RESOLUTION OF THE SUPREME ECONOMIC COURT OF UKRAINE

of May 22, 2007

About claiming damages in the form of lost profit

(determination of Trial chamber on economic cases of the Supreme Court of Ukraine of 26.07.2007 it is refused to open production on review)

Case No. 2/47-06

NAME OF UKRAINE

The Supreme Economic Court of Ukraine as a part of board of judges:

T.P.'s trump - the chairman, I.A., Stratiyenko L. V. Bun., with participation of agents of the parties: the claimant - Gopk V. M. Dov. of 24.02.2006, Dulskaya Yu. V. Dov. of 24.02.2006, Liskina N. M. Dov. of 24:02. 2006, Kasinyuka I. V., the defendant - O.V.'s Foi,

having considered in proceeding in open court in Kiev the writ of appeal of JSC Okhtyrsky Brewery on the resolution of the Kharkiv Economic Court of Appeal of February 7, 2007 in the matter of economic court of the Sumy region in the claim of JSC Okhtyrsky Brewery to the Ukrtekhnosintez company joint Ukrainian Belarusian in the form of Ltd company, 3-е person of JSC Kompresormash, about claiming damages in the form of lost profit, ESTABLISHED:

In January, 2006 JSC Okhtyrsky Brewery took a legal action with the action for damage to the Ukrtekhnosintez company joint Ukrainian Belarusian in the form of Ltd company.

Referring to delivery by the defendant of the low-quality equipment, asked to claim 276647 hryvnias of the loss caused in the form of lost profit.

Case was considered by courts repeatedly.

The claim is satisfied with the decision of economic court of the Sumy region of December 20, 2006 partially.

From the joint Ukrainian-Belarusian business "Ukrtekhnosintez" for benefit of JSC Okhtyrsky Brewery to claim 251768 hryvnias 00 kopeks of damages in the form of lost profit.

For the rest proceeedings are stopped.

By the resolution of the Kharkiv Economic Court of Appeal from 7 February, 2007 the judgment it is cancelled. The claim it is refused.

In the writ of appeal of JSC Okhtyrsky Brewery asks to repeal the resolution of the Kharkiv Economic Court of Appeal of February 12, 2007 and to leave the decision of local economic court without change, referring to the wrong application of the Art. of the Art. by Appeal Court 22, of 611, of 623, of 662, of 673, of 675, of 678 both 679 Civil Code of Ukraine and violation of the Art. of the Art. 33, of 34, 38 GPK of Ukraine.

The applicant specifies that the defendant delivered him the low-quality equipment which the long time did not work because of different malfunctions, owing to what it had losses on sum in dispute, and the Appeal Court incorrectly estimated the proofs provided to them.

In judicial session the applicant's representatives completely supported the writ of appeal, and the defendant's representative did not agree with its arguments, considers the court order of appellate instance legal and completely reasonable.

The representative of 3rd person in judicial session was not.

Considering that are informed on time and the place of consideration of the writ of appeal of the party properly, the court finds it possible to consider the writ of appeal in its absence.

Having listened to explanations of agents of the parties, having discussed arguments of the writ of appeal, having studied case papers, the court considers that the writ of appeal is not subject to satisfaction for the following reasons.

As it is established by Appeal Court, on January 19, 2004 between the parties the contract N2-14/1-2004 for delivery of two compressor installations is signed by total cost of 290 thousand hryvnias.

According to Items 4.1 and 4.4 of this agreement Ukrtekhnosintez LLC took the responsibility for completeness, quality and delivery dates of products, its compliance technical documentation, and also guaranteed safe work of installations within 24 months from day of commissioning, but it is no more than 30 months from day of shipment of goods.

The fact of delivery of goods is confirmed by the goods issue slip N3892 of May 18, 2004 and acts of acceptance transfer of June 14, 2004.

The equipment - compressor installations - is put into operation on June 14, 2004.

For the period of the conclusion of the specified contract for the equipment caused in it there was no normative to the document because this equipment was new and had no serial production.

Technical documentation on the delivered equipment was developed and approved with the claimant in pursuance of terms of the contract on single batch of compressor installations.

The claimant knew of these circumstances, he agreed to acquisition of the equipment and did not declare claims on design indicators of compressor installations.

By protocols of technical acceptance of June 25, 2004 it was determined that compressor installations are in working order, all nodes and details function according to technical documentation, parameters answer technical documentation.

Item 4.2 of the agreement of the party also Instructions of P-7 "About procedure for product acceptance of technological appointment and goods of the national use on quality" of April 25, 1966 stipulated product acceptance by quantity and quality according to requirements of the Instruction of P-6 of June 15, 1965 "About procedure for product acceptance of technological appointment and goods of the national use by quantity".

However, as it is established by court, the fact of delivery of products of unseemly quality was not attested according to requirements of the agreement and the specified regulations.

The defendant fulfilled the warranty obligations on repair of the delivered equipment.

The Appeal Court checked all arguments of the parties, researched and estimated all proofs provided by them, fully established the facts of the case, correctly applied the Art. of the Art. 22, of 623, of 678 Civil Code of Ukraine and came to good in law conclusion about lack of reasons for satisfaction of the claim because of cause and effect relationship absence of proof between actions of the defendant and origin at the claimant of losses.

Considering stated, the court order of appellate instance legal and reasonable and therefore is not subject to change.

At the same time arguments of the writ of appeal which concern research and assessment of proofs the court of cassation instance leaves out of attention as such which overstep the bounds of its powers.

Being guided by the Art. of Art. 111-5, 111-7 - 111-9, 111-11 Economic Procedure Codes of Ukraine, the court DECIDED:

Leave the writ of appeal without satisfaction, and the resolution of the Kharkiv Economic Court of Appeal of February 7, 2007 - without change.

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