Failure to reach agreement on essential terms of the contract is not a ground for refusal of the claim if its conclusion is mandatory — Commercial Cassation Court of the Supreme Court
The Commercial Cassation Court as part of the Supreme Court clarified that in pre-contractual disputes, the court must determine the terms of the contract rather than refuse due to lack of agreement between the parties.
If the law provides for the mandatory conclusion of a contract, and the parties have not reached an agreement on its essential terms, the court cannot limit itself to stating such disagreement and refuse the claim. The court's task in a pre-contractual dispute is precisely to resolve differences between the parties and determine the contract terms taking into account legal requirements and the positions of the dispute participants. This conclusion was reached by the Commercial Cassation Court as part of the Supreme Court.
JSC "Ternopiloblenergo" filed a lawsuit against JSC "Ukrtelecom" to recognize the contract for access to the supports of overhead power transmission lines for placing wired broadcasting cables as concluded. The plaintiff noted that the defendant actually uses its infrastructure, but the parties could not agree on certain contract terms.
The Commercial Court, whose conclusions were agreed upon by the appellate commercial court, denied the claim on the grounds that the parties did not reach an agreement on the essential terms of the contract.
Reviewing the case, the Commercial Cassation Court of the Supreme Court noted that the Law of Ukraine "On Access to Construction, Transport, and Electric Power Facilities for the Development of Electronic Communication Networks" provides the infrastructure owner's right to demand the conclusion of a contract, and disputes regarding its conclusion can be resolved by the court.
The Commercial Cassation Court of the Supreme Court stated that filing a claim to recognize the contract as concluded aims not to confirm an already reached agreement by the parties, but to resolve the dispute regarding the contract terms. Therefore, the absence of agreement on certain essential terms is a reason for the court to consider the dispute, not to refuse the claim.
The court emphasized that the opposite approach would effectively make judicial protection impossible in cases where one party evades concluding the contract or unjustifiably disagrees with its terms despite the legally established obligation to conclude it.
The Commercial Cassation Court of the Supreme Court noted that the lower courts did not properly evaluate the parties' arguments and evidence regarding the disputed contract terms, effectively avoiding resolving the pre-contractual dispute on the merits.
Under these circumstances, the Commercial Cassation Court of the Supreme Court partially satisfied the cassation appeal of JSC "Ternopiloblenergo", canceled the decisions of the lower courts, and sent the case for a new hearing to the local commercial court.
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