The economic downturn has contributed to rising numbers of property, financial and contract disputes, prompting lawyers to think hard about how to represent clients in a judicial system widely viewed as for sale – either to the highest bidder or to those with the most power. However, lawyers say that success or failure in court depends on many factors, not only personal connections or the failure to meet demands for bribes. Legal competence and knowledge of how Ukraine’s court system works are also vital.
“In order to have an effective litigation practice in Ukraine, you must be a master of procedural code, to demonstrate unbelievable word and procedural juggling,” said Oleksandra Pavlenko, a partner with Pavlenko and Poberezhnyuk law group.
Appearance is also important, according to Pavlenko. “Judges pay attention to the way you present the case, what cases you led before, the outcome and publicity of the proceedings,” Pavlenko said.
Olexandr Martinenko, head of the commercial practice at CMS Cameron McKenna, an international law firm, said litigation and dispute resolution work have increased substantially during the recession, with most of the work going to Ukrainian firms.
The reason?
“Some international law firms avoid litigation in Ukraine altogether,” Martinenko said. “They are concerned about their global reputation and don’t want to be accused of offering bribes to obtain a favorable outcome.”
Other law firms provide litigation services out of a sense of obligation. They say a clean reputation is more important for most publicly traded foreign companies than a victory in a Ukrainian court.
“When we start working on a case, we warn our clients about the risk and don’t promise an outcome,” Martinenko said. “[Corruption] here is something that is called a country risk.”
Litigating abroad
Lawyers prefer adjudicating cases with the relatively more independent judges in the nation’s courts of appeals and cassation. They say another option is to litigate outside of Ukraine in international arbitration courts, although this practice is far less common.
“If one of the participants in a dispute is a company with foreign investments, then the case may be heard outside of the country,” said Svitlana Romanova, head of Baker & McKenzie’s litigation practice. “But purely Ukrainian incorporated companies can’t go to international [arbitration] courts to litigate their disputes.”
Even if a foreign company wins the case outside of Ukraine against a local counter-party, it may face difficulty having the decision enforced because there are no bilateral agreements between Ukraine and Western European countries, United States or Canada on recognition of these court decisions, she said. “Ukraine has such agreements only with some former Soviet and East European countries, with some countries of the Middle East, Asia, as well as with Cyprus, Greece and Turkey,” Romanova said.
Kyiv Post staff writer Olga Gnativ can be reached at [email protected]
