The Higher Commercial Court of the Ukraine Acknowledges Arbitration Rules of Domestic Arbitral Institutions

Irina Nazarova, Managing Partner, ENGARDE Attorneys at Law, for PLC Arbitration multi-jurisdictional monthly e-mail

The Higher Commercial Court of Ukraine has issued Informational Letter N 01-08/530, acknowledging, for the first time, that procedural rules of domestic arbitration bodies can be used by the courts as a source of law.

On 29 September 2009, the Higher Commercial Court of Ukraine (HCCU) issued Informational Letter N 01-08/530, acknowledging, for the first time, that procedural rules of domestic arbitration bodies can be used by the courts as a source of law.

In answering questions posed by the lower commercial court, the HCCU noted, among other things, that, unless the parties agreed otherwise, when remitting a case for consideration to a domestic arbitral institution or referring to a domestic arbitral tribunal in an arbitration clause, the parties thereby accept the procedural rules of such institutions as an integral part to the arbitration agreement. Therefore, the commercial courts should carefully examine the provisions of the procedural rules of the relevant arbitral institution and their correlation with the arbitration agreement when deciding whether the tribunal has been lawfully established.

If this position is applied by extension to international arbitrations, it would be a serious shift in practice for the recognition of international arbitral awards. So far domestic courts have been reluctant to accept the rules of the respective institutions as sources of law in recognition proceedings, and in practice would give very little weight to the provisions of institutional rules.