JSC Lebedynskyi hirnycho-zbahachuvalnyi Combinat v. PJSC Ilyich Iron and Steel Works

At a glance

Parties

JSC Lebedynskyi hirnycho-zbahachuvalnyi Combinat (Lebedinsky GOK, Russia) v. PJSC Ilyich Iron and Steel Works (Mariupol, Ukraine)

Case no.

Supreme Court of Ukraine No. 264/1297/17 (proceeding No. 61-35280sv18)

Court

Court of Appeal of Donetsk Region (11 October 2017); Supreme Court, Civil Cassation Court, First Judicial Chamber (24 October 2018)

Underlying award(s)

Award of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, 17 March 2014

Treaty

New York Convention 1958 (Articles I, III, IV); Kyiv Agreement of 20 March 1992 (CIS)

Sector

Steel; supply of hot-briquetted iron

Outcome

The Supreme Court set aside the lower courts' rulings, which had returned the application because no writ of execution was attached, and sent the case back to the Illichivskyi District Court of Mariupol to continue the proceedings.

Amount

Award: USD 36,765.49 contractual penalty and USD 618.87 arbitration costs

The dispute

On 13 October 2011 the Russian company Lebedinsky GOK agreed to supply hot-briquetted iron to PJSC Ilyich Iron and Steel Works of Mariupol under supply contract No. 111823/4022. Clause 11.1 sent disputes to the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation. On 17 March 2014 that court ordered Ilyich to pay USD 36,765.49 as a contractual penalty and USD 618.87 in costs. Ilyich did not pay voluntarily, and Lebedinsky GOK applied in Ukraine to have the award recognised and enforced. Ilyich opposed the application. It said that an earlier application had been returned in 2016 and that the time limit for enforcement had expired. The Ukrainian courts below returned the application without examining it, because it did not include a writ of execution. They held that Article 8 of the 1992 Kyiv Agreement required one.

Key holdings

1. The Court of Appeal upheld the return of the application under Article 394(4) of the Civil Procedure Code (CPC). It held that Article 8 of the Kyiv Agreement requires a writ of execution to be attached. The applicant had also not cured the same defect after a first application was returned on 12 September 2016. Court of Appeal ruling, pp. 4–5
2. The Court of Appeal noted that the applicant had not shown that Russian courts refused to issue it a writ of execution. Returning the application did not prevent it from filing again with the missing document. Court of Appeal ruling, pp. 4–5
3. The Supreme Court held that the New York Convention is the special instrument for foreign arbitral awards. The 1993 CIS Legal Assistance Convention and the 1992 Kyiv Agreement deal with judgments of courts and justice institutions. The New York Convention is in force for both Ukraine and Russia. Supreme Court, p. 3
4. The New York Convention's list of required documents is exhaustive and may not be read broadly. Demanding any additional document breaches the Convention, as does imposing conditions substantially more onerous than for domestic awards (Article III). An award need not be enforceable as a writ of execution in the State where it was made before it can be enforced abroad. Supreme Court, p. 3
5. The applicant had filed everything Article IV of the Convention and Article 35 of Ukraine's Law on International Commercial Arbitration require: a certified copy of the award with a certificate that it had become final, and a certified copy of the contract containing the arbitration clause. The lower courts therefore had no basis to return the application for lack of a writ of execution. Supreme Court, pp. 3–4
6. The lower courts had not examined the application on its merits, so the cassation court could not grant or refuse it. It set aside both rulings and sent the case back to the Illichivskyi District Court of Mariupol to continue the proceedings. Supreme Court, p. 4

Procedural history

1. 13 October 2011Supply contract No. 111823/4022 concluded, with an arbitration clause (clause 11.1).
2. 17 March 2014The International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation issues its award against Ilyich.
3. 12 September 2016The Illichivskyi District Court of Mariupol returns the first application for recognition (case No. 264/3900/16-ts) because no writ of execution is attached. The ruling becomes final on 10 October 2016.
4. 16 March 2017Lebedinsky GOK files a second application for recognition and enforcement.
5. 6 July 2017The Illichivskyi District Court returns the second application without examining it, under CPC Article 394(4).
6. 11 October 2017The Court of Appeal of Donetsk Region dismisses Lebedinsky GOK's appeal.
7. 7 December 2017Cassation proceedings are opened by the Higher Specialised Court. The case reaches the Supreme Court in June 2018.
8. 24 October 2018The Supreme Court allows the cassation appeal in part, sets aside both rulings and sends the case back to the first-instance court.

Tribunal, counsel and experts

Decided by

• S.A. Popova Judge, Court of Appeal of Donetsk Region (presiding)
• V.M. Barkov Judge, Court of Appeal of Donetsk Region
• I.P. Myronenko Judge, Court of Appeal of Donetsk Region
• D.D. Luspenyk Judge, Supreme Court of Ukraine (presiding)
• O.V. Bilokon Judge, Supreme Court of Ukraine
• B.I. Hulko Judge, Supreme Court of Ukraine
• S.F. Khopta Judge, Supreme Court of Ukraine
• Yu.V. Cherniak Judge, Supreme Court of Ukraine (judge-rapporteur)

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Keywords

• New York Convention
• Article IV documents
• Article III
• recognition and enforcement
• writ of execution
• Kyiv Agreement 1992
• Minsk Convention
• ICAC Russian Chamber of Commerce
• Lebedinsky GOK
• Ilyich Iron and Steel Works
• Mariupol
• hot-briquetted iron
• contractual penalty
• Ukraine
• exhaustive list of documents
• remand

Summary generated with AI from the published documents — refer to the award for the authoritative text.