Report on the ICAC at the UCCI activity for the first half of 2020

Quantitative and qualitative outcomes

During the first six months of 2020 the ICAC registered 153 cases, which is an increase of 68% compared to the same period last year. This demonstrates the end of the stagnation period and gradual increase in the number of cases, allowing the ICAC to reach the usual level of considering 300-500 cases annually. Given the COVID-19 pandemic as well as quarantine and restrictive measures taken in this regard, the ICAC experts predict the growth in the number of cases.

The parties to the cases registered by the ICAC were represented by 41 foreign countries. Speaking of the Ukrainian business, the parties to the cases represented mostly the capital of Ukraine (35 cases) as well as Lviv and Dnipro regions (23 and 17, respectively).

Despite the quarantine and restrictive measures, the ICAC at the UCCI traditionally provides for quick and efficient consideration of cases.

A steady increase is noted in the number of cases considered in English and Ukrainian as well as a corresponding decrease in a number of Russian-language cases. Thus, 8% of cases were considered in English, 35,5% in Ukrainian and 56,5% in Russian.

Branches, most actively using arbitration as a tool for dispute resolution, explicitly pinpoint the areas of the economy that are most operating, including in foreign markets. In the first half of 2020, these areas were chemical industry, agribusiness, light industry, metallurgy, energy and natural resources, machinery and food industry.

The ICAC activity during COVID-19 pandemic

During the COVID-19 quarantine and restrictive measures, the ICAC at the UCCI considered cases on a regular basis and in accordance with its Rules. All the cases were considered in compliance with the key principles of international arbitration such as effectiveness, time-efficiency, fair arbitral award issuing. The ICAC attempted to ensure the dispute consideration without unreasonable delays.

One of the most relevant and demanded opportunities was an ability provided by the ICAC Rules to participate in arbitration proceedings via the video-conference. This opportunity was actively used by parties to the cases as well as Arbitral Tribunal. The online cases consideration was held from both the ICAC equipped and the arbitrators’ own premises. This allowed not only to consider cases in compliance with all procedural deadlines, but also to save the financial resources of the parties, as neither they nor the arbitrators appointed by them incurred the costs of participation in the consideration.

The ICAC at the UCCI also responded to the situation in Ukraine and the world. Based on the need to balance the protection of rights and interests of the parties, their safety as well as the safety of the arbitrators and employees, the ICAC recommended that the Arbitral Tribunal and the users of its services 1) present the e-version of the documents related to the arbitration proceedings; 2) establish procedural schedules of cases consideration taking into account the current situation and the location of the parties; 3) adhere to remote interaction, hold organizational meetings and hearings via video or telephone conference.

Currently, the ICAC at the UCCI is working on the development of the online platform for its users and personal e-cabinets for the parties to the disputes, as well as on the modernization of the electronic document management system. These measures will allow the full digitalization of the administration of cases.

Due to the COVID-19 pandemic, a series of regional events scheduled for March-May to promote international arbitration, as well as roundtables with the Civil Court of Cassation and the Commercial Court of Cassation under the Supreme Court, had to be postponed until the end of quarantine and restrictive measures in Ukraine.

However, the ICAC at the UCCI has launched 2 online projects:

a series of free of charge webinars ICAC Webinars aimed at providing practical advice to the users of arbitration services, their representatives, and arbitration lawyers. In total, 4 webinars were held in May on the strategy of choosing the arbitration institution and arbitrators, drafting an efficient arbitration clause, providing practical advice on cases consideration in the ICAC as well as recognising and enforcing the arbitral awards. All the participants of the webinars were able to ask questions online and get answers during the webinar. Moreover, all the registered attendees received the summaries of the webinars. As of right now, the webinars were viewed more than 1000 times;
a new international project – Inside Arbitration – a series of expert talks on arbitration. Inside Arbitration is an open format of online dialogues hosted by the President or the staff of the ICAC with professional lawyers, arbitrators, judges, representatives of the business community and users of the ICAC services from many countries around the world as guests. The first episode of Inside Arbitration was live on the of July 4th, 2020, dedicated to the development of arbitration in Eastern Europe. During the online broadcast, the invited speakers shared their views on the current state of arbitration in their jurisdictions, the legal regulation of arbitration, the number of arbitration institutions, competition in Eastern Europe and the directions and prospects of arbitration in the future. Work on the next issue is ongoing.

To promote the ICAC at the UCCI among the foreign users, alongside the Facebook page, the ICAC created an official LinkedIn page and launched a series of English-language interviews with leading lawyers and Ukrainian arbitrators of the ICAC – Arbitration in Faces. During the interviews, well-known arbitrators share with the audience their thoughts on the benefits of arbitration, interesting facts and advice about the career of an arbitrator. The project was successful and interesting for the audience, so the Russian-language version of the interview is published in the publication “Yuridicheskaya prarkita”.

Status of goals for 2020

To execute the decision of the ICAC and UMAC Presidiums of January 30th, 2020 three Working Groups were created and staffed:

Working Group responsible for the development of the proposals for amendments to the Law of Ukraine “On International Commercial Arbitration”, procedural codes and other regulatory documents. The Working Group prepared proposals which were included in the draft Concept of Legislation Improvement on Judicature, the Status of Judges, Judiciary and Related Legal Institution. The Concept was developed by the Commission on Legal Reform, established by the Decree of the President of Ukraine of August 7, 2019 № 584;
Working Group responsible for the preparation of the proposals on the necessity of the development of the Rules on consideration of specific types of disputes. This Working Group was focused on the development of two additional Rules to the existing one: 1) for complex disputes, such as investment, corporate, privatization, construction, etc. The Rules will provide the increase of the arbitration fee, a different procedure for Arbitral Tribunal composition (including the appointment of the arbitrator who is not included to the ICAC Recommendatory List of Arbitrators) and certain specialities in the provision of evidence; 2) for disputes with a low price of claim to simplify the arbitration procedure by reducing the arbitration fee and duration of dispute consideration;
Working Group responsible for the development of the unified form of arbitration award. The Working Group has already developed a pro forma of arbitration award on termination of arbitration proceeding, which will have to be adhered to by the Arbitral Tribunals. The pro forma is based on the standards of international arbitration. At the same time, the pro forma does not affect the rights of the Arbitral Tribunal to freely state its position on the case in any way, but only provides general requirements for the form and structure of the award (title page, type and size of font used, necessary sections, requirements for abbreviations in the text, etc.).

In addition, the ICAC is actively working on the development of the Rules of Mediation. The Verkhovna Rada of Ukraine approved the first reading of draft Law № 3504 “On Mediation”, submitted by the Government of Ukraine. The ICAC experts, who were members of the Working Group under the Ministry of Justice of Ukraine responsible for development of the draft Law of Ukraine “On Mediation” and proposals on ratification of the UN Convention on International Settlement Agreements Resulting from Mediation, took an active part in preparing this draft Law. Therefore, after the draft Law is passed by the Parliament of Ukraine, the ICAC at the UCCI will have all the legal grounds for providing its users with mediation services.