Which arbitration institutions do Ukrainian businesses prefer?
Ukrainian businesses largely opt to submit disputes to the International Commercial Arbitration Court (ICAC) at both the Ukrainian and Russian Chambers of Commerce and Industry. This has a great deal to do with the geographical location of these institutions, the language used in their proceedings and their associated costs in relation to other arbitral institutions. If this latter factor is considered, it appears that a claim worth $500,000 heard by a sole arbitrator would incur arbitration fees and expenses of around $41,000 under International Chamber of Commerce arbitration, $37,000 under arbitration at the Arbitration Institute of the Stockholm Chamber of Commerce and only $12,000 under ICAC arbitration at the Ukrainian Chamber of Commerce and Industry. With involvement of a panel of three arbitrators the arbitration fees and expenses would rise up to around $95,000, $66,000 and $15,000 respectively. However, these are not the only pertinent factors.
For example, as provided in the Order of Payment in Foreign Currency Act, fines for untimely crediting by Ukrainian residents of their foreign currency accounts in the course of export/import operations involving non-Ukrainian residents will not be imposed where the respective claim against the non-resident has been accepted by a court, the ICAC or the Maritime Arbitration Commission at the Ukrainian Chamber of Commerce and Industry. This issue, however, has long been a subject of debate between practitioners, courts and state authorities.
Apart from the above, a significant number of cases are referred to arbitration in England. This is especially so where disputes arise between major groups of companies or deep industry businesses (eg, grains, oils, seeds and sugar). Most company groups choose the London Court of International Arbitration, as it is one of the most popular in the region. Deep industry businesses tend to refer their disputes to the arbitration tribunals of the Grain and Feed Trade Association, the Federation of Oils, Seeds and Fats Associations, the Refined Sugar Association and other similar specialised organisations, whose arbitration rules are often incorporated into the standard contracts used by the relevant market players.