Recognizing the general rule that "everything always goes wrong at the worst possible moment," large multi-national companies often agree to resolve their disputes with each other in an international, and therefore presumably unbiased, arena.

In an effort to accommodate the business needs of such companies, the world's leading nations have entered into numerous bilateral and multilateral international arbitral agreements. Such agreements set the stage for implementing the accepted international arbitration rules and executing the resulting judgments on a local level.

Likewise, Ukraine has established a similar forum for resolving international commercial disputes at the Ukrainian Chamber of Commerce and Industry, the rules of which are based on the Law of Ukraine "On International Commercial Arbitration" which, in turn, is based on the UNCITRAL rules. Ukraine also adheres to many international agreements previously entered into by the former Soviet Union, including the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, and the European Convention on International Commercial Arbitration of 1961 (Geneva). Plus, Ukraine is a signatory to the multi-lateral Agreement on the Procedure of Dispute Resolution Connected with Commercial Activity between the CIS states (also known as the Kiev Agreement).

Following the declaration of its independence in August 1991, Ukraine passed its own comprehensive legislation governing dispute resolution in the context of both domestic and foreign transactions and investments. These laws included Law No. 1142-XII "On Commercial Courts," dated June 4, 1991 (lost force in February 2002), Law No. 4002-XII "On International Commercial Arbitration," dated February 24, 1994, Law No. 93/96-VR "On the Foreign Investment Regime," dated March 19, 1996, and Law No. 959-XII "On Foreign Economic Activities," dated April 16, 1991, among others.

Generally, Ukraine's local and foreign arbitration legislation is in accordance with global standards. As in other countries, the parties to international agreements have the freedom to select either the domestic (Ukrainian) national court system or international arbitration in any country (including Ukraine). The final award or ruling can be executed in Ukraine under the 1958 New York Convention, assuming that all parties involved in the arbitration are signatories to that Convention. While the applicable legislation is well-settled, in today's Ukraine numerous unexpected practical problems may arise to prevent the actual enforcement of international arbitral decisions.

Under Ukrainian legislation, foreign investors may submit disputes for resolution to either (1) Ukrainian national (commercial) courts; (2) Ukrainian national arbitration courts or (3) any other international arbitration tribunal. The third option can be further separated into two categories: (a) arbitration conducted in Kiev at the Ukrainian Chamber of Commerce and Industry or (b) arbitration held in a third country (e.g., Sweden, Great Britain, U.S.A.). The following series of articles examines each of these options, as well as enforcement of foreign arbitral awards in Ukraine.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.