Interim measures in support of arbitration in Ukraine: lessons from JKX Oil & Gas et al v Ukraine and the recent reform of Ukrainian legislation

Interim measures in support of arbitration in Ukraine: lessons from JKX Oil & Gas et al v Ukraine... Abstract On 9 June 2015, the Kyiv Pechersk District Court in Ukraine enforced an award rendered by an emergency arbitrator under the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) Arbitration Rules in the investment arbitration case JKX Oil & Gas et al v Ukraine. The judgment resulted from the first ever attempt to enforce an emergency arbitrator award in Ukraine. It was also reported as the first successful enforcement of an emergency arbitrator award against a state. The outcome is of particular importance in Ukraine, where courts were previously reluctant to order interim measures in support of arbitration. The enforcement proceedings for the JKX Oil & Gas et al v Ukraine emergency arbitrator award also demonstrate why a reform of Ukrainian arbitration-related law was necessary. On 15 December 2017, amendments to the Ukrainian Code of Civil Procedure entered into force regulating, inter alia, interim measures in support of arbitration. This article will analyse whether these changes may aid efficient enforcement of interim measures in Ukraine in the future and whether an emergency arbitrator award remains a viable option in arbitration proceedings related to Ukraine. 1. INTRODUCTION Obtaining interim relief in support of international arbitration proceedings may sometimes prove to be challenging. Most jurisdictions recognize that both arbitrators and national courts have concurrent jurisdiction on matters of provisional relief.1 Prior to the constitution of an arbitral tribunal, parties would usually have to rely on the assistance of national courts. In addition, a number of international arbitration institutions introduced emergency arbitrator provisions into their arbitration rules in order to provide the parties with an opportunity to obtain interim relief prior to the commencement of arbitration proceedings.2 Despite some initial scepticism, a tendency of increased use of this tool appears to emerge.3 The experience with the emergency arbitrator award in the investment arbitration case JKX Oil & Gas et al v Ukraine is a good example of why these mechanisms are not just useful, but may also be the only option to obtain timely interim relief in certain circumstances. In Ukraine, court-ordered interim relief in support of arbitration has been a challenging topic. Ukrainian courts have generally been reluctant to grant interim measures in support of arbitration either prior to the formation of the arbitral tribunal or during arbitral proceedings. Article 9 of the Ukrainian Law on International Commercial Arbitration4 provides that it is ‘not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure’. At the same time, Ukrainian procedural laws, until recently, only dealt with the possibility of ordering interim measures in support of proceedings before Ukrainian courts, not arbitral tribunals. The lack of a specific reference to interim measures in support of arbitration in the procedural law resulted in the reluctance of Ukrainian courts to apply Article 9 of the Ukrainian Law on International Commercial Arbitration.5 Thus, recourse to an emergency arbitrator would have been the only viable option to secure an arbitration claim when dealing with Ukrainian counterparties and assets located in Ukraine. On 3 October 2017, the Ukrainian legislator introduced a number of changes to the Ukrainian Code of Civil Procedure which came into force on 15 December 2017. The new legislation, inter alia, introduced regulations on interim relief in support of arbitration proceedings. In the following, the article sets out the background and provides a brief analysis of enforcement proceedings of the JKX Oil & Gas et al v Ukraine emergency award (the Emergency Award) (Section 2) which demonstrates the problems that were inherent in the Ukrainian arbitration support system (Section 3). It further evaluates the changes introduced to Ukrainian civil procedure and whether these would be able to fully address the challenges which existed before the reform (Section 4). 2. JKX OIL & GAS ET AL V UKRAINE 2.1. Background of the dispute At the start of 2015, JKX Oil & Gas plc, an energy company listed in London, together with its subsidiaries (the JKX Companies or the Claimants) initiated three arbitration proceedings against Ukraine. Two of them were based on bilateral investment treaties and set to be heard under the UNCITRAL rules and at ICSID. The third was initiated under the Energy Charter Treaty and set to be heard under the SCC Arbitration Rules.6 All three cases concerned similar claims for compensation of damages resulting from a number of legislative measures adopted by Ukraine. In 2014, in response to the ongoing crisis, the Ukrainian Parliament, inter alia, amended the Ukrainian Tax Code increasing royalties on gas production, introducing regulations requiring private companies to buy gas only from the state-owned enterprise Naftogaz, and restrictions on foreign cash transactions and repatriation of dividends.7 The JKX Companies alleged that they had suffered damages as a result of the measures and claimed the recovery of over USD 180 million incurred, inter alia, in rental fees which the Ukrainian subsidiary paid on production of oil and gas in Ukraine since 2011.8 2.2. SCC emergency arbitrator proceedings On 7 January 2015, the JKX Companies applied to the SCC for the appointment of an emergency arbitrator under Article 32(4) and Appendix II of the SCC Arbitration Rules, requesting interim measures to be imposed until the constitution of an arbitral tribunal. The Claimants sought suspension of the increase of royalties for gas production in Ukraine.9 The emergency arbitrator provisions of the SCC Arbitration Rules are applicable to all disputes that arose after the new Rules came into force in 2010.10 They provide for an expeditious procedure of acquiring interim relief from an emergency arbitrator: arbitrator’s appointment is to be expected within 24 hours of receipt of the application11 and the arbitrator is generally expected to deliver his award within a five-day period.12 On 8 January 2015, the Board of SCC appointed Mr Rudolf Dolzer13 to act as an emergency arbitrator in the case. On 14 January 2015, after requesting a one-day extension from the SCC,14 the emergency arbitrator issued the Emergency Award. Ukraine was ordered to refrain from imposing the new royalties rate on the gas production of the JKX subsidiary. The award was set to be valid until the determination on interim measures is made by the main tribunal appointed to hear the case. Ukraine did not participate in the proceedings.15 SCC Arbitration Rules provide that a decision rendered by an emergency arbitrator is binding upon the parties16 and the parties are expected to comply with it voluntarily and without delay.17 Having in mind the high voluntary compliance rates in arbitration,18 as well as some evidence regarding high compliance rates with emergency arbitrator awards,19 it may be expected that an emergency arbitrator award would be complied with without further enforcement. Ukraine, however, refused to comply with the Emergency Award, which prompted enforcement proceedings before Ukrainian courts. 2.3. Enforcement proceedings in Ukraine: a never-ending story? During the enforcement proceedings before the Kyiv Pechersk District Court (the First Instance Court),20 Ukraine opposed the enforcement of the Emergency Award based on, inter alia, allegations that: (i) the arbitration proceedings were not initiated in accordance with the agreement of the parties—the cooling off period was not observed since the trigger letter was addressed to the Administration of the President of Ukraine rather than the Ministry of Justice of Ukraine, which Ukraine asserted to be the proper addressee; (ii) the proceedings were not in accordance with the agreement of the parties since at the time of Ukraine’s accession to the Energy Charter Treaty SCC Arbitration Rules did not yet contain the emergency arbitrator mechanism; (iii) Ukraine was not properly notified about the appointment of the emergency arbitrator and could not present its case; and (iv) the award was against Ukrainian public policy, since the level of taxation could only be set by Ukrainian legislation and the award’s enforcement would effectively amend it affecting the state’s economic situation. The First Instance Court dismissed these arguments. First, it found that the emergency arbitrator procedure was in accordance with the agreement of the parties since the emergency arbitrator mechanism was foreseen in the SCC Arbitration Rules that were in force at the time of the request for the appointment of an emergency arbitrator. The court also ruled that Ukraine was properly notified about the appointment of the emergency arbitrator. The communications about his appointment were sent via email and the procedural schedule provided Ukraine a possibility to present its arguments on Claimants’ request for interim measures. Ukraine was, therefore, given sufficient opportunity to present its case. According to the First Instance Court, Ukraine’s failure to react to the email communications could not serve as a ground for refusal of enforcement of the Emergency Award. Finally, the court also stated that the Emergency Award did not violate Ukrainian public policy. Its enforcement would not amount to an amendment of Ukrainian tax legislation. It would only affect the royalty rate imposed on the JKX Companies. On 8 June 2015, finding no reasons that would speak against enforcement, the First Instance Court ordered Ukraine to comply with the Emergency Award. The court’s order was set to be valid until the determination on interim measures was made by the arbitral tribunal appointed to hear the case. At the time, Ukrainian procedural rules did not provide for any special procedures for the enforcement of arbitral awards. The First Instance Court judgment could, therefore, be appealed as any other Ukrainian court judgment. Thus, Ukraine filed an appeal to the Kyiv Court of Appeal (the Court of Appeal). In the meantime, the three proceedings initiated by the JKX Companies against Ukraine were consolidated under the UNCITRAL Arbitration Rules. On 23 July 2015, the investors obtained an interim award from the main tribunal with an identical order requiring Ukraine to limit the collection of rental fees on gas production to a rate of 28 per cent instead of 55 per cent.21 Even though the main tribunal made a determination on the interim measures, the enforcement proceedings related to the Emergency Award continued in Ukrainian courts. On 17 September 2015, the Court of Appeal reversed the judgment of the First Instance Court.22 The Court of Appeal stated that taxation is regulated exclusively by Ukrainian Tax Code and can only be changed by law. Therefore, allowing courts to change the tax rate would violate fundamental principles of Ukrainian taxation and of Ukrainian public policy. Furthermore, the Court of Appeal found that enforcement of the Emergency Award would pose a threat to the state interests, affect Ukrainian economy, and lead to a loss of budgetary income. On 24 February 2016, the decision of the Court of Appeal was invalidated in cassation proceedings before the High Specialized Court of Ukraine for Civil and Criminal Matters (the Cassation Court).23 The Cassation Court found that the Court of Appeal had erred when ruling that the Emergency Award’s enforcement would violate Ukrainian public policy. In particular, the Court of Appeal failed to take into account the fact that the Emergency Award only produced a temporary effect until the interim measures are determined by the main tribunal, and did not evaluate whether the award changed the system of taxation, or replace Ukrainian Tax Code provisions. In accordance with the regulations existing at the time, the case was then remanded to the Court of Appeal for reconsideration. On 17 May 2016, the Court of Appeal issued its second decision ruling to enforce the Emergency Award.24 The judgment echoed the findings of the Cassation Court, resolving that there were no grounds to refuse enforcement of the Emergency Award, since it did not generally affect Ukrainian tax rates. This decision was also challenged to the Cassation Court. This time, on 2 November 2016, the Cassation Court found that: (i) the Court of Appeal failed to fully consider Ukraine’s arguments that the Emergency Award goes against Ukrainian public policy and would lead to loss of budgetary income; (ii) the Administration of the President of Ukraine was not the proper recipient of the trigger letter and that it should have been addressed to the Ministry of Justice of Ukraine; (iii) the email notice on the appointment of the emergency arbitrator was sent out of office hours in view of statutory holidays; (iv) the SCC Arbitration Rules 2010 could not be applied in the case, since these were not the rules in force at the time when Ukraine signed the Energy Charter Treaty.25 Despite the possibility provided by the Ukrainian legislation, the Cassation Court did not issue a final decision and opted to repeatedly refer the case for reconsideration to the Court of Appeal. On 21 December 2016, the Court of Appeal denied enforcement of the Emergency Award.26 In its reasoning, the Court of Appeal echoed the concerns raised by the Cassation Court. On 11 January 2017, the Cassation Court opened yet another round of cassation proceedings initiated by the JKX Companies.27 The case appears to be still pending and no further information on the development of the enforcement proceedings is publicly available. In the meantime, the final award in the investment arbitration proceedings was rendered by the tribunal on 6 February 2017.28 The tribunal dismissed the main claim relating to the payment of royalties on gas production and awarded JKX Companies approximately USD 12 million for the Ukrainian rules requiring private companies to buy gas from state-owned suppliers and rules related to restrictions on repatriation of dividends.29 3. UKRAINIAN ENFORCEMENT SYSTEM AND THE NEED OF REFORM There is some discussion as to whether provisional measures ordered by an arbitral tribunal and emergency arbitrator awards may be enforced under the New York Convention with authorities holding that only ‘final’ awards may be so enforced while the interim measures are not final.30 The above enforcement proceedings demonstrate that, on the positive side, emergency arbitrator awards can be recognized in Ukraine and could, thus, be considered if an interim relief is sought prior to the commencement of arbitration proceedings. In fact, none of the courts in any of the judgments made any mention of the distinction between emergency arbitrator awards and final arbitral awards or raised concerns regarding the finality of the award.31 This is an important development for the parties trying to enforce emergency or partial awards in Ukraine. As mentioned above, court assistance for interim measures prior to arbitration or in support of an ongoing arbitration was at the time not readily available in Ukraine. Therefore, the emergency arbitrator procedure allowed the parties to circumvent the limitations of Ukrainian procedural laws and obtain interim relief that would be enforceable in Ukraine. The same would also be true for other jurisdictions that may be uncooperative in terms of court assistance. At the same time, even if a party succeeded in obtaining a judgment ordering enforcement of an emergency arbitrator award from a Ukrainian court, securing the awarded interim relief would have previously been a rather lengthy endeavour if not a never-ending story. This is well demonstrated by the chronology of proceedings in JKX Oil & Gas et al v Ukraine, where the final award was issued while the challenges to the judgment ordering enforcement of the Emergency Award were still pending. JKX Oil & Gas et al v Ukraine demonstrated that even if obtaining an emergency arbitrator award could theoretically be a viable circumvention of the lack of possibility to obtain interim measures from Ukrainian courts, in practice, this option appears to have rather been a moot tool due to the lack of limitations on the possibility to appeal related court decisions at the time. Accordingly, it was obvious that not only a clear regulation in relation to the general power of Ukrainian courts to grant interim relief in support of arbitration proceedings was desirable, but also a limitation of appeal proceedings in relation to the enforcement of arbitral awards before Ukrainian courts. 4. REFORMS OF UKRAINIAN CIVIL PROCEDURE On 15 December 2017, the long-awaited reform of the Ukrainian Code of Civil Procedure entered into force. First, the reform clarifies the inconsistencies in Ukrainian procedural laws and specifically regulates court-ordered interim measures in support of arbitration.32 The provisions give claimants a choice between applying for interim measures to a court of appeal at the place of arbitration, respondent’s place of residence or where the respondent’s property is located33 after the commencement of arbitral proceedings.34 The courts are required to consider the application within two days of receiving it and, generally, on ex parte basis without any prior notification of the parties.35 The decision of the court is immediately enforceable despite any appeal that may be filed against it.36 Secondly, the amendments limit the number of courts responsible for the enforcement of arbitral awards to two instances: (i) the Kyiv Court of Appeal would act as the court of first instance for foreign arbitral awards37 and (ii) the Supreme Court would act as the court of appeal38 without the possibility to refer the case back to the court of first instance.39 Cassation proceedings will no longer be available for the enforcement of arbitral awards.40 The consideration of the enforcement application is therefore now limited to two instances only. This has the potential to speed up the enforcement of arbitral awards ordering interim measures. In particular, the continuing back-and-forth of the case between different courts which took place in the JKX Oil & Gas et al v Ukraine Emergency Award enforcement proceedings appears to no longer be possible. Unfortunately, the amendments only offer a partial solution, as they do not provide for a possibility of obtaining interim measures prior to the commencement of arbitration.41 In some cases, interim measures granted after the commencement of arbitration may come too late if assets are relocated as soon as the request for arbitration is served upon the respondent. Thus, even after the amendments of Ukrainian legislation, emergency arbitrator provisions remain a relevant measure for obtaining pre-arbitration interim relief. At the same time, the amendments are a significant improvement and a step towards the creation of a more arbitration-friendly environment in Ukraine. It remains to be seen how they will be applied in practice. Footnotes 1 See eg Nigel Blackaby and others, Redfern and Hunter on International Arbitration (Oxford University Press, 6th edn, 2015) para 7.24. 2 For instance, the International Chamber of Commerce (ICC) launched the mechanism of pre-arbitral referee already in 1990 and replaced it with an emergency arbitrator mechanism in 2012. The Swiss Rules of International Arbitration contain similar provisions in their 2012 version. The London Court of International Arbitration (LCIA) introduced emergency arbitrator provisions in 2014, the China International Economic and Trade Arbitration Commission (CIETAC) in 2015, the Singapore International Arbitration Centre (SIAC) in 2010. SCC has the provisions in force since 1 January 2010. 3 During 2010–16, SCC administered 27 emergency arbitrator proceedings after the revision of its arbitration rules in 2010, see statistical data available on the SCC website <http://www.sccinstitute.com/statistics/> accessed 4 March 2018. During 2012–17, ICC received 61 applications for emergency measures after the revision of its arbitration rules in 2012, see data available on the ICC website <https://iccwbo.org/media-wall/news-speeches/full-2016-icc-dispute-resolution-statistics-published-court-bulletin/> accessed 4 March 2018. At the same time, SIAC received 57 applications for emergency relief following the revision of its arbitration rules, between July 2010 and March 2017, see statistical data available on the SIAC website <http://www.siac.org.sg/2014-11-03-13-33-43/facts-figures/statistics> accessed 4 March 2018. 4 Ukrainian Law on International Commercial Arbitration no 4002-XII of 24 February 1994, based on the 1985 UNCITRAL Model Law on International Commercial Arbitration. 5 See Pavlo Byelousov, ‘Ukraine’ in International Comparative Legal Guide to International Arbitration (Global Legal Group Ltd., 2015). It is worth noting that interim measures during the enforcement of an arbitral award in Ukrainian courts were possible and provided for in the Ukrainian Code of Civil Procedure, see Pavlo Byelousov, ‘Interim measures in Ukraine prior to, During and After Arbitration’, 67 <http://vkp.ua/content/files/articles/06.04.2012-3.pdf> accessed 4 March 2018. 6 See Kyriaki Karadelis, ‘Ukraine Faces Trio of Claims Over Gas Reforms’ (Global Arbitration Review, 16 February 2015) <http://globalarbitrationreview.com/article/1034222/ukraine-faces-trio-of-claims-over-gas-reforms> accessed 4 March 2018. 7 See Sebastian Perry, ‘Emergency Award Enforced Against Ukraine’ (Global Arbitration Review, 1 July 2015) <http://globalarbitrationreview.com/article/1034576/emergency-award-enforced-against-ukraine> accessed 4 March 2018. 8 See JKX Oil & Gas plc press release, 16 February 2015, ‘JKX Oil & Gas plc Announces International Arbitration Proceedings’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2015/PR-16-02-15.pdf> accessed 4 March 2018. 9 See Kyiv Pechersk District Court, JKX Oil & Gas et al v Ukraine, 8 June 2015, available in Ukrainian <http://reyestr.court.gov.ua/review/45009594> accessed 21 March 2017. The new amendments to the Ukrainian Tax Code mandated JKX to pay rental fees on gas production in Ukraine at a rate of 55% instead of the previous rate of 28%. 10 See the preamble to the SCC Arbitration Rules: ‘the parties shall be deemed to have agreed that the following rules, or such amended rules, in force on the date of the commencement of the arbitration, or the filing of an application for the appointment of an Emergency Arbitrator, shall be applied unless otherwise agreed by the parties’. For a detailed analysis of the new SCC emergency arbitrator provisions, see Patricia Shaughnessy, ‘Pre-arbitral Urgent Relief: The New SCC Emergency Arbitrator Rules’ (2010) 27(4) J Int Arbit 337. 11 SCC Arbitration Rules, Appendix II, art 4(1). 12 ibid art 8(1). 13 The arbitrator’s name is available in the full version of the court decision <http://res.cloudinary.com/lbresearch/image/upload/v1435757674/jkx_ppc_emergency_award_enforcement_in_ua_ruling_on_merits_8_june_2015_16115_1434.pdf> accessed 4 March 2018. 14 The five-day deadline can be extended upon a reasoned request from the emergency arbitrator or if the extension is otherwise necessary, see n 12. 15 The emergency arbitrator’s findings and the proceedings were summarized during Ukrainian enforcement proceedings, see Kyiv Pechersk District Court (n 9). 16 SCC Arbitration Rules, Appendix II, art 9(1). 17 ibid art 9(3). 18 See Queen Mary University of London 2008 International Arbitration Study – Corporate Attitudes and Practices: Recognition and Enforcement of Foreign Awards, noting that only 11% of cases result in recognition and enforcement proceedings <http://www.arbitration.qmul.ac.uk/research/2008/index.html> accessed 4 March 2018; see also Queen Mary University of London 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process, noting that 62% of interim measures granted by arbitral tribunals are complied with voluntarily <http://www.arbitration.qmul.ac.uk/research/2012/index.html> accessed 4 March 2018. 19 According to the information of the ICC, there is an encouraging rate of voluntary compliance with emergency arbitrators’ decisions in international commercial arbitration, see Andrea Carlevaris and José Ricardo Feris, ‘Running in the ICC Emergency Arbitrator Rules: The First Ten Cases’ (2014) 25(1) ICC Int Court Arbit Bullet 25, 37–38; see also Ank Santens and Jaroslav Kudrna, ‘The State of Play of Enforcement of Emergency Arbitrator Decisions’ (2017) 34(1) J Int Arbit 1, 14–15. 20 See Kyiv Pechersk District Court (n 9). 21 See JKX Oil & Gas plc press release, 23 July 2015, ‘JKX Oil & Gas plc (“JKX”) Announces Interim Award: International Arbitration Proceedings’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2015/JKX%20International%20Arbitration%20Proceedings%20Interim%20Award%2023%2007%2015.pdf> accessed 21 March 2017. See also Kyiv Pechersk District Court (n 9), which mentions that (i) the emergency arbitrator limited the validity of the Emergency Award until the determination on interim measures is made by the main tribunal in the case and (ii) the court’s enforcement order is valid until the main tribunal appointed to hear the case makes a determination on the appropriate interim measures. Thus, presumably, both the Emergency Award and the court’s enforcement order should have expired when the main tribunal issued its interim award on 23 July 2015. Whether the Emergency Award and the judgment of the First Instance Court could still be valid is debatable, but the enforcement proceedings proceeded nonetheless. 22 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 17 September 2015, available in Ukrainian <http://www.reyestr.court.gov.ua/review/51814205> accessed 21 March 2017. 23 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 24 February 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/56161176> accessed 21 March 2017 and in English <http://www.italaw.com/sites/default/files/case-documents/italaw7391.pdf> accessed 4 March 2018. 24 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 17 May 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/57985816> accessed 21 March 2017 and in English <http://www.sccinstitute.com/media/145837/appeal-court-decision_17052016_eng.pdf> accessed 4 March 2018. 25 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 2 November 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/62524805> accessed 1 May 2018. 26 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 21 December 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/Review/63837890> accessed 23 August 2017. 27 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 11 January 2017, available in Ukrainian <http://www.reyestr.court.gov.ua/Review/64262600> accessed 21 March 2017. 28 See JKX Oil & Gas plc press release, 7 February 2017, ‘Tribunal Award – Update’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2017/International%20Arbitration%20FINAL.pdf> accessed 4 March 2018. 29 See ‘On the Wires: Philippines Liable for BIT Breach; Investor that Won Emergency Orders vs. Ukraine Does not Fare as Well in Final Result; Iranians Pursue Bahrain over Bank Closure’ (IAReporter, 12 February 2017) <https://www.iareporter.com/articles/on-the-wires-philippines-liable-for-bit-breach-investor-that-won-emergency-orders-vs-ukraine-does-not-fare-as-well-in-final-result-iranians-pursue-bahrain-over-bank-closure/> accessed 2 March 2018. 30 Gary B Born, ‘Provisional Measures in International Arbitration’ in International Arbitration: Law and Practice (Kluwer Law International, 2nd edn, 2015) 209–26, para 23. 31 See similar observations regarding the lack of reference to any issues pertaining to the finality of the Emergency Award, Olena Perepelynska, ‘Enforceability of Emergency Arbitrator Awards in Ukraine’ (CIS Arbitration Forum, 7 December 2015) <http://www.cisarbitration.com/2015/12/07/enforceability-of-emergency-arbitrator-awards-in-ukraine/> accessed 4 March 2018. 32 See Ukrainian Code of Civil Procedure, art 149(3). 33 ibid 152(3). 34 ibid 151(6). 35 ibid 153(1). 36 ibid 153(10). 37 ibid arts 475(3) and 23(3)(2). If the seat of arbitration is in Ukraine, courts of appeal at the seat would act as first instance courts with respect to enforcement and setting aside proceedings, see ibid arts 23(3)(1) and 454(4). 38 ibid art 351(2). 39 ibid art 382(1)(4). 40 ibid art 389(3)(1). 41 ibid art 151(6), which requires the applicant to submit information on the commencement of arbitration within its application for interim measures. © The Author(s) 2018. Published by Oxford University Press on behalf of the London Court of International Arbitration. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Arbitration International Oxford University Press

Interim measures in support of arbitration in Ukraine: lessons from JKX Oil & Gas et al v Ukraine and the recent reform of Ukrainian legislation

Arbitration International , Volume Advance Article (2) – Jun 4, 2018

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Abstract

Abstract On 9 June 2015, the Kyiv Pechersk District Court in Ukraine enforced an award rendered by an emergency arbitrator under the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) Arbitration Rules in the investment arbitration case JKX Oil & Gas et al v Ukraine. The judgment resulted from the first ever attempt to enforce an emergency arbitrator award in Ukraine. It was also reported as the first successful enforcement of an emergency arbitrator award against a state. The outcome is of particular importance in Ukraine, where courts were previously reluctant to order interim measures in support of arbitration. The enforcement proceedings for the JKX Oil & Gas et al v Ukraine emergency arbitrator award also demonstrate why a reform of Ukrainian arbitration-related law was necessary. On 15 December 2017, amendments to the Ukrainian Code of Civil Procedure entered into force regulating, inter alia, interim measures in support of arbitration. This article will analyse whether these changes may aid efficient enforcement of interim measures in Ukraine in the future and whether an emergency arbitrator award remains a viable option in arbitration proceedings related to Ukraine. 1. INTRODUCTION Obtaining interim relief in support of international arbitration proceedings may sometimes prove to be challenging. Most jurisdictions recognize that both arbitrators and national courts have concurrent jurisdiction on matters of provisional relief.1 Prior to the constitution of an arbitral tribunal, parties would usually have to rely on the assistance of national courts. In addition, a number of international arbitration institutions introduced emergency arbitrator provisions into their arbitration rules in order to provide the parties with an opportunity to obtain interim relief prior to the commencement of arbitration proceedings.2 Despite some initial scepticism, a tendency of increased use of this tool appears to emerge.3 The experience with the emergency arbitrator award in the investment arbitration case JKX Oil & Gas et al v Ukraine is a good example of why these mechanisms are not just useful, but may also be the only option to obtain timely interim relief in certain circumstances. In Ukraine, court-ordered interim relief in support of arbitration has been a challenging topic. Ukrainian courts have generally been reluctant to grant interim measures in support of arbitration either prior to the formation of the arbitral tribunal or during arbitral proceedings. Article 9 of the Ukrainian Law on International Commercial Arbitration4 provides that it is ‘not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure’. At the same time, Ukrainian procedural laws, until recently, only dealt with the possibility of ordering interim measures in support of proceedings before Ukrainian courts, not arbitral tribunals. The lack of a specific reference to interim measures in support of arbitration in the procedural law resulted in the reluctance of Ukrainian courts to apply Article 9 of the Ukrainian Law on International Commercial Arbitration.5 Thus, recourse to an emergency arbitrator would have been the only viable option to secure an arbitration claim when dealing with Ukrainian counterparties and assets located in Ukraine. On 3 October 2017, the Ukrainian legislator introduced a number of changes to the Ukrainian Code of Civil Procedure which came into force on 15 December 2017. The new legislation, inter alia, introduced regulations on interim relief in support of arbitration proceedings. In the following, the article sets out the background and provides a brief analysis of enforcement proceedings of the JKX Oil & Gas et al v Ukraine emergency award (the Emergency Award) (Section 2) which demonstrates the problems that were inherent in the Ukrainian arbitration support system (Section 3). It further evaluates the changes introduced to Ukrainian civil procedure and whether these would be able to fully address the challenges which existed before the reform (Section 4). 2. JKX OIL & GAS ET AL V UKRAINE 2.1. Background of the dispute At the start of 2015, JKX Oil & Gas plc, an energy company listed in London, together with its subsidiaries (the JKX Companies or the Claimants) initiated three arbitration proceedings against Ukraine. Two of them were based on bilateral investment treaties and set to be heard under the UNCITRAL rules and at ICSID. The third was initiated under the Energy Charter Treaty and set to be heard under the SCC Arbitration Rules.6 All three cases concerned similar claims for compensation of damages resulting from a number of legislative measures adopted by Ukraine. In 2014, in response to the ongoing crisis, the Ukrainian Parliament, inter alia, amended the Ukrainian Tax Code increasing royalties on gas production, introducing regulations requiring private companies to buy gas only from the state-owned enterprise Naftogaz, and restrictions on foreign cash transactions and repatriation of dividends.7 The JKX Companies alleged that they had suffered damages as a result of the measures and claimed the recovery of over USD 180 million incurred, inter alia, in rental fees which the Ukrainian subsidiary paid on production of oil and gas in Ukraine since 2011.8 2.2. SCC emergency arbitrator proceedings On 7 January 2015, the JKX Companies applied to the SCC for the appointment of an emergency arbitrator under Article 32(4) and Appendix II of the SCC Arbitration Rules, requesting interim measures to be imposed until the constitution of an arbitral tribunal. The Claimants sought suspension of the increase of royalties for gas production in Ukraine.9 The emergency arbitrator provisions of the SCC Arbitration Rules are applicable to all disputes that arose after the new Rules came into force in 2010.10 They provide for an expeditious procedure of acquiring interim relief from an emergency arbitrator: arbitrator’s appointment is to be expected within 24 hours of receipt of the application11 and the arbitrator is generally expected to deliver his award within a five-day period.12 On 8 January 2015, the Board of SCC appointed Mr Rudolf Dolzer13 to act as an emergency arbitrator in the case. On 14 January 2015, after requesting a one-day extension from the SCC,14 the emergency arbitrator issued the Emergency Award. Ukraine was ordered to refrain from imposing the new royalties rate on the gas production of the JKX subsidiary. The award was set to be valid until the determination on interim measures is made by the main tribunal appointed to hear the case. Ukraine did not participate in the proceedings.15 SCC Arbitration Rules provide that a decision rendered by an emergency arbitrator is binding upon the parties16 and the parties are expected to comply with it voluntarily and without delay.17 Having in mind the high voluntary compliance rates in arbitration,18 as well as some evidence regarding high compliance rates with emergency arbitrator awards,19 it may be expected that an emergency arbitrator award would be complied with without further enforcement. Ukraine, however, refused to comply with the Emergency Award, which prompted enforcement proceedings before Ukrainian courts. 2.3. Enforcement proceedings in Ukraine: a never-ending story? During the enforcement proceedings before the Kyiv Pechersk District Court (the First Instance Court),20 Ukraine opposed the enforcement of the Emergency Award based on, inter alia, allegations that: (i) the arbitration proceedings were not initiated in accordance with the agreement of the parties—the cooling off period was not observed since the trigger letter was addressed to the Administration of the President of Ukraine rather than the Ministry of Justice of Ukraine, which Ukraine asserted to be the proper addressee; (ii) the proceedings were not in accordance with the agreement of the parties since at the time of Ukraine’s accession to the Energy Charter Treaty SCC Arbitration Rules did not yet contain the emergency arbitrator mechanism; (iii) Ukraine was not properly notified about the appointment of the emergency arbitrator and could not present its case; and (iv) the award was against Ukrainian public policy, since the level of taxation could only be set by Ukrainian legislation and the award’s enforcement would effectively amend it affecting the state’s economic situation. The First Instance Court dismissed these arguments. First, it found that the emergency arbitrator procedure was in accordance with the agreement of the parties since the emergency arbitrator mechanism was foreseen in the SCC Arbitration Rules that were in force at the time of the request for the appointment of an emergency arbitrator. The court also ruled that Ukraine was properly notified about the appointment of the emergency arbitrator. The communications about his appointment were sent via email and the procedural schedule provided Ukraine a possibility to present its arguments on Claimants’ request for interim measures. Ukraine was, therefore, given sufficient opportunity to present its case. According to the First Instance Court, Ukraine’s failure to react to the email communications could not serve as a ground for refusal of enforcement of the Emergency Award. Finally, the court also stated that the Emergency Award did not violate Ukrainian public policy. Its enforcement would not amount to an amendment of Ukrainian tax legislation. It would only affect the royalty rate imposed on the JKX Companies. On 8 June 2015, finding no reasons that would speak against enforcement, the First Instance Court ordered Ukraine to comply with the Emergency Award. The court’s order was set to be valid until the determination on interim measures was made by the arbitral tribunal appointed to hear the case. At the time, Ukrainian procedural rules did not provide for any special procedures for the enforcement of arbitral awards. The First Instance Court judgment could, therefore, be appealed as any other Ukrainian court judgment. Thus, Ukraine filed an appeal to the Kyiv Court of Appeal (the Court of Appeal). In the meantime, the three proceedings initiated by the JKX Companies against Ukraine were consolidated under the UNCITRAL Arbitration Rules. On 23 July 2015, the investors obtained an interim award from the main tribunal with an identical order requiring Ukraine to limit the collection of rental fees on gas production to a rate of 28 per cent instead of 55 per cent.21 Even though the main tribunal made a determination on the interim measures, the enforcement proceedings related to the Emergency Award continued in Ukrainian courts. On 17 September 2015, the Court of Appeal reversed the judgment of the First Instance Court.22 The Court of Appeal stated that taxation is regulated exclusively by Ukrainian Tax Code and can only be changed by law. Therefore, allowing courts to change the tax rate would violate fundamental principles of Ukrainian taxation and of Ukrainian public policy. Furthermore, the Court of Appeal found that enforcement of the Emergency Award would pose a threat to the state interests, affect Ukrainian economy, and lead to a loss of budgetary income. On 24 February 2016, the decision of the Court of Appeal was invalidated in cassation proceedings before the High Specialized Court of Ukraine for Civil and Criminal Matters (the Cassation Court).23 The Cassation Court found that the Court of Appeal had erred when ruling that the Emergency Award’s enforcement would violate Ukrainian public policy. In particular, the Court of Appeal failed to take into account the fact that the Emergency Award only produced a temporary effect until the interim measures are determined by the main tribunal, and did not evaluate whether the award changed the system of taxation, or replace Ukrainian Tax Code provisions. In accordance with the regulations existing at the time, the case was then remanded to the Court of Appeal for reconsideration. On 17 May 2016, the Court of Appeal issued its second decision ruling to enforce the Emergency Award.24 The judgment echoed the findings of the Cassation Court, resolving that there were no grounds to refuse enforcement of the Emergency Award, since it did not generally affect Ukrainian tax rates. This decision was also challenged to the Cassation Court. This time, on 2 November 2016, the Cassation Court found that: (i) the Court of Appeal failed to fully consider Ukraine’s arguments that the Emergency Award goes against Ukrainian public policy and would lead to loss of budgetary income; (ii) the Administration of the President of Ukraine was not the proper recipient of the trigger letter and that it should have been addressed to the Ministry of Justice of Ukraine; (iii) the email notice on the appointment of the emergency arbitrator was sent out of office hours in view of statutory holidays; (iv) the SCC Arbitration Rules 2010 could not be applied in the case, since these were not the rules in force at the time when Ukraine signed the Energy Charter Treaty.25 Despite the possibility provided by the Ukrainian legislation, the Cassation Court did not issue a final decision and opted to repeatedly refer the case for reconsideration to the Court of Appeal. On 21 December 2016, the Court of Appeal denied enforcement of the Emergency Award.26 In its reasoning, the Court of Appeal echoed the concerns raised by the Cassation Court. On 11 January 2017, the Cassation Court opened yet another round of cassation proceedings initiated by the JKX Companies.27 The case appears to be still pending and no further information on the development of the enforcement proceedings is publicly available. In the meantime, the final award in the investment arbitration proceedings was rendered by the tribunal on 6 February 2017.28 The tribunal dismissed the main claim relating to the payment of royalties on gas production and awarded JKX Companies approximately USD 12 million for the Ukrainian rules requiring private companies to buy gas from state-owned suppliers and rules related to restrictions on repatriation of dividends.29 3. UKRAINIAN ENFORCEMENT SYSTEM AND THE NEED OF REFORM There is some discussion as to whether provisional measures ordered by an arbitral tribunal and emergency arbitrator awards may be enforced under the New York Convention with authorities holding that only ‘final’ awards may be so enforced while the interim measures are not final.30 The above enforcement proceedings demonstrate that, on the positive side, emergency arbitrator awards can be recognized in Ukraine and could, thus, be considered if an interim relief is sought prior to the commencement of arbitration proceedings. In fact, none of the courts in any of the judgments made any mention of the distinction between emergency arbitrator awards and final arbitral awards or raised concerns regarding the finality of the award.31 This is an important development for the parties trying to enforce emergency or partial awards in Ukraine. As mentioned above, court assistance for interim measures prior to arbitration or in support of an ongoing arbitration was at the time not readily available in Ukraine. Therefore, the emergency arbitrator procedure allowed the parties to circumvent the limitations of Ukrainian procedural laws and obtain interim relief that would be enforceable in Ukraine. The same would also be true for other jurisdictions that may be uncooperative in terms of court assistance. At the same time, even if a party succeeded in obtaining a judgment ordering enforcement of an emergency arbitrator award from a Ukrainian court, securing the awarded interim relief would have previously been a rather lengthy endeavour if not a never-ending story. This is well demonstrated by the chronology of proceedings in JKX Oil & Gas et al v Ukraine, where the final award was issued while the challenges to the judgment ordering enforcement of the Emergency Award were still pending. JKX Oil & Gas et al v Ukraine demonstrated that even if obtaining an emergency arbitrator award could theoretically be a viable circumvention of the lack of possibility to obtain interim measures from Ukrainian courts, in practice, this option appears to have rather been a moot tool due to the lack of limitations on the possibility to appeal related court decisions at the time. Accordingly, it was obvious that not only a clear regulation in relation to the general power of Ukrainian courts to grant interim relief in support of arbitration proceedings was desirable, but also a limitation of appeal proceedings in relation to the enforcement of arbitral awards before Ukrainian courts. 4. REFORMS OF UKRAINIAN CIVIL PROCEDURE On 15 December 2017, the long-awaited reform of the Ukrainian Code of Civil Procedure entered into force. First, the reform clarifies the inconsistencies in Ukrainian procedural laws and specifically regulates court-ordered interim measures in support of arbitration.32 The provisions give claimants a choice between applying for interim measures to a court of appeal at the place of arbitration, respondent’s place of residence or where the respondent’s property is located33 after the commencement of arbitral proceedings.34 The courts are required to consider the application within two days of receiving it and, generally, on ex parte basis without any prior notification of the parties.35 The decision of the court is immediately enforceable despite any appeal that may be filed against it.36 Secondly, the amendments limit the number of courts responsible for the enforcement of arbitral awards to two instances: (i) the Kyiv Court of Appeal would act as the court of first instance for foreign arbitral awards37 and (ii) the Supreme Court would act as the court of appeal38 without the possibility to refer the case back to the court of first instance.39 Cassation proceedings will no longer be available for the enforcement of arbitral awards.40 The consideration of the enforcement application is therefore now limited to two instances only. This has the potential to speed up the enforcement of arbitral awards ordering interim measures. In particular, the continuing back-and-forth of the case between different courts which took place in the JKX Oil & Gas et al v Ukraine Emergency Award enforcement proceedings appears to no longer be possible. Unfortunately, the amendments only offer a partial solution, as they do not provide for a possibility of obtaining interim measures prior to the commencement of arbitration.41 In some cases, interim measures granted after the commencement of arbitration may come too late if assets are relocated as soon as the request for arbitration is served upon the respondent. Thus, even after the amendments of Ukrainian legislation, emergency arbitrator provisions remain a relevant measure for obtaining pre-arbitration interim relief. At the same time, the amendments are a significant improvement and a step towards the creation of a more arbitration-friendly environment in Ukraine. It remains to be seen how they will be applied in practice. Footnotes 1 See eg Nigel Blackaby and others, Redfern and Hunter on International Arbitration (Oxford University Press, 6th edn, 2015) para 7.24. 2 For instance, the International Chamber of Commerce (ICC) launched the mechanism of pre-arbitral referee already in 1990 and replaced it with an emergency arbitrator mechanism in 2012. The Swiss Rules of International Arbitration contain similar provisions in their 2012 version. The London Court of International Arbitration (LCIA) introduced emergency arbitrator provisions in 2014, the China International Economic and Trade Arbitration Commission (CIETAC) in 2015, the Singapore International Arbitration Centre (SIAC) in 2010. SCC has the provisions in force since 1 January 2010. 3 During 2010–16, SCC administered 27 emergency arbitrator proceedings after the revision of its arbitration rules in 2010, see statistical data available on the SCC website <http://www.sccinstitute.com/statistics/> accessed 4 March 2018. During 2012–17, ICC received 61 applications for emergency measures after the revision of its arbitration rules in 2012, see data available on the ICC website <https://iccwbo.org/media-wall/news-speeches/full-2016-icc-dispute-resolution-statistics-published-court-bulletin/> accessed 4 March 2018. At the same time, SIAC received 57 applications for emergency relief following the revision of its arbitration rules, between July 2010 and March 2017, see statistical data available on the SIAC website <http://www.siac.org.sg/2014-11-03-13-33-43/facts-figures/statistics> accessed 4 March 2018. 4 Ukrainian Law on International Commercial Arbitration no 4002-XII of 24 February 1994, based on the 1985 UNCITRAL Model Law on International Commercial Arbitration. 5 See Pavlo Byelousov, ‘Ukraine’ in International Comparative Legal Guide to International Arbitration (Global Legal Group Ltd., 2015). It is worth noting that interim measures during the enforcement of an arbitral award in Ukrainian courts were possible and provided for in the Ukrainian Code of Civil Procedure, see Pavlo Byelousov, ‘Interim measures in Ukraine prior to, During and After Arbitration’, 67 <http://vkp.ua/content/files/articles/06.04.2012-3.pdf> accessed 4 March 2018. 6 See Kyriaki Karadelis, ‘Ukraine Faces Trio of Claims Over Gas Reforms’ (Global Arbitration Review, 16 February 2015) <http://globalarbitrationreview.com/article/1034222/ukraine-faces-trio-of-claims-over-gas-reforms> accessed 4 March 2018. 7 See Sebastian Perry, ‘Emergency Award Enforced Against Ukraine’ (Global Arbitration Review, 1 July 2015) <http://globalarbitrationreview.com/article/1034576/emergency-award-enforced-against-ukraine> accessed 4 March 2018. 8 See JKX Oil & Gas plc press release, 16 February 2015, ‘JKX Oil & Gas plc Announces International Arbitration Proceedings’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2015/PR-16-02-15.pdf> accessed 4 March 2018. 9 See Kyiv Pechersk District Court, JKX Oil & Gas et al v Ukraine, 8 June 2015, available in Ukrainian <http://reyestr.court.gov.ua/review/45009594> accessed 21 March 2017. The new amendments to the Ukrainian Tax Code mandated JKX to pay rental fees on gas production in Ukraine at a rate of 55% instead of the previous rate of 28%. 10 See the preamble to the SCC Arbitration Rules: ‘the parties shall be deemed to have agreed that the following rules, or such amended rules, in force on the date of the commencement of the arbitration, or the filing of an application for the appointment of an Emergency Arbitrator, shall be applied unless otherwise agreed by the parties’. For a detailed analysis of the new SCC emergency arbitrator provisions, see Patricia Shaughnessy, ‘Pre-arbitral Urgent Relief: The New SCC Emergency Arbitrator Rules’ (2010) 27(4) J Int Arbit 337. 11 SCC Arbitration Rules, Appendix II, art 4(1). 12 ibid art 8(1). 13 The arbitrator’s name is available in the full version of the court decision <http://res.cloudinary.com/lbresearch/image/upload/v1435757674/jkx_ppc_emergency_award_enforcement_in_ua_ruling_on_merits_8_june_2015_16115_1434.pdf> accessed 4 March 2018. 14 The five-day deadline can be extended upon a reasoned request from the emergency arbitrator or if the extension is otherwise necessary, see n 12. 15 The emergency arbitrator’s findings and the proceedings were summarized during Ukrainian enforcement proceedings, see Kyiv Pechersk District Court (n 9). 16 SCC Arbitration Rules, Appendix II, art 9(1). 17 ibid art 9(3). 18 See Queen Mary University of London 2008 International Arbitration Study – Corporate Attitudes and Practices: Recognition and Enforcement of Foreign Awards, noting that only 11% of cases result in recognition and enforcement proceedings <http://www.arbitration.qmul.ac.uk/research/2008/index.html> accessed 4 March 2018; see also Queen Mary University of London 2012 International Arbitration Survey: Current and Preferred Practices in the Arbitral Process, noting that 62% of interim measures granted by arbitral tribunals are complied with voluntarily <http://www.arbitration.qmul.ac.uk/research/2012/index.html> accessed 4 March 2018. 19 According to the information of the ICC, there is an encouraging rate of voluntary compliance with emergency arbitrators’ decisions in international commercial arbitration, see Andrea Carlevaris and José Ricardo Feris, ‘Running in the ICC Emergency Arbitrator Rules: The First Ten Cases’ (2014) 25(1) ICC Int Court Arbit Bullet 25, 37–38; see also Ank Santens and Jaroslav Kudrna, ‘The State of Play of Enforcement of Emergency Arbitrator Decisions’ (2017) 34(1) J Int Arbit 1, 14–15. 20 See Kyiv Pechersk District Court (n 9). 21 See JKX Oil & Gas plc press release, 23 July 2015, ‘JKX Oil & Gas plc (“JKX”) Announces Interim Award: International Arbitration Proceedings’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2015/JKX%20International%20Arbitration%20Proceedings%20Interim%20Award%2023%2007%2015.pdf> accessed 21 March 2017. See also Kyiv Pechersk District Court (n 9), which mentions that (i) the emergency arbitrator limited the validity of the Emergency Award until the determination on interim measures is made by the main tribunal in the case and (ii) the court’s enforcement order is valid until the main tribunal appointed to hear the case makes a determination on the appropriate interim measures. Thus, presumably, both the Emergency Award and the court’s enforcement order should have expired when the main tribunal issued its interim award on 23 July 2015. Whether the Emergency Award and the judgment of the First Instance Court could still be valid is debatable, but the enforcement proceedings proceeded nonetheless. 22 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 17 September 2015, available in Ukrainian <http://www.reyestr.court.gov.ua/review/51814205> accessed 21 March 2017. 23 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 24 February 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/56161176> accessed 21 March 2017 and in English <http://www.italaw.com/sites/default/files/case-documents/italaw7391.pdf> accessed 4 March 2018. 24 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 17 May 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/57985816> accessed 21 March 2017 and in English <http://www.sccinstitute.com/media/145837/appeal-court-decision_17052016_eng.pdf> accessed 4 March 2018. 25 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 2 November 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/review/62524805> accessed 1 May 2018. 26 See Kyiv Court of Appeal, JKX Oil & Gas et al v Ukraine, 21 December 2016, available in Ukrainian <http://www.reyestr.court.gov.ua/Review/63837890> accessed 23 August 2017. 27 See High Specialized Court of Ukraine for Civil and Criminal Matters, JKX Oil & Gas et al v Ukraine, 11 January 2017, available in Ukrainian <http://www.reyestr.court.gov.ua/Review/64262600> accessed 21 March 2017. 28 See JKX Oil & Gas plc press release, 7 February 2017, ‘Tribunal Award – Update’ <http://www.jkx.co.uk/∼/media/Files/J/JKX/press-release/2017/International%20Arbitration%20FINAL.pdf> accessed 4 March 2018. 29 See ‘On the Wires: Philippines Liable for BIT Breach; Investor that Won Emergency Orders vs. Ukraine Does not Fare as Well in Final Result; Iranians Pursue Bahrain over Bank Closure’ (IAReporter, 12 February 2017) <https://www.iareporter.com/articles/on-the-wires-philippines-liable-for-bit-breach-investor-that-won-emergency-orders-vs-ukraine-does-not-fare-as-well-in-final-result-iranians-pursue-bahrain-over-bank-closure/> accessed 2 March 2018. 30 Gary B Born, ‘Provisional Measures in International Arbitration’ in International Arbitration: Law and Practice (Kluwer Law International, 2nd edn, 2015) 209–26, para 23. 31 See similar observations regarding the lack of reference to any issues pertaining to the finality of the Emergency Award, Olena Perepelynska, ‘Enforceability of Emergency Arbitrator Awards in Ukraine’ (CIS Arbitration Forum, 7 December 2015) <http://www.cisarbitration.com/2015/12/07/enforceability-of-emergency-arbitrator-awards-in-ukraine/> accessed 4 March 2018. 32 See Ukrainian Code of Civil Procedure, art 149(3). 33 ibid 152(3). 34 ibid 151(6). 35 ibid 153(1). 36 ibid 153(10). 37 ibid arts 475(3) and 23(3)(2). If the seat of arbitration is in Ukraine, courts of appeal at the seat would act as first instance courts with respect to enforcement and setting aside proceedings, see ibid arts 23(3)(1) and 454(4). 38 ibid art 351(2). 39 ibid art 382(1)(4). 40 ibid art 389(3)(1). 41 ibid art 151(6), which requires the applicant to submit information on the commencement of arbitration within its application for interim measures. © The Author(s) 2018. Published by Oxford University Press on behalf of the London Court of International Arbitration. All rights reserved. For permissions, please email: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)

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Arbitration InternationalOxford University Press

Published: Jun 4, 2018

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