Trial court:Intermediate People's Court of Yingkou City, Liaoning Province

Case No:(2022) Liao 08 min zong no 2446

Cause of action:Construction Contract Disputes

Date of Referee:October 20, 2022

Intermediate People's Court of Yingkou City, Liaoning Province

civil judgment

(2022) Liao 08 min zong no 2446

Appellant (Defendant in the Original Instance): Yingkou Haidong Ecological Industry Co., Ltd. has its domicile in Xiangyang Garden Community, Bayuquan District, Yingkou CityStore 10-16, building 24.

Legal Representative:Wu Mou Middle, General Manager.

Authorized agent ad litem: Yuan Yuan, lawyer of Liaoning Tianying Law Firm.

Authorized litigation agent: Yang Qingxiao, lawyer of Liaoning Shancheng Law Firm.

Appellee (plaintiff in the original trial): Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. has its domicile on the south side of Dongyi Road, Hongze County Economic Development Zone,328 on the west side of Provincial Highway.

Legal Representative:Zhao Mouxi, General Manager.

Authorized agent ad litem: Gao Jian, lawyer of Jiangsu Suyuan Law Firm.

The appellant Yingkou Haidong Ecological Industry Co., Ltd. (hereinafter referred to as Haidong Company) refused to accept the people's Court of Bayuquan District, Yingkou City due to a dispute over a construction contract with the appellee Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. (hereinafter referred to as Fengyuan Company) (2021) Liao 0804 civil judgment No. 903 at the beginning of the Republic of China appealed to this court. After filing the case, the court formed a collegial panel in accordance with the law to hear the case. The case has now been closed.

haidong company appeal request:1. Request the court to revoke the first item of the civil judgment (2021) Liao 0804 Minchu No. 903 made by the people's Court of Bayuquan District, Yingkou City, Liaoning Province, requesting a reduction of 1006534 yuan of project funds according to law, and the appellant is not required to pay interest; 2. The appeal fee shall be borne by the appellee. Facts and reasons: 1. the original court of fact finding error. 1. The basic situation of this case. Since November 12, 2013, the Bayuquan District Government has signed a series of agreements with the appellant on the renovation projects of Honghai River and Erdaohe River. The appellant contracted the project from the Bayuquan District Government, and then the appellant subcontracted the equipment part (equipment production and installation of the two sewage outlets Shengshui River and Jintun River sewage treatment stations) to the appellee in this case. Due to the delay in paying the project funds involved in the case by the Bayuquan District Government, the appellant sued the Bayuquan District Government on August 31, 2017 to form a series of legal documents. 2. The appellant and the appellee have not clearly agreed on the total project price/equipment payment, and the project involved in the case has an appraisal conclusion approved by the effective judgment. According to the "Entrustment Agreement" signed by the appellant and the appellee, both parties only agree that according to the entrustment agreement, the appellant will pay the appellee the advance payment of the project. In the absence of clear agreement between the appellant and the appellee, the whole project including the project involved in the case has been appraised and the judgment recognized by the court and made accordingly has also taken effect, therefore, this case should also accept the appraisal conclusion made by Liaoning jinbiao new voyage construction management co., ltd. that is, the equipment is 4393466 yuan, the appellant has paid 1.6 million yuan, and the appellee has to pay 2793466 yuan. 3. The basis for the original court to determine the facts (the judgment of first instance) has been remanded for retrial by the court of second instance with unclear facts, and the retrial has accepted the appraisal amount to determine the project fund. The basis for supporting the appellee's 3.8 million application is only the civil judgment (2020) Liao 0881 Minchu No. 1286 issued by gaizhou city court, which states that "on may 12, 2014, yingkou haidong ecological industry co., ltd. and the plaintiff signed an entrustment agreement, agreeing that the overall design, equipment production, installation and commissioning of the purification tank treatment project of the two river treatment project shall be completed by the plaintiff, the two parties agreed that the equipment price shall be 5.4 million yuan, and the defendant shall actually pay 1.6 million yuan". However, the (2020) Liao 0881 Minchu Civil Judgment No. 1286 made by the Gaizhou Municipal People's Court has long been remanded for retrial by the Yingkou City Intermediate People's Court of Liaoning Province in the (2020) Liao 08 Minchu Ruling No. 2745 with unclear facts. Page 10 of the (2020) Liao 0881 Minchu Judgment No. 3884 made by the Gaizhou City Court for retrial clearly states: "Regarding the underground civil engineering, above-ground construction engineering and equipment value stored in the buildings of the two sewage treatment stations of Shengshui River and Jintun River, our hospital accepts the appraisal conclusion made by Liaoning Jinbiao New Navigation Construction Management Co., Ltd., and the total price of the above-mentioned projects and equipment is 5832289.71 yuan (1438823.71 yuan for civil engineering and 4393466 yuan for equipment), which Bayuquan District Government shall pay". 2. on interest section. 1. In the Entrustment Agreement, the appellant and the appellee did not clearly agree on the construction period, payment time and other related matters. Just as the court held on page 11 of the (2020) Liao 0881 Minchu 3884 judgment that has come into effect: "Before Yingkou Haidong Company signed the Cooperation Agreement with Bayuquan District Government, Yingkou Haidong Company had already carried out actual design, survey and construction, in the" Cooperation Agreement ", the two parties did not clearly agree on the project duration, payment time and other related matters. Therefore, Yingkou Haidong Company's request for the Bayuquan District Government to pay liquidated damages for overdue payment is not valid and this court will not support it". 2. The appellant and Bayuquan District Government agreed in Paragraph 1 of the Seventh Liability for Breach of Contract in the Cooperation Agreement: "If Party A fails to repay Party B's investment and income with the land transfer proceeds in accordance with the agreement, Party A shall pay Party B a penalty of three ten thousandths of the total investment for each day of delay". The agreement of three thousandths on that day is not only a penalty agreement, but also an interest agreement, however, in the case between the appellant and the Bayuquan District Government, the effective judgment made by the Yingkou Intermediate People's Court did not support the appellant's claim for interest on the grounds that the two parties did not clearly agree on the project duration and payment time. 3. This case belongs to the same project as the appellant v. Bayuquan government. According to the spirit of the Implementation Measures of the Supreme People's Court for the Uniform Application of Laws, the appellee's claim for interest shall be similarly withheld from the appellee's claim for interest on the project payment owed by the general contractor on the premise that the general contractor and the subcontractor have no clear agreement on the project construction period, payment time and liability for breach of contract. To sum up, the court of second instance is requested to support the appellant's appeal.

The appellee Fengyuan Company argued that the facts found in the first instance judgment were clear and the applicable law was correct, for the following reasons: 1. the appellant and the appellee to the total project price./The equipment payment has long been clearly agreed to be 5.4 million yuan, which is reflected not only in the fact-finding part of (2020) Liao 0881 Min Chu Civil Judgment No. 1286, but also in (2020) Liao 0881 Min Chu Civil Judgment No. 3884 and the second (2021) Liao 08 Min Zhong Civil Judgment No. 3070. (2020) in the civil judgment of Liao 0881 Minchu No. 3884, the appellant's claim part, page 2, line 3, "the price of the purification tank is 5.4 million yuan", and page 6, line 8, "the price of the equipment agreed by both parties is 5.4 million yuan". It can be seen that in the whole litigation process between the appellant and the people's government of Bayuquan district, Yingkou city, the employer, the appellant admitted from beginning to end that the contract price agreed with the appellee was 5.4 million yuan, which has been confirmed by the court many times. 2. the principle of contract relativity. There is a contractual relationship between the appellant and the people's Government of Bayuquan District of Yingkou City, there is a contractual relationship between the appellant and the appellee, and there is no contractual relationship between the people's Government of Bayuquan District of Yingkou City and the appellee. The appellant and Yingkou Bayuquan District People's Government in (2020) Liao 0881 Minchu No. 3884 case for the purification tank procurement and installation project cost appraisal, is only part of the basis for the project payment settlement between the appellant and Yingkou Bayuquan District People's Government, and has nothing to do with the appellee. In addition, the appellant and the appellee set a price of 5.4 million yuan. At that time, both parties not only considered the market price, but also considered the appellee's reasonable profit expectation. However, the cost appraisal did not consider the profit. If there is no legal prohibition when the appellant and the appellee sign the contract, it shall be a true and effective basis for settlement. 3. on interest section. Although the appellant and the appellee did not clearly agree on the construction period, payment time and other related matters in the "Entrustment Agreement", the court of first instance did not make any mistake in accordance with the provisions of Articles 26 and 27 of the "(I) on the Interpretation of the Supreme People's Court on the Application of Law in the Trial of Disputes over Construction Contracts of Construction Projects. The reason is as follows: the appellee completed the construction task and delivered it for use from September 1, 2014. therefore, the equipment has generated electricity charges for operation since September 1, 2014 (the appellee has submitted relevant evidence in the first instance). It can also be seen in (2020) the appellant's facts and reasons in the civil judgment No. 3884 of Liao 0881 Minchu, line 4 on page 3, "on September 1, 2014, the civil construction, equipment installation and wooden house installation of the two sewage treatment stations were completed", and line 22 on page 3, "since the project was put into use in November 2014", that the appellant recognized that the project was completed on September 1, 2014, the project was put into use in November 2014. In the first instance of this case, the appellee sued the appellant for interest payment. unlike the first instance of this case, the appellee sued the people's government of Bayuquan district of Yingkou city for liquidated damages instead of interest. just as the court held in the civil judgment (2021) Liao 08 min zong No. 3070, page 13, line 3, "regarding Haidong company's demand for interest payment for overdue payment, since Haidong company did not make this request in the original lawsuit, therefore, this request will not be supported by this court". This case is different from the other case put forward by the appellant. Therefore, the reasons put forward by the appellant for the same case are not valid.

Fengyuan Company filed a lawsuit with the court of first instance: the 1. ordered the defendant to pay the plaintiff for the project.3800000 yuan, and bear the interest calculated from September 1, 2014 to the date of actual settlement at the interest rate of similar loans of the People's Bank of China for the same period. The 2. ordered the defendant to pay the plaintiff 49000 yuan for electricity. The 3. ordered the defendant to pay the plaintiff 100000 yuan for labor and travel expenses. The 4. ordered the defendant to pay the plaintiff 50000 yuan for bacterial cultivation in the purification tank. The 5. ordered that the costs of litigation and appraisal in this case be borne by the defendant.

The court of first instance found out the facts: the people's Government of Bayuquan District of Yingkou City willThe ecological treatment project of "Shengshui River" and "Jintun River" sewage treatment stations was contracted out to the defendant. On May 12, 2014, the original and the defendant signed an entrustment agreement, stating that the defendant entrusted the plaintiff to be the contractor for the overall design, equipment production, installation and commissioning of the purification tank treatment project of the Lianghe treatment project in Yingkou Economic Development Zone. The defendant paid the plaintiff an advance payment of RMB 2600000 yuan, and the agreement was valid until the formal contract for the project was signed. The defendant paid 1600000 yuan in advance for the project. The plaintiff carried out the construction according to the agreement and delivered it for use in September 2014. The plaintiff repeatedly urged the defendant for the above expenses but failed. In the same year, the original and defendant signed and confirmed the "Delivery List of 500m/d Sewage Purification Equipment for Bayuquan Two Rivers Treatment Project (Shengshui River) (Jintun River)", the Treatment Handover Form of Sewage Purification Equipment Commissioning Plan and the "Treatment Handover List of 500m/d Sewage Purification Equipment for Bayuquan Two Rivers Treatment Anmu of Yingkou Haidong Ecological Industry Co., Ltd." On November 4, 2014, Yingkou Environmental Testing Center Station issued Yinghuan Monitoring Zi (2014) No. 065 "Test Report". The entrusted unit was the plaintiff company and the testing category was water quality. In addition, the people's Government of Bayuquan District of Yingkou City did not organize the completion acceptance and final accounts audit. The plaintiff issued a quotation for 300T/D buried sewage treatment of Shengshui River in Bayuquan District, with an amount of 1.55 million yuan, a quotation for 200T/D buried sewage treatment of Shengshui River in Bayuquan District, with an amount of 1.15 million yuan, a quotation for 300T/D buried sewage treatment of Jintun River in Bayuquan District, with an amount of 1.55 million yuan, and a quotation for 200T/D buried sewage treatment of Jintun River in Bayuquan District. The defendant has no amount of 1.15 million yuan, but there are objections to the price. The plaintiff provided the civil judgment (2020) Liao 0881 Minchu No. 1286 issued by Gaizhou People's Court. The fact determination part stated that Yingkou Haidong Ecological Industry Co., Ltd. began to build two sewage treatment stations, Shengshui River and Jintun River, in June 2014. On May 12, 2014, Yingkou Haidong Ecological Industry Co., Ltd. signed an entrustment agreement with Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd, it was agreed that the overall design, equipment fabrication, installation and commissioning of the purification tank treatment project of the two rivers treatment project would be completed by Jiangsu fengyuan environmental protection technology engineering co., ltd. both parties agreed that the equipment price would be 5.4 million yuan, and the defendant would actually pay 1.6 million yuan. The plaintiff provided the civil judgment (2020) Liao 0881 Minchu No. 3884 issued by the Gaizhou Municipal People's Court. The fact determination part stated that according to the application of Yingkou Haidong Ecological Industry Co., Ltd, the Intermediate People's Court of Yingkou City entrusted Liaoning Jinbiao New Voyage Construction Management Co., Ltd. to conduct underground civil engineering, above-ground construction (equipment room) construction, and the value of equipment stored in the buildings of the two small sewage treatment stations of Shengshui River and Jintun River. Judicial appraisal. On July 15, 2021, Liaoning jinbiao new voyage construction management co., ltd. issued appraisal opinion no 002 (2021) of Liao jinjiansi. the appraisal opinion is that the price of underground civil works of shengshui river and jintun river sewage treatment stations is 1035587.51 yuan, the construction cost of above-ground buildings (equipment) is 403236.2 yuan, the value of equipment stored in the buildings (including installation fee, etc.) is 4393466 yuan, and the total of the three items are 5832289.71 yuan. Again, in September 2014, after the overall project was delivered, the plaintiff paid 49000 yuan's operating electricity bill on behalf of the defendant. According to another investigation, the plaintiff submitted an application for suspension of litigation to the court, applying for the court to suspend the case. The reason is that in 2014, the people's government of Bayuquan District of Yingkou City contracted out the ecological treatment project of Shengshui River and Jintun River sewage treatment stations to the defendant, and the defendant subcontracted the purification tank treatment project to the plaintiff for construction. The plaintiff has fulfilled all the obligations of the contract in accordance with the agreement, but so far the defendant has not settled some of the project funds. The defendant's failure to pay for the project was due to the contractor's failure to conduct an audit settlement with the People's Government of Bayuquan District, Yingkou City. Therefore, another case (2020) Liao 0881 Republic of China No. 3884 is being heard by Gai County Court. Due to the dispute between the two parties on the cost of the project, the defendant has applied to the court to identify the cost of the project. Therefore, this case needs to be based on the results of another case, so the application for suspension of the case.

The court of first instance held that the signing of the "Entrustment Agreement" between the plaintiff and the defendant was the true intention of both parties and did not violate the mandatory provisions of relevant laws and regulations, and the contract should be true and effective. Now the plaintiff has fulfilled the corresponding obligations in accordance with the contract between the two parties, but the defendant has not paid the remaining project funds and corresponding expenses. Therefore, the defendant shall pay the plaintiff the remaining project funds.3.8 million yuan. The defendant replied that there was no final account for the project involved in the case, and the amount of the project payment to the plaintiff should be subject to the project cost opinion issued by the appraisal institution. the defendant had applied for project cost appraisal in another case. the (2020) civil judgment No. 3884 of Liao 0881 Minchu issued by gaizhou city people's court already stated that the underground civil engineering price of shengshui river and jintun river sewage treatment stations was 1035587.51 yuan, and the above ground construction cost of 403236.2 yuan, the value of the equipment stored in the building (including installation fee, etc.) is 4393466 yuan, and the total of the three items is 5832289.71 yuan. In addition, the Gaizhou Municipal People's Court issued a civil judgment (2020) Liao 0881 Min Chu No. 1286, which stated in the fact-finding part that on May 12, 2014, Yingkou Haidong Ecological Industry Co., Ltd. signed an entrustment agreement with the plaintiff, agreeing that the overall design, equipment production, installation and commissioning of the purification tank treatment project of the two river treatment project should be completed by the plaintiff. Both parties agreed that the equipment price was 5.4 million yuan and the defendant actually paid 1.6 million yuan. Therefore, the plaintiff's claim is supported by this court. With regard to the section on the plaintiff's request for the defendant to pay the interest on the outstanding project funds, according to Article 26 of the Interpretation (I) of the Supreme People's Court on the Application of Law in the Trial of Disputes over Construction Contracts, "If the parties have an agreement on the standard for calculating and paying the interest on the outstanding project funds, they shall be dealt with in accordance with the agreement. In the absence of an agreement, the interest shall be calculated in accordance with the interest rate of the same type of the same period or quoted market rate of the same period." and Article 27 "Interest shall be paid from the date on which the price of the work is payable. If the parties do not agree on the payment time or the agreement is unclear, the following time shall be deemed as the payable time: (1) if the construction project has actually been delivered, it shall be the date of delivery; if the (II) construction project has not been delivered, it shall be the date of submission of the completion settlement documents; if the (III) construction project has not been delivered and the project price has not been settled, it shall be the date of prosecution by the parties, and the defendant, from the actual date of delivery, that is, September 1, 2014 to August 19, 2019, it shall be calculated according to the interest rate of similar loans of the people's Bank of China for the same period; from August 20, 2019 to the date of full payment, it shall be calculated according to the loan market quotation interest rate published by the national interbank lending center for the same period; regarding the plaintiff's request to order the defendant to pay the advance electricity fee of 49000 yuan, the plaintiff was confirmed by the special receipt and the defendant, therefore, the court supports the plaintiff's claim. With regard to the plaintiff's request to order the defendant to pay labor costs, travel expenses and bacterial cultivation fees in the purification tank, the plaintiff did not provide formal special bills and other evidence to prove it, and should bear the legal consequences of the inability to provide evidence. Therefore, the court does not support the plaintiff's request. The plaintiff may take another action after obtaining the corresponding evidence. To sum up, the court of first instance ruled as follows: the 1. defendant Yingkou Haidong Ecological Industry Co., Ltd. shall pay 3800000 yuan and interest to the plaintiff Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. within 10 days from the effective date of this judgment, the interest shall be calculated according to the interest rate of similar loans of the people's Bank of China for the same period from September 1, 2014 to August 19, 2019. From August 20, 2019 to the date of full payment, calculated according to the loan market quotation interest rate announced by the National Interbank Funding Center during the same period; the 2. defendant Yingkou Haidong Ecological Industry Co., Ltd. shall pay the plaintiff Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. 49000 yuan in advance within 10 days from the effective date of this judgment; If the obligation to pay money is not fulfilled within the period specified in this judgment, the provisions of Article 253 of the the People's Republic of China Civil Procedure Law shall be followed, double the interest on the debt during the period of delay in performance. The 3. rejected other claims of the plaintiff Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. The case acceptance fee of 38792 yuan shall be borne by the plaintiff Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd., 1551.68 yuan, and the defendant Yingkou Haidong Ecological Industry Co., Ltd. shall bear 37240.32 yuan.

During the second instance, the appellant Haidong Company provided the court with the price of Liaoning Jinbiao New Voyage Construction Management Co., Ltd (2021) Appraisal Opinion No. 002 proves that 5.4 million yuan is only a quotation, not the final audit result. The cross-examination opinion of the appellee Fengyuan Company is that there is no objection to the authenticity of the evidence. We believe that the contract price between the appellee and the appellee was 5.4 million yuan by the appellee before this case and has been confirmed by the court many times.

This court confirms the facts ascertained by the court of first instance.

The Court believes that the People's Government of Bayuquan District of Yingkou City contracted out the ecological environment treatment project of Honghai River and Erdaohe River to Haidong Company, and Haidong Company subcontracted the purification tank treatment project in the two river treatment project to Fengyuan Company, and signed the Entrustment Agreement with Fengyuan Company, but the agreement did not stipulate the total contract price. Although Haidong Company sued the People's Government of Bayuquan District of Yingkou City for project payment, Haidong Company stated that the contract price with Fengyuan Company was5.4 million yuan, but the case was appraised by Liaoning Jinbiao New Voyage Construction Management Co., Ltd., and the appraisal conclusion was: "The underground civil engineering price of Shengshui River and Jintun River Sewage Treatment Station is 1035587.51 yuan, the construction cost of above-ground construction (equipment) is 403236.2 yuan, the value of equipment stored in the building (including installation fee, etc.) is 4393466 yuan, and the total of the three items is 5832289.71 yuan", the court accepted the appraisal amount and ordered the people's Government of Bayuquan District of Yingkou City to pay the project fund to Haidong company according to the standard. The above appraisal conclusion of "the value of the equipment stored in the building (including installation fees, etc.) 4393466 yuan" is the case of Fengyuan company construction of all projects, so the case should also be this amount as the total price of the project involved in the case more in line with the principle of fairness. Since Haidong Company has paid 1600000 yuan for the project, Haidong Company shall bear the responsibility for the remaining 2793466 yuan for the project. With regard to the issue of interest, Article 27 of the (I) of the Supreme People's Court on the Interpretation of the Application of Law in Cases of Disputes over Construction Contracts stipulates: "Interest shall be calculated and paid from the date on which the price of the project is payable. If the parties do not agree on the time of payment or the agreement is unclear, the following time shall be deemed as the time of payment: if the (I) construction project has actually been delivered, it shall be the date of delivery; if the (II) construction project has not been delivered, it shall be the date of submission of the completion settlement documents; if the (III) construction project has not been delivered and the project price has not been settled, it shall be the date of prosecution by the parties". In this case, both parties have no objection to the fact that the delivery time of the project involved in the case is September 2014. Therefore, the court of first instance ruled that Haidong Company began to pay the interest on the project payment from September 1, 2014, and the court maintained it.

To sum up, the appeal claim of the appellant Yingkou Haidong Ecological Industry Co., Ltd. is partially established. In accordance with the provisions of paragraph 1, paragraph 2, of Article 177 of the the People's Republic of China Civil procedure Law, the judgment is as follows:

1. maintain Yingkou Bayuquan District People's Court (2021) Liao 0804 Minchu No. 903 Civil Judgment II and III;

2. Change Yingkou Bayuquan District People's Court (2021) The first item of Liao 0804 Minchu No. 903 civil judgment is "Yingkou Haidong Ecological Industry Co., Ltd. shall pay Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. 2793466 yuan and interest within 10 days from the effective date of this judgment (the interest is based on 2793466 yuan, From September 1, 2014 to August 19, 2019, it will be calculated according to the same loan interest rate of the People's Bank of China for the same period; from August 20, 2019 to the date of actual payment, based on the loan market quotation rate published by the National Interbank Lending Center for the same period)".

If the obligation to pay money is not fulfilled within the period specified in this judgment, the interest on the debt during the period of delay shall be doubled in accordance with the provisions of Article 260 of the the People's Republic of China Civil Procedure Law.

First instance case acceptance fee38792 yuan, 27542 yuan borne by Yingkou Haidong Ecological Industry Co., Ltd. and 11250 yuan by Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd. The acceptance fee for the second instance case is 13859 yuan, which is borne by Jiangsu Fengyuan Environmental Protection Technology Engineering Co., Ltd.

This judgment is final.

Presiding Judge Gaishi Fei

Judge Xu Dan

Judge Yao Wang

October 20, 2002

Judge Assistant Sun**Hua

Clerk Xu Pengyuan