Civil asset recovery in Ukraine

Civil asset recovery

Is there any restriction on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter?

There are no restrictions on civil proceedings progressing in advance of criminal proceedings concerning the same subject matter.

According to the Criminal Procedure Code of Ukraine, the person to whom pecuniary or non-pecuniary damage has been caused by a criminal offence has the right to enter a civil action in the course of criminal proceedings against the suspect, accused or other person or entity civilly liable by law for the damage caused. However, if an action has been dismissed in separate civil proceedings, the claimant cannot file the same civil claim in the course of criminal proceedings, and vice versa. Moreover, the claimant must confirm that he or she did not file the same claim (concerning the subject and grounds of the dispute) regarding the same defendant. Hence, the person has no right to bring a civil action before the civil court in parallel with the civil action in the criminal proceedings concerning the same subject matter.

In which court should proceedings be brought?

According to the Civil Procedure Code of Ukraine, all cases that are examined in accordance with civil procedure are considered by the district courts as the first instance courts. In this regard, if the claimant wishes to recover his or her property from a defendant, it is a private property dispute. Therefore, such claims for the recovery of assets shall be brought in district courts, which have jurisdiction to hear at first instance any civil actions. However, there is a specificity of jurisdiction depending on the legal status of parties to the dispute. According to the Commercial Procedure Code of Ukraine, if the dispute is raised between legal entities, the claim shall be brought in the district commercial courts as the first instance courts.

What are the time limits for starting civil court proceedings?

The Civil Code of Ukraine provides general and specific time limitations for starting civil court proceedings. As regards asset recovery claims, the general time limitation shall be applied; the general limitation of an action is three years. In addition, the Civil Code provides that the duration of a limitation period shall begin from the day when a person finds out, or could find out, about the violation of his or her right, or about a person that violated the right.

In what circumstances does the civil court have jurisdiction? How can a defendant challenge jurisdiction?

Under the Civil Procedure Code, civil jurisdiction is the defendant’s home location, namely, the place of residence of an individual, and the legal address of a legal entity. However, a claimant may use other jurisdictions. In particular, claims for damage caused to property may also be filed at the place of the damage.

In terms of challenging jurisdiction, first, a defendant can submit a response to the claim concerning jurisdiction irrelevance. Secondly, a defendant has the right to appeal the decision of the court of first instance under the Civil Procedure Code providing, inter alia, arguments are challenging jurisdiction.

What is the usual time frame for a claim to reach trial?

In general, there are several steps to the proceedings. This affects their general time frame. Pursuant to the Civil Procedure Code, the court commences proceedings in a case within five days of claim submission. The next step provides preliminary proceedings, which shall be conducted within 60 days of the day when proceedings are opened. The last step is a consideration on the merits. The court shall consider a case within 30 days. Therefore, if the hearings are not postponed, a claim reaches trial within approximately 90 days.

What rules apply to the admissibility of evidence in civil proceedings?

Evidence in a civil proceeding is witnesses and their testimony, material evidence, written evidence, electronic evidence and experts’ reports.

The Civil Procedure Code establishes the following for recognising evidence as admissible:

• relevance of evidence: it shall include any information regarding the subject matter of the dispute;
• admissibility of evidence: the court shall not consider evidence obtained by violation of the procedure established by law;
• reliability of evidence: the credibility of a source that is being used as evidence; and
• sufficiency of evidence: it provides the possibility of establishing the existence or absence of the relevant circumstances of the case concerning the subject matter of the dispute.

What powers are available to compel witnesses to give evidence?

Under the Civil Procedure Code, there are several actions that may be used to compel witnesses to give evidence. For instance, parties in a case can summon witnesses by issuing a summons. However, if a properly summoned witness does not appear at the court hearing without a justified reason, or did not report the reason for non-appearance, he or she may be subject to the relevant authorities of the National Police of Ukraine with reimbursement to the state’s revenue for the costs of its implementation.

What sources of information about assets are publicly available?

To obtain information relevant for finding and tracing assets, the following databases or state registers can be used (the list is non-exhaustive):

• the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organisations of Ukraine contains information on legal entities and individual entrepreneurs registered in Ukraine and information on the ownership structure of legal entities, including the beneficial owners (controllers) of such persons, etc;
• the State Register of Proprietary Rights to Real Estate, and the State Land Cadastre contain information on land plots, other real estate objects and their owners;
• the Unified State Register of the Ministry of Internal Affairs, concerning vehicles contains information on registered vehicles and their owners; and
• the Unified State Register of Declarations of Persons Authorised to Perform Functions of the State or Local Self-Government contains information about property, income, expenses, financial obligations and private interests of all public servants, including the beneficiary ownership of assets.

The mentioned registers are publicly available, and information therefrom can be obtained via the internet (in some cases, it may require a fee payment), with the exception of certain confidential data.

Can information and evidence be obtained from law enforcement and regulatory agencies for use in civil proceedings?

Yes, the information and evidence from law enforcement and regulatory agencies may be obtained for use in civil proceedings. Under national legislation, any person has the right to information, namely, the free acquisition, use, distribution, storage and protection of information that is necessary for the exercising of rights, freedoms and legitimate interests. In order to obtain certain information, a person shall file a request to the competent authorities. If such information includes relevant circumstances, it can be recognised by a court as admissible evidence.

How can information be obtained from third parties not suspected of wrongdoing?

Information can be obtained from third parties by a witness summons in accordance with the special procedure under the Civil Procedure Code (see question 7). Moreover, concerning a legal entity, a party of the dispute can obtain relevant information by making a request to a different competent agency or authority. As to banks, the customer has the right to access information concerning bank activities. However, if a person wants to obtain information related to bank secrecy, it may be possible only under judicial procedure.

What interim relief is available pre-judgment to prevent the dissipation of assets by, and to obtain information from, those suspected of involvement in the fraud?

According to the Civil Procedure Code, the following interim relief can be used as measures of procedural compulsion in a civil proceeding:

• seizure of property and money (or both) belonging to, or subject to transfer or payment to, the defendant and held by him or her or other persons;
• prohibition of taking certain actions;
• obligation of performing certain actions;
• prohibition of other persons taking actions on the subject matter of the dispute, making payments, transferring the property to the defendant or performing other obligations on behalf of him or her;
• suspension of the sale of the arrested property, if a claim is filed for the recognition of title to this property and a challenge to the property’s arrest;
• suspension of enforcement based on an executive document, which is contested by the debtor in court;
• transfer of the item that is the subject of the dispute to the custody of other persons who are not involved in resolving the dispute; and
• suspension of customs clearance of goods or objects.

How do courts punish failure to comply with court orders?

There are several types of legal liabilities on this matter. For instance, according to the Law on Enforcement Proceedings, when a debtor does not comply with a binding decision, the bailiff makes a resolution to impose a fine on the debtor and establishes a new term of execution. The amount of the fine depends on the status of the debtor (individual, legal entity or official). If the debtor repeatedly fails to comply with a decision without valid reasons, the bailiff in the same order imposes a double fine and appeals to the bodies of the pretrial investigation with a statement of commission of a criminal offence. Pursuant to the Criminal Code of Ukraine, failure to comply with a legally binding court order is recognised as a criminal offence and shall be punished by a fine or imprisonment. Moreover, the deprivation of the right to occupy certain positions or engage in certain activities within a certain term shall also be applied to officials. The Civil Procedure Code also provides a fine for non-compliance with a court order, namely, if a person fails to comply with court requirements during the civil proceedings; disobeys or resists the lawful order, process or other mandate of a court; does not provide relevant evidence in time; or interferes with the judicial proceedings.

How can information be obtained through courts in other jurisdictions to assist in the civil proceedings?

On 21 July 2001, Ukraine ratified the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters 1970. According to article 1 of this Convention, in civil or commercial matters, a judicial authority of a contracting state may, in accordance with the provisions of the law of that state, request the competent authority of another contracting state, by means of a letter of request, to provide evidence or to perform some other judicial act. According to article 2 of this Convention, a contracting state shall designate a central authority, which will undertake to receive letters of request coming from a judicial authority of another contracting state and to transmit them to the authority competent to execute them.

On 11 November 1994, Ukraine ratified the Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters. According to article 6 of this Convention, the contracting parties grant legal assistance to each other by carrying out the following procedural (and other) actions envisaged by law of the contracting parties, in particular:

• compiling and sending documents;
• requisition;
• sending and delivering exhibits;
• conducting expertise and interrogations of the parties, witnesses and experts; and
• recognising and fulfilling court decisions in civil cases, writs of execution and by way of handing.

What assistance will the civil court give in connection with civil asset recovery proceedings in other jurisdictions?

As mentioned in question 13, Ukraine is a party to the Hague Convention. Therefore, it undertakes to fulfil obligations for transmitting judicial documents. In accordance with the Convention, the contracting state makes a request to the competent central body designated by the international treaty with Ukraine. The central body sends the request to the Ministry of Justice of Ukraine to process the service of documents from the contracting state. For information on the Minsk Convention, see question 13.

What are the main causes of action in civil asset recovery cases, and do they include proprietary claims?

Under the Civil Code, the main causes of action in civil asset recovery cases are as follows:

• breach of a contract;
• tort as the main cause of action;
• unjust enrichment; and
• infringement of intellectual property rights.

What remedies are available in a civil recovery action?

The Civil Code provides the following possible remedies in a civil recovery action, namely:

• recognition of title;
• recognition of the transaction as invalid;
• termination of the action that violates the right;
• restitution;
• compulsory fulfilment of duty;
• change in a legal relationship;
• termination of the legal relation;
• indemnification and other methods of compensation of property damage;
• compensation of moral (non-property) damage; and
• recognition of decisions, actions or omissions of the state authorities or their officials as illegal.

Moreover, the court may protect civil rights or interests in another way established by the contract, the law or by the court in cases determined by law.

Can a victim obtain a judgment without the need for a full trial?

Under the Civil Procedure Code, the following proceedings do not require a full trial:

• simplified proceedings (or summary proceedings), which are applied to minor cases (depending on the cost of the claim, the importance of the case, the legal remedies that the claimant is asking the court to apply, the category and complexity of the case, the existence of public interest in the current case, etc); and
• default proceedings, which are applied when all conditions are fulfilled as follows:
• a defendant was duly notified about the judicial hearing;
• a defendant did not appear at the judicial hearing and did not have a valid reasons for non-appearance or did not inform the court about the reasons;
• a defendant did not submit a response; and
• a claimant does not object to the dispute resolution.

What post-judgment relief is available to successful claimants?

Under the Civil Procedure Code, the successful claimant can apply for debt collection by filing an action before the court. The court also can limit the right of a person to cross the border until the defendant complies with the court’s decision. Moreover, the state enforcement officer can take coercive measures to enforce the judgment and recover the debt, including, but not limited to, seizure of the debtor’s funds or other assets, sale of the debtor’s assets at a public auction and collection of any regular payments.

What methods of enforcement are available?

The Law on Enforcement Proceedings provides for the following methods of enforcement:

• collection of funds, securities or other property (property rights);
• recovery of salary, pension, scholarship and other debtor income;
• withdrawal from the debtor and transfer to the collector of the items specified in the decision; and
• a prohibition on the debtor to dispose of or use property owned by him or her on the right of ownership, including funds, or to establish a debtor’s obligation to use the property on terms and conditions specified by the bailiff.

What funding arrangements are available to parties contemplating or involved in litigation and do the courts have any powers to manage the overall cost of that litigation?

Under the Civil Procedure Code, there is a general rule that provides for the proportional partition of the court fee. This partition depends on the party’s satisfied claims: if a claim is fully satisfied by the court, the defendant shall pay the total sum of the court fee. If the claim is refused by the court, the claimant shall pay the total sum of the court fee. In the case of partial satisfaction, the parties shall pay a sum that is proportional to the satisfied claim. The same rule is established for overall court costs, including the costs of the legal assistance. In addition, a court has the power to limit the compensation of the overall costs. However, this limitation can only be applied based on a party’s application in cases of non-proportionality of costs, and complexity of the claim and trial.