PRAGNUM returns the “bad” debt from Nord PJSC

Due to the refusal of AVK PJSC to lease the refrigeration plant of Nord PJSC, the latter decided to bail on paying its contractors involved in the process of modernising the plant. As a result of numerous negotiations, the client was offered to either receive 10% of the debt and forgo the rest or get nothing at all due to the high corruption risks of Ukrainian justice and threats by “tough guys who deliver on their promises”. The resulting project was complicated not only by the lack of a complete package of documents confirming the debt of Nord PJSC, but also by a personal conflict between the management of both parties.

As a result, as part of one project, in order to achieve the task set by the client, PRAGNUM was forced to fight corruption both in a dispute about debt collection and in a counter dispute about collecting a penalty in the amount of 90% (!) of the contract price. And, despite the “creativity” of the opponent in the courts of the first two instances, the Supreme Court confirmed the legality of the client’s claims, collected the entire amount of the debt, and refused to collect a fine from the client.

Having not found support in the courts, the opponent chose the tactic of using their connections in their local executive service of the Donetsk region, underestimating the ability of our lawyers to bypass such obstacles. We secured the seizure of 64 real estate properties, 54 cars and all bank accounts, which, coupled with the opponent’s legal costs for the “tough guy’s promise,” led to the voluntary repayment of the debt.

Still we didn’t stop there, since we believe that our client was entitled not only to getting their money back, but also to monetary compensation for the delay. Following this principle, we recovered, with barely any dispute, the amount of inflationary losses, interest per annum and, as a bonus to the client, our lawyer’s fee, which was actually paid for our client from the account of Nord PJSC.

David versus Goliath situations are not uncommon in business, and have happened in our practice more than once, so we recommend against giving up. An obstacle that seems impregnable at first glance does not need to be crossed but can be circumvented through perseverance and being well-versed in the fine points, including the ins and outs of your opponent’s thinking and decision-making.