recognition was not followed up .

Until the process is successful, attention must be paid to the need to comply with certain legislator requirements for this request, in particular:

• presentation of the subject - the right to submit an application for legalization endowed directly with the applicant (or his representative) or, if an international treaty, the other person (or his representative), active legitimacy;

• the request must contain:

1) the name (title) of the person submitting the request, the indication of the place of residence (stay) or position;

2) name (title) of the debtor, indication of the place of residence (stay), his location and the location of his assets in Ukraine;

3) the reasons that determine and legitimize the submission of the application (h 1 ° 394 GIC Ukraine);

• the list of documents attached to the application and the treaties to which it refers.

• The following documents must be attached to the request:

1) a certified copy of the foreign judgment for which enforcement is requested;

2) an official document that the foreign decision is effective and irrevocable;

3) a document certifying that the party against whom the decision of a foreign court is addressed has been duly served with terms for defense;

4) document defining the amount due;

5) the legalization of all documents.

It should be noted that the enforcement of foreign judgments is annexed only if carried out in accordance with the requirements of the Code of Civil Procedure of Ukraine. If the application is not accompanied by all the documents listed, the application in Ukraine must be rejected by the judge and returned to the applicant.

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HAGUE CONVENTION OF 2 JULY 2019 ON THE RECOGNITION OF FOREIGN JUDGMENTS

The 2019 Convention obeys, in its structure, a completely traditional scheme. In extreme summary, it lists, on the one hand, the conditions under which a contracting State (the requested State) has the obligation to recognize, and possibly declare enforceable, decisions coming from another Contracting State (the State of origin) . On the other hand, the Convention indicates the circumstances in which the authorities of the requested State are authorized to deny recognition or enforcement of a decision for which the obligation indicated above would otherwise exist.

It is worth paying attention if the amount indicated in the foreign judgment is specified in foreign currency, the judge must determine the amount in the national currency at the exchange rate of the National Bank of Ukraine on the day of judgment. In practice, although it is not provided for by the legislation, the applicant is required independently for each hearing to prepare a request for the calculation of the amount of recovery in the national currency at the exchange rate of the National Bank of Ukraine. Otherwise, the judge can postpone the final decision on the recovery of funds until the next hearing to make the corresponding calculation.

In any case, the decision regarding the procedure in question can be appealed.

Based on the ruling of a foreign court, the Ukrainian judge issues a warrant for execution of the title. However, in practice, the act does not contain explicit provisions on the need to recover the money from the debtor - it simply enforces a foreign judgment in its essence.

The conditions that qualify a decision as suitable for recognition concern, in particular, its origin. For this purpose, the Convention prepares jurisdictional "filters", or criteria of international or indirect jurisdiction. In fact, it subordinates the recognizability of a sentence to the fact that it was delivered in a country with which the case has a connection that the Convention itself considers appropriate.

Scope of recognition of foreign judgments in Ukraine.

The Convention deals with the effectiveness, in a Contracting State, of decisions (only those expressive of a jurisdictional cognitive activity, therefore excluding precautionary measures) rendered by the authorities of another Contracting State in civil or commercial matters (they are also assimilated to decisions, for the expenditure of the related executive effects, judicial settlements, where the conditions established for this purpose apply).

In fact, the material field of application of the Convention is limited to rulings made by state authorities in relation to cases of a private nature. Hence the exclusion of arbitration, explicit in the art. 2, par. 3, and the statement in art. 2, par. 5, that the Convention does not affect in any way the privileges and immunities due to States and international organizations. The public nature of the cases for which those privileges and immunities exist places the relevant sentences outside the boundaries of the uniform regime, but the clarification nevertheless appeared appropriate.

Decisions in bankruptcy matters, broadly understood, are excluded from the uniform regime, as are, among others, decisions concerning the validity and dissolution of legal persons and other entities, and those concerning registrations and transcriptions in public registers. Also excluded, because they are the subject (at least in part) of particular treaty instruments, often containing special rules on recognition, are decisions relating to the transport of goods and passengers, those concerning marine pollution and those relating to liability arising from nuclear accidents. Intellectual property is also among the excluded subjects.

Jurisdictional filters

The Convention, as noted, contains provisions on the so-called international jurisdiction of the judge of origin, or indirect jurisdiction. It thus outlines, in a uniform way, a classic requirement for recognition and enforcement which takes on importance in contexts characterized by a lower degree of mutual trust than that which, for example, permeates European civil judicial cooperation.

As for disputes regarding consumer or employment contracts, art. 5, par. 2, dictates a restrictive regulation, by virtue of which some jurisdictional filters of the art. 5, par. 1, must be considered inoperative (this is the case, in particular, of the filter of contractual matters, centered on the locus solutionis criterion), while other filters operate only when particular circumstances contribute (thus, for example, the acceptance of jurisdiction by of the defendant operates as a criterion of indirect jurisdiction only if it is expressed before the judge).

For disputes relating to residential rentals of properties, pursuant to art. 5, par. 3, a single filter, that of the situs rei.

The art. 6 concerns sentences regarding real rights on immovable property. These are removed from the filters of the art. 5 to be delivered to a rule of exclusive indirect jurisdiction, by virtue of which the sentences in question are effective if, and only if, they come from the State of the situs rei. This is the only situation in which, as anticipated, the Convention - in addition to imposing the recognition of sentences that satisfy the conditions set out therein - requires that States refrain from recognizing a provision which, vice versa, does not come from the country designated by the filter . This solution is corroborated by the clarification made in the art. 15, that the freedom recognized to the Contracting States to give effect according to their own internal rules to sentences that do not integrate the conventional requirements does not exist with respect to the falling decisions referred to in the art. 6.

With specific regard to sentences rendered on counterclaims, the convention distinguishes between sentences of acceptance and sentences of rejection. With regard to the former, it is necessary that the counterclaim derives from the same facts or from the same relationship side to side underlying the main claim (in the absence of such common derivation, the sentence may nevertheless be circular if other requirements are met, such as, for example, habitual residence of the main actor in the State of origin). The close connection between the two applications is not required in the event of a rejection sentence, but the sentence will not be likely to be circulated thanks to the requirement in question if the applicant was obliged to promote the counterclaim in order to avoid incurring foreclosures.

The impeding conditions of recognition and the procedure in Ukraine

The reference to national law - which must be determined taking into account the operating rules applicable in the case of multi-legislative systems (articles 22 and 25) - is however not total because the Convention, in addition to requiring us to proceed promptly and not to refuse recognition because the request should have been presented in another State (art. 13), expressly regulates some aspects of the procedure, such as, in particular, the documentation with which the applicant is required to accompany the request for recognition or enforcement (art. 12). Added to this is that the art. 14 prohibits making the presentation of the application for recognition subject to security deposits or other forms of guarantees for the sole fact that the applicant is a foreigner with respect to the requested State or neither domiciled nor resident in it: this is certainly a rule deferential to the right of access to justice, which, however, States can exclude by making use of the reservation referred to in the same art. 14.

Rejection of the petition/recognition: the judge can reject exceptionally under Article 396 Code of Civil Procedure of Ukraine or by reason provided by the international treaty (which is a priority).

Thus, the request can be denied:

1) If the foreign decision according to the law of the State in which it is made, has not entered into force and/or final;

2) If the party against whom the decision of a foreign court has been deprived of the opportunity to participate in the proceedings due to the fact that adequate notice of the proceedings was not given (defense deadlines);

3) if the decision is made on the case, the jurisdiction of which belongs exclusively to the jurisdiction of the Court or any other competent authority, in accordance with the law of Ukraine;

4) In case of lis pendens;

5) if the decision falls outside international treaties, the parties have agreed to be bound by Ukrainian law by the Verkhovna Rada of Ukraine;

6) If the subject of the dispute under the laws of Ukraine is not the subject of judicial proceedings;

7) whether the execution of the decision would threaten the interests of Ukraine;

8) In other cases, the established laws of Ukraine or the sentence is issued in fraud of the law.

The art. 9 then allows partial circulation of the sentence when the request for recognition concerns only a part of the sentence, or when the sentence can only be partially recognized due to the recognition requirements or impeding conditions. A particular impediment condition is provided for in the art. 10 with regard to decisions awarding exemplary or punitive damages: these decisions may not be recognised, or partially recognised, for the strictly compensatory portion

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The Firm, by virtue of the pro-European direction undertaken by Ukraine, thanks above all to the ratification of  international treaties in the last period, has perfected an indeterminable number of recognitions of foreign community, Italian or common law judgments before the Ukrainian courts.

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