Published on 19 September 2022

FIFTH SECTION

Application no. 1752/13 CARLTON TRADING LTD and CARLTON TRADING UKRAINE, LLC against Ukraine lodged on 4 January 2013 communicated on 21 February 2022

SUBJECT MATTER OF THE CASE

The application concerns alleged unfairness of commercial proceedings over the validity of a contract concluded between the first and second applicant companies, on the one hand, and Hotel K. (a State enterprise attached to the Ministry of Defence), on the other hand, containing an arbitration clause.

On 30 September 2011 the Arbitration Institute at the Stockholm Chamber of Commerce issued an arbitral award finding the contract binding for the parties.

On 10 July 2012 the Higher Commercial Court of Ukraine upheld the decisions of the lower courts finding the contract and, as a consequence, the arbitration clause, invalid. The first applicant company participated only in the proceedings before the Higher Commercial Court of Ukraine.

The applicant companies complain under Article 6 of the Convention alleging that:

(i) the national courts were not “established by law”, since they had no jurisdiction to consider the claim about the validity of the contract;

(ii) the decisions of the national courts contain inadequate reasoning regarding their finding of jurisdiction.

The first applicant company further complains that the first and second instance courts did not invite it to participate in the proceedings and that the Higher Commercial Court of Ukraine did not quash their decisions (and remit the case for re-examination) on that ground, as required under the law.

QUESTIONS TO THE PARTIES

1. Did the applicant companies have a fair hearing in the determination of their civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular,

(a) was the first applicant company afforded the possibility to be present and to effectively participate in the commercial proceedings before the courts of first and second instance?

(b) did the applicant companies have a fair hearing by a “tribunal established by law”, as required by Article 6 § 1 of the Convention?

(c) did the commercial courts provide adequate reasoning for their finding of jurisdiction regarding the contract containing an arbitration clause?