Legal dispute over a construction contract for electrical installation of a fire alarm system and commissioning  

 

 

I P LLP (hereinafter referred to as the Contractor) filed a lawsuit against C kz LLP (hereinafter referred to as the Customer) for debt collection under two work contracts No. 28/10/23 dated August 28, 2023 for electrical installation work at the Multi-Storey Residential Building facility.

Position 87" (hereinafter referred to as Contract 1) and No. P-51 dated September 22, 2023, for the installation of a fire alarm system, commissioning work at the facility "Complex of 12- and 16-storey residential buildings under construction on Prospect K.Satpayev in Ust-Kamenogorsk.

Position 51" (hereinafter referred to as contract 2). The plaintiff substantiates the claims by the fact that the debt under contract 1 amounted to 1,419,780 tenge, under contract 2 amounted to 1,089,450 tenge, minus the prepayment in the amount of 115,200 tenge, amounting to 974,250 tenge.

The fact that the work has been completed in full is confirmed by acts of completed work, by a response to the notice of arrears dated November 28, 2023, and by the defendant's acceptance of the work.

To date, despite the plaintiff's notifications and claims for repayment of the debt, the defendant has not paid the debt under these agreements and has delayed the fulfillment of obligations.

In accordance with clauses 7.6 of the contracts, the plaintiff accrued a penalty in the amount of 0.01% for each day of delay, but not more than 10% of the unpaid amount. Under contract 1, the penalty amounted to 58,930 tenge (the number of overdue days was 415; 0.01% of the amount was 142 tenge).

Under contract 2, the penalty was 37,218 tenge (the number of overdue days was 382; 0.01% of the amount was 97.43 tenge), the penalty was calculated as of November 1, 2024.

In accordance with Articles 48, 169 of the Civil Procedure Code (hereinafter referred to as the CPC), the plaintiff clarified the claims, and therefore requests the court to recover from the defendant arrears under the two contracts in the total amount of 2,394,030 tenge (1,419,780 tenge + 974,250 tenge), penalties for them in the total amount of 96,148 tenge (58,930 tenge + 37,218 tenge) and court costs for the payment of the state fee in the amount of 74,706 tenge, assistance from a representative in the amount of 249,020 tenge, payment for HR services 39,320 tenge.

The plaintiff's representative supported the clarified claims, for the reasons stated in the claim, explained that they had completed the work, the acts had been signed, there had been no complaints about the quality of the work performed from the defendant, no notifications about the withholding of funds had been sent to them, and he requested that the claims be satisfied.

The representative of the defendant did not agree with the claim and explained that the parties had mutual claims under contract 1, as a result of which an inspection of the facility was carried out and discrepancies in materials, equipment and quality of work were established, and an act of malfunction was received from the chairman of the AXIS of the Ministry of Railways on I.Yesenberlin – Kasimov M.B. street, installed automatic fire alarm systems There are problems with the alarm system (APS) at the Facility.

The terms of the contract also contain the contractor's obligation to provide a warranty period for completed works within 60 months from the date of signing the act of completed works.

Also, he did not agree with the amount of court costs for paying for the activities of the CHSI, since he believes this is not a court expense, but the assistance of a representative, since the original contract with Law Firm Stalker LLP was not provided, and therefore he asked to dismiss the claim.

In accordance with Article 616 of the Civil Code (hereinafter referred to as the Civil Code), under a contract, one party (contractor) undertakes to perform certain work on behalf of the other party (customer) and deliver its result to the customer within the prescribed period, and the customer undertakes to accept the result of the work and pay for it (pay the price of the work). The work is performed at the contractor's risk, unless otherwise provided by legislation or contract.

According to Articles 268, 272, 273 of the Civil Code of the Russian Federation, obligations arising from the contract must be fulfilled by the parties properly. In case of non-fulfillment of the contract by one of the parties, the party that fulfilled the obligation has the right to demand from the other party the fulfillment of the obligation.

The court found that the defendant has the following debts to the plaintiff: under contract 1 in the amount of 1,419,780 tenge, which is confirmed by the signed act of completed works No. 3 dated September 30, 2023 in the amount of 1,419,780 tenge; under contract 2 in the amount of 1,089,450 tenge, which is confirmed by the signed act of completed works No. 4 dated October 12, 2023 in the amount of 1,089,450 tenge. In addition, in a letter dated November 28, 2023, to the plaintiff's notification, the defendant actually confirmed that he owed the amount of debt to the plaintiff.

In court, the defendant's representative also did not dispute the existence of arrears in the acts of completed works. At the same time, according to the arguments of the defendant's representative about the prepayment made by them under contract 2, the plaintiff reduced the debt by the amount of the prepayment in the amount of 115,200 tenge under contract 2, and no prepayment was made under contract 1.

The defendant's arguments that in August and September 2028, I. P. LLP is subject to a refund of the guarantee deduction in the amount of 289,327.87 tenge and this amount must also be excluded from the amount owed, according to the court, are not justified, since this deadline has not come and the defendant has not actually incurred such expenses.

The signing by the defendant of the above-mentioned acts of completed work indicates that the defendant accepted the work, but they did not provide evidence to the contrary to the court.

According to clause 3.3 of the contracts, payment will be made in the form of non-cash payments upon completion of the work by transferring funds to the contractor's current account.

The court considers the defendant's arguments that he has the right to withhold the amounts of compensation, all costs, and losses incurred by him to be unfounded, since according to clauses 3.9 of the contract 1 and 2, the customer has the right to withhold compensation from the amount of the guarantee for all costs and losses incurred as a result of the contractor's failure to fulfill or improper fulfillment of its obligations under the contract by notifying the contractor in advance in writing.

In this case, no written notification has been provided by the customer to the contractor about the costs or losses incurred. In addition, in court, the defendant's representative acknowledged the fact of not sending written notices to the plaintiff, in accordance with clause 3.9 of the contracts.

Further, the survey reports submitted by the defendant verifying the amount of work performed, equipment displayed and materials used dated November 24 and 25, 2024, were signed by the defendant and his employees without the participation of the plaintiff's representatives, therefore, the court is critical of these acts and cannot accept them as admissible evidence in the case.

The defendant's arguments about the existence of a malfunction report received from the chairman of the MZHD AXIS, K. M.B., on the APS system at the Facility and the existing problems are refuted by the provided act on troubleshooting the APS at the facility at 68 Esenberlin Street, dated December 12, 2024, signed by the Chairman of the MZhD AXIS, K. M.B., whose statement referred to the defendant, who has confirmed that all the work has been completed in full and meets the requirements established by the contract and technical standards, has no complaints about the quality of the work performed.

Moreover, the defendant's arguments about poor-quality performance of work and repeated filing of claims are untenable, since no such evidence was provided to the court, information about the filing of claims on this issue by the defendant was not sent to the plaintiff after signing the acts of work performed, the defendant's claim was filed only on November 28, 2024, before filing the claim, whereas the acts of work performed signed in September and October 2023.

In relation to this, according to Parts 3, 6 of Article 68 of the CPC, circumstances are considered established if one party does not dispute and recognizes the evidence presented by the other party, or the contesting of evidence does not directly follow from the defendant's objection or the plaintiff's objection to the defendant's arguments.

The totality of evidence is considered sufficient to resolve a civil case if acceptable and reliable evidence has been collected that indisputably confirms the circumstances relevant to the case and has not been refuted by the other party. The plaintiff has fulfilled the obligations under the contract, but the defendant has not fulfilled the obligations assumed to pay for the work performed.

The defendant did not provide the court with evidence refuting the plaintiff's arguments. According to Article 293 of the Civil Code, paragraph 7.6 of contracts 1, 2, the court verified the calculation of the penalty for a total amount of 96,148 tenge (under contract1 - 37,218 tenge and contract2 – 58,930 tenge), this calculation does not exceed the contractual penalty amount – 10% of the unpaid amount due to the contractor, is correct and justified.

These circumstances allow the plaintiff to calculate the penalty under the contract and demand its recovery, in connection with which, the claim for the recovery of the penalty is subject to satisfaction.

By virtue of paragraph 4 of Article 8 of the Civil Code, citizens and legal entities must act in good faith, reasonably and fairly in exercising their rights, observing the requirements contained in the legislation, the moral principles of society, and entrepreneurs, as well as the rules of business ethics.

This obligation cannot be excluded or limited by the contract. Good faith, reasonableness and fairness of the actions of participants in civil law relations are assumed.

Based on the above, the plaintiff's claims for recovery of the amount owed and the penalty are subject to satisfaction. However, by virtue of part 1 of Article 109 of the CPC, the court awards the party in whose favor the decision was made, on the other hand, all court costs incurred in the case.

According to part 1 of Article 113 of the CPC, at the request of the party in whose favor the decision was made, the court awards, on the other hand, the costs incurred by her to pay for the assistance of a representative (several representatives) who participated in the process and is not in an employment relationship with this party, in the amount of the costs actually incurred by the party.

For property claims, the total amount of these expenses should not exceed ten percent of the satisfied portion of the claim.

The plaintiff submitted for reimbursement the costs of paying for the assistance of the representative of A. A. However, the plaintiff's representative did not provide the originals of the contract for the provision of legal services with Law Firm S. LLP and documents confirming the transfer of funds from the legal entity to the representative. In addition, the receipt for cash receipt No. 101 in the amount of 260,980 tenge cannot be accepted as evidence of the expenses incurred to pay for the representative's assistance, since the funds were accepted from a legal entity in favor of Law Firm S. LLP. In favor of such conclusions, the court takes into account the following.

According to the provision provided for in Article 7 of the Law of the Republic of Kazakhstan "On Accounting and Financial Reporting dated February 28, 2007 No. 234, the limited Liability Partnership "I. P.", being a legal entity, was obliged to issue a primary accounting document (paragraph 4 of the said article) when making payments based on the contract and to confirm to the court the incurred they receive expenses by submitting a payment document that transfers money with a bank stamp, or when making a cash payment, an expense cash order.

In the absence of such documents, the plaintiff's expenses for the assistance of the representative of A. A. should be recognized as unconfirmed, and these expenses are not reimbursable. In accordance with Article 109 of the CPC, the costs incurred by the defendant to pay the state fee in the amount of 74,706 tenge and to pay for the activities of a private bailiff in the amount of 39,320 tenge, confirmed by payment documents, are to be recovered from the defendant in favor of the plaintiff.

Guided by Articles 223-226 of the CPC, the court decided, The claims Guided by Articles 223-226 of the CPC, the court DECIDED: the requirements of the limited liability company "I. P." to the limited liability company "S. kz" on debt collection and penalties to satisfy.

Collect from the limited liability company "S. kz" in favor of the limited liability partnership "I. P." debt in the amount of 2,394,030 (two million three hundred and ninety-four thousand thirty) tenge, a penalty in the amount of 96,148 (ninety-six thousand one hundred and forty-eight) tenge, as well as court costs for the payment of state fees in the amount of 74,706 (seventy-four thousand seven hundred and six) tenge, payment for the activities of a private bailiff in the amount of 39,320 (thirty-nine thousand three hundred and twenty) tenge.

On March 12, 2025, case No. 6399-25-00-2a/200 of the Judicial Board for Civil Cases of the East Kazakhstan Regional Court considered in open court through audio-video recording an electronic civil case on the claim of a limited liability partnership (hereinafter-LLP). " I P" to " C kz" LLP on debt and penalty recovery, received on the defendant's appeal against the decision of the specialized interdistrict Economic Court of the East Kazakhstan region dated January 23, 2025

Guided by subparagraph 1) Parts 1 of Article 424, Articles 425, 426 of the CPC, the judicial board decided to leave unchanged the decision of the specialized interdistrict economic court of the East Kazakhstan region dated January 23, 2025. The defendant's appeal is dismissed. To collect from C kz LLP in favor of I P LLP the court costs of paying for the services of a private bailiff in the amount of 39,320 (thirty-nine thousand three hundred and twenty) tenge.

 

 

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