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RESOLUTION OF THE SUPREME ECONOMIC COURT OF THE REPUBLIC OF UZBEKISTAN

of February 21, 2005 No. 11-0401/1285

(extraction)

In case of delivery of goods of inadequate quality the buyer has the right to demand from the seller of indemnification, in cost type of low-quality goods, and also payment of penalty.

The management of material and military supply of the Ministry of Internal Affairs of the Republic of Uzbekistan appealed with the claim to economic court of the Tashkent region to state of emergency of "TURANGUL" about collection of 25099800 bags of principal debt and penalty in the amount of 5019960 bags.

Claims are satisfied by resolution of the Trial Court.

The judgment is left by the resolution of appellate instance without change.

Without having agreed with the decision and the court order, state of emergency of "TURANGUL" addressed with the writ of appeal in which the question of cancellation of judgments is put.

Judicial board, having discussed the arguments stated in the writ of appeal and response, having checked case papers, considers the decision and the court order subject to leaving without change, and the writ of appeal - without satisfaction on the following bases.

Apparently from case papers, between the parties the agreement N37/5-13, according to which the defendant undertook to make delivery of meat and cereal canned food to the total amount of 43875000 bags is signed on March 7, 2003, and the claimant undertook to accept products and to pay its cost. In accordance with the terms of the specified agreement the defendant made delivery of canning products in assortment:

- porridge pearl-barley with meat in cans in number of 35.100 pieces at the price of 600 bags of the total amount of 21060000 bags;

- buckwheat cereal with meat in cans in number of 35.100 pieces at the price of 650 bags of the total amount of 22815000 bags. The cost of the received products was completely paid by the claimant.

On the delivered products were issued by the defendant the hygienic certificate of N025721 of February 10, 2003 and the certificate of conformity N026527 of February 17, 2003. Products delivered by the defendant were made in March, 2003 and according to GOST 8286-90 the storage duration of products constitutes 2 years after its production.

In January, 2004 in v/ch-7873, located in the Surkhandarya region, when opening cans with tinned products the mold and dark stains in this connection laboratory researches were conducted by Republican TsGSEN of the Ministry of Health of RUZ were found. As a result of researches it was determined that in case of production of meat-packing products by the producer violations of industrial sterility were allowed and the Chief health officer of the Ministry of Internal Affairs of RUZ passed Decisions of N2 and N3 of February 4, 2004 about withdrawal of all remaining balance of meat-packing products and about their destruction. Unused part of production manufactured in state of emergency of "TURANGUL" is delivered from all divisions and the Central military base Ministry of Internal Affairs and the defendant was informed on the revealed shortcomings of canning products.

On February 24, 2004 the head of the defendant was handed the letter of claim about return of cost of goods of inadequate quality and payment of penalty in the amount of 20%.

However the taken measures of pre-judicial dispute settlement did not yield results in this connection the claimant took a legal action with the requirement about collection of 25099800 bags constituting the cost of unused low-quality canning products, and penalty in the amount of 20% of the cost of low-quality products that constitutes 5019960 bags.

According to item 4.1 of the agreement quality of delivered goods shall correspond to the existing state standard specifications and be confirmed by the quality certificate, origins and compliance (safety).

On the delivered products were issued by the defendant the hygienic certificate of N025721 of February 10, 2003 and the certificate of conformity N026527 of February 17, 2003 according to which the delivered products conform to requirements of GOST 8286-90 and 5284-84, and the storage duration of products constitutes 2 years after its production.

Arguments of the seller that whether courts do not find out the reasons of the found low-quality goods it is technological scrap or non-compliance by the claimant with procedure for storage of canning products are unreasonable since from the conclusion of the laboratory researches conducted by Republican TsGSEN of the Ministry of Health of the Republic of Uzbekistan provided to court in case of production of meat-packing products by the producer violations of industrial sterility were assumed that led to spoil of products till the expiry date. This fact is confirmed as well by the conclusions of the Tashkent center of researches and certifications (the NN302, 303 and 548 protocols of May 4, 2004), the expert opinion of JSC Uzbekekspertiza of May 13, 2004 N09-1027.

According to the expert opinion of Republican TsGSEN of the Ministry of Health of RUZ of October 22, 2004 N1-8/1646 of canned food are made with violation of industrial sterility and do not conform to safety requirements on organoleptic indicators.

According to Art. 402 of RUZ Group the seller shall report to the buyer goods which quality corresponds to the agreement of kupliprodazha. In case of delivery of goods of inadequate quality the buyer has the right to demand agreement cancelation with compensation of the suffered losses. Therefore, requirements of the buyer (claimant) about return of cost of low-quality goods, and also payment of penalty are reasonable.

Under such circumstances, it is necessary to leave the decision and the court order without change, and the writ of appeal - without satisfaction with reference of court costs on the defendant.

 

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