An agricultural receipt is not part of a supply contract.

An agricultural receipt and a supply contract are two separate legal instruments by their legal nature, each establishing certain rights and obligations. An agricultural receipt is executed independently of the supply contract.

Performance of an agricultural receipt must not depend on the fact of challenging or invalidating the provisions of the underlying contract.

Amendments to the supply contract do not affect the legal validity of the agricultural receipt or the debtor's obligations to fulfill its terms unless changes are made to the agricultural receipt itself.

The structure of the unconditional monetary obligation of the debtor [formula in the FAR – ed.] does not affect the legal validity of the agricultural receipt or the debtor’s obligation to perform it.

A debtor’s failure to fulfill a monetary obligation under a FAR is sufficient grounds for opening bankruptcy proceedings based on a creditor's application.

The burden of proving the origin of agricultural products extends to the third-party buyer who acquired them from the debtor.

“...in a dispute between the creditor and a third party to whom the debtor transferred property that is collateral under an agricultural receipt before fulfilling its obligations, the burden of proving the origin of the transferred agricultural products lies with the debtor under the agricultural receipt and the third party, who is also a debtor in these legal relations.”

The application of “draconian” (ed.) sanctions under an agricultural receipt may be limited by the court.

The creditor filed a claim to recover debt under a financial agricultural receipt. According to the FAR terms, the creditor demanded:
(1) the principal amount;
(2) penalty (double NBU discount rate);
(3) fine (30%);
(4) interest for the use of funds (36% per year);
(5) inflation losses.

Guided by the principles of “fairness, good faith, and reasonableness” (and not only “freedom of contract”), the court:

• fully satisfied claims (1) and (5), but
• significantly (by 90%) reduced the amount of claims (2), (3), and (4).

Agricultural Receipt ≠ Promissory Note

The legal nature of an agricultural receipt is not similar to promissory notes. Unlike an agricultural receipt, issuing a promissory note [always] terminates monetary obligations under the corresponding contract.

It is not mandatory to indicate contract details in an agricultural receipt

Although the agricultural receipts did not contain references to the underlying contractual obligation, the Supreme Court concluded that the law does not explicitly require this; therefore, it stated that:

• the absence of contract details in an agricultural receipt is not a ground for declaring it void;
• to acquire the status of a creditor under an agricultural receipt, what matters is proving the existence of contractual relations under which the receipt was issued—not the presence of contract details inside the receipt.

Bankruptcy: To classify claims under an agricultural receipt into the 4th priority, the creditor must waive collateral

The Supreme Court overturned lower court decisions on opening bankruptcy proceedings because:

• from the text of earlier decisions it was impossible to determine why the creditor’s claims were assigned to the 4th priority (“other unsecured claims”), since obligations under an agricultural receipt are secured by future crops, and the lower courts did not determine whether the creditor had submitted a statement waiving this collateral.

The absence of information about land title documents in the agricultural receipt was not grounds for cancelling its registration

The debtor attempted to terminate and cancel the entries in the Agricultural Receipts Register regarding two receipts, arguing that the documents titled “financial agricultural receipt” did not contain all mandatory elements required by Article 6 of the Law of Ukraine “On Agricultural Receipts,” particularly information about land title documents. The court rejected the claim because this information exists in the register itself, which is an integral part of the legal validity of the agricultural receipt as a legal act consisting of several legal facts.