Sponsor Seeks to Recover 2.5 Million UAH from Hockey Club Due to Delay of Championship: The Supreme Court Sends Case for Retrial.

The Commercial Cassation Court addressed the dispute in case No. 911/2780/24 concerning the reimbursement of funds paid under the agreement to promote the trademark through sponsorship support of the hockey club. The court found that the previous instances had not thoroughly examined the case’s circumstances. Therefore, it nullified their decisions and remitted the case for a fresh trial.

Circumstances of the Case

According to the case documents, the parties entered into an agreement to provide sponsorship support. Under this agreement, the company was to fund the hockey club in stages for a total of 15 million UAH. In return, the club committed to promoting the brand throughout the 2024/2025 Ukrainian Hockey Championship season.

Specifically, the company’s logo was to be displayed on players' uniforms, boards, and the arena ice, as well as on the official club pages on social media and the website, in media coverage, electronic mailings, advertising materials, and during the championship’s opening and award ceremonies.

In July 2024, the company made the initial payment of 2.5 million UAH to the club.

However, in September 2024, the company informed the club of its unilateral termination of the agreement. It cited the championship not commencing, lacking official information on the competition’s start date, and therefore not receiving the expected brand promotion as reasons for termination. Subsequently, the company requested the return of the 2.5 million UAH already paid as unjustly acquired funds.

Conversely, the hockey club contested the legality of this decision. It argued that before the championship began, it had fulfilled a significant portion of its obligations to promote the sponsor’s brand, and the competition’s start date was subsequently determined. Additionally, the club filed a counterclaim seeking to recover 9.5 million UAH in unpaid sponsorship support under the agreement from the company.

The Commercial Court of Kyiv Region, followed by the Northern Appellate Commercial Court, dismissed the company’s claim and fully upheld the hockey club’s counterclaim.

The courts determined that the company unjustly terminated the agreement since the Ukrainian Hockey Championship had started within the agreed period, and the club had fulfilled its obligations to promote the sponsor’s brand during the competition’s preparation phase.

Consequently, the company was instructed to pay the 9.5 million UAH debt under the agreement, and the claim for the return of the 2.5 million UAH sponsorship support was rejected.

Supreme Court’s Decision

The Supreme Court concluded that the lower courts prematurely dismissed the original claim, misapplying substantive law norms regarding the unilateral termination of the agreement.

The court highlighted that the agreement granted the public joint-stock company (PJSC) the right to unilaterally terminate it no later than 60 calendar days before the championship date. Nevertheless, at the time of sending the termination notice on September 10, 2024, the championship’s start date had not been confirmed.

Furthermore, the Supreme Court referenced its legal opinion from the ruling dated April 4, 2023, in case No. 916/1349/21, stating that if legal consequences are linked to an event whose occurrence is not definite, it is a condition rather than a term. As the championship date depended on decisions by the Ukrainian Hockey Federation, approval of regulations, and team formation, it did not qualify as an event that must inevitably occur according to Article 251 of the Civil Code of Ukraine. Therefore, calculating the 60-day period from an undetermined date was inaccurate.

The Supreme Court stressed that the championship date was contingent on decisions by the Ukrainian Hockey Federation, regulation approvals, and team formations, making it inappropriate to view it as an event that must inevitably happen under Article 251 of the Civil Code of Ukraine. Hence, calculating the 60-day period from an undefined date was flawed.

The panel of judges further emphasised that interpreting contract terms should not hinder a party’s ability to exercise its rights. According to the court, the approach taken by the lower courts effectively deprived the PJSC of its right to unilaterally terminate the agreement as stipulated in the contract.

Therefore, the Supreme Court acknowledged that the courts' findings on the absence of grounds for termination were premature, and the provisions of Articles 251 and 252 of the Civil Code of Ukraine had been misapplied.

Simultaneously, the cassation court clarified that it lacked the procedural authority to independently assess evidence regarding the championship’s preparedness, incurred expenses, or the validity of the counterclaim. These aspects should be determined by the court of first instance during the new trial.

Following the review, the Supreme Court partially upheld the cassation appeal of the PJSC, invalidated the decision of the Commercial Court of Kyiv Region and the ruling of the Northern Appellate Commercial Court, and remanded case No. 911/2780/24 for a new trial to the court of first instance.

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