Ukraine Expands International Arbitration Competence to Include Investment Disputes with the State

Verkhovna Rada passes Bill 15197, allowing international arbitration institutions to resolve investment disputes between the state and foreign businesses.

By: AXL Media

Published: Apr 28, 2026, 9:18 AM EDT

Source: Information for this report was sourced from the Verkhovna Rada of Ukraine and Interfax-Ukraine.

A Legislative Leap Toward Global Dispute Resolution Standards

In a decisive plenary session on Tuesday, the Verkhovna Rada approved Bill No. 15197 in its second reading, with 291 MPs voting in favor of the measure. This legislative overhaul marks a fundamental shift in how Ukraine handles international commercial and civil law disputes. By expanding the competence of international arbitration, the state is moving to adopt the UNCITRAL Model Law standards, which are widely recognized as the global benchmark for commercial justice. The primary objective is to transform Ukraine into a more attractive jurisdiction for legal services and to provide foreign entities with a familiar, standardized framework for resolving complex economic disagreements.

Broadening the Definition of International Commercial Ties

The new law introduces more flexible criteria for determining when a dispute can be referred to international commercial arbitration. Previously, such referrals were largely contingent on at least one party being located abroad. Under the revised rules, disputes may now be arbitrated if the parties explicitly agree that the subject of their agreement relates to more than one country. Furthermore, arbitration is now permissible if the place of arbitration, the place of significant performance, or the location most closely connected to the dispute is outside the state where the parties maintain their commercial enterprises. This change reflects the increasing complexity of modern global supply chains and digital trade.

Opening the Door to State-Investor Arbitration

Perhaps the most significant provision of the bill is the inclusion of disputes involving foreign investors and the Ukrainian state, its bodies, or intergovernmental organizations. The competence of international commercial arbitration now officially extends to conflicts arising from investment activities based on international treaties, domestic laws, or specific party agreements. By allowing these disputes to be settled through institutions like the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, the government aims to reduce the heavy burden on the state budget currently spent on defending interests in foreign courts.