We are examining whether a decision of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry has res judicata effect on other disputes under Ukrainian law.

The question of whether a decision of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (hereinafter—the ICAC at the UCCI) for another dispute in which different claims are asserted must be analyzed taking into account the principles of arbitral independence, the specific nature of international commercial arbitration, and the provisions of Ukrainian law.

Regarding the interpretation of res judicata facts and judicial practice in their application

Res judicata facts are facts established by a court decision that has become final. Res judicata is based on the legal property of a court decision having the force of law and is determined by its subjective and objective limits, beyond which the parties and other persons who participated in the case, as well as their successors in title, may not again challenge in another proceeding the legal relationships established by the court decision in that case.

According to the Supreme Court’s ruling of November 2, 2022, in Case No. 140/6115/21, it is generally accepted that res judicata (Latin: praejudicialis —that is, relating to a prior judicial decision—is the court’s ability to accept as undisputed the circumstances (legal facts) established by another court in a different case and set forth in the reasoning section of a decision that has become final. The same parties or their successors in interest must have participated in that prior case. Failure to meet even one of these conditions makes it impossible for the court to apply res judicata, which is particularly important when new parties are involved in the case.

Res judicata differs from the concept of “pre-litigation,” which refers to a person’s ability to initiate the resolution of a dispute in court only after a court decision has been rendered in another, directly related case, if required by procedural law.

Res judicata also differs from the binding nature of legal conclusions (positions) of the Supreme Court, which are of a precedential nature and concern the interpretation of legislation carried out by the Court during a cassation review of a case (in accordance with Parts 5 and 6 of Article 13 of the Law of Ukraine “On the Judicial System and the Status of Judges” conclusions regarding the application of legal provisions set forth in Supreme Court rulings are binding on all public authorities that apply, in the course of their activities, a normative legal act containing the relevant legal provision; conclusions regarding the application of legal provisions set forth in Supreme Court rulings shall be taken into account by other courts when applying such legal provisions).

Prejudicial effect grants a party to the case a certain privilege not to have to prove again circumstances (legal facts) already established by the court.

At the same time, the other party must have the opportunity to challenge such res judicata circumstances (legal facts) by citing relevant and admissible evidence, and the court is required to provide reasons for rejecting or accepting these challenges.

When rejecting these objections, the court must explain that there are circumstances (legal facts) of a prejudicial nature have been established by another court and that they are, in fact, not a “legal assessment given by the court to a specific circumstance (legal fact).”

A legal assessment given by a court regarding a specific fact in the course of another case is not binding on the court.

According to the resolution of the Civil Chamber of the Supreme Court dated December 11, 2019, in case No. 320/4938/17, the subjective limits of res judicata are that the same persons or their successors in title are parties to both cases, or at least one person in respect of whom these circumstances have been established. The objective limits relate to the circumstances established by a court decision.

Circumstances giving rise to res judicata do not require proof if the following conditions are simultaneously met:

- the circumstance has been established by a court decision;

- the court decision has become final;

- the same persons who participated in the previous case are involved in the current case, or at least one person in respect of whom these circumstances have been established ().

The Grand Chamber of the Supreme Court has already noted that res judicata effect in a case is attributed to the facts established by court decisions, rather than to the legal assessment of such facts made by another court. Res judicata is established exclusively by those facts that were directly examined and established by the court, as reflected in the reasoning section of the court decision. Res judicata facts differ from another court’s assessment of the circumstances of the case. These conclusions are set forth in paragraph 32 of the Resolution of the Grand Chamber of the Supreme Court dated July 3, 2018, in Case No. 917/1345/17

Regarding the Principles of Case Consideration by an Arbitration Court

One of the fundamental principles of arbitration proceedings is the independence of arbitrators and the autonomy of each specific arbitral tribunal. Unlike the judicial systems of states, where the principle of the binding nature of court decisions on lower courts and their res judicata effect within the same case applies, arbitration awards are rendered by independent panels of arbitrators and are not subject to a system of mandatory adherence to prior decisions in other cases.

Each arbitration proceeding is conducted within the framework of an individual agreement between the parties, which defines the jurisdiction of the arbitration. Consequently, different panels of arbitrators are not bound by the decisions of other arbitrators, even in disputes between the same parties but involving different subjects of the claim.

Pursuant to Article 68 of the Rules of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, unless the parties agree otherwise, the proceedings and other related activities of the ICAC are confidential.

Unless the parties have agreed otherwise, the Arbitral Tribunal and the parties must maintain the confidentiality of any document submitted by a party or a person who is not a party to the arbitration proceedings and which is not available from public sources.

Arbitrators, rapporteurs, and experts appointed by the Arbitral Tribunal, the ICAC and its employees, the Ukrainian Chamber of Commerce and Industry and its employees are obligated not to disclose information that has come to their knowledge regarding cases pending before the ICAC, which could harm the legitimate interests of the parties or the ICAC.

The Chairman of the ICAC determines the procedure for accessing materials and information related to the ICAC’s activities.

Furthermore, arbitration proceedings are governed by the principle of confidentiality, which means that other arbitrators are not required to take into account decisions rendered in other proceedings, as each dispute is resolved based on the specific evidence and circumstances of the case.

Absence of Res Judicata Under Ukrainian Law

Pursuant to Part 6 of Article 75 of the Commercial Procedural Code of Ukraine (hereinafter, the “CPC of Ukraine”), only court decisions rendered in civil, commercial, administrative, or criminal proceedings have res judicata effect for a court. International commercial arbitration awards are not included in this list and, therefore, cannot be considered res judicata for subsequent court proceedings.

Furthermore, Article 36 of the Law of Ukraine “On International Commercial Arbitration” provides for the possibility of refusing to recognize and enforce an arbitral award if it is contrary to the public policy of Ukraine or if the respondent proves procedural violations. This confirms that arbitral awards are considered within the context of a specific case and do not have binding force for other proceedings.

Regarding the Prejudicial Effect of an Arbitration Award

The existence of a foreign international commercial arbitration award resolving a dispute between the parties involving similar claims, but which has not undergone the procedure for recognition or authorization of enforcement in Ukraine, does not constitute grounds for a commercial court to dismiss proceedings in a case concerning a dispute between the same parties, regarding the same subject matter, and on the same grounds. (Case No. 904/2267/20, Resolution of the Grand Chamber of the Supreme Court dated September 15, 2021)

A decision of the ICAC at the UCCI without a ruling granting permission for the enforcement of such a decision (which has become final) has no res judicata effect, and the facts established therein are subject to proof in accordance with the general procedure. (Case No. 904/2104/19, Resolution of the Grand Chamber of the Supreme Court dated July 28, 2020)

In light of the foregoing, it can be concluded that an award of the ICAC at the UCCI has no res judicata effect on other arbitration or court proceedings if those proceedings involve different claims, even if the parties remain the same. This assertion is based on the principle of the independence of arbitrators, the absence of direct statutory provisions establishing the res judicata effect of arbitral awards, and the case law of the Supreme Court of Ukraine.