Sayenko Kharenko secures recovery of Debt in Cyber Fraud-Related Arbitration
Sayenko Kharenko’s arbitration practice team successfully represented the claimant – a Ukrainian supplier – in international commercial arbitration under the Rules of the ICAC at the UCCI against the respondent – a foreign buyer – and secured an effective resolution of the dispute and recovery of the debt in favour of the client.
The dispute arose from an international contract for the supply of agricultural products. Although the Ukrainian supplier duly performed its contractual obligations and delivered the goods in accordance with the agreed terms, payment was not received.
The case was complicated by unidentified third parties’ interference with the parties’ email correspondence during the negotiation and performance of the contract. As a result, the respondent maintained that it had discharged its payment obligation by transferring funds to what it believed to be the claimant’s bank account. It later emerged that the account belonged to an unrelated third-party company with no connection to the contractual relationship between the parties. The arbitration, therefore, raised important issues concerning the allocation of contractual risks, standards of due diligence, and liability for the consequences of cyber fraud in international trade.
During the arbitration proceedings, the respondent also filed a counterclaim. Following an active procedural phase and an oral hearing, the foreign counterparty withdrew its counterclaims, marking a significant step towards a positive outcome for the client.
In its final award, the arbitral tribunal fully upheld the claimant’s position and ordered the respondent to pay the principal debt, annual interest, contractual penalties, as well as arbitration costs and legal fees.
Through a comprehensive procedural strategy and in-depth analysis of the factual and legal issues involved, Sayenko Kharenko secured an effective outcome and successfully protected the client’s interests in this complex arbitration.
Sayenko Kharenko team working on the project consisted of senior associate Alina Bahan, as well as associates Henriietta Yaitska and Anna Yakovenko, under the supervision of partner Oleksandr Droug.
