Challenging Arbitration Clauses in Ukraine: A Guide

Dispute Resolution | JVS Law

Arbitration clauses are not challenged because they are badly drafted. They are challenged because one side does not want to arbitrate — usually the side that would rather litigate at home, slowly and cheaply.

The good news is that a Ukrainian court has a very narrow corridor for that argument. The bad news is that the corridor closes not on a calendar deadline but on your first procedural step. Miss the moment and the arbitration point is gone for good, however impeccable the clause.

Below: what the court actually does, the moment at which it is decided, the three grounds it may consider, and how to handle arbitration and litigation running in parallel.

Start with the terminology, because this is where most guides go wrong. On seeing an arbitration agreement a Ukrainian court does not refuse to open proceedings and does not dismiss the case. Nor is this a “challenge to the judge” — recusal concerns the judge, not jurisdiction.

There is one mechanism: leaving the claim without consideration. In commercial procedure that is Article 226(1)(7) of the Commercial Procedure Code, and the formula is this: the court leaves the claim without consideration where the parties concluded an agreement to refer the dispute to international commercial arbitration and the defendant filed objections to the dispute being resolved by the commercial court — unless the court finds that the agreement is void, has lapsed or cannot be performed.

The same rule is mirrored in Article 8 of the Law on International Commercial Arbitration, and it is Ukraine’s enactment of Article II(3) of the New York Convention.

The practical consequence that gets underestimated: the court will not do this of its own motion. No objection from the defendant, no referral. The court is not obliged to notice your arbitration clause for you.

Next to it, in paragraph 11 of the same article, sits the mirror rule for agreements choosing a foreign court. It has become markedly more relevant since the 2005 and 2019 Hague Conventions took effect for Ukraine — covered separately in arbitration or court in a cross-border contract.

There is no deadline in days here, which is exactly why it is missed. The trigger is procedural.

Under Article 226(1)(7) the objection must arrive no later than the start of the hearing on the merits, and before the defendant files its first statement on the substance. A statement of defence is therefore already too late: by filing it you have accepted the court’s jurisdiction.

The 1961 European Convention puts it more sharply still. Under Article VI(1) a plea as to the jurisdiction of the court based on the existence of an arbitration agreement must be presented by the respondent before or at the same time as the presentation of his substantial defence — and expressly under penalty of estoppel.

A symmetrical rule operates inside the arbitration: under Article 16(2) of the Law, a plea that the tribunal lacks jurisdiction must be raised no later than the submission of the statement of defence. Appointing an arbitrator does not forfeit that right — participating in the constitution of the tribunal is not acceptance of its jurisdiction.

And one point that removes the most common fear. Applying to a state court for interim measures is not a waiver of arbitration: this is stated expressly in Article VI(4) of the European Convention and in Article 9 of the Arbitration Law. Freezing assets through the courts while the arbitration runs is a normal structure, not a contradiction.

The court does not assess whether the clause was a good idea, whether the chosen forum is convenient or whether arbitration is expensive. The law gives it exactly three grounds for not referring the parties to arbitration: the agreement is void, has lapsed, or cannot be performed.

The first two are rare in practice. The fight is almost always over the third.

“Cannot be performed” means a clause from which it is impossible to work out where to go. The classics: an institution that does not exist; a name distorted enough to fit two different bodies; the rules of one institution combined with administration by another; or a reference to arbitration for a subject matter that is not arbitrable under Ukrainian law.

The line matters here. An imprecise name is not fatal in itself — the question is whether the parties’ true intention can be established. “Arbitration at the Chamber of Commerce and Industry in Kyiv” can be established; “an international arbitration court in Europe” cannot.

Separately — separability. Article 16(1) of the Law says plainly that an arbitration clause forming part of a contract is treated as an agreement independent of the other terms, and a tribunal’s decision that the contract is void does not of itself invalidate the clause. The argument “the contract is void, therefore so is the arbitration agreement” does not work — worth having ready, because it is raised constantly.

Which law governs the validity of the agreement itself is set by Article VI(2) of the European Convention: capacity of the parties under their personal law; everything else under the law the parties chose for the arbitration agreement, failing that the law of the country where the award is to be made, and failing that under the conflict rules of the court seized.

The tribunal may rule on its own jurisdiction, including on any objection to the existence or validity of the arbitration agreement — Article 16(1) of the Law. This is competence-competence, and it means the Ukrainian court is neither the only nor the first instance on the question.

The mechanics run as follows. Where the tribunal rules on jurisdiction as a preliminary question and finds that it has jurisdiction, any party may within 30 days of notice ask the state court to decide the matter. Under Article 6(2) of the Law that is the general appellate court at the seat of the arbitration. Two consequences usually decide the case:

• that court’s decision is not subject to appeal — one instance only;
• while the application is pending, the tribunal may continue the proceedings and make an award. Going to court does not by itself stop the arbitration.

The framing rule is Article 5: in matters governed by the Law, no court intervention shall take place except where the Law so provides. That is a provision to cite directly, not a slogan.

Hence the conclusion that follows: even if a Ukrainian court declares the arbitration agreement invalid, a foreign tribunal is not bound to agree — it assesses its own jurisdiction under the law applicable to the agreement. A favourable ruling in Kyiv does not stop an arbitration in Stockholm; it creates a problem later, at the enforcement stage in Ukraine.

Article VI(3) of the 1961 European Convention is cited often and almost always loosely. The text is worth knowing verbatim, because all three elements matter.

It applies where arbitration was initiated BEFORE any resort was had to a court. That is a precondition, not a detail: if the court claim came first, Article VI(3) does not operate at all.

Next, the court stays its ruling on the arbitrator’s jurisdiction — not the proceedings as a whole. That is narrower than usually described.

And finally the duty is not absolute: the court does this unless it has “good and substantial reasons to the contrary”. The carve-out is in the text, and your opponent will use it.

Ukraine has been a party since 1963, so the Convention applies where both parties are seated in Contracting States. Where it does not apply, what remains is Article 5 on the limits of court intervention and Article 16 on competence-competence.

1. If a claim has already been filed in a Ukrainian court. The objection to that court hearing the dispute is the first document on the file, before any statement on the substance, with the contract and clause attached. The missed moment cannot be restored.
2. If you want to challenge someone else’s clause. Assess the ground soberly: “cannot be performed” works only where the forum genuinely cannot be identified from the text. Inconvenience is not a ground, and losing hands your counterparty a ready argument at the enforcement stage.
3. If the arbitration is already running. Check whether it started before the court claim — that determines whether Article VI(3) is available to you at all.
4. If the tribunal has ruled on jurisdiction as a preliminary question. Thirty days, and a single instance. That is the deadline nobody forgives.
5. If assets need preserving. Go to court for interim measures without hesitation: it is not a waiver of arbitration.
6. If the contract is not signed yet. The cheapest stage by far. Institution, seat, language, number of arbitrators and governing law — five elements whose absence produces everything described above.

Where this comes from

Two longer treatments of the same problem by Gennadii Tsirat, both free to read:

• State courts and international commercial arbitration: the Ukrainian experience — Yurydychna Gazeta. The legislative framework, the notable Ukrainian cases in which arbitration agreements were declared void, and what the author would recommend to judges.
• Applying Article II(3) of the 1958 New York Convention in Ukrainian court practice — paper delivered at the 5th Pobirchenko International Arbitration Readings, 4 October 2018. Article II(3) is the provision a Ukrainian court is supposed to apply when it is asked to hear a dispute covered by an arbitration agreement.
• The full conference volume (184 pp., PDF, in Ukrainian) — “The New York Convention: 60 Years of Success”, published by the ICAC and MAC at the Ukrainian Chamber of Commerce and Industry, 2019. Twenty papers around the same Convention: public policy as a ground for refusing enforcement, enforcement against non-signatories, and the US, Polish, Chinese and French experience.

Updated 13 August 2026 against the current consolidated texts of the Commercial Procedure Code of Ukraine and the Law of Ukraine “On International Commercial Arbitration” on the Legislation of Ukraine portal; the text of the 1961 European Convention on International Commercial Arbitration is cited from the official publication. This page describes the mechanism; it does not replace analysis of a particular clause, where the outcome turns on its exact wording and on which document you filed first.

The author has practised in international commercial arbitration since 1991 and teaches it at the Institute of International Relations of Taras Shevchenko National University of Kyiv; both works cited above address the limits of state-court intervention in arbitration. Related: ICC Rules or ICAC Rules in the clause.