Viche 2010 13

13, 2010

Commercial Arbitration. Kyiv and Stockholm - Forces are Equal

Igor POBIRCHENKO: The decision is to be just. But, certainly, it will be carried out by will of those who decide

The chairman of the International Arbitration Court and Maritime Arbitration Commission at the Chamber of Commerce and Industry of Ukraine Igor Gavrylovych POBIRCHENKO told our correspondent Yuliya Tsyrfa about the work features of international commercial courts:

            Could you, please, tell what the procedure of selection of arbiters is like?

            There are courts with closed recommendation lists and there are courts without such lists. In Stockholm, for example, there is no such list. Therefore in order to be an arbiter at some case in Stockholm (in case if one of the sides requires it), one has to submit his resume to the Arbitration Institute. Only after this the lawyer can be permitted to deal with the consideration of case. If there are recommendation lists, then arbiters make selection on their basis. For example, the present president of the Russian Federation Dmitry Medvedev is in the list of arbiters of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (although, now he temporally does not take part in consideration of cases).

            What is compulsory order of execution of decision of arbitration?

            State performer on the basis of executive letter passes the order to the bank about the deduction of the proper sum and its transfer from the accounts of debtor. The Stockholm Arbitration institute is not a tribunal, however. After the decision had been made in relation to the Naftogas and RosUkrEnergo in June of the current year, the Minister of Fuel and Energy of Ukraine Yuriy Boyko in one of his interviews noticed that this decision has to be executed because the Stockholm Institute is an international tribunal. Although, a tribunal is Arbitration, Arbitration College, Court of Arbitration. That is the composition of arbitration court which arbitrates. That is they are those three arbiters which investigate concrete case. Their decision can be appealed accordingly.

            And what in general can you say in relation to this decision?

Revising the decision of Stockholm Arbitration on the case of Naftogas, I can say that I know none of arbiters who considered this case. These arbiters are neither from Ukraine, nor from Russia. The latter, however, is connected with this case as in fact 50 percent of the owners of RosUkrEnergo are representatives of Gasprom. It is unknown who of representatives of the sides comes forward from a plaintiff and from a defendant: from where they and who gave them authority?  

Therefore whether to execute such decision or not is still a question. Once Yuriy Boyko says that it has to be executed, and then that it has to be appealed.  

I think that in accordance with New York convention of 1958 this decision conflicts with a public order, and therefore it is not subject to execution. And it can be executed forcibly only through the state court at the place of residence of debtor (in this case it is Shevchenko district court of Kyiv, in fact National Joint Stock company Haftogas  Ukraine is territorially within jurisdiction to exactly this court).  

The Ukrainian legislation facilitates the interpretation of the vexed question concerning public order. In the Law of Ukraine On International Private Law from June, 23, 2005 there is warning concerning public order: the rule of right of the foreign state is not applied in case, if its application results in the consequences obviously incompatible with the basic law and order of Ukraine. In such cases the right which has the closest connection with the legal relationships, and if such right can not be defined or applied, then the right of Ukraine is used. The refusal to apply the right of the foreign state can not ground only on the differences of the legal, political or economic system of the proper foreign state from the legal, political or economic system of Ukraine.


In our case the legal order has been already violated, as far as the sides specify that they apply the right of Sweden, because such agree was made in the contract. However, if to revise the decision from the beginning to the end, it is impossible to find reference to any rule of the Swedish legislation. There is the description of consideration itself. Therefore, knowing from own experience the work of Stockholm Arbitration, I can say that I read this decision with surprise. I have never met such decisions before.  

It is foreseen in our Civil Procedure Code: the decision of foreign court is executed after its acknowledgment by the state court of Ukraine at the place of residence of debtor, and this court gives out an executive letter on the forced execution. Procedure had to be the following: if Naftogas does not execute this decision, RosUkrEnergo applies to the Shevchenko district court of Kyiv and asks to acknowledge the decision and to give out an executive letter, but Naftogas, if this request is satisfied, has the right to appeal the decision at the Appeal Court of Kyiv. Further the side which does not agree can appeal it at the Supreme Court of Ukraine, which makes final decision. 

In general, I never forecast the consequences of football match and judicial dispute. I dont have the case itself, however, because grounding on this, if you will excuse me, unskilled decision, it is impossible to make any conclusions. But, if it is proved that Ukraine paid to Gasprom for the gas which was kept, then RosUkrEnergo would have claims regarding 50 percent of cost of gas exactly to Gasprom but not to Ukraine. In fact Gasprom received money for this gas.  

Therefore I can only say that the decision is to be just. But, certainly, it will be carried out by will of those who decide.