INFORMATION LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of November 21, 2011 No. 01-06/1623/2011

About practice of application by the Supreme Economic Court of Ukraine in hearing of cases of separate regulations of procedural law

For the purpose of ensuring the correct and identical court practice we consider necessary to draw the attention of economic courts to practice of application by court of cassation instance in hearing of cases of separate regulations of procedural law, namely:

1) Item 3 of Article 83 of the Economic Procedure Code of Ukraine.

According to Item 3 of Article 83 of the Economic Procedure Code of Ukraine (further - HPK of Ukraine) economic court, making the decision, has the right to reduce in exceptional cases the penalty size (penalty, penalty fee) which is subject to collection from the party which violated obligations.

In the given regulation there is a speech about possibility of reduction of the size of penalty (penalty, penalty fee), and therefore it cannot be applied in resolution of disputes, the amounts of losses and damage connected with compensation (Article 22, Chapter 82 of the Civil code of Ukraine).

Besides, the specified regulation of HPK of Ukraine can be applied only in interrelation (set) with regulation of the substantive right which provides possibility of reduction of the size of penalty (penalty, penalty fee), namely part three of Article 551 of the Civil code of Ukraine and article 233 of the Economic code of Ukraine. If the corresponding sanctions are applied not in connection with violation of the obligation, and on other bases provided by the law, their size cannot be reduced by court (see resolutions of the Supreme Economic Court of Ukraine of 16.03.2011 No. 22/274, of 20.04.2011 No. 4/110-38);

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