Lviv Officially Terminates Contract with Polish Contractor for Waste Processing Plant Construction

On Monday, April 6, 2026, the Lviv City Council, referencing the municipal enterprise 'Zelenе Misto', made a significant announcement regarding the termination of its contract with the Polish contractor Control Process S.A. This decision comes as a result of the contractor's persistent failure to meet its obligations in the construction of the waste processing plant.

According to the announcement, the contractor is required to vacate the construction site within seven days, where the waste processing plant is to be built. Any further disputes between the parties will be resolved through arbitration at the International Commercial Arbitration Court of the Ukrainian Chamber of Commerce and Industry.

The decision to terminate the contract was prompted by numerous violations on the part of the contractor, which 'Zelenе Misto' had repeatedly brought to the attention of Control Process S.A. over the past year. However, despite these numerous appeals, the contractor failed to rectify the identified deficiencies and did not fulfill its obligations appropriately.

Following the termination of the contract, 'Zelenе Misto' plans to conduct an assessment of the work completed, as well as the damages incurred. Additionally, the enterprise intends to prepare an open tender to attract a new contractor who will be able to continue the implementation of the waste processing plant project.

'Zelenе Misto' emphasized that they are acting strictly within the terms of the contract and Ukrainian legislation. Meanwhile, representatives of the enterprise noted that the contractor is attempting to justify its actions by referring to the so-called 'FIDIC arbitration decision.' However, 'Zelenе Misto' asserts that there is no such concept as 'FIDIC arbitration.' FIDIC is a set of international rules for construction contracts, not a court or arbitration body.

According to information provided, the contract stipulates a different mechanism for dispute resolution—a commission that is supposed to assist the parties in quickly resolving conflicts before resorting to arbitration. However, in this case, such a commission was effectively not established. Instead, the individual who was supposed to be an independent member of the commission acted as a private expert, hired and paid by the contractor, which contradicts the principle of impartiality.

This individual did not sign a tripartite agreement with the client, as required by legislation, and worked based on a separate contract with the contractor. Therefore, the documents referenced by the contractor are not decisions from the commission provided for in the contract and lack the necessary legal force. In this regard, the city plans to challenge these documents in international arbitration.

It is important to note that Lviv's decision to terminate the contract with the Polish contractor regarding the construction of the waste processing plant is prompted by systemic violations on the part of the contractor. This decision aims to ensure the further development of the project and the fulfillment of obligations to the community.

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