March 2013
NEWSLETTER

Developments in Court Practice

The High Specialized Court of Ukraine for Civil and Criminal Cases (HSCU) in its Ruling No. 3 on Certain Matters Concerning Trial Courts' Competence and Jurisdiction in Civil Matters provided the explanation of the following issues:

  1. The cases on protection of dignity, honour and goodwill where a public authority is a party are to be considered in civil jurisdiction.
  2. The cases pertaining to remedies against violation of copyright and related rights are subject to civil courts' jurisdiction. However, claims against the State Intellectual Property Service regarding other intellectual property rights subject to registration, depending on the subject matter and grounds of the claim, and provided that the dispute is public in nature do not fall within civil jurisdiction.
  3. Land disputes in which one of the parties is an individual are also within the competence of civil courts. Such disputes also include cases concerning invalidation or cancellation of executive authorities' or local governments' decisions and disputes on returning unlawfully occupied land plots.

The HSCU in its Ruling No. 4 Concerning Claims for Compensation of Damage Caused by Sources of Elevated Danger brings to the attention of the lower courts that the list of sources of elevated danger provided in Article 1187 of Civil Code of Ukraine is not exhaustive. Therefore the courts can by means of application of certain criteria decide whether a given facility presents an elevated danger. One of the key criteria is individual's inability to completely control the source.

The HSCU in its Information Letter No. 32/0/9-13 dated 19 March 2013 highlights that the costs of publication of summonses are to be covered by the claimant. If the costs are not paid, they are to be recovered when the decision was held pursuant to Article 88 of Civil Procedural Code of Ukraine.

The High Commercial Court of Ukraine (HCCU) in its Information Letter dated 28 March 2013 explains certain aspects of amendments to the Bankruptcy Law.

The HCCU stipulates, inter alia, that in rehabilitation procedure commenced prior to commencement of bankruptcy proceedings the debtor can independently work out a plan then negotiate it with the secured creditors, receive the creditors' committee approval. Subsequently the plan is subject to approval by the commercial court.

It should also be noted that depending on the debtor's category, nature of its business and assets different bankruptcy court procedures, namely general, special or simplified, are used.

The list of appealable court's rulings in the amended law is exhaustive and cannot be interpreted broadly.

Another important issue is that the uncontested claims of the creditor cannot be proven by court's decision alone. The appropriate proof will also include the writ of enforcement and the ruling of the state enforcement agency on commencement of enforcement proceeding.

All pecuniary claims against the debtor shall exclusively be resolved by the commercial court that considers the bankruptcy case against that debtor.

Special attention shall be devoted to the issue of invalidation of debtors' contracts and cancellation of debtors' transactions that took place after the commencement of the bankruptcy proceeding or during one year prior to such commencement.

Under such transactions one should understand performance of debtor's obligations under contracts concluded before that year that cause harm to the interests of the debtor and its creditors. This may include performance of obligations prior to the term set in the contract, waiver of debtor's claims, payment to a creditor or acceptance of assets in payment if at the time of payment/acceptance the creditors' claims exceeded the debtor's assets. Contracts can be invalidated where the debtor's assets were alienated without compensation, where the debtor undertook non-reciprocal obligations or created new mortgages or pledges with respect to its assets.

The consequence of the cancellation of transactions or invalidation of contracts is that the property is returned to the debtor's estate subject to liquidation. However, as the HCCU specifies, the debtor's obligations under such transactions or contracts remain in principle binding on the debtor and must be performed if debtor's solvency is restored and bankruptcy proceedings are terminated.

March also saw introduction of a long-expected legislative proposal, a draft law on amendments to the Notaries Law. The amendments describe the procedure for collection and securing of evidence. This initiative is potentially very positive and would help facilitate legal work in particular in the intellectual property sphere and in all legal matters pertaining to the Internet.



For further information please contact managing partner Oleksiy Didkovskiy
and senior associate Andriy Pozhidayev

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