The Grand Chamber of the Supreme Court sided with our client.
In this case, the Grand Chamber confirmed that a dispute arising out of private law relations with a foreign element between legal entities registered in Ukraine may be submitted to foreign arbitration (in our case, GAFTA arbitration), if it does not violate the rules of exclusive jurisdiction established by current procedural law of Ukraine.
Also, in this case, the Grand Chamber for the first time applied such a tool as amici curiae, i.e. obtaining a competent opinion from unbiased experts, namely: the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry and the Ukrainian Arbitration Association.
The Grand Chamber of the Supreme Court drew attention to Article II of the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which imposes on each Contracting State the obligation to recognize a written agreement by which the parties undertake to submit to arbitration all or any disputes that have arisen or may arise between them in connection with any specific contractual or other legal relationship, the subject matter of which may be the subject of arbitration. A court of a Contracting State, if it receives a claim on a matter in respect of which the parties have entered into an agreement under this Article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is invalid, void or unenforceable.
In addition, according to the established practice of the ECHR, a voluntary waiver of the court procedure for dispute resolution in favor of arbitration is generally acceptable in terms of compliance with Article 6 of the Convention for the Protection of Human Rights and Fundamental Freedoms. Therefore, leaving a claim without consideration by a court due to the existence of an arbitration agreement does not in itself constitute an unacceptable restriction of access to court.
In view of the above, the Grand Chamber of the Supreme Court stated that the effect of the arbitration clause included by the parties to the agreement extends to legal relations under this agreement with the participation of another person who entered into these legal relations as a party and assumed the relevant rights and obligations of a party to this agreement. At the same time, this is possible provided that the parties have not terminated the arbitration agreement, excluded a certain dispute from its scope, deprived it of its binding force for such party and the arbitration agreement has not expired due to other circumstances.
The case was led by attorney-at-law, senior associate of Kosovan Legal Group Valentyn Bychek with the participation of managing partner Anatoliy Kosovan.