1. **Subject matter of the dispute:** The prosecutor filed a lawsuit with the court seeking to invalidate a gas mask supply contract concluded as a result of a tender due to anti-competitive concerted practices by the participants, and to apply the consequences of invalidity of the transaction in the form of recovery of funds into the state revenue.<\/p>\n
2. **Court’s arguments:**
\n – The court of cassation instance was guided by the legal position established by the Joint Chamber of the Commercial Cassation Court in case No. 922\/3456\/23, which significantly changed the approach to the application of Part 3 of Article 228 of the Civil Code of Ukraine.
\n – The Supreme Court emphasized that Article 228 of the Civil Code of Ukraine, which provides for confiscatory sanctions, cannot be applied automatically solely due to the fact of a violation of the legislation on the protection of economic competition.
\n – The Court noted that anti-competitive behavior of tender participants does not always aim to cause harm to the interests of the state or society within the meaning of this provision.
\n – To apply such severe consequences, the prosecutor had to prove that the transaction is inherently unlawful and that the state suffered actual pecuniary damage or received low-quality goods as a result of its conclusion.
\n – Since the prosecutor did not prove the intent of the parties to violate public order and did not substantiate that the contract was unprofitable for the state, there are no grounds for declaring it invalid under Article 228 of the Civil Code of Ukraine.
\n – The Court also rejected the prosecutor’s motion to transfer the case to the Grand Chamber, as it saw no grounds for departing from the position set forth by the Joint Chamber in the aforementioned case.<\/p>\n
3. **Court’s decision:** The Supreme Court set aside the decisions of the lower courts in the part regarding the invalidation of the contract and adopted a new decision to dismiss the claim in this part, while closing the cassation proceedings in the remaining part due to the lack of an appeal.<\/p>\n
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\nIn this decision, the Supreme Court applied the legal position set forth by the Joint Chamber of the Commercial Cassation Court in case No. 922\/3456\/23, which effectively clarified and limited the practice of applying Part 3 of Article 228 of the Civil Code of Ukraine, departing from previous approaches that allowed for the automatic invalidation of contracts due to violations of competition law.<\/p>\n