MEDIATION AS A TOOL FOR MODERNIZING BANKRUPTCY PROCEDURES IN UKRAINE

Abstract

The article substantiates the feasibility of introducing a model of parallel mediation in Ukrainian bankruptcy procedures without suspending the core proceedings. It identifies legal inconsistencies and legislative gaps in the Law of Ukraine “On Mediation”, the Commercial Procedural Code, and the Bankruptcy Code that hinder the institutional integration of mediation as an effective conflict-resolution mechanism. The author proposes targeted legal amendments, including defining “bankruptcy mediation”, enabling its initiation at any procedural stage, allowing the temporary suspension of ancillary proceedings, and establishing mechanisms for judicial recognition of mediated agreements. The proposed model seeks to reduce legal conflict, cut procedural costs, and accelerate debtor solvency restoration, thereby increasing overall system efficiency. Drawing on comparative legal analysis, the article argues that mediation–under judicial oversight and with safeguards to ensure creditor equality–can improve procedural flexibility and enhance outcomes in insolvency cases. The role of insolvency practitioners, the demand for qualified mediators, and the potential economic and social benefits of introducing mediation into insolvency proceedings are explored. Practical recommendations include the institutionalization of a “parallel mediation” framework, implementation of pilot court-referred mediation programs, professional training for judges and administrators, and public education to build trust in mediation. The article also emphasizes the need for a clear legal mandate to ensure the enforceability of mediation outcomes and effective coordination among courts, mediators, and insolvency trustees. Strengthening Ukraine’s mediation infrastructure is viewed as a strategic step toward a more cooperative and humane insolvency system.