Arbitration proceedings in complex commercial disputes may last for many months, or even years. During this time, a dishonest respondent will often attempt to evade enforcement of a future arbitral award – for example, by transferring their assets to other companies or disposing of the disputed property to third parties. As a result, the claimant risks obtaining an award that cannot in practice be enforced, since the respondent may no longer have any assets available for debt recovery.
The Significance of Interim Measures
Interim measures are a procedural mechanism designed to prevent such situations and to ensure the preservation of assets for the future enforcement of an arbitral award. The most common forms of interim relief include the freezing of a respondent’s assets or funds, and injunctions prohibiting certain actions, such as disposing of property or the subject matter of the dispute.
Powers of the Ukrainian Courts
Ukrainian courts are authorised to apply a wide range of interim measures in support of arbitral proceedings – both international and domestic – irrespective of the place where the arbitration is seated. The Law of Ukraine “On International Commercial Arbitration” has, since 1994, provided for the possibility of applying to the courts for interim relief. However, for a long time this mechanism remained ineffective due to the absence of clear procedural rules.
The situation changed following the 2017 judicial reform, when provisions were introduced into the Civil Procedural Code of Ukraine (CPC) establishing a transparent procedure for granting interim measures in support of arbitration. The current version of the CPC stipulates that a court may grant such measures either before a claim is filed, or at any stage of the proceedings, if failure to do so could significantly complicate or render impossible the enforcement of a court judgment or the effective protection of the claimant’s rights (Article 149 CPC).
At the same time, Article 150 CPC contains an exhaustive list of such measures, including: the attachment of property or funds; prohibitions on taking certain actions; suspension of the sale of attached property; and suspension of enforcement under a writ of execution, among others. These tools are also available in disputes referred to international arbitration or domestic tribunals, even where the arbitration itself takes place abroad.
The legislator has also determined the procedural jurisdiction for such applications: the court of first instance is the appellate court at the location or residence of the respondent or their property in Ukraine. The Supreme Court hears such cases on appeal, with no further cassation review provided – thereby ensuring a swift and final resolution of the issue.
Types of Interim Measures
Article 150 of the Civil Procedure Code of Ukraine provides for various forms of interim relief (the list is non-exhaustive), and the court may combine several measures simultaneously, provided they are proportionate to the claims. The principal measures include:
- the attachment of the respondent’s property and/or funds, including assets held by the respondent or by third parties;
- prohibiting the respondent or third parties from taking actions in respect of the subject matter of the dispute;
- suspension of the sale of attached property;
- suspension of enforcement based on a writ of execution;
- suspension of customs clearance of goods that are the subject of the dispute;
- arrest of a seagoing vessel to secure a maritime claim (an exception to the principle of proportionality);
- attachment of assets in proceedings concerning the recognition of assets as unjustified;
- other measures provided by the laws of Ukraine and international treaties.
Conditions and Procedure for the Application of Interim Measures
Interim relief may be granted at any stage of the dispute – both before a claim is filed and during the proceedings. The key ground is demonstrating a real risk that a potential arbitral award in favour of the claimant may not be enforced (Article 149 p. 2 CPC).
A claimant seeking interim measures must substantiate their necessity and urgency. Ukrainian courts take into account circumstances indicating the risk of the respondent’s evasion, such as insolvency, lack of assets, asset transfers, or the sale of the disputed property. At the same time, the court is required to balance the parties’ interests and to observe the principle of proportionality so that the measures imposed are not excessively burdensome.
The procedure for filing is clearly regulated: an application must be submitted to the appellate court at the location of the respondent or their assets. It may be filed only after arbitral proceedings have commenced, accompanied by the arbitration agreement and proof of the claim’s submission. If arbitration has not yet begun, the court will dismiss the application as premature.
The application must set out the subject matter of the dispute, list the requested measures, and provide detailed reasoning. At this stage, the respondent is usually not notified in order to prevent the leakage of information. The court considers the application immediately – no later than two days from its receipt (Article 153 CPC). Such speed allows assets to be promptly frozen.
If the application is granted, the court issues an order subject to immediate enforcement. For instance, a bank receiving an order to freeze accounts is obliged to block transactions without delay. The measures remain in force until they are lifted or replaced. The respondent may request their modification or cancellation if circumstances change (Article 158 CPC).
The Advantages of Turning to Fortior
We have extensive experience in swiftly and effectively obtaining interim measures from Ukrainian courts. In many cases, the outcome of the dispute is in practice determined even before the final arbitral award – at the interim stage.
Clients of Fortior benefit from a unique combination of in-depth knowledge of Ukrainian law and prompt, decisive action. Our lawyers prepare well-substantiated applications and accompany the process in court until a favourable decision is secured.
If you or your company are facing court proceedings in Ukraine, please contact us at [email protected] – we will ensure your representation.
