A legal entity entered into a contract with a public authority to provide site supervision (\u201cdirigen\u021bie de \u0219antier\u201d) for a limited period of 8 months, at a fixed price. Later, an addendum extended the initial contract by another 3 months due to the contractor\u2019s delay in completing rehabilitation works.<\/p>\n\n\n\n
Subsequently, between the same contracting parties, a second contract for related services was concluded, with an object closely connected to, but different from, the first contract.<\/p>\n\n\n\n
During a control by the Cluj Chamber of Auditors, it was found that, for the first contract, three months\u2019 worth of payments had been made beyond the contractual term. Further, the second contract was deemed unjustified because its services should have been covered by the first contract, since the price of that contract was fixed per investment objective and not per month. The auditors concluded that these extra payments caused a prejudice to the contracting authority, and that the sums should be recovered.<\/p>\n\n\n\n
As a consequence of that audit report, the public authority sued the company (represented by Brisc Legal attorneys specializing in litigation arising from Court of Auditors controls) requiring recovery of the allegedly improper payments.<\/p>\n\n\n\n
In defense, we requested rejection of the lawsuit primarily on the ground of incorrect legal basis. We also challenged the Court of Auditors\u2019 interpretation of contract clauses as abusive. On the merits, we argued that the company was entitled to receive those sums, since valid contractual relations existed between the parties and were not contested. We showed that the addenda increasing price and period were justified by the delay of the executing contractor. Because the company provided site supervision services\u2014which require oversight and approval\u2014the extension was legally justifiable as long as rehabilitation works remained unfinished.<\/p>\n\n\n\n
The Tribunal of Cluj, at first instance, gave an unfavorable outcome for our client. It upheld that the auditors properly determined that for the first contract the three extra months were unjustified under the addendum. Regarding the second contract, the court agreed with the Court of Auditors\u2019 view: the services covered by it should have been included in the first contract because that contract\u2019s price was based on the investment objective, not on monthly performance.<\/p>\n\n\n\n
We appealed that decision to the Cluj Court of Appeal, arguing among other things that the lower court failed to consider arguments presented in the first instance, rendering its judgment inadequately reasoned.<\/p>\n\n\n\n
The Cluj Court of Appeal prioritized our criticisms of illegality and found that the first instance judgment did not respond (not even implicitly) to arguments we made during the trial. It concluded that the lower court violated Article 425(1)(b) of the Civil Procedure Code (which requires that the judgment of first instance set out the reasons for rejecting each party\u2019s requests), and thus ordered re-evaluation of the case.<\/p>\n\n\n\n
Upon re-examination, the Court of Appeal held that the public authority\u2019s lawsuit was grounded on the institution of tortious civil liability<\/strong> but failed to prove the existence of an unlawful act by the company. Therefore the Court rejected the claim and held that the company assisted by specialized administrative & Court of Auditors litigation attorneys was not required to return any amounts.<\/p>\n","protected":false},"excerpt":{"rendered":" Case Study \u2013 Litigation Derived from Court of Auditors Control: Dismissal of the Claim for Recovering Prejudice Factual Background A legal entity entered into a contract with a public authority to provide site supervision (\u201cdirigen\u021bie de \u0219antier\u201d) for a limited period of 8 months, at a fixed price. Later, an addendum extended the initial contract … <\/p>\n