PRAGNUM collected EUR 900,000 in debt under a foreign economic activity contract in the ICAC at the Ukrainian Chamber of Commerce and Industry

PRAGNUM defended the interests of a client – an engineering and design company (resident of Slovak Republic) – in a dispute with JSC “NNEGC “Energoatom” regarding the final payment for delivered products in the amount of over EUR 900,000 (with a total contract price of EUR 8,100,000).

With the beginning of the full-scale invasion of the russian federation and the introduction of martial law in Ukraine, the National Bank of Ukraine (NBU) issued a resolution dated 24.02.2022 No. 18 prohibiting the cross-border transfer of currency values (funds) from Ukraine. As a result of this ban, JSC “NNEGC Energoatom” stopped paying the client for products delivered under the contract.

Understanding the complexity of the circumstances in which both Ukraine in general and JSC “NNEGC “Energoatom” in particular found themselves (constant shelling of energy infrastructure, occupation of the Zaporizhzhia NPP, etc.), the client did not insist on immediate payment. This is despite the fact that the payment deadline had expired even before the introduction of martial law.

However, the debt was not paid even after the stabilizing of security and economic situation in Ukraine. JSC “NNEGC “Energoatom” did not respond to the client's pre-arbitration appeals and did not take any measures to obtain permission from the NBU for a cross-border transfer of funds to repay the debt under the contract.

PRAGNUM lawyers fully supported the dispute, which resulted in the adoption of a decision by the ICAC at the Ukrainian Chamber of Commerce and Industry on full satisfaction of the client's claims for debt collection under the contract. It is noteworthy that the arbitrators supported the client's position (rejecting the opponent's line of defense) that the currency restrictions introduced by the NBU are not a “good reason” for non-fulfillment of the terms of the foreign economic contract.