Ukrainian Defense Ministry wins $18M arbitration case against US ammunition supplier in Switzerland

A Swiss arbitration tribunal has ruled in favor of Ukraine's Ministry of Defense, ordering an American supplier to return over $18 million to the state budget for breach of contract, the Ministry of Justice of Ukraine reports.

The dispute centered on a contract signed at the beginning of Russia's full-scale invasion, under which the US company committed to deliver a shipment of artillery ammunition within a short timeframe. Ukraine made a 100% advance payment, but the supplier delivered only one-third of the ordered ammunition with significant delays.

The 17 December 2025 ruling by the Swiss Arbitration Centre tribunal upheld all of Ukraine's claims in full. According to the Ministry of Justice, the tribunal recognized the defendant's violation of contractual obligations and ordered the recovery of funds paid for undelivered ammunition plus penalties.

The American company insisted it had fulfilled the contract properly. The supplier claimed the contract had been amended and that Ukraine's Ministry of Defense had allegedly agreed to cover additional costs for sourcing and purchasing ammunition—costs that arose from the company's own negligence and bad faith performance, according to the Ukrainian side.

"The defendant made repeated attempts to accuse the Ministry of Defense of allegedly bad faith procedural conduct and concealment of evidence," the Ministry of Justice stated.

However, the tribunal sided with Ukrainian arguments. "The tribunal confirmed that no amendments were made to the contract, the defendant company did not fulfill the contract properly, and the claims for recovery of paid amounts for undelivered ammunition and accrual of penalties were recognized as justified," according to the announcement. The defendant's objections, arguments, and unfounded accusations of bad faith against the Ministry of Defense were rejected.

Legal representation for Ukraine's Ministry of Defense was provided by the Ministry of Justice of Ukraine. The international law firm Staiger Attorneys at Law Ltd. provided consultations on Swiss law.

The Ministry of Justice expressed gratitude to the Ministry of Defense and the Main Directorate of Military Justice for assistance in gathering evidence, as well as to current and former employees of the Ministry of Defense and the Main Directorate of Military Cooperation of the General Staff who provided oral and written testimony "which were important for the tribunal's assessment of the circumstances of the case."