Ukrainian Court Opens Proceedings to Set Aside ICAC Award in Defence Procurement Dispute
⚖️ DEFENCE PROCUREMENT AGENCY v ULTRA DEFENSE CORP (UDC USA, INC)
📂 Case Details
Case Title: Defence Procurement Agency v Ultra Defense Corp (UDC USA, INC)
Case No.: 824/62/26
Court: Kyiv Court of Appeal
Date: 6 August 2026
Case Category: International Commercial Arbitration
Subject Matter: Setting Aside Arbitral Awards
Sub-Subject: Defence Procurement
Arbitral Institution: International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC)
ICAC Case No.: 63/2025
ICAC Award Date: 21 July 2026
Background of the Dispute
The proceedings arise from an international commercial arbitration between Ultra Defense Corp (UDC USA, INC), a US company, and the Defence Procurement Agency, a Ukrainian state enterprise under the Ministry of Defence of Ukraine. The Italian state entity Agenzia Industrie Difesa participated in the arbitration as a third party.
According to the Kyiv Court of Appeal's order, Ultra Defense Corp pursued claims totalling approximately USD 9.47 million, including payments allegedly due for services, penalties, interest and arbitration costs.
The arbitration also involved set-off claims connected with an earlier ICAC award and a counterclaim brought by the Defence Procurement Agency seeking approximately UAH 14.16 million, together with interest and other amounts.
ICAC rendered its award in Case No. 63/2025 on 21 July 2026.
On 30 July 2026, the Defence Procurement Agency applied to the Kyiv Court of Appeal under Article 454 of the Civil Procedure Code of Ukraine seeking to set aside the ICAC award.
The Court's Decision
The Kyiv Court of Appeal found that the application complied with the formal and substantive procedural requirements of Article 455 of the Civil Procedure Code and that the case fell within its jurisdiction.
On 6 August 2026, the Court therefore opened proceedings on the application to set aside the ICAC award.
The Court scheduled the substantive hearing for 29 September 2026 at 14:45 and gave the other participants five days from receipt of the order to submit their objections, explanations and supporting evidence.
The Court also reminded the Defence Procurement Agency that certain documents required by Article 455(4) must be provided before the substantive hearing; otherwise, the application may be returned.
The order opening the proceedings is not subject to appeal.
Why This Decision Matters
The case provides a useful illustration of the judicial supervision of international commercial arbitration seated in Ukraine, particularly at the post-award stage.
Unlike recognition and enforcement proceedings, the Defence Procurement Agency is not asking the Ukrainian court to enforce the award. It is seeking to set it aside. The proceedings therefore concern the validity and continued legal effect of the ICAC award rather than its compulsory enforcement.
The international and public-procurement dimensions are also notable. The underlying arbitration involves a Ukrainian state defence procurement entity, a US defence company and an Italian state entity, while the amounts in dispute are substantial.
At this stage, however, the Kyiv Court of Appeal has not determined whether the award should be set aside. Its 6 August order is procedural: it permits the challenge to proceed to substantive consideration.
Lions Lawyers’ Analysis
This case highlights an important distinction in international arbitration between challenging an arbitral award at the seat of arbitration and resisting its recognition or enforcement.
Where Ukraine is the seat, Ukrainian courts exercise the supervisory jurisdiction provided by Ukrainian arbitration legislation and the Civil Procedure Code. An application to set aside an award does not constitute an appeal on the merits of the underlying commercial dispute. The court's role in set-aside proceedings is governed by the limited statutory framework applicable to challenges to international commercial arbitration awards.
The case is also commercially significant because it demonstrates how an arbitration involving state defence procurement and parties from several jurisdictions can move from the arbitral process into national court proceedings shortly after the award is rendered. Here, the application was filed only nine days after the ICAC award.
For parties contracting with Ukrainian state entities, the case reinforces the importance of considering the entire dispute-resolution cycle: the arbitration agreement, conduct of the arbitration, potential challenges at the seat, recognition and enforcement, and the location of assets.
The next substantive development will be particularly important. The Court has scheduled the set-aside application for 29 September 2026, when the grounds advanced against the ICAC award may be considered.
Lions Lawyers advises Ukrainian and international clients on international commercial arbitration, challenges to arbitral awards, recognition and enforcement, interim measures and cross-border disputes involving Ukraine.