Ukraine’s Courts of Arbitration to Work Without the Right to Make a Mistake
Last Wednesday the Kyiv Trade and Industry Chamber (KTTP) held an unusual presentation at which journalists met with the members of the court of arbitration. Although this court has been functioning at the KTTP only since 1996, it has already examined fifty-two cases. The thirty other courts of this kind in Ukraine have approximately the same workload. (There are 1,200 courts of arbitration in Moscow alone, but they were set up five years earlier than in Ukraine.) The idea of non-state arbitrage has swiftly taken root in Ukraine. Until recently, all matters concerning arbitration were subject to a regulation issued by the State Arbitration Committee of the USSR back in 1975. Therefore, the absence of a national law was not conducive to the development of such courts.
Finally, in May 2004, the law “On Courts of Arbitration in Ukraine” came into force after being “chewed over,” to use Ukrainian legal jargon, in the Verkhovna Rada for two years. “The creation of a court of arbitration points to the further democratization of economic life,” says Mykola Zasulsky, chairman of the standing court of arbitration at the KTPP. He predicts that this will encourage 1,000 more businesses to become members of the Kyiv Trade and Industry Chamber in a month’s time. What will attract them to the chamber is the availability and advantages of a court of arbitration, as well as the fact that, according to lawyers, arbitration courts are not susceptible to corruption because they are interested in “clean procedures.” The chamber advises clients to select arbiters from among experienced legal experts, heads of law firms, and holders of academic degrees, such as the twenty-one people who sit in this court today. They must meet very tough requirements, although their number is not limited. This guarantees that cases will be tackled without undue delay.
This is by no means the only advantage of this type of court. Lawyers also point to the uncomplicated procedure and mainly the finality of a ruling. “Only those who have dealt with courts know what a final ruling is,” says Liudmyla Syzykova, chief of the KTPP’s legal division, “because, once it is handed down, it cannot be appealed.” Still, in her words, the main advantage of arbitration is the swift pace of court procedures. As Ms. Syzykova noted, rulings handed down by arbitration courts are open to challenge if there has been a gross violation of procedure or if the court looked into a case beyond its jurisdiction, e.g., bankruptcy.
In a court of arbitration, both sides receive a final judicial result. At first, there were doubts as to whether verdicts from this kind of court would be obeyed. From now on, the executive branch of government must ensure compliance with arbiters’ decisions, as well as those of other courts. To this end, some amendments were made to the Law of Ukraine “On the Execution of Court Rulings.”
What will also surprise both claimants and respondents is the cost of court litigation. The conference organizers revealed, albeit reluctantly, current rates of judicial costs of arbitration courts. If, for example, a plaintiff files a suit for 5,000 hryvnias, s/he will have to pay 150 hryvnias in court fees. This is quite a small amount for an enterprise, but what about individuals? The creators of this court would like their brainchild to develop further. Still, judges do not think that arbitration will become popular at the grassroots level. “So far, individuals are taking a cautious approach to the institution of arbitration. So we will have not very many suits from ordinary individuals,” judge Zasulsky said confidently.
To solve the problem of the arbiters’ workload, a marketing system has been developed. It will soon be possible to obtain detailed information about the activities, composition, and fees of arbitration courts on KTPP’s Web site. For the time being, these courts will be primarily dealing with KTPP member enterprises. Will there be many firms that will venture to choose a judge by themselves to solve a certain problem? This is difficult to predict. For the “final” judge has no right — by conscience and by law — to make a mistake.
