Changes in procedural codes, subject to their proper implementation, will certainly simplify the procedure for enforcement of judgments and accelerate dynamics of such enforcement.
Oleksandr Krenets, Senior Associate / Attorney-at-Law, Dispute Resolution, and Petro Novakovsky, Junior Associate, Dispute Resolution, open the curtain and with their article for “Юридична практика” answer the question: how would the enforcement proceedings look like in 2018?
One of the main events of 2017 in the legal sphere was the enactment of the Law No. 2147-VIII “On Amendments to Code of Commercial Procedure of Ukraine, Code of Civil Procedure of Ukraine, Code of Administrative Proceedings and Other Legislative Acts” (hereinafter – the “Law 2147-VIII”). Such large-scale reformatting of procedural legislation could not pass by the stage of the judgments` enforcement, which also underwent many significant changes.
The New Register
One of the main innovations in the enforcement proceedings in 2018 would be the introduction of the Unified State Register of Writs of Execution (hereinafter – the “Register of Writs of Execution”). According to the Law No. 2147-VII, this Register would be an automated system for collecting, storing, protecting, recording and searching for electronic writs of execution with the possibility of obtaining information from it. It is planned that all writs of execution, on the basis of which judgments are being enforced, must be entered into the Register of Writs of Execution. At the same time, writs of execution are to be entered into the Register no later than on the day following the day of issuing such a writ of execution. Electronic versions of writs of execution will be sealed through electronic digital signatures by judges (and other persons authorized to issue the writs of execution). Absence of a writ of execution in the Register of Writs of Execution would constitute the grounds for refusing to commence the enforcement proceedings, i.e. it would be impossible to commence enforcement proceedings without entering the writ of execution into the Register. However, the Law No. 2147-VIII contains only general provisions on the Register of Writs of Execution, and the Ministry of Justice and State Judicial Administration shall be responsible for the development of a more specific Regulation on such a register.
It is expected that the introduction of the Register of Writs of Execution will become another pillar of confirmation of the writs` of execution authenticity and simultaneously a significant barrier for the abusive practices within the enforcement proceedings. At the same time, it is possible to forecast the first difficulties of its functioning. For example, creditors, having received the writs of execution, will become dependent in one more way: it will be impossible to enforce the writs without entering them into the Register, and this directly depends on the diligent performance of their duties by judges and other officials. Such a situation may significantly affect the speed of judgements` enforcement, especially in cases where the prompt commencement of the enforcement proceedings is critical, e.g., when enforcing a court ruling on injunctive relief.
Return of the Writs of Execution
The next important change in the judgment enforcement process would be the elimination of the mechanism for the return of writs of execution. In contrast, a part 1 of the Article 37 of the previous version of the Law established eleven scenarios when the return of a writ of execution to the claimant, including by their own petition, was possible. The new version of the law also provides the new title for the Article 37: “Termination of enforcement proceedings”, which, in fact, has no effect on the legal consequences for a claimant. Since, as it was earlier – upon the return of a writ of execution to claimant, and as it is now – upon the delivery of a resolution to terminate the enforcement proceedings, a claimant is not deprived of the right to re-submit a writ of execution within the set time limits.
Changes to the Article 37 are mostly due to the introduction of the Register of Writs of Execution, which is confirmed by a simultaneous entry of such changes into force. Currently, the enforcement of judgments is directly dependent on the physical location of a writ of execution in materials of the enforcement proceedings, i.e. in case if a bailiff has physically no such document, any actions within the proceedings would be considered illegal. On the other hand, introduction of the Register of Writs of Execution will eliminate the above-mentioned need, since it will provide an access to writs of execution and the possibility to use them through the means of Register.
However, it remains a question when the Register of Writs of Execution would start functioning and when the changes to the specified Articles of the Law of Ukraine “On Enforcement Proceedings” would come into force. Such indefiniteness is due to the conditional term of introduction of these changes – 30 days after the day of publishing of the announcement on the beginning of functioning of the Unified State Register of Writs of Execution in the newspaper “Holos Ukrainy” by the State Judicial Administration of Ukraine.
Therefore, the lack of clear time limits for the introduction of the Register of Writs of Execution entails well-founded doubts on the beginning of its functioning in 2018, at least in the first half of the year.
Article 38 of Law “On Enforcement Proceedings” also establishes a mechanism for the return of a writ of execution to a court that has issued it. The new version of Article 38 of the Law of Ukraine “On Enforcement Proceedings”, which was put into effect, quashed this mechanism. As of today, according to Article 38 of the Law, should a court renew deadline for filing an appeal or admitting appeal from a judgment under which a writ of execution was issued – the enforcement proceeding shall be terminated, whereof a bailiff shall deliver a relevant ruling.
This change is quite important, since it would significantly accelerate the enforcement process compared to a previous version of the Law. Earlier, if a writ of execution was returned to the court, in order to further enforce it, a state or private bailiff had to send a ruling on resuming of the enforcement proceedings to the court, and the latter, or the authorized body, a claimant to whom a writ of execution was returned, had to submit it for the enforcement within a month. Thus, it was quite common practice earlier to put the enforcement procedures on hold for several months due to bureaucratic difficulties. Undoubtedly, it has negatively affected the judgment enforcement process, enabled unscrupulous debtors to take actions aimed at complicating the enforcement of a judgment, and violated the rights of claimants.
Termination of the Enforcement
In addition to the information above, changes to the procedural codes regarding the powers of Cassation Court to terminate the enforcement of judgments delivered by court of previous instances should be mentioned separately. Article 436 of the Code of Civil Procedure, Article 332 of the Code of Commercial Procedure and Article 375 of the Code of Administrative Proceedings, regulate new powers of Cassation Court – to terminate the enforcement of judgments until the end of the review of cassational reconsideration. It should be reminded that earlier the Cassation Court was authorized to terminate only the enforcement of judgments. Although the above Articles established that the effect of the judgment shall be terminated in case if such judgment does not envisage its enforcement, but, according to the new edition of Article 26 of the Law of Ukraine “On Enforcement Proceedings”, such a termination of procedure would consist the grounds for termination of the enforcement proceedings, once the Unified State Register of Writs of Execution starts functioning.
To summarize, the described changes are generally of a positive nature, and when properly implemented, certainly simplify the procedure for the enforcement of judgments and accelerate dynamics of such enforcement.