The principle legislative act covering securing of obligations in Ukraine is the Civil Code of Ukraine effective as of January 1, 2004 with numerous subsequent amendments, which are continuously included into the same by Ukrainian Parliament (Verkhovna Rada Ukrayiny). And there are also another two very important is this regard Ukrainian laws – the Law of Ukraine "On Pledge" effective as of November 11, 1992 with numerous subsequent amendments, which are continuously included into the same by Ukrainian Parliament and the Law of Ukraine "On Mortgage" effective as of January 1, 2004 with numerous subsequent amendments, which are continuously included into the same by Ukrainian Parliament.

Clause 572 of the Civil Code of Ukraine provides that on the grounds of a pledge the creditor (holder of the security (mortgage or pledge)) has the right to satisfy his claims at expense of the property (mortgaged or pledged) before all the other creditors of the same debtor in the event if such debtor (the mortgager or the pledger) has not fulfilled his obligation, which was secured with the property (mortgaged or pledged).

Clause 574 of the Civil Code of Ukraine provides that mortgage and/or pledge appears on the grounds of an agreement, law or judicial award.

In its turn clause 575 of the Civil Code of Ukraine divides contractual securities in Ukraine onto two types, which are named accordingly the mortgage and the pledge. The last term is used in the wide meaning and often covers both types of contractual securities, i.e. the pledge itself and the mortgage.

It should be mentioned that Ukrainian legislation covering the contractual securities is not perfect as far as in fact we have three main legislative acts covering one and the same legal issue and not so perfect terminology, which is something rather difficult for translation and use by non-Ukrainian lawyers.

Therefore one should consider the first two legislative regulations – the Civil Code of Ukraine and the Law of Ukraine "On Pledge" - covering the pledge relations; and the last one, the Law of Ukraine "On Mortgage" – as the special legislative regulation specially covering mortgage relations in Ukraine, which in fact are recognized to be a special type of pledge.

Therewith provisions of the Civil Code of Ukraine in fact are the principle provisions as regarding the pledge relations in Ukraine, which are further covered in more details in two special legislative regulations - the Law of Ukraine "On Pledge" and the Law of Ukraine "On Mortgage".

The above regulations provide that the pledge (and mortgage as well) agreements are to be made in the written form, often with required notarization and state registration. For more information please see other related information materials on this site, which are specially devoted to mortgage and pledge relations and agreements in Ukraine.

The above information is provided herein in educational and informative purposes only. It is provided that you have to get appropriate legal advice as regarding the legal and other issues of your interest in Ukraine in order to have the exact, extensive and up-to-date legal and other related information.

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