In a Settlement Agreement, Commercial Dispute Parties May Agree on a Debt Repayment Schedule Exceeding One Year – Supreme Court of Ukraine

Agreeing in a settlement agreement on phased repayment of the entire debt claimed by the plaintiff, including a de facto installment plan extending beyond one year, does not constitute a violation of Article 192 of the Commercial Procedure Code (CPC).

This conclusion was reached by the Joint Chamber of the Commercial Cassation Court of the Supreme Court in a ruling dated June 6, 2025, in case No. 917/141/24.

In this case, the plaintiff filed a claim to recover debt (3% annual interest and inflation losses) under a contribution agreement for the development of engineering, transport, and social infrastructure in a settlement.

The local commercial court upheld the claim.

Upon motions from both the plaintiff and the defendant, the appellate court approved a settlement agreement, which effectively provided for installment payments of the debt and court fees over a three-year schedule. The agreement stated that upon full performance of its terms, neither party could demand any further payments from the other. The appellate court also annulled the lower court's judgment and closed the proceedings.

The Supreme Court’s Joint Chamber considered the relationship between two legal mechanisms:

• installment (or deferral) of enforcement of a court decision (Article 331 CPC); and
• settlement agreement (Article 192 CPC), particularly regarding the possibility of establishing an obligation performance period exceeding the one-year limit set by Article 331(5) CPC.

Following the review of the cassation complaint, the Chamber concluded that:

• the Civil Procedure Code does not prohibit the inclusion of a payment schedule, even beyond one year, in a settlement agreement;
• such an agreement reflects the mutual will and compromise of the parties, based on their respective interests;
• equating a negotiated installment clause in a settlement agreement (Article 192 CPC) with a court-ordered deferral of judgment enforcement (Article 331 CPC) is incorrect.

As a result, the Supreme Court’s Joint Chamber departed from its earlier legal position in a ruling dated February 5, 2025, in case No. 917/1291/23, where it had stated that a settlement agreement providing for phased debt repayment could not substitute a court decision (ruling) on installment of enforcement.

The Chamber upheld the appellate court’s decision to approve the settlement agreement and close the proceedings.