On 11 October 2024, the ICAC held the annual International Arbitration Readings in memory of Academician Igor Pobirchenko. The Readings were held for the eleventh time in Ukraine and for the third year in a row in the context of a full-scale war. Nevertheless, the Readings have once again confirmed their status of the most anticipated arbitration event of the year and gathered about 100 delegates in person and 400 participants online.

The agenda of the 2024 Readings was built around the topic “Arbitration in the face of challenges: shaping the future today”.

Opening the international conference, Mykola Selivon, President of the ICAC and the UMAC, briefly outlined the changes and innovations that had been the ICAC’s response to the challenges of the war. These include the transition to electronic document management, online consideration of the vast majority of cases, transfer of documents and materials to a cloud storage abroad. These and other solutions allowed the ICAC to resume full operations within weeks after the start of the full-scale invasion and ensure the efficient administration of a record 584 cases in 2023, the biggest caseload in the last five years. Mr. Selivon also stressed that Ukrainian courts, in particular the Supreme Court, continue to demonstrate a strong pro-arbitration position, as evidenced by the landmark decisions of the Supreme Court in recent years.

Not only current challenges, but also future prospects were discussed in the welcoming remarks of the special guests of the International Readings. They included: Iryna Mudra, Deputy Head of the Office of the President of Ukraine (online), Larysa Rogach, Head of the Cassation Commercial Court within the Supreme Court,  Roman Babiy, Head of the Subcommittee on the Enforcement of Judgments of the European Court of Human Rights and Alternative Dispute Resolution of the Verkhovna Rada Committee on Legal Policy, Gennadiy Chyzhykov, President of the Ukrainian Chamber of Commerce and Industry.

Session I of the International Readings entitled  “International arbitration and investment attractiveness” was moderated by Inna Yemelianova, Vice President of the ICAC and the UMAC. During the first session, the speakers analysed a number of practical aspects of arbitration that affect the investment attractiveness of a country.

Lucas Mistelis, Senior Partner at Clyde & Co, compared approaches to solving the age-old issue of appointing arbitrators. Summing up, Mr Mistelis emphasised 4 criteria that should be taken into account when choosing an arbitrator: competence and expertise, efficiency, availability, and personal characteristics. 

Vasyl Krat, a Supreme Court judge at the Civil Cassation Court,  noted that in order to ensure the stability of an arbitration clause, it is necessary to avoid situations where a transaction is concluded with the intention of not performing it. In other words, there is a ‘bad invalidity’ in place. The purpose of civil contracts is to enforce them, and avoiding ‘bad invalidity’ is a way to ensure the stability of an arbitration clause, the Supreme Court judge said.

Oleksandr Melnychenko, acting Executive Director of UkraineInvest, spoke about the incentives for attracting foreign investment that had been developed and were in place at the state level. Ukraine, realizing the importance of providing an attractive, predictable and cost-effective environment for investors for both post-war reconstruction and further development, has developed various forms of state support, which are enshrined in the Law of Ukraine ‘On State Support for Investment Projects with Significant Investments in Ukraine’. UkraineInvest’s activities in the first half of 2024 resulted in executing investment agreements totalling EUR 96 million. Mr Melnychenko also stressed the importance of developing arbitration and other alternative dispute resolution methods in Ukraine. Ensuring timely and fair protection of investors’ rights is one of the main requirements and expectations of international and Ukrainian businesses that are ready to implement investment projects in Ukraine.

Sergiy Gryshko, Head of Sergiy Gryshko’s Attorney Bureau Queritius Ukraine, analysed both the advantages of Ukraine as a seat of investment arbitration and the issues that need to be addressed for Ukraine’s competitiveness as a seat of investment arbitration. Mr. Gryshko noted that Ukraine can already be a venue for investment disputes, the current legislation does not prohibit the choice of Ukraine as a seat for investment arbitration, many arbitration rules do not prohibit the parties from choosing Ukraine as a seat for investment arbitration, but it is advisable to supplement the Law of Ukraine ‘On International Commercial Arbitration’ with a special provision on the capabilities of considering investment disputes. In his opinion, the most promising institution to consider investment disputes is the International Court of Arbitration at the Ukrainian Chamber of Commerce and Industry (the ICAC), which has considerable experience and reputation in commercial arbitration, as well as well known arbitrators with the necessary expertise and experience to resolve both commercial and investment disputes. To this end, new Arbitration Rules should be adopted for the ICAC to consider investment disputes.

Session II of the International Readings –“Impact of military conflicts and sanctions on arbitration” – moderated by Volodymyr Nahnybida, Vice President оf the ICAC, offered the participants the views of international and Ukrainian arbitration lawyers, representatives of the judiciary and the Ministry of Justice of Ukraine on arbitrating cases involving sanctioned persons.

Inna Bohatykh, Deputy Minister of Justice of Ukraine, explained the nature of national and international instruments used to influence aggressor countries, including through the application of sanctions, and outlined the dynamics of sanctions against russia by the United States, the United Kingdom and the EU. The Deputy Minister stressed that sanctions were not a way to bring to justice, but a response and countermeasure to an illegal act, and the application of sanctions, in particular the sanction to recover assets of sanctioned persons during martial law, is a fair and proportionate measure. 

Oleh Vaskovskyi, Secretary of the Judicial Chamber on Bankruptcy Cases of the Commercial Cassation Court within the Supreme Court, briefly outlined the recent court practice of the Supreme Court related to the application of sanctions legislation. The speaker paid special attention to the analysis of the court practice on the application of the Resolution of the Cabinet of Ministers of Ukraine No. 187 dated 03.03.2022 ‘On Ensuring the Protection of National Interests in Future Claims of the State of Ukraine in connection with the Military Aggression of the Russian Federation’. Mr Vaskovskyi also discussed recent practical cases with the conference participants. 

The international speakers of the second session focused on the practice of arbitration and the operations of foreign arbitration institutions that consider cases with a sanctioned element, in particular cases related to the hostile actions of the russian federation against Ukraine. Michael Cottrell, Senior Associate at Pinsent Masons Law Firm, noted that some sanctions affected not only the mechanics of the arbitration process, but also the arbitration institutions and the parties’ legal advisers. In this regard, Mr. Cottrell shared some approaches to managing the risks arising from participation in cases involving sanctioned persons. Maria Kostytska, Head of Arbitration and Partner at Winston & Strawn in Paris , spoke about the peculiarities of preparing and enforcing arbitral awards in the face of challenges. In particular, she spoke about the arbitral awards related to the occupation of the Crimea (total number of cases – 12, total amount of compensation – USD 6.8 billion; the tribunals recognised their jurisdiction in 10 cases, and the proceedings in 5 cases are ongoing), as well as arbitration cases related to the full-scale military invasion into Ukraine in 2022.

The second session was concluded by Olga Kostyshyna, Counsel and Head of International Arbitration at LCF Law Group, who summarized facts and figures about arbitration proceedings during the martial law. Olga drew the audience’s attention to the rapid growth of cases administered by the ICAC during the war – 584 cases in 2023, and also highlighted the growing number of cases in the defence industry, in which Ukraine had been among top 5 international arbitration institutions for two years in a row. Ms Kostyshyna also analysed several cases illustrating the wartime court practice. Predicting the development of arbitration practice in the near future, the speaker shared her expectations regarding the emergence of new types of arbitration cases, in particular those related to counter-sanctions imposed by the russian federation, energy disputes as a result of russian attacks on the Ukrainian energy system, investment arbitrations against russia for damages caused in Ukraine.

Closing the XI International Arbitration Readings, Mykola Selivon outlined the main tasks of the ICAC for the coming year. Among them, the President of the ICAC mentioned the full digitalisation of case administration and the expansion of the ICAC’s competence as a platform for investment dispute resolution.

You can view photos from the event here.