Iran recently executed an Olympic wrestler and Russia jailed opposition leader Alexey Navalny on trumped-up charges. Who would want to invest in these countries?
Ukraine, unlike the Russian Federation or the Republic of Iran, can be called a democratic state, but the cornerstone of any government and economy is its judicial system. All stakeholders should view Themis as a fair and impartial system that is applicable to all levels of society. But today the Ukrainian courts are more of a stumbling block than a cornerstone. Infamous for its corruption schemes (the latest news about the Constitutional Court deserve a special noting), the Ukrainian judicial system is the largest barrier to foreign direct investment.
So is there a solution?
With great political will, strong public support and strong national leadership, a complete reboot of the judiciary will take at least ten years.
I am unconditionally convinced that Ukraine represents enormous economic opportunities today. And anyone who can offer a fair, impartial and legally enforceable dispute resolution mechanism to transparently conduct business here will free up massive foreign direct investment. And it turns out that this can be done without fixing the entire Ukrainian judicial system.
According to the current Ukrainian legislation, the decision of the international arbitration commission is enforceable in Ukraine, and any two or more stakeholders can establish international arbitration to resolve their disputes.
In other words, national and international business, municipal authorities and state institutions jointly decide that their disputes will be settled not at the level of the official judicial system of Ukraine, but with the involvement of independent arbitration. For example, at the World Trade Center in Kyiv, we are working to create an arbitration system that employs foreign judges in accordance with Ukrainian legislation so that this can be implemented in all our initiatives.
Undoubtedly, the presence of international arbitrators will reduce the risk of corruption. Even so, for deals in which one or more international companies are involved, any party dissatisfied with the decision of such an arbitration system will be able to appeal it in a foreign jurisdiction.
Ukraine needs to develop a transparent, accountable and fair ecosystem of enterprises, investors, strategic partners, municipal and other authorities—the "economy of trust". Providing a simple mechanism for international arbitration can easily become the basis for its construction.
Will this work?
Well, judging by the positive responses I've seen, there are already many Ukrainian business leaders and foreign investors who really want a legitimate alternative to state arbitration.
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