Judgment no. 01/2018/KDTM-PT dated january 11, 2018 on dispute over claim for termination of stone mining contract, equipment rental contract and stone slab production cooperation contract

THE SUPERIOR PEOPLE’S COURT OF HO CHI MINH CITY

JUDGMENT NO. 01/2018/KDTM-PT DATED JANUARY 11, 2018 ON DISPUTE OVER CLAIM FOR TERMINATION OF STONE MINING CONTRACT, EQUIPMENT RENTAL CONTRACT AND STONE SLAB PRODUCTION COOPERATION CONTRACT

On January 11, 2018, at the Supreme People's Court in Ho Chi Minh City, a public appellate trial is conducted to hear the case No. 29/2017/TLPT-KDTM dated August 22, 2017 on the dispute over "Claim for termination of contract for mining of white granite at T2 quarry, a contract to rent white granite mining equipment at T2 quarry and contract addendum , contract for stone slab production cooperation; claim for reimbursement of the value of machinery and equipment for transporting and lifting block stones and advance money before terminating the contract; claim for fulfillment of liabilities to pay debts to the State under cooperation contract, compensate for damage caused by breaches of contract” based on the appeal against the First Instance Business Judgment No. 02/2017/KDTM-ST dated June 15, 2017 of the People's Court of Ninh Thuan Province.

According to the Decision to Bring the Case to the Appellate Trial No. 818/2017/QD-PT dated December 20, 2017 between the parties:

- Plaintiff:  K stone material limited liability company (CS Co., Ltd); address: D Development Zone, E Commune, F City, Fujian Province, China.

Legal representative:  Mr. Huang Tian Y - Director General; address: D Development Zone, E Commune, F City, Fujian Province, China (absent).

Authorized representative (Letters of Authorization dated April 4, 2016 and November 21, 2016):  Mrs. Nguyen Thi C - born in  1960; residing in: G Ward, H District, Ho Chi Minh City (present).

- Respondent:  V Geology Joint Stock Company; address: Industrial Cluster I, I Commune, J City, Ninh Thuan Province. Legal representative:  Mr. Luong Ngoc K1 - Director General (absent).

Authorized representative (Authorization contract dated August 24, 2016): Mr. Tran Duy L, born in 1976; residing in: A Ward, B City, Dong Nai Province (present).

- Person with related interests and obligations:  P Joint-stock Commercial Bank; address: D District, Hanoi City. Legal representative:  Mr. Nguyen Quang D

- Director General; address: No. 229 Tay Son, D District, Hanoi City (absent). The authorized representative (Authorization Decision No. 185/2014/QD-TGD dated July 31, 2014): Mr. Le Ngoc L1, born in 1977

- Deputy Director in charge of Khanh Hoa Branch; residing in: L Ward, M City, Khanh Hoa Province (absent). Authorized representative (Letter of Authorization No. 01/2018/UQ-PGD dated January 8, 2018): Mr. Tran Duc C1; residing in: N Ward, O District, Ho Chi Minh City (present).

- Appellant: respondent.

THE CASE

Representation of the plaintiff’s authorized representative  in the lawsuit petition, statements, during the lawsuit settlement process and at the first instance court hearing:

K - CS Co., Ltd stone material limited company (hereinafter referred to as Company K) and V Geology Joint Stock Company (hereinafter referred to as Company V) signed three contracts below: Contract No. 03/GEO-CFS/13 dated August 1, 2013 for cooperation in mining white granite at the T2 quarry (hereinafter referred to as Contract No. 03); Contract No. 12/GEO-CFS/13 dated December 15, 2013 for rental of equipment for mining white granite at the T2 quarry (hereinafter referred to as Contract No. 12); Contract Addendum No. 12A / GEO-CFS/13 dated December 30, 2013 of the contract No. 12/GEO-CFS/13 dated December 15, 2013 (hereinafter referred to as Contract Addendum No. 12A); Contract No. 15/GEO-CFS/13 dated December 15, 2013 to cooperate in manufacturing granite stone slabs (hereinafter referred to as Contract No. 15).

Company K imported machines and equipment under Contract No. 12 including: double-blade block cutting machine at the quarry, Shuinan mark YZK-1360/1900 model, year of manufacture 2013: 2 sets; cutting blade (2.2m + 3,3m): 4 sets; rail: 700m; drilling machine: 1 set; wire cutting machine: 1 set; WSM loader, 951T18 model: 2 units. Company V has intentionally pledged all of the above assets to P Joint Stock Commercial Bank (hereinafter referred to as Bank) to secure the own loan of Company V.

Company K has strictly complied with the commitments in the contract: paid in advance; building houses for workers and auxiliary works at T2 quarry; building abutment, office building (under construction) at Industrial Cluster I, J City, Ninh Thuan Province. Company V does not comply with the contractual commitments, does not carry out legal procedures for Chinese workers and experts of Company K under the labor laws of Vietnam resulting in the consequence that experts, workers of Company K must return home upon expiration of their visas. At the time of the dispute in September 2014, Company V continued to use all assets including machinery, equipment, buildings and other structures at T2 quarry as well as Industrial Cluster I.

Company K initiates a lawsuit requesting the termination of all contracts signed and executed by both parties; requires Company V to pay: the asset value of Company K under Contract No. 12 and accessories of VND 5,677,955,116; advances from two receipts No. 8/CP on August 17, 2013 of VND 800,000,000, non-number receipt slip dated September 16, 2013 of VND 525,000,000 and cash of VND 15,000,000, total amount is VND 1,340,000,000; bathhouses, Q water tank, 10-room worker suites, roofs of workers' suites, all located at T2 quarry, total amount of VND 69,412,000; concrete block of 14.3m3, brick wall with a length of 80m and more than 2m of height, located in Industrial Cluster I, total amount of VND 154,485,000; tax refund for import of 02 stone cutters and 02 loaders is VND 367,200,209; debt amount is VND 74,750,416; money for block stones at the yard which were checked and accepted: VND 92,501,220. At the first instance trial, the plaintiff's representative requested the respondent to pay the value of the cooperative property including machinery, equipment, workshops, debts (requested by plaintiffs) is VND 6,329,033,514 in which the value of machinery and equipment in cooperation is VND 5,677,955,116.

According to the counterclaim, the declarations, the minutes of the testimony, the authorized representative of V Geology Joint Stock Company presented:

Company K and Company V signed contracts as presented by the plaintiff. Contract No. 03 is not performed and rights and obligations of which are transferred to Contract No. 12, Contract Addendum No. 12A and Contract No. 15. According to the request to terminate contracts and addendum of Company K, Company V agrees to terminate all contracts and addendum signed by both companies.

Company V has strictly complied with the terms of the contracts. Company K did not continue to apply for visa extension for Chinese experts and workers resulting in the consequence that they arbitrarily returned to China, causing damage to Company V. Company V has repeatedly sent documents to Company K but no response has been received. Due to the fault of Company K, Company V continued to use a part of machinery and equipment to continue exploiting and using all assets of Company K including machinery and buildings mortgaged at the Bank P.

Company V received advance from Company K according to the receipt No. 18/CP dated August 17, 2013, the receipt on September 16, 2013 and VND 15,000,000 in cash, totaling VND 1,340,000,000. Company V spent this amount on: fees, taxes, fees, housing construction costs for workers at T2 quarry, which is VND 903.583.405, so it only agrees to pay VND 436,416,595. Company V agrees to pay Company K the refund of VAT on import of two stone cutters of VND 146,494,704, two loaders of VND 220,705,505, totaling VND 367,200,209.

Company V agrees to pay Company K debt of 70% of block stone production until December 2014, which is VND 74,750,416, the debt of accepted block stone remaining at the quarry, which is VND 92,501,220, totaling VND 167,251,636.

Accordingly, Company V still owes Company K a total of VND 970,868,440. The amount of VND 50,000,000 received by Company V from Mr. Hoa is not related to the case, the Company will pay directly to Mr. Hoa.

Company V requests to buy back all assets of machinery and equipment of Company K at the price calculated by Company V, after depreciation.

Company V makes a counterclaim, requesting Company K to pay the following:

- Debts to the State of Vietnam as prescribed in Clause 5.2 of Article 5 of Contract No. 12 is VND 664,660,566 including:

+ Land rent from January 2014 to October 2015 is (7,000m2 x VND 357/m2/year): 12 months x 22 months = VND 4,581,500. + Charge for granting the mineral mining right from January 2014 to December 2014 is VND 834,363,747/year: 12,000m3/year x 6,000m3 x 70% = VND 292,027,311. + Charge for granting the mineral mining right from January 2015 to October 2015 is VND 292,027,311/year: 12 months x 10 months = VND 243,356,093. + The fine for late payment of charge for granting the mineral mining right from January 2014 to December 2014 is VND 292,027,311/year x 25.2%/year = VND 73,590,882; from January 2015 to October 2015, VND 243,356,093/year x 25.2%/year/12 months x10 months = VND 51,104,780.

- Compensation under Article 4 of Contract No. 12, including:

+ 20% of Class A stone is 30m3 x VND 2,300,000 /m3 = VND 69,000,000.

+ 40% of Class B stone is 60m3 x VND 1,800,000/m3 = VND 108,000,000.

+ 40% of grade C stone is 60m3 x VND 1,200,000/m3 = VND 72,000,000.

Total: VND 249,000,000/month x 15 months (from August 2014 to October 2015) = VND 3,735,000,000. - VND 100,000,000 for smashing two machine foundations, foundations and walls illegally built by K Company at Industrial Complex I.

At the first instance trial, the authorized representative of the respondent asked the plaintiff to pay tax debts, compensations for breach of contract totaling VND 4,499,660,566.

According to the deposition, testimony record, authorized representative of the person with related rights and obligations - P Joint Stock Commercial Bank has the opinion:

Company V borrowed money from the Bank and mortgaged all machines and buildings but the Bank did not know these were the assets of Company K. The process of appraisal and lending, Company V did not let the bank know the original source of the assets. The Bank has no independent request, does not require reconciliation, only requests the participation of the Bank in the trial to ensure that the assets still maintained under the Mortgage Agreement between the Bank and Company V.

In the First Instance Business Judgment No. 02/2017/KDTM-ST dated June 15, 2017, the People's Court of Ninh Thuan Province decided:

Pursuant to Article 30 Clause 1, Article 35 Clause 3, Article 147, Article 165 of the Civil Procedure Code 2015; Articles 303, 308, 319 of the Law on Commerce; Articles 357, 468 of the Civil Code 2015; Article 24 Clauses 1, 4, 5 of Ordinance on Court Charges and Fees; Section 3 Part I List of court fees and charges issued together with Ordinance No. 10/2009/UBTVQH12 dated February 27, 2009.

Hereby judges: 

1. Declaring termination of contracts and contract addendum signed between K Stone Material Limited Liability Company (CS Co., Ltd) and V Geology Joint Stock Company including:

- Contract No. 03/GEO-CFS/13 dated August 1, 2013;

- Contract No. 12/GEO-CFS/13 dated December 15, 2013; Quarry Contract Addendum of Contract No. 12/GEO-CFS/13 dated December 15, 2013;

- Contract No. 15/GEO-CFS/13 dated December 15, 2013.

2. Accepting part of the petition of K Stone Material Limited Company against V Geology Joint Stock Company; forcing V Geology Joint Stock Company to return to K Stone Material Limited Liability Company a total amount of VND 5,415,574,823 (Five billion four hundred and fifteen million five hundred seventy four thousand eight hundred and twenty three dong).

3. Accepting part of the counterclaim request of V Geology Joint Stock Company against K Stone Material Limited Liability Company; forcing K Stone Material Limited Liability Company to return to V Joint Stock Company a total amount of: 591,013,353 VND (Five hundred and ninety one million thirteen thousand three hundred and fifty three dong).

4. V Geology Joint Stock Company is entitled to own assets below:

+ 02 WSM loaders, 951T18 model.

+02 stone cutters.

+04 sets of blade (four blades 2.2m and four blades 3.3m).

+700 meters of rails.

+01 wire cutter.

+01 air compressor (including compressor and gas tank).

+ Bathhouses (temporary houses), concrete block walls, cement floors, area: 5 m2, residual value: 40%.+01 water tank Q 1000 liters, residual value 80%.

+01 rows of workers' suites, 10 rooms (including 03 rooms without corrugated iron roofs), concrete block walls, cement-covered floors, iron gates, corrugated-zinc roofs, an area of ​​120m2, residual value: 40%.+ Covered roof (of workers' suites), wooden truss roof, corrugated iron roof, cement floor, area: 60m2, residual value: 60%.In addition, the Court of First Instance also decided to maintain the mortgage of the assets of V Geology Joint Stock Company pledged at Q Joint Stock Commercial Bank - Khanh Hoa Branch, the cost of appraisal and valuation, judicial assistance costs, judgment enforcement, interest rates if the judgment enforcement is delayed, court fee and the right to appeal according to the provisions of law.

On June 27, 2017, V Geology Joint Stock Company appealed to the Court of Appeal to amend the First Instance Judgment for reasons below: The plaintiff violated the contract, stopped mining on September 13, 2014 due to conflicts between members of the Company and the plaintiff's family without noticing the respondent. There was no labor dispute between the plaintiff and the respondent. The plaintiff committed breach of the contract for not selecting and providing evidence of skilled and experienced Chinese workers while the unskilled workers must prioritize the employment of Vietnamese. The respondent pledged the property based on the verbal consent of the plaintiff, shown in the 5th Contract Completion Record signed by the plaintiff’s representative. The plaintiff sold Mrs. Y1 some machines for Mrs. Y1 to resell them to the respondent. The Court of First Instance was against the law when forcing the respondent to pay the tax refund, not based on the asset price at the time of appraisal and infringed a part of rights and legitimate interests of the respondent when only partially accepting counterclaim while the respondent provides sufficient evidence just solely based on the reason that the respondent used wire cutters and air compressors leading to the high quotation.

At the appellate trial, the respondent presents his opinion as stated in the appeal and requests the Appellate Trial Panel to consider the following issues: Contract No. 15 has not been performed. The Chinese side arbitrarily stopped mining while the Company had to prioritize the employment of Vietnamese labor. Advances and construction investment are counted twice. The Court of First Instance’s acceptance to the tax refund amount which was brought into during the trial is considered as beyond the plaintiff's initial petition request, which forces the respondent to pay twice and charge the court fee inadequately. The valuation is incorrect, although the respondent did not use the assets, the respondent is presumably deemed as using the assets. Circular of Ministry of Finance at the time of valuation is not applied. The fault of both parties has not been fully considered. The respondent proposed to make restitution according to the percentage, based on the Contract Completion Record signed between the two parties. The plaintiff acknowledged and recorded in the report that the plaintiff intended to divide the assets to sell them to Mrs. Y1 but failed.

Opinions of the plaintiff at the appellate trial: Advances for investment (according to the cross-examination report dated November 25, 2016). The respondent violated all requests for Chinese workers.

At the appellate trial, the representative of P Joint Stock Commercial Bank proposes to repay the debt in accordance with the law.

The representative of the High-level People's Procuracy in Ho Chi Minh City expressed the viewpoint of resolving the case as follows: The Court of First Instance partially accepted the plaintiff's petition request, partially accepted the request in accordance with laws and regulations. The respondent appealed without any new evidence or argument Proposing the Appellate Trial Panel not to accept the respondent's appeal and uphold the First Instance Judgment.

JUDGEMENT OF THE COURT

 [1] The legal representative of the plaintiff, the respondent and the person with related rights and obligations are absent but they have authorized representatives to participate in the proceedings at the trial. The Trial Panel agrees with the request of the Prosecutor and the decision to bring the case to trial in accordance with the law.

 [2] Plaintiff and respondent confirm that they concluded Contract No. 03, Contract No. 12, Contract Addendum No. 12A and Contract No. 15. The time of dispute agreed by both parties was in September 2014. The plaintiff sued on June 20, 2016, so it means within the prescriptive period for initiating lawsuits under Article 319 of the Commercial Law 2005.

 [3] In Official Letter No. 798/SLDTBXH-LDTL dated May 10, 2017 on providing information on granting work permits to foreigners at Company V (hereinafter referred to as Official Letter 798), the Department of Labor, War Valids and Social Affairs (hereinafter referred to as Dolisa) affirmed: From August 2013 to September 2014, Mr. Luong Ngoc K1 went to the Dolisa to work directly to apply for a work permit for 03 foreign workers (Chinese nationality) but the dossier still lacks 02 items of documents as prescribed in the annual need for employment of foreigners to register with the Dolisa, the professional qualifications of people labor or certification of at least 05 years of professional experience certified by a foreign competent authority. Dolisa instructed and requested Mr. Luong Ngoc K1 to add 02 missing items. During the period from August 2013 to September 2014, Dolisa did not accept the application and did not issue work permits to Company V. After that, Company V sent the Official Letter No. 29/GEO-KT to the Dolisa asking guidance on the procedures for granting work permits to foreigners working at the Company.   On August 19, 2013, Dolisa issued Official Letter No. 2788/SLDTBXH-VLATLD on guidelines for procedures for granting work permits to foreigners working in Vietnam to the Company. By the time of signing Official Letter 798, Dolisa had not granted work permits to Company V.

 [4] Based on the contents of Official Letter 798, temporary residence registration does not replace the obligation to complete the procedures for work permit application for foreign workers working in Vietnam and there is no basis for accepting the respondent’s claim that that it has fulfilled its obligations such as: applying for a work permit for skilled and experienced Chinese technicians and workers, facilitating the fulfillment of all obligations in terms of temporary residence registration for Chinese technical workers. The respondent violated Article 5, Section 5.1 of Contract No. 12, which requires Company V to arrange legal procedures and dossiers in accordance with the laws of Vietnam to apply for work permits for technical experts and workers of Company K. After working and being guided by Dolisa of Ninh Thuan Province the procedure for applying for work permits for foreign workers, but the respondent did not urgently supplement the missing documents and notify the plaintiff for coordination.

 [5] The respondent affirmed that the plaintiff violated the obligation to select and introduce the respondent technical experts and workers, provide documents proving that Chinese technical workers have suitable qualifications or experience in order for the respondent to apply for work permits (as agreed in Section 5.2 Article 5 of Contract No. 12) but the respondent cannot provide documents and evidence to support this argument. Meanwhile, under the contract signed by two contracting parties, the respondent is bound to apply for work permits. Therefore, the Court of First Instance has valid grounds for determining that Company K does not violate Section 5.2 Article 5 of Contract No. 12.

 [6] The respondent stated that the proximate cause of the dispute arose from the internal conflict of members and the plaintiff's family, causing the plaintiff to stop mining on September 13, 2014, without notifying the respondent. This argument is not well-grounded because the respondent, instead of relying on the mutual agreement to determine whether the partner committed violate, denied is responsibility. In fact, in September 2014, the plaintiff continued sending workers to work and settle disputes, but failed to do so because these workers did not comply with stay regulations under Vietnamese law. The Appellate Trial Panel has no basis to accept the respondent's appeal, claiming determination of the plaintiff's breach of the contract due to the stop of mining.

 [7] The respondent acknowledges that all equipment and machinery for mining and operating white block stones at T2 quarry are under the ownership of Company K under the provisions of Contract No. 12 and Contract Addendum No. 12A. Without the consent of Company K, the respondent arbitrarily used the assets of Company K to mortgage at the Bank to secure the loan of the respondent before the dispute occurrence (the mortgage in June 2014, the dispute in September 2014). Thus, the respondent has violated the contract and infringed upon the plaintiff's property rights.

 [8] The respondent stated that the plaintiff's mortgage of assets at the Bank was entirely based on the consensus of the plaintiff's representative, affirming that the agreement was only verbal. The plaintiff knew and approved that, through the fact that the plaintiff representative, Mr. Y signed the 5th Contract Completion Record, agreed to compensate with some machines, equipment and for the respondent to use, the rest of machines and equipment were sold to Mrs. Y1 and the respondent is free to use these machines and equipment when the sale between Mrs. Y1 and the respondent was completed. The respondent's statement has no valid ground because the plaintiff does not confirm that the plaintiff agreed to let the respondent to pledge the plaintiff's assets to the Bank as the mortgage. Moreover, the 5th Contract Completion Record was recorded on July 9, 2015 after the respondent arbitrarily pledged the plaintiff's assets to the Bank and in this Record there was no content showing the plaintiff’s consent for the respondent to mortgage the plaintiff's assets. On the other hand, the respondent did not have documents and evidence to prove that the plaintiff sold machines and equipment to Mrs. Y1 and the respondent bought Mrs. Y1's machines and equipment before the time of mortgage to the Bank as stated by the respondent. Therefore, the Court of First Instance had valid grounds for determining that the respondent has violated Contract No. 12 and Contract Addendum No. 12A, directly infringing on the legal rights and interests of Company K. The Appellate Trial Panel does not accept the respondent's appeal in determining that the respondent has no error when arbitrarily pledging the plaintiff's assets for a loan.

 [9] The respondent stated that at the first instance trial, the plaintiff representative requested the respondent to refund the tax but the Court of First Instance did not verify but accepted the lawsuit petition as an infringement of rights and interests of the respondent and beyond the initial lawsuit request. The respondent's opinion has no basis because the tax refund is the advance paid by the plaintiff and is included in the plaintiff's claim. The First Instance Judgment states the plaintiff's request, which requires the respondent to pay the plaintiff VND 367,200,209 for tax refund of import of 02 stone cutters and 02 loaders. At the first instance trial, the respondent confirms and agrees to pay the plaintiff this amount so the Court of First Instance does not have to verify. The plaintiff requires completion and resolution of all contracts between the two parties and issues related to the plaintiff's assets in contract and contract addendum, in which the tax refund is given in general content, it is not a separate issue, so the Court of First Instance’s resolution is deemed not to exceed the original lawsuit petition. In addition, the First Instance Trial Panel did not record that the respondent has to return to the plaintiff any other refund. Therefore, the Appellate Trial Panel has no valid ground to accept the respondent's appeal regarding the request regarding the tax refund amount that the respondent must pay to the plaintiff as stated in the First Instance Judgment.

 [10] In the Asset Valuation Record from March 21, 2017 to March 31, 2017 signed by the parties, the Asset Valuation Council determined the prices of the assets used by the respondent from January 2014 to September 2014 and from January 2014 to March 31, 2017, determine the prices of unused assets currently managed by respondent from January 2014 to September 2014 and value of assets at the time of valuation on March 31, 2017. The respondent admitted the respondent imported machinery and facilities under the contract, having pledged all assets to the Bank to borrow money in June 2014 while Clause 2.1 of Article 2 of the Contract No. 12 recognizing that all machines, equipment and facilities are 100% new, so it was appropriate for the First Instance Trial Panel to take asset valuation result from January 2014 to September 2014 to force the respondent to pay the plaintiffs accordingly (If determining prices according to the asset status at the time of valuation is unfair because the asset has been worn out over the time the respondent exploited or used it, self-managed or mortgaged. Particularly, air compressors and wire cutters are listed in the group of assets that the respondent used in the Asset Valuation Record which has been confirmed by the respondent. Therefore, the Appellate Trial Panel does not accept the respondent's appeal that the respondent must buy the plaintiff's machines and equipment not based on the price at the time of appraisal and the respondent had to pay high price while the respondent did not use a wire cutter, air compressors.

 [11] The respondent countered the request to force the plaintiff to pay the debts payable to the State of Vietnam according to the agreement in Clause 5.2 of Article 5 of Contract No. 12 of VND 664,660,566, compensate the respondent under the agreement at Article 4 of Contract No. 12 is VND 3,835,000,000 (of which VND 100,000,000 is the cost of smashing 2 machine foundations, foundations and walls which were illegally built by the plaintiff in Industrial Cluster I). Clause 5.2 Article 5 of Contract No. 12 determines that the respondent is responsible for reimbursing the natural resource tax, environmental protection fee and related tax obligations (if any) on the volume of paid block stones of the respondent. Therefore, the Court of First Instance has correctly identified the amounts that the plaintiff has to pay to the respondent, in particular: the plaintiff participating in the cooperation contract from January 2014 to September 2014, so the plaintiff should incur land rent (7,000m2 x VND 357 /m2: 12 months) x 9 months = VND 1,874,250, charge for granting the mineral mining right (VND 834,363,747/year: 12,000m3/year) x 6000m3 x 70%: 12 months x 9 months = VND 219,020,483 (land rent is based on the land lease contract between People's Committee of Ninh Thuan Province and Company V, the charge for granting mining right is based on the Decision No. 2662 dated December 19, 2014 of People's Committee of Ninh Thuan Province). [12] From January 2015 to October 2015, the respondent proceeded to mine stones itself, so the Court of First Instance had valid grounds for not accepting the respondent's request to force the plaintiff to pay the charge for granting mining right in this period a total of VND 243,356,093.

 [13] According to the confirmation of Tax Department of Ninh Thuan Province, the amount of late payment of charge for granting stone mining right in 2014 - 2015 was VND 173,964,841. In 2015, the respondent extracted stones by itself, so the First Instance Trial Panel was well-grounded when only forcing the plaintiff to pay the respondent a half of the amount determined by the Tax Department, which is VND 86,982,420 and not accepting the request of the respondent to force the plaintiff to pay VND 124,695,662.

 [14] Article 4 Contract No. 12 provides for payment methods: the respondent pays 70% of the volume of finished stone products during the contract performance period, the plaintiff is responsible for paying 30% of the volume of block stones to the respondent if the exploitation bench is not enough to exploit 30% of the block stone output; in the case that the plaintiff does not reach the minimum output of 500m3/month, the plaintiff is responsible for paying the respondent in cash with a value of VND 3,000,000/m3 of the volume of blocks that the plaintiff cannot extract. However, after the time of the dispute (September 2014), the respondent managed and used the plaintiff's machinery to mine stones, so only the claim for the amount payable to the respondent under Article 4 of Contract No. 12 before the termination of cooperation in the respondent's counterclaim (September 2014) shall be considered. According to the table of debt comparison on November 3, 2014, determined from October 1, 2014 to October 31, 2014, the respondent owes plaintiff VND 74,750,416 and the respondent also has to pay 70% of the volume of block stone to the plaintiff. In addition, the respondent also admitted non-payment of the accepted volume of block stones at the yard to the plaintiff. Thus, there is no basis to determine that the plaintiff must pay the amounts under Article 4 of Contract No. 12 to the respondent. On the other hand, the respondent committed a breach of contract, so the plaintiff does not have to compensate for the amounts under Article 4 of Contract No. 12. The First Instance Trial Panel correctly did not accept the respondent's request to claim compensation VND 3,735,000,000 from the plaintiff.

 [15] According to the Asset Valuation Record, the cost of smashing the two machine foundations, foundations and walls illegally built at Industrial Cluster I by the plaintiff is VND 12,000,000 so the Court of First Instance had valid grounds for not accepting the request of the respondent forcing the plaintiff to pay VND 100,000,000 but only accepting VND 12,000,000.

 [16] The respondent has sufficient documents proving the fact that the respondent assisted the plaintiff to build houses for workers, roofs, bathhouses, toilets and water tanks with a total cost of 271,362,200 VND, so the Court of First Instance was reasonable for accepting the respondent's counterclaim on this cost.

 [17] In total amount of the counterclaim of the respondent of VND 4,499,660,566, the Court of First Instance accepted VND 591,013,353 (including VND 1,874,250, VND 219,020,483, VND 86,982,420, VND 271,136,200 and VND 12,000,000), which are fully and satisfactorily resolved. The Appellate Trial Panel has no basis to accept the respondent's appeal regarding the request to accept the whole of respondent's counterclaim.

 [18] The Trial Panel does not consider the respondent's request at the appellate trial on the court fee for the tax refund because this request is not stated in the appeal. On the other hand, the first instance court fee has been determined by the Court of First Instance based on the petition and the counterclaim request, calculated on the total value of assets that the two parties must deliver to each other, which is consistent with the provisions of law.

 [19] From the above analysis, the Appellate Trial Panel does not accept the entire appeal of the respondent.

 [20] The view of representative of the Superior People's Procuracy in Ho Chi Minh City should be accepted as it is suitable with the view of the Appellate Trial Panel.

 [21] The respondent's appeal is not accepted, so the respondent must bear the court appellate business fee in accordance with Clause 1 Article 148 of the Civil Procedure Code and Clause 1 Article 29 Resolution No. 326/2016/NQ-UBTVQH14 dated December 30, 2016 of the Standing Committee of the National Assembly on court fees and charges and collection, exemption, reduction, collection, remittance, management and use thereof and the list of court fees and charges issued together with this Resolution.

 [22] In the decision part of the First Instance Judgment, the First Instance Trial Panel writes "Article 24, Clauses 1, 4 and 5 of the Ordinance on Court Fees and Court Fees", which is inaccurate. So, the Appellate Trial Panel revises it to "Clauses 1, 4 and 5 Article 27 of the Ordinance on Fees and Charges of Court No. 10/2009/UBTVQH12 dated February 27, 2009".

Based on the above-mentioned facts and matters,

HEREBY DECIDES

Pursuant to Clause 1, Article 308 of the Civil Procedure Code,

Do not accept the respondent's appeal, uphold the First-Instance Business Judgment No. 02/2017/KDTM-ST dated June 15, 2017 of the People's Court of Ninh Thuan province.

Pursuant to Clause 1 Article 30, Clause 3 Article 35, Article 147, Article 165 of the Civil Procedure Code 2015; Articles 303, 308, 319 of the Law on Commerce; Articles 357, 468 of the Civil Code 2015; Clauses 1, 4, 5 Article 27 of Ordinance on Court Charges and Fees No. 10/2009/UBTVQH12 dated February 27, 2009; Section 3 Part I List of court fees and charges issued together with Ordinance..

Hereby judges: 

1. Declaring termination of contracts and contract addendum signed between K Stone Material Limited Liability Company (CS Co., Ltd) and V Geology Joint Stock Company including: Contract No. 03/GEO-CFS/13 dated August 1, 2013, Contract No. 12/GEO-CFS/13 dated December 15, 2013, Contract Addendum No. 12A/GEO-CFS/13 dated December 30, 2013 of the contract No. 12/GEO-CFS/13 dated December 15, 2013, Contract No. 15/GEO-CFS/13 dated December 15, 2013.

2. Accepting a part of the petition of K Stone Material Limited Company against V Geology Joint Stock Company; forcing V Geology Joint Stock Company to repay to K Stone Material Limited Liability Company a total amount of VND 5,415,574,823 (Five billion four hundred and fifteen million five hundred seventy four thousand eight hundred and twenty three dong).

3. Accepting a part of the counterclaim of V Geology Joint Stock Company for K Stone Material Limited Liability Company, forcing K Stone Material Limited Liability Company to pay V Geology Joint Stock Company the total amount of VND 591,013,353 (Five hundred and ninety one million, thirteen thousand and thirty five and fifty thousand Vietnamese dong).

4. V Geology Joint Stock Company is entitled to own assets below: 02 WSM loaders, model 951T18; 02 stone cutters; 04 sets of blades (four blades 2.2m and four blades 3.3m); 700 meters of rails; 01 wire cutting machine; 01 air compressor (including compressor and gas tank); bath houses (temporary houses), brick walls, cement floors, area of ​​5 m2, 40% remaining value; 01 water tank Q 1000 liters, the remaining value 80%; 01 row of 10-room workers’ suites (in which 03 rooms have no corrugated iron roof) brick walls are built with bricks, cemented floor, iron doors, zinc-roofed roofs, area is 120m2, remaining value: 40%; roofs (belonging to workers’ suites), wooden truss roofs, corrugated iron roofs, cement floors, an area of ​​60m2, a residual value of 60%.The respondent has to pay 2,000,000 (two million) dong of the court appellate business charge, deducted from the amount of 2,000,000 (two million) dong of advance (the receipt of advance payment of court fees and charges No. 0013781 dated July 5, 2017 of Department of Civil Judgment Enforcement of Ninh Thuan Province).

Other decision parts of the First Instance Judgment which do not have any appeal will remain legally effective from the expiry of time limit for the appeal.

From the date of the application for judgment execution, the judgment debtors must pay monthly interest on the delayed amount corresponding to the time of enforcement delay according to the interest rates prescribed in Article 468 of the Civil Code. 2015.

In case the judgment or court decision is enforced as per regulations in Article 2 of the Law on enforcements of civil judgments, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on Enforcement of Civil Judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on Enforcement of Civil Judgments.

The Appellate Judgment shall take legal effect from the date of pronouncement.


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Judgment no. 01/2018/KDTM-PT dated january 11, 2018 on dispute over claim for termination of stone mining contract, equipment rental contract and stone slab production cooperation contract

Số hiệu:01/2018/KDTM-PT
Cấp xét xử:Phúc thẩm
Agency issued: Tòa án nhân dân cấp cao
Field:Kinh tế
Date issued: 11/01/2018
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