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Judicial reform in Ukraine: new specifics of considering labor disputes and disputes with corporate officers

On 15 December 2017, landmark changes of Ukrainian procedural law entered into force, as introduced by Law of Ukraine of 3 October 2017 No. 2147-VIII "On Amendments to the Commercial Procedure Code of Ukraine, Civil Procedure Code of Ukraine, Code of Administrative Procedure of Ukraine, and other Legislative Acts" (the "Amendments"). 

The Amendments have enacted the restated versions of procedural codes of Ukraine resulting in substantial changes in a number of procedural rules of both general nature and in respect of consideration of specific categories of disputes. In particular, the Amendments have introduced new specifics of consideration of labor disputes, and have altered certain rules related to disputes with corporate officers. 

The key novelties on consideration of labor disputes by general courts are as follows: 

  • upon entry into force of the Amendments, a simplified court procedure applies to all labor disputes in order to ensure their quick resolution. The simplified procedure contemplates shorter time limits for consideration of cases (up to 60 days from the date of commencement of the court proceedings) and for completion of separate procedural steps, absence of certain stages of court proceedings (preparatory court hearing, legal debates), and the possibility of a written procedure without presence of the parties. However, the court may, at its own initiative or if a party so requests, summon the parties to the labor dispute to appear for an oral hearing; 
  • additional grounds to reject a cassation review by the Supreme Court may apply for labor disputes with a minor amount of claim (particularly, if a legal opinion of the Supreme Court is available based on review of a similar case); 
  • representation by licensed attorneys is not mandatory for labor disputes. 

The Amendments have also changed the procedure for consideration by commercial courts of damages claims to corporate officers (including former officers) of companies: 

  • the jurisdiction of commercial courts now extends to disputes of all legal entities (not only those established in a form of business entities) on recovery of damages by corporate officers based on the claims of owners (participants, shareholders) of such legal entities; 
  • now only the owner (participant, shareholder) of a legal entity holding at least 10 percent of its shares or authorized capital can act as a claimant in such disputes in commercial courts. Previously, the right to lodge damages claims before commercial courts also rested directly with legal entities that suffered such damages due to actions or inactivity of its officers. Apparently, now such disputes may be considered by general courts.

For further information please contact Asters' partner Svitlana Chepurna and senior associate Inesa Letych.