Expansion Of The Competence Of International Commercial Arbitration

On 06 February 2025, the Committee on Legal Policy of the Verkhovna Rada reviewed Draft Law No. 12141, aimed at improving arbitration procedures and aligning Ukrainian legislation with international standards.

The Draft Law proposes to extend the jurisdiction of international commercial arbitration to disputes arising from contractual and other civil law relations in the course of foreign trade and other types of international economic relations, if the parties have expressly agreed that the subject matter of the arbitration agreement is related to more than one country, or one of the following places is outside the country where the parties have their commercial enterprises:

• the place of arbitration, if it is determined in or pursuant to the arbitration agreement;
• any place where a substantial part of the obligations arising from the contractual or other civil law relationship is to be performed;
• the place with which the subject matter of the dispute is most closely connected.

The document also proposes to empower international commercial arbitration to consider disputes involving an investor and a state (its bodies and institutions) or an intergovernmental organisation in connection with investment activities in Ukraine or another state arising under an international treaty, a law of Ukraine, another regulatory act or an agreement of the parties contained in a contract or other document.

In addition, the Draft Law clarifies that disputes arising from contractual and other civil law relations in the course of foreign trade and other types of international economic relations will be able to be submitted to international commercial arbitration, in particular, if the commercial enterprise of at least one of the parties is located abroad at the time of the arbitration agreement.

We will closely monitor further developments in the status of this Draft Law and report on them in the future Legal News.