Court Refuses to Order Contractor in Mykolaiv to Pay Two Million

The prosecutor’s office was unable to collect a fine of more than two million hryvnias from the contractor repairing the shelter at Lyceum No. 38 in Mykolaiv. Master Bud-Montazh LLC and the city’s capital construction department proved that the project deadlines were legally extended due to objective delays.

This is stated in the decision of the Commercial Court of Mykolaiv Oblast. 

The prosecutor’s office’s claims were denied in their entirety, and court costs were ordered to be borne by the prosecutor’s office.

The court found that the law does not contain an exhaustive list of documents required to confirm the objective circumstances of the delay, and the form of such confirmation depends on the specific situation.

Since all work was carried out in stages, progress reports were signed, and changes to the deadlines were made within the terms of the main contract and without increasing the cost estimate, no grounds were found to cancel the agreements or impose penalties.

The contract for the renovation of the shelter at Mykolaiv Lyceum No. 38 was signed by the Capital Construction Department of the Mykolaiv City Council with Master Bud-Montazh LLC back in early summer 2024. Initially, the contractors were supposed to complete all work by the end of February 2025. However, a number of significant obstacles arose during the renovation.

In particular, as noted in the court case, access to the school was temporarily blocked due to repairs on an adjacent road. This necessitated adjustments to the design and cost estimate documentation. There was also a need to perform additional construction work.

In this regard, the client and the contractor entered into several supplementary agreements, officially extending the deadline for completing the repairs until the end of December 2025. At the same time, the total cost of the contract for the city budget remained unchanged.

The Mykolaiv District Prosecutor’s Office filed a lawsuit seeking to have the supplementary agreements extending the deadlines declared invalid. According to the prosecutors, the contractor failed to provide adequate documentary evidence of the objective reasons for the delays, which constitutes a violation of public procurement law. In this regard, the prosecutor’s office insisted on imposing a penalty of over two million hryvnias on “Master Bud-Montazh” LLC for failing to meet the original deadlines.

The contractor disagreed with the prosecutor’s office’s demands. He explained that all delays occurred for reasons beyond his control and were documented in official letters, minutes of on-site meetings, and agreements with the designers. The city’s Capital Construction Department fully supported the builders’ position. 

Юлія Калабайда