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Ilyashev & Partners Defends Major Grain Elevator in a Dispute with Foreign Agricultural Trader and Ukrainian Exporter

News date: 4 April 2024

Ilyashev & Partners Law Firm successfully defended the interests of the elevator in a dispute against a foreign agricultural trader and a Ukrainian exporter on providing access to the product and reissuing the rights to it.

The elevator provides services for the storage and transshipment of grain cargoes, has a developed infrastructure and is a major transport hub in the south of Ukraine, located on the territory of the Kherson Sea Port.

In 2021, the elevator made an agreement with a Ukrainian exporter to provide storage services for about 2,000 tons of grain worth more than USD 2 mln. According to the contract, the elevator was responsible for the storage of goods in the grain warehouse, transshipment, finishing, preventive and sanitary measures, etc. Later, the exporter – the owner of the grain stored in the warehouse – sold it to a foreign agricultural trader.

The Ukrainian exporter undertook to deliver the goods to a foreign agricultural trader independently, but did not fulfill its obligations under the contract, as a result of which the foreign company filed a claim against the grain warehouse seeking an access to the grain for its shipment and issuance of the new set of warehouse documents in favor of the new owner. Dispute resolution was complicated by the illogical and inconsistent position of the Ukrainian exporter, who filed a counterclaim, but later withdrew it.

Ilyashev & Partners’ lawyers provided the court with the reasonable evidence to confirm the Ukrainian exporter’s failure to follow the contractual procedure for re-registration of the ownership right of the goods. Accordingly, the rights of the foreign company were violated not by the elevator, but by the seller of the goods, since the elevator cannot re-register the grain without the participation of its owner. In addition, the elevator did not receive payment for provided storage services, and according to the concluded contract it is impossible to re-register the ownership of the grain without full payment for the services.

As a result of the efforts and well-supported position of Ilyashev & Partners’ lawyers the court agreed that the elevator is not a responsible party to this case and in no way violated the rights and legitimate interests of the foreign company. Thus, the Odesa Region Commercial Court sided with the defendant – the elevator.

The project was handled by Sergey Nedelko, Attorney at Law, Counsel, Head of the Odesa Office of Ilyashev & Partners Law Firm, and Dmytro Hruba, Attorney at Law.