Back to publication

Oksana Pavlukhina | comment for Advokatskaya Gazeta: The Supreme Court clarified the rules for writing off penalties accrued to the supplier but not paid by the customer

The Supreme Court pointed out that penalties arising in connection with non-performance or improper performance of obligations under the state contract are subject to write-off, regardless of the time of their occurrence.

Oksana Pavlukhina, Head of Antitrust Practice Group at ART DE LEX, believes that the Supreme Court has clarified the procedure for applying Para. 42.1 Art. 112 of the Contract System Act and Government Decree No. 783, which establish the rules for writing off forfeit (fine, penalty) accrued by a state or municipal customer under state (municipal) contracts.

The expert noted that in this case the lower courts did not agree on which factor affects the possibility to apply special grounds to write off forfeit (fine, penalty) - either the contract-set due date or the due date of the obligation in full. "The Supreme Court confirmed that the decision to write off the accrued and unpaid forfeit (fine, penalty) is based on the supplier’s  (contractor’s, operator’s) full performance of obligations under the contract in the years established by law (in this case - in 2020), confirmed by the act of acceptance or other document,’ she stressed.

Read more here:

Head of Antitrust Practice Group