26.05.2026
Oleksandr Kudym, Director of Euro Trade Energy LLC, became one of the initiators of the Energy Club professional discussion “Public Procurement of Electricity: Legal Certainty, Retrospective Risks, and Energy Security,” held in Kyiv on May 11.
During the forum, which brought together market participants, representatives of state authority, and lawyers, the community sought constructive answers to the question: is the state able to provide such rules in the field of public procurement of electricity under which businesses will not be punished retroactively for actions that complied with the then-current regulations, and the public sector will not be left without stable supply due to legal chaos.
Participating in two panel discussions, Oleksandr Kudym raised the issue of the retrospective application of new judicial practice approaches to electricity supply contracts, the problems of the “10% rule,” formula pricing, and systemic risks for the energy market and critical infrastructure.
The Director of Euro Trade Energy LLC emphasized that today the market faces not just legal uncertainty, but a crisis of trust in state institutional rules.
According to him, business is capable of working under conditions of war, market volatility, budget deficits, and regulatory risks. However, the greatest threat is posed by a situation where the actions of market participants, which at the moment of concluding contracts fully complied with legislation, official clarifications, and the practice of controlling bodies, begin to be evaluated as violations a few years later.
“When the rules under which business operated yesterday on the basis of the law, government resolutions, official clarifications, and established practice begin to be evaluated tomorrow as violations — this destroys trust in state institutional rules,” emphasized Oleksandr Kudym.
He recalled the situation of 2021, when the electricity market faced a sharp and unpredictable rise in prices. During that period, market participants acted in accordance with the then-current edition of the Law “On Public Procurement,” clarifications of the Ministry of Economy, and the practice of the State Audit Service, which provided for the possibility of multiple price adjustments within 10% for each individual increase — without increasing the total contract amount.
However, today this practice has begun to be evaluated through a completely different legal logic — as an absolute restriction of 10%.
According to Oleksandr Kudym, the retrospective re-evaluation of such contracts creates critical risks for the market, as suppliers increasingly avoid participating in public procurement or are forced to include an additional “risk premium” in the price.
A separate section of the speech was dedicated to the topic of formula pricing, which in recent months has also found itself at the center of judicial disputes.
The Director of Euro Trade Energy LLC emphasized that the formula with a fixed margin, provided for by the Peculiarities, is not a mechanism for bypassing legislation or a hidden price increase. On the contrary — it reflects the market nature of electricity as a highly volatile exchange-traded commodity.
The speaker noted that today, even to formula pricing, they are beginning to apply the logic of the “10% ceiling,” which indicates a deeper systemic conflict between the nature of the energy market and the current model of public procurement.
Oleksandr Kudym informed the attendees that based on the cases known to him alone, dozens of court cases regarding the formula are already being reviewed, and in individual instances, courts of first instance make decisions to apply the “10% barrier” even to the formula mechanism.
In this regard, he suggested more actively involving the Ministry of Economy in court processes as a third party, so that the ministry officially clarifies the legal nature of formula pricing and the difference between the formula and the price modification mechanism under Clause 2 of Part 5 of Article 41 of the Law.
He also drew attention to the problem of contradictory positions of state bodies, when the Antimonopoly Committee, the State Audit Service, and other institutions interpret the exact same norms of legislation differently.
During the forum, Oleksandr Kudym repeatedly emphasized that the problem has long gone beyond the limits of a purely legal discussion, as the mass prosecutorial challenging of supplementary agreements and formula pricing is gradually turning into a systemic risk factor for the entire energy market.
“When a supplier sees that any supplementary agreement concluded a few years ago in accordance with the then-understanding of the rules can today become the ground for a multi-million lawsuit or criminal proceedings, they make a very simple conclusion: it is better not to enter public procurement,” he noted.
According to the speaker, the consequence of this could be a reduction in competition, an increase in starting prices at tenders, an increase in the number of terminated contracts, and risks to the stable energy supply of hospitals, water utilities, district heating companies, and other critical objects.
Separately, Oleksandr Kudym drew attention to the practical aspects of market operation: the problem of imbalances, the complexity of short-term supply, the specifics of large consumers, and the need for professional management of electricity consumption forecasting.
At the same time, he outlined possible ways out of the situation. Among them are constitutional proceedings regarding the retrospective application of legal conclusions of the Grand Chamber of the Supreme Court, refinement of draft law No. 11520, the creation of a working group under the Cabinet of Ministers on formula pricing, as well as the consolidation of all market participants.
Oleksandr Kudym called on market participants to be active, unite, and join common initiatives, emphasizing that the problem already affects virtually every company in the market.
“In unity is our strength. In reality, today there are no longer any companies that have not received a lawsuit or criminal proceedings,” highlighted he.
The speech of Oleksandr Kudym became one of the most substantial within the Energy Club forum, as it raised not only individual aspects of judicial practice or public procurement, but a fundamental question of the predictability of state policy and the stability of rules for the energy business.
The discussion around the “10% rule,” formula pricing, and the retrospective review of contracts today already directly concerns not only suppliers or customers, but market competitiveness, investment trust, and the energy security of the state. That is why the market expects not spot solutions, but a systemic and professional settlement of the problem at the level of state policy, judicial practice, and legislation.
