The international arbitration has rendered three decisions awarding in favor of the Ministry of Defense of Ukraine amounts exceeding 14 million euros and 4 million US dollars.
These decisions concern foreign trade contracts for the supply of various types of goods and protective equipment for the Armed Forces of Ukraine, including winter uniforms, body armor, and so on.
According to the concluded foreign trade contracts, the Ministry of Defense fully fulfilled its obligations and paid the cost of the goods on time.
However, none of the foreign suppliers delivered the goods on time. Moreover, some contractors delivered partially substandard goods or failed to deliver part of the goods paid for under the contract.
In connection with this, the defense department appealed to international arbitration to recover the cost of substandard and undelivered goods, as well as penalty sanctions for late delivery. The Ministry of Defense also demanded the recovery of annual interest for the use of funds.
The foreign suppliers disagreed with the Ministry of Defense's claims. In their opinion, the rejected goods were of proper quality. At the same time, the delay or non-delivery of the goods allegedly occurred due to force majeure circumstances.
The arbitration satisfied the claims of the Ministry of Defense. In its decisions, the arbitrators recognized the Ministry of Defense's rightful refusal of substandard goods and unanimously found the absence of force majeure circumstances. According to the arbitration decisions, the funds for undelivered goods must be promptly returned to the Ministry of Defense.
Furthermore, the arbitration obliged the foreign suppliers to pay interest accruing on the funds until their return to the Ministry of Defense.
The Ministry of Defense of Ukraine monitors the performance of obligations by suppliers to ensure that the Ukrainian military receives all types of supplies on time and of proper quality. At the same time, the Ministry of Defense takes all legal measures to protect its rights and interests in relations with unscrupulous suppliers.
