Supreme Court: Procedural Violations by the Court Are Grounds for Annulment of the Ruling on Leaving the Claim Without Consideration
A shareholder of a Private Joint Stock Company, acting both in his own interests and in the interests of other former shareholders, filed a lawsuit to protect corporate rights and recover damages (compensation) due to an allegedly understated price of share buyout during the squeeze-out procedure.
The commercial court of first instance left the claim without consideration based on paragraph 4 of part one of article 226 of the Commercial Procedural Code of Ukraine – the plaintiff's failure to appear at the court hearing and failure to submit a request for the case to be considered in his absence.
The Northwestern Appellate Commercial Court annulled the ruling of the local commercial court, considering such an approach too formalistic, and returned the case for substantive consideration to that court. It concluded that the local commercial court made significant procedural errors and did not take into account important circumstances – it left the claim without consideration instead of suspending the proceedings, since the case materials contained evidence that another ruling in the same case regarding the return of the plaintiff's application to reduce the claims was being appealed in the appellate instance. At the same time, the panel of judges noted that the local commercial court did not investigate why the plaintiff's absence at the hearing created a real impossibility to consider the dispute on the merits.
By its ruling dated 19.05.2026, the Supreme Court upheld the decision of the Northwestern Appellate Commercial Court dated 23.02.2026 in case No. 906/1068/25. It noted that due to the plaintiff's appeal against the ruling under paragraph 6 of part one of article 255 of the Commercial Procedural Code of Ukraine, the court of first instance was obliged to send all case materials of case No. 906/1068/25 to the appellate court and necessarily suspend the proceedings in it, guided by subparagraph 17.12 of paragraph 17 of the Transitional Provisions of the Commercial Procedural Code of Ukraine. However, the court of first instance violated these requirements: it sent only copies of the materials and did not suspend the proceedings.
In view of this, the Supreme Court agreed with the conclusions of the Northwestern Appellate Commercial Court regarding the annulment of the court's ruling on leaving the claim without consideration.
The full text of the ruling of the Cassation Commercial Court dated 19.05.2026 in case No. 906/1068/25 can be found at this link.
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