Ukraine allows foreign private parties to conclude 'forum selection clauses'

Ukraine

On 21 September 2022, Ukraine’s parliament adopted the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine in Connection with the Ratification of the Convention on Choice of Court Agreements”. The much-awaited law introduces amendments to national legislation and entitles private parties with a foreign element to designate foreign courts to decide their legal disputes.

Under the law, private parties with a legal relationship with a foreign element can enter into an agreement on the choice of court and agree on the location and jurisdiction of one or several courts to resolve disputes (i.e. the forum selection clause). The choice-of-court agreement must be performed in writing.

Private parties, however, are prohibited from changing the exclusive jurisdiction of Ukrainian courts to resolve certain disputes (e.g. related to real estate, IP rights registration, bankruptcy, liquidation issuance of securities, inheritance, etc.). Also, if the parties choose the Ukrainian court’s jurisdiction, the respective agreement must be executed in accordance with provisions of the Ukrainian legislation.

The law will enter into force after being signed by the President of Ukraine and upon its official publication.

The ultimate purpose of the law is to attract new investment to Ukraine by providing investors with the freedom to select suitable dispute-resolution venues that ensure protection of their investments in Ukraine.

The passage of this law is in line with other recent legislative initiatives to improve the business climate in Ukraine. As reported in July, Ukraine recently ratified the Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters, which provides a legal framework for the circulation and enforcement of civil and commercial judgments across jurisdictions.

For more information on dispute resolution in Ukraine, contact your regular CMS advisors or our local experts: Olga Shenk, Oleksandr Protsiuk.