If a court collects a debt under an obligation in a monetary equivalent in a foreign currency, the amount payable in hryvnia is determined at the official NBU rate on the day of execution of the court decision - SC GC

If the obligation specifies a monetary equivalent in a foreign currency, the amount payable in hryvnia is determined at the official exchange rate of the relevant currency on the date of payment, which, in the event of a dispute between the parties and its resolution by the court, is the date of execution of the court decision.

This conclusion was made by the Grand Chamber of the Supreme Court.

In the case under consideration, the plaintiff (the customer) and the defendant (the contractor) entered into an agreement on participation in the joint construction of a real estate object. The contractor drew up a receipt stating that he had received USD 65 thousand from the customer as full payment for the property.

Later, the parties entered into an agreement on termination of the said agreement, under which the contractor undertook to return to the customer the amount equivalent to USD 65 thousand received as payment for the real estate.

As the contractor failed to fulfil his obligation to return the funds, the customer filed a lawsuit to recover the debt in the amount equivalent to USD 65 thousand at the NBU exchange rate on the day the court made its decision on the merits of the dispute.

The courts of previous instances satisfied the claim and recovered the debt in the amount equivalent to USD 65 thousand at the NBU exchange rate on the day of execution of the decision.

The defendant in the cassation appeal, while not disputing the fact of his failure to fulfil the obligation, referred to the fact that the equivalent of USD 65 thousand in national currency should be calculated at the time of filing the claim, and not at the time of execution of the court decision.

The Grand Chamber of the Supreme Court noted that the parties did not specify the currency of payment in the agreement. At the same time, the absence of a reference to the payment currency in the agreement does not refute the public policy requirement that the hryvnia is the only means of payment in Ukraine, regardless of the currency of the obligation arising between resident individuals.

Pursuant to part 2 of Article 533 of the Civil Code of Ukraine, the amount to be paid in hryvnias is determined at the official exchange rate of the relevant currency on the day of payment, unless a different procedure for its determination is established by an agreement or a law or other regulatory act.

The parties did not agree on a special procedure for determining the amount to be paid in hryvnias in the agreement they entered into.

In this case, the dispute arose precisely because the defendant failed to voluntarily fulfil the contractual obligation. At the time of the court hearing, the defendant had not made a payment in accordance with the terms of the agreement.

Recovery of debt under the contract in a court decision confirms the existence of an outstanding obligation between the parties and the debtor's obligation to pay funds in favour of the creditor within the procedure for the enforcement of a court decision (enforcement proceedings).

Therefore, the Grand Chamber of the Supreme Court concluded that if the obligation specifies a monetary equivalent in a foreign currency, the amount payable in hryvnia is determined at the official exchange rate of the relevant currency on the date of payment, which, in the event of a dispute between the parties and its resolution by the court, is the date of execution of the court decision.

The recovery by the court of first instance from the contractor in favour of the plaintiff of the debt in the amount equivalent to USD 65 thousand at the NBU exchange rate on the day of execution of the judgment fully complies with the provisions of part 2 of Article 533 of the Civil Code of Ukraine.

At the same time, when a court collects a debt in the equivalent of a foreign currency at the NBU exchange rate on the day of execution of the judgment, the court decision shall specify only one amount of debt (in foreign currency), and the amount payable in hryvnias shall be determined by the public/private enforcement officer at the time the debtor makes the payment in the course of execution of the judgment.

Resolution of the Grand Chamber of the Supreme Court of 11 September 2024 in case No. 500/5194/16 (proceedings No. 14-81цс24) - https://reyestr.court.gov.ua/Review/122118320.

This and other legal opinions of the Supreme Court are available in the Database of Legal Positions of the Supreme Court - https://lpd.court.gov.ua.