Ilyashev & Partners Defends Former JSC Ukrzaliznytsia Employee in Supreme Court Property Damage Dispute

Ilyashev & Partners Law Firm successfully defended the interests of a former employee of JSC Ukrzaliznytsia (Ukrainian Railways) in the Supreme Court in a dispute initiated by the company seeking the recovery of more than UAH 7.5 million for alleged property damages.

The former head of the Kryvyi Rih Main Railway Station of the regional branch Prydniprovska Railway of JSC Ukrzaliznytsia was accused of undercharging fees for the transportation of empty wagons with removable roofs for one of the Ukrainian companies in 2016–2017. JSC Ukrzaliznytsia alleged that the station chief allowed the company to lose revenue due to violations of labor duties, which allegedly led to millions in losses. In 2021, the pre-trial investigation qualified his actions under Part 2 of Article 367 of the Criminal Code of Ukraine.

After the filing of a civil lawsuit within the criminal proceedings, the appellate court satisfied the claims of JSC Ukrzaliznytsia and ordered the former employee to compensate the specified amount. To protect his rights, the former employee sought legal advice from Ilyashev & Partners Law Firm.

To defend the client’s interests, Ilyashev & Partners’ dispute resolution team developed a new legal position and filed a cassation appeal with the Supreme Court.

Ilyashev & Partners’ team gathered evidence showing that the internal documents of JSC Ukrzaliznytsia contained inconsistencies regarding the classification of wagons with removable roofs, and that the employee’s requests for clarification submitted to the company’s management remained unanswered for nearly six months. Moreover, in a separate dispute between JSC Ukrzaliznytsia and the wagon owner, the court had already recovered the freight charges from the Ukrainian company in a significantly smaller amount than what the company sought to recover from the employee.

Ilyashev & Partners’ team proved in court that the limitation period for filing a claim for damages is determined by the Labour Code of Ukraine and begins from the moment the damages are actually established by inspection reports, and not from the initiation of criminal proceedings, as argued by JSC Ukrzaliznytsia.

The Supreme Court accepted the arguments presented by Ilyashev & Partners’ team, cancelled the Court of Appeal decision, and denied JSC Ukrzaliznytsia’s claim to recover property damages. The Supreme Court’s decision is final and not appealable.

The case was handled by Valeriia Gudiy, Partner at Ilyashev & Partners, Oleh Trokhymchuk, Counsel and Co-Head of Dispute Resolution Practice, and Oleksandr Kamsha, Head of Dnipro Office.