Legal Alliance wins victory in dispute over advance payment for services

Legal Alliance successfully represented the client in the courts of three instances in a dispute over advance payment for services.

In early 2020, a client company ordered services from an agency to organize a conference in Cyprus. However, due to the COVID-19 pandemic, the conference never took place. The client requested a refund of the advance payment, but only received a partial refund.

When the case was considered by the Supreme Court, attorneys of Legal Alliance confirmed the success of the previous instances and proved that the agency has no legal grounds to retain client's funds.

The agency argued that the contract between the client and the agency had a number of flaws, which justified its refusal to refund the full amount. The agency also argued that there was no dispute in the case. Legal Alliance refuted these arguments and proved that the shortcomings of the contract did not affect the fact that the agency had not provided the services.

Legal Alliance also proved that the client had no way to predict the pandemic at the time the contract was signed and that the client would not have ordered the services if it had known about the pandemic.

To prove that the client would not have ordered the services if he had known about COVID-19, the simultaneous existence of several of the following criteria is required:

• the impossibility of predicting the beginning of a pandemic when concluding a contract;
• the existence of quarantine restrictions beyond the influence and will of the client;
• inability of the client to remove quarantine restrictions;
• execution of the contract under new circumstances is not economically beneficial for the client;
• the specified risk does not rest with the client according to the contract.

During the consideration of the case, the court examined:

• fixing the first disease of COVID-19;
• the date of determination of the name of the new disease by the World Health Organization;
• WHO recognition of COVID-19 as a pandemic;
• the period of introduction of quarantine restrictions on the territory of Ukraine and the Republic of Cyprus;
• information in the media about the spread of the disease.

Legal Alliance successfully navigated the challenges in this case and proved that the client could no longer be interested in holding the conference after the start of the pandemic. The court ruled in favor of the client.

Project team included partner Vitalii Savchuk and attorneys Yaroslav Fuiyaka and Roman Pechenyuk.