A Set-Aside Application Is Not a Pause Button

You have an award. The debtor has a lawyer with a calendar. Within the three months the law allows, the debtor files an application to set the award aside at the seat, and then tells your enforcement court that nothing can be decided until that application is resolved.

The instinctive reaction of a creditor is to wait. The instinctive reaction of most enforcement courts is not.

In short: under Article VI of the New York Convention a pending challenge at the seat gives the enforcement court a discretion to adjourn, not an obligation, and the same article lets it order the debtor to post suitable security as the price of that delay. How much of that discretion is actually used differs by country. In Ukraine the second half of Article VI, the security, is the half creditors rarely ask for.

The wording is short enough to quote in full. If an application for the setting aside or suspension of the award has been made to a competent authority of the country where, or under the law of which, it was made, the authority before which the award is relied upon “may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security”.

Three words carry the weight: may, proper, security.

The Convention does not say enforcement stops. It says the enforcement court may pause if it thinks the pause is justified, and that a creditor may ask for security in exchange. The second sentence exists precisely because the drafters knew what the first one would be used for.

Ukrainian procedure has two provisions, depending on where the arbitration was seated.

For a foreign award, Article 477(7) of the Civil Procedure Code allows the court to stay the recognition proceedings if an application to set the award aside is pending before a competent court, until that application is finally resolved.

For an award made in Ukraine (ICAC or ad hoc seated here), Article 482(2) says the same: the court may stay the proceedings on the application for leave to enforce if an application to set that award aside is pending, until the ruling on it becomes final.

Several things follow, and they are usually missed.

The stay is a power of the court, not a right of the debtor. The Code says “may stay”, the same permissive formula as Article VI. The Supreme Court lists the stay among the court’s powers in these proceedings, next to interim measures and joint hearing, and has held that the court considering an application for leave to enforce has no power to defer enforcement of the award at all (ruling of 8 April 2021, case No. 824/53/19). A debtor who files a challenge has not obtained a suspension; it has obtained an argument for one.

The creditor has a counter-move written into the same article. Under Article 482(3) either party may ask the court to hear the set-aside application and the enforcement application together, in one set of proceedings, and the court rules on joining them on the day the set-aside application arrives, or the next day at the latest. A debtor whose real aim is delay does not want the two heard together; that is exactly why the creditor should ask for it first.

The set-aside court will not re-try the case. It does not review how the tribunal applied the substantive law; it checks only the grounds listed in Article 459 of the Code and Article 34 of the Law “On International Commercial Arbitration”, and whether public policy has been breached (Supreme Court, ruling of 18 November 2021, case No. 824/30/21). A challenge that is in substance an appeal on the merits has poor prospects, and that is worth saying out loud when the debtor asks for a stay.

Three months is the deadline for filing, not for deciding. An application to set aside an award made in Ukraine cannot be filed more than three months after the party received the award (Article 34 of the Law; Article 454(6) of the Code), and a missed deadline is not restored for international commercial arbitration (Article 454(7)). But the proceedings themselves run longer, and a Ukrainian debtor has one more lever: it can insist that the foreign creditor be served through the Hague Service Convention, which on its own can take months. The answer is on the creditor’s side: give the court an address for service in Ukraine, usually through Ukrainian counsel, so that procedural documents reach you directly. Most debtors use the three-month window; fewer creditors close the service gap.

Two kinds of “security” are not the same thing. Ukrainian law separates interim measures that secure the claim, which the court may grant on the creditor’s application at any stage of the recognition proceedings (Article 477(3) of the Code), from Article VI security posted by the debtor as the price of a stay. Interim measures are routinely requested, with two limits drawn by the Supreme Court: a freeze reaches only property that belongs to the debtor itself, not assets of related companies (ruling of 25 January 2019, case No. 796/165/18), and a foreign applicant with no presence or assets in Ukraine should expect to post counter-security proportionate to the loss the freeze may cause (ruling of 21 October 2021, proceedings No. 61-13884ав21; Article 154 of the Code). Article VI security has no separate procedure in the Code; the Convention applies directly, and the creditor has to ask for it.

Section 103(5) of the Arbitration Act 1996 reproduces Article VI almost word for word: where a set-aside or suspension application has been made at the seat, the court “may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award” and “may also on the application of the party claiming recognition or enforcement of the award order the other party to give suitable security”.

The statutory language is the same as Ukraine’s. What differs is how the discretion is exercised. English courts apply criteria developed by the Court of Appeal in Soleh Boneh v Uganda (1993) and IPCO v NNPC: whether the challenge at the seat is genuine or a delaying tactic, whether it has a realistic prospect of success, and what prejudice the delay would cause. When they do adjourn, they can order security for all or part of the award, and in IPCO v NNPC (2017) the UK Supreme Court confirmed that this is precisely the situation in which security may be required, and not a general price for resisting enforcement on other grounds. A debtor asking for time is asked what it is prepared to put up for it.

German law starts from the same place: § 1061(1) ZPO refers recognition and enforcement of foreign awards to the New York Convention, so Article VI applies as it does everywhere.

What Germany adds is the tool on the creditor’s side of the table. Under § 1063(3) ZPO the presiding judge of the civil senate may, without hearing the debtor, allow the applicant to enforce the award before the application is decided, and to enforce interim measures ordered by the tribunal itself. That enforcement is limited to securing measures: an arrest, not a payment out. The debtor can stop it by providing security in the amount the applicant could recover.

Read the two provisions together and the picture is the opposite of a pause button. The challenge at the seat may slow the declaration of enforceability; it does not stop the creditor from freezing assets while everyone waits.

There is a symmetrical rule for the other direction: if the award is set aside abroad after it has been declared enforceable in Germany, the debtor may apply to have that declaration revoked (§ 1061(3)).

Switzerland does not have a separate exequatur to suspend. Article 194 of the Private International Law Act refers recognition and enforcement of foreign awards to the New York Convention, and the recognition question is decided inside the debt-enforcement procedure, when the creditor asks the court to lift the debtor’s opposition.

For a creditor this has a practical consequence: the asset freeze (sequestro/Arrest) comes first and does not wait for the recognition debate. A set-aside application at the seat is an argument the debtor will make inside the opposition proceedings, not an event that halts the machinery.

In France neither an action to set aside an award rendered in international arbitration nor an appeal against the order granting enforcement suspends enforcement. The safety valve is narrow: the first president ruling in summary proceedings or, once seized, the judge in charge of case management may stop or adjust enforcement if it is likely to seriously harm the rights of one of the parties (Article 1526 of the Code of Civil Procedure, applicable to awards rendered after 1 May 2011, in the version in force until 1 January 2027).

Debtor filed a set-aside at the seat while you enforce elsewhere? Tell us the seat and the forums in play — we will map where a stay is likely and what security to demand.

The comparison yields a short list, and none of it depends on the jurisdiction being creditor-friendly.

• File for interim relief with the enforcement application, not after it. Every system above lets assets be frozen while the recognition question is argued. None of them does it on its own motion.
• Ask for security whenever a stay is proposed. Article VI puts this in the creditor’s hands and nowhere else; the court will not order it by itself.
• In Ukraine, ask for the two applications to be heard together (Article 482(3) of the Code). It is the cheapest way to turn a delay tactic into a single timetable.
• Give the Ukrainian court an address for service in Ukraine. It closes the gap a debtor can open by insisting on service abroad.
• Budget for counter-security if you are a foreign applicant asking for a freeze in Ukraine, and aim the freeze at assets that belong to the debtor itself.
• Do not treat a challenge as a reason to wait. The debtor’s application is an argument for the court, not a decision of it.

If a debtor has filed a challenge at the seat and is using it to stall your enforcement, send us the award, the challenge and what you know about the assets. We will tell you what can be frozen now, what to ask for in exchange for any stay, and whether the challenge is even admissible. A partner replies within one business day.

Practice: Enforcement of Foreign Arbitral Awards in Ukraine · International Commercial Arbitration in Ukraine

Written by Anna Tsirat, Doctor of Laws, partner at JVS Law. She has given expert evidence on Ukrainian law in PCA proceedings (The Hague) and writes the Ukrainian national monograph for the International Encyclopaedia for Civil Procedure (Wolters Kluwer).

Published 19 October 2026. Ukrainian provisions are cited to the Civil Procedure Code and the Law “On International Commercial Arbitration” as in force, with the Supreme Court rulings referenced; English, German, Swiss and French provisions to their official texts. Practice on stays and security keeps moving — verify the current position before relying on it.