Supreme Court: A General War-Related Force Majeure Letter Is Not Enough — Courts Must Examine Whether the War Actually Prevented Performance
⚖️ Ukraine | Commercial Disputes | Force Majeure
Case Details
Case No.: 910/7679/22
Court: Supreme Court, Commercial Cassation Court
Decision Date: 13 September 2023
Case Category: Commercial Law
Subject Matter: Termination of Lease Agreement
Sub-Subject: Force Majeure / Destruction of Leased Premises / Guarantee Payment / Martial Law
Underlying Contract: Commercial real estate lease
Property: Premises in the Retroville Shopping and Entertainment Centre, Kyiv
Relief Sought by Tenant: Termination of the lease and recovery of the guarantee payment
Counterclaim by Landlord: Early termination of the lease due to the tenant’s breach of monetary obligations
Key Issue: Whether Russia’s military aggression and the destruction of part of the Retroville shopping centre constituted force majeure affecting the tenant’s ability to perform the lease, notwithstanding the absence of an individual force-majeure certificate
Outcome: The Supreme Court remitted the case for a new trial because the lower courts had failed to assess material circumstances concerning the actual effect of the hostilities on performance of the lease.
Background of the Dispute
A tenant brought proceedings seeking termination of a commercial lease and recovery of the guarantee payment previously paid to the landlord.
The lease concerned premises in the Retroville Shopping and Entertainment Centre in Kyiv.
The tenant had leased the premises from June 2020 and paid the landlord a contractual guarantee payment.
Following Russia’s full-scale invasion of Ukraine on 24 February 2022, the shopping centre ceased operating.
On 20 March 2022, part of the Retroville shopping centre was destroyed as a result of a missile strike, substantially affecting the possibility of using the leased premises.
The tenant subsequently brought proceedings seeking termination of the lease on the basis of force-majeure circumstances and recovery of its guarantee payment.
The landlord filed a counterclaim seeking early termination of the lease, alleging that the tenant had breached its monetary obligations under the agreement.
The Lower Courts Accepted the Landlord’s Position
The first-instance commercial court rejected the tenant’s claim.
At the same time, it allowed the landlord’s counterclaim and terminated the lease on the basis advanced by the landlord.
The appellate commercial court upheld that judgment.
A central issue was the evidence relied upon by the tenant to establish force majeure.
The tenant referred to the general letter issued by the Ukrainian Chamber of Commerce and Industry on 28 February 2022 concerning Russia’s military aggression against Ukraine.
The lower courts did not consider that document sufficient to establish force majeure in relation to the particular lease.
The dispute reached the Commercial Cassation Court of the Supreme Court.
A General Chamber of Commerce Letter Is Not a Contract-Specific Force Majeure Certificate
The Supreme Court addressed the legal significance of the Ukrainian Chamber of Commerce and Industry’s letter No. 2024/02.0-7.1 dated 28 February 2022.
The Court confirmed an important distinction.
That letter is a general informational document concerning Russia’s military aggression and the introduction of martial law in Ukraine.
It is not equivalent to an individual force-majeure certificate issued under Article 14-1 of the Law of Ukraine “On Chambers of Commerce and Industry in Ukraine.”
In particular, the general letter does not establish that force majeure prevented a specific business from performing a specific contractual obligation.
Accordingly, the existence of the general Chamber of Commerce letter does not, by itself, prove force majeure in an individual contractual dispute.
But a Force Majeure Certificate Is Not the Only Possible Evidence
The Supreme Court, however, did not accept the opposite proposition either.
The absence of an individual force-majeure certificate does not necessarily mean that force majeure cannot be established at all.
The Court indicated that the existence of force-majeure circumstances may be demonstrated by other evidence unless legislation or the contract makes a particular form of proof mandatory.
This point materially limits the proposition that a Chamber of Commerce certificate is always indispensable.
The evidential question must instead be considered in the context of the applicable law, the wording of the agreement and the particular factual circumstances of the dispute.
The Courts Must Examine What Actually Happened
The facts of the case were particularly significant.
From 24 February 2022, the Retroville shopping centre was not operating.
Then, on 20 March 2022, the building containing the leased premises was partially destroyed as a result of a missile strike.
The occurrence of the missile strike was a generally known fact and did not itself require proof in the ordinary manner.
These circumstances went directly to the tenant’s argument that performance of the lease had been affected by force majeure.
The Supreme Court found that the lower courts had failed properly to assess circumstances material to resolving the dispute.
The Relevant Question Is the Effect on the Specific Contract
The decision reinforces a recurring principle in Ukrainian Supreme Court case law concerning force majeure.
The existence of war in Ukraine does not automatically establish force majeure for every contractual relationship.
At the same time, courts cannot simply disregard the actual consequences of hostilities for a particular contract.
The analysis therefore requires a connection between:
the extraordinary event → the affected property or business → the particular contractual obligation → the alleged inability to perform.
In this case, the tenant was not relying merely on the general existence of the war.
The commercial property in which it operated had ceased functioning and was subsequently partially destroyed by a missile strike.
Those circumstances required substantive judicial assessment.
The Absence of a Certificate Could Not End the Analysis
The Supreme Court’s approach is particularly important because it prevents force-majeure disputes from becoming purely formalistic.
An individual certificate from the Ukrainian Chamber of Commerce and Industry may constitute important evidence.
But where the relevant law or agreement does not make such a certificate the exclusive mandatory means of proof, the court must also consider other admissible evidence capable of demonstrating the existence and effect of force majeure.
The absence of the certificate therefore does not necessarily permit a court to disregard objective evidence concerning destruction, interruption of operations or other consequences of hostilities.
Destruction of Commercial Property May Be Directly Relevant to Contractual Performance
The facts involving Retroville illustrate the distinction between general economic hardship caused by war and a direct physical impact of hostilities on contractual performance.
A general deterioration in economic conditions, reduction in revenue or loss of customers may raise different legal questions.
Here, however, the leased commercial premises were situated in a shopping centre that ceased operating and was subsequently damaged by a missile strike.
The tenant’s ability to use the property — the central commercial purpose of the lease — was therefore directly implicated.
The Supreme Court held that the lower courts should have evaluated those circumstances rather than resolving the force-majeure issue without properly addressing them.
The Supreme Court’s Decision
The Commercial Cassation Court remitted the dispute for a new trial before the court of first instance.
The Supreme Court’s reasoning established several important points:
the Ukrainian Chamber of Commerce and Industry’s general letter of 28 February 2022 is not an individual force-majeure certificate;
that general letter does not, by itself, prove force majeure in relation to a specific contractual obligation;
an individual Chamber of Commerce certificate is not necessarily the only permissible evidence of force majeure unless legislation or the agreement provides otherwise;
courts must assess other relevant evidence concerning the existence and impact of force-majeure circumstances;
the lower courts had failed adequately to examine the fact that Retroville ceased operating from 24 February 2022;
they also failed properly to assess the missile strike of 20 March 2022 and the resulting partial destruction of the building containing the leased premises; and
those circumstances were material to determining whether force majeure existed and how it affected the tenant’s contractual obligations.
The case was therefore returned for reconsideration rather than finally resolved in favour of either contractual party on the force-majeure issue.
Why This Decision Matters
The judgment is particularly relevant to foreign investors, landlords, tenants, retailers and businesses with commercial property interests in Ukraine.
It provides a more nuanced picture of Ukrainian force-majeure law than the proposition that a party either possesses a Chamber of Commerce certificate or has no force-majeure case.
The existence of a certificate matters, but so do the underlying facts.
For businesses affected by wartime events, the relevant questions may include:
Was the particular property physically damaged or destroyed?
Was access to the premises impossible?
Did the business or shopping centre cease operating?
Which particular contractual obligations were affected?
Was there a direct causal relationship between the military event and non-performance?
What does the contract require as evidence of force majeure?
Does the contract make a Chamber of Commerce certificate mandatory?
What other evidence exists concerning the relevant event?
Was the counterparty notified in accordance with the contract?
Does force majeure suspend performance, affect liability or provide a right to terminate?
The answers may be materially different from one contract to another, even where both contracts were affected by the same war.
Lions Lawyers’ Analysis
This judgment should be distinguished from cases in which a party relies merely on the general existence of martial law or the Ukrainian Chamber of Commerce and Industry’s nationwide letter of 28 February 2022.
Here, there was an alleged direct physical connection between the military action and the subject matter of the contract: the shopping centre containing the leased premises ceased operating and was subsequently struck by a missile.
That distinction is important.
A party arguing that “there is a war in Ukraine” has not necessarily established why a particular obligation could not be performed. A party demonstrating that the specific facility necessary for performance was destroyed or rendered inaccessible presents a materially different evidential case.
The judgment is also important because it confirms that force majeure should not necessarily be reduced to possession of a particular document. Where an individual certificate is not prescribed as the exclusive form of proof, courts must consider the totality of relevant evidence.
For foreign companies operating in Ukraine, the practical approach should therefore be to preserve a comprehensive evidential record: contractual notices, photographs and records of physical damage, governmental restrictions, access limitations, correspondence with counterparties, evidence of suspension of operations and, where appropriate, an individual Chamber of Commerce force-majeure certificate.
Lions Lawyers advises Ukrainian and international clients on commercial disputes in Ukraine, including force majeure, commercial leases, wartime damage to business premises, termination of contracts, guarantee payments, contractual liability and cross-border disputes. We provide full-service legal representation as well as standalone Ukrainian-law opinions for foreign companies, investors, landlords, tenants and international counsel assessing contractual rights and wartime risks in Ukraine.
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