BEGARAT Vertriebs- und Service GmbH v. Inko-Food Ukrayina LLC

At a glance

Parties

BEGARAT Vertriebs- und Service GmbH (Germany), acting through its representative office in Ukraine (applicant; respondent and counterclaimant in the arbitration), v. Inko-Food Ukrayina LLC (Ukraine) (claimant in the arbitration)

Case no.

Kyiv Court of Appeal Case No. 824/263/2018 (appellate proceeding No. 2-к/824/4/2019)

Court

Kyiv Court of Appeal, Judge Yu. O. Matviienko (Матвієнко Ю.О.) sitting alone

Underlying award(s)

Award of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC), 15 February 2018, Case AC No. 175г/2017. Tribunal: Pashchenko (chair), Stretovych V.M., Hrynchyshyn V.A.

Forum and rules

Application to recognise and enforce an award made in Ukraine, under Articles 475–482 of the Ukrainian Code of Civil Procedure and Articles 35–36 of the Law of Ukraine on International Commercial Arbitration

Treaty

Contract No. ВЕ-М 4998 F/U of 29 September 2016, clauses 9.1–9.2 (ICAC arbitration, Ukrainian law); the court also referred to the 1958 New York Convention

Sector

Food-processing machinery (sausage-tying machine)

Outcome

Application granted (25 February 2019). The court recognised the award and allowed enforcement of the part that orders Inko-Food to return the Inotec IG S2 machine, and issued a writ of execution.

Amount

Under the award, BEGARAT was ordered to pay Inko-Food UAH 1,771,800 for the goods plus UAH 127,505.44 in arbitration fees, UAH 1,899,305.44 in total. BEGARAT's counterclaim was for EUR 8,785.75. In the court proceeding, Inko-Food was ordered to pay BEGARAT UAH 881.00 in court fees.

The dispute

On 29 September 2016 the German company BEGARAT Vertriebs- und Service GmbH and the Ukrainian company Inko-Food Ukrayina LLC signed Contract No. ВЕ-М 4998 F/U. The contract provided for ICAC arbitration under Ukrainian law. Inko-Food sued in the ICAC for UAH 1,771,800, and BEGARAT counterclaimed for EUR 8,785.75. In an award of 15 February 2018, the ICAC ordered BEGARAT to pay Inko-Food UAH 1,899,305.44, made up of the value of the goods and the arbitration fees. The award also ordered Inko-Food to return a high-performance Inotec IG S2 sausage-tying machine, which BEGARAT could dispose of as it saw fit. In December 2018 BEGARAT applied to the Kyiv Court of Appeal to recognise the award and allow enforcement of the part on the machine. Inko-Food opposed the application but did not give specific grounds or evidence.

Key holdings

1. The arbitration clause in clauses 9.1–9.2 of the contract is a written arbitration agreement that meets Article 7 of the Law of Ukraine on International Commercial Arbitration and Article 2(1) of the ICAC Rules. The award became binding on 15 February 2018, is final and is subject to immediate enforcement. p. 3
2. The applicant filed within the three-year limit in Article 475(3) of the Code of Civil Procedure. It also supplied the documents required by Article 476 of the Code and Article 36 of the Law: a notarised copy of the award and the original contract containing the arbitration clause. p. 4
3. The party opposing recognition must prove the grounds for refusal. Inko-Food gave no proper or admissible evidence of any ground under Article 36 of the Law, Article 478 of the Code of Civil Procedure or the 1958 New York Convention. p. 4
4. The court recognised the award and allowed enforcement of the part that obliges Inko-Food to return the Inotec IG S2 sausage-tying machine to BEGARAT. It ordered a writ of execution to issue in those terms. pp. 5–6
5. Inko-Food must pay BEGARAT's court fee of UAH 881.00. The ruling could be appealed to the Supreme Court within thirty days. p. 6

Procedural history

1. 29 September 2016The parties signed Contract No. ВЕ-М 4998 F/U, which contains the ICAC arbitration clause.
2. 15 February 2018ICAC award in Case AC No. 175г/2017: BEGARAT to pay UAH 1,899,305.44; Inko-Food to return the Inotec IG S2 machine.
3. December 2018BEGARAT applied to the Kyiv Court of Appeal for recognition and enforcement.
4. 26 December 2018The court left the application without movement (suspended it pending correction).
5. 11 January 2019The court opened proceedings and gave the debtor one month to file objections.
6. 15 February 2019The court set the hearing for 25 February 2019.
7. 25 February 2019The Kyiv Court of Appeal granted the application and ordered a writ of execution to issue. The ruling took effect on 28 March 2019.

Tribunal, counsel and experts

Decided by

• Yu. O. Matviienko Judge, Kyiv Court of Appeal

For the respondent

Representative office of BEGARAT Vertriebs- und Service GmbH in Ukraine

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Keywords

• recognition and enforcement
• New York Convention
• ICAC at the Ukrainian Chamber of Commerce and Industry
• Ukraine
• Kyiv Court of Appeal
• Law on International Commercial Arbitration
• Article 36
• Code of Civil Procedure Article 475
• Article 478
• domestic international award
• writ of execution
• burden of proof
• sausage-tying machine
• Inotec
• return of goods
• counterclaim
• food-processing equipment

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