CRITICAL MISTAKES IN EXPORT OPERATIONS: ANALYSIS OF A REAL CASE AND ITS CONSEQUENCES FOR BUSINESS (Part 3)

Debt Recovery Track

In the course of further consideration of two debt recovery cases against non-resident debtors for supplied goods, the debtors paid the principal amount of the debt to the Client. However, they refused to pay contractual penalties in the amount of approximately EUR 80,000 for late payment.

As a result, it became necessary to pursue recovery of the penalties and to go through all judicial instances — up to the Supreme Court, which ultimately awarded the penalties for recovery.

After obtaining favorable Supreme Court decisions, we succeeded in persuading the non-resident debtors to voluntarily comply with the court judgments and pay EUR 80,000 in penalties to the Client.

Tax Dispute Track

Following partial success before the Supreme Court, we focused on preparing written submissions for the repeated consideration of the case by the appellate court.

Our actions:

– prepared written submissions to strengthen the Client’s legal position;

– represented the Client before the appellate court;

– the appellate court again dismissed the appeal;

– prepared a cassation appeal and represented the Client before the Supreme Court;

– upon repeated consideration, the Supreme Court ultimately dismissed the cassation appeal. This decision is final in this case.

Subsequently, the tax authority filed a claim with the court seeking recovery of the Client’s tax debt in the amount of UAH 7.1 million. This claim was effectively undisputed in light of the Supreme Court’s decision in favor of the tax authority.

The court of first instance granted the tax authority’s claim. It was decided not to appeal this decision. We filed a motion for installment payment of the court judgment regarding the tax debt for a period of six months in order to allow the Client to continue its full-scale business operations.

However, the court denied the motion without substantively reviewing the submitted documents and arguments. As a result, the Client paid the tax debt in full.

This tax debt is a direct consequence of the counterparty’s delayed payment of the debt owed to our Client.

Going forward, it is likely that this amount will be claimed as damages from the non-resident counterparties.

Conclusion

Engage qualified legal counsel at the stage of entering into foreign economic contracts to assess contractual risks in advance;

If a counterparty fails to make payment within the contractual deadlines, seek legal assistance proactively;

In the event of a currency compliance audit, involve legal counsel already during the audit process — or, ideally, at the stage when you first identify a potential issue and before the tax authorities become involved.

This material is published with the Client’s consent.

02.01.2026