Publications
In this article, we will focus on the process of filing a lawsuit against the Russian Federation in Ukraine and provide a detailed analysis of the practical aspects of filing a claim. The recommendations described in this article are based on the practical experience of AGA Partners' clients in Ukrainian courts against the Russian Federation.

Dariia Zyma, senior associate at AGA Partners
Vasyl Radetskyi, associate at AGA Partners
(exclusively for Yurydychna Hazeta)

This article is available in Ukrainian only.

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20.06.24
Although since the outbreak of the full-scale war, new mechanisms for compensation for war-related losses have been created at the international level, such as the International Register of Damages Caused by the Aggression of the Russian Federation against Ukraine, and Ukraine has developed a positive practice of compensating such losses in court, investment arbitration remains the most effective tool in the business arsenal.

Viktor Pasichnyk, associate at AGA Partners
Dmytro Kvashuk, intern at AGA Partners
(exclusively for Yurydychna Hazeta)

This article is available in Ukrainian only.

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19.06.24
Martial law has led to significant changes in all aspects of Ukrainian life, contributing to the disintegration of many families. Regrettably, the rate of divorces among Ukrainian families continues to rise each year.

Olena Sibirtseva, counsel and attorney-at-law at AGA Partners
(exclusively for Yurydychna Hazeta)

This article is available in Ukrainian only.

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12.06.24
The rapid development of cross-border trade relations necessitates the need to enter new markets and scale up operations. Due to the increase in foreign economic transactions resulting in the conclusion of contracts between counterparties from different countries, the parties are increasingly choosing alternative dispute resolution methods. Arbitration is one of such methods of dispute resolution. In addition, the growing popularity of arbitration is also evidenced by the statistics of the ICAC at the Ukrainian CCI, according to which the number of reviewed cases increased from 243 cases in 2019 to 584 cases in 2023, involving representatives of 57 countries. This phenomenon is not surprising, given that arbitration, among other methods, is characterized by a fast procedure, lack of bureaucratic obstacles, commercial orientation and impartiality of dispute resolution.

Iryna Moroz, Partner at AGA Partners
Maksym Fesenko, associate at AGA Partners
(exclusively for Yurydychna Hazeta)

This article is available in Ukrainian only.

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07.06.24
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Olena found her professional calling in law. As a family and inheritance lawyer, she believes in the importance of promoting a conscious and balanced attitude towards formalizing relationships, family and the divorce consequences if a couple has children. Olena Sibirtseva, attorney-at-law, counsel at AGA Partners, Head of the Committee on Civil, Family and Inheritance Law of the Ukrainian Bar Association, guest lecturer at Yaroslav Mudryi National Law University, told us more about the peculiarities of her professional activity in an interview. Olena is also a leading lawyer in Ukraine in the field of family law according to Ukrainian law firms in 2022, a leader in family law according to the annual research “Client's Choice. 100 Lawyers of Ukraine 2023”. She was awarded the international award of the Order of St. Sophia for high achievements in the profession and active public position in 2023.

(exclusively for “Super Lady magazine”)

This article is available in Ukrainian only.

08.05.24
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Children have suffered greatly under martial law, with the negative impact being felt in many areas of their lives. One of the most affected areas is parental rights and responsibilities, which have been impacted in different ways. Some parents have taken necessary actions to protect their families, ensuring their physical and psychological well-being. Others, however, have become caught up in the conflicts caused by instability in all spheres of life. Protecting children's rights means putting their interests first and foremost.

Olena Sibirtseva, counsel and attorney-at-law at AGA Partners
(exclusively for Yurydychna Hazeta)

This article is available in Ukrainian only.

18.04.24
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The issues of marriage and divorce under martial law have become one of the most popular among Ukrainians. Many factors cause this, such as relocation of family members abroad, military service by one or both spouses, the general impact of stress on families, etc. And while at the beginning of the war the number of marriage registrations increased, over time, statistics show that divorce among Ukrainians is one of the consequences of the war. Olena Sibirtseva, attorney at law and counsel at AGA Partners, spoke about the ways of divorce for Ukrainians living in Ukraine or abroad.

(exclusively for "Yuryst&Zakon")

This article is available in Ukrainian only.

07.03.24
Ivan Kasynyuk, Partner of AGA Partners, on being included in the Recommendation List of Arbitrators of the International Commercial Arbitration Court - ICAC
The article also highlights arbitration practice during a full-scale war, industrial arbitration growth, compensation for damages caused by Russian aggression, the agricultural industry and market turbulence.

(exclusively for "Yurydychna Hazeta")

This article is available in Ukrainian only.

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04.03.24
On 7 February 2024, the Verkhovna Rada adopted a law on the storage of reproductive cells of our defenders in case of their death or irreversible health consequences due to injury. Olena Sibirtseva, the head of the Committee on Civil, Family, and Inheritance Law of the Ukrainian Bar Association, analyzed what this really means and what nuances can be found in it.

(exclusively for "Fakty ICTV")

This article is available in Ukrainian only.

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13.02.24
The martial law has made adjustments to all spheres of Ukrainian life, and therefore the judicial system of Ukraine faces new challenges.

Olena Sibirtseva, counsel, attorney at law at AGA Partners
(exclusively for "Liga zakon")

This article is available in Ukrainian only.

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09.02.24
What's wrong with the Ukrainian law "On amendments to certain laws of Ukraine on ensuring the right of the military officers and other persons to biological paternity (motherhood)"?

Olena Sibirtseva, counsel, attorney at law at AGA Partners
Oleksandr Gubin, counsel, attorney at law at AGA Partners
(exclusively for "Yurydychna praktyka")

This article is available in Ukrainian only.

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08.02.24
This article analyses a recent judgement of the Grand Chamber of the Ukrainian Supreme Court on the possibility of extending the arbitration clause to non-signatories. The differences between the Supreme Court's new, more liberal approach to this issue and the previous practice were examined, and conclusions were drawn as to the possible approaches to similar cases in the future.

Viktor Pasichnyk, associate at AGA Partners
(exclusively for "Wolters Kluwer")

On 1 November 2023, the Grand Chamber of the Ukrainian Supreme Court – the highest judicial body in the country – opined on the extension of the arbitration clause to non-signatories in its judgement in case No. 910/3208/22 (Berezan Processing Plant v Grain Power, hereinafter ‘Berezan case’).

This judgement is a landmark one because it takes a liberal approach to the controversial topic of extending the arbitration clause to non-signatories. Before that, although the possibility of extension of the arbitration agreement to non-signatories, including based on succession, alter ego and “piercing the corporate veil” doctrines, was recognised by Ukrainian scholars,1) Ukrainian courts had been reluctant to extend arbitration clauses to non-signatories, grounding their conclusions predominantly on the privity of contracts.

Below, the post will first outline the state of case law prior to the Berezan case. Then, a background of the Berezan case will be briefly outlined before analysing the Grand Chamber’s reasoning. After that, several issues, not directly related to non-signatories but important for developing the pro-arbitral approach of Ukrainian courts, will be elucidated before proceeding to conclusions.

 Case Law Prior to the Berezan Case

The judgement of the Civil Court of Cassation of the Supreme Court dated 21 May 2020 in case No. 824/181/19 (New Alternative Oak v Galicia Distillery) was seen as the leading authority. In this case, Galicia Distillery failed to pay an advance payment under the contract with a company called Litco Lumber. A company called New Alternative Oak, which was not a party to the respective sale and purchase contract, paid an advance payment to Litco Lumber instead of Galicia Distillery and signed an additional agreement to the contract between Galicia Distillery and Litco Lumber, under which Galicia Distillery acknowledged that it owed money to New Alternative Oak. The original contract (to which New Alternative Oak was not a party) included an arbitration clause providing for the application of ICDR arbitration rules, but the additional agreement did not.

Following that, New Alternative Oak initiated an arbitration against Galicia Distillery, won, and applied to enforce the award in Ukraine. The Supreme Court determined that New Alternative Oak had not succeeded in any way Litco Lumber’s rights and obligations, and hence, there was no valid arbitration agreement between Galicia Distillery and New Alternative Oak. The Supreme Court refused to enforce the award based on this argument.

Background of the Berezan Case

A Ukrainian agricultural company, Berezan Processing Plant LLC (Seller), concluded a wheat supply contract with a Swiss commodities trader, Orsett Trading SA (Buyer), under a sale and purchase agreement (Contract), as per which the Seller undertook to supply the wheat, and the Buyer undertook to pay the price of the delivered wheat. The Contract contained an arbitration clause providing that any disputes arising out of or within the scope thereof shall be subject to arbitration in accordance with the arbitration rules of the Grain and Feed Trade Association, with London as the seat of arbitration and English as a language of proceedings (GAFTA Arbitration Rules No. 125).

Two weeks later, the Buyer and Grain Power LLC (Guarantor) – another Ukrainian agricultural company – entered into an additional agreement to the Contract under the terms as per which the Guarantor assumed all obligations of the Buyer arising from the Contract (Additional Agreement). The Additional Agreement contained no arbitration clause.

After receiving the goods under the Contract, the Buyer failed to pay the price. Subsequently, the Seller filed a Statement of Claim with the Commercial Court of Kyiv, requesting the court to collect the indebtedness under the Contract from the Guarantor. The court left the Seller’s claim without consideration on merits and referred the parties to arbitration.

However, later, the Northern Commercial Court of Appeal (NCCA) reversed the judgement of the Commercial Court of Kyiv, concluding that the Guarantor is not bound by the arbitration clause contained in the Contract, and referred the dispute for further consideration by the local commercial court.

The Guarantor submitted a request for the annulment of the NCCA’s judgement to the Commercial Court of Cassation of the Supreme Court. The Commercial Court of Cassation transferred the case to the Grand Chamber for its consideration of “an exceptional legal problem,” which was whether non-signatories could be bound by an arbitration agreement.

Grand Chamber’s Reasoning

The Grand Chamber concluded that non-signatories, in principle, can be bound by the arbitration clause in the agreement they had not signed. As noted by the Grand Chamber in para 32 of its judgement,

the inclusion of an arbitration clause by the parties in the contract has the effect of extending the effect of this arbitration clause to the legal relations under this contract with the participation of another person who entered into these legal relations as a party, assumed the respective rights and obligations of the party to this contract, and at the same time the parties did not terminate the arbitration agreement, did not exclude a certain dispute from its scope, did not deprive it of binding force for such a party, and the arbitration agreement did not lose its validity due to other circumstances.

The Grand Chamber explained why it came to this conclusion, which deviated from the Supreme Court’s previous practice, by referring to significant changes in law, namely, the Civil Procedure Code of Ukraine and the Commercial Procedure Code of Ukraine. These codes were significantly amended at the end of 2017 and now oblige the courts to adopt a pro-arbitration approach to the resolution of issues concerning the validity and enforceability of the arbitration agreement.

However, it should be noted that this conclusion was made with regard to a particular situation when a legal entity, which has not been a party to a contract containing the arbitration clause, nonetheless became bound by it by assuming the rights and obligations of the Buyer as a guarantor. The Grand Chamber’s reasoning is predominantly based on the notion that the Guarantor was familiar with the terms of the Contract, including the arbitration clause contained therein (the Guarantor made the respective representations in the Additional Agreement), and that after the Buyer’s default, the Guarantor acquired its contractual obligations.

While transferring the case for consideration by the Grand Chamber, the Commercial Court of Cassation made the following observations:

The effect of the arbitration clause may extend to persons who are directly involved in the performance of the [main] contract […]. […] in some cases, third parties who did not actually sign the arbitration agreement may be bound by it and be able to directly invoke it (for example, but not limited to, succession, including singular, the “group of companies” doctrine, the “alter ego” doctrine, the doctrine of “piercing the corporate veil”.

However, the Grand Chamber avoided mentioning these doctrines and limited itself to a conclusion on the possibility of extending the arbitration clause to non-signatories only in a specific disputed situation without drawing more general conclusions.

Other Important Findings of the Grand Chamber

The decision is also noteworthy with respect to at least three other aspects demonstrating the pro-arbitration shift in the Supreme Court’s practice.

First, the Grand Chamber concluded that courts should not rule on the merits of a dispute referred to them and refer the parties to arbitration even if both parties are Ukrainian legal entities, but the contractual relations between them contain a foreign element. Prior to that, courts could question the applicability of the New York Convention, concluding that certain disputes between Ukrainian legal entities fall under the notion of domestic arbitration, which is subject to different regulations.

Second, in relying on the ICCA’s Guide to the Interpretation of the New York Convention: A Handbook for Judges, the decision suggested that arbitral awards could be considered ‘delocalised,’ which could be interpreted to support the autonomous nature of international arbitration, which is advocated by some prominent scholars, including Emmanuel Gaillard.

Third, it was the first time that the Ukrainian Supreme Court asked the Ukrainian Arbitration Association (UAA), as the leading Ukrainian non-commercial organisation uniting international arbitration practitioners and scholars, and the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (ICAC at UCCI), as the sole Ukrainian arbitration institution, to provide amicus curiae briefs. Prior to that, UAA had already submitted such briefs to the Supreme Court in several notable cases but did so on its own initiative. This development demonstrates the increasing trust of the Ukrainian Supreme Court in the local international arbitration community and its willingness to cooperate with it in order to make Ukraine a more arbitration-friendly jurisdiction.

It is worth noting that the amicus curiae submitted by the UAA and amicus curiae submitted by ICAC at UCCI did not address the issue of extension of the arbitration clause to non-signatories, focusing only on such issues as whether an arbitration clause contained in a contract concluded by two Ukrainian parties is valid from the standpoint of the New York Convention and Ukrainian law.

Conclusion

Although there is no system of binding judicial precedent in Ukraine as is the case in common law jurisdictions, as a matter of practice, judgements issued by the Grand Chamber carry the greatest weight and are de facto binding. Thus, the judgement in the Berezan case will guide Ukrainian courts in similar cases, thereby significantly changing the approach to non-signatories issues.

However, one should be careful with applying the Grand Chamber’s conclusions in the Berezan case in a broad fashion and outside the context of succession and assignment of rights and obligations of the party to a contract containing an arbitration clause. Even in this context, the Grand Chamber’s reasoning indicates that any decision would likely be fact-specific, requiring evidence of the successor/assignee’s knowledge of the underlying contract with the arbitration clause.

It is yet unclear if the Ukrainian courts will adopt similar reasoning in more complicated cases calling for the application of the estoppel, alter ego and other doctrines that are still under development in Ukrainian law or some more controversial doctrines that are currently foreign to Ukrainian law, such as the group of companies.

Viktor Pasichnyk, associate at AGA Partners

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04.02.24
Viktor Pasichnyk and Anastasia Shevchuk highlighted the recent changes to the export rules for agricultural products, their consequences, as well as the procedure for verifying exporters and licensing of agricultural exports.

Viktor Pasichnyk, associate at AGA Partners
Anastasiia Shevchuk, associate at AGA Partners
(exclusively for "LigaZakon")

This article is available in Ukrainian only.

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31.01.24
Previously, business and managing functions were essential, but now it is extremely important to have a common sense of values. The feeling of being part of a team that does more than just makes money in these difficult times, allows you to breathe and look in the mirror. This is the opinion of Aminat Suleymanova, Managing Partner, Attorney at Law at AGA Partners. Read in the interview how she manages to adapt her goals in the face of uncertainty, what the legal business demands now, and what new leadership skill Aminat has learned during the war.

(exclusively for "Yurydychna Hazeta")

This article is available in Ukrainian only.

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02.01.24
Iryna Moroz and Vladyslav Kapustynskyi commented on Ukrainian agricultural market and how they see its future.

Iryna Moroz, partner at AGA Partners
Vladyslav Kapustynskyi, associate at AGA Partners
(exclusively for "Farmer.pl")
  1. The Black Sea Grains Agreement was interrupted by Russia, what must happen in your opinion for it to be resumed?

Given Russia's constant blackmailing, Ukraine no longer needs to hope for another "gesture of goodwill" and the reopening of the Grain Corridor. In fact, during the term of the Grain Deal, its execution was sabotaged by Russia through various means. Sometimes, vessels could not pass JCC inspections at all, which paralysed the work. Grain exports from mid-July (after the closure of the Grain Corridor) to early November 2023 were extremely difficult, but a solution was found - a humanitarian corridor coordinated by the Ukrainian Navy, which began operating in September and continues to operate as of today.

In our opinion, there is no point in resuming negotiations on the extension of the Grain Deal at this time. Russia has set unacceptable conditions for the continuation of the Grain Deal, such as the resumption of the work of the ammonia pipeline to Europe and the connection of banks to SWIFT. A compromise on these issues cannot be reached, as Ukraine is not ready to make concessions to the aggressor. Moreover, Ukraine has managed to open the Black Sea on its own, so the issue of reopening the Grain Corridor is not currently on the Ukrainian agenda. Over the period of the humanitarian corridor's existence, more than 200 vessels have left Ukrainian ports, exporting a total of 7 million tonnes of cargo.

  1. Does the possible unblocking of Ukrainian Black Sea ports reduce the pressure on the transit of grain through frontline countries, including Poland? Is the market paying attention to what is happening in Ukraine, or is the war already over?

The temporary corridor from Odesa ports significantly reduced the degree of tension regarding the export of Ukrainian goods and reduced the congestion of the Danube ports and the Western borders. However, exports through the Odesa ports cannot reach the level of pre-war exports in times of war due to a number of factors: limiting the number of vessels that can simultaneously load within the temporary corridor, military risks of loading in Odesa ports, delays in vessel entry or exit due to active hostilities, etc.   In any case, Ukrainian farmers and traders will not be able to completely refuse deliveries by land transport via neighbouring countries. Establishing logistics across the western borders has been and remains a priority for our government and business. In our opinion, in this situation, the only reasonable solution to reduce the pressure is to reach a compromise at the highest level of both countries.

  1. Is it profitable for Ukraine to invest in storing its agricultural produce at the eastern border and in the railway fleet?

Investments by business and Ukraine in the development of new logistics routes, railway connections and the construction of warehouses on the western borders are certainly promising and beneficial for all parties. The most attractive investment projects are those involving the storage of goods and the construction of terminals close to the western borders, which makes it possible to relieve border congestion and store goods in safer locations. Accordingly, businesses are looking for options to expand storage capacity near the border, in neighbouring countries or in neighbouring ports (Gdansk, Gdynia, Konstanza).

  1. Who makes money on the export of grain and agricultural products from Ukraine, the state, agroholdings?

Agribusiness is currently the main and fundamental segment of the Ukrainian economy, generating income and turnover for all market participants and the state. When exporting agricultural products, all members receive preferences and income: 1) farmers and agriholdings that grow and export their own products, which makes it possible to reinvest in new crops and harvests 2) traders who can sell the goods at marginal prices 3) the state of Ukraine, which receives taxes 4) related industries that work together with agribusiness (ports, terminals, logistics companies, carriers, shipowners, insurance companies, surveyors, etc.) 5) people who get jobs and employment. It is worth noting that Ukraine is strengthening control over the budget revenues from agricultural exports by creating new rules for the verification and reporting of exporters. Ukraine's policy is aimed at maximising revenues from agricultural exports, which is the main working sector of the economy at the moment.

  1. How can the frontline countries make money, if at all, from trade in agricultural produce with Ukraine?

In our opinion, it is possible to make a profit from trading agricultural products with Ukraine if stable and partnership-based trade relations are maintained. Ukrainian goods are highly competitive in terms of quality and price. Ukraine is one of the key exporters of raw materials to the EU, Africa, Asia, and India, which creates benefits for neighbouring countries.  Neighbouring countries can earn substantial income if they increase port, transshipment, storage and logistics capacities for Ukrainian goods. For example, the transshipment capacities of foreign ports and railways do not reach the level of Odesa ports. Currently, there is a large demand for agricultural exports in transit through neighbouring countries and ports, but neighbouring countries do not have sufficient capacity to meet this demand. In addition, the situation is complicated by long queues and blockades at the borders. Ukrainian traders and manufacturers are constantly looking for new logistics routes. Neighbouring countries that can offer improved logistics and increased exports of Ukrainian goods in transit could generate significant revenues and new investment opportunities for the development of railway, port and warehouse infrastructure.

  1. Transport costs have recently become much more expensive, which also affects the trade in agricultural raw materials. What does it look like in Ukraine?

Due to complicated logistics, there is a gap between the prices for Ukrainian grain in international contracts and the price received by producers domestically.  Today, however, Ukrainian producers and traders operate on a "grow/trade or die" basis. Producers sell their goods knowing that they will not make a profit this year. If they don't grow and trade, hundreds of companies will stop, and the entire industry will feel the impact.  Therefore, farmers continue to work in extremely difficult conditions, looking for ways to diversify their business, grow new crops and optimise costs.

  1. In your opinion, regardless of whether the Polish border was open or closed to agricultural products from Ukraine, grain imports in the current season would remain marginal, mainly for purely economic reasons? – We are unable to answer this question due to the difficulty of forecasting this situation. This question should be addressed to price analysts in the agricultural sector.
  2. The transit of four agricultural products from Ukraine, i.e. wheat, corn and rapeseed, is still being carried out, although in the meantime there has been a breakdown in diplomatic relations between Poland and Ukraine and a unilateral blockade. How does this conflict affect trade, if at all?

First of all, we would like to point out that there is no diplomatic conflict, as Poland and Ukraine continue to negotiate and find a way out of the situation at the state level. The situation is different with the organisations that actually initiated the blockade - their demands are ultimative, and in such circumstances, the possibility of reaching a compromise is reduced to zero.

It is worth recognising that the blockade of the border has a huge impact on trade not only in agricultural products, but also on the economies of both countries, especially Ukraine. In November, the losses incurred by the Ukrainian economy due to the border blockade were estimated at more than €400 million.

Even when goods are transported in transit, they cannot be delivered to their destination on time due to the border blockades, which creates additional costs in terms of transport downtime, non-fulfilment of export contracts, and deterioration in the quality of goods.  In such a scenario, there is only one outcome - contracts are not fulfilled, and losses increase in multiple amounts, which demotivates Ukrainian exporters to use the western borders for exports.

  1. Do you agree with the opinion that it was not the import ban introduced in May by the EC to five frontline countries that led to a decline in imports of Ukrainian grain, but the market situation made Ukrainian grain no longer competitive. How do you rate it?

We do not agree with this statement. The main factor behind the decline in exports of Ukrainian goods is the blocking of transport for Ukrainian companies. Ukrainian goods are competitive, and Ukrainian traders are even more interested in transit exports across neighbouring borders. If transit is blocked, it significantly reduces the amount of exported goods.

For example, before the war, the largest share of exports was carried out via sea routes - 49.5 million tonnes in 2021. Since the Russian Federation withdrew from the Grain Agreement in July 2023, sea exports began to recover only in October this year, with 5.6 million tonnes in October. Taking into account the situation on the western border, Ukrainian suppliers are now actively working to solve these problems and looking for new markets.

Exporting Ukrainian grain is a matter of logistics, not quality.

  1. Is Ukrainian agriculture able to quickly transform to EU standards, e.g. in the context of the consumption of active substances recommended in the EU?

In accordance with the Association Agreement with the EU, all EU requirements for the quality and safety of agricultural products have been incorporated into Ukrainian legislation. This is confirmed by the fact that Ukrainian farmers have already been quite successful in exporting their products to the EU, where they are checked for compliance with EU legislation. For full adaptation, Ukraine still needs to develop an internal mechanism for monitoring compliance with the above-mentioned norms.

  1. What are the current prices of cereals, rapeseed and sunflower in Ukraine? – We are not quite competent to answer this question, so you should ask your brokers.
  2. Can I ask for data on how many agricultural products Ukraine has managed to export since the beginning of this season? And what countries were they? –

According to the Ministry of Agrarian Policy and Food of Ukraine, in 8 months of 2023, Ukraine exported over 41.1 million tonnes of agricultural products, including over 30.7 million tonnes of grains and over 3.8 million tonnes of oilseeds. 59% were exported to the EU, 15% to the Middle East, 12% to Asia, and 7% to Africa.

Iryna Moroz, partner at AGA Partners
Vladyslav Kapustynskyi, associate at AGA Partners

link to the source

22.12.23
Oleksandr Gubin, attorney at law at AGA Partners, reviewed the Supreme Court's current practice in cases of marital property division.
(exclusively for "YURLIGA")

This article is available in Ukrainian only.

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03.11.23