25.07.2025
Key developments in case No. 920/19/24, closely watched by Ukraine’s entire energy community, were discussed at a closed working meeting on the Energy Club platform on July 24. The goal was to assess new risks and opportunities and to jointly find the best ways to protect the industry’s interests.
The discussion involved 26 participants, including representatives of the club’s member companies, traders, and electricity suppliers, as well as People’s Deputies of Ukraine, Ludmila Buimister and Victoria Hryb—the latter being the Head of the Subcommittee on Energy Security of the Verkhovna Rada Committee on Energy, Housing and Utilities Services.
The Grand Chamber of the Supreme Court has postponed the hearing to review its position on limiting the price change per unit of goods in procurement contracts to no more than 10% until September 17, 2025.
Maksym Nemchynov, the meeting’s moderator and Vice President of the Energy Club, emphasized that this position effectively negates market relations in the electricity market. He noted that the final consumer price for electricity includes the costs of transmission and distribution, tariffs for which are set by the national regulator (NEURC) and can be changed several times a year by more than 10%.
The decision to limit price changes to 10% has allowed law enforcement agencies to open proceedings against traders and electricity suppliers under these contracts. The primary task for market participants is to develop a strategy in response to the postponement of the Grand Chamber of the Supreme Court’s decision on the 10% limit until it reviews case No. 920/19/24.
Unfortunately, there are already cases in Ukraine where individuals have been notified of suspicion of committing criminal offenses under Part 4 of Article 101 of the Criminal Code of Ukraine, which carries a penalty of 5-8 years in prison.
Meeting participants—traders and electricity suppliers—noted that the Supreme Court’s postponement was due to the significant media and public attention on the situation and the demands to heed the energy community’s view that the 10% “ceiling” is incorrect. The Supreme Court of Ukraine based its stance on the explanatory note to the Law of Ukraine No. 114-IX “On Amendments to the Law of Ukraine ‘On Public Procurement’…”, in which it interpreted the 10% rule and linked it to countering dumping.
However, all participants understand that the legislation already has a provision regulating price dumping, specifically the mechanism for an abnormally low price in a participant’s tender offer. The evolution of legislative changes shows a clear position from both People’s Deputies and the Ministry of Economy in each subsequent version of the Law “On Public Procurement”: the 10% limit applies to each individual supplementary agreement. Each new version expanded this rule, clarifying that the terms for drafting contracts are clear and understandable for the energy market.
Rising energy prices are the basis for concluding supplementary agreements. Businesses have taken on a shared responsibility with the state. Every market participant understands that NEURC’s position on price caps is decisive, and each price cap leads to a price increase that cannot be predicted. Business risks must at least be outlined. But what should be done if the state makes decisions that lead to market price increases?
Provisions included in the draft Law No. 13392/1 on local content in public procurement, as well as in the new draft Law No. 11520 “On Public Procurement,” contain a consensus position that the 10% limit applies not to the entire contract, but to each separate supplementary agreement, with a total limit of 50% introduced for the entire contract.
If one looks for new opportunities in this problem, the postponement of the case by the Grand Chamber of the Supreme Court until September likely occurred to give energy market participants a chance to gain the support of People’s Deputies in conveying to the Court what the original intent behind the 10% figure was.
Under the Association Agreement with the European Union, Ukraine has committed to gradually adapting its public procurement legislation to EU standards. The Annex to the Agreement lists the Directives that must be implemented, including the Directive on public procurement, which should be a compelling argument for the Grand Chamber of the Supreme Court.
As noted by the People’s Deputies, the process of agreeing on changes to the Law “On Public Procurement” with the European Commission is underway. The Commission acknowledges that exchange-traded commodities, whose markets are regulated by the Laws “On the Electricity Market” and “On the Natural Gas Market,” should not fall under the restrictions of the Law “On Public Procurement.” The draft law to amend the “On Public Procurement” law is on the Verkhovna Rada’s priority agenda. An appeal from the Verkhovna Rada Committee on Energy to the Supreme Court is questionable, as it cannot influence or pressure the judiciary. However, another path is possible: providing the Supreme Court with clarifications on the provisions of the laws.
Thus, the use of clarifications from the Ministry of Economy has become a trap for traders and energy suppliers, making their continued operation impossible. For law enforcement, it has “untied their hands”: one criminal case triggers a chain reaction of others, demonstrating the efficiency of law enforcement while complicating life for electricity suppliers. The problem is urgent and requires the quickest possible resolution, as it does not align with the state’s goals or the realities of wartime.
Options were proposed to establish a presumption of legality for energy suppliers’ use of clarifications from the authorized body on public procurement—the Ministry of Economy—and to nullify the liability of energy suppliers for using these clarifications.
Following this and future discussions, the meeting participants proposed that the Energy Club appeal to the Verkhovna Rada Committee on Energy and Utilities and the Committee on Economic Policy, as well as to the European Commission, to assist in rectifying the situation that has already occurred and may yet occur—namely, people receiving court sentences. A joint meeting of the Verkhovna Rada Committees is also planned, with invitations extended to representatives from the Ministry of Economy and the Energy Club, to develop the best options for protecting the interests of the energy industry.
