Penalty award for Defense Ministry cut by 97 percent
MOSCOW, March 26 - RAPSI. The Moscow Commercial Court has partially satisfied the Defense Ministry's lawsuit against its supplier Uniform-N, while cutting the claimed amount from $44.2 million to $1.3 million.
According to the ministry, the company contracted to supply 317,900 new uniform sets worth 747.06 million rubles ($25.4 million) by August 2010.
The ministry maintains that the supplier undertook to deliver the uniforms within one month, but was late with the delivery. Under the contract, the customer was entitled to a penalty amounting to no less than 1/300 of the refinancing rate for each event of default.
However, the 1.28 billion ruble ($43.5 million) penalty will only be paid partially.
While considering the defendant's complaint about the disproportionate penalty amount, the court found it possible to apply Civil Code Article 333 and reduce the penalty to exactly 1/300 of the refinancing rate, i.e. 37.8 million rubles ($1.3 million). The judgment reads that the claimed penalty is obviously disproportionate to the default effects.
The court also refused to satisfy the ministry's claim for interest on the 30.4 million ruble ($1 million) trade credit issued to the supplier.