LEGRANT succeeded in defending in court a 50 percent reduction in penalties for its ClientMay 25, 2021 · News
The client of Legrant, a port operator, who found itself in an unfavorable financial situation associated with a number of circumstances beyond its control, incl. pandemic COVID-19, failed to timely fulfill its obligations under one of the contracts to a permanent counterparty. As a result, the Client's counterparty counted penalties under the contract and applied to the court for recovery.
Legrant’s lawyers prepared defense position and substantiated the existence of grounds that gives opportunity to decrease penalties. During the consideration of the case, court took into account the arguments of lawyers and reduced the amount of the penalty by 50%. One of the key arguments was that the counterparty did not have any losses caused by late payment for services under the contract.
It is important for businesses that find themselves in a similar situation to understand that late compliance is not always the basis for excessive penalties.
It is also important to remember that reducing the amount of the penalty can be a good mechanism for a bona fide counterparty who finds himself in a similar situation to protect his interests in the presence of a reasonable position.