• Andrii Kubko

    Partner, Salkom


Address: 12 Khreschatyk Street,
Kyiv, 01001, Ukraine
Tel.: +380 44 591 3100, 591 3101
Fax: +380 44 591 3115, 591 3107
E-mail: salkom@salkom.kiev.ua
Web-site: www.salkom.ua

Salkom law firm was founded in 1990 and quickly built a reputation for honest and efficient counsel. It is now recognized as one of the leading providers of legal services in Ukraine.

Year on year the firm is being rated by Ukrainian and foreign rating experts as one of the leaders on the legal services market in Ukraine. Famous international publications and guidebooks, such as The Legal 500 (Europe, Middle East & Africa), PLC Which Lawyer?, Chambers Global recommend the Salkom law firm as one of Ukraine’s top law firms that practices successfully in the fields of antitrust law, contract law, corporate and commercial, securities, bankruptcy and insolvency, international trade, privatization, and litigation, including foreign courts and international commercial arbitration procedures.

Salkom law firm has extensive intellectual and professional potential as it employs 39 highly-experienced lawyers. The firm’s employees speak English and other languages, which enable them to work efficiently with foreign clients.

The firm’s clientele are foreign and domestic companies, both private and state-owned, engaged in various industries such as automotive industry, banks, financial institutions and insurance companies, hotel business and leisure, publishing, investments, information technologies, shipbuilding, international trade, metallurgical industry, real estate, oil and gas, the food industry, natural and mineral resources, retail, agriculture, telecommunications and media, transport, chemical industry, power industry.

Salkom enjoys longstanding cooperative relationships with international law and consulting firms in the United Kingdom, USA, Russia, Austria, France, Cyprus, Italy, Australia, etc.

The firm is a member of European Business Association (EBA), British-Ukrainian Chamber of Commerce (BUCC), and American Chamber of Commerce (ACC) in Ukraine. The firm’s Partners are members of the International Bar Association.

In 2013, Salkom law firm and Squire Patton Boggs, an international law firm with 44 offices in 21 countries of the world, established the Squire Patton Boggs — Salkom International Association.

Protection of Property

The right of ownership is one of the core concepts of modern civil law in Ukraine. This right is enshrined in the Constitution of Ukraine and is guaranteed by international law governing human rights and protection of investments, such as the European Convention for the Protection of Human Rights and Fundamental Freedoms and Protocol No.1 to the Convention. Disputes between the state of Ukraine and private persons regarding violations of the rights to property guaranteed by Protocol No. 1 are adjudicated on a regular basis by the European Court of Human Rights. Ukraine recognises the jurisdiction of this court.

The right of ownership is also protected by international investment treaties. Ukraine has acceded to a number of international agreements related to the protection of foreign investments, which are known as bilateral investment treaties.

In addition to the purely legal aspect, there is an economic (financial) element of the right of ownership. Nowadays, it is impossible to imagine that market relations could develop in the absence of reliable guarantees of the ownership right and its efficient exercise. It is a well-known fact that insufficient implementation of the guarantees of the right of ownership on the level of the judiciary and the executive in recent decades was one of the major impediments that have prevented the development of economic relationships in the country, including the extension of  domestic and foreign investments.

Considering the above, it seems impossible to underestimate the importance of the right of ownership in modern conditions.

On the other hand, it is the duty of the state to regulate matters pertaining to ownership. Such regulation is necessary to protect public interests, implement tasks imposed on the state, and to balance the interests of owners. Such regulation implies certain restrictions of the right of ownership. By the way, the right of the state to use measures to control property and also to interfere in the right of ownership is expressly recognised by Protocol No. 1 to the Convention and in the jurisprudence of the European Court.

This is particularly relevant in the situation where the state has to protect the integrity of its territory and state sovereignty, and to eliminate external military and political threats.

Therefore, the regulation of the right of ownership is always entwined with a search for an optimum balance between the interests of a private owner and the need of the state to restrict the ownership right in certain cases so as to attain the overall objectives of the state. This issue has huge importance in the conditions that modern Ukraine finds itself.

Protection of the right of ownership plays the most important role in the concept of ownership.  The efficiency of the mechanisms intended for the protection of the right of ownership is an indicator as to whether the real exercise of this right is secured and whether real guarantees to this right exist.

Legislators use efforts to implement mechanisms aimed at strengthening the protection of the right of ownership. This in the main applies to the state registration of rights to real properties. On 6 October 2016, the Law of Ukraine On Amendments to Certain Acts of Ukraine to Modernise State Registration of Rights to Real Properties and Protect Rights to Property was adopted. This Law introduced amendments, among other things, to the Law of Ukraine On the State Registration of Property Rights to Real Properties and Encumbrances thereof.

Such amendments cover the following areas.

Firstly, the Law more precisely regulates information that should be recorded in the State Register of Rights.

Secondly, the rules about software support of the State Register and functions of a technical administrator were made more specific.

Thirdly, the procedure for the creation of a data base of applications filed to register rights to real properties was updated. Not only court decisions prohibiting registration of rights but also applications filed by owners requesting to prohibit registration, court decisions setting aside decisions issued by trial courts, and applications filed by owners to withdraw application to prohibit registration filed earlier, are all recorded in the database.

Fourthly, the Law defined more precisely the time frames for registering rights to real properties in the State Register. The right of ownership and other property rights have to be registered within five business days following the date of the application filed with the State Register of Rights. Rights arising as a result of notarial acts have to be registered immediately following the completion of a notarial act. Amendments in the information recorded in the Register must be registered within one business day, and the same time frame is established for issuing excerpts from the Register. The suspension of the registration procedures, cancellation of the state registration of rights, and annulment of a decision made by the state registrar should be recorded within two hours following the registration of a relevant application or a court decision in the State Register.

Fifthly, certain amendments were introduced to the procedure for suspending registration of real properties. From now on, registration procedures may be suspended not only by a court order but also on the basis of an application submitted by an owner of real property seeking to prohibit registration activities in connection with their property. Such an application is registered by the State Register of Rights. If the owner does not submit to the registrar within ten business days a final court decision prohibiting registration, the state registrar may resume registration operations in connection with the property owned by the relevant applicant.

Sixthly, the Law of 6 October 2016 set out the mechanism for registration of real property based on court decisions. Rights are registered exclusively on the basis of court decisions obtained within the framework of interaction between the State Register of Rights and the Unified State Register of Court Decisions, and no additional filings on behalf of the applicant are required. The State Court Administration of Ukraine is responsible for ensuring that court decisions are delivered to the State Register of Rights on the same day when a relevant decision comes into force.

Finally, the introduction of provisions imposing control over the state registration of rights is an important development. The Law of 6 October 2016 provides that the Ministry of Justice of Ukraine is in charge of controlling and monitoring the registration activities of the State Register of Rights. The objective of such measures is to uncover violations of registration procedures by state registrars and parties who have the authority to register rights. Based on such monitoring, the Ministry of Justice audits the operations of state registrars and parties who have the authority to register rights.

If violations are discovered during audits, the Ministry may impose sanctions, such as temporary or permanent restriction of access to the State Register of Rights, administrative penalties, or annulment of accreditation.

The other area of legislative development in the sphere of the right of ownership is the upgrading of management of certain properties.

On 2 June 2016, the Law of Ukraine On Amendments to some Acts of Ukraine Concerning the Management of State-owned and Municipal Property was adopted. Although the Law of 2 June 2016 governs the use of state-owned and municipal property, its provisions are applicable to private business. The reason for this is that privately-owned companies develop their business relations with state-owned and municipal companies, in particular, due to recent developments in the area of public-private partnership. 

The Law of 2 June 2016 introduces new rules concerning the governance of state-owned unitary businesses, reporting procedures, and disclosure of information about operations. The new legislation strengthens the role of the supervisory board of such companies. The supervisory board has received the power to elect the chief executive officer.

The Law also establishes a procedure for the execution of transactions with interested parties. The Law of 2 June 2016 set out criteria for transactions with interested parties and established a procedure for approval of such transactions. The approval is granted by the supervisory board or by the government agency that governs the unitary enterprise. Furthermore, a special procedure was introduced for state-owned unitary enterprises assuming “substantial commercial commitments”, i.e. when the market value of property or services covered by a given commitment equals 10% or more of the value of assets of the enterprise.

Talking about trends in legislation that governs certain types of property, special attention should be paid to the desire of legislators to improve the regulation of the use of certain properties that have specific importance for the development of the national economy, and to bring such regulation into line with modern realities. This relates to, for instance, regulation of the use of motorways and treatment of foreign investments.

In the first case, the legislator has introduced a mechanism of long-term agreements on the maintenance of motorways. The Law of Ukraine of 17 November 2016 (coming into force on 1 January 2018) provides for long-term (up to seven years) agreements on the maintenance of motorways, and sets out the requirements that apply to the terms and conditions of such agreements. Moreover, the Law of 17 November 2017 expressly provides for the application of international standards, such as FIDIC contract templates, in these agreements.

In connection with the second case, it should be noted that the requirement for mandatory registration of foreign investments has been waived in Ukraine. This amendment was introduced by the Law of Ukraine of 31 May 2016 and its objective was, in fact, to simplify the exercise of the right of ownership by foreign investors.

In summary, one can observe an increase in the legislator’s attention to the issues of property rights protection recently. Despite the complex and contradictory nature of matters related to property, the steps taken in this direction are bound to make an ultimate contribution towards strengthening legal guarantees in this area.