The American Chamber of Commerce in Ukraine (ACC), the European Business Association (EBA), and the Union of Ukrainian Entrepreneurs (SUP) welcomes and fully supports the Ukraine’s President’s and Government’s statements on improving the investment climate in Ukraine and the initial steps taken. Measures to fight corruption through the removal of blanket parliamentary immunity, passage of the new law on concessions, and legislation regarding privatization and property rights protection will indeed send a strong signal to foreign investors that Ukraine is truly open for investment. Continued efforts by the President and Government to attract foreign investment will be vital to achieving the new administration’s goal of 5-7% GDP growth year-on-year.
A crucial pre-condition to inspiring investor confidence to put significant capital into Ukraine is the stability and predictability of the rule of law. It is vital to create an environment where investors and businesses feel secure in the irrevocability of established rules and the even-handed protection of property rights adjudicated by an independent judicial system free from interference by executive authority.
It is in this context that our three associations raise our concerns regarding the proposed changes to the selection of judges and composition of the Supreme Court of Ukraine set out in Draft Law #1008 “On Amendments to Certain Laws of Ukraine regarding the Functioning of Judicial Governance” (Draft Law #1008). We fear that the proposals set out in these initiatives may serve to undermine the trust and confidence of foreign investors necessary to encourage large-scale investments to achieve the administration’s economic growth goals.
Regarding the judicial reform proposals set out in Draft Law #1008, our associations have been following events since the Draft Law’s introduction in early September for the first reading. We find quite worrying the concerns of the international community expressed in the joint statement of the Canadian Embassy in Ukraine and the European Commission Delegation dated September 11, 2019, the letter from the Secretary-General of the Council of Europe dated October 1, 2019, and the Resolution of Plenum of the Supreme Court of Ukraine dated September 16, 2019, Assessment of Draft Law by the Council of Europe dated September 2019, letter of the American Chamber of Commerce in Ukraine dated September 27 as well as the views of members of the Public Integrity Council of the Higher Qualification Commission of Judges, civil society and professional legal organizations regarding the potentially deleterious impact of Draft Law #1008 on the independence of the judicial system. We cannot stress strongly enough the importance to business of an effective and independent court system that offers prompt access to justice and high-quality decisions resolving disputes. Our concern is that Draft Law #1008 may serve to undermine principle of the rule of law, restrict access to justice, which is an imperative prerequisite to protecting the sanctity of property rights and the much-needed confidence among the business community to make further investments into Ukraine’s economy.
From the perspective of our members, while not perfect, the reform of the process of selection of judges and the new composition of the Supreme Court of Ukraine, which began its work in January 2018, has been a marked improvement over the system that existed before. We welcome the incremental improvements though no complete overhaul of the new Supreme Court given there are significant issues pending in overhauling lower courts and completing the long-awaited reform of the judicial system as a whole. Indeed, we remain concerned about the capacity of the Supreme Court to continue to deliver proper decisions in a timely manner given the size of the current caseload. We understand that the Supreme Court has reportedly received 220,000 cases since Supreme Court launched and continues to receive on average 360 cases per day. In total, there are 193 judges in the Supreme Court and 63,000 pending cases.
In this context, we are deeply concerned by estimates that if the number of Supreme Court judges is cut from 200 to 100 without first reforming the lower and appellate courts and putting procedural filters into the court procedure codes, it is estimated that claimants may need to wait in excess of 5 years for a decision from the Court.
We firmly believe that any changes to the manner of selection of judges and composition of the Supreme Court must be vigorously debated in public similar to the selection proves of the current Supreme Court, which was a transparent and rigorous process that took place in a public manner and with significant discussion, debate and expert involvement. With respect to Draft Law #1008, it is important to have a robust public discussion between the Legal Affairs Committee of the Verkhovna Rada with the wider civil society, business and international community regarding how the proposed law will achieve its stated objective to improve access to justice and ensure high-quality decisions. Such a discussion should discuss the fact that the most egregious problems faced by our members remain with the courts of first instance and the appellate courts.
ACC, EBA, and SUP welcome the news that the Venice Commission of the Council of Europe will review the Draft Law #1008 to ensure its compliance with European norms and standards. Our associations stand ready to fully participate in a public dialogue with the authorities to continue facilitating the judicial reform process to ensure effective access to justice that will result in timely, high-quality decisions. We reaffirm our commitment to work with the Ukrainian authorities to continue creating a certain and predictable legal environment based on the rule of law principles that should be the hallmark of the Ukrainian legal system.
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