Dispute of right as a safeguard against premature commencement of bankruptcy proceedings: a comparative legal perspective

The article explores the substance and legal nature of the dispute over a right as a ground for rejecting the opening of bankruptcy proceedings upon a creditor’s application, pursuant to Article 39 of the Code of Ukraine on Bankruptcy Procedures. It is argued that a dispute over a right constitutes a legal phenomenon arising from an unresolved conflict between the creditor and the debtor regarding the claim, which requires separate adjudication through a lawsuit. The authors maintain that such a dispute should not be reduced to a mere formal denial of the debt but must be based on concrete and substantiated evidence, in particular the existence of a pending lawsuit or an initiated legal conflict prior to the filing of a bankruptcy petition. The article outlines key criteria developed by the Supreme Court of Ukraine’s case law that help distinguish a genuine legal dispute from artificial objections, including the timing of the dispute, the substantiation of objections, the subject matter of the claim, and the nature of the supporting evidence. Contemporary trends in Ukrainian judicial practice concerning the interpretation and application of this legal construct are examined, with emphasis on the judiciary’s efforts to unify standards and strike a balance between protecting debtor rights and ensuring creditors’ access to effective legal remedies. A comparative legal analysis is conducted with reference to the legal systems of the United States and the United Kingdom, where restrictions on initiating bankruptcy proceedings based on disputed claims are also present. U.S. law applies the bona fide dispute doctrine, while the U.K. utilizes regulatory safeguards to prevent abuse of insolvency petitions by creditors. The article proposes ways to improve the regulation of legal disputes in bankruptcy under Ukrainian law, including legislative clarification of the term, procedural standards of proof, safeguards against abuse, and the integration of foreign best practices. The authors conclude that the proper application of the dispute over a right doctrine requires a high level of judicial professionalism, good faith among participants, and clear normative regulation. Such improvements would help avoid both unjustified refusals to open proceedings and abuses of the bankruptcy procedure.