BARBAROV v. UKRAINE

FIFTH SECTION

DECISION

Application no. 75577/17
Oleksandr Yuriyovych BARBAROV
against Ukraine

The European Court of Human Rights (Fifth Section), sitting on 27 March 2018 as a Committee composed of:

André Potocki, President,
Mārtiņš Mits,
Lado Chanturia, judges,
and Milan Blaško, Deputy Section Registrar,

Having regard to the above application lodged on 17 October 2017,

Having deliberated, decides as follows:

THE FACTS

1. The applicant, Mr Oleksandr Yuriyovych Barbarov, is a Ukrainian national, who was born in 1977 and lives in Chernigiv.

A. The circumstances of the case

2. The facts of the case, as submitted by the applicant, may be summarised as follows.

3. The applicant has been licensed as an insolvency administrator (арбітражний керуючий) since 2003.

4. On 5 September 2013 the Chernigiv Regional Commercial Court (“the commercial court”) opened proceedings concerning insolvency of limited liability company V. and on 17 September 2013 declared it bankrupt and opened liquidation procedure in its regard.

5. On 24 September 2014 the commercial court appointed the applicant, at his request, as the company’s liquidator.

6. On 15 August 2017 the applicant asked the commercial court to relieve him of the liquidator’s duties. He stated that due to “personal circumstances" he was no longer able to perform the liquidator’s duties. He gave no further details in this respect. He referred, inter alia, to Article 4 of the Convention.

7. The commercial court scheduled the hearing concerning the applicant’s request for 18 September 2017.

8. From 31 August to 13 September 2017 four other insolvency administrators applied to be appointed as the company’s liquidators.

9. On 14 September 2017 company K. lodged an appeal against the commercial court’s ruling of 5 September 2013 opening proceedings in the insolvency case concerning company V. The Court has not been informed about the reasons for appeal.

10. On 15 September 2017 the commercial court held a hearing and, without examining the applicant’s request, decided to suspend the bankruptcy proceedings for the period of examination of the appeal.

On 13 October 2017 the Kyiv Commercial Court of Appeal dismissed company K.’s appeal holding that no appeal lay against the type of ruling it was attempting to challenge. Company K. appealed on points of law to the Supreme Court but on 1 March 2018 a judge of that court found that the requisite court fee had not been paid and suspended examination of the appeal giving the appellant company until 16 March 2018 to provide proof of payment.

B. Relevant domestic law

11. The Insolvency Act of 1992 defines insolvency administrators as a liberal profession exercised under a license and the liquidator as the administrator managing the liquidation of an entity declared bankrupt (sections 1 § 1, 4 of the Act). Liquidators are appointed by court order from among licensed administrators. They are entitled to remuneration and reimbursement of their expenses incurred on behalf of the bankrupt entity. This compensation and expenses are payable out of any collected assets of the entity or can be advanced by the creditors if the latter so decide (sections 45 § 1 (1) and 115 §§ 1, 3-6). The court may relieve a liquidator of his duties if he so requests (section 114 § 3).

12. The Insolvency Act provides that insolvency administrators are civilly liable for damage caused to the third parties and provides for disciplinary sanctions against insolvency administrators, namely a warning and withdrawal of the license (sections 107-109). Moreover, Article 367 of the Criminal Code provides for various punishments up to imprisonment for neglect of official duty.

COMPLAINTS

13. The applicant complained under Article 6 § 1 of the Convention that his right to a trial within reasonable time had been breached in that the commercial court had failed to examine his request to be relieved of the liquidator’s duties before suspending the proceedings and that this meant that he would have to wait for “eight to ten” months while the case was pending on appeal for his request to be finally heard. He further complained under Article 4 that this delay caused him to remain the liquidator under threat of liability, which, for him, amounted to forced or compulsory labour.

THE LAW

14. The applicant submitted that the examination of his request to be relieved of the liquidator’s duties was delayed for the duration of examination of an unrelated matter on appeal and that he was required to remain the bankrupt company’s manager and advance its current expenses out of his own funds and, were he to cease exercising those duties in the meantime unilaterally, he would be subject to liability, including under the Criminal Code.

He relied on Articles 4 and 6 of the Convention which read, in so far as relevant:

Article 4. Prohibition of slavery and forced labour

“...

2. No one shall be required to perform forced or compulsory labour.

3. For the purpose of this article the term ‘forced or compulsory labour’ shall not include:

(a) any work required to be done in the ordinary course of detention imposed according to the provisions of Article 5 of [the] Convention or during conditional release from such detention;

(b) any service of a military character or, in case of conscientious objectors in countries where they are recognised, service exacted instead of compulsory military service;

(c) any service exacted in case of an emergency or calamity threatening the life or well-being of the community;

(d) any work or service which forms part of normal civic obligations.”

Article 6. Right to a fair trial

“In the determination of his civil rights and obligations ... everyone is entitled to a ... hearing within a reasonable time by [a] ... tribunal ...”

15. The applicant submitted that, even though an appeal could be lodged against the decision to suspend proceedings, this would not constitute an effective remedy in respect of his complaints. In light of its conclusions below, the Court does not find it necessary to make a definitive finding as to whether that was indeed the case.

16. Turning to the applicant’s complaint under Article 6 of the Convention that the proceedings on appeal would be excessively long, the Court observes that this complaint, which was lodged within just one month of the appeal having being lodged, is based on a hypothetical assumption of the future length of proceedings on that appeal, which the applicant estimated would take eight to ten months. However, even assuming that the proceedings concerning that appeal are still pending as of today, the Court, having examined all the materials submitted to it and having regard to its case-law on the subject, considers that the length of the proceedings cannot be said to be excessive or unreasonable (see, for example, Zbaranskaya v. Ukraine (dec.), no. 43496/02, 11 October 2005).

17. As to the applicant’s complaint under Article 4, the Court reiterates that the Convention does not contain a definition of the term “forced or compulsory labour”. In its case-law, the Court has had recourse to International Labour Organisation (ILO) Convention No. 29 concerning forced or compulsory labour. For the purposes of that Convention, the term “forced or compulsory labour” means “all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily”. The Court has taken that definition as a starting-point for its interpretation of Article 4 § 2 of the Convention (see, for example, Radi and Gherghina v. Romania (dec.), no. 34655/14, § 24, 5 January 2016, with further references therein).

18. However, the Court has specified that not all work exacted from an individual under threat of a “penalty” is necessarily “forced or compulsory labour” prohibited by Article 4 § 2 of the Convention (ibid., § 26). When deciding whether the service required of the applicant falls within the prohibition of “forced or compulsory labour”, the Court will have regard to all the circumstances of the case in the light of the underlying objectives of Article 4. The Court reiterates that paragraph 3 of Article 4 forms a whole with paragraph 2 and indicates what the term “forced or compulsory labour” shall not include. This being so, paragraph 3 serves as an aid to the interpretation of paragraph 2. The four subparagraphs of paragraph 3, notwithstanding their diversity, are grounded on the governing ideas of the general interest, social solidarity and what is normal in the ordinary course of affairs (see, for example, Mihal v. Slovakia (dec.), no. 31303/08, § 64, 28 June 2011, with further references therein).

19. In its case-law the Court has developed standards for evaluating what could be considered normal in respect of duties incumbent on members of a particular profession and would accordingly not be considered “forced or compulsory labour”. The relevant standards are: whether the services rendered fall outside the ambit of the normal professional activities of the person concerned; whether the services are remunerated or not or whether the service includes another compensatory factor; whether the obligation is founded on a conception of social solidarity; and whether the burden imposed is disproportionate (see Van der Mussele v. Belgium, 23 November 1983, § 39, Series A no. 70, and Radi and Gherghina, cited above, § 25).

20. In the instant case the applicant alleged that he might be liable, including criminally, if he refused to execute the duties of the liquidator before being relieved of them by the court. He did not point to any more specific penalties, even though it would appear that certain provisions on civil, disciplinary or criminal liability might conceivably come into play (see paragraph 12 above and compare Mihal, cited above, §§ 68 and 69). Be it as it may, given its conclusions below in respect of the other aspects of this complaint, the Court is prepared to assume, in the applicant’s favour, that he was indeed under a threat of a “penalty” if he refused to exercise liquidator’s duties without a formal decision of the domestic court relieving him of them. Likewise, the applicant’s prior acceptance of appointment as a liquidator does not in itself warrant a conclusion that his situation cannot amount to forced or compulsory labour (see Van der Mussele, cited above, § 36).

21. However, the Court observes that the applicant’s complaint is insufficiently developed in that he has failed to explain what specific work is required of him in the capacity of liquidator. This is not evident from the context: it appears that, by the time he asked to be relieved of his duties, liquidation proceedings were pending for almost four years and there is no indication whether at that stage there were any assets to be found, whether the search for them was under way, etc. The applicant has also failed to specify the exact reasons for which he wished to be relieved of the liquidator’s duties. He did mention, without substantiation, that those duties were preventing him from pursuing “Ph.D. studies in Europe” and that “his health has substantially deteriorated”, but that was the extent of his submissions in this respect. Therefore, the information furnished by the applicant is wholly insufficient to assess the burden the impugned situation imposed on him.

22. What is more, the services the applicant is required to perform are his normal professional activities, in which he engaged of his own initiative. Moreover, there is no indication that those services in respect of company V. interfere with his other possible engagements as an insolvency administrator.

23. The applicant states that he is not receiving any compensation for his services and is obliged to cover the liquidated company’s expenses out of his own funds. However, he applied to be appointed liquidator when the company had already been declared bankrupt and it is in the very nature of his compensation as liquidator that its source is inherently uncertain, as it is to be derived mainly from any recovered assets (see paragraph 11 above and compare, for example, Mihal, cited above, § 78, and Novitskiy v. Ukraine (dec.), no. 20324/03, 16 October 2007, where the Court found that, even though the applicant had not actually received his salary because the debtor lacked sufficient assets, his entitlement to compensation had not been denied and therefore no issue of forced or compulsory labour arose). As to the need to cover the company’s expenses out of his own funds, the applicant has provided no detail or substantiation in that respect.

24. Therefore, the applicant’s complaint appears to be based on nothing more than his dissatisfaction with a delay in the examination of his request to be relieved of the liquidator’s functions, which has been addressed in the context of Article 6 (see paragraph 16 above).

25. The Court finds that no arguable case has been made that the applicant’s situation can be characterised as forced or compulsory labour.

26. It follows that both of the applicant’s complaints are manifestly ill‑founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court, unanimously,

Declares the application inadmissible.

Done in English and notified in writing on 19 April 2018.

Milan BlaškoAndré Potocki
              Deputy RegistrarPresident

 

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