RESOLUTION OF THE SUPREME ECONOMIC COURT OF UKRAINE

of May 24, 2007

About claiming damages

(determination of Trial chamber on economic cases of the Supreme Court of Ukraine of 09.08.2007 it is refused to open production on review)

Case No. 12/579

NAME OF UKRAINE

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

chief judge: Dobrolyubova T. V.

judges: Gogol T. G., Prodayevich L.V.

having considered materials of the writ of appeal of the State company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex"

on the resolution of the Kiev Economic Court of Appeal of 12.02.07

on case N12/579

in the claim of the State company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" (further - the Agency)

to the State-owned joint stock company "Bread of Ukraine" (daleekompaniye)

about collection of 3rd 732, 94 UAH of losses

representatives took part in judicial session:

from the claimant: Svatukh O. V. - on Dov. of 29.12.06 N269d

from the defendant: Vilchinskaya N. I. - on Dov. of 06.10.06 N12-14/58

The state company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" in September, 2006 declares the recovery suit from the State-owned joint stock company "Bread of Ukraine" 3 732, of 94 UAH of the principal debt transferred to the claimant on distribution balance of 31.07.03. The claimant proved requirements by Articles 107, of 109, of 512, of 519, of 526, 530 Civil codes of Ukraine, article 59 of the Economic code of Ukraine and Item 3 of the Resolution of the Cabinet of Ministers of Ukraine N690 of 15.05.03. During consideration of dispute in the Agency Trial Court changed claims and asked to exact from the defendant 3732, 94 UAH of the loss in the form of loss of property rights caused by transfer of the invalid requirement to Vasilkovsky Open joint stock company. The claimant referred to instructions of Articles 16, of 22, of 190, of 519, 623 Civil codes of Ukraine and article 224 of the Economic code of Ukraine.

Decision of economic court of the city of Kiev of 06:12. 06, the accepted judge Prokopenko L. V., claims are satisfied completely. The local court proved the decision by instructions of Article 22 of the Civil code of Ukraine, article 224 of the Economic code of Ukraine and Article 198 of the Civil code USSR. As court it is recognized that the defendant as primary creditor shall answer to the new creditor - the claimant for invalidity of the requirement transferred to it. The court recognized that determination of economic court of the Cherkassk region made of 06.05.03 the decision on liquidation of JSC Vasilkovsky. Creditor requirements to the debtor were not declared by the defendant. Therefore the court determined that for the period of signing of the act of acceptance transfer of receivables of JSC Vasilkovskoye to distribution balance the debt of the last already was hopeless.

The Kiev Economic Court of Appeal as a part of board of judges: Kapatsin N. V. - the chairman, Ropy L. M., Zelenina V. O., the resolution of 12.02.07 cancelled the checked decision on case, refused satisfaction of claims. The Appeal Court determined that receivables are transferred to the claimant based on the administrative act owing to reorganization of the defendant, but not owing to declaration of will of the parties or their economic activity. Besides, the court specified that the requirement of the claimant about claiming damages in the form of the lost property rights based on article 224 of the Economic code of Ukraine and Article 22 of the Civil code of Ukraine is unreasonable as the agreement of the party was not signed, receivables are listed in the act without proper documentary reasons and specifying of its specific signs - details. Thus the Appeal Court recognized that there are no confirmations of losses in general.

The state company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" appealed to the Supreme Economic Court of Ukraine with the writ of appeal in which it asks the resolution to cancel on case as accepted with violation of regulations of the procedural and substantive right, and the decision on case to leave without changes. The complainant refers to the wrong application of instructions of Articles by Appeal Court 197, 198 Civil codes USSR and violation of requirements of Articles 4, 202 same Codes. Together with it specifies inaccuracy of the conclusions of court about absence between the parties of the contractual commitments connected with right to claim concession based on the act of acceptance transfer of receivables. At the same time the applicant specifies that applying Articles 611, of 614, 623 Civil codes of Ukraine, the court incorrectly established nature of legal relationship between the parties and came to wrong conclusion about impossibility of application of regulations of the civil legislation which provide responsibility of primary creditor for invalidity of the requirement. The agency specifies availability in actions of the defendant of element of civil offense.

From the State-owned joint stock company "Bread of Ukraine" the comment on the writ of appeal in which the Company asks the resolution to leave on case without changes, and the writ of appeal - without satisfaction is received.

The Supreme Economic Court of Ukraine, having heard the report of the judge Dobrolyubova T. V. and explanations of agents of the parties, having reviewed case papers and arguments of the writ of appeal, having checked correctness of application by economic Appeal Court of instructions of the current legislation, notes the following.

According to part 1 of Article 111-7 of the Economic Procedure Code of Ukraine, reviewing in cassation procedure judgments, cassation instance based on the actual established facts of the case checks application by court of the first or appellate instance of regulations of substantive and procedural law.

Economic courts of the first and appeal instances it is established and confirmed with case papers that 15.05.2003 the Cabinet of Ministers of Ukraine the Resolution N690 "About formation of the state company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" which forms the new legal entity is accepted, by allocation from structure of DAK "Bread of Ukraine" of branch, "Agency on debt restructuring of the companies of agro-industrial complex" and it is carried to the sphere of management of the Ministry of agrarian policy of Ukraine. According to Item 3 of the called Resolution DAK "Bread of Ukraine" shall provide transfer to the Agency of right to claim against debtors of the Company by calculations for payment of the material resources delivered according to Resolutions of the Cabinet of Ministers of Ukraine of 03.09.1997 of N 977, of 24.01.1998 of N 77, of 24.01.1998 of N 83, of 25.08.1998 of N 1338, of commodity deliveries within the program of United States Department of Agriculture and also to other debtors of the Company. In pursuance of the mentioned Item of the Resolution of the Cabinet of Ministers of Ukraine N690 between the claimant and the defendant signs distribution balance as of 31.07.2003 and the act of acceptance transfer of receivables on this balance which were approved by the protocol of 02.09.03 N5 of government commission on restructuring of DAK "Bread of Ukraine". According to these documents and the schedule of accounts receivable to the claimant passed right to claim against Vasilkovsky Open joint stock company to the amount of 3rd 732, of 94 UAH. Item 1.3. The charter of the claimant it is determined that the company is legal successor of property rights and obligations of the reorganized DAK "Bread of Ukraine" according to the distribution act (balance). According to Item 3.1. The charter the company is formed for the purpose of the organization of work on return of debts of the companies of agro-industrial complex to the state and their restructuring, and also the organization of carrying out calculations between the companies and profit earnings. By courts of the previous instances it is also determined that determination of economic court of the Cherkassk region approves of 06.05.03 the report of the liquidator, the liquidation balance sheet and the decision on liquidation of Vasilkovsky Open joint stock company is made. Creditor requirements to the debtor were not declared by the defendant. The register of creditors was approved in 1999. Subject of action on this case is the requirement of GP "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" about collection from the defendant of 3rd 732, of 94 UAH of losses for transfer of the invalid requirement. According to Article 22 of the Civil code of Ukraine losses which person suffered in connection with destruction or damage of thing, and also expenses which person made belong to real losses or it is forced to make for recovery of the violated right. By article 224 of the Economic code of Ukraine it is determined that the participant of the economic relations who violated the economic obligation or the established requirements for implementation of economic activity shall pay the loss caused by it to the subject, the rights or legitimate interests of which are violated. Losses are understood as the expenses made by the authorized party, loss or damage of its property, and also income which is not gained by it which the authorized party would gain in case of proper accomplishment of the obligation or observance of rules of implementation of economic activity by the second party. Indemnification according to part 2 of article 217 of the Economic code of Ukraine is type of economic sanctions as which understand measures of influence on the offender in the field of housekeeping; it is necessary for their application that offenses at the victim resulted losses. The claimant, proving causing to him losses, refers to instructions of Article 519 of the Civil code of Ukraine, it is provided by which that primary creditor in the obligation answers to the new creditor for invalidity of the requirement transferred to it, but is not responsible for failure to carry out by the debtor of the obligation, except cases when primary creditor was charged for the debtor before the new creditor. The specified Article which belongs to general provisions about the obligations established limits of responsibility of the assignor to the cessionary and fixes the rule by which person is responsible only for the wrongful acts owing to which harm was done. Refusing satisfaction of claims, the Appeal Court correctly came to conclusion that between the claimant and the defendant of the obligation arose based on the administrative act owing to restructuring, but not on declaration of will of the parties. Obligations about transfer and acceptance of right to claim at JSC Vasilkovsky are executed by the parties properly. Unlike the civil relations which are based on free declaration of will of the parties administrative legal relationship follow from powers of authority of one of the parties which the instruction obliges other party to make certain actions or to refrain from them. The Appeal Court finds out that obligations between the claimant and the defendant arose in connection with accomplishment of the Resolution of the Cabinet of Ministers of Ukraine of 15.05.2003 of N 690, owing to reorganization of the defendant for debt restructuring, and do not confirm declaration of will of the parties which is necessary for agreement signature taking into account that the main and necessary condition of activities of the company is his independence in adoption of economic decisions. According to article 34 of the Law of Ukraine "About the companies in Ukraine" (acting for that time) in case of separation of the company pass to the new companies which resulted from this division under the separate act in the corresponding parts property rights and obligations of the reorganized company. In case of allocation from the company of one or several new companies pass to each of them under the separate act in the corresponding parts property rights and obligations of the reorganized company. The amount of the rights and obligations of neogenic person as a result of division (allocation) is fixed in the distribution act which is the financial record which reflects property condition of the company and which is constituted for certain date. Therefore actions of DAK "Bread of Ukraine" for transfer to the claimant of right to claim to her debtors are especially accomplishment of the order. Thus, statement of the complainant that the act of acceptance transfer confirms of 31.07.2003 availability between agreement parties is recognized wrong as the specified statement is drawn up to distribution balance and in turn determines object of successorship of neogenic economic structure. Taking into account it requirements of Chapter 17 of the Civil code USSR which correspond to provisions of Chapter 47 of the Civil code of Ukraine cannot be applied to disputable legal relationship. Arguments of the complainant about incorrect application of instructions of Articles by appellate instance 611, of 614, 623 Civil codes of Ukraine are based on approval of the party about the wrong establishment of the facts of the case by court. By appellate instance it is determined that in case there are no proofs confirming incurring with the claimant of losses on the declared amount and existence at the defendant of obligation to compensate those. At the same time the board of judges considers that the Company sent all means from the deliveries listed in the act to the government budget. From day of signing of the act for party litigants only the sequence of such transfer changed of 31.07.03. According to part 2 of Article 111-7 of the Economic Procedure Code of Ukraine the cassation instance has no right to establish or consider proved circumstances which were not established in the decision or the resolution of economic court or are rejected by it, to resolve issue of reliability of this or that proof, of benefit of one proofs over others, to collect new proofs or in addition to check proofs.

In case of such established facts of the case arguments of the writ of appeal about violation by court of regulations of substantive and procedural law do not confute correctness of the conclusions of Appeal Court about groundlessness of the declared claims. In this connection appeal instance the board of judges does not see the bases for change or cancellation of the resolution.

Being guided by Articles 111-5, 111-7, 111-8, 111-9, 111-11 of the Economic Procedure Code of Ukraine, the Supreme Economic Court of Ukraine, DECIDED:

Of 12.02.2007 on case N12/579 to leave the resolution of the Kiev Economic Court of Appeal without changes.

To leave the writ of appeal of the State company "Agency on Debt Restructuring of the Companies of Agro-industrial Complex" without satisfaction.

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