To recognize as illegal the order to eliminate violations and deficiencies identified by the results of the conducted state audit
No. 6001-23-00-6ap/1038 dated 12/21/2023
Plaintiff: GKP na PCV "FC "O" (FC "O") at the state institution "Department of Physical Culture and Sports"
Respondent: State Institution "Auditing Commission"
Interested parties: Akimat of the region, State Institution "Department of Physical Culture and Sports"
The subject of the dispute: to declare illegal the defendant's order No. 38 dated May 11, 2022 on the elimination of violations and deficiencies identified by the results of the conducted state audit in terms of reimbursement of funds in the amount of 292,094.9 thousand tenge in accordance with the annex to the order, namely points: 7, 12, 15, 18, 22, 26, 27
Review of the plaintiff's cassation appeal
PLOT: The plaintiff filed the above-mentioned claim with the court, arguing that he did not agree with the defendant's order No. 38 dated May 11, 2022 (order) according to the above-mentioned paragraphs of its appendix, since the funds submitted by the Revolutionary Commission for reimbursement to the budget were spent by the plaintiff in accordance with the norms of current legislation.
Judicial acts:
1st instance: the claim was denied.
Appeal: the court's decision remains unchanged.
Cassation: the decision of the judicial board is canceled. The case was sent to the court of appeal for a new hearing in a different composition of the court.
Conclusions: The plaintiff disputes the following points of the application of the order:
paragraph 7 states that the plaintiff incurred unreasonable expenses for athletes' meals in the period between sporting events (competitions and training camps) for a total amount of 28 220.8 thousand tenge;
Paragraph 12 states that the plaintiff provided spaces and structures on the basis of contracts for the provision of paid services, as a result of which, in violation of the current legislation on state property, revenues in the amount of 14,601,0 thousand tenge were not credited to the regional budget.;
paragraph 15 states that the plaintiff unreasonably incurred expenses for visa services for foreign citizens staying at the plaintiff's location to conclude employment contracts totaling 2,452.0 thousand tenge;
paragraph 18 states that the plaintiff unreasonably incurred expenses for accommodation and meals for employees (players and coaches of the main team) during their stay in the city between sports events in the total amount of 240,210,1 thousand tenge;
paragraph 22 states that during the period of the release of foreign legionnaires to participate in the national teams of other countries, the plaintiff unreasonably paid wages totaling 2,572.3 tenge;
paragraph 26 that the plaintiff unreasonably took into account advance reports on air travel in the absence of termination of employment for 60 five employees for a total amount of 1,280.5 thousand tenge (restored – 262.3 thousand tenge);
paragraph 27 states that the plaintiff unreasonably reimbursed the expenses of employees for air travel to places not related to their work duties in 36 cases during the period of validity of contracts for a total amount of 2,758.2 tenge.
At the same time, an analysis of the reasoning part of the SMAS decision contested by the cassator shows that, rejecting the claim, the court limited itself to quoting the norms of industry laws and regulations of subordinate regulatory legal acts, as well as citing the facts, events and arguments of the defendant indicated in his audit report.
Citing and taking into account the arguments of only the defendant, the court of first instance ignored the arguments of the plaintiff, which he cited in the text of the claim and the addendum to it, without any attention and legal assessment.
The Court of Appeal did not critically assess this omission of the SMAS and, in turn, also limited itself to quoting the norms of the law, while mentioning only some of the plaintiff's arguments, and did not reliably substantiate them with evidence in the case and the norms of the law.
Meanwhile, based on the plaintiff's claim and appeal, the local courts did not clarify the following circumstances that are essential for a legitimate and reasonable resolution of the dispute.
1. The plaintiff referred to paragraph 3 of Article 28 of the Law of the Republic of Kazakhstan "On Physical Culture and Sports" (the Law on FCS), according to which a professional athlete and coach, or other specialist in the field of physical culture and sports, are compensated for the expenses they have spent on food, travel, accommodation and preparation for sports competitions, organization of the recovery process, medical treatment in case of sports injury or illness, as well as other expenses in the amounts determined by the sports activity agreement. However, the courts did not mention this argument of the plaintiff at all and, accordingly, did not give a proper assessment of the circumstances of the case in the context of the meaning of the above-mentioned provision of the FCC Law.
2. The plaintiff referred to the order of the Minister of Culture and Sports of the Republic of Kazakhstan dated November 4, 2014 No. 74, which approved the Rules for holding sports events, from paragraph 22 of which the plaintiff argued that sports and sports organizations conducting training camps provide meals, travel expenses, medical, biological and restorative means and methods in accordance with the Methodology of nutrition standards and pharmacological support for athletes, including military personnel of all categories and employees of law enforcement and special government agencies, during the educational and training process and sports events, approved by the Order of the Minister of Culture and Sports of the Republic of Kazakhstan dated November 22, 2014 No. 107. This argument of the plaintiff has also not been investigated by the courts and has not been evaluated.
3. The plaintiff argued that Article 128 of the Law of the Republic of Kazakhstan "On State Property" established the grounds for the acquisition and termination of the right of economic management and the right of operational management. According to paragraph 3 of the specified article of the Law, fruits, products and income from the use of property under economic management (operational management), as well as property acquired by a state legal entity under contracts or other grounds, are transferred to the economic state legal entity (operational management) in accordance with the procedure established by law for the acquisition of ownership rights. According to Article 6 of the Civil Code, the norms of civil legislation must be interpreted in accordance with the literal meaning of their verbal expression. If there are possible different understandings of the words used in the text of legislative norms, preference is given to an understanding that meets the provisions of the Constitution of the Republic of Kazakhstan and the basic principles of civil legislation. The plaintiff claims that the funds received from the provision of services to NBK JSC, IP "S", MT LLP, OO LLP in the amount of 14,601,0 thousand tenge were not hidden and were used by him for economic purposes. At the same time, he believes that in the description of the violation, indicating the paragraph of the audit report, the auditors applied the rules for the transfer of state property to property lease (lease), which are not applicable, and the applicable law was not applied. The courts of previous instances also ignored these arguments of the plaintiff and did not evaluate them, including with the application of the principles of administrative justice.
4. Based on the legal norms specified in the claim, the plaintiff argued that the costs of visa services (state duty and visa issuance) are carried out by the receiving party of the State Enterprise for PCV FC O and the employment contract does not provide that travel expenses to the place of work are carried out at the expense of the employee. This claim has not been refuted by the courts of previous instances with reference to any legal acts and specific norms of employment contracts with all employees, the costs of which were included in the audit report.
5. The courts in their judicial acts refer to the FIFA Regulations in terms of the fact that they do not provide for the retention of salaries for players released to participate in matches for national teams, but the courts do not provide specific rules of this document governing these issues. In addition, the courts did not evaluate the plaintiff's argument that, in accordance with Chapter VIII of the FFK Regulations on the Status and Transfers of Players, the release of players to play for national teams is conditional, article 31 of which states that Clubs are required to release their players to their national teams upon the call of national associations. Any conflict of this agreement between the player and the football club is prohibited and will not be taken into account.
Thus, the courts of previous instances, citing only the arguments of the defendant, did not give a proper assessment of the contested order, as well as left without legal analysis and evaluation the arguments of the plaintiff, the provisions of the employment contracts that were the subject of audit, and also did not sufficiently examine the documents mandatory for FC "O" regulating its activities.
In addition, the judicial acts do not critically analyze the arguments of the plaintiff and the defendant for their legal validity and compliance with the requirements of industry regulations, as well as there is no detailed assessment of the terms of employment contracts in the context of the applicable legislation in this case.
According to the first part of Article 152 of the CPC, the court must make a decision based on its inner conviction based on the results of a direct investigation of the circumstances of the case.
At the request of the sub-items 2), 3), 4), 5), 6),7) of the fourth part of Article 152 of the CPC, the reasoning part of the court's decision must necessarily contain:
claims and their justifications;
the evidence on which the court bases its decision;
the reasons why the court rejected any evidence;
justification of why the court does not agree with each of the arguments of the participants in the administrative process;
the norms of the legislation of the Republic of Kazakhstan;
the court's conclusions on each of the stated claims.
In accordance with part five of Article 226 of the CPC, the reasoning part of the court's decision briefly indicates the circumstances of the case established by the court.;
the evidence on which the court's conclusions about rights and obligations are based; the arguments on which the court rejects certain evidence, and the laws that guided the court.
However, the decision of the court of first instance and the decision of the court of appeal do not comply with these requirements of the procedural law, respectively, there are violations specified in parts one and two of Article 427 of the CPC.
The court of cassation is obliged to reverse the decision of the court of first instance, the decision of the court of appeal and send the case for a new hearing to the court of appeal with a different composition of judges in case of violations provided for in Article 427 of the CPC.
When reviewing a case again, the court of appeal should examine all the circumstances of the case relevant to its lawful and reasonable resolution, as well as give an appropriate legal assessment to each argument of the parties to the dispute.
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