Both Parties Appeal CNY 925,028 Construction Payment Ruling
A construction payment dispute between an engineering firm and a chemical company in Eastern China City has resulted in a trial court judgment ordering the chemical company to pay outstanding fees of CNY 925,028 plus interest. Both parties have appealed the decision, with the engineering firm seeking an additional amount for equipment installation fees and the chemical company arguing that the claim was based on fabricated evidence. The case involves multiple contracts signed between 2005 and 2007 for various construction and installation projects.
The engineering company and the chemical company entered into eight separate contracts between April 2005 and November 2007 covering projects such as the fabrication and installation of gas collectors, lime kilns, steel structures, and other facilities. Four of the contracts specified that the chemical company would supply the equipment and materials while the engineering company would charge installation fees of 4% to 5% of the equipment costs. The engineering company completed the work and the projects were put into use, but the parties could not agree on the final工程造价 valuation. The chemical company had already paid CNY 2,517,000. The engineering company initially filed a lawsuit in 2009 but lost because it relied on its own estimated values. The parties then agreed to resolve the matter through a court-ordered appraisal, leading to a second lawsuit.
During the second hearing, the engineering company applied for a forensic appraisal of the remaining seven projects. The court appointed a certified cost consulting firm, which issued an appraisal report stating that the total installation cost for the seven projects was CNY 1,612,345. Combined with the previously settled eighth project, the total contract value was CNY 3,618,508, leaving an unpaid balance of CNY 925,028. The engineering company presented evidence including contracts, construction drawings, site inspection records, and photographs. The chemical company challenged the appraisal’s validity, claiming the drawings were outdated and not properly authenticated, and requested a new appraisal. The court rejected this request because the chemical company failed to provide evidence meeting the legal standards for re-appraisal.
The trial court held that the contracts were legally valid and binding on both parties. The engineering company had performed its construction obligations, and although the projects were never formally inspected, they had been delivered and put into use by the chemical company. The court found the appraisal report to be reliable and admissible, as the chemical company offered no credible counter-evidence. The court also rejected the chemical company’s claim that some work was done by another contractor, noting that the engineering company had submitted sufficient proof of performance. On the issue of equipment installation fees, the court refused the engineering company’s request for an additional CNY 176,480, ruling that the company did not provide enough evidence to support that amount.
According to the Contract Law of the People’s Republic of China and judicial interpretations regarding construction contract disputes, the court determined that the chemical company was obligated to pay the remaining balance plus interest. Interest was calculated from the date of the first lawsuit, May 27, 2009, at the benchmark lending rate set by the People’s Bank of China. The court also allocated litigation costs, with the chemical company bearing the majority. The engineering company appealed, arguing that the equipment installation fee should have been included in the total cost because the chemical company withheld relevant purchase receipts during the appraisal