ATTEMPT NO. 2: THE GRAND CHAMBER OF THE SUPREME COURT HAS REVISITED THE 10% LIMIT IN PUBLIC PROCUREMENT.

On November 21, 2025, the Grand Chamber of the Supreme Court (hereinafter referred to as the "Grand Chamber") issued a ruling in case No. 920/19/24.

This decision was a response to an attempt by the Commercial Cassation Court to revise a previous legal conclusion of the Grand Chamber regarding the application of Clause 2, Part 5, Article 41 of the Law of Ukraine "On Public Procurement," which stipulates that the unit price of goods may not, under any circumstances, be increased by more than 10% of the price determined by the parties in the contract following the procurement procedure, regardless of the number of price changes or the duration of the contract.

In this overview, we break down the Court's findings and what they mean for energy suppliers moving forward.

It is worth noting that when referring this case to the Grand Chamber, the panel of judges of the Commercial Cassation Court stated that "given the lack of stability in the goods market (specifically electricity), it believes it is necessary to depart (by way of clarification) from this conclusion of the Grand Chamber of the Supreme Court, noting that in the event of market price fluctuations, the unit price may be increased in proportion to such fluctuations, with the 10% limit calculated based on the price established by the contract or the most recent supplementary agreement increasing the price. In this scenario, the total contract price should remain unchanged."

However, the Grand Chamber refused to depart from its previous position, upholding the decisions of the lower courts.

KEY FINDINGS OF THE RULING DATED NOVEMBER 21, 2025

Following its review of the case, the Grand Chamber formulated three fundamental conclusions that are binding on the entire judicial system:

- The 10% limit is cumulative and final. Contractual amendments increasing the unit price of goods by more than 10% of the price determined at the tender stage are prohibited. This restriction applies regardless of the number of supplementary agreements or the timing of their execution.

- Law No. 1530-IX did not change this approach. The amendments to the Law, which allowed for a 90-day period to be calculated from the date of the last price change, relate exclusively to the timing (frequency) of amendments. They in no way abolish the prohibition against exceeding the overall 10% threshold.

- The exception for energy resources applies only to the frequency of changes, not the percentage limit. The final sentence of Clause 2, Part 5, Article 41 of Law No. 922-VIII regarding gasoline, gas, and electricity simply means that parties are not required to wait 90 days for the next change. However, the 10% limit based on the initial price remains unchanged for these categories of goods as well.

Thus, as in its previous decision, the Court employed a teleological interpretation, aiming to combat "price dumping." In doing so, the Grand Chamber once again overlooked the fact that the electricity market is inherently highly volatile. The Court's conclusion that a supplier must prove the unpredictability of price fluctuations places an excessive burden on them, as prices on the "day-ahead" market can fluctuate by tens of percentage points within a single week, making forecasting and incorporating such fluctuations into a price meaningless, and rendering any long-term contract potentially loss-making.

Furthermore, in this decision, the Court finally nullified the significance of letters from the Ministry of Economy, which for years had permitted "cascading" price recalculations. The Grand Chamber's position is unequivocal: ministerial clarifications are not regulatory acts and cannot contradict the conclusions of the Supreme Court.

While it is difficult to disagree with this conclusion, the Supreme Court's ruling in this specific case conflicts with the fundamental principle of legitimate expectations, and here is why.

QUALITY OF LAW AND LEGITIMATE EXPECTATIONS OF MARKET PARTICIPANTS

Although the Grand Chamber formulated clear and categorical conclusions regarding the application of the 10% limit, the decision of November 21, 2025, leaves open a question of fundamental importance for all electricity market participants: can a court hold businesses liable for actions that, at the time they were taken, were based on legitimate expectations fostered by the state itself?

Requirements for the quality of law in light of ECHR practice

In its established case law, the European Court of Human Rights has repeatedly emphasized that a law must meet the criterion of "quality"—that is, it must be accessible to interested parties and clear and predictable in its application. This is not merely a theoretical requirement; it is a guarantee that an individual can foresee the legal consequences of their actions and plan their activities accordingly.

In the landmark case of *Shchokin v. Ukraine* (judgment of October 14, 2010), the ECHR stated that the lack of necessary clarity and precision in national legislation violates the "quality of law" requirement. The Court formulated a fundamentally important approach: where national legislation allows for ambiguous or multiple interpretations of the rights and obligations of individuals, national authorities are obliged to apply the approach most favorable to those individuals..

The Grand Chamber of the Supreme Court implemented this approach in national judicial practice back in 2018-2019 (ruling of 06.11.2018 in case No. 812/292/18, ruling of 03.07.2019 in case No. 911/1521/18), acknowledging that if the state is unable to ensure the issuance of clear rules, it must bear the consequences of its own miscalculations.

Objective ambiguity of the 10% limit provision

Applying these criteria to the situation regarding Clause 2, Part 5, Article 41 of the Law "On Public Procurement," it is impossible not to notice the obvious: this provision did not meet the "quality of law" standard.

The very fact that there were contradictory Supreme Court decisions and the need to refer the case to the Grand Chamber of the Supreme Court is irrefutable proof that the provision allowed for multiple interpretations. The Administrative Cassation Court of the Supreme Court (ruling of 05.04.2023 in case No. 420/17618/21) effectively concluded that an unlimited number of energy price changes was possible, provided the 10% limit was observed per instance. Other courts reached opposite conclusions.

The role of official clarifications in shaping legitimate expectations

The issue of official clarifications from the Ministry of Economy, which for years permitted "cascading" price adjustments—meaning the application of the 10% limit not to the initial contract price, but to the price established by the most recent supplementary agreement—deserves special attention.

In its ruling of 21.11.2025, the Grand Chamber of the Supreme Court clearly stated that ministry clarifications are not regulatory acts and cannot contradict Supreme Court findings. From a formal legal perspective, this conclusion is entirely correct; indeed, an administrative body cannot use its letters to create legal norms or alter the interpretation of the law established by the highest judicial authority.

However, this formally correct statement conflicts with another equally important principle: the principle of protecting legitimate expectations.

In practice, this looks like this: an electricity supplier, operating under conditions of legal uncertainty (contradictory judicial practice), turns to the relevant ministry for clarification. The ministry, as the central executive body in the respective field, provides an official response explaining the mechanism for applying the provision. The supplier, relying on this state position, structures its operations accordingly. Consumers—local government bodies and municipal enterprises—also follow these clarifications when concluding and executing contracts.

And then, years later, the court declares: "These clarifications have no legal force. You should have known the correct interpretation of the law, despite the fact that the state itself, in the person of the ministry, told you otherwise."

Such a position directly contradicts ECHR practice regarding the protection of legitimate expectations. In the case of "Stretch v. the United Kingdom" (application No. 44277/98), the ECHR emphasized that public authorities should not be able to benefit from their own unlawful actions or inconsistent behavior. If an authority creates certain expectations in private individuals through its official acts (even if they are not formally regulatory), and those individuals act in good faith by relying on the state's position, the negative consequences of the state's inconsistency cannot be borne solely by those individuals.

In the case of "Rysovskyy v. Ukraine" (application No. 29979/04), the ECHR formulated the principle of "good governance," according to which state bodies must act consistently, and if they do not implement or follow their own procedures, they should not be able to benefit from their own unlawful actions.

Balance of interests and fairness

Returning to the decision of 21.11.2025, it can be stated that the Grand Chamber of the Supreme Court was technically correct in pointing out that ministry letters are not a source of law. But this statement, detached from the context of legitimate expectations and the principle of good governance, creates a situation of legal injustice.

Suppliers who acted in good faith by relying on the official position of the state, as expressed by the relevant ministry during a period of objective legal uncertainty (contradictory Supreme Court decisions), have found themselves in a situation where their contracts are declared invalid and the funds paid must be returned. Yet, they did not act against the law (as the law was ambiguous), but rather against a later interpretation of the law that emerged only after these contracts were concluded.

If we apply the principle set forth by the Supreme Court in case No. 911/1521/18, according to which "if the state is unable to ensure the issuance of clear rules, it must bear the consequences of its own miscalculations," it becomes clear that the burden of legal uncertainty, contradictory state clarifications, and the lack of clear judicial practice cannot be placed solely on businesses.

Electricity suppliers are not lawmakers. They could not have resolved the legal uncertainty created by imperfect legislation and contradictory official clarifications. They acted in good faith, attempting to comply with the requirements of the law as understood through the official position of the state and existing judicial practice.

POSITIVE ASPECT OF THE RULING: CONFIRMING THE PRIORITY OF THE SPECIAL RULES

One of the biggest challenges market participants have faced between 2023 and 2026 is the question of whether the Special Rules granted suppliers and their counterparties the right to deviate from the strict 10% limit established (taking into account the Grand Chamber of the Supreme Court's ruling) by Clause 2, Part 5, Article 41 of the Law on Public Procurement.

Currently, prosecutors are citing case law that does not permit this.

For instance, in its ruling of February 6, 2025, in case No. 916/747/24, the Supreme Court stated that:Cabinet of Ministers of Ukraine Resolution No. 1178 of October 12, 2022, does not amend the Law of Ukraine on Public Procurement; it merely establishes specific procedures for public procurement during martial law (Supreme Court rulings of June 18, 2024, in case No. 922/2595/23, and October 1, 2024, in case No. 918/779/23).

In its ruling of August 28, 2024, in case No. 918/694/23, the Supreme Court indicated that Cabinet of Ministers of Ukraine Resolution No. 1178 of October 12, 2022, details the circumstances under which parties may change the contract price pursuant to Clause 2, Part 5, Article 41 of the Law of Ukraine on Public Procurement, and does not establish a different algorithm for calculating the percentage-based pricing ratio provided for by that provision. (paras. 60, 61).

Clearly, it is impossible to agree with this conclusion because, firstly, the legislature itself authorized the Government (Clause 3-7, Section X, Final and Transitional Provisions of the Law of Ukraine on Public Procurement) to establish special—i.e., different—rules for the period of martial law, and secondly, this Supreme Court conclusion fails to take into account the provisions of Clause 17 of the Special Rules.

Indeed, in accordance with Clause 17 of the Special Rules, a procurement contract resulting from a procurement procedure conducted under Clauses 10 and 13 of these Special Rules is concluded in accordance with the Civil and Commercial Codes of Ukraine, taking into account the provisions of Article 41 of the Law—excluding Parts 2 through 5 and 7 through 9 of Article 41 of the Law—and these Special Rules.

Thus, Clause 17 of the Special Rules clearly and unambiguously determined that the provisions of Part 5 of the Law of Ukraine on Public Procurement (which provides for the 10% limit) do not apply during martial law.

However, for unknown reasons, courts are ignoring this mandatory provision of the Special Rules and, by applying flawed Supreme Court precedent, continue to grant prosecutors' claims to invalidate supplementary agreements, even if they were concluded while the Special Rules were in effect.  

A positive conclusion in case No. 920/19/24

In its ruling of November 21, 2025, the Grand Chamber of the Supreme Court provided important clarification on this issue. Analyzing the evolution of the legislative framework, the Court noted in paragraphs 156-157 of the ruling:

It is worth emphasizing that, when examining the legislative evolution of Clause 2, Part 5, Article 41 of Law No. 922-VIII, the Grand Chamber of the Supreme Court draws attention to the normative codification of such a possibility in Cabinet of Ministers Resolution No. 1178, specifically in Subclause 2 of Clause 19 (as amended by Cabinet of Ministers Resolution No. 1067), which, among other things, determines that the restriction on increasing the unit price by no more than 10% applies to each individual instance of a unit price increase (without limiting the number of changes), and the adjusted unit price must not exceed 50% of the unit price provided for in the initial procurement contract.

The Court further continued:

"In other words, the provisions of Cabinet of Ministers Resolution No. 1178 (as amended by Cabinet of Ministers Resolution No. 1067 of September 1, 2025), unlike the norms of Clause 2, Part 5, Article 41 of Law No. 922-VIII, clearly define both the possibility of applying the 10% limit to each individual increase (without limiting the number of changes), rather than to all changes in aggregate, and a maximum threshold of 50% by which the unit price stipulated in the initial procurement contract may be changed, which once again further confirms that the provisions of Part 5, Article 41 of Law No. 922-VIII do not provide for the possibility of increasing the unit price by 10% each time the procurement contract is amended.

What does this mean in practice?

This conclusion by the Grand Chamber of the Supreme Court is of fundamental importance, as it acknowledges that the regulatory regime for price changes during martial law is determined specifically by the Special Provisions.

This is important for several reasons:

First,it confirms that special regulations (the Special Provisions) apply during martial law, rather than the general rule of Article 41 of the Law in its "pure" form. Although the Court insists that the 10% limit is cumulative and final, it acknowledges that the specific rules for its application (the possibility of "cascading," a maximum threshold of 50%, etc.) are determined by the Special Provisions.

Second,it creates greater predictability for market participants. Suppliers can now clearly understand that if their supplementary agreement was concluded, for example, in the first half of 2023, when a version of the Special Provisions without clear percentage limits (only a proportionality requirement) was in effect, then that specific version should be applied by the courts when assessing the legality of the agreement, rather than later versions with stricter requirements.

Third,this conclusion makes it impossible to apply the legal findings set out by the Supreme Court in cases No. 916/747/24, 922/2595/23, and 918/779/23, 918/694/23.

CONCLUSION

The decision of the Grand Chamber of the Supreme Court dated November 21, 2025, in case No. 920/19/24, was another attempt to finally resolve the issue of applying the 10% price change limit in public procurement contracts. The Court reaffirmed its previous position that this limit is cumulative and final, and applies to the initial contract price, regardless of the number of supplementary agreements. The Court also clearly stated that the 2024 legislative changes (Law No. 1530-IX) concerned only the timing (frequency) of amendments, but did not abolish the general 10% limit.

However, this decision, despite its legality from the perspective of formal legal application, raises serious questions regarding fairness and the balance of interests.

The electricity market during wartime is extremely volatile. Price fluctuations of 20-50% over a few months are not an exception, but an objective reality. The Court's conclusion that a supplier must prove the unpredictability of such fluctuations seems like an excessive burden in a situation where prices on the day-ahead market (DAM) change by tens of percent every week. This makes any long-term price planning meaningless, and long-term fixed-price contracts potentially unprofitable for suppliers.

The most problematic aspect of the decision is the disregard for the principle of protecting legitimate expectations.

Suppliers, acting in good faith and relying on the official position of the state, entered into supplementary agreements to adapt to market realities. Now that the Grand Chamber of the Supreme Court declares that "ministry letters are not regulatory acts," these suppliers find themselves in a situation where their contracts are being declared invalid.

Formally, the Court is right—ministry letters are indeed not a source of law. But this assertion ignores the principle set out both in the practice of the ECHR (Rysovskyy v. Ukraine, Stretch v. the United Kingdom) and in the practice of the Supreme Court of Ukraine itself: if the state creates legal uncertainty, it is the state, not the business, that should bear the burden of that uncertainty.

At the same time, the decision contains a positive point. The Grand Chamber of the Supreme Court confirmed that during martial law, the Special Provisions apply to contracts, rather than the general rule of Article 41 of the Law in isolation from subordinate regulations. This means that for contracts concluded in different periods between 2022 and 2026, different versions of the Special Provisions with different requirements must be applied. This is an important step toward predictability in judicial practice and adherence to the principle of the temporal application of the law.

However, the overall picture remains alarming. Hundreds of electricity suppliers across Ukraine are currently facing mass lawsuits from the prosecutor's office to declare supplementary agreements invalid and recover millions of hryvnias. Most of these suppliers acted in good faith, trying to ensure uninterrupted energy supply during the war and guided by official clarifications from state authorities. Declaring their contracts invalid creates not only financial risks for businesses but also a threat to the stability of energy supply at the municipal level.

The electricity market during wartime requires flexibility, predictability, and a reasonable balance of interests, not rigid formalism.

Unfortunately, it must be stated that until the legislature resolves these issues, suppliers will remain in a zone of legal uncertainty, where every supplementary agreement can become the subject of a legal dispute, and every fluctuation in market price can be a potential source of millions in losses.

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