The parties to a contract concluded as a result of a public procurement may repeatedly change the price of goods in case of its increase on the market, but not by more than 10% of the price determined at the conclusion of the contract - SC Grand Chamber

During the term of the procurement agreement the parties may repeatedly increase the price of the goods under the conditions established by Article 652 of the Civil Code of Ukraine and paragraph 2, part 5, Article 41 of the Law of Ukraine "On Public Procurement", but the total increase of such price shall not exceed 10% of the price of the goods determined by the parties at the conclusion of the agreement on the basis of the results of the procurement procedure.

This is stated in the Resolution of the Grand Chamber of the Supreme Court.

In the circumstances of the case, the prosecutor filed a lawsuit against the energy supplier to invalidate additional agreements to the contract for the supply of electricity to the consumer, concluded as a result of a public tender on the website Prozorro, and to recover unjustly received funds.

The prosecutor noted that as a result of the conclusion of these additional agreements between April and October 2021, the real cost of 1 kWh of electricity increased by UAH 1.48 (i.e. 92%), and its volume decreased by 355,154.9531 kWh (i.e. 46.57%). This led to a complete leveling of the tender results.

The courts of first and appellate instances found that there were no grounds to believe that the additional agreements were concluded in violation of Article 41 of the Law of Ukraine "On Public Procurement" and dismissed the claims in their entirety.

Considering the case, the Grand Chamber of the Supreme Court noted that the systematic interpretation of the provisions of the Civil Code of Ukraine, the Commercial Code of Ukraine and the Law of Ukraine "On Public Procurement" makes it clear that the price of the goods is an essential term of the procurement contract. It is not allowed to change the price of goods in a purchase agreement after the seller has fulfilled its obligation to transfer such goods to the buyer's ownership.

An upward change in the price of goods prior to their transfer to the buyer's ownership under a purchase agreement is possible if the price of such goods increases on the market, if the parties to the contract have agreed on this condition. If the parties have not agreed on this condition, an increase in the price of the goods in case of an increase in the price of such goods on the market is possible only if it has resulted in a significant change of circumstances in accordance with Article 652 of the Civil Code of Ukraine, if they have changed to such an extent that the parties, if they had been able to foresee it, would not have concluded the contract or would have concluded it on different terms.

The SC Grand Chamber also noted that in any case, the price per unit of goods cannot be increased by more than 10% of the price of goods determined by the parties in the contract based on the results of the procurement procedure, regardless of the number and timing of price changes during the term of the contract. That is, during the term of the procurement agreement the parties may repeatedly increase the price of the goods under the conditions established by Article 652 of the Civil Code of Ukraine and paragraph 2, part 5, Article 41 of the Law of Ukraine "On Public Procurement", but the total increase of such price shall not exceed 10% of the price of the goods determined by the parties at the conclusion of the agreement on the basis of the results of the procurement procedure.

Otherwise, the purpose of the Law of Ukraine "On Public Procurement", which is to ensure efficient and transparent procurement, to create a competitive environment in the field of public procurement, to prevent corruption in this area and to develop fair competition, will not be achieved, since sellers can offer a lower price for goods during the procurement procedure and then, after the conclusion of the procurement contract, demand an increase in this price, motivated by fluctuations in the price of such goods on the market.

In this case, the parties signed 12 additional agreements, which resulted in a total increase in the price per unit of electricity of 92% of the initial price of the goods determined by the parties at the conclusion of the purchase agreement.

In view of the above conclusions, the Grand Chamber of the Supreme Court considers that additional agreements to the electricity supply agreement contradict the provisions of the Civil Code of Ukraine and the Law of Ukraine "On Public Procurement" and are therefore subject to invalidation.

In addition, since the said additional agreements are null and void and have no legal consequences, the legal relations between the plaintiff and the defendant regarding the price of the electricity supplied under the contract should have been regulated by Annex No. 1 "Contract Price", which was signed by the parties upon the conclusion of the said contract.

Thus, the cost of electricity supplied by the defendant amounts to UAH 1,121,772.32. However, the consumer paid UAH 1,595,530.62 for the specified amount of electricity consumed.

The funds in the amount of UAH 473,758.30 were received by the defendant without justification, the reasons for their acquisition have ceased to exist, and the defendant is obliged to return them to the consumer in accordance with Articles 216 and 1212 of the Civil Code of Ukraine.

The Resolution of the Grand Chamber of the Supreme Court of January 24, 2024 in case No. 922/2321/22 (proceedings No. 12-57гс23) - https://reyestr.court.gov.ua/Review/116670838.

This and other legal positions of the Supreme Court can be found in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.