On the cancellation of the order to eliminate the identified violations and on the consideration of the responsibility of persons
No.6001-24-00-6ap/3337 dated April 08, 2025
The plaintiff: State Institution "Akim's Office"
Respondent: Russian State Institution "Department of Internal State Audit of the Internal State Audit Committee of the Ministry of Finance of the Republic of Kazakhstan" (hereinafter referred to as the Department)
Interested parties: LLP "I", LLP "B"
The subject of the dispute: on the cancellation of the order dated November 14, 2023 to eliminate the identified violations and on the consideration of the liability of those who committed them in part 1 – on compensation (transfer) to
the budget amounts to 16,801.8 thousand tenge
Review of cassation complaints of interested persons PLOT:
A.A. appealed to the Department of the Anti-Corruption Agency of the Republic of Kazakhstan (Anti-Corruption Service) with a complaint regarding violations during public procurement for the facility "Construction of retaining structures to eliminate a natural emergency, elimination of a landslide situation and installation of a retaining gabion wall (new construction)."
This request has been forwarded to the Department to take action within the scope of the powers granted to it.
Based on the results of the audit on the validity of the work performed on the above-mentioned facility, the Department identified violations, compiled an audit report dated August 25, 2023, and issued a contested order to eliminate the identified violations dated November 14, 2023.
When compiling the report and issuing the contested order, the Department was guided by the expert's conclusion, according to which it was established that the cost of unfinished construction work on the facility amounted to 16,801,773 tenge.
On September 8, 2023, the plaintiff filed an objection with the Appeal Commission of the Ministry of Finance of the Republic of Kazakhstan. On November 8, 2023, based on the results of consideration of the objection, the Appeal Commission issued a decision to dismiss the objection.
Disagreeing with the results of the audit, the plaintiff appealed to the court with this claim.
Judicial acts:
1st instance: the claim was denied. A private ruling was issued to the Akimat, the Agency of the Republic of Kazakhstan for Civil Service Affairs on violations of the rule of law by employees of the Akim's Office.
Appeal: By the decision and ruling of the SCAD dated February 13, 2024, these judicial acts were left unchanged.
By the resolution of the SCAD of the Supreme Court of the Republic of Kazakhstan dated
On July 16, 2024, the SCUD resolution and ruling of February 13, 2024 were canceled, and the case was sent for a new hearing to the court of appeal.
Upon a new review, the decision of the court of first instance was left unchanged by the decision of the SCAD dated October 8, 2024.
Cassation: The SCUD decision of October 8, 2024 in this case was canceled.
The case has been sent for new consideration to the court of appeal in a different composition of the court.
Conclusions: the judicial board, by its decision of July 16, 2024, canceling the decision and ruling of the SCAD of February 13, 2024 and sending the case for a new hearing to the court of appeal, indicated the following.
Firstly, the courts did not investigate the appeals of A.A. and other persons who served as the basis for the audit event. As a representative of the defendant's Department explained at the hearing, these appeals concerned the quality of construction work at the Facility, and not the use of budgetary funds. In this regard, the courts should have examined the Department's actions on the validity of initiating and conducting an audit, rather than redirecting appeals to authorized bodies carrying out state architectural and construction control and supervision.
Secondly, at the hearing, representatives of LLP "B" (technical supervision) and LLP "I" (author's supervision) explained that during the inspection and measurements by a specialist engaged by the Department, no one invited them, they were not familiar with the conclusion of this specialist, they were not given the opportunity to express their concern. he expressed his opinion, while the acts of hidden work were provided to the courts, but they ignored them. The courts also did not give a legal assessment to these circumstances, as well as to the legality of the Department's actions not to involve persons who carried out copyright and technical supervision in the audit event.
Thirdly, the conclusions of the courts of previous instances, as well as the Department's order disputed by the plaintiff, are based on only one expert opinion, which, in turn, both in the conclusion and during the court proceedings, indicated that he had not measured the entire volume of the Facility, but had reached his conclusions about the unfulfilled amount of work in the amount of 16,801,807 tenge by calculations. However, in conditions when the Department's order was based only on the conclusion of this specialist, when the auditor himself did not participate in the inspection and measurements of the Object, this position of the courts is vulnerable from a legal point of view.
The above arguments, as well as the factual circumstances of the case and the legal arguments of the plaintiff and interested parties who filed cassation complaints, were unreasonably left without due attention and proper legal assessment by the courts of previous instances.
According to part 4-1 of Article 451 of the CPC, instructions on the need to perform the procedural actions set out in the decision of the court of cassation instance, in case of cancellation of judicial acts and transfer of the case for a new hearing, are mandatory for the court reviewing the case.
This requirement was not fulfilled by the court of appeal.
The essence of the conclusions of the said court regarding the instructions of the court of cassation instance boils down to disagreement with it.
More moreover, the court of appeal did not consider
the appeals of the interested parties of LLP "I" and LLP "B", as well as the plaintiff's private complaint against the private definition.
Such a significant violation of procedural rules in itself serves as a basis for the cancellation of the decision of the court of appeal.
In addition, the board re-states that the courts have incorrectly determined and clarified the range of circumstances relevant to the case, the conclusions of the courts are premature.
According to the expert, the cost of the formwork construction exceeded the actual cost by 16,801,773 tenge, based on the need to build it only from the front side of the gabion wall. This conclusion was justified by the fact that "Since part of the retaining walls is located in inaccessible places for a specialist to perform control measurements, the volume of work performed was taken as a basis, which is reflected in the approved design estimates and adjustment certificates (delete-add)."
The indicated conclusions of the expert have not been properly investigated by the courts, and they have not been given a proper legal assessment taking into account the requirements of the PSA. The conclusions of the courts in this part are based on assumptions, explanations by the plaintiff, representatives of interested parties about the design features of the formwork, have not been refuted by the defendant, and have not been verified by the courts in accordance with the established procedure.
The above arguments, as well as the factual circumstances of the case and the legal arguments of the interested parties who filed cassation complaints, were unreasonably left without due attention and proper legal assessment by local courts.
The above-mentioned violations of substantive law cannot be eliminated by the court of cassation, since this requires establishing the factual circumstances of the case through research and evaluation of evidence. Due to the requirements of the CPC, the court of cassation is not endowed with these powers, and therefore the case must be referred for a new hearing to the court of appeal.
During the new review, the court of appeal should have eliminated these shortcomings (including by appointing a judicial construction and economic expertise) and considered the claim in full, ensuring the protection of the rights of the persons involved in the case, and, depending on the established, in accordance with the norms of substantive and procedural law, to decide a lawful and reasonable judicial act.
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