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Legal Protection of Business Reputation of Entrepreneurs of Uzbekistan

Business of any entrepreneur is closely linked with that information, which reflects the company"s image, as well as moral and professional qualities of its head. Negative assessment may significantly affect the financial well-being of the business.

20.07.2014Jakhongir Azimov, Partner / Executive Director, Юридическая фирма "Diplomat Law", www.diplomatlaw.com
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Business of any entrepreneur is closely linked with that information, which reflects the company's image, as well as moral and professional qualities of its head. Negative assessment may significantly affect the financial well-being of the business.
Under the current legislation of the Republic of Uzbekistan, businesses and individuals, the participants of civil relations, are  provided with a wide array of civil rights, among which various types of material and non-material benefits might be included.
The dynamics of the development of economic relations, increasing the legal culture and literacy among entrepreneurs necessitates proper application of the above benefits that require a deep and comprehensive regulation. This statement can especially be attributed to intangible benefits, interest and use of which increases with increasing their role in the public consciousness.
The eighth chapter of the Civil Code of Uzbekistan, in articles 97-100, refers intellectual property and similar means of identification to the number of results of intangible benefits, such as trademarks, trade names and other, official and commercial secrets, the right to a name and integrity, honor, dignity and business reputation.
All considered above intangible benefits are protected from any undue encroachment of third parties. Protection of honor, dignity and business reputation and other intangible benefits has its own specifics due to the special nature of these intangible benefits. Civil Code of Uzbekistan guarantees citizens and legal entities discretion to dispose their civil rights, as well as the right to protect them. Article 11 of the Civil Code establishes various ways of protecting intangible benefits, including through the recognition of the rights; restore of the situation that existed prior to the violation of law, and the suppression of acts that infringe or threatening to infringe; damages and lost profits, compensation for moral damage.
According to the Resolution of the Plenum of the Supreme Court of the Republic of Uzbekistan № 5 from 19.06.1992. "On the practice of courts of law on the protection of honor, dignity and business reputation of individuals and organizations", the courts resolution of disputes related to the protection of honor, dignity and business reputation of individuals and organizations, in respect of which circulated defamatory, are classified as the most important and primary tasks assigned by the justice system.
Nevertheless, it must be noted that, despite the detailed elaboration of the procedural mechanism for the protection of intangible goods and court practice, current legislation until today does not contain legal confirmation and disclosure at the normative level of legal definitions and concepts such as "honor" and "dignity". Same term "business reputation" in the narrow sense, partly governed by the laws on accounting.

1. Basic Terms
In law-enforceable practice and scientific literature, the definition of "honor" means a positive public assessment of the social and spiritual qualities of the person. "Dignity" implies a positive self-esteem subjective human awareness of his position in society. "Business reputation" - an assessment of competencies person in the public consciousness. It can be both positive and negative.

In accordance with Article 100 of the Civil Code of Uzbekistan, citizen has the right to demand refutation of discrediting his honor, dignity or business reputation, if disseminated such information does not prove that it is true. Typically, this article on the protection of business reputation of a citizen shall be applied respectively to the protection of business reputation of a legal entity.
As practice shows, people applying to the courts for protection of their rights under this category of disputes approach not uniformly to the understanding of the concepts of "defamatory". In the case of absence of legislative recognition of this concept, the following judicial interpretation of the term should apply, as reflected in paragraph 9 of the Resolution of the Plenum of the Supreme Court: defamatory information is deemed such information, which detract from the honor, dignity and business reputation in public opinion or the opinion of individuals in terms of compliance with laws, moral principles.
Demands for a retraction of information containing untrue criticism of shortcomings in work behavior in a public place or in everyday life cannot be considered as reasonable.
It is important to emphasize, that individuals - citizens or individual entrepreneurs have the right to refute the information affecting their honor, dignity and business reputation, while the legal entity shall be entitled only to the protection of business reputation. This difference is explained by the fact that the citizens-entrepreneurs by existing activities are equaled to legal entities, but not identical to the last one in view of the fact that the honor and dignity - category inherent only to individuals, as opposed to business reputation, which physical and legal entities equally have.

2. Business reputation and mass media
Article 27 of the Act of the Republic of Uzbekistan "On Mass Media" describes that a natural or legal entity is entitled to demand from the editorial rebuttal published in the mass media of false and damaging his honor and dignity information.
Legal entities and individuals, whose rights and legitimate interests have been violated because of the publication, have the right to publish in the mass media rebuttal. Refutation or response should be published under a special heading or on the same page, which housed the material that caused the need of a response. Deadline for publishing in newspapers is within one month of receipt of rebuttal, or response in other periodicals - in the next publication. Refutation or response received or edited broadcast television broadcasted in the same program or series of programs not later than one month from the date of receipt.
It should be noted that the requirements are subject to judicial review of the denial discrediting the honor, dignity and business reputation, no matter in what form and in what way they are distributed. The article 27 of the Act "On Mass Media" enshrines provisions that person or entity may file a lawsuit against the media in court only in case of evasion of the media from publishing a refutation or breach of publication deadline. The legislation provides for this category of disputes settlement pre-trial order.
However, the Act of the Republic of Uzbekistan "On mass media" entitles participants in civil defense of their rights violated in two ways: refutation and publication of response. That means that in addition to refute untrue defamatory statements, it is lawful to claim the so-called response to the publication in relation to those of false information, which is not defamatory, but affect the rights and legitimate interests of the person. For example, the publication of false information of the financial report of any corporation or untrue information about changing a company name just deserve an answer, and not refutations.
Dissemination of information discrediting the honor , dignity and business reputation of the legal or natural person are understood as publication in the media presentation in professional references, public speeches, statements to State officials, or other message, including several oral individuals or even one person. 
Post of such information only to person to which they relate cannot be admitted as spread.
Citizen, who was reported for offensive information about him, has rights to apply to the Court to institute proceedings for the imposition of criminal liability under Articles 139, 140 of the Criminal Code of Uzbekistan or administrative liability under Articles 40, 41 of the Code of the Republic of Uzbekistan on Administrative Responsibility for insult or defamation in the presence of reason.

3. Disclaimer of the judgment
In practice, there is great interest in the question of the possibility of refutation of information, discrediting the honor, dignity and business reputation of causing damage to the information contained in the judgments and sentences, rulings of the preliminary investigation and the official documents of other public bodies. These documents may contain facts as relevant and not relevant.
If such situation occurs, following should be kept in mind. Generally, the person, whose rights are affected, for example, in the judgment, is not entitled to make a claim on their rebuttal, because their appeal is provided a statutory procedure.
Therefore, if in respect of a legal entity the judgment concluded that it improperly executed agreement, then such a judgment is capable to diminish reputation of a legal entity in the eyes of the business environment. However, this conclusion is the result of the trial, so, if a party of the dispute do not agree with this decision, the procedural law gives the right to appeal the decision to a higher court.
It should be borne in mind that if, together with a request for the protection of honor, dignity and business reputation of the plaintiff, it is also stated a claim for compensation for material or moral damage caused by defamation, the court sentences the claim in accordance with Articles 985 - 1021 of the Civil Code of Uzbekistan. According to Article 985 of the Civil Code, the harm caused by unlawful actions (inaction) to the person or property of a citizen, as well as damage caused to the legal entity shall be fully compensated by the person caused the harm, including lost profits.
Possibility of compensation for moral damage to individuals is clearly regulated by the current legislation. Nevertheless, the economic courts have large volumes of claims with the requirements of compensation for moral damage in favor of legal entities. It should be emphasized that Article 1021 of the Civil Code determines the moral damage as physical and mental suffering. By virtue of its nature, legal entity cannot carry any moral or physical suffering. Even if some suffering was caused, then – it was for employees of a legal entity, its founders and leaders. Consequently, they, individuals, should claim independently for moral damages.

4. Monetary equivalent of business reputation
Analysis of the majority of claims for damages caused to the business reputation reveals the fact that not all entrepreneurs similarly approach to methods for evaluating business reputation, size of the damage, and, especially, to ways of its protection.
Intangible benefits used in business are named in accounting as intangible assets. According to the NAS №7, "Intangible Assets" from 27.06.2005 (registered by MJ of Uzbekistan № 1485), intangible assets are property identifiable objects that do not have a real material content that the company contains in order to use them in the course of production, performance of works, rendering of services or goods, or for the implementation of administrative and other functions in the long term.
The initial cost of intangible assets is the cost of actually incurred spending (the amount of cash or its equivalent or the present value of the other consideration) for creation (elaboration) or the acquisition of intangible assets, including paid and non-refundable taxes (fees) and other costs directly associated with bringing the asset to a working condition for its intended use.
In accounting, business reputation is called "goodwill". Goodwill (the value of firm, business reputation), created by a business entity, should not be recognized as an asset , as it arises in buying the company as the difference between the purchase price and the actual price of the assets that make up this entity. Therefore, while claiming for compensation for loss of business reputation, the party should prove the monetary equivalent, an assessment of its goodwill, and based on these financial indicators present calculation of the amount of economic damage caused to the party.
Thus, in law enforcement the right selection of methods of protection of the intangible benefits by taking into account procedural rules and legislation on accounting is extremely important.

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