Instituto de Estudios Políticos y Derecho Público "Dr. Humberto J. La Roche"
de la Facultad de Ciencias Jurídicas y Políticas de la Universidad del Zulia
Maracaibo, Venezuela
Esta publicación cientíca en formato digital es continuidad de la revista impresa
ISSN-Versión Impresa 0798-1406 / ISSN-Versión on line 2542-3185Depósito legal pp
197402ZU34
ppi 201502ZU4645
Vol.41 N° 76
Enero
Marzo
2023
Recibido el 04/11/22 Aceptado el 12/01/23
ISSN 0798- 1406 ~ De pó si to le gal pp 198502ZU132
Cues tio nes Po lí ti cas
La re vis ta Cues tio nes Po lí ti cas, es una pu bli ca ción aus pi cia da por el Ins ti tu to
de Es tu dios Po lí ti cos y De re cho Pú bli co “Dr. Hum ber to J. La Ro che” (IEPDP) de la Fa-
cul tad de Cien cias Ju rí di cas y Po lí ti cas de la Uni ver si dad del Zu lia.
En tre sus ob je ti vos fi gu ran: con tri buir con el pro gre so cien tí fi co de las Cien cias
Hu ma nas y So cia les, a tra vés de la di vul ga ción de los re sul ta dos lo gra dos por sus in ves-
ti ga do res; es ti mu lar la in ves ti ga ción en es tas áreas del sa ber; y pro pi ciar la pre sen ta-
ción, dis cu sión y con fron ta ción de las ideas y avan ces cien tí fi cos con com pro mi so so cial.
Cues tio nes Po lí ti cas apa re ce dos ve ces al año y pu bli ca tra ba jos ori gi na les con
avan ces o re sul ta dos de in ves ti ga ción en las áreas de Cien cia Po lí ti ca y De re cho Pú bli-
co, los cua les son so me ti dos a la con si de ra ción de ár bi tros ca li fi ca dos.
ESTA PU BLI CA CIÓN APA RE CE RE SE ÑA DA, EN TRE OTROS ÍN DI CES, EN
:
Re vicyhLUZ, In ter na tio nal Po li ti cal Scien ce Abs tracts, Re vis ta In ter ame ri ca na de
Bi blio gra fía, en el Cen tro La ti no ame ri ca no para el De sa rrol lo (CLAD), en Bi blio-
gra fía So cio Eco nó mi ca de Ve ne zue la de RE DIN SE, In ter na tio nal Bi blio graphy of
Po li ti cal Scien ce, Re vencyt, His pa nic Ame ri can Pe rio di cals In dex/HAPI), Ul ri ch’s
Pe rio di cals Di rec tory, EBS CO. Se en cuen tra acre di ta da al Re gis tro de Pu bli ca cio-
nes Cien tí fi cas y Tec no ló gi cas Ve ne zo la nas del FO NA CIT, La tin dex.
Di rec to ra
L
OIRALITH
M. C
HIRINOS
P
ORTILLO
Co mi té Edi tor
Eduviges Morales Villalobos
Fabiola Tavares Duarte
Ma ría Eu ge nia Soto Hernández
Nila Leal González
Carmen Pérez Baralt
Co mi té Ase sor
Pedro Bracho Grand
J. M. Del ga do Ocan do
José Ce rra da
Ri car do Com bel las
An gel Lom bar di
Die ter Nohlen
Al fre do Ra mos Ji mé nez
Go ran Ther born
Frie drich Welsch
Asis ten tes Ad mi nis tra ti vos
Joan López Urdaneta y Nil da Ma rín
Re vis ta Cues tio nes Po lí ti cas. Av. Gua ji ra. Uni ver si dad del Zu lia. Nú cleo Hu ma nís ti co. Fa-
cul tad de Cien cias Ju rí di cas y Po lí ti cas. Ins ti tu to de Es tu dios Po lí ti cos y De re cho Pú bli co
“Dr. Hum ber to J. La Ro che”. Ma ra cai bo, Ve ne zue la. E- mail: cues tio nes po li ti cas@gmail.
com ~ loi chi ri nos por til lo@gmail.com. Te le fax: 58- 0261- 4127018.
Vol. 41, Nº 76 (2023), 437-452
IEPDP-Facultad de Ciencias Jurídicas y Políticas - LUZ
Disciplinary liability of insolvency
ocers: current challenges
DOI: https://doi.org/10.46398/cuestpol.4176.25
Serhii Donkov *
Nataliia Nykytchenko **
Mykhailo Mishchuk ***
Mariia Lysa ****
Marian Kurliak *****
Abstract
In this article we have studied the specic features of the
liability of insolvency administrators for disciplinary oenses.
The norms of the current legislation (in particular, the Bankruptcy
Proceedings Code of Ukraine, the Tax Code of Ukraine, the Labor
Code of Ukraine) regarding the determination of the legal status
of insolvency ocers and the specic features for bringing them
to liability have been analysed in the article. The purpose of this
research was to study problematic issues related to the liability of insolvency
administrators. During the research general scientic methods, in particular
dialectical, methods of analysis and synthesis, formal and legal, systematic
approach have been used. It is concluded that disciplinary liability in the
profession of insolvency ocers in Ukraine is of mixed nature. It is partly
civil, partly disciplinary and administrative liability -- in its essence -- and
is not clearly regulated by the current legislation. Referring to the facts of
bringing insolvency administrators to disciplinary liability even for a single
oense has, on the one hand, elements of civil liability. On the other hand,
disciplinary liability can also be imposed on insolvency administrators.
Keywords: disciplinary liability; arbitration managers; ministry of
justice of Ukraine; self-regulated organization of arbitration
managers; current challenges.
* Postgraduate student of the Educational and Scientic Institute of Law of the State Tax University,
Irpin, Ukraine. ORCID ID: https://orcid.org/0000-0003-1909-0379
** Doctor in Law, Associate Professor, University of the State Fiscal Service of Ukraine, Irpin, Ukraine.
ORCID ID: https://orcid.org/0000-0001-9545-1434
*** Doctor in Law, Associate Professor, Scientic Secretary, Rivne Regional Institute of Postgraduate
Pedagogical Education, Rivne, Ukraine. ORCID ID: https://orcid.org/0000-0003-0192-9033
**** PhD. in History, Associate professor of the Department of Tactical Special Training, Lviv State
University of Internal Aairs, Lviv, Ukraine. ORCID ID: https://orcid.org/0000-0001-9585-8007
***** PhD. in Economics, Associate professor of the Department of Tactical Special Training, Lviv State
University of Internal Aairs, Lviv, Ukraine. ORCID ID: https://orcid.org/0000-0001-8062-4806
438
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
Responsabilidad disciplinaria de los gestores de
arbitraje: los desafíos de hoy
Resumen
En este artículo se han estudiado las características especícas de
la responsabilidad de los administradores concursales por infracciones
disciplinarias. Las normas de la legislación actual (en particular, el Código
de Procedimientos de Quiebra de Ucrania, el Código Fiscal de Ucrania,
el Código Laboral de Ucrania) con respecto a la determinación del
estatus legal de los ociales de insolvencia y las características especícas
para llevarlos a responsabilidad han sido analizadas en el artículo. El
propósito de esta investigación fue estudiar cuestiones problemáticas
relacionadas con la responsabilidad de los administradores concursales.
Durante la investigación se han utilizado métodos cientícos generales,
en particular dialécticos, métodos de análisis y síntesis, enfoque formal y
legal, sistemático. Se concluye que la responsabilidad disciplinaria en la
profesión de los ociales de insolvencia en Ucrania es de naturaleza mixta.
Es responsabilidad en parte civil, en parte disciplinaria y administrativa
--en su esencia-- y no está claramente regulada por la legislación vigente.
Referirse a los hechos de llevar a los administradores concursales a la
responsabilidad disciplinaria incluso por un solo delito tiene, por un
lado, elementos de responsabilidad civil. Por otro lado, la responsabilidad
disciplinaria también se puede imponer a los administradores concursales.
Palabras clave: responsabilidad disciplinaria; gestores de arbitraje;
ministerio de justicia de Ucrania; organización
autorregulada de gestores de arbitraje; desafíos
actuales.
Introduction
The professional activity of insolvency ocers in Ukraine has a very
complex specicity due to the peculiarities of the legal status of the insolvency
ocer. Apart from the private legal nature, the activity of insolvency ocers
is burdened with a public element associated with obtaining the right to
carry out professional activities through a specially authorized state agency
- the Ministry of Justice of Ukraine - and the procedure for recognition in
cases of bankruptcy (insolvency) by the state court.
Therefore, insolvency ocers in Ukraine, although they are not civil
servants, court ocials, representatives of creditors and debtors in
bankruptcy proceedings, are vested with powers of external administration,
supervision and management of the business activities of the bailis and
439
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
are entitled to the fullest possible proportionate satisfaction of the demands
of the creditors.
V. V. Dzhun noted that taking into account the factors of signicant
public interest in the activities of insolvency ocers and the features of
their real legal status, the conclusion that the insolvency ocer is a special
subject of public law is very grounded (Dzhun, 2009). The strengthening
of public element in the competition procedure was noted in 1863 by
G. F. Shershenevich in his systematic work “Competition process”
(Shershenevich, 2000).
Therefore, the authority empowered by the state to perform public
functions of redistribution of the property of the debtors for the benet
of the creditors causes increased legal liability of insolvency ocers for
the compliance with the lawfulness and completeness of their procedural
actions in the bankruptcy proceedings.
1. Methodology of the study
The scientic article is based on the provisions of the legal acts of
Ukraine, ocial data of court practice regarding the disciplinary liability of
insolvency ocers. Scientic data of current jurisprudence, international
relations, world politics and economics was actively used while working
on the article. Theoretical basis of this article was the current scientic
development of domestic and foreign scholars on disciplinary liability of
insolvency ocers, the strains of improvement of legislation on this matter
and law enforcement practice.
During the study, general scientic methods were used, in particular,
dialectic, methods of analysis and synthesis, formal and legal, systematic
approach. The comparative and legal method was widely used, by means
of which the experience of France and the Federal Republic of Germany
with regard to imposing disciplinary liability on arbitration supervisors
was examined. The systematic method has been used in identifying the
problems of the current state of aairs in this matter.
2. Results and discussion
2.1. Grounds for disciplinary liability of insolvency ocers and
its features
In accordance with the Art. 21 of the Bankruptcy Procedures Code of
Ukraine insolvency ocers are brought to the following types of liability for
their actions: civil, administrative, disciplinary, criminal (Law of Ukraine
No. 2597-VIII “Code of Ukraine on Bankruptcy Procedures”, 2018).
440
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
The disciplinary liability among the listed types of legal liability is of
particular interest for the research and requires conceptual rethinking and
legislative reform taking into account the following listed factors.
As we have already noted, disciplinary liability is one of the types of
legal liability. The classic notion of disciplinary liability in domestic law is
found in the Labour Code, which regulates the relations between employers
and employees (The Labour Code of Ukraine, 1971). In the eld of labour
relations, disciplinary liability is the obligation of an employee who has
committed a disciplinary oence to account to his/her employer for his/her
illegal actions and to bear disciplinary penalties provided by the labour law.
The basis for disciplinary liability is a disciplinary oence - a culpable,
illegal failure to perform or improper performance of the duties imposed on
the employee (violation of labour discipline) for which disciplinary liability
is incurred. According to the Art. 1471 of the Labour Code of Ukraine:
“Disciplinary penalties shall be imposed by the authority that has granted
the right to hire (recruit, approve and appoint to the position) the given
employee” (The Labour Code of Ukraine, 1971).
According to the Labour Code of Ukraine, disciplinary penalties shall
be imposed by the owner or its authorised agency indirectly upon the
discovery of a disciplinary oence, for a breach of the employment discipline
prescribed by the employment regulations, the disciplinary statute or
another disciplinary procedure (The Labour Code of Ukraine, 1971).
General disciplinary liability is stipulated by the Labour Code of Ukraine and
internal labour regulations for all categories of employees, except for those whose
labour activity is regulated by special legislation of Ukraine or by internal acts
(statute or discipline regulations). The special disciplinary liability is characterized
by the possibility of applying to the oender of labour discipline, in addition to
the admonition and dismissal, also such disciplinary restraint measures, such as:
demotion in rank, demotion, loss of badge, dismissal with loss of rank, reprimand
for inactive service, a delay of up to one year in promotion to a higher rank or in
being appointed to a higher position, reduction in rank, reduction in rank by one
level, etc., (Ocial position of the Ministry of Justice of Ukraine, 2018: 15).
There is a number of questions: whether an insolvency ocer is a subject
of labour relations, an employee in the context of the Labour Code of Ukraine,
what type of disciplinary liability is applicable to him? The professional
legislation does not provide an answer to this question, but a concrete
answer can be found in the Tax Code of Ukraine. Since the insolvency
ocer is a subject of independent professional activity in accordance with
paragraph 1 of the Art. 10 of the Bankruptcy Code of Ukraine, in accordance
with the Tax Code of Ukraine he cannot be an employee since he is a self-
employed person (Tax Code of Ukraine, 2010: article 14.1.226).
441
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
The conclusions of the Supreme Court’s Resolution of 13 March 2018
in the case No. B8/180-10 are also interesting in this context. Thus, the
Court states the following in clauses 49.1 and 49.2: “The insolvency ocer
is appointed by the court and acts in accordance with the provisions of
the Law of Ukraine “On Restoring the Debtor’s Solvency or Declaring the
Bankruptcy of the Debtor”. Nevertheless, even the insolvency ocer’s
performance of his duties as the head of the insolvency organization, i.e.
the duties of the head of the company, does not conrm the existence of
employment relations and the respective guarantees associated with them.
The Bankruptcy Law does not automatically create employment duties
when the duties of the head of the company are performed by the head of
the insolvency organization. The Law on Bankruptcy shall be predictable in
application, which complies with the principle of legality and legal certainty
as components of the rule of law. A prerequisite of the employment relations
is the existence of an employment contract between the employee and the
employer.
In this case the court-appointed insolvency ocer is a subject of
independent professional activity, is not an employee and, therefore, the
employment contract between him and the company is absent. There is
no owner or his authorized agency, the presence of which is required by
the Art. 117 of the Labour Code of Ukraine and his fault. The nature of the
relationship between the insolvency ocer and the debtor is civil one and is
regulated by “the Law on Bankruptcy”. (Resolution of the Supreme Court,
2018).
Thus, the insolvency ocer is not a subject of disciplinary liability under
the Labour Code of Ukraine and his liability is of special nature and is
regulated exclusively by a special law - the Code of Ukraine on Bankruptcy
Procedures.
The codied act denes the concept and types of “disciplinary
misconduct” (Article 19):
1) the fact of engaging in an activity incompatible with the activity of
the insolvency ocer;
2) violation of professional ethics rules of the insolvency ocer;
3) failure to perform or improper performance of his/her duties;
4) non-compliance with the statute and decisions of the self-regulatory
agency of the insolvency ocers (Law of Ukraine No. 2597-VIII
“Code of Ukraine on Bankruptcy Procedures”, 2018).
Paragraph 5 of the Art. 20 of the Code of Ukraine on Bankruptcy
Procedures stipulates that: “If violations of legislation are found during
the insolvency ocer’s inspection, the bankruptcy authority may terminate
442
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
the insolvency ocer’s activity and submit the materials to a disciplinary
commission for imposing disciplinary penalties on the oender” (Law of
Ukraine No. 2597-VIII “Code of Ukraine on Bankruptcy Procedures”, 2018).
The bankruptcy legislation does not provide sucient legal denition
of the types of disciplinary oences, although the scope of disciplinary
oences may be dened exclusively by law. The stated conclusion is based
on the provisions of the Art. 92 of the Constitution of Ukraine (Constitution
of Ukraine, 1996) and also on the practice of applying the Art. 8 of the
Convention on the Protection of Human Rights and Fundamental Freedoms
(hereinafter - the Convention) (Convention on the Protection of Human
Rights and Fundamental Freedoms, 1950).
In the interpretation of the law, it is inadmissible to use a broad
interpretation of the construction of the enshrined in its disciplinary
oences. In our opinion, this interpretation does not comply with the
principle of legal deniteness and, therefore, contradicts the Art. 8 of
the Constitution of Ukraine and violates the guarantees for the right to
profession provided by the Art. 8 of the Convention.
2.2. Specic features of bringing insolvency ocers to
disciplinary liability
It should be noted that there is no code, statute or collection of
disciplinary rules and regulations for insolvency ocers in Ukraine. Both
the Code of Ukraine on Bankruptcy Procedures (Law of Ukraine No. 2597-
VIII, 2018) and the Order on the procedure for monitoring the activities of
insolvency ocers (Order No. 3928/5, 2019), and the Code of professional
ethics of insolvency ocers (Congress of Arbitration Administrators
of Ukraine, 2019) do not contain specied list of disciplinary oences
(infractions, gross misconduct) and correspondingly established sanctions
for their commission.
This results in duplication of the functions of the agencies controlling
the activities of the arbitral authorities, dual jurisdiction of judicial control
(commercial and administrative), full use of the formulas of oences and
sub-evaluation of the sanctions.
Insolvency ocers who are subject to disciplinary liability shall be liable
for violation of the law, the rules of the organization of their professional
activities, the rules of professional ethics, the regulations of self-regulatory
organizations. This entails substituting the notion of disciplinary oence
with the notion of gross misconduct, which is not clearly dened and is
applied in a voluntary and subjective manner.
Violations found as a result of inspections and referred to the Disciplinary
Commission are generally classied by the inspection agencies as “gross
443
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
violations”. Such violations are often the basis for imposing disciplinary
liability on the insolvency ocers, including forfeiture of the right to
operate. But there is no clear denition and list of gross violations in the
professional regulations.
The system of control over the activities of insolvency ocers in Ukraine
is characterized by duplication of internal control responsibilities on the
part of the state authority for bankruptcy and judicial control within the
scope of the proceedings in the bankruptcy case. We believe that this
duplication of control agencies causes a shift in the scope of dierent types
of responsibility of insolvency ocers: civil and legal and disciplinary.
State courts control the activities of insolvency ocers within the scope
of court proceedings in bankruptcy cases. Judicial control is based on the
analysis of the current reports of the insolvency ocer on the exercise of
his/her powers at dierent stages of bankruptcy proceedings, reviewing
appeals by parties to bankruptcy proceedings in the form of applications
and complaints about the insolvency ocer’s performance. Institutional
control is based on scheduled and unscheduled inspections of the activities
of the insolvency ocers. Unscheduled inspections are carried out at the
request of any individual or legal entity regarding the activities of the
insolvency ocers.
Occasionally, complaints are led simultaneously with both the
Commercial Court and the Ministry of Justice of Ukraine. Often the aim of
such complaints is not to restore the violated right of the claimant, but to
remove the disloyal insolvency ocer and replace him with a trustworthy
one.
This duplication of control functions in the law and in law enforcement
practice interaction between the state agency on bankruptcy and the
commercial court is virtually absent, and these forms of control exist
separately and independently of one another and are aimed at dierent
results with the same subject of control: as opposed to the main focus of
home control on the part of the Ministry of Justice of Ukraine, the main
result of the exercising by a state court of bankruptcy control in case of
nding violations of the legislation is the dismissal of the insolvency ocer
and/or the court decision ordering to require him/her to initiate certain
actions/obstruct their initiation within the scope of the bankruptcy case,
where the latter shall exercise the powers of special subjects in bankruptcy
proceedings.
In accordance with the Art. 21 of the Bankruptcy Code of Ukraine:
“Insolvency ocers shall be liable to disciplinary liability under the
procedure established by this Code. The bankruptcy state authority shall
impose disciplinary penalties on the insolvency ocers upon the ling of a
disciplinary commission” (Law of Ukraine No. 2597-VIII “Code of Ukraine
on Bankruptcy Procedures”, 2018).
444
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
Special attention should be paid to the fact that the Regulation on the
Ministry of Justice of Ukraine, approved by the Resolution of the Cabinet
of Ministers of Ukraine of July 2 2014 No. 228. does not provide for the
Ministry of Justice of Ukraine to impose disciplinary liability on insolvency
ocers.
Similar provisions are stipulated by the Art. 3 of the Bankruptcy Code
of Ukraine, which provides an exclusive list of powers of the bankruptcy
authority, in particular: “establishes the procedure for exercising control
over the activities of insolvency ocers, checking the organization of their
work, their compliance with the legislation on bankruptcy”. However, there
is no obligation to impose disciplinary liability.
We believe that this case is not an accident - the Ministry of Justice of
Ukraine and the insolvency ocers do not have a full range of legal relations
that could entail disciplinary liability.
It should be noted that the Ministry of Justice of Ukraine does not employ
insolvency ocers and they, in turn, are not civil servants. In bankruptcy
cases, insolvency ocers are appointed by the state courts and the source of
payment for their work is creditors, debtors or the liquidation estate.
A characteristic feature of disciplined liability of insolvency ocers is the
fact that the authority which imposes disciplinary liability on the oenders
(the Ministry of Justice of Ukraine) does not decide on the imposition of
the respective penalty. The Disciplinary Commission shall take a decision
in accordance with the Art. 22 of the Bankruptcy Code of Ukraine.
This procedure, especially in combination with a short statute of
limitations, inherently undermines the eectiveness of the disciplinary
liability mechanism.
The provisions of paragraph 3 of the Art. 20 of the Code of Ukraine on
Bankruptcy Procedures and paragraph 3, clause 6 of the Section II of the
Control Procedure as amended, establish an unreasonably large number
of persons who have the right to appeal (complain) against the actions of
insolvency ocers, which is the basis for unscheduled audits. It is, in fact,
any individual or legal entity who contacts the supervisory authority on the
grounds of non-compliance or improper performance of the duties of the
insolvency ocer.
Notwithstanding the fact that any legal relation that creates obligations
for the insolvency ocers to perform a certain set of procedural actions
shall arise within the scope of bankruptcy proceedings, the list of persons
entitled to apply for information on their violated rights shall be limited to
the participants in the bankruptcy proceedings as dened by the Bankruptcy
Procedures Code of Ukraine.
445
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
The Disciplinary Commission of Arbitrage Managers, in accordance
with the Art. 22 of the Bankruptcy Code of Ukraine: “shall be constituted
in accordance with the procedure established by the bankruptcy authority
to consider the cases of arraignment of insolvency ocers for committing a
disciplinary oence.
The Disciplinary Committee shall consist of seven members, three of
whom shall be appointed by the order of the head of the bankruptcy authority
and four of whom shall be appointed by the meeting of insolvency ocers.
The duties term for the members of the Disciplinary Committee shall be
two years. The Disciplinary Commission shall be chaired by the head of
the bankruptcy authority or a person designated by the authority” (Law of
Ukraine No. 2597-VIII “Code of Ukraine on Bankruptcy Procedures, 2018).
The activity of the Disciplinary Commission is regulated by the Regulation
on the Disciplinary Commission of Insolvency Ocers, approved by the
Decree of the Ministry of Justice of Ukraine No. 2993/5, dated of 25th of
November, 2019 (Ministry of Justice of Ukraine, 2019).
The Disciplinary Commission of Insolvency Ocers is an advisory and
expert agency established by the Ministry of Justice of Ukraine to take a
decision on the imposition of disciplinary penalties in respect of oences
detected by the insolvency ocers’ supervision authorities. Its members
shall not receive any compensation for their activities or for their expenses
incurred in travelling to the meeting. At the same time, the Disciplinary
Commission is not a separate agency or legal entity. It cannot issue
regulatory documents or act as a party to court proceedings, nor it can be a
defendant in a court, when a decision to impose disciplinary liability on the
insolvency ocers is appealed.
The lack of clarity of the legal status of the Disciplinary Commission of
Insolvency Ocers causes low problems of disciplinary proceedings.
There are two types of decisions to impose the same disciplinary penalties
on insolvency ocers: the decision of the Disciplinary Commission and the
order of the Ministry of Justice of Ukraine. There may be a considerable
lapse of time between the adoption of these decisions, which creates a
procedural problem in terms of determining the time limit for disciplinary
liability.
Decisions of the Disciplinary Commission, which are drawn up in a
protocol, do not suciently motivate and substantiate the grounds for taking
specic decisions on each disciplinary case. According to court practice, the
decision to disqualify insolvency ocers from disciplinary liability cannot
be determined by the content of the minutes, do not allow to establish
the motives used by the Disciplinary Commission, in particular why the
credible arguments of the person who was held liable were suppressed.
446
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
Protocol decisions of the Disciplinary Commission shall not be
transparent and open to the public. As the Disciplinary Commission is not
an independent agency, it is not able to maintain its website or publish its
decisions in mass media.
Disclosure of information about disciplinary proceedings may be made
with due regard to the condentiality of the activities of the insolvency
ocer and the bankrupt company. At the same time, it is necessary to take
into account the presence of commercial and state secured assets, especially
in state-owned enterprises.
The experience of France and the Federal Republic of Germany is very
useful to take into account in the proposals for reforming the legal status
and work regulations of the Disciplinary Committee of Insolvency Ocers.
In France, the National Commission for the Registration and Discipline
of Court Administrators and Court Representatives (CNID) (henceforth
referred to as the National Commission) is an independent and self-
regulated agency, independent of the Ministry of Justice.
The Commission is not a court but acts as a tribunal. Every three years,
the National Commission conducts inspections of court representatives and
court administrators. Professional auditors are hired for this inspection.
Regarding decision-making, there are no set criteria and situations are
regulated depending on the circumstances. Regarding the qualication of
disciplinary oences, the expert noted that an act is considered a disciplinary
oence if it is of a continuous, systemic nature.
The Federal Republic of Germany does not in any way control the quality
of work of the members of the profession of insolvency ocers. The state
control is not exercised in general in the profession, but in each case where
the court controls the actions of the manager. Complaints about the work
of the insolvency ocer shall be sent by a sheet to the court, which shall
forward it to the insolvency ocer for explanations.
The explanations shall be given to the creditor with a copy to the court.
In exceptional cases, if it is insucient, the court shall examine the case
and take specic steps for the supervision. This may include additional
requirements or, in the worst case, the replacement of the insolvency ocer
by another person (Hlushko, 2019).
According to its statute the Disciplinary Commission is not a structural
unit of the Ministry of Justice of Ukraine, which means that its decisions
in the form of a protocol on the results of the relevant meetings (p. 5 of
the Art. 22 of the Bankruptcy Code of Ukraine) are not decisions of the
Ministry of Justice of Ukraine. However, the Ministry of Justice of Ukraine
as a state agency responsible for bankruptcy shall be executed by the decree
of the Ministry, which in essence is an administrative act of the powers that
should be subject to administrative jurisdiction.
447
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
This circumstance created a jurisdictional collision for consideration
of appeals against decisions on imposition of disciplinary penalties:
bankruptcy cases are considered by commercial courts, while decisions
to impose disciplinary liability on insolvency ocers are considered by
administrative courts.
In view of the above-mentioned law collisions, there is ambiguity in
determining the terms of disciplinary liability. Paragraph 4 of the Art. 21
of the Bankruptcy Code of Ukraine stipulates that the decision to impose
a disciplinary penalty shall be taken within two months from the date of
detection of the disciplinary oense, but not later than one year from the
date of its commission. What decision is referred to: the protocol decision
of the Disciplinary Commission or the order of the Ministry of Justice of
Ukraine? The legislation does not clearly regulate it. There is a signicant
time lag between these decisions being taken. These are the arguments used
by the insolvency ocers in bringing them to disciplinary liability.
The most widespread types of irregularities detected by the authorities
controlling the activity of insolvency ocers are the following: failure
to conduct inspections (the absolute majority of violations); violations
regarding creditors and maintenance of the creditor register; violations
related to the inventory and protection of the property of a debtor; errors
related to the realization of the property of the debtor (bankrupt); errors
related to the analysis of nancial and business activities; violations related
to the identication and management of the assets of the debtor; failure to
submit timely and proper information on their activities to the joint-stock
company; violations of organizational nature (lack of an insurance contract,
deciencies in management, failure to comply with the rules of the oce
equipment); failure to upgrade the qualication; failure to implement the
order to eliminate the violations identied by the previous inspection.
Cases of dierent types of sanctions for the same oences were recorded.
There is no gradation and harmonisation of the types of oences according
to the degree of guilt of the insolvency ocer, the degree of gravity of the
oence, the systemic nature of the oence, the overall individual capacity to
execute a particular order and the amount of the inicted school.
Based on the above, we can conclude that the application of the above
formulas and denitions of disciplinary oences of insolvency ocers today
is of subjective and evaluative signicance and requires a clear normative
regulation.
2.3. Scientic discussion on amending the rules for recovering
penalties on insolvency ocers
Experts in the eld of insolvency, judges of commercial and
administrative courts are discussing the feasibility of amending the rules on
448
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
the jurisdiction of disputes over the cancellation of orders of the Ministry
of Justice and the decisions of the Disciplinary Commission of Insolvency
Ocers in order to transfer their decisions to state courts (appellate state
courts), to refer their decisions to commercial courts (appellate commercial
courts), which directly apply the bankruptcy law.
The study of court practice shows that administrative courts due to
the lack of proper specialization of judges can be important to assess the
correctness of the application of bankruptcy law by insolvency ocer, which
may be necessary to assess the legality of the penalty imposed on him.
The Bankruptcy Procedures Code of Ukraine provides the establishment
of a single self-regulatory organization with mandatory membership of all
insolvency ocers, whose information is included in the Unied Register of
insolvency ocers. Such an organization was established in Ukraine on 21
of November 2019. Today it is called the National Association of Insolvency
Ocers of Ukraine (NAIOU).
According to the Art. 33 of the Bankruptcy Code of Ukraine (Functions
and duties of self-regulatory agency of insolvency ocers), the self-
regulatory organization of insolvency ocers shall carry out in the manner
prescribed by this Code control over the activities of insolvency ocers for
the compliance with this Code, the Code of Ethics for Insolvency Ocers
and other regulations on the activities of insolvency ocers (Law of Ukraine
No. 2597-VIII “Code of Ukraine on Bankruptcy Procedures, 2018).
A self-regulatory organization of insolvency ocers “shall have the right,
upon application of a participant in a bankruptcy case or at its own initiative,
to review the performance of the insolvency ocer for the compliance with
the statute of the self-regulatory organization of insolvency ocers; Code
of Ethics for insolvency ocers; decisions of the self-regulatory agency of
insolvency ocers related to the activities of insolvency ocers.
Violation of the professional ethics of the insolvency ocer and non-
compliance with the statutes and decisions of the self-regulatory organisation
of insolvency ocers are disciplinary oences, the commission of which is a
basis for holding the insolvency ocer disciplinarily liable (Law of Ukraine
No. 2597-VIII “Code of Ukraine on Bankruptcy Procedures, 2018).
The current legislation on bankruptcy does not dene the concept of
“professional ethics” in terms of ethical norms and standards of professional
activity of insolvency ocers. The legislator has therefore placed the
establishment and regulation of this norm within the competence of the
self-regulatory organisation of insolvency ocers. As a general rule,
professional ethics is a code of rules governing the conduct of a specialist
in a service environment, norms, standards that comply with current laws
and regulations, professional knowledge, teamwork and a strong awareness
of moral responsibility for performance of professional duties (Donkov et
al., 2020).
449
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
The insolvency ocer, in the exercise of his professional activity, has
a duty, sometimes excessive, towards the participants in the bankruptcy
proceedings (bailis and creditors in the rst place); courts, the bankruptcy
authority and other state authorities; other insolvency ocers and
professionals in the eld of insolvency; the public in general.
In his or her activity, the insolvency ocer shall be guided by such
basic principles as ensuring competence; independence and objectivity;
contributing to increasing the value of the competition and liquidation
proceedings; respect for condentiality; and good faith.
The professional ethics of the insolvency ocer is the proper behaviour
of the insolvency ocer prescribed by the corporate rules in cases where the
legal regulations do not establish specic rules of conduct for him or her.
The NAIOU at its statutory meeting on November 21, 2019 approved
the Code of Ethics for Insolvency Ocers, but as of today it can be stated
that it has only a basic form, contains only the general principles of ethics
of professional activity of insolvency ocers and does not regulate all the
rules of professional activity of insolvency ocers.
No doubt, violations of ethical rules can and should lead to the imposition
of disciplinary sanctions. At the same time, it is clear that not every ethical
violation should lead to the imposition of disciplinary penalties. Only gross,
obvious violations that are incompatible with the status of the insolvency
ocer should lead to disciplinary liability.
An examination of the disciplinary practice concerning violations of
ethical rules by judges reveals that such violations include, for example,
driving while being intoxicated, inappropriate statements about trial
participants, publications in the press, where the judge grossly violates the
presumption of innocence and allows personal attacks on other individuals,
etc. The disciplinary practice of judges today does not consider violations
(even obvious and gross violations of the requirements of procedural law
that are allowed in the administration of justice) as violations of ethical
norms.
The Ukrainian Council of Insolvency Ocers of Ukraine of October 2,
2020 the Procedure for Control by the National Association of Insolvency
Ocers of Ukraine over the Activities of Insolvency Ocers, which was
developed in accordance with the Bankruptcy Procedures Code of Ukraine,
was adopted, Code of Ethics for Insolvency Ocers and acts of the National
Association of Insolvency Ocers of Ukraine (The Ukrainian Council of
Insolvency Ocers of Ukraine, 2020).
The NAIOU control procedure species the number of persons entitled
to apply to the NAIOU for ling a complaint or an appeal. This number
is limited to the participants in bankruptcy proceedings as dened in the
450
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
Bankruptcy Procedures Code of Ukraine as well as to the persons who
monitor the bankruptcy.
Conclusion
Thus, disciplinary liability in the profession of insolvency ocers
in Ukraine has a mixed nature. In its essence, it is partly civil, partly –
disciplinary and administrative liability and is not clearly regulated by the
current legislation. On the one hand, it has elements of civil liability taking
into account the facts of bringing insolvency ocers to disciplinary liability
even for a single violation of the current legislation.
On the other hand, insolvency ocers are brought to disciplinary
liability, whose actions have the corpus delicti of criminal oenses, although
in this case the specied violations of the law should be the subject matter
of law enforcement agencies.
Unfortunately, insolvency ocers are not immune from criminal
prosecution, and quite often minor misconduct by insolvency ocers leads
to the initiation of criminal proceedings against them. In Ukraine, there
is a lack of sucient regulation and coordination of the actions of law
enforcement agencies and disciplinary control agencies over the activities
of insolvency ocers.
Insolvency ocers, who are subject to disciplinary liability, shall be liable
for violation of the law, the rules of the organization of their professional
activities, the rules of professional ethics, the regulations of self-regulatory
organizations. This entails substitution of the notion of disciplinary oense
with the notion of gross misconduct, which is not clearly dened and is
applied in a voluntary and subjective manner. Violations found as a result
of inspections and referred to the Disciplinary Commission are generally
classied by the inspection agencies as “gross violations”.
Such violations are often the basis for disqualication of insolvency
ocers. However, there is no clear denition and list of gross violations
in the regulatory legal acts. Therefore, in our opinion, it is necessary
to introduce amendments to the current legislation in order to modify
the conceptual apparatus and eliminate collisions in regard to bringing
insolvency ocers to disciplinary liability.
Bibliographic References
CONGRESS OF ARBITRATION ADMINISTRATORS OF UKRAINE.
2019. “Code of Professional Ethics of Arbitration Administrators”.
451
CUESTIONES POLÍTICAS
Vol. 41 Nº 76 (2023): 437-452
Available online. In: https://ips.ligazakon.net/document/MUS27420.
Consultation date: 31/10/2022.
COUNCIL OF EUROPE. 1950. “European Convention on Human Rights” as
amended by Protocols Nos. 11, 14 and 15 supplemented by Protocols Nos.
1, 4, 6, 7, 12, 13 and 16. Available online. In: https://www.echr.coe.int/
documents/convention_eng.pdf. Consultation date: 31/10/2022.
COUNCIL OF EUROPE. 1950. Convention for the Protection of Human
Rights and Fundamental Freedoms of 4 November 1950. Available
online. In: https://www.echr.coe.int/Documents/Convention_
ENG.pdf. Consultation date: 16/06/2022.
DONKOV, Serhii; SOKOLYK, Dmytro; MIROSHNICHENKO, Anatolii. 2020.
“Analysis of application of measures of disciplinary responsibility of
arbitration managers” In: Publication of the EU Project «Law-Justice».
Available online. In: https://www.pravojustice.eu/storage/app/uploads/
public/5fd/a16/e04/5fda16e04a1ce915069653.pdf. Consultation date:
31/10/2022.
DZHUN, Viacheslav. 2009. Theoretical and applied problems of reforming the
legislation of Ukraine on bankruptcy: diss. ... Doctor of Law Sciences.
Taras Shevchenko National University of Kyiv. Kyiv, Ukraine.
HLUSHKO, Serhii. 2019. “The German bankruptcy experience: the
duration of procedures cannot be predicted” In: Judicial and
legal newspaper. Available online. In: https://sud.ua/ru/news/
publication/145466-nimetskiy-dosvid-bankrutstva-trivalist-protsedur-
nemozhlivo-sprognozuvati?fbclid=IwAR14VUFFwHWKbkumjWT_
faH8hc1DU90PAsJAfBKP7ILcC6ZWF90qoXTGXWA. Consultation
date: 31/10/2022.
MINISTRY OF JUSTICE OF UKRAINE. 2019. “Regulations on the Disciplinary
Commission of Arbitration Administrators” Order No. 2993/5.
Available online. In: https://zakon.rada.gov.ua/laws/show/z1068-19.
Consultation date: 31/10/2022.
MINISTRY OF JUSTICE OF UKRAINE. 2019. “The procedure for monitoring
the activities of insolvency ocers” Order No. 3928/5. Available online.
In: https://bankruptcy-ua.com/news/15237. 15.07.2022. Consultation
date: 31/10/2022.
SHERSHENEVICH, Gabriel. 2000. Competition process. A monograph.
Statute. Moscow, Russia.
SUPREME COURT. 2018. Resolution No. B8/180-10. The Unied State
Register of Court Decisions. Available online. In: https://reyestr.court.
gov.ua/Review/72882334. Consultation date: 30/10/2022.
452
Serhii Donkov, Nataliia Nykytchenko, Mykhailo Mishchuk, Mariia Lysa y Marian Kurliak
Disciplinary liability of insolvency ocers: current challenges
THE UKRAINIAN COUNCIL OF INSOLVENCY OFFICERS OF UKRAINE.
2020. “The Procedure for Control by the National Association of
Insolvency Ocers of Ukraine over the Activities of Insolvency
Ocers”. Regulations. Available online. In: https://bankruptcy-ua.com/
news/15237. Consultation date: 31/10/2022.
VERKHOVNA RADA OF UKRAINE. 1971. Law of Ukraine No. 322-VIII “Code
of Labor Laws of Ukraine”. Available online. In: https://zakon.rada.gov.
ua/laws/show/322-08#Text. Consultation date: 31/10/2022.
VERKHOVNA RADA OF UKRAINE. 2010. Law of Ukraine No. 2755-VI “Tax
Code of Ukraine”. Available online. In: https://zakon.rada.gov.ua/laws/
show/2755-17#Text. Consultation date: 31/10/2022.
VERKHOVNA RADA OF UKRAINE. 2018. Law of Ukraine No. 2597-VIII “Code
of Ukraine on Bankruptcy Procedures”. Available online. In: https://
zakon.rada.gov.ua/laws/show/2597-19. Consultation date: 31/10/2022.
VERKHOVNA RADA OF UKRAINE.1996. Law of Ukraine No. 254к/96-ВР
“Constitution of Ukraine”. Available online. In: https://zakon.rada.gov.
ua/laws/show/254к/96-вр#Text. Consultation date: 30/10/2022.
www.luz.edu.ve
www.serbi.luz.edu.ve
www.produccioncienticaluz.org
Esta revista fue editada en formato digital y publicada
en enero de 2023, por el Fondo Editorial Serbiluz,
Universidad del Zulia. Maracaibo-Venezuela
Vol.41 Nº 76