On the inclusion of the partnership in the register of unfair participants in public procurement

By the decision of the Council of Economic and Social Council of the city of Nur-Sultan dated January 16, 2020, which was left unchanged by the decision of the appellate instance, the application of Automatik Prosystem LLP to cancel the order of the Public Procurement Committee of the Ministry of Finance on the inclusion of the partnership in the register of unfair participants in public procurement was satisfied. The court found that according to the protocol on the results of August 26, 2019, the Partnership was determined the winner of public procurement conducted by the municipal state institution "Kazaly Sports Club" of the Department of Physical Culture and Sports of the Kazalinsky district (hereinafter referred to as the Customer) for the supply of a gas meter in the amount of 420 000 tenge. On September 6, 2019, the Customer sent the signed contract on public procurement of goods (hereinafter referred to as the Contract) to the Partnership. The Partnership did not sign the Contract within the prescribed time, and therefore the Committee automatically issued an order to include the plaintiff in the register of unfair participants in public procurement. The appeals board, leaving the court's decision unchanged, indicated that the Partnership had no intention of evading signing the Contract, since the plaintiff had sufficient labor and material resources to fulfill it. The Company has confirmed that the plaintiff's authorization on the public procurement portal has not been recorded during the time allotted for signing the Contract. The Judicial Board for Civil Cases of the Supreme Court of the Republic of Kazakhstan recognized the conclusions of the local courts as erroneous, since they do not correspond to the established circumstances of the case and are based on the incorrect application of substantive and procedural law.

On the inclusion of the partnership in the register of unfair participants in public procurement

According to paragraph 3 of article 43 of the Law, the draft public procurement contract must be certified by the winner of public procurement by means of a tender, auction, request for price proposals through an electronic digital signature within three working days from the date of receipt of the notification on the public procurement web portal, with the attachment of the draft public procurement contract. Paragraph 1 of Article 44 of the Law stipulates that if a potential supplier, recognized as the winner, has not submitted a signed public procurement contract to the customer within the time limits established by this Law, such a potential supplier shall be deemed to have evaded the conclusion of a public procurement contract. Subparagraph 2) Paragraph 4 of Article 12 of the Law establishes that the register of unscrupulous participants in public procurement is a list of potential suppliers identified by the winners who evaded the conclusion of a public procurement contract. Paragraph 22 of the Rules for the Formation and Maintenance of Registers in the field of public procurement, approved by the Order of the Minister of Finance of the Republic of Kazakhstan dated December 28, 2015 No. 694, stipulates that if a potential supplier, recognized as the winner or runner-up, has not signed a public procurement contract through the web portal within the time limits established by Law, such a potential supplier is a decision of the authorized body, adopted through the web portal in accordance with Annex 5 to the specified Rules., It is automatically included in the register of unscrupulous participants in public procurement. It follows from the case file that on September 6, 2019, the Customer sent the Contract to the Supplier for signing. The contract has not been certified by the Partnership through an electronic digital signature within three working days from the date of receipt on the web portal of public procurement. In this regard, the Committee legitimately, by its Order, automatically included the Partnership in the register of unscrupulous participants in public procurement. The Board of Appeal found the conclusions that the plaintiff's authorization on the public procurement portal had not been recorded during the time allotted for signing the Contract to be untenable. From the information provided by the Company, it follows that the director of the Partnership, D., was logged into the system of the public procurement web portal on September 6, 9 and 10, 2019.

It follows from this that the Supplier had the actual opportunity to certify the contract with an electronic digital signature within the time limits established by law. The reference of local courts to paragraph 5 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan dated December 14, 2012 No. 5 "On the application of legislation on public procurement by courts", which provides that when considering claims for recognition of suppliers who have failed to fulfill or improperly fulfilled their obligations under public procurement contracts concluded with them, is untenable., By unscrupulous participants in public procurement, the courts must take into account the supplier's guilt as the basis of civil liability in accordance with Article 359 of the Civil Code and the negative consequences for the customer, based on the criteria of fairness and reasonableness in accordance with Part 5 of Article 6 of the CPC. Negative consequences should be understood as causing such damage to a party to a contract that it has largely lost what it was entitled to expect when concluding the contract. It follows from the content of this rule of law that it is applicable by the courts exclusively to claims for recognition of unfair participants in public procurement under concluded public procurement contracts.

The agreement, in accordance with paragraph 1 of Article 386 of the Civil Code, enters into force and becomes binding on the parties from the moment of its conclusion. Meanwhile, no Contract has been concluded in the present case. Paragraph 26 of the regulatory resolution of the Supreme Court of the Republic of Kazakhstan "On certain issues of application by courts of the norms of Chapter 29 of the Civil Procedure Code of the Republic of Kazakhstan" dated December 24, 2010 No. 20 clarified that the legality of the appealed decision, action (inaction) means that it was made (committed) in accordance with regulatory legal acts, within the competence of the state the authority or authority of a local government body, the authority of an official or civil servant. Having recognized the legality of the appealed decision, action (inaction), the court, in accordance with the second part of Article 227 of the CPC, decides to dismiss the application. In such circumstances, the cassation judicial board concluded that the contested order was adopted by the Committee in accordance with regulatory legal acts and within its competence. Therefore, the judicial acts were canceled, and a new decision was made in the case to reject the partnership's application. 

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