When railcars stand idle, business suffers tangible losses. This is not merely a story of unpaid invoices – it is a case that clearly demonstrates how well-drafted contractual terms, a solid legal strategy, and competent legal representation can restore control over the situation and secure recovery of real damages.
A valid freight forwarding agreement was in force between the client – a transport and logistics company with a long-standing reputation in the market – and its customer. Under the terms of the contract, the client arranged for the delivery of freight railcars in April 2023 for the transportation of sugar to Hungary. However, the contracting party failed to load the railcars in due time and refused to use part of the railcars, citing force majeure circumstances – specifically, the sugar import embargo introduced under Hungarian Government Decree No. 130/2023 (IV.18).
The result: the transportation failed, the client had to cover the cost of railcar lease, incurred penalties, and sustained additional logistical expenses. During pre-trial negotiations, the defendant refused to compensate the losses caused by the delay and attempted to create the appearance of exemption from liability under the agreement.
Attorney Rostyslav Salamakha, who represented the client before the Commercial Court of Kyiv, developed a strategic legal approach, compiled all documentation substantiating the client’s expenses, and properly substantiated the claim. He convincingly demonstrated that the defendant had materially breached the contract.
Among other points, the plaintiff’s legal team highlighted that the Supreme Court of Ukraine, in the decision dated 19 August 2022 in case No. 908/2287/17, ruled that a certificate issued by the Chamber of Commerce and Industry (confirming the existence of force majeure circumstances) cannot be treated as indisputable evidence and must be critically assessed by the court in conjunction with other evidence and the specific facts of the case. Similar legal conclusions were expressed by the Supreme Court in rulings dated 14.02.2018 (case No. 926/2343/16), 16.07.2019 (case No. 917/1053/18), and 25.11.2021 (case No. 905/55/21). Accepting such a certificate as sufficient proof without further judicial evaluation would violate the adversarial principle of court proceedings.
Force majeure refers to circumstances that a party could neither prevent nor mitigate, even by exercising due diligence and taking reasonable measures. The key criterion is that such circumstances must render performance of the obligation objectively impossible, not merely difficult or economically disadvantageous (see para. 38 of the Supreme Court’s ruling of 21 July 2021 in case No. 912/3323/20).
Attorney Salamakha further emphasized that the defendant was not deprived of the opportunity to load the wagons with other cargo, propose a change in the loading station, or formally decline further transportation under the agreement. However, the defendant failed to take any of these steps and allowed the railcars – ordered at its own request – to remain idle, while simultaneously refusing to pay the contractual penalties agreed upon in the freight forwarding agreement.
Following a thorough court proceeding, the court concluded that the defendant had violated the performance deadlines, and that the plaintiff’s expenses were properly documented and justified.
Ultimately, the defendant voluntarily paid the debt owed to the client immediately after the appellate court upheld the claim.
This decision serves as a strong message to the business community: contractual terms matter. When a contracting party disregards its obligations, it is not just a business inconvenience – it is a clear legal ground for judicial protection.
#force majeure #commercial litigation #breach of contract #court dispute