On 1 September 2023, Convention on the recognition and enforcement of foreign judgments in civil or commercial matters will enter into force (between Ukraine and EU)

On 24 April 2023, EU Council established treaty relations with Ukraine within the framework of Convention on the recognition and enforcement of foreign judgments in civil or commercial matters (hereinafter – “the Convention”). Under the Convention, Ukrainian and foreign citizens and businesses will be entitled to seek recognition and enforcement in EU countries (except Denmark) of the Ukrainian judgments handed down in civil and commercial matters in which the proceedings will be initiated after 1 September 2023. The number of countries participating in the Convention will likely increase in the future.

The Convention will not extend to revenue, customs or administrative matters, nor will it apply to certain matters, inter alia:

• the status of natural persons
• maintenance obligations
• family law matters, succession
• insolvency
• the carriage of passengers and goods
• intellectual property
• activities of armed forces, including the activities of their personnel in the exercise of their official duties
• anti-trust matters
• arbitration

For a judgment to be recognized and enforced, one of the following requirements will have to be met:

• certain residency of the defendant in the state where the judgment was given
• express consent of the defendant to jurisdiction of the court (or if the defendant argued on the merits before the court without contesting jurisdiction)
• the judgment ruled on a contractual obligation and it was given by a court of the state in which performance of that obligation took place, or should have taken place, in accordance with the agreement of the parties, or the law applicable to the contract
• the judgment ruled on a lease of immovable property (tenancy) and it was given by a court of the state in which the property is situated
• the judgment ruled on a non-contractual obligation arising from death, physical injury, damage to or loss of tangible property, and the act or omission directly causing such harm occurred in the state of origin, irrespective of where that harm occurred, etc.

At the same time, the Convention contains a rather limited list of grounds for refusal to recognize and enforce judgments.

In particular, the court may refuse to recognize and enforce the judgment, if:

• the other party was improperly notified about the proceedings in the state where judgment was given
• such recognition or enforcement would be manifestly incompatible with the public policy of the requested state
• the specific proceedings leading to the judgment were incompatible with fundamental principles of procedural fairness
• the judgment is inconsistent with an earlier judgment given by a court of another state between the same parties on the same subject matter
• proceedings between the same parties on the same subject matter are pending before a court of the requested state.

The convention will not only ensure a universal approach to the recognition and enforcement of Ukrainian judgments in various EU countries but will also reduce the risks of parallel court proceedings and competing judgments, that would in turn facilitate international trade and encourage investments.

Authors

Olena Perepelynska Partner Krystyna Khripkova Counsel Anastasiia Iliashenko Associate