Choice of law and resolution methods

In your jurisdiction, are there constraints on the choice of law or the method of dispute resolution provided for in joint venture agreements?

Until recently, in joint ventures incorporated in Ukraine, relations between shareholders regarding joint ventures and corporate governance have been subordinated exclusively to Ukrainian law and Ukrainian courts. Legislative changes introduced in 2021 to the Law of Ukraine on Private International Law permit a choice of law governing a corporate (shareholder) agreement if at least one of the shareholders of the joint venture is a non-resident party.

Disputes arising from a shareholders’ agreement can be subjected to international arbitration only if the joint venture and all its shareholders have explicitly consented thereto and signed a respective arbitration agreement (covenant in the shareholders’ agreement).

Joint venture agreements between participants in an unincorporated joint venture and disputes between them may be subordinated (except for imperative provisions of Ukrainian law) to a foreign jurisdiction and arbitration.

Mandatorily applicable local law

What mandatory provisions of local law will apply irrespective of the choice of governing law?

Legal provisions pertaining to areas of Ukrainian public law – such as accounting, taxation, monetary regulations and currency control, as well as customs, competition, regulatory, administrative and criminal law – remain mandatory and must be complied with.

Regardless of the chosen law, Ukrainian law also applies to all real estate matters for real estate situated in Ukraine, as well as to other property subject to state registration in Ukraine, such as transport vehicles and securities. Overall, according to the general principle of private international law, Ukrainian law shall determine the property and other proprietary rights to things located in Ukraine.

In addition, some types of disputes are subject to the exclusive jurisdiction of Ukrainian courts, such as disputes related to real estate located in Ukraine, intellectual property rights registered in Ukraine, and corporate disputes regarding Ukrainian legal entities and their bankruptcy.

Remedy restrictions

Are there any restrictions on the remedies a tribunal can grant that would have a bearing on the arbitration of joint venture disputes? Are there any restrictions on the arbitration of shareholder claims?

Corporate disputes or shareholder claims of incorporated joint ventures may not be subject to arbitration. State commercial courts are the competent courts of Ukraine. The only exception is for disputes arising out of a shareholder agreement between shareholders of an incorporated joint venture. Such disputes may be subjected to international commercial arbitration based on an arbitration clause (agreement) endorsed and signed by the joint venture and all its shareholders.

Courts may decide on injunctive relief to the extent permitted under procedural legislation. The following interim measures, however, may not be used as injunctive relief in corporate disputes:

  • prohibition on holding shareholders’ meetings and taking decisions (except for certain decisions determined by court directly related to the subject matter of a dispute and a prohibition to amend the company charter with respect to charter capital if the subject of a dispute is the shares of the joint venture);
  • prohibition on issuers, registrars or custodians that provide the shareholders’ registers or information on shareholders necessary for the holding of general meetings; or
  • prohibition on participation (registering for participation) in shareholders’ meetings and determining their quorum.


Injunctive relief measures must be proportionate to the claimant’s demands and not affect other shareholders’ rights.

Minority investor protection

Are there any statutory protections for minority investors that would apply to joint ventures?

With regard to an incorporated joint venture, a minority investor can file an action to the court against the company’s officials who have caused damage to the company. Shareholders that hold 10 per cent or more of the company are entitled to file such an action and initiate a general shareholders’ meeting.

Additionally, shareholders in joint-stock companies shall have the right to claim from the company to buy out their shares at market value if they have registered at the general shareholders’ meeting and voted against a decision on one of the following:

  • a merger, accession, division, transformation, spin-off or change of company type;
  • granting consent to a substantial or interested-party transaction;
  • refusal to exercise the pre-emptive right of a shareholder to purchase shares of an additional issue in the process of their placement; or
  • a change (decrease or increase) of the share capital.


Moreover, in joint-stock companies, in the case of a purchase of the controlling shareholding (ie, more than 50 per cent of the shares), the new majority shareholder (acting alone or with its affiliates) is obliged to offer the remaining minority shareholders the ability to buy out their shares at the market value.

Participants of limited liability companies (LLCs) that hold less than 50 per cent of the shares have a general right to exit the company upon giving notice with a demand to pay the proportional amount of assets. Participants that hold 50 per cent or more of the shares require the consent of the other participants to withdraw from the company.


How can joint venture parties have liabilities to each other beyond what is expressly agreed in the joint venture agreement?

With regard to an incorporated joint venture in the forms of an LLC and a joint-stock company, the Law of Ukraine on Limited Liability Companies and Additional Liability Companies and the Law of Ukraine on Joint-Stock Companies prescribe that the shareholders can be held liable within the amount of their shares only. A notable exception applies in the case of a joint venture’s bankruptcy resulting from its shareholders’ fault. Such shareholders can bear subsidiary liability for the company’s obligations if its assets are not sufficient to cover the creditors’ claims. Few other forms of legal entity can envisage the full responsibility of their shareholders for the joint venture’s liabilities.

For non-incorporated joint ventures, the participants bear joint responsibility under all joint obligations, irrespective of the grounds for their emergence. If a joint venture agreement was not terminated due to a participant’s refusal to participate in it further, or if the agreement is terminated on request of one of the participants, the participant whose participation in the agreement is terminated is liable to the third parties under joint obligations that emerged during the term of its participation in the agreement.

A shareholder agreement can provide for liability (eg, financial sanctions or reimbursement of damages, or both) of its parties for failure to comply with their obligations. These liability measures are enforceable by the courts.

Disclosure of evidence

Are there any particular issues that can arise in joint venture disputes in your jurisdiction concerning disclosure of evidence?

According to the Law of Ukraine on Limited Liability Companies and Additional Liability Companies and the Law of Ukraine on Joint-Stock Companies, shareholders and participants of an incorporated joint venture can only have access to a limited portion of a company’s documentation. As a matter of practice, a majority shareholder has full access to the company’s documentation and, in the case of a dispute with their partners, can obstruct the disclosure of evidence.

Otherwise, if a shareholder initiates an independent audit of a joint venture in form of a joint-stock company or an LLC, the company’s executive body is obliged to provide documents that relate to the subject of the audit. If a joint venture dispute is considered by a court, the company is obliged to provide evidence pertaining to the case (eg, corporate documents) upon the request of the court.