And they also need to pay interest. The court ruled that they should be paid. The state-owned enterprise refused to pay 15 million yuan for the private enterprise's goods due to the suspension of the project
Due to the long-term suspension of the project, a state-owned enterprise in Shanghai refused to pay 15 million yuan for goods due to the failure to meet the payment terms stipulated in the contract. The delayed private enterprise faced difficulties in recovering funds and had no choice but to file a lawsuit in court. Recently, the reporter learned about this case from the Baoshan District People's Court in Shanghai. After being tried by two levels of courts, it was determined in accordance with the law that the defendant's state-owned enterprise should pay the outstanding amount, and a reasonable interest calculation time was determined using the principle of fairness.
The plaintiff in this case is a private enterprise registered in Henan Province. In July 2019, the plaintiff and defendant signed three concrete procurement contracts and supplementary agreements. The defendant purchased commercial concrete from the plaintiff for the construction of a local park project in Henan. The payment method is to process a monthly settlement statement, with 70% to be paid by the end of next month. Within 2 months after the settlement of the main structure of the project is completed, 85% to be paid. Within 2 months after the acceptance and settlement of the main structure are completed, 95% to be paid. The remaining 5% to be paid within 6 months after the completion of all top concrete pouring and settlement. The contract also stipulates that if the defendant is unable to fulfill its obligations as stipulated in the contract and causes losses to the plaintiff, the defendant shall compensate the plaintiff for the direct economic losses incurred as a result.
In 2020, after the plaintiff gradually supplied concrete with a total price of over 60 million yuan, the theme park constructed by the defendant was suspended due to the construction party's reasons. Due to the fact that most of the main structures of the project have not been capped, the defendant has only paid a portion of the concrete payment and still owes more than 15 million yuan.
In the trial, the defendant had no objection to the unpaid balance of over 15 million yuan, but believed that the main structure of the project under the contract was not capped, and according to the terms of the contract between both parties, the payment terms had not been reached. And since both parties have not completed the settlement of the concrete supply contract mentioned above, the plaintiff has no right to claim overdue interest.
After the trial by Baoshan Court, it was found that there is a prerequisite for the payment milestones agreed upon in the contract between the two parties, which is that the project can be constructed, completed, and accepted normally. The project has been suspended for a long time now, and both parties are uncertain whether construction can resume in the future. In this situation, if payment is still strictly made according to the agreed milestones in the contract, it is clearly unfair to the plaintiff who has already provided concrete.
Taking into account factors such as the cessation of supply, the construction party, and the time of filing a lawsuit, Baoshan Court has ruled in the first instance that the defendant shall pay the plaintiff more than 15 million yuan for the goods and pay the corresponding overdue interest from September 1, 2022 to the actual payment date.
After the first instance judgment, the defendant was dissatisfied and filed an appeal. Recently, the Shanghai Second Intermediate People's Court rejected the appeal in the second instance and upheld the original verdict.
