Court awards Ukrtransgaz UAH 1.15 million in penalties from ball valve supplier
On 18 August 2026, the Commercial Court of Sumy Region ordered VKM-Armatura LLC to pay JSC Ukrtransgaz UAH 500,000 in late-delivery penalties and UAH 650,000 in a fine for delaying the supply of ball valves. The defendant was also ordered to pay UAH 25,700 in court fees.
Contract terms
The parties signed the contract on 18 July 2025. It covered the supply of DN25–DN400 ball valves worth UAH 33.6 million including VAT. The expected value of the tender was UAH 28.58 million excluding VAT, and the winning bid from VKM-Armatura was UAH 28 million excluding VAT.
The supplier was to deliver the goods within 150 calendar days, that is, by 15 December 2025 inclusive. The date of delivery was defined as acceptance by quantity and quality, documented by an incoming inspection act. Acts for five batches were signed between 31 December 2025 and 21 January 2026, and the last batch, worth UAH 12.46 million, was accepted more than 30 days late.
The contract provided for a penalty of 0.1% of the value of the delayed goods for each day of delay and an additional 10% fine for delays beyond 30 days. Ukrtransgaz claimed UAH 895,300 in penalties and UAH 1.25 million in fines, UAH 2.14 million in total.
The parties' positions and the ruling
VKM-Armatura asked for the sanctions to be reduced to 30% of the amount claimed. It pointed to full performance of the contract, acceptance of the goods without objections, and the fact that the delay period included time the buyer spent on incoming inspection. The supplier also stressed the impact of shelling, damage to production and warehouse premises, and power outages.
The court rejected the argument that the delivery date should be determined by delivery notes, since the contract expressly provided for incoming inspection acts. It also found that the buyer carried out acceptance within the set deadlines and considered the calculation of sanctions justified. At the same time, the court reduced the penalty and fine, taking into account full delivery and acceptance, a delay of 15 to 36 days (including inspection time), and the lack of evidence of losses to Ukrtransgaz.
Appeal
Ukrtransgaz appealed the reduction and seeks a further UAH 990,300. The Northern Commercial Court of Appeal opened appeal proceedings on 21 September 2026 and scheduled the hearing for 20 October 2026.