Won a debt collection case resulting from international sale contract

Our lawyers helped a foreign company to collect debt in Ukraine

Litigation lawyers of our law firm have successfully represented a foreign company in Ukraine (a creditor) in a debt collection lawsuit. Court ruled in favor of legal arguments presented in our client’s complaint despite some disadvantageous clauses of the main contract governing the controversial relations between the parties.

Background of this legal dispute was quite ordinary for the time: business relations regarding supplying of goods from abroad began in “pre-crisis” period. At the beginning local Ukrainian company was duly paying for supplied goods and by doing so showed good faith intentions and earned trust which unfortunately led to less diligent formalization of paperwork governing their business relations. Subsequently the payments stopped and primary analysis of documents performed by our lawyers showed that the contract in regard to which there was a dispute included a clause on payment for goods upon their sale.

The supplier (our client) possessed information that the goods were sold but the buyer (debtor) refused to pay, stating otherwise. As of this stage of the emerging dispute the foreign company contacted our law firm in regard to provision of legal advice, major points of which were subsequently used when drafting a complaint to be filed with the Ukrainian commercial court.

Lawyers of our firm managed to develop a strong legal position which was supported by positive decision of a court of first instance as well as court of appeal. In particular, we organized process of documents collection which proved the fact of supply taking place (based on invoices and bills of lading that were requested from a French office of carrier company) and based on which we could clearly define the amount of debt owed.

The major issue was defining the payment due date. By means of applying provisions of the 1980 United Nations Convention on Contracts for the international sale of goods (concerning defining of payment due dates) to the relations in dispute, our attorneys proved that the terms of payment set in the contract (upon sale) could not be recognized as particular due date for payment. Based on this the payment had to take place as of the moment of supplying or transfer of cargo documents.