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How to prove debt without primary documents? Bargen customer case.

In November 2023, the Economic Court of the Zaporizhzhia region issued a decision to recognize the monetary claims of our client in the amount of more than 12 million hryvnias in the bankruptcy case of PJSC "Azovstal Metallurgical Combine".

Thus, between our client and the debtor for a long time there were contractual relations regarding the supply of various construction mixtures. Over a certain period, the debtor incurred a debt of over 12 million hryvnias.

The difficulty of proving this debt in court was that almost all the primary documents of our client under the contracts with the debtor were destroyed in as a result of one of the air raids on the client's office, which was located in occupied Mariupol. Yes, a small part of the goods and transport invoices that we have survived were able to present to the court, but neither contracts nor invoices were preserved.

First of all, representing the client, we appealed to the fact that the destruction of primary documentation regarding business transactions with the Debtor is as a result of force majeure circumstances - an enemy attack by the Russian Federation and military operations on the territory of Ukraine. The creditor should not be responsible for the occurrence of such circumstances and be deprived of the right to legal protection.

Referring to the position of the Supreme Court that "in case of defects in primary documents, the parties are not deprived of the opportunity to prove the supply of goods by others evidence that will convincingly testify to the actual circumstances of the delivery of the goods", we began to form evidence base, based on the fact of drawing up and registration by our client as a supplier of tax invoices for supplies, as well as the fact of formation by the debtor as a buyer of a tax credit.

The Grand Chamber of the Supreme Court formed the position that tax invoices obtained from the Unified register of tax invoices are the basis for charging amounts for the recipient of goods/services tax, related to the tax credit and confirming the fact of the actual implementation of transactions for the acquisition of goods and material values from for the purpose of their use in taxable transactions within the limits of the taxpayer's economic activity.

Therefore, we collected all the tax invoices for the supplies between the parties, as well as the tax declarations of the debtor for value added tax, which were requested from the tax authorities.

We analyzed the debtor's tax returns and compared them with tax invoices, providing the court with detailed written explanations for all deliveries.

The court evaluated all the evidence and explanations provided and concluded that they «in their interrelationship and comparison, they convincingly and reliably confirm the debtor's receipt of the entire volume of supply, which our creditor indicated, and the formation of debt in the amount declared before recognition."  Therefore, the court recognized the monetary claims of our client to the debtor in full.

As you can see, even in the absence of written evidence, including contracts, expense invoices, the creditor can prove the fact of deliveries and the amount of debt with other evidence, including tax invoices and income tax declarations.

Link to the court decision:


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