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of October 19, 2004

About compliance of the resolution of Judicial Board on cases on economic disputes of the Supreme Court of the Azerbaijan Republic of February 28, 2002 to the Constitution and the laws of the Azerbaijan Republic in connection with the claim of RAFZAN Small Enterprise

Name of the Azerbaijan Republic

Plenum of the Constitutional Court of the Azerbaijan Republic as a part of F. Abdullaev (chairman), F. Babayeva, B. Garibov, R. Gvaladze (judge-speaker), E.Mamedova, I. Nadzhafova, S. Salmanova and A. Sultanov,

with participation of the secretary of I. Ismaylov,

the applicant - the director of MT of "RAFZAN" R. N. Gasanov and his representative R. B. Akhmedov

according to part V of article 130 of the Constitution of the Azerbaijan Republic considered in proceeding in open court according to the procedure of the constitutional judicial proceedings the constitutional complaint case of RAFZAN Small Enterprise about compliance of the resolution of Judicial Board on cases on economic disputes of the Supreme Court of the Azerbaijan Republic of February 28, 2002 to the Constitution and the laws of the Azerbaijan Republic. The constitutional case was considered without participation of defendant.

Having heard the report of the judge R. Gvaladze, speech of the representative applicant R. Gasanov on case, having considered and having discussed case papers the Plenum of the Constitutional Court of the Azerbaijan Republic Established:

The claim of the Trastbank Commercial Bank (CB) to the Zirve Housing Cooperative (HC) and the RAFZAN Small Enterprise (SE) about debt repayment on the credit was partially satisfied with the decision of Local economic court No. 1 of the Azerbaijan Republic of August 22, 2001:

* the principal credit debt in the amount of manat due to pledged property;

* the interest-bearing debt added for the credit in the amount of 8.516.261 manats;

* the paid expenses for legal services in case in the amount of 10.000.000 manat;

* the state fee in the amount of 1.000.000 manat is decided to be transferred to advantage of CB Trastbank.

The part of the claim concerning collection of the additional percentage amount added for the credit was left without consideration.

The resolution of the Trial Court is left by the decision of Economic Court of the Azerbaijan Republic of November 27, 2001 without changes.

The judgment of appellate instance is left by the resolution of Judicial Board on cases on economic disputes of the Supreme Court of the Azerbaijan Republic (SKDES) of February 28, 2002 without changes.

In the claim MT "RAFZAN" addressed in the Constitutional Court of the Azerbaijan Republic it is specified what based on the order was allocated to 0,23 of hectare of the parcel of land for construction of the administrative and apartment house, in connection with financial difficulties and not to tighten construction term, it was organized by HCC Zirve based on the agreement on building construction according to the contract agreement, the building construction was entrusted to this housing cooperative of the contract. In the claim further it is specified that after construction of three floors of the building due to the lack of financial resources the credit agreement between HCC Zirve and CB Trastbank based on which HCC Zirve was issued the credit in the amount of 550.000.000 manat for a period of 165 days was signed, however in view of the fact that there was not enough issued amount for completion of construction, at insistance of the chairman of HCC Zirve the second credit agreement on the amount 500.000.000 manat for a period of 165 days on April 3, 2001 was signed.

The right of bank to require return of the credit of earlier fixed term in case of use of the credit in not compliance with the established purpose in case of untimely interest payment on the credit and other cases is provided in Items 4.4 in both credit agreements signed on identical conditions and rules.

Before execution of the second credit agreement, i.e. on April 5, 2001, as one of founders of HCC Zirve and as the pledger of MT of "RAFZAN" addressed to bank with the letter on suspension of loan granting before carrying out the corresponding audit inspection connected with identification of inexpedient use and waste of the credit. But CB Trastbank, despite emergence of the right to turn payment on pledged property in connection with the passed term of return of principal debt and percent on the credit agreement, not only did not take a legal action with such requirement, on the contrary, having drawn up the act of reasonable use of the credit, began issue of the new credit. However, 3 months later after execution of this act, "Trastbank" took a legal action with the claim, referring to non-execution of conditions of the above-stated contracts.

Courts solved dispute in the above-stated procedure.

The complainant, considering illegal and groundless court resolutions on this case, specifying in the claim to violations of article 21 of "The law on Cooperation" of the Azerbaijan Republic, requirements of Articles 213. 3, 213.6, 213.7, 215.4, 215.5, 337.4, 338; 299. 431.1,431. 3, 444 of the Civil Code of the Azerbaijan Republic (group of companies) and on restriction with that of the property right and right to judicial protection, compliance of the adopted court resolutions to the civil legislation and the Constitution of the Azerbaijan Republic asks to check 1,.

The constitutional court of the Azerbaijan Republic, according to part I of article 131 of the Constitution of the Azerbaijan Republic, the first and second parts of article 77 of the Law "About Courts and Judges", provisions of the Code of civil procedure and article 34.4.1 of the Law "About the Constitutional Court", found possible acceptance in production the claim MT "RAFZAN".


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