The team of Law Firm “KAVCHUK & PARTNERS” successfully represented the client before the Commercial Court of Lviv Region in a dispute concerning recovery of debt under an agricultural products supply agreement.

The total amount of the claims exceeded UAH 25.7 million. After the claim was filed, the defendant partially repaid the principal debt, and following consideration of the case the court granted the remainder of the client’s monetary claims.

Case background

The client of Law Firm “KAVCHUK & PARTNERS” and its counterparty entered into an agreement for the supply of agricultural products.

In performance of the agreement, the client supplied goods for a total amount of UAH 71,975,558.74. The supply and acceptance of the goods were confirmed by duly executed primary accounting documents.

The counterparty accepted the goods but fulfilled its payment obligations only in part. By the time the claim was filed, UAH 47,845,000 had been paid, leaving an outstanding principal debt of UAH 24,130,558.70.

Before applying to the court, the client attempted to settle the dispute out of court and sent the counterparty a written demand requesting repayment of the debt.

The defendant received the demand but did not respond and did not repay the debt in full.

Under these circumstances, to protect the client’s property interests, the team of Law Firm “KAVCHUK & PARTNERS” filed a claim with the Commercial Court of Lviv Region.

Our team’s work

The Firm’s lawyers analysed the terms of the supply agreement, the primary documents confirming transfer and acceptance of the products, the settlements made between the parties, and the deadlines for performance of the monetary obligations.

Based on that analysis, the team developed the evidentiary record, prepared the claim and calculated the contractual and statutory amounts due as a result of the delayed payment.

The claim sought recovery not only of the principal debt, but also a penalty, 3% annual interest and inflation losses.

The total amount claimed was UAH 25,753,208.66, including:

UAH 24,130,558.70 — principal debt;

UAH 1,231,210.19 — penalty;

UAH 122,600.09 — 3% annual interest;

UAH 268,839.68 — inflation losses.

The Firm represented the client throughout the proceedings and maintained the claims while taking into account the defendant’s partial repayment of the debt after the proceedings had already been initiated.

Course of the proceedings

After the proceedings were opened, the defendant began partially repaying the principal debt.

During the court proceedings, the counterparty made four payments totalling UAH 6,500,000. Thus, the client actually recovered part of the debt claimed before the court issued its decision.

Because that part of the principal debt had been repaid, the court closed the proceedings regarding recovery of UAH 6.5 million due to the absence of a subject matter in dispute.

At the same time, more than UAH 17.6 million of principal debt remained outstanding, together with the claimed penalty, 3% annual interest and inflation losses.

Result

Following consideration of the case, the Commercial Court of Lviv Region upheld the client’s position and granted the claims in respect of the outstanding debt and the amounts accrued due to delay in performance of the monetary obligation.

The court ordered the defendant to pay:

UAH 17,630,558.70 — principal debt;

UAH 1,231,210.19 — penalty;

UAH 122,600.09 — 3% annual interest;

UAH 268,839.69 — inflation losses;

UAH 231,038.50 — court fee.

A further UAH 6,500,000 of the principal debt was paid by the defendant after the proceedings had been opened.

Accordingly, within the court process the client’s interests were protected in relation to the entire principal debt exceeding UAH 24.1 million: part of the debt was repaid voluntarily after the claim was filed, while the remainder was awarded by the court.

In addition to the principal debt, the court granted in full the claims for the penalty, 3% annual interest and inflation losses in a total amount exceeding UAH 1.6 million.

By an additional judgment, the court also awarded the client UAH 50,000 in professional legal fees.

Case No. 914/1019/26 — Commercial Court of Lviv Region