An unspecified arbitration clause is unenforceable: the dispute must be considered by a commercial court – SC CommCC

An arbitration clause that contains only a general reference to the resolution of the dispute through arbitration in accordance with the legislation of the seller’s country, without specifying a particular arbitral institution, its rules, the place of arbitration or other procedural matters, is unenforceable. In such circumstances, priority in hearing the dispute lies with the commercial court as a judicial authority, rather than with an unspecified court in the seller’s country.

This conclusion was reached by a panel of judges of the Commercial Cassation Court within the Supreme Court.

The commercial court dismissed the proceedings on the claim for debt recovery, citing the arbitration clause in the contract, which provides for the resolution of disputes under the law of the seller’s country (Turkey). The court of appeal quashed the court’s ruling, noting that the arbitration clause was unenforceable due to the absence of a specific arbitral institution, venue and arbitration rules. Therefore, priority in hearing the dispute lies with the commercial court, and the court of first instance had erroneously applied private international law instead of the Agreement between Ukraine and Turkey.

The Commercial Cassation Court within the Supreme Court, upholding the decision of the appellate court, noted that the provision of the contract concluded between the parties to the case constitutes an arbitration clause rather than a prorogation agreement on the choice of a state court, as the parties provided for the resolution of disputes through arbitration under the law of the seller’s country. At the same time, the Court noted that the arbitration clause is unenforceable, as the contract does not specify a particular arbitral institution, the place of arbitration, the procedure for constituting the arbitral tribunal, and the rules of arbitration, which makes it impossible to conduct arbitration proceedings. In view of this, priority in the consideration of the dispute lies with the commercial court, and not with an unspecified arbitration tribunal in the seller’s country.

The Supreme Court also took into account the provisions of the European Convention on Foreign Trade Arbitration, according to which, if the parties have not agreed on the place of arbitration, the claimant is entitled, at its discretion, to apply either to the president of the competent chamber of commerce of the state in which the respondent resides or has its seat at the time of filing the application for arbitration, or to the Special Committee, the composition and nature of whose activities are set out in the annex to the Convention. If the claimant has not exercised the rights granted to them, the same rights may be exercised by the respondent or the arbitrators. At the same time, neither party has made use of the mechanisms provided for in the Convention to resolve the uncertainty regarding the place of arbitration.

The Commercial Cassation Court of the Supreme Court concluded that the arbitration clause cannot be enforced due to its vague and incomplete provisions, and therefore the dispute must be considered by the commercial court in accordance with the rules of jurisdiction.

Resolution of the Commercial Cassation Court of the Supreme Court dated November 19, 2025, in case No. 924/389/25 – https://reyestr.court.gov.ua/Review/132237483.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.