On May 16, 2024, AGA Partners and ICC Ukraine held a business breakfast: “Act or wait? The main dilemma of damages compensation caused by the war” for Ukrainian companies that suffered and lost assets as a result of the full-scale armed aggression of the Russian Federation.

The event was moderated by Aminat Suleymanova, Managing Partner at AGA Partners and Ivan Kasynyuk, Partner at AGA Partners

Among the speakers of the business breakfast were:
Iryna Moroz, Partner at AGA Partners
Pavlo Lebediev, Counsel at AGA Partners
Dariia Zyma, lawyer at AGA Partners
Maria Kostytska, Partner at Winston & Strawn LLP
Olesya Prantyuk, Director at HKA's London office
Alexander Milner KC, barrister and arbitrator at Fountain Court Chambers in London
Andrew W., partner at Raedas
Dmytro Shemelin, Investment Manager, Senior Legal Counsel at Omni Bridgeway in Amsterdam office

We discussed available mechanisms of compensation for losses for Ukrainian businesses,
how losses and damages caused by military actions are recorded,
expert assessment of losses,
prospects for recovering damages under the decisions of Ukrainian courts,
investment arbitration against Russia,
enforcement of arbitral awards and judgments in foreign jurisdictions,
search for assets in the Russian Federation,
financing of arbitration and litigation against the Russian Federation and Russian companies.

We are grateful to the speakers and participants for the interesting and informative event and also appreciate the assistance in organization ICC Ukraine.

Both cases concerned the seller’s action for the price claim of the goods duly delivered under DAP sale contracts. Additionally, the seller claimed contractual interest at the rate of 0.1% on the sum of the debt for each day of delay.

During the arbitration proceedings, the parties exchanged the four rounds of written submissions and conducted an oral examination of the parties' witnesses.

As a result of the professional and coordinated efforts of AGA Partners, the seller’s claims were fully satisfied.

The total award conferred upon the seller following both RSA arbitrations amounts to EUR 3,700,000.00. Within this sum, EUR 1,300,000.00 is designated as contractual interest. It is particularly noteworthy that this interest will continue to accrue until such time as the debtors fulfil the obligations mandated by the arbitration award in full.

Considering the parties’ positions, the tribunal concluded that the contractual interest amount was not unproportionate compared to the sellers' legitimate interest in timely payment for the goods, considering the potential penalties from Ukrainian authorities related to foreign currency control.

Furthermore, the tribunal ruled in favour of the seller concerning the arbitration costs.

The successful outcome of both RSA arbitrations was achieved through the joint efforts of partner Iryna Moroz, along with associates Anastasia Shevchuk and Vasyl Radetskyi.

The dispute arose out of a FOB contract concluded between our client (a Swiss trading company) and a Turkish buyer. The contract was agreed upon amidst the maritime hostilities in the Black Sea region due to russian aggression. 

Under the terms of the contract, the Buyer should have presented the performing vessel to one of the Odesa ports so our client could load the goods and ship them to Turkey. As the performance of the contract involved the JCC inspection on the way to the loading port (under the then-effective Grain Corridor Initiative), the contract contained a number of atypical performance conditions. In particular, the buyers’ obligation to present the performing vessel was considered fulfilled not upon arrival at the loading port but rather to the place of the JCC inspection. 

The buyer failed to comply with the above obligations, citing the force majeure (due to the temporary suspension of russia’s participation in the Grain Deal) as an excuse. The buyer alleged that the said event led to the impossibility of providing the vessel, taking into account the military risks on the way to loading port. 

As the buyer’s failure to present the vessel led to substantial damages, our client decided to initiate the arbitration, seeking appropriate redress. Our legal team directed the Tribunal's attention to the fact that the buyer was under the obligation to present the vessel not at the Ukrainian port of loading but specifically at the JCC control point in Turkey. Considering that this place was and remains far beyond the boundaries of any military actions, nothing could have prevented the buyer from placing the vessel there and awaiting their turn for the JCC inspection.  

After a long-lasting exchange of written submissions between the parties, the Tribunal fully satisfied the client’s claim, awarding the damages in the amount of about USD 600,000 together with interest. The Tribunal, in its award, admitted that the Buyers’ declaration of force majeure and the related defence arguments were without merit. These proceedings once again highlighted how important it is to properly understand the scope of contractual obligations – in the case at hand, the obligation to present the performing vessel. Moreover, the Tribunal provided a useful explanation of what can be considered a force majeure event in the circumstances of ongoing war in Ukraine. 

The AGA Partners’ team was represented by partner Ivan Kasynyuk, as well as senior associate Dmytro Izotov and associate Viktor Romaniv. 

On April 17, as part of the BLACK SEA GRAIN. KYIV-2024 conference organized by UkrAgroConsult, AGA Partners, and Prospex-Agro commodity brokerage company, a joint seminar was held titled "Challenges in Agricultural Trade: Cases, Tips, and Solutions". The speakers, partners Iryna Moroz and Ivan Kasynyuk, along with senior associates Pavlo Lebediev and Yurii Bedenko, discussed the latest trends in the most common defaults under sales contracts, force majeure, and calculation of damages.

On April 10-11, a large-scale international conference EuroGrainExchange was held in Bucharest.

Partner Ivan Kasynyuk and senior associate Pavlo Lebediev held an exclusive shipping course dedicated to the recent challenges encountered in the carriage of agricultural commodities by sea.

Ivan also moderated a panel where, together with other speakers, discussed the role of logistics routes in the development of companies for the next 5 years, the costs of growing crops to optimize production, and the analysis of contract terms.

We are grateful to the organizers of EuroGrainExchange for organizing such a great event.

Senior associate Dmytro Izotov was a speaker at the Chinese Grains&Oils Congress, organized by APK-Inform.

Dmytro Izotov spoke during the session "Market of grains and pulses: trends of global and Chinese markets" with the topic "Legal aspects of grain trade in the realities of the global geopolitical crisis and military conflicts."

In a recent interview for the agribusiness video platform GET Talks, Partner Iryna Moroz discussed the latest changes in trade contracts in Ukraine. She highlighted the issues related to the legislative changes and their impact on CIF, FOB, and DAP export contracts. Iryna also discussed the disputes related to demurrage, payment terms, and quality disputes that may arise as a result of these changes.

The dispute emerged under CIF sale contract and was mainly concerned with the buyer’s claim for damages, comprising an allowance for an extension of a delivery period under a further sale contract in string. In particular, the buyer claimed that such damages were recoverable, given that they were allegedly incurred as a consequence of the seller’s non-delivery of the goods under the contract with the buyer. 

The seller denied the buyer’s claim, asserting that damages sought were too remote and not recoverable, given that by the date of conclusion of the contract with the buyer the seller had not been aware of terms of the buyer’s further sale contract. 

Upon a thorough analysis of the parties’ written submissions the Tribunal rendered the award in favour of the seller. The Tribunal confirmed that being unaware of terms of the buyer’s further sale contract the sellers could not reasonably contemplate emergence of damages sought. in case the goods were not shipped. In these circumstances, based on applicable English law the buyer’s claim was dismissed in full. 

The AGA Partners’ team was represented by partner Iryna Moroz, as well as a senior associate Ievgen Boiarskyi and an associate Daria Ivanova. 

According to the results of the international rating The Legal 500, AGA Partners Law Firm has traditionally been recognized in three practices:

International trade - Tier 2
Private clients - Tier 2
Resolution of disputes - Tier 3

Personal recognition received:

Iryna Moroz - Leading individual in the practice of International Trade and Private Clients
Aminat Suleymanova - Leading individual in the practice of Private clients
Oleksandr Gubin - Rising star in the practice of Private clients

In addition, partner Ivan Kasynyuk, counsel Olena Sibirtseva, senior associates Pavlo Lebediev, Dmytro Izotov, Yurii Bedenko and associate Vasyl Radetskyi received positive feedback about cooperation from clients.

➡ Read more about the rating 

At the initial stages of the dispute, the AGA Partners team noticed that the Seller was late in initiating arbitration. According to the arbitration rules, a notice of arbitration in respect of a dispute arising out of a CPT-based contract must be sent not later than one year after the last day of the contractual delivery, collection or arrival period, as the case may be.  

As a result of the corresponding motion prepared by the AGA Partners' team, the Tribunal limited the submissions on the merits of the parties to the issue of time bar. 

In order to prove the Seller's argument regarding the justification for failing to meet the prescribed timelines, the Seller tried to apply the provisions of the arbitration rules, according to which an arbitration initiated outside the time limits can be considered by the Tribunal in their discretion if two conditions are met: (a) the circumstances were outside the reasonable contemplation of the parties when they entered into the contract and it would be just to extend the time, or (b) when the conduct of one party makes it unjust to hold the other party to the strict terms of the time limit in question. 

As a result of the AGA Partners' team professional representation of the Client's interests, applying provisions of English law and the precedents of the English courts, the Tribunal found that the Sellers had breached the time bar and dismissed the claim in its entirety on this basis. 

The AGA Partners’ team was represented by partner Ivan Kasynyuk, senior associate Dmytro Izotov, as well as associates Dariia Zyma and Maksym Fesenko. 

The topic of the speech was legal literacy as an integral part of a modern successful woman. In her speech, Olena Sibirtseva also spoke about the importance of contacting a family lawyer before getting married or starting to live with a partner without going to the registry office. Why do business competitors "wait" for divorce and division of marital property? Should we allow "registering an apartment in one's mother's name" and why is it dangerous for the family? Is inheritance planning about everyone's responsibility or unnecessary precautions? Why should you divorce your previous spouse if a new relationship is on the horizon?

The dispute arose out of a DAP contract under which our client had to deliver the goods to a Polish border station using railway transport. Our client submitted the applications to the electronic railway system to book the railcars for delivery. The said applications had to be approved by a Polish railway with the assistance of a buyer and its consignee. Some of the applications were approved, allowing our client to successfully deliver part of the goods. However, some of the submitted applications were rejected by the Polish side. As a result, the client could not deliver the remaining contract quantity of the goods within the delivery period.

The client insisted that the performance of the contract was prevented by the buyer’s omission, i.e., failing to facilitate the approval of shipment applications by a Polish railway. As a result of this omission, the client incurred substantial default damages, as the non-delivered goods were re-sold at a much lower price. Because the buyer refused to compensate for these damages, the client decided to initiate the FOSFA arbitration proceedings.

During the arbitration, the buyer insisted on the absence of his fault. The buyer stated that under a classic DAP contract, it is a seller who is responsible for the delivery of the goods until the place of destination, bearing all the risks. Our legal team, in turn, referred the Tribunal to numerous contractual provisions which expressly mentioned the buyer’s obligation to facilitate the delivery of the goods and acceptance of the shipment applications. In addition, numerous pieces of evidence were submitted (witness statements, excerpts of Ukrainian legislation, etc) proving that a buyer is playing an important role in the delivery process from Ukraine to Poland.

After a long-lasting exchange of written submissions between the parties, the tribunal fully satisfied the client’s claim awarding the damages in the amount of about USD 2 mln together with interest. The Tribunal in its award admitted that while under a common DAP contract, a seller indeed bears all the risks related to the delivery of the goods to the destination, in the present case the parties in the contract expressly placed additional obligations on the buyer. This decision reminds us once again to carefully study the contractual provisions before signing agreements with counterparties.

The AGA Partners’ team was represented by partners Ivan Kasynyuk and Iryna Moroz, as well as senior associates Ievgen Boiarskyi and Dmytro Izotov.

The list includes 115 arbitrators from 39 countries who are the leading practitioners and most respected academicians recommended in arbitration by reputable international legal rankings, including Chambers and Partners, The Legal 500 and Who's Who Legal.

The Claimant filed a lawsuit against a Chinese corporation, claiming that the agreement for a bank guarantee was invalid and any disputes arising out of the guarantee are to be settled under Ukrainian law at Ukrainian courts. However, such a position was contradicted by the fact that the bank had signed an arbitration agreement, which provided that English law applies and disputes should be resolved under ICC Arbitration Rules.

As a result, the first instant court remained the claim without consideration, because the parties had agreed to settle any disputes through arbitration instead of going to court.

Nevertheless, the appeal court overturned the previous court's decision, stating that one of the defendants was in bankruptcy proceedings, therefore the dispute is non-arbitrable and shall be considered by the Ukrainian court.

Disagreeing with this outcome, AGA Partners filed a cassation to the Supreme Court, drawing attention to the fact that the appeal court wrongly ignored the binding arbitration clause, under which arbitration proceedings had already been initiated. This violated the Law of Ukraine "On International Commercial Arbitration" and the Commercial Procedure Code of Ukraine (hereinafter referred to as the "CPCU"). The appeal court also made a mistake in concluding that the dispute under the guarantee in non-arbitrable.

The Supreme Court upheld our client's position and completely overturned the appeal court's decision, leaving the first-instance court's ruling in force. The Supreme Court noted that:

"...the appeal court erroneously prioritized individual provisions of national law over the provisions of valid international treaties of Ukraine in the disputed legal relations, and unjustifiably interpreted the absence of special provisions regarding the implementation of an arbitration agreement by the debtor in a bankruptcy case as a basis for applying analogies of law instead of applying the mandatory provision of Article 226, Part 1, Section 7 of the CPCU".

It is an important decision, demonstrating the court’s support for arbitration dispute resolution in Ukraine. The decision of the Supreme Court can be found at the following link.

The AGA Partners team was represented by partner Iryna Moroz and senior associate Olena Sibirtseva.