The III International Arbitration Readings in Memory of Academician Igor Pobirchenko

13/11/2015

The III International Arbitration Readings in Memory of Academician Igor Pobirchenko

On November 13, 2015, the Ukrainian Chamber of Commerce and Industry hosted the III International Arbitration Readings in Memory of Academician Igor Pobirchenko. The event was jointly organized by the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry, and it was supported by the United Nations Commission on International Trade Law (UNCITRAL).

In 2015, the world celebrates the 35th anniversary of the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), which is widely applied in the field of international trade and also in the course of resolution of international commercial disputes both in international commercial arbitration and in public courts. Therefore, it was quite logical for the organizers to dedicate the event to the subject matter that reads “Applicable Law in International Commercial Arbitration. Practices of Application of the Vienna Convention on Contracts for the International Sale of Goods”.

The selected subject enabled the participants to precisely discuss one of the most important issues of arbitration proceedings; what law should be applied in the course of proceedings on a particular dispute and to what extent can the litigants decide at their discretion on the matters and on the lineup of the arbitrators when choosing them? Furthermore, the discussion of the practical application of the Vienna Convention on Contracts for the International Sale of Goods, which became one of the most important instruments of international trade over the last 35 years, turned out to be so interesting for the audience that it took half of the time assigned for the event.

More than 200 participants from Ukraine, Austria, Belarus, Poland, Sweden, Serbia, USA and Germanyattended the venue.

The welcoming speeches for the participants of the event were delivered by Mr. Oleksii FILATOV, the Deputy Head of the Administration of the President of Ukraine, the Head of the Council for Judicial Reform under the aegis of the President of Ukraine and the Secretary of the Constitutional Committee; by Mrs. Yuliia KOVALIV, the First Deputy Minister for Economic Development and Commerce of Ukraine; by Mr. Cyril EMERY, the UNCITRAL representative; by Mr. Manfred HEIDER, the Secretary General of the Vienna International Arbitration Center at the Austrian Federal Chamber of Economy; by Mr. Gennadiy CHYZHYKOV, the President of the Ukrainian Chamber of Commerce and Industry; and by Mr. Mykola SELIVON, the Head of the ICAC and MAC at the Ukrainian Chamber of Commerce and Industry.

At the opening ceremony of the III Arbitration Readings, Mr. Mykola SELIVONas the Head of the ICAC and MAC at the Ukrainian CCI underlined that the current event was held with the support from the UNCITRAL as the United Nations major body in the field of international trade law. The support to the event from such a respected institution and its participation in it do acknowledge that Ukraine has been recognized as a country with good arbitration, and it also shows that the UCCI arbitration bodies have earned recognition worldwide. This was further acknowledged as the ICAC at the Ukrainian CCI and the famous Vienna International Arbitration Center at the Austrian Federal Chamber of Economy signed a cooperation agreement in the course of the event.

While saying his greeting words to the event participants, Mr. Oleksii FILATOV as the Deputy Head of the Administration of the President of Ukraine said the following: “It has already been for decades that the discussion about the importance of arbitration is held in professional circles of Ukraine. This institution has been established and works freely in Ukraine, but it could also be applied to a greater extent based on the examples from international practices available. There are numerous initiatives regarding international arbitration, and they are being considered as a part of our judicial reform these days. Arbitration is efficient not only because it is an alternative way to resolve a dispute, but also because Ukraine’s judicial practice offers particular problems that promote those disputes to be referred exactly to arbitration. This institution reflects the basic values, which are so much important for our state nowadays; freedom, independence, and concordance”.

In her address to the participants of the even, Mrs. Yuliia KOVALIV, the First Deputy Minister for Economic Development and Commerce of Ukraine, made an emphasis that “international commercial arbitration is nowadays one of the most important institutions in the international law, and its role is growing continuously. International commercial arbitration is a body that enjoys enough trust from business communities. Courts of arbitration compete with each other globally, and Ukraine has got an opportunity to develop an arbitration institution of its own. To this effect, the Ministry for Economic Development and Commerce of Ukraine has established its own task force on the subject”.

Mr. Gennadiy CHYZHYKOV, the President of the Ukrainian Chamber of Commerce and Industry, made an accent on the importance of the event as a permanent venue where the most nagging issues of progress in international commercial arbitration can be discussed and where the relevant policy steps in this crucial sphere can be developed. He maintained that an efficient arbitration is a necessary element of civil society and a sign of favourable business environment in this country as it positively affects the influx of investment to Ukraine as a whole and the development of foreign links in particular. Therefore, the UCCI and its management do everything in their power to promote the event and the efficient operation of the arbitration bodies at the UCCI. Although the number of cases as a sign of quality and success in the work of the ICAC has risen by almost two times over the recent years, life requires that we keep moving fast. The head of the UCCI informed that the ICAC and the MAC are currently going thru a period of modernization, technical re-equipment of the arbitration process, and introduction of new means of communication. He also added that the chamber provides organizational and material support to those steps. “The UCCI pays special attention to the development of the ICAC. However, we never interfere into its operations and we always emphasize its independence” added Mr. Gennadyi CHYZHYKOV.

It was a solemn part of the event that Mr. Manfred HEIDER, the Secretary General of the Vienna International Arbitration Center at the Austrian Federal Chamber of Economy, and Mr. Mykola SELIVON, the Head of the ICAC at the Ukrainian Chamber of Commerce and Industry, signed the Cooperation Agreement between the ICAC and the Vienna International Arbitration Center at the Austrian Federal Chamber of Economy, which is one of the most renowned and popular among the permanent arbitration institutions in Europe.

It was a logical continuation of the greeting speeches when Mr. Bohdan LVOV, the Head of the Supreme Economic Court of Ukraine, presented his special report titled “Improvement of National Legislation in the Field of International Commercial Arbitration and Third-Party Resolution of Disputes as Part of the Judicial and Constitutional Reforms in Ukraine”. The said reports states that “the government institutions, including courts, and the society are deeply interested to develop and spread alternative methods of dispute resolution. Subjects of legal relationships and business entities (and not state bodies) should independently decide and be able to choose the most efficient, fair, and cost-saving form of dispute resolution”. The said report also postulates that it still remains a fundamental issue to determine the scope of jurisdiction when appealing against and enforcing the awards of international commercial arbitration since the improvement of judicial controls is the most important step towards the formation of a legally favorable environment for arbitration in the country. For this reason, it is “crucial for the purposes of improvement of the international commercial arbitration laws to solve the issue of how to properly assign such category of cases to the jurisdiction of exactly economic courts. Such suggestions are being currently discussed by the Council on Judicial Reform under the aegis of the President of Ukraine as the work on the refurbishment of the Economic Code of Procedure of Ukraine is underway”.

In the course of the entire day filled with reports and vivid discussions, many important issues were raised and discussed regarding the applicable law for international commercial arbitration. The participants also discussed the most nagging issues of the application of the Vienna Convention as faced by the international arbitration community in its daily practices. The level of the reports delivered and the degree of involvement of both reporters and other participants were also a pleasant thing. Bearing in mind the great interest towards the issues raised in the course of the event and with regard to the discussions that arose, it was decided to extend the event for another 1.5 hour to provide enough time for the question and answer session. Vivid discussions were also kept during the breaks and after the official end of the event. The participants expressed their concerns about the processes currently underway around the arbitration in Ukraine. Since the ICAC at the Ukrainian CCI has become a respectable arbitration body of the European level over the period of its operation, it was assumed that, in order to create favorable conditions for good arbitration in Ukraine, the government should further go the way of minimum intervention into the arbitration process and that approach should above all follow the “do no harm” principle.

The moderator of the first session titled The Vienna Convention: Particularities of Application was Mr. Mykola SELIVON, the Head of the ICAC and MAC at the Ukrainian CCI. He suggested discussing the following groups of subjects: General details of the Convention, its status, and scope of application; Comparative analysis of the Conventions application practices in different countries (Austria, Belarus, Croatia, and Ukraine); the Convention’s impact on the development of national legislation; Correlation between loss and liability under the Convention and under the national legislation.

The first group of subjects was multilaterally researched in the report by Mr. Cyril EMERY, the UNCITRAL representative. The report was titled Status and Outlooks of the Vienna Convention: 35 Years Later, and it underlined the importance and the special meaning of the UN Convention on Contracts for the International Sale of Goods as it is an international unification of the material and legal norms to regulate the most widespread type of a contract; the one for purchase and sale.

Mr. Aleksander ĆIRIĆ, the Professor of the University of Nis (Serbia), in his report singled out one of the basic principles of the Vienna Convention; the bona fide, which business partners must follow as they enter into foreign trade contracts.

The issues of the application scope and the practical issues of the Vienna Convention same as its impact on the development of the national legislation were widely covered in the reports delivered by Mr. Hennadii KRAVCHUK, the Deputy Head of the Supreme Economic Court of Ukraine; by Mrs. Nataliia KUZNETSOVA, the Professor of the Kiev National Taras Shevchenko University; by Mr. Alexandre KHRAPOUTSKI, the Partner of “Sysouev, Bondar, Khrapoutski” Law Office (Republic of Belarus); by Mr. Oleksii KOT, the Partner of “Antika” Legal Firm; and also by Mr. Dmytro LESHCHENKO, the Advocate of “VERUM” Law Firm.

Mr. Manfred HEIDER, the Secretary General of the Vienna International Arbitration Center at the Austrian Federal Chamber of Economy, delivered his report to inform the event participants about the practical application of the Vienna Convention by the Vienna International Arbitration Center at the Austrian Federal Chamber of Economy, showing some examples of particular cases, and Mr. Alexey ANISCHENKO, the Advocate of “SORAINEN” Law Firm (Republic of Belarus) told the audience about the practices of the Convention’s application in judicial and arbitration proceedings in Belarus, particularly, in the field of collection of annual interest.

The issue of the correlation between the Convention and the national legislation when it comes to the estimation of loss and liability was discussed in the reports delivered by Mrs. Yuliya CHERNYKH, the Adviser of “Arbitrade” Legal Firm, and by Mrs. Olena PEREPELYNSKA, the Partner of “Intergrites” International Law Firm. In particular, the reporters mentioned that the fundamentals of the Vienna Convention are the principles of complete compensation, strict liability, and the demand for predictability of loss at the moment a contract is made.

Mr. Sergii OMELCHENKO, the Managing Partner of “Kairos” Law Firm, dedicated his report to an extremely popular subject of today; the exemption from liability under the Vienna Convention and under the national legislation.

After the reports were delivered to the audience, a discussion was started on a number of topics including the form of a foreign trade contract and, hence, the wording of an arbitration clause. Directly opposed points of view were voiced; it was suggested to abolish the Ukrainian wording of the arbitration clause prepared in the course of the ratification of the Vienna Convention and to completely liberalize the requirement about the form of foreign trade contracts. Others were still in favor of keeping the written form in effect. The discussion was further fuelled with the remarks by Cyril EMERY who said that the Americans prefer a classical written form even when entering into domestic sales contracts. Vivid discussions were also held about the liability of business entities with regard the sanctions against Russia.

The second session of the conference was dedicated to the problems of identifying the material and procedural laws for the purposes of international commercial arbitration. The Moderator of the session was Mrs. Liudmyla VYNOKUROVA, the Deputy Head of the ICAC at the Ukrainian CCI, Assistant Professor at the Economic Law Department of the Kiev National Taras Shevchenko University.

The second session was opened by Mr. Oleksandr GAIDULIN, the Associate Professor of the International and European Law Department of the Kiev National Vadim Hetman University of Economy, as he delivered his report titled Interpretation of Applicable Law in the Context of Arbitration: A Cross-Cultural Analysis where he suggested an original and philosophical approach to the interpretation of applicable law and proposed a concept of arbitration as a spirit of natural law, discretion, and pacification for further consideration and discussion.

Mr. Alexander TRUNK, the Professor of the Institute of Law of the Eastern Europe of the University of Kiel (Germany), described the modern trends in the identification of the law to be applied to arbitration agreements. The reporter made an emphasis that those trends could be taken into consideration in the course of improving the national arbitration legislation.

The audience responded with great interest to the report delivered by Mrs. Annette MAGNUSSON, the Secretary General of the Stockholm Chamber of Commerce (Sweden). The report was titled Arbitration in Sweden: Rules and Procedures Applied to Jurisdictional Objections.

Mr. Włodzimierz BRYCH, the Head of the Arbitration Court at the Tomyśl Chamber of Commerce, at the beginning of his speech expressed his doubt about the possibility for the Ukrainian government represented by the Ministry of Economic Development and Commerce of Ukraine to raise an issue of reforming the UCCI ICAC Rules of Procedure. Thereafter, he proceeded to describing the subject of his report dedicated to the application of the Polish procedural law on arbitration in the context of the currently discussed ways to improve the international commercial arbitration in Ukraine, including the activities of the UCCI ICAC. Having made a reference to the specific (private) nature of the international commercial arbitration, Mr. Włodzimierz BRYCH expressed an opinion that making changes to the Rules of Procedure and to some other conditions of UCCI ICAC operation is the task for the ICAC itself and not for the government. The reporter referred to the experience of Poland as he mentioned that the attempts to intervene into the operations of the international commercial arbitration undertaken some time ago by the Ministry of Economy of Poland were strongly criticized by Polish lawyers. Besides, according to Mr. Włodzimierz BRYCH, the continuously growing number of the disputes examined by the UCCI ICAC is considerably more than the number of disputes tied by other international arbitration institutions and this acknowledges the successful operation of this arbitration body.

Mr. Yaroslav PETROV, the Secretary General of the Ukrainian Arbitration Association, offered a number of problems to be discussed; those problems are related to the observation of the legal norms applicable to determining the judicial personality of litigants and to the warrants of attorney. The reporter mentioned that such law should be taken into account at each stage of arbitration proceedings, especially when signing an arbitration agreement and subsequently during the arbitration proceedings, and at the stage of appealing against and at the stage of acceptance and enforcement of arbitral awards.

A report titled Identification of the Contents of International Laws thru Arbitration was delivered by Mr. Herman GALUSHCHENKO, the Associate Professor of the Chair of International Private Law of the Institute of International Relations of Taras Shevchenko National University of Kyiv.

Mr. Markian MALSKYY, the Partner of “Arzinger” Law Firm, chose to select the particularities of application of ex aequo et bono and amiable composite as the subject for his report.

Mr. Kostiantyn PILKOV, the Partner of “Cai & Lenard” Law Firm, in his report paid attention to a set of problems associated with the law applicable to the matters of evidencing, including the determination of the facts to be proven, the distribution of the burden of evidence, the presumptions under substantive law, and the specifics of the admissibility of evidence used in arbitration.

Mr. Igor SEMENOV, the Senior Lawyer of “Astapov Lawyers” Law Firm, dedicated his report to the issues of application of laws in several countries and to the concept of “dépeçage”. The speaker said that the dépeçage is viewed by international private law as the biggest change for litigants to execute their will when it comes to the selection of the material law for a contract. At the same time, according to the speaker, the concept of dépeçage can only be applied in the case of a complex contract and a complex legal relationship and its application is restricted by the necessity to comply with the public law requirements and with the mandatory provisions of national legislation, which litigants are not allowed to bypass.

A topical subject for his report was selected by Mr. Bohdan KRYVOLAPOV, the Associate Professor of the International Private Law Department of the International Relations Institute of the Kiev National Taras Shevchenko University. The title of his report reads ªThe Issues of Application of the Oversees Foreign Exchange Law in Present-Day Arbitration Practices”. The reporter drew the audience attention to the fact that the judicial and arbitration practices lack a uniform approach to the opportunity of applying an oversees foreign exchange law, especially when it comes to foreign requirements to monetary control. However, in the reporter’s opinion, if need arise, the Ukrainian courts of justice should apply oversees regulations for foreign exchange, which restrict payments under all kinds of transactions in compliance with the IMF Agreement, Article 8, Section 2, Clause (b), and which are part of the national legislation of Ukraine.

Mrs. Tina de VRIES, the Senior Scientific Contributor of the Institute for Eastern-European Law in Munich (Germany), dedicated her report to the issues of the application of the UN Convention on the Limitation Period in the International Sale of Goods (New York, 1974). In particular, she spoke about the chances to apply the said convention in the countries not being parties thereto.

Mr. Andrii SMITIUKH, the Associate Professor of the Odessa National Ivan Mechnikov University, finalized the second session of the event with his report dedicated to the practical application of the Principles of International Commercial Contracts (UNIDROIT) by the public courts in Ukraine. On having analyzed some court adjudications where the UNIDROIT Principles were mentioned, the reporter came to the conclusion that the economic courts give prevalence to the understanding of those Principles as a document that contains a set of ordinary legal norms (applicable mostly as the secundum legem customs) binding regardless of the will of litigants not only in the field of international trade, but also a bit wider; in a large number of business fields in general. The reporter also acknowledged that the common law courts accept the legality of the awards produced by international arbitration bodies when such awards are based purely on the UNIDROIT Principles without any reference to the national law provisions, and that testifies of actual acceptance of the UNIDROIT Principles by the public courts of Ukraine as part of the lex mercatoria in the form of an autonomous legal order that can be applied in Ukraine without any contradiction to its public law.

The third session of the conference held with the moderation by Mr. Oleh PODTSERKOVNYI, the Professor of the National University “Odessa Legal Academy”, was dedicated to the subject of “Mandatory Provisions in International Commercial Arbitration”.

Mr. Volodymyr KROKHMAL, the Arbiter of the ICAC at the Ukrainian CCI, paid his special attention to the issue of application of super-mandatory rules in international arbitration practices. In particular, the reporter mentioned that the application of the mandatory rules, which are not envisaged by the choice-of-law clause, always cause complications. He pointed out to the general approaches used by arbitrators in order to overcome such complications, and he also proposed to classify such rules and provisions. Finally, the reporter delivered an overview of the arbitration practices of the ICAC at the Ukrainian CCI and of the International Chamber of Commerce.

In his report, the Professor Mr. Oleh PODTSERKOVNYI explored the issues of distinguishing between dispositional and mandatory provisions in commercial legal relations with regard to the issues of the application of the Vienna Convention and of the provisions of the Ukrainian legislative acts titled “On International Private Law” (Article 14) and “On Foreign Trade Operations” (Article 6). The reporter mentioned that the assessment of the public requirements in the course of the examination of applications for enforcement of arbitral awards in the local courts of justice forms the conditions for unequal enforcement of law, and in this regard, as he thinks, the cases about appealing against and about enforcing any international arbitral awards should belong exclusively to the scope of competence of the economic courts in Ukraine.

Mrs. Iryna VENEDYKTOVA, the Professor of the Kharkov National Vasiliy Karazin University, delivered her report titled The Immunity of State in International Commercial Arbitration where she noticed that the jurisdictional immunity of states/governments, which stems from the principle reading “equals cannot be tried by other equals”, is the most important provision of international public law and is nowadays based on the European Convention on State Immunity of 1972 and on the UN Convention on Jurisdictional Immunities of States and Their Property of 2004. Such immunity has the typical signs of the immunity against legal process, and of the immunity against application of preventive and enforcement measures, and of the immunity against enforcement of an adjudication produced by a foreign court of justice (commercial arbitration).

Mrs. Emma VIDAK-GOJKOVIC (Austria), the Lawyer of “Baker & McKenzie”, delivered her report about mandatory rules and public order in comparison to the systems of general law (New York) and civil law (Croatia). The reporter gave some examples from the legal practices in the USA. She also mentioned that, contrary to those practices, European countries, including Croatia, have shown that the refusal from practical application of arbitral awards due to the contradictions to the public law is not a uniform thing.

Mr. Danylo VOLKOVETSKYI, the Lawyer of “Avellum Partners” Law Firm, delivered his report titled ªMandatory Rules and the Law Applicable to the Arbitrability of Disputes”. In the report, he analyzed the practice of judicial and arbitral bodies in European countries with regard to the selection of the law applicable to a contract and in relation to the arbitrability of disputes. The laws of Switzerland have been identified as the most favorable to arbitration agreements since it considers any commercial contract as subject to arbitration. The laws of Sweden and England are viewed as a bit more restrictive in this regard. The reporter came to the conclusion that, despite the provisions of the UNCITRAL Standard Law of 1985 and when selecting the applicable law and when estimating whether the dispute can be arbitrated, the arbitrators should be governed by the non-written rule stating that an arbitral award must comply with the laws of the country that hosts the arbitration since the arbitration should always care about the stability of its own awards from the viewpoint of the possibility of appealing against those awards at a public court of justice in the country that hosts the arbitration. The law of the country where an arbitral award is to be enforced is rated second in the line of the most important rules for arbitrators when selecting the applicable law and when estimating whether a dispute can be arbitrated.

Mr. Dmytro SHEMELIN, the Lawyer of “Ilyashev & Partners” Law Firm, in his report made an emphasis on the practical application of the EU mandatory rules by international arbitration bodies within the concept of public order. The said concept envisages a distinction between “positive” and “negative” public order. In the first case, arbitrators must abstain from the application of foreign law provisions that contradict the public order of Ukraine if Ukraine is the place of arbitration or the place of enforcement of an arbitral award. The “positive” public order envisages the obligation of arbitrators to apply specific provisions of the EU laws independently from the choice of the law made by litigants. It is in particular about the competitive prescriptions of Article 81 of the EU Constituent Agreement (Eco Swiss China Time Ltd. vs. Benetton International Ltd. case, etc). Among the major fields of application of the public order according to the EU laws, there are provisions on the protection of a less capable litigant (consumer right); and provisions on the protection of the basic economic principles (antimonopoly law; foreign exchange regulations; embargoes and export/import bans); and the major non-derogable elements of legal order, such as struggle against corruption, migration restrictions, taxation law, etc.

Following the discussion of the reports delivered, Mr. Mykola SELIVON, the Head of the ICAC and MAC at the Ukrainian CCI, thanked all reporters and discussion participants, having mentioned their high professional level and broad knowledge on the matters discussed. He also underlined the conference’s importance for better performance in foreign trade practices, for improvement of judicial and arbitral practices, and for the national legislation.

In order to provide the opportunity for the general public to learn about such valuable and interesting reports, the relevant materials of the event will be publicized at the Website ICAC at the Ukrainian CCI in accordance with the long tradition.

To this end, the organizers of the III International Arbitration Readings in Commemoration of Academician Igor Pobirchenko are beginning the preparations for the IV International Arbitration Readings, which will traditionally be held in the fall of the year 2016. The event organizers are inviting everyone interested to take part in the event.



Add to calendar 20151113 20151113 Europe/Kiev The III International Arbitration Readings in Memory of Academician Igor Pobirchenko

On November 13, 2015, the Ukrainian Chamber of Commerce and Industry hosted the III International Arbitration Readings in Memory of Academician Igor Pobirchenko. The event was jointly organized by the International Commercial Arbitration Court and the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry, and it was supported by the United Nations Commission on International Trade Law (UNCITRAL).

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