The Commercial Cassation Court of the Supreme Court Has Established Criteria for Considering Multiple Transactions as a Single Significant Transaction

If a company could have completed one significant transaction instead of several smaller ones, each of those smaller transactions is deemed significant. When resolving such disputes, the court must not merely conduct a formal assessment of each contract’s price. Instead, it must undertake a comprehensive analysis to clarify the circumstances surrounding these transactions. This collective analysis will indicate whether it was possible or impossible to conduct one significant transaction rather than multiple transactions that, individually, would not be considered significant by formal criteria. This conclusion was reached by the Commercial Cassation Court of the Supreme Court in case No. 906/358/25.

The court reviewed a cassation appeal filed by an LLC against a private enterprise concerning the invalidation of equipment and vehicle purchase and sale agreements. The plaintiff argued that the company’s director, in violation of the company’s charter and without a resolution from the general meeting, had entered into four interconnected contracts. The total value of these contracts exceeded the limit stipulated by the charter.

According to the plaintiff, the alienation of the agricultural machinery was artificially divided into several smaller, related contracts specifically to conceal the fact that a purchase and sale agreement had been concluded for an amount exceeding the director’s authority as established by the charter.

The local commercial court dismissed the claim. The appellate commercial court, while amending the reasoning of the decision, proceeded on the basis that each disputed contract had an independent subject matter and a separate value that did not exceed the threshold set by the charter. Therefore, the approval of the general meeting of participants was deemed unnecessary.

COURT’S ASSESSMENT

The Commercial Cassation Court of the Supreme Court observed that, according to part 4 of Article 44 of the Law of Ukraine "On Limited and Additional Liability Companies," if a company could have completed one significant transaction instead of several, then each of those transactions is considered significant.

The Supreme Court stressed that part 4 of Article 44 of the Law does not specify any criteria or conditions under which each of several transactions is considered significant in such a scenario. Consequently, in each specific case, the court must conduct a comprehensive analysis and ascertain the circumstances surrounding the conclusion of these transactions. This collective assessment will determine the possibility or impossibility of executing one significant transaction instead of several transactions that, by formal criteria, are not significant.

The court noted that when examining whether the parties could have concluded one significant transaction instead of several contracts, the court cannot limit itself solely to a formal assessment of their price. It is necessary, among other things, to consider the intervals between the conclusion of such contracts, the identity of their subjects, the true purpose and economic feasibility of concluding multiple contracts, as well as other circumstances presented by the plaintiff that demonstrate the company could have entered into one significant transaction instead of several.

The Commercial Cassation Court of the Supreme Court drew attention to the fact that the appellate court, without proper legal assessment, failed to examine the plaintiff’s arguments. These arguments stated that the contracts were concluded between the same parties within a short period, concerned similar property, were of the same type, had identical content and form, and that the buyer had previously agreed to purchase all the property via a single resolution of the general meeting. Furthermore, the arguments that the signatories were simultaneously founders and officials of both legal entities were not evaluated.

According to the Supreme Court, the appellate court did not clarify whether the parties could have concluded one significant transaction instead of several contracts that were not significant by formal criteria, which would also allow each of these transactions to be considered significant. In these circumstances, the appellate court’s conclusions—that there were no grounds to consider the disputed contracts as having exceeded the authorised person’s powers, and thus no grounds for applying Article 241 of the Civil Code of Ukraine—were premature.

The Commercial Cassation Court of the Supreme Court specifically emphasised that it is the court’s duty to adhere to the requirements of comprehensiveness, completeness, and objectivity in clarifying the circumstances of the case and evaluating the evidence. The decision must be based on fully and comprehensively clarified circumstances, with an assessment of all arguments presented by the parties.

As a result of considering the cassation appeal, the Commercial Cassation Court of the Supreme Court partially upheld it, cancelled the decision of the appellate commercial court, and remitted the case for a new hearing by the appellate court.

Further details and the text of the decision of the Commercial Cassation Court of the Supreme Court dated 03.06.2026 in case No. 906/358/25 can be found at this link.

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