Originally from Handbook on Third-Party Funding in International Arbitration, Second Edition

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PART I.  THE THIRD-PARTY FUNDING LANDSCAPE

1.  The TPF market in Ukraine

1.1.  Please shortly describe the TPF market in your Jurisdiction.

In Ukraine, the TPF market is not yet fully developed.  For domestic disputes, claimants sometimes resort to contingency fee arrangements with law firms representing such claimants in court proceedings. In its Resolution dated 12 May 2020 in case No. 904/4507/18 the Supreme Court acknowledged the legality of contingency fee agreements.  As to international disputes, claimants predominantly rely on their own funding.

1.2.  Is it dominated by local or international Funders? Which Funders are active? Which cases get typically funded?

In Ukraine, the dispute resolution sector is dominated by local law firms, which decide on whether to agree on contingency on a case- by-case basis.  Typically, law firms are more willing to finance cases where there is a high probability of a positive outcome.  First of all, these are cases of debt collection under contracts. In addition, before the decision is made, the body of evidence and the possibility of actual execution of a court decision (the size and reputation of the defendant, the sustainability of the defendant’s business, the availability of liquid assets, the possibility of alienation or transfer of assets, the existence of a mortgage, the bankruptcy risks, etc.) are analyzed. 

As to TPF for international arbitration, there are no statistics on the cases that have relied on TPF, but we assume that even if there are such cases, their number is minimal. 

1.3.  What types of funding exist (e.g., ISDS, Commercial Arbitration, portfolio funding, respondent-side funding etc.)?

Contingency fee agreements between claimants and law firms are concluded for cases in domestic courts and commercial arbitration.

Respondents may actually fund court costs according to the “loser pays” principle applied by courts and by the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (hereinafter – “ICAC”) (for more detailed information please see Question 3.1 below). 

Insurance companies propose voluntary insurance for court costs (please see Question 1.7 below).

Other types of funding, such as ISDS and portfolio funding, have not yet spread in Ukraine.