"Skliarenko, Sydorenko and Partners" proved in the Supreme Court the need for the state-owned enterprise to pay 50 million debt

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"Skliarenko, Sydorenko and Partners" proved in the Supreme Court the need for the state-owned enterprise to pay 50 million debt

State Joint Stock Company Chernomorneftegaz must pay UAH 49.98 million to one of the leading enterprises in the capital construction industry in the fuel and energy complex due to the delay in fulfilling obligations to pay for works related to the development of gas fields on the Black Sea shelf.

The Supreme Court made the corresponding decision on October 13, 2020. The legal position of the plaintiff enterprise was formed and defended by the lawyers of Skliarenko, Sydorenko and Partners.

In 2012, based on the results of competitive bidding, Chernomorneftegaz, a major Ukrainian gas producer, entered into contracts with a company specializing in capital construction in the fuel and energy sector for a set of works for the manufacture and transportation of underwater pipeline strings.

“Our client has fulfilled his part of the obligations in compliance with the agreed terms of reference and the schedule. This is confirmed by acts of work that been performed and certificates of their cost, - said the lawyer of Skliarenko, Sydorenko and Partners Timur Mikhailov, who represented the plaintiff in court. - However, the customer paid the contractor only partially, as evidenced by the acts of reconciliation of mutual settlements. The Supreme Court did not accept the arguments of the representatives of Chernomorneftegaz about the unreality of business operations, confirming the conclusion of the Court of Appeal that the work was actually performed by our Client".

The Economic Court of Kiev, where the company applied back in September 2017, decided to release Chernomorneftegaz from liability for violation of the obligation on the grounds that such a violation occurred due to force majeure. The case file contained a certificate of the Ukrainian Chamber of Commerce and Industry, according to which the Ukrainian Chamber of Commerce and Industry certified force majeure to the defendant from 27.02.2014 due to the temporary occupation of the territory of the Autonomous Republic of Crimea.

“One of the main features of the work on this project was the powerful procedural opposition that our team faced. Since 2017, the local economic court has actually twice evaded consideration of the claim on formal grounds (which is why we had to challenge such decisions up to the Supreme Court). When the court of first instance was nevertheless forced to consider the claim on the merits, it turned out that the defendant's arguments boil down mainly to formal grounds - the provision of an incomplete package of documents, the omission of the limitation period, force majeure. At the same time, the very fact of the work was not refuted - Oleksandr Skliarenko, managing partner of Skliarenko, Sydorenko and Partners, commented on the process. “In my opinion, this position can only be explained by the government’s desire to shift responsibility for lost assets onto a private company that has met its obligations in good faith”.

That is why the lawyers prepared and filed an appeal against the decision of the Economic Court of the City of Kiev, in which they substantiated the client's compliance with the statute of limitations and the groundlessness of the defendant's release from the obligation.

“We insisted that force majeure circumstances should be confirmed by a certificate issued by the Chamber of Commerce and Industry, issued under a specific agreement, the implementation of which was difficult or impossible due to the occurrence of force majeure circumstances. However, the certificate in the file did not apply to our work contracts. In addition, our client did not declare claims for damages, it was about the fulfillment of obligations in kind,” - T. Mikhailov explained the legal position.

The Northern Commercial Court of Appeal agreed with this, noting that the violation by the defendant of the terms of the contract for payment of the cost of the work performed is the basis for calculating certain Art. 625 of the Civil Code of Ukraine of payments, and the presence of force majeure circumstances under the contract does not relieve the defendant from the statutory obligation to compensate the creditor's material losses from the depreciation of funds due to inflationary processes and does not deprive the creditor of the right to receive compensation from the debtor for the use of the funds held by him.

Moreover, the norm of Art. 617 of the Civil Code of Ukraine and Art. 218 of the Economic Code of Ukraine does not provide for the possibility of exemption from the fulfillment of obligations in kind, in this case, payment to the contractor for the work performed and compensation for the use of funds and inflationary processes. On this basis, the findings of the first instance court were declared premature, and the decision was overturned.

The Supreme Court analyzed the legislation and the circumstances of the case, did not find any grounds for canceling the decision of the court of appeal.

Out of almost 50 million UAH that Chernomorneftegaz must pay in favor of the client Skliarenko, Sydorenko and Partners, the main debt under the contracts concluded in 2012 is 20 million UAH. The remaining payments include accrued 3% per annum and inflationary losses for the period from 2014 to 2017.

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