The team of Law Firm “KAVCHUK & PARTNERS” successfully represented a contractor in a commercial dispute concerning performance of a construction contract.

The customer sought to recover more than UAH 3.4 million from our client, alleging delays in performance of the works and termination of the contract. The case was considered by courts at all three levels. Following cassation review, the Supreme Court left the decisions of the lower courts unchanged.

Case background

The Customer and our client entered into a construction contract for a package of works involving installation of aluminium structures, suspended ventilated façades and wet façades.

The parties agreed the scope and price of the works, the schedule for their performance, and a separate payment schedule for the Customer.

A dispute arose during performance of the contract. The Customer alleged that the Contractor had missed the agreed deadlines and declared its withdrawal from the contract. It subsequently filed a claim with the Commercial Court of Lviv Region seeking UAH 3,422,930.02 from the Contractor.

The Customer’s claims included UAH 2,388,826.57 previously paid under the contract, as well as inflation losses, 3% annual interest, a penalty and a fine.

The situation was complicated by the fact that the Customer did not sign the certificates of completed works prepared by the Contractor. One of the key issues was therefore proving the actual scope and value of the works in the absence of certificates signed by both parties.

Our team’s work

After entering the case, the team of Law Firm “KAVCHUK & PARTNERS” developed a position that involved not only defending the Contractor against the claims brought against it, but also actively protecting the Contractor’s own property interests.

The team first conducted a detailed analysis of the contract, the parties’ agreed schedules for works and payments, primary documentation, correspondence between the parties, and the actual chronology of payments made by the Customer.

This revealed a material circumstance for resolution of the dispute: the Customer itself had breached the contractual financing schedule. The second payment of UAH 672,879.50 was due no later than 16 October 2023, but was not made on time.

At the same time, the contract expressly provided for an automatic extension of the deadlines for performance of the works if the Customer failed to comply with the agreed payment schedule.

Accordingly, a key part of the defence was to demonstrate the absence of fault on the Contractor’s part in relation to the deadlines and the existence of contractual grounds for extending the time for performance.

It was also essential to prove that the works had actually been performed because the Customer refused to sign the relevant certificates.

A construction and technical expert examination was conducted to establish the actual scope and value of the completed works. The expert examination confirmed performance of the works and assessed their value at UAH 2,352,676.46.

In addition to objections to the Customer’s original claims, a counterclaim was filed on behalf of the Contractor seeking recovery of the outstanding payment for the completed works and the relevant amounts accrued due to delayed payment.

Proceedings before the court of first instance

The Commercial Court of Lviv Region agreed with the key arguments advanced on behalf of the Contractor.

The court established that the Customer had breached the payment schedule and concluded that, under the contract, such delay triggered an automatic extension of the deadlines for performance of the works.

The court therefore found no fault on the Contractor’s part for the alleged delay and held that the Customer’s withdrawal from the contract under Article 849(2) of the Civil Code of Ukraine was unlawful.

The construction and technical expert opinion was also important to the outcome. Despite the absence of certificates signed by the Customer, the court examined the works actually performed and took into account the value established by the expert.

Of the UAH 3,422,930.02 that the Customer sought to recover from our client, the court found only a small part of the claims to be substantiated.

In particular, the Customer was awarded UAH 70,650.11 of principal debt, UAH 4,183.87 of inflation losses and UAH 1,013.42 of 3% annual interest.

The court rejected recovery of UAH 2,318,176.46 of the principal amount, most of the inflation losses and 3% annual interest. It also rejected in full the Customer’s claims for UAH 158,638.27 in penalties and UAH 699,734.01 in fines.

At the same time, the court partially granted our client’s counterclaim and awarded the Contractor principal debt, a penalty, 3% annual interest and inflation losses.

The Contractor was also awarded UAH 20,533.80 as reimbursement of the cost of the construction and technical expert examination.

Appeal and cassation review

The Customer disagreed with the outcome and continued to challenge the judgment.

By its ruling of 29 January 2026, the Western Commercial Court of Appeal left the first-instance judgment unchanged.

The Customer then filed a cassation appeal with the Supreme Court.

The team of Law Firm “KAVCHUK & PARTNERS” continued to represent the Contractor before the Commercial Cassation Court within the Supreme Court: the team analysed the grounds of the cassation appeal, developed arguments in response, prepared and filed a written response to the cassation appeal, and represented the client during the cassation hearing.

By its ruling of 14 July 2026, the Supreme Court closed the cassation proceedings in respect of one of the grounds relied on by the appellant and dismissed the cassation appeal in respect of the other ground.

The judgment of the Commercial Court of Lviv Region and the ruling of the Western Commercial Court of Appeal were left unchanged.

Separately, following cassation review, the Supreme Court ordered the Customer to reimburse our client UAH 20,000 in professional legal fees incurred before the Supreme Court.

Result

The dispute passed through all three court levels, and the position developed on behalf of the Contractor was upheld at the appellate and cassation stages.

Of the UAH 3.42 million sought by the Customer, the court awarded only approximately UAH 76,000 of principal debt and related charges, or about 2.2% of the original amount claimed.

The courts found no fault on the Contractor’s part in relation to the deadlines, rejected the Customer’s claims for penalties and a fine, and took into account the actual scope of completed works confirmed by the construction and technical expert examination.

At the same time, the counterclaim secured recovery for our client of outstanding payment and charges for delayed payment, as well as part of the expert examination costs.

The outcome remained unchanged after both appeal and cassation review.

Case No. 914/3177/24 — Commercial Court of Lviv Region; Western Commercial Court of Appeal; Commercial Cassation Court within the Supreme Court