International Arbitration vs. Court: How to Choose the Forum for a Ukrainian Contract

Dispute Resolution | JVS Law

For thirty years the answer was automatic: arbitrate. Not because arbitration was better, but because a Ukrainian court judgment had nowhere to go. It could not be enforced in Europe, while an arbitral award travelled on the 1958 New York Convention.

That premise disappeared in the autumn of 2023. Two Hague Conventions took effect for Ukraine, and a Ukrainian judgment acquired a route into the European Union for the first time. This did not make courts better than arbitration. It made the choice a real one — something to be justified rather than assumed.

This page sets out how to justify it: what actually changed, what the New York Convention has never done despite being credited with it, and what each route costs in figures.

Two dates worth recording:

• 1 August 2023 — the 2005 Hague Choice of Court Convention entered into force for Ukraine. It operates where the parties have written an exclusive jurisdiction clause naming the courts of one state: courts of other Contracting States must respect that clause and recognise the resulting judgment.
• 1 September 2023 — the 2019 Hague Judgments Convention entered into force for Ukraine, on the same day as for the European Union. Ukraine ratified it by Law No. 2342-IX of 1 July 2022. Here no exclusive clause is needed at all.

The practical consequence: a judgment of a Ukrainian commercial court against a European counterparty now has an enforcement mechanism in the EU. The same mechanism switched on for the United Kingdom on 1 July 2025.

Four limits that press releases tend to leave out.

Denmark is not in. The EU acceded on behalf of its member states with the exception of Denmark, which has an opt-out from judicial cooperation in civil matters. That is 26 states, not 27.

The Convention does not look backwards. Article 16 ties application to the moment proceedings were instituted in the state of origin. A case commenced in a Ukrainian court in 2022 falls outside it, whenever the judgment was eventually issued. For the United Kingdom the clock starts on 1 July 2025.

The exclusions are broader than expected. Article 2 takes out, among others, carriage of passengers and goods, intellectual property, insolvency, defamation, privacy, competition matters and arbitration itself. For a transport or logistics contract this route simply does not exist — which is where the general advice “you can use the courts now” breaks against an actual agreement.

The judgment must pass a jurisdictional filter. Article 5 lists the bases on which a foreign judgment is eligible at all: the defendant was habitually resident there, consented to that jurisdiction, operated through a branch there, or the contractual obligation was performed in that state. That last one, Article 5(1)(g), carries its own caveat — it fails if the defendant’s activities did not amount to a “purposeful and substantial connection” with the state.

Hence the first practical conclusion. If you deliberately choose the court route, do not leave jurisdiction to the default rules — write a jurisdiction clause. An exclusive clause engages the 2005 Convention; a non-exclusive one is expressly listed in Article 5(1)(m) of the 2019 Convention. A contract with no clause at all forces you to prove the filter after the fact.

The 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards remains the most successful instrument in private international law: as of August 2026 it has 172 States parties. Ukraine is among the earliest — signature on 29 December 1958, ratification on 10 October 1960, in force from 8 January 1961, subject to a reciprocity reservation for awards made in non-contracting states.

That reach is precisely why the Convention gets credited with things it does not contain. The three most common:

• Confidentiality. It is not in the text. At all.
• Court support for the arbitration — appointing an arbitrator for a party that refuses to, interim measures, assistance in taking evidence. That is not the Convention but the Ukrainian Law on International Commercial Arbitration, Articles 6, 9, 11 and 17 — Ukraine’s enactment of the UNCITRAL Model Law.
• Procedural flexibility. It comes from the rules of the chosen institution and from the parties’ agreement, not from a treaty.

What the Convention does do is narrow: it obliges courts of Contracting States to give effect to a written arbitration agreement and refer the parties to arbitration, to treat awards as binding and enforce them, and it closes the list of grounds for refusal. Ukrainian law reproduces that list in Article 478 of the Civil Procedure Code and Article 36 of the Arbitration Law — incapacity, invalidity of the agreement, lack of notice, excess of mandate, irregular composition or procedure, the award set aside at the seat, non-arbitrability and public policy.

The distinction is not academic. A company that chooses arbitration “because it is confidential” is buying something the instrument does not sell. What it actually gets is below.

Worth noting separately: Ukraine’s arbitration statute was amended in 2026 — Law No. 4856-IX of 28 April 2026, in force from 21 May 2026, widened the category of investor–state disputes and rewrote the appointment mechanism in Articles 6 and 11.

Start with a checkable fact. The word “confidentiality” does not appear in the Ukrainian Law on International Commercial Arbitration a single time — not in the current version of 21 May 2026, nor in any earlier one.

Confidentiality lives one level down, in institutional rules. In the Rules of the ICAC at the Ukrainian Chamber of Commerce and Industry (as amended with effect from 18 February 2025) it is Article 68, and it opens with the words “unless the parties have agreed otherwise”. A default, not a guarantee. Article 71 of the same Rules allows the ICAC Presidium to publish awards in anonymised form if no party objects within 30 days.

The larger point is different. An award recovers nothing by itself. To take money from a debtor in Ukraine, the creditor goes to a state court for leave to enforce — and a different regime engages.

Under Article 479(2) of the Civil Procedure Code, the court’s ruling granting recognition and leave to enforce must state the name and composition of the tribunal, the names of the parties, the details of the award and the sum recovered. And the Law on Access to Court Decisions requires every court decision to be entered in the Unified State Register no later than the day after it is drawn up (Article 3), with free round-the-clock public access (Article 4).

So what stays confidential is the conduct of the proceedings and the tribunal’s reasoning. The existence of the dispute, the parties and the amount become public the moment you decide to enforce. The same register works against you as well: a counterparty running diligence on your company before signing will find your arbitrations there.

Confidentiality is real in one scenario — where you do not expect to enforce, because the award itself is enough to make the other side pay. That is a legitimate expectation. It is simply a scenario, not a property of arbitration.

This is where the myths are thickest and the arithmetic thinnest.

Commercial court. Under the Law on Court Fees, a monetary claim filed by a legal entity attracts 1.5% of the amount claimed, but not less than one subsistence minimum for able-bodied persons and not more than 350 of them. In 2026 that minimum is UAH 3,328, so the range runs from UAH 3,328 to UAH 1,164,800. The operative words are “not more than”: the fee is capped.

ICAC at the UCCI. A registration fee of USD 600, non-refundable and credited against the arbitration fee. The arbitration fee follows a sliding scale on the amount claimed, capped at USD 350,000.

Court fees below are converted at the National Bank rate for 13 August 2026 (UAH 44.71 to the dollar), which puts the court fee ceiling at roughly USD 26,050.

At first glance the conclusion is brutal: the court is cheaper everywhere, and on small claims by multiples. A USD 10,000 dispute costs USD 1,800 in filing fees at the ICAC — 18% of the claim before a lawyer writes a line. Below USD 50,000 arbitration makes no economic sense unless you specifically need something the courts cannot give you.

But comparing one instance against a whole arbitration is unfair, because a Ukrainian case rarely stops at first instance. An appeal costs 150% of the first-instance rate and a cassation appeal 200%. A full run through three instances is 4.5 base rates. Arbitration is once and for all: the award is not reviewed on the merits, and an application to set aside or to enforce costs 0.5 of a subsistence minimum — UAH 1,664.

With that correction the picture flips at around USD 100,000: USD 6,750 for three court instances against USD 6,200 once at the ICAC. Above that line arbitration gets relatively cheaper; below it, the courts do.

One caveat without which the table misleads. These are institutional fees, not the cost of a dispute. Counsel fees in arbitration usually run higher than in commercial litigation, and the claimant pays the arbitration fee up front and in full. If you are heading to the ICC rather than the ICAC, the scale is different and materially heavier — a separate discussion, which we have set out in our comparison of the ICC and ICAC Rules.

The most expensive mistake here is not a poor choice but a clause that does not work. Article 1 of the Arbitration Law draws the scope narrowly, and two limits are worth checking before negotiations rather than after.

A foreign element is mandatory. A dispute may go to international commercial arbitration if the place of business of at least one party is abroad at the time the arbitration agreement is made; or the parties have expressly agreed that the subject matter relates to more than one state; or the seat, the place of performance of a substantial part of the obligations, or the centre of gravity of the dispute lies abroad. Two Ukrainian companies cannot send their dispute to the ICAC merely because they find it convenient. A separate basis covers enterprises with foreign investment.

Writing is required, but “writing” is generous. Article 7 treats the agreement as written where it is assembled from an exchange of letters or electronic messages, provided the content remains accessible for subsequent reference. A reference in the contract to another document containing a clause also works — so long as the reference makes that clause part of the contract.

And so that the clause does not look airtight when it is not: a state court is not obliged to stand down on sight of an arbitration agreement. Under Article 8 it leaves the claim without consideration and refers the parties to arbitration only if a party asks it to do so no later than its first statement on the substance, and only if the court does not find the agreement void, inoperative or incapable of being performed. Stay silent at the outset and the case proceeds in court. How Ukrainian courts read those three grounds in practice is covered in our guide to challenging an arbitration agreement.

• Three months to set aside. An application to set aside an award cannot be made later than three months from the day the party received it (Article 34 of the Arbitration Law). It goes to the general appellate court at the seat of the arbitration.
• Three years to enforce. An application for recognition and leave to enforce must be filed within three years of the date of the award (Article 475(3) of the Civil Procedure Code). The court may restore a missed deadline, but only on request and for good cause; otherwise the application is returned without consideration.
• The first statement on the substance. There is no deadline in days here, which is exactly why it is missed: the right to insist on arbitration is lost once a party files its first submission on the merits.

One point on venue. Where the seat of the arbitration is outside Ukraine, the enforcement application goes to the appellate court whose jurisdiction covers the city of Kyiv, irrespective of where the debtor sits (Article 23(3)(2) of the Civil Procedure Code). Where the arbitration was seated in Ukraine, it goes to the appellate court at the seat. We have set that stage out step by step in our guide to the enforcement of arbitral awards in Ukraine.

Instead of a universal answer, the questions your own contract answers.

Where are the debtor’s assets if this goes badly? This comes before everything else. Assets in a New York Convention state outside the EU — arbitration, with no real alternative: 172 states against 26. Assets in the EU or the UK — both routes work, and other considerations decide. Assets in Ukraine — the courts are almost always faster and cheaper, because an award will have to go through the Kyiv appellate court anyway.

What kind of contract is it? Carriage of goods, an intellectual property licence, anything touching your counterparty’s insolvency — the 2019 Convention does not cover them, and the court route abroad closes. There arbitration remains the only working mechanism.

How large is the claim, and will it be fought? Below USD 50,000 the arbitration fee eats too much. Above USD 100,000, in a dispute the other side will certainly push to cassation, arbitration wins on both money and time.

Is there actually a dispute? An undisputed debt is a collection exercise, not a dispute. Spending an arbitration on it is waste.

How much does neutrality matter to the counterparty? This is the reason no convention repeals. A foreign board may refuse to litigate in a Ukrainian court on any terms — and then arbitration is not a choice but a condition of the deal.

A closing observation. The worst outcome is neither courts nor arbitration but a clause copied from someone else’s contract: it names an institution that does not exist, or rules under a former title, or sends to arbitration a dispute that Article 1 does not permit. Such a clause does not work, and that is discovered only once the money has moved.

Verified against primary sources as at 13 August 2026: the status of the New York Convention from the UNCITRAL status table; the entry-into-force dates of the 2005 and 2019 Hague Conventions from the HCCH status tables; statutory texts from the current consolidated versions on the Legislation of Ukraine portal; ICAC fees from the Regulations on Arbitration Fees and Costs annexed to the Rules as amended from 18 February 2025; the exchange rate from the National Bank of Ukraine for 13 August 2026. Party counts and the subsistence minimum change — check both sources before relying on these figures in live negotiations.

The author has taught international commercial arbitration at the Institute of International Relations of Taras Shevchenko National University of Kyiv since 1998, and his doctoral work addresses the unification of international civil procedure — precisely the seam this page runs along. Related work is collected in his library of publications, and the mechanics of arbitration seen from the enforcement end are set out in his textbook “International Commercial Arbitration”.