Dmitry Uryakin explained to Novy Prospect Baltiysky Zavod’s reluctance to make timely payments to counterparties

LLC Sanesta-Metal Pipe Company, one of the largest suppliers of industrial steel pipes in the North-West, has filed six lawsuits against JSC Baltiysky Zavod in the Commercial Court of St. Petersburg and Leningrad Region since the end of November 2023. The plaintiff’s claims in all cases are similar: the company is trying to recover from the shipyard through the court the payment for the products already delivered, as well as penalties for delayed payment stipulated in the contract. Some of the claims have already been decided in favour of Sanesta-Metal. Baltiysky Zavod’s lawyers did not object to the main debt during the consideration of the cases, mainly disputing the amount of the penalty. Judging by the judicial acts that have already appeared, the contracts between Baltiysky Zavod and Sanesta-Metall limit the maximum amount of penalty for breach of payment terms for goods to 5% of the unpaid amount, while it is charged at the rate of 0.05% daily.

“Most likely, the reason is a simple unwillingness to pay money for products here and now, as it is less profitable than to pay sometime later ‘in court’,” suggested Dmitry Uryakin, Senior Associate, Head of General Business practice at Maxima Legal. In his opinion, such amount and procedure of penalty accrual does not incentivise Baltiysky Zavod to pay for the goods as soon as possible.

Dmitry also drew the attention of the Novy Prospect to the fact that this is not a trend, but the realities of economic turnover. “Large players in the market are pushing through conditions favourable to themselves, limiting the size of their liability to the counterparty as much as possible. As a result, it becomes unprofitable for them to pay money promptly,” Maxima Legal’s expert emphasised.

To read the full article (in Russian) please visit Novy Prospect website >>>