The Polish company Control Process wins against Lviv. A devastating verdict, the Ukrainian anti-corruption bureau supports Poles
Let's briefly recall what this is about. In 2021, the Polish company Control Process won the tender for the construction of a waste processing plant in Lviv. The city urgently needed the plant because it transported garbage to distant landfills and to this day it has to pay dearly for it. The local landfill overflowed and was scheduled to close in 2006.
Of the total cost of the plant of EUR 35 million, EUR 10 million was provided by the EBRD and an additional loan of EUR 14.5 million, so everything had to be done in accordance with the procedure of the European Development Bank. The city provided only EUR 10 million. The investor was the municipal company Zielone Miasto. The construction deadline was set for August 2023. Then the city extended it to August 2025, and even later to October 2025. And the plant is not operational yet.
It is already about 95% ready, as project director Krzysztof Chabier informs Business Insider. But the Poles were forced to stop the work, and the local government has not yet started its part (without which the investment cannot be completed). And the plant is not operational, although it was supposed to be operational almost three years ago. The cost has probably increased to EUR 55 million and the city must pay the difference after the latest judgments, and additionally pay a fine.
The interior of the plant
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Control Process
Lviv tried to force the Polish contractor to take actions that went beyond the contract, which was confirmed by the Poles winning the first arbitration proceedings, which found that Lviv was at fault. In December, we had another piece of the puzzle that crushed the city's argument.
The National Anticorruption Bureau of Ukraine has entered the game (NABU), recently famous for detecting scandals in Ukraine and destroying widespread corruption in this country. In the second half of 2025, NABU detected 367 new cases of corruption, issued suspicions against 103 people, and 70 were sentenced by the court. NABU's conclusions are definitely negative for Lviv, there were illegal actions, there are suspicions of crimes.
But more on that below, because there is completely new, fresh information that practically demolishes Lviv's activities. On February 10, another award was issued by the FIDIC (International Federation of Consulting Engineers) DAB (Dispute Resolution Board) arbitration court.
Nearly EUR 7 million fine for Lviv
So far, Lviv has referred to the decisions of one of the FIDIC (International Federation of Consulting Engineers) engineers. However, on February 10, the FIDIC arbitration court ruled that all key decisions of this engineer (Hidroterra) cooperating with the ordering party, i.e. the local government company LKP Zielone Miasto, made between May 1, 2025 and February 12, 2026 were immediately repealed. The court stated that they were of “character organized, systematic creation of a fictitious, virtual contract realitywhich has no support in the authentic provisions of the Contract or in the actual state of the Project,” the arbitration said.
These decisions resulted in the imposition of contractual penalties on the Polish company and led to the termination of the contract by the ordering party. The contract was to be taken over by a company chosen by the city, and the almost ready plant would be transferred to the city almost free of charge.
“The FIDIC DAB Arbitration Decision repeals them with immediate effect – they do not require separate withdrawal by the FIDIC Engineer or the Ordering Party,” Control Process informs the deputies of the Lviv City Council in an open letter.
The arbitration showed that LKP Zielone Miasto had not complied with the earlier decisions of the Dispute Settlement Board (DAB) of the International Federation of Consulting Engineers (FIDIC) of July 18, 2025. Arbitration ordered the immediate payment of the amounts to Control Process.
It was established that work delays were caused solely by LKP Zielone Miasto and the investment completion date was extended from May 1, 2025 to December 2, 2026 plus 90 days for tests and acceptances. On Control Process no late penalties may be imposed.
Attempt to enter the construction site Cover Energy Plus was found by arbitration to be inconsistent with the contract and for breach of clause 13, which gives the right for Control Process to charge additional costs and gives you extra time to complete.
The court also ordered immediate payment of the amount to Control Process within 21 days 4.6 million eurosincluding PLN 1.1 million of suspended payments, PLN 334 thousand euro interest, 262 thousand indexation and interest retention and EUR 3 million of contract extension costs incurred. Additionally, EUR 2 million was awarded for the costs of extending the contract until December. In total, the ordering party, i.e LKP Zielone Miasto is to pay EUR 6.7 million and the amount will increase with interest every day.
LKP Zielone Miasto must notify the EBRD and the E5P Fund (EBRD fund established to invest in environmental and energy saving projects in Central and Eastern Europe) of the findings by March 3. If it fails to do so, Control Process has been granted the right to inform itself by March 12.
If the DAB's decision is not implemented, the case will go to ICC arbitration in Paris. The Commission proposed a meeting in Krakow to conclude a settlement on February 26-27. Control Process declares that only suffers lossesbut wants to complete the project.
The Polish victory is devastating. And these are not all the dark clouds that have gathered over the city authorities, headed by mayor Andriy Sadovy. There is also an anti-corruption investigation and criminal charges, cases in Ukrainian courts.
The effect of the NABU investigation is negative for Lviv
The National Anti-Corruption Bureau of Ukraine (NABU) sent an official state expert to investigate the case. And this one found serious violations.
“In the course of criminal and court proceedings conducted in Ukraine, a full sequence of events was revealed, which shows why Control Process SA could not – without violating the law – sign the documents that were requested to be signed in 2024 and 2025 and in the appeal to Donald Tusk,” Control Process describes to Business Insider.
This is what NABU stated in its statement criminal proceedings (The Polish company sent the case reference number – No. 42025000050000039). The expert opinion clearly stated that the design documentation for the construction of the plant was illegally divided into three stages (construction phases) and introduced into the State Electronic Construction System in a manner contrary to Ukrainian regulations.
Expert Kiryło Yuriyovich Uskow pointed out that the facility at ul. Plastowa 13 in Lviv is one building that cannot function technologically in parts. “The artificial division into three stages was not of a technical nature, but of a formal and administrative nature and aimed to circumvent the building permit system and create the basis for the implementation of works by third parties.” – said the expert.
Letter from the NABU expert in the case of Control Process vs. the city of Lviv
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Press materials
This completely undermines the argument of the Lviv authorities, who wanted to blame the Polish company for the delays, tried to put political pressure on, among others, Prime Minister Tusk and even partially successfully activated the guarantees earlier. The city authorities argued that the Polish contractor would not allow companies selected by Lviv to enter the construction site. But he couldn't let them in, because in the contract he was responsible for these parts of the construction.
The authorities of Lviv are under fire from the justice system
At the same time, proceedings are underway before the Lviv District Administrative Court regarding the approval of staged projects and entering data into the state system. – The files of this case show that information was entered into the system that did not correspond to the actual legal and technical status of the investmentwhich was also reflected in subsequent process activities – Krzysztof Chabier, project director from Control Process, tells Business Insider.
Moreover, criminal proceedings are pending in Kiev before the Pechersk District Court regarding suspicion of entering false data into official documents and abuse of official powers in connection with this investment.
Part of the unfinished waste processing plant in Lviv
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Control Process
The sly one loses twice, or rather three times
All this shows that the Polish company did the right thing, not succumbing to the pressure of the Lviv authorities and not signing electronic documents that the city demanded. Poles stood on the basis of regulation. – Signing it [dokumentacji — red.] would mean not only a violation of building regulations, but also participation in a mechanism that is currently the subject of criminal and court proceedings – explains director Chabier to Business Insider.
Indicates that Lviv is still suspending paymentsdrags out the procedures and “is trying to lead to a situation in which Control Process SA will either leave the construction site itself or will be forced to terminate the contract and reactivate the KUKE state guarantees.” The director partly holds a grudge against the EBRD, which “despite knowledge of ongoing criminal and judicial proceedings, has not yet taken systemic action.”
According to him, the whole case showed the “second bottom” of the contract, i.e. “an administrative and financial attempt to push out a legal contractor from a project worth several dozen
The end of the case means that Lviv could have a plant worth EUR 35 million for EUR 10 million and get rid of a significant part of the costs of transporting waste from the city over long distances. In return, it will pay a fine of EUR 6.7 million, the investment cost has increased by approximately EUR 15-20 million, which it has to cover, and on top of that, residents have been unnecessarily overpaying for garbage collection for three years.
Activating the guarantee – even LKP Zielone Miasto managed to do it for EUR 7 million – was even presented in the Ukrainian media as a clever move by the city, because these funds were supposed to go to Lviv's budget. By implication – the city was to have the plant for free. As it turned out, the cunning one loses twice. Instead of EUR 10 million, the city will spend about EUR 30 million, perhaps more, so this time the cunning person lost even “three times”.
Author: Jacek Frączyk, editor of Business Insider Polska
