Download here the chapter on Ukraine from the last edition of our Ship Arrests in Practice publication.
The law is stated as at December 1st 2011.

On 7 September 2011 the Verkhovna Rada (the Parliament) of Ukraine passed the Law ‘On Ukraine’s accession to the International Convention for the Unification of Certain Rules Relating to the Arrest of Sea-Going Ships (Brussels, 1952).

As some other parties to the International Convention (Great Britain, Antigua, Bahamas etc.) Ukraine accedes to the Convention subject to reservation according to which ‘Ukraine reserves the right not to apply the provisions of the Convention in relation to the warships and other state-owned vessels being operated non-commercially’.

Pursuant to the Law the Convention comes into force after six months of the receipt of notification on Ukraine’s accession to the Convention by the Belgian Ministry of Foreign Affairs (Article 15 of the Convention).

As experts consider the adoption of the Law will regulate, in the long run, the legal procedures for the arrest of vessels in Ukrainian ports and will give the possibility to overcome numerous obstacles faced by Ukrainian and foreign carriers in international sea carriages related to cargoes and passengers through Ukrainian ports. Thus, it shall facilitate the development of transport and maritime sectors of Ukraine.  
  
Penned by Alexander Chebotarenko
Senior Lawyer of Interlegal
Chebotarenko@interlegal.com.ua
http://www.interlegal.com.ua/

Besides the adaptation of the Ukrainian legislation to the legislation of the EU, joining the Convention should lead to the situation when Ukrainian vessels could be arrested in the member countries under the maritime claims only, as well as vessels of the member countries could be arrested under the maritime claims only in the ports of Ukraine.

The Commercial Procedural Code and the Civil Procedural Code of Ukraine are supposed to be amended accordingly.

Thus, in the result of the bill’s enactment the commercial process shall be innovated by the exclusive jurisdiction. Article 116 of the Commercial Procedural Code of Ukraine is to be amended by inclusion of the second part to clarify that the cases on the disputes arising out of the maritime claims are to be heard by the court at the location of the port where the vessel, in relation to which the security of the maritime claim is made, stays. The civil process (Article 114 of the Civil Procedural Code of Ukraine) shall be amended in the same way. These novelties may result in introduction of the legal principle pursuant to which the jurisdiction on the maritime disputes shall be defined at the place of the vessel’s arrest (arresto fundatur jurisdictio). 

At the same time, the bill contains a highly disputable proposal on entering a provision to Article 110 of the Civil Procedural Code according to which the claim under the dispute arising out of the damages that make the debt due to maritime claim, can be filed at the location of the respondent’s ship or at the place of the ship’s registration (port).

The latest provision definitely contradicts the previous provisions as in case of arrest of the vessel to secure the maritime claim, unsolvable option appears between the obligatory jurisdiction and the jurisdiction at the discretion of the claimant (forum electivum). As it is widely known that the exclusive territorial jurisdiction excludes the competence of other courts or the right of the claimant to choose the court. 

However it should be noted that the Legal Support Department of the Verkhovna Rada paid attention to the contradiction in the bill and recommended to amend same, in particular, to exclude the corresponding provisions of Article 110 of the Civil Procedural Code of Ukraine.  

Aleksander Chebotarenko (chebotarenko@interlegal.com.ua)
International Law Offices, Ukraine.
http://www.interlegal.com.ua/

Kazanceva Street 7-b,Office 51
Mariupol City,
Ukraine 87500

Tel: +38 (0629) 49-16-64
Fax: +38  (048) 725-80-89

Website: www.gglaw.com.ua
E-mail: office@gglaw.com.ua

Contact 1: Nikolay I. Golbin
Contact 2: Svetlana A. Khymych
Contact 3: Yevgeniya I. Popandopulo

Other Offices: Sevastopol, Odessa, Kherson

International Labour Law, Maritime Law, Ship arrests in the territory of Ukraine and beyond its borders, Commercial and Civil law.

nitsevych@interlegal.com.ua
www.interlegal.com.ua
2/4 observatorny lane, suite 57
Odessa 65014, Ukraine
Tel: +38 (048) 715-58-55
Fax: +38 (0482) 49-69-25

Overview

1. Please give an overview of ship arrest practice in your country.

Ukraine is a shipping country with impressive law traditions, but as a sovereign and independent state, it exists only from the beginning of the nineties of the last century. Thus, new culture of jural state is at the initial stage of development. Ukraine is not a signatory to the international conventions which regulate relations connected with ship arrest. Thus, there is no special procedure as to arresting a vessel meaning that it is arrested as any other property. Of course, Merchant Shipping Code of Ukraine, adopted in 1995, provides for ship arrest procedure, but this procedure could be applied to vessels flying the Ukrainian Flag only. A vessel flying the flag of the other country can be arrested in Ukraine under conditions provided by the Commercial Procedure, the Civil Procedure Codes and the Private International Law Act of Ukraine. The practice of ship arrest is rather wide, especially in the ports of Big Odessa (Odessa, Ilyichevsk, Yuzhny).

Applicable Laws

2. Which International Convention applies to arrest of ships in your country?

No international conventions apply to arrest of ships in Ukraine.

3. Is there any other way to arrest a ship in your jurisdiction?

There are some other ways to arrest a ship in a Ukrainian port. As a rule vessels are arrested in Ukraine by means of:
a) administrative arrest by the harbour master;
b) preliminary arrest in security of a maritime claim pursuant to the order of Commercial court;
c) arrest in accordance with Court or arbitration award;
d) arrest of a ship under a criminal matter.

Commercial courts and courts of general jurisdiction are the state courts which exercise jurisdiction over maritime disputes. The Maritime Arbitration Commission at the Chamber of Commerce and Industry of Ukraine is a domestic arbitral institution with a panel of arbitrators specializing in maritime arbitration.

4. Are these alternatives e.g. saisse conservatoire or freezing order?

These measures are similar to saisse conservatoire or freezing order.

Claims subject to ship arrest

5. For which types of claims can you arrest a ship?

A vessel can be arrested regardless whether claims are maritime or not, in principle.

Nevertheless, according to the maritime law of Ukraine the vessel may be arrested only upon at least one of the following conditions:
• a claim referred to the category of privileged claims, particularly:
* claims arising out of labour relations, claims for reimbursing damage inflicted by injury, other  impairment of health or death;
* claims arising out of nuclear damage and maritime environment pollution as well as elimination of said pollution consequences;
* claims regarding port and channel dues;
* claims regarding salvage and payment of general average contribution;
* claims for reimbursement of losses resulting from collision of vessels or from other sea casualty, or from damage to port facilities and other property located in the port as well as to navigational aids;
* claims for reimbursement of losses related to cargo or baggage;
• a claim based upon the vessel’s registered mortgage;
• a claim referring to the rights of vessel ownership or possession;
• a claim not indicated hereinabove and referring to the person that is the vessel owner by the moment of origination of the said claim and is responsible for this claim by the moment of starting a procedure connected with vessel’s arrest;
• charterer of the vessel on bareboat charter is liable for the said claim and is the vessel’s bareboat charterer or her owner by the moment of starting a procedure connected with vessel’s arrest.

These rules shall not concern the vessels flying the State Flag other than Ukrainian. Such vessels are treated as a res in general legal sense. 

6. Can you arrest a ship irrespectively of her flag?

It is possible to arrest a ship irrespectively of her flag in Ukraine, in principle.

7. Can you arrest a ship irrespectively of the debtor?

There is no proceeding in rem in Ukraine, so it is possible to arrest a ship owned by the debtor only .

8. What is the position as regards sister ships and ships in associated ownership?

Associated vessels can be arrested if by the moment of initiating the arrest procedure they were property of a person liable for the maritime claim and who was the proprietor/owner of the vessel to which the said claim has arisen.

9. What is the position as regards Bareboat and Time-Chartered vessels?

Associated vessels can be arrested if by the moment of initiating the arrest procedure they were property of a person liable for the maritime claim and who was the charterer of her on bareboat, time or voyage charter basis.

M. Grinchenka Street 4
Kyiv, 03038
Ukraine

Tel: +380-44-391-5942
Fax: +380-44-390-59-00

Email: ukrlaw@ukrainelaw.com.ua
Web: http://www.hough-heidingers-attorneys.com.ua/

Contact: Raimonds Heidingers

Hough, Heidingers, Yablonsky & Partners

International Law Offices

Lexcellence

INFO Port of Llichevsk

About Ship Arrests / Releases inLlichevsk

About Ship’s management, ownership or port detentions

Hough, Heidingers, Yablonsky & Partners

International Law Offices

Lexcellence

INFO Port of Berdiansk

About Ship Arrests / Releases in Berdiansk

About Ship’s management, ownership or port detentions

LEXCELLENCE

Email: v.mallayev@lexcellence.com.ua
Website: www.lexcellence.com.ua
2, Chernomorskaya Str., office 15 
Odessa 65014
Ukraine
Tel: +38 048 784-97-89
Fax: +38 048 784-97-92

10. Do your Courts require counter-security in order to arrest a ship?

The Courts may require counter-security as a prerequisite for arrest of a ship, but in practice it happens rarely. The better evidences are arranged and presented with the claim to the court the more chances to avoid the payment of counter-security.

11. Is there any difference in respect to arresting a ship for a maritime claim and a maritime lien?

There is no procedural difference in respect to arresting a ship for maritime claim and a maritime lien.
12. Does you country recognise maritime liens?  Under which International Convention, if any?
Yes, Ukraine ratified the International Convention on Maritime Liens and Mortgages (Geneva, 1993) on 22.11.2002.
13. What lapse of time is required in order to arrest a ship since the moment the file arrives to your law firm?
Two-three business days will be required in order to arrest a ship.

14. Do you need to provide a POA, or any other documents of the claim to the Court?

As a rule a POA duly legalized/apostilled and translated into Ukrainian is to be presented to the Court and the State Enforcement Service of Ukraine. However within the civil and commercial court proceedings it is sufficient to present a warrant that was issued by a corresponding Bar of Association along with extract from a contract certified by an attorney and his client.  
We need all documents relating to the claim which are in possession of the plaintiff, – the presence of the evidences may help to avoid a payment of counter-security to the Court.

15. What original documents are required, what documents can be filed electronically, what documents require notarisation and/or apostille, and when are they needed?

The Court may require an original or its notarized and legalized copy of any document the plaintiff referred to in his claim.
We recommend arranging of most important evidences (contracts, BLs, charter parties etc) in original or its notarized and legalized/apostilled copies. Other copies can be certified by the plaintiff’s corporate seal and signature. In case your Ukrainian attorney received a document in original he may hold the original in his office and present the copy certified by him to the court.
Documents can not be filled electronically. Original Power of Attorney has to be notarized, dully legalized/apostilled and translated into Ukrainian.

16. Will your Courts accept jurisdiction over the substantive claim once a vessel has been arrested?

No, they will not. At present there is an important prerequisite that must be met to get an arrest of a ship – a Ukrainian court has jurisdiction on the claim on merits. So it is impossible to arrest a vessel without having a jurisdiction over the substantive claim.

17. Which period of time will be granted by the Courts in order for the claimants to take legal action on the merits?

Proceedings within civil jurisdiction: The petition to arrest a ship has to be submitted to a court of common jurisdiction on the same day of filling a statement of claim, or later during the civil proceedings.

Proceedings within commercial jurisdiction: Pursuant to the Art. 43-3 (3) of Commercial Procedure Code of Ukraine a plaintiff must commence legal actions on the merits within 5 (five) days from the day of obtaining the arrest order.

18. Do the Courts of your country acknowledge wrongful arrest?

Yes, the Ukrainian Courts on request of defendant acknowledge a wrongful arrest in case of:
(a) The arrest is cancelled by the decision of court.
(b) The claimant fails to commence proceedings on the merits within the given time.
(c) The claimant recalled his claim.
(d) The claimant fails in his legal action on the merits.
In case a wrongful arrest is acknowledged defendant may claim to an initiator of arrest to cover all losses and damages incurred.

19. Do the Courts of your country acknowledge the piercing and lifting of the corporate veil?

No, Ukrainian Courts do not acknowledge the pierce and lift of the corporate veil. The basic principle of civil law is that a shareholder or director/officers of a corporation could not be held liable for any debts or liabilities of the corporation.

20. Is it possible to have a ship sold pendente lite; if so how long does it take?

No. A vessel’s auction will take place only after the end of court proceeding as an enforcement of the final court judgment entered into force.

G&G Law Firm

Hough, Heidingers, Yablonsky & Partners

International Law Offices

Lexcellence

INFO Port of Mariupol

About Ship Arrests / Releases in Mariupol

About Ship’s management, ownership or port detentions