Communicated on 3 April 2019
FIFTH SECTION
Application no. 23819/11
ARCELORMITTAL AMBALAJ CELIGI SANAYI VE TICARET ANONIM SIRKETI
against Ukraine
lodged on 8 April 2011
STATEMENT OF FACTS
The applicant, Arcelormittal Ambalaj Celigi Sanayi Ve Ticaret Anonim Sirketi, is a private company incorporated under the laws of Turkey. It is represented before the Court by Mr T. Gürmen, a lawyer practising in Istanbul.
A. The circumstances of the case
The facts of the case, as submitted by the applicant company, may be summarised as follows.
On 22 January 2007 the applicant company and a Ukrainian private company, A., entered into a contract for the supply of goods (“the contract”). The contract was drafted in both English and Ukrainian, and specified that both versions had equal legal force and were authentic. Clause 8 of the contract contained an arbitration clause, the Ukrainian version of which reads as follows:
“8. Arbitration
8.1. All disputes arising from the present Contract or in connection with the present Contract shall be settled by negotiation between the parties.
8.2. If the parties cannot agree, the dispute shall be submitted for consideration to the International Commercial Arbitration Court at the Kyiv Chamber of Commerce and Industry (Міжнародному Комерційному арбітражному Суді при Торгово‑промисловій палаті м. Київ). The decision of the Arbitration Court shall be final and binding upon both parties.
8.3. The parties have agreed that during the consideration and resolution of any such dispute the Rules of the International Commercial Court at the Ukrainian Chamber of Commerce and Industry in Kyiv (Регламент Міжнародного Комерційного суду при Торгово-Промисловій палаті України, м. Київ) shall be applied ...”
In the English version of the arbitration clause, the designated arbitration tribunal was referred to as “the International Commercial Arbitration Court of the Chamber of Commerce and Industry of Ukraine”.
On 7 October 2008 the applicant company lodged a statement of claim with the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (“the ICAC”) against A., seeking payment for delivered goods plus damages.
On 8 December 2008 A. submitted a statement of defence, which contained, inter alia, objections to the ICAC’s jurisdiction. It argued, in particular, that the initial negotiation procedure referred to in clause 8.1 had been bypassed, despite being a prerequisite for arbitration. A. also asked for additional time in order to submit supplementary documents in the case and requested an oral hearing.
On 20 February 2009 the ICAC issued an arbitral award, ordering A. to pay the applicant company in full for the delivered goods and to reimburse the arbitration fee. The ICAC dealt with the issue of its jurisdiction both of its own motion and in reply to A.’s objections. It pointed first to an “inaccuracy” in the arbitration clause, in that it referred to the “International Commercial Arbitration Court at the Kyiv Chamber of Commerce and Industry” instead of the “International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry”. It found that the parties had meant the ICAC because it was the only arbitral institution at a chamber of commerce and industry, in accordance with the Rules on the ICAC and the Law of Ukraine on international commercial arbitration. Further, it replied to A.’s objection that it lacked jurisdiction, finding that the requirement for negotiations could not have been implemented, as the clause did not contain a clear procedure or time-limit and thus was not enforceable.
In April 2009 A. lodged an application with the Shevchenkivskyy District Court of Kyiv, seeking to set aside the arbitral award, claiming that the arbitration clause was invalid under Ukrainian law, that the ICAC had surpassed its jurisdiction and that the arbitral award was contrary to the public policy of Ukraine.
On 27 July 2009 the Shevchenkivskyy District Court of Kyiv allowed the application and set aside the arbitral award. The court found that the arbitration clause referred to a non-existent institution, the “International Commercial Court at the Kyiv Chamber of Commerce and Industry” (Міжнародний Комерційний суд при Торгово-промисловій палаті м. Київ), that the parties had failed to provide for a procedure for dispute resolution through the courts, and that the arbitral award had dealt with matters that fell outside the ambit of the arbitration clause in that the ICAC had interpreted the arbitration clause and ruled on its jurisdiction to deal with the case.
The applicant company appealed against that decision. It argued that the parties had agreed to refer all disputes to arbitration and not to the national courts, that A. had actively participated in the arbitral proceedings, thereby demonstrating its consent to arbitration, and that, under section 16 of the Law of Ukraine on international commercial arbitration which stated that an “arbitral tribunal may rule on its own jurisdiction”, the ICAC had had the power to rule on the question of its jurisdiction.
On 9 December 2009 the Kyiv Court of Appeal upheld the decision of the first-instance court. The reasoning given was that the Ukrainian version of the arbitration clause referred to a non-existent institution and that the parties had not explicitly authorised the ICAC to interpret the arbitration clause. The Court of Appeal did not comment on the applicant company’s arguments about the arbitral tribunal’s power to rule on its jurisdiction or A.’s active participation in the arbitral proceedings.
The applicant company lodged a cassation appeal. It pleaded again that the ICAC had the power to rule on its own jurisdiction and that A.’s statement of defence had contained an acknowledgment that the ICAC had jurisdiction to hear the case.
On 13 October 2010 the Supreme Court of Ukraine upheld the decision of the lower courts. It did not comment on the applicability of section 16 of the Law of Ukraine on international commercial arbitration but stated that the arbitration clause did not explicitly authorise the ICAC to interpret it, nor had the parties asked the tribunal to do so. In addition, the Supreme Court concluded that A.’s objections to the ICAC’s jurisdiction indicated that the parties had not agreed to refer their disputes to it.
B. Relevant domestic law
The Law of Ukraine on international commercial arbitration of 24 February 1994 provided:
Section 7. Definition and form of arbitration agreement
“1. An arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.
2. The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a document signed by the parties or in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement, or in an exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by another. A reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement, provided that the contract is in writing and the reference is such as to make that clause part of the contract.”
Section 16. Competence of arbitral tribunal to rule on its own jurisdiction
“1. An arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
2. A plea that the arbitral tribunal does not have jurisdiction shall be raised no later than the submission of the statement of defence. A party is not precluded from raising such a plea by the fact that he has appointed, or participated in the appointment of, an arbitrator. A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. The arbitral tribunal may, in either case, admit a later plea if it considers the delay justified.
3. The arbitral tribunal may rule on a plea referred to in subsection 2 of this section either as a preliminary question or in an award on the merits. If the arbitral tribunal deals with the issue as a preliminary question and rules that it has jurisdiction, any party may request, within thirty days of receiving notice of that ruling, the court specified in section 6 to decide the matter, and no appeal is available against such a decision. While such a request is pending, the arbitral tribunal may continue the arbitral proceedings and make an award.”
COMPLAINTS
The applicant company complains under Articles 6 and 13 that the national courts failed to provide adequate reasoning for their decisions and that the State breached its positive obligations under Article 1 of Protocol No. 1 and Article 13 to provide adequate judicial procedures.
QUESTIONS TO THE PARTIES
1. Did the applicant company have a fair hearing before the Kyiv Court of Appeal and the Supreme Court of Ukraine? In particular, was there a proper examination of the applicant company’s arguments by those courts, not least in relation to the question of jurisdiction, and did they provide adequate reasoning for their decisions (see, for instance, Bochan v. Ukraine (no. 2) [GC], no. 22251/08, § 61, ECHR 2015; Mala v. Ukraine, no. 4436/07, § 48, 3 July 2014; and Pronina v. Ukraine, no. 63566/00, § 25, 18 July 2006)? Has there been a violation of Article 6 § 1 and/or of Article 13 of the Convention in this respect?
2. Is Article 1 of Protocol No. 1 applicable in the circumstances of the present case and, if so, was the applicant company afforded access to judicial procedures in the context of the High Contracting Parties’ positive obligation under Article 1 of Protocol No. 1 (see, for instance, Chadzitaskos and Franta v. the Czech Republic, nos. 7398/07 and 3 others, § 48, 27 September 2012; S.L. and J.L. v. Croatia, no. 13712/11, § 61, 7 May 2015; and Sovtransavto Holding v. Ukraine, no. 48553/99, § 96, ECHR 2002‑VII)? Has there been a violation of Article 1 of Protocol No. 1 to the Convention and/or of Article 13 of the Convention in this respect?
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