Arbitration is often chosen for its finality, confidentiality, and global enforceability. But what happens when one party tries to sidestep the arbitration clause and files a claim in a Ukrainian court? Can arbitration agreements be challenged, and under what conditions might a court declare them unenforceable?
This guide breaks down real-life scenarios of how arbitration agreements are questioned in Ukrainian courts and explains what steps parties can take to protect their arbitration rights
1. Why it matters: the role of an arbitration agreement
An arbitration agreement is a key element in a contract. It provides that the parties submit a dispute to international arbitration, rather than to a national court. This guarantees neutrality, confidentiality, and a more straightforward procedure for recognizing the decision abroad.
However, it happens that one of the parties decides to challenge the arbitration agreement by appealing to a Ukrainian court.
2. What to do if an arbitration agreement is challenged in a state court
🔍 Situation 1: You are a defendant in a state court
If a lawsuit is filed against your company in a Ukrainian court, despite the existence of an arbitration agreement:
- 📌 File a motion to challenge the court’s jurisdiction based on the arbitration agreement.
- 🧾 Attach a copy of the contract with an arbitration clause.
- ⏳ Do this BEFORE filing a response to the lawsuit — otherwise, the court will consider that you have accepted jurisdiction.
The goal is to force the court to stop the proceedings and refer the parties to arbitration.
🔍 Situation 2: You are a plaintiff, and you want to declare the arbitration agreement invalid
This is possible, but risky. The law does not explicitly prohibit filing such a lawsuit in court, but international practice favors arbitration.
Recommendations:
- ⚠️ Filing a lawsuit for the invalidity of an arbitration agreement makes sense only if there are serious formal errors (no institution, undefined right, incapacity of the signatory).
- 📚 Check whether the 1961 European Convention applies. If so, the court must keep the proceedings until the arbitration decision is reached.
3. Case law: what courts pay attention to
- ✅ The presence of a specific, clearly formulated arbitration agreement (name of the institution, place, language, number of arbitrators, law).
- ❌ Errors in the name of the arbitration institution may give the court grounds to recognize the agreement as unenforceable.
- ❗ Important: even if a Ukrainian court has recognized the arbitration agreement as invalid, this does not mean the arbitration (for example, in Stockholm) will agree. They have the right to assess the validity of the agreement themselves.
4. Parallel proceedings: how to proceed
- 📌 If arbitration is already considering the case, and the other party has appealed to the state court – refer to Art. VI(3) of the European Convention. The court must suspend the consideration of the case until the arbitration decision.
- 📌 If the Convention does not apply – argue through the principle of “pro-arbitration approach” and restrictions on court intervention (Art. 5 of the Law of Ukraine on International Commercial Arbitration).
Practical advice from Jurvneshservice
- ✅ At the stage of contract negotiations, involve a lawyer to formulate the arbitration agreement correctly.
- ✅ If your counterparty files a lawsuit in a state court, react immediately and declare the arbitration agreement.
- ✅ If you are summoned to a case about the invalidity of the arbitration agreement, prepare a legal position, and refer to the competence of the arbitration to resolve such issues.
- ✅ Avoid situations where the arbitration agreement is unclear or incorrectly drawn up.
How Jurvneshservice Can Help
We have over 30 years of experience in international arbitration and litigation support in Ukraine. Our team, led by Professors Ganna Tsirat and Gennadii Tsirat, advises both foreign and Ukrainian clients in high-stakes disputes involving arbitration agreements.
✅ We defend arbitration agreements from wrongful challenges in Ukrainian courts;
✅ We support clients in drafting, interpreting, and enforcing arbitration clauses;
✅ We assist with parallel proceedings, recognition of foreign awards, and interim measures.
If your arbitration clause is being challenged — or you want to avoid that risk in the future — we’re here to help.
📧 Email: kyiv@jvs.law
📞 Phone: +38 (067) 465-77-73
