Partner of AGA Partners Iryna Moroz gave a lecture at the Legal High School and told the audience how to minimize risks when paying in international trade, and illustrated payment methods in international trade using the example of real foreign economic contracts.
Link to the source. The material is available in Ukrainian and Russian only.
The protection of violated rights of investor is not limited to national courts or investment arbitration. The experience of AGA Partners confirms the possibility of successfully resolving construction and land disputes in the European Court of Human Rights. It is this protection mechanism that our Client has chosen in order to compensate for losses caused by the seizure of the land plot and the termination of the construction project.
As a result of a long consideration of the case «Construction and Investment Group 1 v. Ukraine» in the European Court of Human Rights, on 17 December 2020, a decision was made in favor of the Client on the responsibility of the state of Ukraine for violation of the right to peaceful possession of property, established by the Article 1 of the Protocol No. 1 to the Convention on Protection of Human Rights and Fundamental Freedoms.
The dispute arose between the Client and the Kiev City Council in 2008 and concerned the termination of the right to lease a land plot for the construction of a multi-storey residential building with underground parking in Kiev.
The Client entered into a lease agreement of a land plot with the Kiev City Council for the construction of a multi-storey residential building in Kiev and received all the necessary approvals and permits for the construction work. In addition, foreign investments were attracted to implement the construction project.
However, during the preparatory stage of construction, local authorities canceled the decision to allocate the land plot to the Client, proposed to terminate the lease agreement and assigned to the land plot the status of a public garden. The Client applied to the national courts in order to recover the losses incurred caused by the seizure of the land plot, however, the Ukrainian courts of all instances unreasonably refused to satisfy the Client's claims.
As a result, a decision was made to apply to the European Court of Human Rights in order to establish a violation by Ukraine of the Convention on Protection of Human Rights and Fundamental Freedoms and to obtain fair compensation.
AGA Partners succeeded in proving that the indicated actions of the State of Ukraine, represented by its state authorities, prevented the Client from using the land plot for the construction of a multi-storey residential building without providing any compensation, which is a violation of the right to peaceful possession of the land plot.
At the moment, the case is at the stage of consideration of the “just satisfaction claim”.
«The decision in the case shows that any interference by State authorities with the peaceful possession of property can only be justified if it is in the legitimate interests and is accompanied by the provision of a reasonable compensation. In this case, the state authorities terminated the Client's right to lease a land plot without providing any compensation, which was the main reason for establishing the responsibility of Ukraine. It is important that national authorities, when interfering with the right to peaceful possession of property, take measures to prevent or mitigate adverse consequences, for example by offering reasonable compensation or providing another plot of land, which was not done in this case».
The details of the case can be found by clicking on the following link: http://hudoc.echr.coe.int/eng?i=001-207984.
The Ukrainian KNU Vis Moot Team, whose trainers included AGA Partners associate Pavlo Lebediev and a graduate of Stockholm University and our former colleague Leila Kazimi, for the first time in history entered the TOP-64 teams from all over the world in the international student competition in commercial arbitration Willem C . Vis Moot.
AGA Partners congratulates the team on great achievements and is ready to continue supporting the student community for a worthy representation of Ukraine in the international arena!
Senior associate Iurii Gulevatyi gave a lecture for students of the Faculty of Legal Sciences of NaUKMA and spoke about the rules for concluding and executing GAFTA and FOSFA standard contracts.
AGA Partners' partner Ivan Kasynyuk has consistently been shortlisted among the leading Ukrainian lawyers for 4 years in a row according to the authoritative international ranking Chambers and Partners. Ivan recognized in Band 4 in Dispute resolution: International practice both by Chambers Europe 2021 and in Chambers Global 2021.
AGA Partners successfully represented a large agri trader from Lithuania in a dispute with a Swiss trading company in London arbitration. The dispute arose under USD1,2 million contract for the supply of Ukrainian sunflower meal.
This was a typical FOB (“Free on Board”) contract, whereby our Client had to present a vessel to one of the Black Sea ports of Ukraine within certain dates, to be further loaded with the sunflower meal delivered by the Respondent.
However, the Respondent refused to deliver the goods to the port, referring to national quarantine in Ukraine due to COVID-19 as a force-majeure event. Disagreeing with Respondent’s position and suffering losses, our Client nonetheless presented the vessel to the Ukrainian Black Sea Port, calling for the execution of the contract.
The situation became even more complicated by the fact that the Respondent accused our Client of so-called ‘phantom nomination’ alleging that the vessel nominated by our Client was actually intended for execution of a different contract, and not the one concluded with the Respondent.
Partner Iryna Moroz commented on this situation:
“Both force majeure and ‘phantom nomination’ of a vessel can justify the non-performance of a contract by a counterparty as a matter of English law.
However, our team of lawyers has managed to provide the arbitral tribunal with all the necessary evidence proving that national quarantine in Ukraine was not a force-majeure event under English Law, entitling the Respondent to refuse to perform the contract. Our team also proved that our Client properly presented a vessel under the Contract and fulfilled its part of contractual obligations.”
After several months of proceedings, the arbitral tribunal fully satisfied our Client’s claim covering a total of about USD200,000 of default damages plus interest, arbitration fees and expenses as well as legal costs.
AGA Partners successfully represented a Swiss trading company (Seller) in a dispute with a Turkish manufacturing and trading company (Buyer) in London arbitration, that arose out of a contract on sale of chickpeas on CIF FO delivery terms for a total value of more than USD1 million.
The dispute concerned the inspection procedure, designed to determine final quality of the goods. In particular, under terms of the sale contract the final quality was to be determined based on an inspection of the goods on loading on board of the vessel. Instead, the Buyer declined to take delivery and terminated the contract based on unsatisfactory results of an informal quality inspection, performed prior to commencement of loading procedures.
AGA Partners managed to prove that an informal quality inspection, allowed to be performed by the Buyer, and/or its results did in no way circumvent finality of quality inspection of the goods, envisaged in the contract. The Buyer’s termination of the contract was found to be premature, and, therefore, unlawful. The Seller was awarded damages in an approximate amount of USD350,000.
It is also notable, in the course of the proceedings the Buyer raised a challenge against the arbitrator, appointed by the arbitration authority instead of the Buyers, on grounds of an alleged lack of neutrality. In particular, the Buyer took position, that the arbitrator lacked neutrality given that he possessed the same nationality, as the legal representatives of the Seller. However, this challenge was dismissed as AGA Partners did establish that arbitrator’s neutrality could not be affected by his nationality in circumstances, where there were no other grounds to challenge his impartiality and/or independence.
“The successful outcome of this case demonstrates that where the contract is clear as to the parties’ contractual obligations, they may not be undermined by an uncertain correspondence between the parties. This is especially relevant with regard to quality clauses, possessing a fundamental nature, as they are aimed specifically to achieve finality as to the quality of the goods and at avoidance of respective disputes.”
The AGA Partners team was led by partners Iryna Moroz and Ivan Kasynyuk with support from senior associates Ievgen Boiarskyi and Iurii Gulevatyi, as well as from associates Yelyzaveta Holovan, Viktoria Tolochko and Pavel Lebedev.
AGA Partners successfully represented a large agri trading company in a dispute with a major Turkish oil manufacturer in London arbitration. The dispute arose under USD2 million contract for the supply of sunflower seeds to Turkey.
The dispute concerned the buyer’s wrongful refusal to accept sunflower seeds supplied. The buyer based his rejection on the presence of poisonous seeds of ambrosia in the cargo. The Client had no other choice than to sell the rejected cargo in the market and seek recovery of a price difference as well as demurrage and logistics costs.
After several months of proceedings, AGA Partners team has successfully proved that rejection of the cargo was wrongful and that our Client was entitled to receive compensation of his damages.
The arbitral tribunal satisfied our Client’s claim covering a price difference and other damages arisen due to resale of goods and further awarded our Client compensation of arbitration and legal costs.
Partner Iryna Moroz commented the case:
“This was a complex quality dispute, involving quality analyses from different laboratories and raising the issue of the contract interpretation: what quality characteristics were agreed by the parties in the contract and how these are to be finally determined?
But the crucial question to be determined in this case was whether the excess of poisonous seeds if any, entitled buyer to reject the goods under the contract. Our team managed to prove that excess of ambrosia would not be a breach, giving rise to buyer’s right of rejection, thus making buyer’s refusal of the goods wrongful.”
First meeting of the UBA Committee on Civil, Family and Inheritance Law. Those who did not have time to join the discussion of the debt obligations of spouses with the participation of partner Iryna Moroz and senior associate Olena Sibirtseva, follow the link to the event recording: https://m.youtube.com/watch?v=mUNf3_8NEpk
AGA Partners successfully represented the Client, an agricultural trading company, in a dispute with a Bangladesh company (buyer or respondent) in London arbitration. The dispute arose out of respondent’s failure to open the letter of credit under the contract worth nearly USD 1 million.
Our Client fully complied with the Contract and provided all necessary instructions and documents, but the respondent failed to open the letter of credit in time. During prolonged period of correspondence the respondent was alleging various obstacles for opening the letter of credit. As a result, the contract was not performed and the Client suffered significant losses.
The arbitral tribunal in full satisfied our Client’s claim for damages and further awarded the arbitration and legal fees to be covered by the respondent.
Partner Ivan Kasynyuk commented the case:
“In commodities trading time of opening the letter of credit is a condition of a contract. The buyer is expected to open the letter of credit within the prescribed period, but in any case before commencement of the delivery period. Thus, opening the letter of credit by the buyer is a pre-condition for seller’s delivery obligation.
The present case included analysis of a plethora of correspondence between the parties. The arbitral tribunal found that the contract was not performed due to the respondent’s fault and awarded full amount of losses suffered by the Client together with interest and costs.”
AGA Partners successfully represented the Ukrainian agri-trading company in a dispute with a Belarusian trading company before the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry (“ICAC”).
The dispute concerned the buyer’s failure to pay for a delivered parcel of the goods as well as his failure to take full quantity of the goods under the sale contract. The Client sought recovery of balance price for the goods, market price damages and penalty for delay in payment.
The buyer claimed that payment for the goods from his side was prevented due to a force majeure, allegedly triggered by the Presidential Decree of the Republic of Belarus No. 70 of 25 February 2020 (“Decree”), setting a mandatory one-year grace period for debts’ repayment. However, AGA Partners convinced the Arbitral Court that the said Decree was not a force majeure, since (1) the buyers’ company was not subject to the Decree, 2) there was no connection between the Decree and the buyer’s duties under the sale contract, (3) the parties expressly excluded breaches of payment duties from a scope of a force majeure clause.
The proceedings were further complicated by the buyer’s abuse of temporary restrictions, imposed due to COVID-19 pandemic, in order to postpone hearing of the matter.
Partner Iryna Moroz commented the case as follows:
“This matter raised quite an uncommon situation of governmental intervention into commercial relations, which led to a temporary suspension of a debt collection process. Furthermore, once more the ICAC has proven its efficiency by countering a party’s delaying tactics to save time and costs for the proceedings”.
Congratulations to our Managing Partner Aminat Suleymanova on her election as Head of the International Arbitration Committee of the Ukrainian Bar Association.