Security for Costs in Ukraine: The Rule That Is Not About Being Foreign

Two assumptions travel with foreign claimants into Ukrainian litigation, and both are wrong.

The first is that a foreign claimant will be made to put up security simply for being foreign — the old continental reflex. The second, more common, is that Ukraine has no security-for-costs mechanism at all, so there is nothing to budget for. Neither survives contact with Article 135 of the Civil Procedure Code.

Read the provision and the first surprise is what it does not say. Nationality appears nowhere. Neither does domicile abroad, taken on its own.

What the court may do, on the defendant’s application and having regard to the circumstances of the case, is order the claimant to place a sum on the court’s deposit account to secure the defendant’s future costs of professional legal assistance and other costs of the proceedings. The provision is Article 135 of the Civil Procedure Code for the general courts and Article 125 of the Commercial Procedure Code for the commercial courts, and the two are worded identically.

Three features decide how this plays out commercially. It is triggered by the defendant, never by the court on its own initiative — so a well-advised Ukrainian defendant raises it and an unadvised one does not. It is discretionary: the court weighs the circumstances. And it attaches to the claimant’s position, not to the claimant’s passport.

One: the claim looks abusive. Security applies where the claim bears the marks of being knowingly unfounded, or other marks of abuse of the right to sue. This has nothing to do with where the claimant is from, and a Ukrainian claimant is exposed to it on the same terms.

Two: no presence and no assets — both together. This is the limb that catches foreign claimants, and the conjunction is the whole point. Security applies where the claimant has no registered place of residence or location in Ukraine and has no property in Ukraine sufficient to cover the defendant’s costs if the claim fails.

Read that twice. A foreign company with a Ukrainian subsidiary holding real assets does not meet the test. Neither does a foreign claimant with property here. Absence of a Ukrainian address alone is not enough; absence of sufficient assets alone is not enough. Both must be true.

Three: the assets are moving. Security may also be ordered where the court is shown evidence that the claimant’s financial position, or its disposals of property, or other conduct, may complicate or defeat enforcement of a future costs order. This limb applies to anyone, and it is the one that responds to conduct during the case rather than to a state of affairs at its start.

Not dismissal on the merits, and not termination of the proceedings. If the sum is not placed on deposit within the period the court sets, the court may leave the claim without consideration — and again only on the defendant’s application.

For a common-law reader the nearest analogue is a stay leading to strike-out, with the important difference that the claim is not adjudicated. The practical effect, though, is the one that matters: the case stops, and it stops at the defendant’s initiative.

Note also the separate, lighter mechanism in the same article. Where a party asks the court to summon a witness, appoint an expert examination, engage a specialist or interpreter, or secure, demand or inspect evidence, the court may require that party to pay those costs in advance. If it does not, the court may simply refuse the application and decide the case on the other evidence before it. That is not security for costs — it is a different provision with a different consequence, and the two are easy to confuse.

The deposit is not a penalty and not a court fee. Its fate follows the outcome.

If the claim succeeds, the court orders the sum returned to the claimant. If the claim is dismissed, or the proceedings are terminated, or the claim is left without consideration, the sum is used to reimburse the defendant’s costs in whole or in part. Whatever is left unused goes back to the claimant within five days of the court deciding those questions.

The amount is set by reference to the ordinary rules on legal-assistance costs, and those rules are specific. Lawyers’ fees must be commensurate with four things: the complexity of the case and of the work done, the time the lawyer spent, the volume of services provided, and the value of the claim or its significance for the party — including the effect of the outcome on that party’s reputation or the public interest in the case. A party who considers the other side’s figure disproportionate may apply to have it reduced, and bears the burden of showing that it is.

The measure, in other words, is the defendant’s likely recoverable costs, not the value of the claim.

The preliminary estimate binds you. Ukrainian procedure expects a party to file a preliminary, indicative calculation of its expected costs. If the sum later claimed for reimbursement substantially exceeds that estimate, the court may refuse to award the excess — unless the party shows it could not have foreseen those costs when the estimate was filed. The mirror rule also exists: if the proven costs turn out disproportionately smaller than the estimate, the court may refuse reimbursement in whole or in part. Foreign counsel used to filing a costs schedule at the end will find the timing unfamiliar.

Conduct is priced in. When allocating costs the court takes into account not only whether the amounts are related to the case and proportionate to its subject, but also the party’s behaviour — conduct that dragged the case out, plainly unfounded applications, baseless assertions or denials of relevant facts, and inflated claims. It also weighs what the parties did about pre-action and amicable settlement, and at what stage. And where a party abuses its procedural rights, or the dispute arose from its own wrongful conduct, the court may place the costs on that party regardless of who wins.

Read together with the first limb of the security provision — the claim that bears the marks of abuse — this is a consistent policy rather than a scattering of rules. Ukrainian procedure prices litigation conduct, at the start through security and at the end through allocation.

Here is where it becomes interesting, and where a reflex answer will mislead you.

International law has spent a century dismantling cautio judicatum solvi — the requirement imposed on a claimant because they are a foreign national or have no domicile in the forum. The Hague Convention on International Access to Justice carries that prohibition forward, and Ukraine’s accession is why a claimant from a contracting state can normally put the question aside. We covered that Convention separately.

But the prohibition is aimed at a requirement imposed solely on grounds of foreignness. Article 135 is not drafted that way. Its second limb requires the absence of a Ukrainian presence and the absence of sufficient assets here — a compound test about enforceability of a future costs order, not about nationality. Its first and third limbs do not mention foreignness at all.

Whether that drafting places the provision outside the conventional prohibition, or whether a court would look through the form to the effect, is not settled by the text alone. What can be said with confidence is this: a foreign claimant who assumes the Convention is a complete answer, and does not read the limb actually being invoked against them, is not reading the case. The first question in any given matter is which limb the defendant has pleaded.

If you act for the claimant. Establish before filing whether your client has assets in Ukraine and whether any are registered here. If neither is true, price the possibility of a security order into the budget and into the settlement analysis — an order made after proceedings have started is an expensive moment to discover it. Where the claim can properly be brought by a group entity with a Ukrainian presence, that is worth considering before filing rather than after.

If you act for the Ukrainian defendant. The application is yours to make and nobody will make it for you. Against a claimant with no presence and no assets here it is a legitimate procedural lever, and against a claim that looks manufactured it is a strong one.

Either way, watch the documents. The court decides on the circumstances and the documentary justification. Both the application and the answer to it are won on evidence of the claimant’s position, not on assertion.

Will the court order security against any foreign claimant?
No. There must be an application by the defendant, and one of the statutory limbs must be made out. Being foreign is not itself a limb.

Our client is foreign but owns property in Ukraine. Are they exposed?
Not under the second limb, provided the property is sufficient to cover the defendant’s likely costs — the test requires both no presence and no sufficient assets. The first and third limbs remain available on their own facts.

What happens to our claim if we decide not to pay?
On the defendant’s application, the court may leave the claim without consideration. The claim is not decided on the merits, but it stops.

Do we get the money back?
If you win, yes. If you lose, it goes to the defendant’s costs, and any unused balance returns to you within five days of the court ruling on it.

Is this the same as security for a counterclaim, or security when seeking an injunction?
No. Those are separate mechanisms with separate tests.

Does an arbitration clause avoid the issue?
It avoids this provision, which is a rule of court procedure. Arbitral institutions have their own practice on security for costs, which is a different analysis entirely.

Related: on the Convention that abolishes security for costs between contracting states, see Ukraine’s accession to the Hague Access to Justice Convention. On where a case can be brought at all, see Ukraine’s exclusive jurisdiction; on starting the proceedings properly, serving proceedings on a Ukrainian defendant. Expert evidence on Ukrainian law is covered on our Expert Witness on Ukrainian Law page.

If you are preparing to sue in Ukraine for a foreign client, or facing a claim by a foreign claimant, send us the parties’ details and the position on assets. A partner responds within one business day.

Written by Gennadii Tsirat, Doctor of Laws, partner at JVS Law, author of International Civil Procedure. He has acted as a Ukrainian law expert before the High Court of Justice (London) and the courts of Austria.

Published 24 September 2026. Stated under Article 135 of the Civil Procedure Code and Article 125 of the Commercial Procedure Code as in force. Court practice on this provision continues to develop — verify the current position before acting in a specific matter.