Disputes related to the unilateral termination of the contract
By virtue of paragraph 1 of Article 359 of the Civil Code, the debtor is responsible for non-fulfillment and (or) improper fulfillment of obligations in the presence of fault, unless otherwise provided by law or contract. The debtor is found innocent if he proves that he has taken all measures in his power to properly fulfill the obligation. Limited Liability Company "A" (hereinafter referred to as the Partnership) has filed a lawsuit against Joint Stock Company "P" (hereinafter referred to as the Partnership). – The Company) on invalidation of the unilateral termination of the contract No. 11-7/LE on the purchase of services dated November 28, 2014, according to the notice dated October 16, 2015, recovery of lost profits in the amount of 77,293,508 tenge, penalties in the amount of 960,771 tenge and the amount of unjustified enrichment in the amount of 4,004,010 tenge for the period from March 2015 year to March 2016. The claim was satisfied by the decision of the specialized Interdistrict Economic Court (hereinafter referred to as the SMEC) of Astana city dated August 10, 2016. The Company's unilateral termination, according to the notice dated October 16, 2015, of Contract No. 11-7/LE dated November 28, 2014, was declared invalid. Lost profits in the amount of 77,293,508 tenge, a penalty in the amount of 960,771 tenge, and unjustified enrichment in the amount of 4,004,010 tenge were recovered from the Company in favor of the Partnership. By the resolution of the Judicial Board for Civil Cases of the Astana City Court dated November 2, 2016, the court's decision was changed, the amount of lost profits recovered from the Company was reduced to 54,498,678 tenge, the penalty to 529,682 tenge. The rest of the solution remains unchanged. The Judicial Board for Civil Cases of the Supreme Court overturned the judicial acts of local courts and issued a new decision to dismiss the claim of limited liability Company "A" to Joint Stock Company "P" for recovery of lost profits, penalties, unjustified enrichment, invalidation of unilateral termination of the contract on the following grounds. It follows from the case file that on November 28, 2014, the Company (the customer) and the Partnership (the contractor) concluded an agreement No. 11-7/LE for the purchase of services for equipping the Company's passenger trains with bedding sets, formed from wagons manufactured by T LLP and P Company (hereinafter referred to as the Agreement). The deadline for fulfilling obligations is set for December 31, 2017.
Disputes related to the unilateral termination of the contract
Under the terms of the Agreement, the Partnership undertook to provide the customer with clean linen and inventory, according to the Annexes to the Agreement, which provide for a technical specification, a daily minimum quantity, a schedule of equipment and other requirements. On October 16, 2015, the Company notified the Partnership of the unilateral termination of the Contract due to improper performance of duties. The plaintiff, pointing to losses caused by the Company's refusal to fulfill its obligations, filed claims for recovery of lost profits, penalties, and unjustified enrichment for the period from March 2015 to March 2016. The Partnership also challenged the termination of the Contract in court, arguing that since January 2015, the Company has unreasonably refused to accept the goods due to the lack of mattresses in the bedding sets (hereinafter referred to as bedding sets). He believes that bedding is an integral part of Talgo wagons that cannot be transferred to the contractor. The Court of first instance, satisfying the claims, agreed with the arguments of the plaintiff and pointed out the prejudicial significance of the decision of the Council of Economic and Social Council of Almaty dated October 14, 2015. This decision declared illegal the previous unilateral termination and unilateral refusal of the Company to fulfill the terms of the Contract, 5,342,967 tenge was recovered from the customer in favor of the contractor for services rendered in January 2015, and the Company's claim for damages for February 2015 was denied. The court justified the recovery of lost profits from the Company by the fact that the Partnership did not receive income due to the fault of the customer, who did not allow it to fulfill its obligations. When determining the amount of lost profits, penalties and unjustified enrichment, the court took into account the conclusion of the independent audit company "B" LLP dated April 5, 2016. The Court of Appeal, reducing the amount of damages and, accordingly, the amount of the penalty, indicated that in the period from January to March 2016, the Partnership provided services. This fact is confirmed by the Company's applications, acts of services rendered and acts of improper provision of services (poor-quality laundry). In the rest of the decision, the court of appeal agreed with the conclusions of the court of first instance. Such conclusions of the courts of first instance and appeal are unfounded, they are based on the incorrect application of substantive and procedural law. According to paragraph 1 of Article 401 of the Civil Code of the Republic of Kazakhstan (hereinafter CC), modification and termination of the contract are possible by agreement of the parties, unless otherwise provided by this Code, other legislative acts and the contract.
The Agreement was concluded between the parties in accordance with the Rules for the Procurement of goods, works and services of JSC "S" and organizations, fifty or more percent of the voting shares (participation interests) of which are directly or indirectly owned by JSC "S" on the right of ownership or trust management, approved by the decision of the Board of Directors of the Joint Stock Company "National Welfare Fund "S" dated May 26, 2012 (hereinafter referred to as the Procurement Rules). The Judicial Board considers that the terms of the Contract have priority over the terms of other contracts concluded without complying with the requirements of the Procurement Rules. Clause 10.5 of the Agreement provides for the customer's right to unilaterally terminate the Agreement in case of improper fulfillment by the contractor of the obligation provided for in subparagraph 3.1.21 of paragraph 3.1. From the content of subparagraph 3.1.21 of paragraph 3.1. Of the Agreement, it follows that the contractor is obliged to confirm readiness to fulfill obligations by providing documentary evidence of the availability of bedding in his ownership and/or lease the entire period of service provision. In accordance with paragraph 1 of the Agreement, bedding is included in the bedding set. Appendix No. 1 to the Contract (Technical Specification) specifies the technical characteristics of the bedding and the frequency of its washing/processing is set at least twice a year (autumn, spring). Therefore, the plaintiff's argument that bedding is an integral part of Talgo passenger cars that cannot be transferred to the contractor for cleaning is unfounded. The case materials reliably established that the Partnership does not have bedding equipment corresponding to the technical characteristics, and it did not wash/process bedding equipment.
Disputes related to the unilateral termination of the contract
Partnership instead of foam latex bedding (inner part) The Society was provided with bedding with cotton padding, which the Society refused to accept for equipping the wagons. In addition, the Partnership often provided substandard bedding sets. These circumstances are confirmed by attached documents drawn up in accordance with the Contract. During the time period specified in the statement of claim, the Partnership did not provide services to the Company. In such circumstances, the termination of the Contract by the customer is justified. The judicial board considers the courts' reference to the prejudicial significance of the decision of the Council of Economic and Social Council of Almaty dated October 14, 2015 to be erroneous. The reasoning and resolution parts of the said decision do not reflect the dates of termination and unilateral refusal of the Company from the performance of the contract, which are recognized as illegal. However, it follows from the content that the court considered a dispute about the fulfillment of obligations by the parties for the period from the date of conclusion of the Contract to March 2016. The case in question challenges the unilateral termination of the contract dated November 28, 2014 No. 11-7/LE, according to the notice dated October 16, 2015, the recovery of lost profits, penalties, unjustified enrichment for the period from March 2015 to March 2016. It follows from this that the subject matter and the basis of the claim in these cases are different. In accordance with paragraph 4 of Article 9 of the Civil Code, losses mean the lost income that this person would have received under normal conditions of turnover if his right had not been violated (lost profits). According to paragraph 4 of Article 350 of the Civil Code, when determining the amount of lost profit, the measures taken by the creditor to obtain it and the preparations made for this purpose are taken into account.
By virtue of these provisions of the law, the amount of lost profits had to be determined from the amount of net income minus the costs that the Partnership had to incur if the obligation was fulfilled. The courts, without deducting any expenses, recovered the amount stipulated in the Contract in favor of the Partnership as a lost profit. The plaintiff has not provided evidence of the measures he took to make a profit and the preparations made for this purpose for the period from March 2015 to March 2016. The calculation of the lost profit, compiled by LLP "B" dated April 20, 2016, was determined without taking into account the actual expenses incurred by the Partnership. According to Articles 64, 65, 67 and 68 of the CPC, this calculation was subject to evaluation by the court in conjunction with other evidence, taking into account their relevance, admissibility and reliability, since it has no advantage for the court over other evidence. Moreover, Appendices No. 3 (Stations equipped with bedding), No. 4 (Daily minimum quantity of clean linen, clean inventory provided by the Contractor to the Customer) and No. 5 (Schedule for equipping trains forming the Astana section of the Express branch with bedding) to the Agreement were signed by the Partnership only on January 15, 2016, after repeated demands from the Company. By virtue of paragraph 1 of Article 359 of the Civil Code, the debtor is responsible for non-fulfillment and (or) improper fulfillment of obligations in the presence of fault, unless otherwise provided by law or contract. The debtor is found innocent if he proves that he has taken all measures in his power to properly fulfill the obligation. The Judicial Board does not consider that the Company is guilty of non-fulfillment of contractual obligations. The stated circumstances indicate a violation of uniformity in the interpretation and application of substantive law norms by local courts.
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