Ukrainian Court Enforces USD 1.38 Million French-Seated Ad Hoc Arbitration Award Against YEVROSVIET
⚖️ INDIVIDUAL CLAIMANT / INTEGRITY LOGISTIC LTD v YEVROSVIET LLC
📂 Case Details
Case No.: 824/16/26
Proceedings No.: 22-вк/824/24/2026
Court: Kyiv Court of Appeal
Date: 23 June 2026
Full Decision Issued: 17 July 2026
Case Category: International Commercial Arbitration
Subject Matter: Recognition and Enforcement of Foreign Arbitral Awards
Sub-Subject: Enforcement of Ad Hoc Arbitration Award / Arbitrability / Validity of Arbitration Agreement / Public Policy
Type of Arbitration: Ad hoc
Seat of Arbitration: Perpignan, France
Language of Arbitration: French
Law Governing Arbitration Agreement: French law
Sole Arbitrator: Kateryna Hordiienko-Lebedieva
Arbitration Case No.: AF-15-23
Award Date: 30 November 2023
Amount Enforced in favour of the applicant: USD 670,000 principal + USD 711,755.67 penalty
Total: USD 1,381,755.67
The Kyiv Court of Appeal granted recognition and enforcement of a foreign-seated ad hoc arbitral award against Ukrainian company YEVROSVIET LLC. The decision is particularly notable because the debtor raised a broad range of objections going to virtually every stage of the arbitration: arbitrability, the existence of an international element, corporate authority to agree to arbitration, validity of the arbitration clause, the status of the sole arbitrator, notice, authentication of the award and Ukrainian public policy. The court rejected those objections and authorised enforcement.
Background of the Dispute
The underlying commercial relationship originated in a series of assignments of claims dating back to 2015.
On 26 June 2015, OTP Bank and YEVROSVIET LLC entered into several assignment agreements under which the bank transferred rights arising from credit agreements. Subsequently, on 14 September 2015, YEVROSVIET assigned certain acquired claims to INTEGRITY LOGISTIC LTD, a company incorporated under the laws of Belize. INTEGRITY LOGISTIC paid YEVROSVIET approximately USD 1.63 million under that transaction.
The contractual structure was later substantially affected by Ukrainian court proceedings. In Case No. 910/2489/17, the Commercial Court of Kyiv invalidated one of the underlying OTP Bank–YEVROSVIET assignments as well as several derivative agreements, including the September 2015 assignment between YEVROSVIET and INTEGRITY LOGISTIC. That judgment ultimately became final. Importantly, however, the Ukrainian courts did not determine restitution arising from the invalidity of those transactions.
The parties subsequently attempted to regulate the financial consequences contractually.
On 3 September 2019, INTEGRITY LOGISTIC assigned part of its monetary claims against YEVROSVIET to an individual Ukrainian creditor. The assigned rights included a USD 670,000 claim and the right to a contractual penalty of USD 711,755.67.
One day later, INTEGRITY LOGISTIC, YEVROSVIET and the individual creditor concluded a tripartite Agreement on Settlement of Relations No. 19/0409.
Under that agreement, YEVROSVIET expressly recognised an obligation to return money received from INTEGRITY LOGISTIC and the parties established the amounts, deadlines and consequences of non-payment. The agreement provided, among other things, that USD 670,000 would ultimately be payable to the individual creditor and that failure to perform would trigger a penalty equal to 100% of the outstanding debt.
The Arbitration Agreement
The 2019 settlement agreement contained an unusually specific ad hoc arbitration clause.
The parties agreed that disputes arising from or connected with the settlement agreement — including disputes concerning its conclusion, interpretation, performance, breach, termination or invalidity — would be referred to an ad hoc international commercial arbitration constituted specifically for the dispute.
They also expressly designated Kateryna Hordiienko-Lebedieva as sole arbitrator.
The parties selected:
Perpignan, France as the seat of arbitration;
French as the language of the proceedings, subject to the arbitrator's authority to permit another language; and
French law as the law governing the arbitration agreement.
The clause also provided that decisions of the designated sole arbitrator would be binding on the parties.
This feature makes the case particularly relevant for arbitration practice: the award did not originate from an established arbitral institution such as the ICC, LCIA or ICAC. It resulted from an ad hoc tribunal constituted directly by agreement of the parties.
The Ad Hoc Award
After YEVROSVIET allegedly failed to comply with its repayment obligations, INTEGRITY LOGISTIC and the individual creditor commenced the agreed ad hoc arbitration.
On 30 November 2023, the sole arbitrator rendered the award in Case No. AF-15-23.
The award ordered YEVROSVIET to pay:
USD 41,755.67 to INTEGRITY LOGISTIC;
USD 670,000 to the individual creditor;
USD 711,755.67 as a penalty to the individual creditor; and
USD 10,500 in legal and arbitration costs to INTEGRITY LOGISTIC.
It additionally provided for post-award simple interest linked to the European Central Bank marginal lending rate plus three percentage points if the award remained unpaid after the specified period.
The Ukrainian enforcement proceedings concerned the individual creditor's entitlement to USD 1,381,755.67.
YEVROSVIET's Objections to Enforcement
YEVROSVIET advanced an extensive set of objections. In substance, the debtor argued that the award should not be enforced because:
the individual claimant was a Ukrainian citizen rather than an entrepreneur and the dispute therefore allegedly fell outside international commercial arbitration;
the dispute allegedly lacked the necessary foreign element;
YEVROSVIET's shareholders had not authorised the director to conclude the arbitration agreement;
the arbitration clause allegedly could not remain effective because the earlier assignment had been declared invalid;
the applicant had allegedly failed to establish the arbitrator's formal status and authority;
YEVROSVIET had allegedly not been properly notified of the arbitration and appointment of the arbitrator;
the foreign arbitration documents allegedly lacked the required authentication/apostille; and
enforcement allegedly violated Ukrainian public policy because the award arose from transactions connected with agreements previously declared invalid by Ukrainian courts and included a substantial contractual penalty.
The court addressed these issues through the restrictive framework governing judicial review at the enforcement stage.
1. Enforcement Is Not an Appeal on the Merits
The Kyiv Court of Appeal first emphasised the limited nature of judicial control over arbitral awards.
Recognition and enforcement proceedings are not appellate proceedings against an arbitral award. Ukrainian courts therefore do not reassess the evidence or determine whether the tribunal correctly resolved the substantive dispute.
According to the court, doing so would constitute impermissible judicial interference with arbitration.
Instead, the court's task is limited to determining whether one of the specific statutory grounds for refusing recognition or enforcement exists. The burden of establishing such a ground lies principally with the party resisting enforcement.
This distinction ultimately affected several of YEVROSVIET's objections: arguments directed essentially at the correctness of the award could not transform enforcement proceedings into a reconsideration of the underlying dispute.
2. Can an Individual Be a Party to International Commercial Arbitration?
One of the most significant parts of the judgment concerns subjective arbitrability.
YEVROSVIET argued that the individual claimant was a Ukrainian citizen and that his participation in the dispute could not qualify as international commercial activity.
The court rejected that proposition.
It referred to the New York Convention and the European Convention on International Commercial Arbitration and observed that parties to arbitration are not necessarily limited to legal entities.
More importantly, the court found that Ukrainian arbitration legislation does not require a natural person to possess the status of an individual entrepreneur in order to conclude an arbitration agreement.
Accordingly, an individual may be a party to an arbitration agreement and to subsequent arbitral proceedings where the relevant substantive and international requirements are otherwise satisfied.
Practical significance
This is a useful clarification for transactions involving founders, shareholders, investors, guarantors, assignees or other individuals.
The mere fact that one participant is an individual rather than a company does not, by itself, remove the dispute from international commercial arbitration.
3. Was There a Sufficient International Element?
The debtor also argued that the dispute lacked a foreign element.
The court disagreed.
INTEGRITY LOGISTIC LTD was incorporated under the laws of Belize and remained a party to the relevant legal relationship at the time the dispute was resolved by arbitration.
The court therefore rejected the argument that the underlying relationship was exclusively domestic.
The subsequent liquidation of INTEGRITY LOGISTIC on 1 January 2026 did not alter the international character of the relationship that existed when the arbitration took place.
4. Authority of the Director to Sign the Arbitration Agreement
YEVROSVIET argued that its general meeting had never separately approved the arbitration clause and that its director lacked authority to agree to arbitration.
The court examined the company's charter.
It found that the 2019 settlement agreement containing the arbitration clause had been signed for YEVROSVIET by its director. Under the company's charter, the director could represent the company without a power of attorney, enter into agreements, conclude foreign economic contracts and perform other transactions on the company's behalf.
Crucially, the charter did not reserve the conclusion of arbitration agreements to the exclusive competence of the general meeting, nor did it require separate shareholder approval for such clauses.
The objection was therefore rejected.
Practical significance
The decision illustrates why corporate-authority objections in enforcement proceedings are heavily dependent on the company's constitutional documents.
The absence of a separate shareholder resolution does not necessarily invalidate an arbitration agreement where the company's director already possesses sufficiently broad contractual authority.
5. Separability of the Arbitration Agreement
Another important argument concerned the relationship between the earlier invalidated transaction and the later arbitration agreement.
YEVROSVIET relied on the fact that Ukrainian commercial courts had invalidated the 2015 assignment and argued, in effect, that an arbitration clause governing disputes arising from the subsequent settlement of those relations could not remain effective.
The Kyiv Court of Appeal rejected that reasoning by applying the principles of separability and competence-competence.
The court stressed that an arbitration agreement is legally autonomous from the substantive contractual relationship. Questions concerning the validity of the underlying transaction therefore do not automatically invalidate the arbitration agreement.
The court also relied on Ukrainian Supreme Court jurisprudence recognising both the positive and negative effects of arbitration agreements and the presumption in favour of their validity and effectiveness.
In this case, the 2019 settlement agreement itself had not been declared invalid. Moreover, the arbitration clause expressly extended to disputes concerning the agreement's conclusion, interpretation, performance, breach, termination and invalidity.
The court consequently treated the arbitration agreement as independently effective.
6. No Jurisdictional Objection During the Arbitration
The court identified another significant factor.
According to the arbitral award, the parties had not raised an objection during the arbitration alleging that the sole arbitrator lacked jurisdiction.
The court connected this with the principles of competence-competence and waiver: a party that participates in arbitration without timely objecting to an alleged procedural or jurisdictional defect may lose the ability to rely on that objection subsequently.
The court therefore interpreted the absence of a jurisdictional challenge during the arbitral proceedings as supporting enforcement.
7. Does an Ad Hoc Arbitrator Need Registration or a Licence?
YEVROSVIET also challenged the status of the named arbitrator, arguing that the materials did not establish her formal status or authority to act as an arbitrator.
The court rejected this argument.
The parties themselves had expressly agreed to ad hoc arbitration and identified the sole arbitrator by name in their arbitration clause.
The court reasoned that an ad hoc arbitral tribunal of this kind:
is not a separate legal entity;
does not require state registration;
does not require licensing; and
does not need to be entered in a governmental register in France or Ukraine.
The arbitrator's authority arose from the parties' arbitration agreement, rather than from institutional membership or governmental accreditation.
This is arguably one of the most practically interesting aspects of the decision because it distinguishes the legal foundation of ad hoc arbitration from that of a permanent arbitral institution.
8. Was YEVROSVIET Properly Notified?
The debtor relied on Article V(1)(b) of the New York Convention and argued that it had not been properly notified of the appointment of the arbitrator or the arbitration proceedings.
The court rejected the objection on the evidence before it.
The arbitral award recorded that a representative of YEVROSVIET, Oleksandr Kravchenko, participated in the proceedings.
For the Kyiv Court of Appeal, actual participation undermined the debtor's contention that it had been deprived of notice or an opportunity to present its case.
Accordingly, the court did not find a sufficient basis to refuse enforcement on procedural fairness grounds.
9. Apostille and Authentication of the Award
The debtor also challenged the documentary formalities.
The court examined the application of the 1961 Hague Apostille Convention, noting that both Ukraine and France are contracting states.
The original arbitral award was examined during the Ukrainian proceedings. The copy submitted by the applicant bore an apostille issued by the competent body connected with the Montpellier Court of Appeal.
The court considered this sufficient authentication of the relevant signature and seal.
The Ukrainian translation had additionally been certified by a Kyiv notary.
The court therefore rejected the debtor's documentary-formality objection.
10. Public Policy: The Court Refuses to Reopen the Merits
The public-policy objection was particularly substantial.
YEVROSVIET argued that enforcement would contradict Ukrainian public policy because the award was connected with transactions that Ukrainian courts had previously declared invalid. It also challenged the USD 711,755.67 penalty, arguing that such liability was legally unjustified and artificially increased the debt.
The court nevertheless distinguished between:
the earlier transactions declared invalid by Ukrainian courts; and
the subsequent 2019 settlement agreement, under which YEVROSVIET expressly recognised repayment obligations and agreed on the consequences of non-performance.
That settlement agreement remained valid and had not been invalidated by a Ukrainian court.
The court therefore declined to reassess whether the arbitrator correctly awarded the contractual penalty. Doing so would require review of the merits — precisely what an enforcement court is not permitted to undertake.
The court concluded that the award did not require YEVROSVIET to perform anything inherently unlawful, did not violate Ukrainian budget legislation and did not interfere with Ukraine's fundamental constitutional, economic or social foundations.
Accordingly, enforcement was not contrary to Ukrainian public policy.
The Court's Decision
The Kyiv Court of Appeal granted the application in full.
It recognised and authorised enforcement in Ukraine of the 30 November 2023 ad hoc award in Case No. AF-15-23.
An enforcement writ was ordered against YEVROSVIET LLC in favour of the individual creditor for:
USD 670,000 — principal debt
plus
USD 711,755.67 — contractual penalty
for a total of:
USD 1,381,755.67
The court additionally ordered YEVROSVIET to reimburse UAH 665.60 in court fees.
The ruling may be challenged before the Supreme Court within 30 days.
Why This Decision Matters
This case goes considerably beyond an ordinary recognition-and-enforcement order.
First, it demonstrates that Ukrainian courts are prepared to enforce an award rendered by a foreign-seated ad hoc tribunal, even where the tribunal consists of a single arbitrator specifically named by the parties rather than appointed through an arbitral institution.
Second, the decision provides a clear statement on individual participation in international commercial arbitration. The court rejected the proposition that a natural person must possess entrepreneur status before becoming a party to an arbitration agreement.
Third, it reinforces separability. The invalidity of an underlying or historically connected transaction does not automatically invalidate a distinct arbitration agreement governing the parties' subsequent relationship.
Fourth, the decision illustrates the importance of timely jurisdictional objections. A party that participates in arbitration without challenging jurisdiction may face considerable difficulty raising the same objection for the first time at the enforcement stage.
Fifth, it confirms that the authority of an ad hoc arbitrator derives principally from party consent. The absence of registration, institutional affiliation or governmental licensing does not itself invalidate the tribunal.
Finally, the court adopted a restrictive conception of public policy, refusing to use the exception as a mechanism for reconsidering the contractual basis or amount of the arbitral award.
Lions Lawyers' Analysis
The most important feature of this decision is not simply that another foreign arbitral award was enforced in Ukraine. It is the extent to which the court was prepared to respect the arbitral architecture designed by the parties themselves.
The parties did not choose a major arbitral institution. Instead, they selected a named sole arbitrator, a French seat, French law for the arbitration agreement and an ad hoc procedure. When enforcement was later sought in Ukraine, the debtor challenged almost every component of that structure.
The Kyiv Court of Appeal nevertheless approached the case from the premise that party autonomy should be respected unless a recognised ground for refusing enforcement is actually established.
Three points are particularly important for international practitioners.
First, ad hoc does not mean informal or legally inferior. Where the parties have validly selected an ad hoc mechanism and identified their tribunal, the absence of an arbitral institution does not itself create an enforcement defect.
Second, objections must be raised at the appropriate stage. Participation in arbitration without a timely jurisdictional challenge can materially weaken a later attempt to resist enforcement.
Third, public policy remains an exceptional defence rather than an appeal on the merits. Even a very substantial contractual penalty — here exceeding the principal debt — was not enough by itself to justify reopening the arbitrator's substantive determination.
The decision therefore provides a useful illustration of Ukraine's pro-enforcement framework under the New York Convention, while also demonstrating the importance of careful drafting of ad hoc arbitration clauses. Here, the parties had expressly identified the arbitrator, seat, language, governing law and scope of disputes — features that subsequently became central when enforcement was challenged.
Lions Lawyers advises Ukrainian and international clients on international arbitration and enforcement of foreign arbitral awards, challenges to arbitral awards, ad hoc arbitration and cross-border disputes involving Ukraine.