In the name of Republic of Tajikistan

DECISION

25.05.2004
Dushanbe

Case no.2-126/03
2-11/04

Economic Court of Republic of Tajikistan consisting of chairman Ismatov R.K., judges Khalikov B.H., Rahimov B.I., Secretary Tavarov A., interpreter Khakimov K.K., having considered the case in session of the court at the suit of deputy prosecutor of Dushanbe city in favor of Government of Dushanbe, defendant Committee on management of state-owned property of Dushanbe, codefendant Mission Center “Grace Sonmin” on invalidation of contract of purchase of undeveloped site of secondary school situated in Bofanda quarter, Dushanbe dated 02.07.1997; license for right of ownership dated 21.07.1998 and official act for right of acquisition of state-owned property with participation of representative of prosecutor of Dushanbe Khalikov H., chief assistant of prosecutor of Dushanbe, representative of Government of Dushanbe Mahmudova N.P., head of administrative-legal department of the Chairman of Dushanbe, acting based on letter of trust dated 13.11.2003 no.87/40/1, representative of Committee on management of state-owned property of Dushanbe Eshboev B.A., deputy chairman of the Committee, representative of Mission Center “Grace Sonmin” Kim V.D. acting based on letter of trust dated 03.01.2004, Kimsanov I.H., Ali-Agaev R.F., letter of trust dated 15.04.2004:

ADJUDGED:

Deputy prosecutor of Dushanbe had applied plaint note to the court that on behalf of Committee on management of state-owned property of Government of Dushanbe based on letters of Administration of capital construction of Government of Dushanbe dated 10.08.1996 no.68 and Mission Center “Grace Sonmin” dated 25.06.1996 no.17 documents for privatization of undeveloped site of secondary school located in Bofanda quarter, 48A Karabaev street, Dushanbe, were prepared. The site was offered for next auction and sold to Mission Center “Grace Sonmin” according to decision of the Chairman of Dushanbe no.53 dated 20.03.1997, based on article 7 of Law of Republic of Tajikistan “On denationalization and privatization of state property” and based on contract of purchase dated 02.06.1997 for the amount of 18.192.200 rubles, and on 21.07.1998 License for right of ownership batch no. 11 HMD and no.3501470 was issued to Mission Center “Grace Sonmin” and official act for right of acquisition of state-owned property by labor collective in specified term.

The contract of purchase of undeveloped site situated in Bofanda quarter dated 02.07.1997 and other documents composed based on the Contract are illegitimate and should be acknowledged as void based on the following foundation.

During privatization Committee on management of state-owned property of Government of Dushanbe violated legislation. The Committee assuming letter and protocol of the Center meeting dated 22.10.1996 no.40 and 02.09.1998 no.24 as basis, set the value of the site at 18.192.200 rubles so the Committee underestimated the value contrary to estimation of the site of 25.988.800 rubles by 7.796.600 rubles.

In this case the Commission on privatization of state property of Government of Dushanbe went beyond its commission. According to paragraph 5.8 of Order of privatization of state property in Republic of Tajikistan the Committee on management of state-owned property and Council of people's deputies have right to reduce price of privatized objects up to 30% based on conclusion of the Commission if object is privatized by labor collective.

At the moment mentioned Commission of Government of Dushanbe does not consider labor collective of Mission Center “Grace Sonmin” as labor collective. In accordance with former law of USSR “On labor collectives” the Center is not labor collective and but according to its Charter is volunteer humanitarian religious society.

Besides, in violation of the order of privatization of state property in Republic of Tajikistan the Protocol of Commission on property estimation no.4 dated 01.11.1996 where the price of the site and other conditions of price reduction are written, is not found.

Very this Protocol was basis for making decision of the Chairman of Dushanbe dated 24.03.1997 no.53 on approval of list of objects offered for sale, contract of purchase dated 02.07.1997 and official act for right of acquisition of state-owned property dated 25.07.1997.

According to the letter of Mission Center “Grace Sonmin” dated 02.09.1996 no.25 it follows that the Center acquired the disputable object in order to open boarding school.

Deputy prosecutor of Dushanbe submitted additional letter where it is noted that for the moment of privatization of disputable object law “On privatization of state property”, “Order of privatization of state property of Republic of Tajikistan”, Provisions on state property value were violated, and thus contract of purchase of undeveloped site of school situated in Bofanda quarter, Dushanbe dated 02.07.1997 between Committee on management of state-owned property of Government of Dushanbe and Mission Center “Grace Sonmin” is to be annulled.

License for right of ownership dated 21.07.1998 for disputable object issued by the Committee on management of state-owned property of Government of Dushanbe to Mission Center “Grace Sonmin” under batch no.11 HMD and no.3501470 is to be annulled.

Official act for right of acquisition of state-owned property by labor collective dated 25.07.1997 is to be annulled.

Mission Center “Grace Sonmin” made application to dismiss the claim.

Representative of prosecutor's office Khalikov H. requested on the court session to sustain the claim.

Representative of Government of Dushanbe Mahmudov N.R. requested on the court session to sustain the claim.

Representative of Committee on management of state-owned property of Government of Dushanbe Eshboev B. requested on the court session to dismiss the claim.

Representative of Mission Center “Grace Sonmin” Kim V.D. requested on the court session to dismiss the claim.

Representatives of Mission Center “Grace Sonmin” Kimsanov I.H., Ali-Agaev R.F. requested on the court session to dismiss the claim.

 

The court having studied case papers, listened to statements of representatives of parties, considered it necessary to dismiss the claim on the following basis.

According to the decision of the Chairman of Dushanbe dated 24.03.1997 no.53 undeveloped site of secondary school situated in Bofanda quarter, Dushanbe was offered for next auction and sold to Mission Center “Grace Sonmin”.

It is apparent from contract of purchase 28.03.1997 registration no.3501260450 RVK it follows that according to the Law of Republic of Tajikistan “On privatization of state property” Government of Dushanbe had sold undeveloped site of secondary school situated in Bofanda quarter, Dushanbe to Mission Center “Grace Sonmin” for 18.192.200 rubles. On 21.07.1998 license for right of ownership batch no.11 HMD and no.3501470 was issued to Mission Center “Grace Sonmin”. It is evident from official act for right of acquisition of state-owned property by labor collective in set period dated 25.07.1997 that Mission Center “Grace Sonmin” is allowed to purchase undeveloped site of secondary school situated in Bofanda quarter, Dushanbe for 18.192.200 rubles.

Prosecutor's office in plaint note marks that during privatization of disputable object letter and protocol of the Center meeting dated 22.10.1996 no.40 and 02.09.1998 no.24 are taken into consideration unfoundedly. In contravention of estimation of the site dated 01.0701997 where the price of the site was set to 25.988.800 rubles, the Commission set the price less for 7.796.600 rubles, i.e. 18.192.200 rubles.

It is evident from note to the Protocol no.4 dated 01.11.1996 that the Commission set the prices taking into account market prices, the object is sold to labor collective of Mission Center “Grace Sonmin” and 30% price reduction is not related to this fact.

It is evident from case papers, including contract of purchase 28.03.1997 no.3501260450 RVK that the Government of Dushanbe sold undeveloped site of secondary school situated in Bofanda quarter, Dushanbe to Mission Center “Grace Sonmin” for 18.192.200 rubles. And Mission Center “Grace Sonmin” should pay this amount till 25.06.1998.

It is apparent from case papers including bills no.1 dated 04.07.1997, no.2 dated 04.07.1997, no.1 dated 25.03.1998, no.3 dated 19.12.1997, no.3 dated 17.04.1998 that the amount shown in contract of purchase at 18.192.200 rubles is paid by vendee - Mission Center “Grace Sonmin”.

According to decision of Chairman of Dushanbe no.53 dated 24.03.1997 “On approval of list of objects offered for next auction” and undeveloped site situated in Bofanda quarter, Dushanbe was included into the list. The decision of Chairman of Dushanbe no.53 dated 24.03.1997 is not annulled.

According to article 6 of Law of Republic of Tajikistan “On denationalization and privatization of state property” in the process of privatization following forms of sale are used: giving time for acquisition of establishment, enterprise of any other state object on behalf of labor collective and other legal entities, enterprises and physical persons.

The court considers that privatization of undeveloped site of secondary school on behalf of Committee on management of state-owned property of Dushanbe based on the said Law was performed correct.

According to article 7 part 2 of Law of Republic of Tajikistan “On denationalization and privatization of state property” the value is defined at the moment of its existence, condition including actual cost.

According to estimation of undeveloped site as of 28.03.1997 no.3501260450 RVK, official act for right of acquisition of state-owned property in set period it is not shown that object is purchased on behalf of labor collective and value of reduced by 7.796.600 rubles.

According to paragraph 3.4 of Order of privatization of state property in Republic of Tajikistan Working Commission studying financial-economic operations of an organization, submits to Commission or Executive Committee of Council of people's deputies plan of privatization including value of site and decision on form of defining price.

According to paragraph 6.2 of Order of privatization of state property in Republic of Tajikistan price of enterprise for privatization is defined depending on its actual existence and condition, based on results of inventory and recommendation of commission on actual price taking into account current price, demand for manufactured products (services), location of enterprise, its category, its good opportunities, development opportunities and other factors.

The court considers that according to Law of Republic of Tajikistan “On denationalization and privatization of state property”, Order of privatization of state property in Republic of Tajikistan the Commission on evaluation defined the value of the site without prejudice.

According to contract of purchase of undeveloped site of school the main term is mandatory commissioning, prohibition for resale, expansion of quantity of production, works and services.

It is apparent from case papers that the vendee observed terms and conditions of the contract.

To date the object is under the aegis of Mission Center “Grace Sonmin”, is not subject to resale, amount 436.633 US doll. is spent for renovation and reconstruction of building. Net cost of the site is 461.949 US doll., value of the building including market factors is 2.000.000 US doll.

According to contract of purchase scope of production, works and services was expanded.

In its letter dated 02.09.1996 no.25 as it is shown in plaint note of deputy prosecutor of Dushanbe Mission Center “Grace Sonmin” has purpose of opening boarding school and this is not specified in the contract of purchase. So Mission Center “Grace Sonmin” did not promise to open boarding school.

According to article 41 of Civil Code of Republic of Tajikistan agreement is action of persons of organizations directed to establish, modify or cease civil rights and obligations.

The court considers that in the course of privatization of undeveloped site situated in Bofanda quarter, Dushanbe requirements of Civil Code of Republic of Tajikistan, Law “On denationalization and privatization of state property”, Order of privatization of state property in Republic of Tajikistan, including Guideline on defining value of state property are not violated.

Based on these reasons the Court decided to dismiss the claim.

On application of Mission Center “Grace Sonmin” the Court considers it necessary to apply limitation period.

In its application Mission Center “Grace Sonmin” requests to dismiss the claim applied on behalf of prosecutor’s office, the Government of Dushanbe, as the result of missing limitation period without due cause.

According to paragraph 2 of article 223, part 2 of Civil Code of Republic of Tajikistan upon expiry of limitation period if party to dispute had announced about its application, this circumstance will be basis for court to make decision to dismiss claim.

The court considers that the Prosecutor and the Government of Dushanbe missed limitation period for claim without due cause.

It is apparent from the case papers that contract of purchase of undeveloped site dated 28.03.1997, license for right of ownership dated 21.07.1998 and official act for right of acquisition of state-owned property by labor collective dated 25.07.1997 are issued correctly.

The contract of purchase is signed by the Chairman of Committee on management of state-owned property of Government of Dushanbe Yunusov M. Official act for right of acquisition of state-owned property by labor collective in specified period dated 25.07.1997 is issued with signature of deputy Chairman of the Government of Dushanbe Aliev A.

The Government of Dushanbe had opportunity to timely apply to court as it should have been advised on violation of its rights.

Arguments shown in plaint note on violation of Order of privatization of state property in Republic of Tajikistan, Protocol of Commission of evaluation no.4 dated 01.11.1996 where price of the site and other conditions for price reduction are shown, is not found and not confirmed. The reason that very this Protocol became basis for making decision by the Chairman of the Government of Dushanbe dated 24.03.1997 no.53, conclusion of contract of purchase dated 02.07.1997 and official act for right of acquisition of state property, is baseless, since as it is apparent from case papers including estimation of undeveloped site of school as of 01.07.1996, contract of purchase, official act for right of acquisition does indicate that based on Protocol no.4 dated 01.11.1996 because of selling the site to labor collective the value is reduced by 30%. According to evaluation as of 01.03.1996 while defining the price of the site for 18.192.200 somoni, market prices are taken into account.

Argument of representative of prosecutor’s office that plaintiff found out about violation of its rights only in 2002 after studying privatization documents is inconsistent since plaintiff should have known about violation of its rights at the moment of conclusion of contract of purchase.

According to article 206, part 2 of Civil Code of Republic of Tajikistan in cases of contract conclusion under threat or use of force (part 1, article 204) or plaintiff founds out about other circumstances that may become basis for invalidation of contract, plaintiff has can file complaint on this in 3 years of contract conclusion.

According to paragraph 2 of article 223, part 2 of Civil Code of Republic of Tajikistan expiry of limitation period which was announced by a party to dispute is basis for court decision to dismiss claim.

The court decides to dismiss the claim because the plaintiff missed limitation period without due cause.

Argument shown in the plaint note that Mission Center “Grace Sonmin” is not in any way related to undeveloped site of secondary school, is not confirmed by case papers, as the site was purchased on behalf of legal entity Mission Center “Grace Sonmin”.

Argument shown in the plaint note that contract of purchase is void as it was concluded after Law “On denationalization and privatization of state property” dated 14.06.1997 came into force, is inconsistent. Since as it is apparent from case papers including contract of purchase, official act for right of acquisition, license for right of ownership that auction on sale of mentioned site was held on 28.07.1997 and comply with Law of Republic of Tajikistan “On denationalization and privatization of state property”.

Argument of representatives of prosecutor’s office and the Government of Dushanbe on appealing against cancellation of illegitimate decision of the Chairman of the Government of Dushanbe dated 24.03.1997 no.53 and its cancellation is inconsistent, as this decision is justified and made in accordance with the Law of Republic of Tajikistan “On bodies of local state authority”.

Following articles 124-127, 134 of Economic procedural Code of Republic of Tajikistan, the court

DECIDED:

The claim of deputy prosecutor of Dushanbe and his additional claim in favor of the Government of Dushanbe against defendant Committee on management of state-owned property of the Government of Dushanbe, codefendant Mission Center “Grace Sonmin” on invalidation of contract of purchase of undeveloped site of secondary school situated in Bofanda quarter, Dushanbe dated 02.07.1997; license for right of ownership dated 21.07.1998 and official act for right of acquisition of state-owned property by labor collective in specified period dated 25.07.1997 are to be dismissed.

The decision can be appealed in cassational procedure in Supreme Economic Court of Republic of Tajikistan in period of one month.

Chairman: Ismatov R.K.
Judges: Kholikov B.H.
Rahimov B.I.