Ukrainian Supplier Failed to Deliver Goods: How to Recover Your Advance or Enforce Delivery

A foreign company paid a Ukrainian supplier for goods, but the agreed deadline passed and the goods were not delivered. Such situations usually develop gradually. The supplier first reports a production delay, then promises to ship the goods within a week, asks for more time, and continues to postpone the delivery date. As long as the buyer expects to receive the order, both parties treat the situation as a commercial delay. After several unfulfilled promises, however, a different question arises: is there still a realistic prospect of obtaining the goods, and has valuable time for recovering the payment already been lost?

At this stage, the buyer should not begin with a general demand to “settle the debt.” It must first determine which obligation has been breached and what outcome it intends to achieve. If the buyer still requires the goods for which it paid, the issue concerns performance of the supply agreement. If the buyer is no longer prepared to wait and demands repayment of the advance, a monetary claim arises once the repayment deadline has passed. This choice determines the content of the demand letter, the relief sought in court, the evidence required, and the method of enforcing the future judgment.

Court proceedings will be effective only if the chosen remedy reflects the actual circumstances and the supplier has goods, funds, or other assets against which the judgment can be enforced.

Missing the contractual deadline is already a breach. Before deciding how to respond, however, the buyer must understand why the delay occurred, as the reason affects not only the negotiations but also the realistic prospects of enforcing a judgment.
The supplier may genuinely have encountered damage to its production facilities, electricity outages, shortages of raw materials, or logistical disruption. In these circumstances, the goods often exist at least in part: materials have been purchased, production has commenced, or the necessary documentation is being prepared. If the buyer requires those particular goods and the supplier remains capable of completing the order, a claim for performance may still make commercial sense.

The position is different where the advance payment has been used to cover existing debts or finance other customers’ orders. The supplier may continue promising delivery not because production is nearing completion, but because it is attempting to gain time and secure new cash inflows. These scenarios may appear similar from the outside. The buyer should therefore not rely solely on explanations provided by a director or account manager. It is necessary to verify whether the goods exist, assess the actual stage of production, and review court disputes, enforcement proceedings, and indicators of the company’s insolvency.

Any reliance on force majeure must be assessed separately. Martial law, air-raid alerts, or infrastructure disruption do not automatically release a supplier from its obligations. The supplier must demonstrate which specific event prevented its particular obligation from being performed, the period during which performance was impossible, and whether it complied with the contractual requirement to notify the buyer promptly. Even evidence of an extraordinary event does not establish that the supplier may retain the advance payment indefinitely. A lack of funds or deterioration in the supplier’s financial position does not constitute force majeure.

The principal mistake usually occurs after the first missed deadline. The buyer agrees to wait, but revised delivery dates remain confined to telephone conversations. The original deadline is recorded in the contract, while the parties’ subsequent conduct becomes open to conflicting interpretations. The supplier argues that the deadline was extended, whereas the buyer believes that it merely refrained temporarily from commencing court proceedings.

Every extension should therefore be documented in writing, including the revised deadline, whether it is final, and the consequences of a further breach. If the buyer is no longer interested in receiving the goods, this must also be stated unequivocally. A buyer cannot continue demanding delivery for several months and then assume that the repayment obligation arose retroactively. The monetary claim must be properly established: the buyer must state the remedy it has selected, demand repayment, and set a deadline where the contract does not already provide one.

The second mistake is investigating the debtor too late. If the supplier’s bank accounts are empty, its real estate has been transferred, and bankruptcy proceedings have already been opened by the time the claim is filed, even indisputable documents will not guarantee actual recovery. A Ukrainian counterparty should therefore be investigated before court proceedings are commenced and, ideally, before the commercial relationship begins.

The third mistake is attempting to include every possible additional amount in the claim without verifying its legal basis. Repayment of the advance, contractual penalties, interest, inflation adjustment, and damages have different legal characteristics. An overstated calculation complicates the case, increases the court fee, and gives the defendant additional grounds for objection. A strong position is based not on the highest possible figure, but on an amount that can be substantiated consistently through documents and applicable law.

Before sending a final demand letter, the entire chronology must be reconstructed. The lawyer verifies which entity is identified as the supplier, which entity received the funds, the type and quantity of goods to be supplied, the agreed deadline, and any steps the buyer was required to take before delivery. If the payment was received by an entity other than the party that signed the contract, the legal basis for the transfer must be established and the proper defendant identified.

Relevant evidence includes the contract, specifications, invoices, payment orders and SWIFT confirmations, correspondence, documents concerning the readiness of the goods, notices extending the delivery deadline, and acknowledgements of the obligation to repay the funds. Electronic messages should be preserved in their original form together with the sender’s details and date, rather than only as selected screenshots. Otherwise, the supplier may challenge the integrity of the correspondence or dispute whether the relevant account belonged to a particular employee.

A foreign company participates in Ukrainian court proceedings on the same procedural terms as a Ukrainian counterparty. Its corporate registration documents, evidence of the signatory’s authority, and the representative’s power of attorney, accompanied by a Ukrainian translation, should be prepared in advance. Deficiencies in these documents do not extinguish the substantive claim, but they may delay the commencement and determination of the proceedings.

Where a supplier has received an advance payment but failed to deliver the goods by the agreed deadline, Ukrainian law allows the buyer to demand either delivery of the paid goods or repayment of the advance.

A claim for delivery of the paid goods is appropriate where the goods exist, are sufficiently identifiable, and have independent value to the buyer. Before commencing proceedings, it is necessary to determine whether the goods remain in the defendant’s possession, whether they have been transferred to a third party, and whether they can be described precisely in the operative part of the judgment. A request merely asking the court to “order performance of the contract” is too general. The relief sought must allow the enforcement officer to determine which specific assets, in what quantity and configuration, must be transferred.

This approach becomes risky where the existence of the goods cannot be verified. A judgment ordering the transfer of property cannot be enforced if the goods were never manufactured, have been lost, or are legally owned by another party. A court cannot replace the production process or create goods that do not exist. If there are serious doubts about whether delivery remains possible, seeking repayment of the advance is usually more practical while the Ukrainian counterparty still has accessible assets.

Once the buyer has properly demanded repayment and the payment deadline has expired, the dispute becomes monetary in nature. The buyer may claim the principal amount together with any additional amounts available under the contract or applicable law. The sequence of actions is important: the correspondence should demonstrate that the buyer ceased waiting for delivery and made a specific demand for repayment.

The principal claim may consist of repayment of the advance. A contractual penalty may also be claimed if the agreement expressly provides for liability for delayed delivery or delayed repayment. The penalty clause must be examined carefully: a sanction for late delivery does not necessarily continue to accrue after the buyer changes its remedy and demands repayment.

Once a monetary obligation becomes overdue, Article 625 of the Civil Code of Ukraine may apply. It provides for annual interest at three per cent, unless a different rate is established by contract or law, together with inflation adjustment. The calculation nevertheless depends on the currency of the obligation and the period of default. Ukrainian law does not permit inflation adjustment to be applied to an amount denominated in a foreign currency. Damages may be claimed separately, but the buyer must prove their amount, their causal connection with the non-delivery, and the measures taken to mitigate the loss.

The demand letter consolidates the legal analysis into a single position. It should identify the contract, payment, missed deadline, selected remedy, calculation, final deadline for voluntary performance, and intention to commence court proceedings. Copies of the supporting documents, evidence of dispatch, and confirmation of receipt should be retained for the case. A pre-action demand is not mandatory in every dispute, but it removes ambiguity and demonstrates to the court when and what form of performance the buyer required.

If the supplier proposes an instalment plan, the resulting agreement should improve the creditor’s position. It should record the acknowledged amount, a precise payment schedule, the consequences of missing a single instalment, and any available security. A simple promise to pay at a later date merely postpones court proceedings and gives the debtor additional time to transfer its assets.

The claim is filed in accordance with the applicable procedural rules. The statement of claim must set out the circumstances of the transaction, connect each item of relief to specific evidence, provide the relevant calculations, and confirm that the claim materials were sent to the defendant. For a monetary claim filed by a legal entity, the court fee is 1.5 per cent of the claim value, subject to the statutory minimum and maximum. If the amount claimed is denominated in a foreign currency, the court fee is paid in Ukrainian hryvnia at the official exchange rate applicable on the payment date.

Once proceedings have been opened, the supplier may dispute the delivery deadline, receipt of the demand letter, the signatory’s authority, the buyer’s performance of its corresponding obligations, the amount of contractual penalties, or other aspects of the claim. The duration of the proceedings therefore depends on more than the apparent clarity of the delay. Translation of documents, examination of electronic correspondence, additional evidence, expert assessments, a counterclaim, and an appeal can all extend the process. A well-documented first-instance case may take several months.

The costs of engaging Ukrainian legal counsel may be claimed together with other litigation expenses. This requires a legal services agreement, evidence of the work performed and its cost, and the timely filing of the relevant procedural documents.

If an investigation of the Ukrainian counterparty indicates asset transfers, the sale of real estate, multiple creditors, or rapidly deteriorating finances, interim relief should be considered either together with the claim or before it is filed. A Ukrainian court may freeze funds or other assets and prohibit specific actions where the absence of such measures would substantially hinder or prevent enforcement of the future judgment.

Interim relief is not granted merely because the supplier breached the contract. The applicant must demonstrate a genuine risk and a connection between the requested measure and the subject matter and value of the claim. Relevant evidence may include information concerning asset disposals, enforcement proceedings, changes in the asset structure, and the debtor’s conduct. A request to freeze all assets without explaining why the measure is proportionate may be dismissed. In certain circumstances, the court may require counter-security for potential losses suffered by the defendant.

Once the judgment becomes enforceable, enforcement proceedings are commenced. A state or private enforcement officer will first seek recovery from the debtor’s funds and, if those funds are insufficient, from its other property. Enforcement is more efficient where the creditor has already identified the supplier’s bank accounts, real estate, vehicles, or accounts receivable at the claim stage and can provide the enforcement officer with specific information.

If bankruptcy proceedings are opened while the dispute is pending, individual recovery may be restricted and the claim must be filed within the bankruptcy proceedings. For claims arising before the opening of those proceedings, the 30-day period following official publication is critical. Missing this deadline does not extinguish the claim, but it weakens the creditor’s position in the decision-making process. The supplier’s status should therefore be monitored throughout the dispute.

Effective action in a non-delivery case involves more than filing a claim. The proper debtor must first be identified and the evidence collected. An enforceable remedy must then be selected, the available assets investigated, and interim measures pursued where necessary. Only after these steps should the case proceed to judgment and actual enforcement. This sequence creates a realistic opportunity either to obtain the goods for which the buyer paid or to recover the funds, rather than merely securing a judgment that remains unenforced.

A German entrepreneur approached us after becoming involved in the purchase of timber from a Ukrainian supplier. The contract was concluded in April 2022. The foreign buyer paid an advance, and the supplier undertook to deliver the goods no later than 1 January 2023.

After receiving the funds, the supplier did not cease communication or expressly refuse to perform its obligations. Instead, it repeatedly postponed the delivery date and continued promising that the order would be completed later. This situation is particularly dangerous for a buyer: as long as the supplier continues responding and provides new delivery dates, court proceedings may appear premature and the buyer may still believe that the goods will eventually be delivered.

The promises, however, were not followed by any meaningful action. The goods were not delivered by the contractual deadline or at any later date. The advance payment was not refunded either. By the time the judgment became final, the Ukrainian supplier had retained the buyer’s funds for more than three years.

At first sight, the dispute appeared straightforward: the buyer had transferred the funds, but the supplier had failed to deliver the goods. In court, however, the defendant attempted to present a different version of events. It argued that the buyer had not paid the amount required under the contract and had therefore failed to satisfy the conditions necessary for delivery.

A further complication was that the parties had been involved in several commercial transactions and payments had been made by different foreign companies. In addition, the amounts sent through SWIFT differed from the amounts actually credited to the supplier’s account because bank charges had been deducted during the transfers.

Simply combining all payment records and claiming the aggregate amount would have allowed the supplier to argue that certain payments related to other contracts. This is precisely what occurred in the proceedings.

In preparing the case, we therefore separated the individual transactions, matched each payment to the relevant contract, and examined the underlying banking records. The court also obtained information directly from the Ukrainian bank. This evidence established that the supplier had received €9,276.80 under the contract in dispute.

This distinction was critical for the client. A court will not award the amount the buyer considers fair; it will award the amount that can be proven to relate to the specific contract. In certain cases, excluding a disputed part of the calculation strengthens the principal claim and reduces the scope for objections by the defendant.

The contractual deadline had expired long before the proceedings commenced, and there was no evidence that delivery remained realistically possible. A claim for performance had therefore lost its practical value. The buyer did not need another promised delivery date. It required the legal relationship to be terminated and its funds returned.

We demonstrated that the failure to deliver had completely deprived the buyer of the result for which the contract had been concluded. The supplier had received the advance payment but had neither delivered the goods nor refunded the money. The breach was material because the foreign buyer received none of what it had reasonably expected when entering into the transaction.

We sought termination of the contract and recovery of the proven advance payment. The supplier contested the claim, alleged that the buyer had failed to comply with the payment terms, and attempted to exclude certain banking records from the evidence. The outcome therefore depended not merely on the existence of a signed contract, but on establishing a clear connection between its terms, the payment, the delivery deadline, and the remedy pursued.

The Commercial Court of the Cherkasy Region found that the Ukrainian supplier had breached its contractual obligations and failed to deliver the paid goods. The court terminated the contract and ordered the supplier to pay the foreign company:

• €9,276.80 as repayment of the advance paid for the undelivered goods;
• UAH 6,114.56 as reimbursement of the court fee.

The judgment was issued on 20 February 2025. The supplier attempted to appeal, but the appeal was returned without consideration. The judgment became final on 28 April 2025.

This case demonstrates that years of unfulfilled promises do not necessarily mean that recovery is no longer possible. Even where significant time has passed since payment, the Ukrainian supplier disputes the amount owed, and the payment history requires detailed analysis, the buyer’s rights can still be protected through the Ukrainian courts.

Waiting, however, is not neutral. While a supplier asks for one more month, its assets may be transferred, additional enforcement proceedings may be commenced against it, and its financial position may deteriorate. Effective legal work therefore begins not with the formal drafting of a claim, but with a review of the contract, payments, evidence, and the debtor’s assets.

If a Ukrainian supplier has failed to deliver paid goods, we can assess which outcome remains realistically achievable: compelling delivery of identifiable goods that still exist, or ending the delay, recovering the advance payment, and proceeding to enforcement of the judgment.