Bank Insolvency: How a Creditor Can Effectively Protect Its Claim

The insolvency procedure for banking institutions in Ukraine operates under a special legal regime in which the Deposit Guarantee Fund for Individuals plays a central role. The Fund is vested with powers to remove insolvent banks from the market, manage their assets, form the register of accepted creditors’ claims, and carry out liquidation procedures.

At the same time, the legal regulation of this area is not limited to a single профиль law. It consists of a complex set of regulations of different legal force, which in practice often leads to ambiguous interpretation and, as a result, to violations of creditors’ rights. In such cases, the protection of interests goes beyond the “internal” procedures of the Fund and moves into the judicial arena.

Submission of Creditors’ Claims: Deadlines, Form, and Evidence

The submission of creditors’ claims to the Deposit Guarantee Fund for Individuals is subject to clearly defined procedural requirements. As a general rule, claims are accepted within 30 calendar days from the date of the official publication by the Fund of the notice on the commencement of the bank’s liquidation in the newspapers Holos Ukrainy or Uriadovyi Kurier.

At the same time, court practice confirms that missing this deadline does not automatically result in the loss of the right to claim. In its ruling of 20 March 2019 in case No. 456/450/16-c, the Grand Chamber of the Supreme Court concluded that restricting creditors to an extremely short time limit without the possibility of its restoration in the presence of valid reasons constitutes a disproportionate interference with the right to peaceful enjoyment of property. Valid reasons are those related to objective and insurmountable difficulties that made timely submission impossible.

Equally important is the proper formalization of claims. An application must be submitted in written form (or electronically, provided a qualified electronic signature is available), in accordance with the form set out in Annex 1 to the Rules for Maintaining the Register of Accepted Creditors’ Claims. Importantly, the law does not require the creditor to independently determine the final amount of the bank’s indebtedness—it is sufficient to confirm the existence of the claim itself. The obligation to calculate its amount rests with the Deposit Guarantee Fund.

Case Law: Jurisdiction

In disputes concerning the inclusion of claims in the register or the recovery of funds under bank deposit agreements exceeding the guaranteed amount, correctly determining the legal nature of the dispute is crucial. In its rulings of 18 April 2018 in case No. 826/7532/16 and 23 May 2018 in case No. 811/568/16, the Grand Chamber of the Supreme Court clearly stated that such disputes are private-law in nature and, depending on the parties involved, must be considered under civil or commercial procedure.

In these legal relations, the Deposit Guarantee Fund (acting through its authorized representative) does not exercise public authority powers but represents the interests of the insolvent bank as a party to the relevant contract. This directly affects the permissible methods of judicial protection.

Formulation of Claims: The Key to a Successful Outcome

Practice shows that even where valid reasons for missing the deadline exist, improperly formulated claims may undermine the prospects of a case. A telling example is the ruling of the Kyiv Court of Appeal dated 27 February 2025 in case No. 757/13648/24-c.

In that case, the claimant sought restoration of the deadline for filing claims and requested that the court recognize him as a creditor and include his claims in the register. The court acknowledged the validity of the reasons for missing the deadline (health condition, post-operative rehabilitation, status as a person affected by the Chornobyl disaster, treatment for coronavirus disease, and the imposition of martial law), but emphasized that the court is not empowered to substitute itself for the Fund. At the same time, relying on the principle of jura novit curia (“the court knows the law”), the court granted the claim by ordering the authorized representative of the Fund to accept and consider the application on its merits, rather than formally rejecting it due to the missed deadline.

By contrast, in disputes where claims were rejected on purely formal grounds—such as alleged deficiencies in document execution—courts have allowed direct claims for inclusion in the register. For example, in the ruling of the Commercial Court of Cassation dated 25 November 2025 in case No. 910/12661/24, the court found unjustified the Fund’s refusal based on the alleged lack of proof of the authority of the person who signed the application, since the creditor had provided the company’s charter and job description confirming such authority.

Conclusions: The Procedure Is Not a Mere Formality

Court practice clearly demonstrates that the liquidation of a bank with the participation of the Deposit Guarantee Fund for Individuals is not a technical stage, but a full-fledged legal process involving significant risks for creditors. Missing deadlines, formal mistakes, or an incorrect choice of judicial remedy may result in the effective loss of a claim, even where it is substantively justified.

It is essential to understand that in the liquidation procedure the Fund acts as a representative of the insolvent bank, rather than as a regulator in public-law relations. Consequently, the protection of creditors’ rights requires a carefully structured procedural strategy that takes into account the limits of judicial authority, the Fund’s discretion, and the established approaches of the Supreme Court.

Only the combination of close attention to procedural details, a robust evidentiary basis, and properly formulated claims can transform a formal right of claim into a real opportunity for its satisfaction.