Researcher at the Department of European Union Law and Comparative Law,
"Odessa Law Academy"
Judge of the October District Court of Mykolaiv region
APPLICATION OF ARTICLES 416-418 OF THE CIVIL PROCEDURE CODE OF UKRAINE WITHIN THE FRAME OF THE WORLDVIEW BELIEFS AND VALUES OF AN INDIVIDUAL JUDGE AS THE DIRECT ENTITY OF THE LAW-ENFORCEMENT ACTIVITIES
The issue of implementation and enforcement of certain rules of the Civil Procedure Code of Ukraine, those having international background, by Ukrainian judges within the scope of their law enforcement activity is being analyzed in the article. The Authors come to the conclusions that while considering the issue of enforcing the foreign court’s request (e.g. servicing of documents) the law enforcement body in Ukraine shall have to critically assess the submitted documents in context of its correspondence to basic principles of justice in Ukraine; meanwhile, the enforcement of a request of a foreign court lacking respective jurisdiction may negatively influence the rights and obligations of Ukrainian residents.
Key words: law implementation, international private law, enforcing foreign court requests by Ukrainian courts.
The integration process of the modern Ukraine into the international community is permanent. This is primarily manifested in intensification of the civil law relations, in particular scientific, commercial, processing, marriage and family relations, etc. However, because of the pluralism of legal systems of the world and sometimes their conceptual differences the state by performing one of its major functions generates public-law acts to organize such relations, to simplify disputes settlement, which involves the entities belonging to different jurisdictions, as well as settlement of conflict-of-laws rules.
Every modern state within its territory and its own sovereign power guarantees in any way the right to judicial protection. At the same time, if disputes arise in relations with the international entity, the competent court of the state that has instituted the judicial proceedings to settle such a dispute, sometimes appears to be divested of practical ability to implement its jurisdiction in the territory of another sovereign, which is a natural factor.
The object of this article is the analysis of the procedural institution functioning for satisfying foreign judgements by the courts of Ukraine within its territory.
A detailed study of the existing procedural order for satisfying foreign judgements by the courts Ukraine, as well as within the framework of the fundamental law, raises many questions, both legal and philosophical, for the entity of the law enforcement. It is quite evident that considering the relative youthfulness of the current legal system of our country and the applicable procedural law in particular, there is a need to essentially improve those procedures. Though, the practicing judge being the direct entity of the law enforcement should consider the appropriate lodgements for satisfying the foreign judgements even now. Each of the judges makes a practical contribution to the further improvement of the legal system as a whole, and specific areas of procedural law in particular. Wherefore it would be a mistake to underestimate the worldview beliefs and values of each subject of law. It is through the prism of their own mindset and perception the legal entities pervade the formalized rule of law with law enforcement subject matter.
In this article we are aimed to study the problem issues occurred while satisfying the foreign judgements in the case of execution the judicial decisions of the competent court of the Republic of Cyprus within the territory of Ukraine. Cyprus therefore has not been chosen by chance, as according to the Ministry of Finance of Ukraine, for many years the country has been in the top three largest investors in Ukrainian economy . Hence the proportion of the judicial decisions of the competent courts of this state should be significant in comparison with the number of the court orders of the other countries. These disputes include a wide range of issues such as corporate matters and civil deceit, responsibilities of directors and company owners. Obviously, the analysis of the subjects mentioned above brings the greatest practical value to the various categories of attorneys-at-law: representatives of the judicial authorities as well as lawyers and other professionals in the field of law, which in practice implement and protect the legal rights.
As for courts of general jurisdiction (district courts) (within subject-matter and court jurisdiction) in enforcement the decisions of the foreign court it should be mentioned that according to part one of Article 416 of the Civil Procedure Code of Ukraine (hereinafter – the CivPC of Ukraine) “content and form of the court order/letter of request for judicial assistance should comply with the demands of the international treaty ratified by the Verkhovna Rada of Ukraine” . Besides, according to Article 10 of the Agreement between the Republic of Cyprus and Ukraine on legal assistance in civil matters (hereinafter - the Agreement) “Legal assistance shall not be rendered if it is deemed that granting such legal assistance would infringe sovereignty, security or public order of the requested Contracting Party” .
According to part two of Article 417 of the CivPC of Ukraine the request of the foreign court shall not be subjected to enforcement in case if it: “1) leads to violation of Ukraine's sovereignty or threatens to the national security of Ukraine; 2) enforcement of order is not the jurisdiction of the court; 3) contradicts to the laws or international treaty ratified by the Verkhovna Rada of Ukraine”.
Moreover, with regard to the general provision of part one of Article 15 of the CivPC of Ukraine the courts conduct the civil proceedings on the cases: “concerning the protection of affected, unrecognized or disputed rights, freedoms or interests arising from civil, housing, land, family, labour relations and other legal relations, except when reviewing of such cases is performed under the rules of other legal proceedings”.
That is, under Article 417 of the CivPC of Ukraine the court of general jurisdiction (district court) while accepting for enforcement the relevant court order of the Cyprian court in fact will be forced to make a preliminary study of the subject-matter of the case, which is considered by the court of Cyprus and, accordingly, its parties. Thus if the subject matter involves the legal entities, the Ukrainian court of general jurisdiction (district court) is not authorized to take into account the order of Article 1 of the Commercial Procedure Code of Ukraine (hereinafter – ComPC of Ukraine), according to which “enterprises, institutions, organisations, other legal entities (including foreign legal entities), citizens engaged in business without the legal entity status but with that of the business entity, lawfully acquired (hereinafter collectively referred to as enterprises and organisations), shall have the right to apply to the economic court, in keeping with set jurisdiction of economic cases [disputes], in order to defend their transgressed or challenged rights and legally protected interests, as well as for taking the measures envisaged by this Code, which are aimed at preventing the misdemeanour.
Government and other bodies, and individuals other than business entities shall have the right to apply to the economic court in cases stipulated by legislative acts of Ukraine” .
Along with that according to paragraph four part one of Article 1 of the ComPC of Ukraine commercial courts have jurisdiction on the cases “arising of corporate relations in disputes between the business entity and its member (founder, shareholder), including the member who has dropped out, as well as between the members (founders, shareholders) of the business entities related to incorporation, activities, administration or liquidation of the entity, except for in labour disputes”. In addition, Article 12 of the ComPC of Ukraine stipulates that commercial courts have jurisdiction on the cases “in disputes arising of land relations, which involve business entities, except those within the jurisdiction of the administrative courts”.
According to the rules of paragraph 7 of Article 16 of the ComPC of Ukraine “the cases in disputes between the business entity and its members (founder, shareholder), including the member who has dropped out, as well as between the members (founders, shareholders) of the business entity related to incorporation, activities, administration or liquidation of the entity, are subject to the jurisdiction of the commercial court at the business entity location/registration according to the Unified State Register of legal entities and individual entrepreneurs”.
According to paragraph 6 of the Decree of the Plenum of the Supreme Court of Ukraine № 13 dd. October 24, 2008 “On the practice of trying the corporate disputes by the courts” “all disputes between the business entity and its member (founder, shareholder), including the member who has dropped out, as well as between the members (founders, shareholders) of the business entities related with their exercising of corporate rights and duties of the business entity member pursuant to paragraph 4 part one of Article 12 of the ComPC of Ukraine are subject to the jurisdiction of the commercial courts regardless of the subject matter of the dispute parties” .
It is also important that according to part one of Article 167 of the Commercial Code of Ukraine “corporate rights are rights of the person having his/her share in the charter fund (property) of economic organization including authority to participate in management of economic organization, receipt of certain part of profit (dividends) of this organization and assets in case of its liquidation pursuant to the law, and other authority provisioned by the law and statutory documents”.
Therefore common is the practice when along with the claims covered by the jurisdiction of the foreign court the additional claims may be filed including those regarding the rights to real property, which is located on the territory of Ukraine, corporate agreements between shareholders (members) of Ukrainian companies, etc. Namely, the claims that are within the exclusive jurisdiction of the Ukrainian courts according to the procedural law and the provisions of the Law of Ukraine “About private international law”.
Thereafter considering the approval for satisfying the court order, the subject of law enforcement should comprehensively evaluate the application submitted for its compliance with the basic principles of the legal procedure and the very public policy of Ukraine.
We can’t but underline the demand for adherence of the sovereignty of Ukraine (Articles 1-6 of the Constitution of Ukraine). According to Articles 1, 2, 5, 6 of the Constitution, Ukraine is a sovereign and independent, democratic, social, law-based state. The sovereignty of Ukraine extends throughout its entire territory. The people are the bearers of sovereignty and the sole source of power in Ukraine. The people exercise power directly and through the state authorities and local self-government bodies. No one shall usurp the state power. The state power in Ukraine is exercised on the principles of its division into legislative, executive and judicial. Bodies of legislative, executive and judicial power exercise their authority within the limits established by this Constitution and in accordance with the laws of Ukraine .
In addition, under the provisions of Articles 2 and 5 of the Law of Ukraine “On the Judiciary and the Status of Judges” the court, exercising justice on the basis of the rule of law, shall ensure everyone’s right to a fair trial and respect for other rights and freedoms guaranteed by the Constitution and laws of Ukraine, as well as international treaties ratified by the Verkhovna Rada of Ukraine. Justice in Ukraine shall be exercised exclusively by courts. The delegation of court functions as well as appropriation of these functions by the other bodies or officials shall not be permitted. .
Accordingly, the court in Ukraine being one of the three branches of government ensures the adherence of the sovereignty of Ukraine, namely, providing everyone the right to a fair trial and respect for others' rights and freedoms guaranteed by the Constitution and laws of Ukraine, as well as international treaties ratified by the Verkhovna Rada of Ukraine. Court decisions in accordance with Article 124 of the Constitution of Ukraine are adopted by the courts in the name of Ukraine and are mandatory for execution throughout the entire territory of Ukraine [1, Article 124].
In its turn, the court of Cyprus (or any other country) does not constitute a part of the judiciary of Ukraine and a part of its sovereignty. The court of Cyprus is a part of the Republic of Cyprus sovereignty and is exclusively subject to law order of this sovereign. The function of the Ukrainian court for the purpose of Ukraine sovereignty is just to ensure exclusive monopoly of the Ukrainian state and its people as the sole source of power for justice within the sovereign territory of Ukraine.
Sometimes in their letter requests for legal assistance (delivery of documents) abroad the Cyprian courts indicate that these orders are subject to enforcement throughout and outside the territory of Cyprus. That is, in the case of Ukraine the relevant decision of the Cyprian court extends throughout the sovereign territory of Ukraine.
Therefore, enforcement of the order based on such a Cyprian court decision under certain circumstances, practically may result in the unlawful attempt to legalize foreign judgments within the territory of Ukraine in circumvention of law and violation of the procedure for confession and enforcement of foreign courts’ judgments determined in Chapter V of the mentioned Agreement on legal assistance and Chapter VIII of the CivPC of Ukraine. The above-noted matter is inadmissible and directly violates the state sovereignty of Ukraine within the framework of the rule of law and the judicial branch authority under the Constitution of Ukraine.
In practice, this pseudo legalization of a certain decision of the foreign court within the territory of Ukraine in circumvention of established procedure may have a negative impact in the very territory of Ukraine and against the subjects of law of Ukraine in particular (Ukrainian members of the foreign judicial proceedings). Sometimes the judicial acts in the Anglo-Saxon system of justice may be delivered unilaterally and declaratory in the absence of any judicial pleadings and Ukrainian members of the court proceeding as such.
Demand for adherence the provisions of Article 17 of the Agreement between the Republic of Cyprus and Ukraine on legal assistance in civil matters by the may act as a strong preventive measure in this situation .
According to provisions of Article 17 of the Agreement for the purpose of this Agreement, the court of the Contracting Party giving the decision (the case under consideration involves the court of Cyprus, which has delivered a court request for legal assistance in Ukraine for the purpose of service of judicial documents to the Ukrainian members of the judicial proceedings), shall be considered to have jurisdiction over the case, if one of the following conditions has been satisfied:
- the defendant had his/her residence in the territory of the Contracting Party at the time when the proceedings were instituted; or
- the proceedings concern a dispute resulting from business activity conducted in that Contracting Party and the defendant had in the territory of that Contracting Party a registered representative office at the time when the proceedings were instituted; or
- the defendant has accepted explicitly the jurisdiction of the Court of that Contracting Party; or
- in case of contractual disputes, the contract has been concluded in the territory of that Contracting Party or it has been or shall be performed therein, or the object of the proceedings is located therein; or
- in case of non-contractual disputes, the infringing act or the result thereof occurs in the territory of that Contracting Party; or
- in case of matters relating to personal status, the litigant has his/her residence in the territory of that Contracting Party; or
- in case of matters relating to maintenance obligations, the debtor has his/her residence in the territory of that Contracting Party; or
- in case of succession, the deceased person had his/her residence or principal property in the territory of that Contracting Party at the time of his death; or
- the real estate which is the object of the proceedings is located in the territory of that Contracting Party.
In consideration of the foregoing the Ukrainian court represented by the subject of law enforcement has to review the documents to be served. Otherwise, the enforcement of foreign court orders, which does not exercise the appropriate jurisdiction, may negatively affect the rights and obligations of the Ukrainian residents. Within the framework of the public policy of Ukraine it may also have a negative impact on execution of the revenues in the local and state budgets, property rights to land, etc.
Moreover, taking into account the adversarial principle as one of the basic doctrines of judicial procedure in Ukraine, the Ukrainian court of competent jurisdiction has to consider the legal objections of the person to whom the foreign documents should be served.
It is also important that the subject of the law enforcement observes the regulations of Article 77 of the Law of Ukraine “About private international law”, as well as Article 114 of the CivPC of Ukraine.
According to paragraph one part one of Article 77 of the Law of Ukraine «About private international law» subjection to a jurisdiction of the Ukrainian courts is exclusive in cases involving foreign entities, “if the real estate which is the object of the proceedings is located in the territory of Ukraine” .
If the dispute under proceeding in the foreign court which received the order of service of judicial documents in Ukraine, deals with the property rights to real estate located in the territory of Ukraine (transferring the rights of the customer, pledge of property, estate succession, etc.) the law enforcement subject should provide a relevant judgement on the specified case circumstances.
Besides, according to Article 114 of the CivPC of Ukraine the claims related to real property, shall be filed at the place of property or the main part of the property location.
The competent court of general jurisdiction (district court) in all relevant cases has to clarify the facts and define weather this very court case is subject to its jurisdiction, with regard to its territorial venue. Thus, the court has to check whether the relevant real estate lies within its territorial jurisdiction.
Within the framework of legal practice of courts in countries with the general system of law to which Cyprus belongs as well, delivery and serving of documents in the territory of Ukraine can be interpreted as validation of the Cyprian court jurisdiction.
Thus, proceeding any case matter, a Ukrainian court has to consider on admissibility of foreign court orders within the jurisdiction of this very foreign court (Article 417 of the CivPC of Ukraine).
Therefore if the disputes under proceedings in the court of Cyprus are subject to the exclusive jurisdiction of the courts of Ukraine, the latter must decide on foreign court orders enforcement, but with regard to subject-matter or court jurisdiction set by the national procedural law. If the service of judicial documents is considered to be the jurisdiction of the court of Cyprus with regard to legal matters that are the subject of litigation in the Cyprian court, this service will result in a direct violation of the public policy of Ukraine within the scope of the property law regulations (e.g. as for real property), corporate relations (which relate to business entities of Ukraine and when proceedings on them are subject to the exclusive jurisdiction of commercial courts of Ukraine), etc. Ignoring of these rules by the subject of law enforcement is unacceptable.
Thus after considering the topic the following conclusions can be made:
- considering the approval for satisfying the court order, the subject of law enforcement should comprehensively evaluate the application submitted for its compliance with the basic principles of the legal procedure of Ukraine;
- the enforcement of foreign court orders, which does not exercise the appropriate jurisdiction, may negatively affect the rights and obligations of the Ukrainian residents, as well as it may also have a negative impact on execution of the revenues in the local and state budgets, property rights to land, etc;
- if the disputes under proceedings in the court of the foreign sovereign are subject to the exclusive jurisdiction of the courts of Ukraine, the latter must decide on foreign court orders enforcement, but with regard to subject-matter or court jurisdiction set by the national procedural law.
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 Thus, it does not subject to the jurisdiction of the foreign court, which has issued the court decision, or the Ukrainian court, which executes the enforcement of such a court decision.