The determination of whether a dispute over a substantive right exists is one of the key issues considered by the commercial court at the preparatory hearing in insolvency proceedings.

However, the legislative framework governing this issue remains incomplete and generates numerous challenges in judicial practice, including the criteria for defining a dispute over a right, the procedural consequences of such a finding, and the admissibility of employing instruments typically associated with adversarial (claim) proceedings.

The purpose of this study is to identify and analyze problematic aspects arising from the court’s determination of a dispute over a right at the preparatory stage of bankruptcy proceedings.

Particular emphasis is placed on the admissibility of applying procedural mechanisms characteristic of adversarial litigation. Furthermore, the paper examines comparative legal regulation of the procedure in foreign jurisdictions, with a view to developing proposals for improving the Ukrainian bankruptcy framework.

The analysis demonstrates that the effectiveness of the legal regulation of disputes over a right at the stage of initiating insolvency proceedings is directly linked to the procedural tools available to the court and the evidentiary means accessible to the parties. The application, at the preparatory hearing, of certain evidentiary mechanisms inherent in adversarial litigation is necessary to ensure a proper assessment of the parties’ arguments regarding the existence or absence of a dispute.

It is further established that legal approaches developed in foreign doctrine and case law concerning a creditor’s winding-up petition may serve as a model for refining national legislation. A creditor’s petition may be dismissed if the debtor claims that the alleged debt is disputed and such dispute is based on substantial (well-founded) grounds (bona fide dispute on substantial grounds).However, it is insufficient for the debtor merely to assert that the debt is disputed: the grounds must be clearly articulated, supported by relevant facts and evidence, and demonstrate their substantive nature. In exceptional circumstances, the court may resolve the dispute on the merits within the insolvency application proceedings themselves, particularly where the dispute is sufficiently straightforward and the necessary evidence has been submitted.

In order to enhance the procedure for considering applications to open insolvency proceedings, it is proposed to amend domestic bankruptcy law to regulate the scope of the court’s use of procedural instruments at the preparatory stage and to prevent abuses of rights by the parties. Specifically, it is recommended that courts be empowered, either ex officio or upon request of the parties, to require the production of evidence by participants in the proceedings and third parties concerning the legal relations between the debtor and the initiating creditor. To counteract potential abuses by debtors, it is further proposed to oblige the debtor’s management body to submit a written statement, compliant with the requirements of Article 88 of the Commercial Procedural Code of Ukraine, where the debtor disputes the existence of legal relations with the initiating creditor.

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