To start legal debt collection in Ukraine, it is necessary to consider specificity of legislation in different countries.
If you want to file a lawsuit to the court against the debtor in Ukraine, you should gather all documents that prove the debt. Single invoice can’t be the ground for going to court. The possibility to obtain the successful court decision in Ukrainian court becomes much higher with signed contract, act of rendered services, CMR or bill of lading (shipping services).
Besides, according to the Ukrainian legislation the foreign company should provide an excerpt from the Trade (Bank, Court) Register, depending of the country. This document will prove the legal personality of the company. That is required by Ukrainian courts before accepting the lawsuit.
Before starting the cooperation with the client, it is necessary to make a decision which kind of court (arbitration or general) to choose in case of client’s default. It is important to fix it in a written form before starting the cooperation.
First of all it is important to compare legal fees. 2% of the amount of debt is the fee in courts of general jurisdiction and 1500 USD and more, depending of amount of debt, is the fee in arbitration court.
There are some differences also between legal debt collection process in arbitration court and in court of general jurisdiction, in particular regarding enforcement proceedings.
First of all, the main advantage of the arbitration in Ukraine is that the arbitration proceedings are faster, can be made confidential than litigation in court and the place of arbitration may be chosen by parties.
At the same time the main disadvantage is enforcement proceedings. The problem arises, if the debtor does not want to fulfill his obligation, determined in the arbitration judgment. The arbitration judgment is not an executive document in Ukraine, therefore it should be confirmed by the courts of general jurisdiction. After these proceedings only, the executive order can be issued or not issued by general court.
At the same time the advantage of arbitration is that enforcement of judgments issued by arbitration court abroad is secured by the New York Arbitration Convention on the higher level.
As a result of above, to prevent the problematic situation that may arise on the stage of legal debt collection in Ukraine it is necessary to control the signature of all the necessary documents by the debtor and to find out which kind of court gives more advantages.