When a founder cannot file a motion to annul an arbitration court decision — the Supreme Court's response

A founder (participant) of a legal entity does not have the right to file a motion to annul an arbitration court decision under part 1 of Article 346 of the Civil Procedure Code of Ukraine if the arbitration court decision does not resolve issues regarding the rights and obligations of such founder (participant), but exclusively concerns the rights and obligations of the legal entity itself as a party to the dispute.

The arbitration court at the Ivano-Frankivsk Chamber of Commerce and Industry satisfied the claim of a private enterprise to recover debt from a limited liability company for transport and forwarding services. The legality of the decision and the refusal to annul it at the defendant's initiative were confirmed by the ruling of the Western Commercial Court of Appeal and the Supreme Court's resolution.

A motion to annul this arbitration decision was submitted to the appellate commercial court by a new party — a company (applicant). The Western Commercial Court of Appeal denied this motion by ruling. The court established that the contested decision exclusively concerns the recovery of debt for transport services between the original parties and does not contain conclusions regarding the rights or obligations of the applicant. Since the decision does not create any legal consequences for the complainant, there are no grounds to annul it based on a motion filed by a person who did not participate in the case.

COURT'S ASSESSMENT

The Supreme Court is a court of appellate jurisdiction that reviews judicial decisions in appellate proceedings in cases where appellate courts act as courts of first instance, including cases concerning appeals against arbitration court decisions.

The subject of the appellate review in this case was a motion to annul the decision of the Permanent Arbitration Court at the Ivano-Frankivsk Chamber of Commerce and Industry in an arbitration case.

Analysis of the provisions of part 1 of Article 346 of the Civil Procedure Code of Ukraine indicates that before considering a motion to annul an arbitration court decision, the relevant courts must first clarify whether the applicant has the status of a party, a third person, or a person who did not participate in the case, since procedural law clearly defines the list of persons entitled to file such an appeal.

The appellate commercial court, having evaluated the complainant's arguments and the content of the contested arbitration court decision, correctly concluded that although the company is a person who did not participate in the arbitration case, neither the reasoning nor the operative part of the contested decision contains a resolution regarding its rights and obligations, and therefore there are no grounds to consider the corresponding motion.

Furthermore, the Supreme Court noted that according to information from the Unified State Register, the company is a founder (participant) of the defendant LLC in the arbitration case.

According to established practice of the European Court of Human Rights, a shareholder (participant) of a legal entity, even a majority one, cannot be considered a proper applicant if the case concerns violations of the rights of the legal entity.

As seen from the case materials, the applicant was not a party to the contract for the provision of transport and forwarding services, the non-performance of which became the subject of the dispute, indicating the absence of a direct legal connection between the contested decision and the rights of the participant.

Thus, the Commercial Cassation Court of the Supreme Court concluded that pursuant to Articles 91, 92, and 96 of the Civil Code of Ukraine, the LLC as a legal entity is legally capable and independently responsible for its obligations. Therefore, the disputed contract could have directly violated the rights of the company itself, not the complainant as its founder (participant). Accordingly, the arbitration court decision reflects violations of the property rights and interests of the company itself, not the corporate rights and obligations of its participants or founders.

As a result of the appeal review, the Commercial Cassation Court of the Supreme Court left the ruling of the Western Commercial Court of Appeal unchanged.

More details and the text of the Supreme Court's Commercial Cassation Court ruling dated 31.03.2026 in case No. 870/5/25 can be found at this link.

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