CASE OF D.B. v. UKRAINE

FIFTH SECTION

CASE OF D.B. v. UKRAINE

(Application no. 36484/16)

JUDGMENT
 

STRASBOURG

25 September 2025

This judgment is final but it may be subject to editorial revision.

In the case of D.B. v. Ukraine,

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

 Georgios A. Serghides, President,
 Gilberto Felici,
 Diana Sârcu, judges,
and Martina Keller, Deputy Section Registrar,

Having regard to:

the application (no. 36484/16) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 22 June 2016 by a Czech and Ukrainian national, D.B. (“the applicant”), who was born in 1977 and lives in the Czech Republic;

the decision to give notice of the complaint under Article 6 § 1 of the Convention concerning an alleged breach of the principle of legal certainty to the Ukrainian Government (“the Government”), represented by their Agent, Ms M. Sokorenko, of the Ministry of Justice, and to declare inadmissible the remainder of the application;

the decision not to have the applicant’s name disclosed;

the decision of the Government of the Czech Republic not to exercise their right to intervene in the proceedings;

the parties’ observations;

Having deliberated in private on 4 September 2025,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The case concerns an alleged breach of the principle of legal certainty, under Article 6 § 1 of the Convention, on account of the domestic courts disregarding findings made in previous judicial proceedings on the same matter.

2.  At the relevant time, the applicant was the managing partner of a law firm established as a partnership.

3.  In March 2009 R., a failing bank, was placed under the temporary administration of the National Bank of Ukraine (“the NBU”).

4.  On 1 July 2009 a legal services contract was concluded between the law firm, acting in the interests and for the benefit of the applicant and his fellow partners, and the temporary administrator of the bank appointed by the NBU, S.Sh. Fees were payable in the event of successful recovery and return to the bank of borrowers’ assets, and were fixed at 8% of the value of assets transferred to the bank.

5.  On 2 July 2009 the NBU approved the expenses estimate (кошторис) for the bank’s temporary administration for the period from June to December 2009. It did not include expenses for payments under the contract.

6.  On 17 July 2009 the State was registered as the bank’s owner.

7.  On 6 November 2009, under an agreement reached within bankruptcy proceedings concerning one of the bank’s borrowers (company B.), the bank took ownership of a large plot of land in Kyiv with an estimated value of 3,770,000,000 hryvnias (UAH).[1] According to the applicant, this was the result of considerable work done by him and his partners. He provided extensive documentation outlining the work.

8.  In November 2009 the law firm provided a report on services provided in connection with company B.’s and other cases. The bank accepted the report and paid UAH 301,600,000[2] in legal fees to the firm, which transferred half of the funds to the applicant and half to O.L., one of his partners.

9.  In August 2010 the bank, represented by a new temporary administrator, brought a civil claim against the law firm, the applicant and O.L. seeking invalidation of the contract and repayment of the fees. The bank’s main argument was that it was contrary to certain provisions of civil law and rules of professional conduct for lawyers to charge a contingency (success) fee, arguing that only hourly or fixed fees payable for specific services were allowed.

10.  The Kyiv Shevchenkivskyy District Court dismissed the claim, considering that the contract, its annexes and other material in the case file showed that fees were payable for specific services rendered and that the relevant rules did not prohibit fixing fees as a share of recovered assets.

11.  The bank lodged an appeal with the Kyiv City Court of Appeal (“the Court of Appeal”), repeating the same arguments. In a supplementary appeal, the bank, relying on Article 303 of the Code of Civil Procedure[3], asked the Court of Appeal to consider new circumstances and evidence not submitted at first instance which also showed that the contract was invalid, namely that the expenses under the contract had not been included in the estimate approved by the NBU. By entering into the contract without the NBU’s approval, the bank’s administrator had acted ultra vires, contrary to NBU Regulation no. 369, which had been approved by the NBU on 29 November 2009. The bank also argued that the contract was contrary to the regulatory prohibition for banks in distress to pay for financial consultancy services and receive debt repayment other than in liquid funds.

12.  On 16 March 2011 the Court of Appeal upheld the first-instance judgment. It held as follows.

(i)  The first-instance court had correctly determined that the parties, in entering into the contract, had acted lawfully and within the scope of their authority.

(ii)  The first-instance court had correctly determined that the way in which fees were set was in compliance with civil law.

(iii)  The bank’s arguments that the contract was contrary to the NBU Regulation were unfounded. In particular, the argument that the expenses under the contract had not been included in the estimate could not be accepted, since the estimate had been approved the day after the contract had been entered into.

(iv)  The bank’s other arguments had to be dismissed, since they had no impact on the contract’s validity: the contract had been entered into by the bank’s authorised chief executive, the temporary administrator. Under the Banks and Banking Act, temporary administrators, in carrying out their duties, were considered equivalent to NBU representatives and had the full and exclusive right to manage the bank and take all action and decisions on its behalf. The bank had failed to provide any evidence that the temporary administrator at the time had lacked the authority to enter into the contract.

13.  On 18 April 2011 the Higher Specialised Court for Civil and Criminal Matters (“the HSC”) dismissed a cassation appeal lodged by the bank as unfounded.

14.  The Prosecutor General’s Office (“the PGO”) lodged another appeal which was dismissed by the HSC on 25 June 2011 on the grounds that the lower courts’ decisions had been lawful and that the arguments set out in the appeal did not call their conclusions into question.

15.  The first-instance court’s judgment, as upheld by the Court of Appeal’s decision of 16 March 2011, became final and binding.

16. On 28 November 2011 the Supreme Court dismissed the application for extraordinary review by the PGO. It pointed out that only a demonstrated divergence of case-law on matters of substantive law (and not procedural law) could constitute grounds for review by the Supreme Court.[4] The cases cited by the PGO did not demonstrate such a divergence, since, in the present case, unlike in those cases, no claim had been filed for invalidation of the contract as ultra vires.[5] The fact that the Court of Appeal had made findings about the bank’s representative’s authority could not constitute grounds for review, since that was a matter of the application of procedural, not substantive, law.

17.  On 17 December 2013 the bank, represented by the new temporary administrator, lodged a claim against the partnership, as a legal entity, seeking invalidation of the contract. He argued that the contract had been entered into in breach of public procurement rules and raised the same arguments as in the first case, particularly concerning the former temporary administrator acting ultra vires.

18.  On 17 March 2014 a first-instance commercial court allowed the claim, finding that the bank, when entering into the contract, had failed to comply with public procurement rules applicable to State-owned entities. It dismissed the arguments concerning the temporary administrator’s lack of authority.

19.  The applicant appealed, arguing that the first-instance commercial court had acted wrongly in not involving him in the proceedings, since he was directly affected by them. He noted that the bank had failed to inform the commercial court of the civil proceedings previously brought by the bank against the applicant and of their outcome.

20.  On 22 September 2015 the Kyiv Commercial Court of Appeal accepted that the applicant had standing to appeal because the proceedings concerned his rights and obligations. It upheld the first-instance decision to declare the contract invalid but gave the following reasons.

(i)  Contrary to the findings at first instance, the public procurement rules had not been applicable to the bank at the time.

(ii)  The temporary administrator had acted ultra vires, since the estimate approved by the NBU on 2 July 2009 for the period from June to December 2009 had not contained any expenses for legal or consultancy services. Under the NBU Regulation, the expenses estimate of a bank liquidator had to be approved by an NBU commission.[6]

(iii)  The applicant’s argument that the matter had already been resolved in the civil case had to be dismissed, because the bank’s claims in the first set of proceedings had not been based on the temporary administrator’s lack of authority but on the alleged illegality of a success fee fixed in the contract. Those proceedings had involved different parties and the claim had been based on different grounds.[7]

21.  The applicant appealed in cassation. He pointed out that the provisions concerning the powers of a bank liquidator relied on by the Commercial Court of Appeal did not apply since, at the relevant time, the bank was not in liquidation but under temporary administration. He also argued that the matter had already been examined by the courts. He relied on Article 35 § 4 of the Code of Commercial Procedure, which provided that a decision of a civil court was binding on the commercial court with respect to the facts established by that court which were relevant to the resolution of the dispute.[8]

22.  On 13 January 2016 the Higher Commercial Court (“the HCC”) upheld the lower courts’ decisions. It confirmed the applicant’s standing to appeal by referring to provisions of the partnership agreement, stating that the partnership entered into contracts with clients on behalf of its partners and that fees received from clients did not belong to the partnership but were transferred to the partners involved in the relevant matter. The HCC also upheld the Commercial Court of Appeal’s findings on the merits.

23.  The applicant lodged an application for extraordinary review by the Supreme Court, citing a divergence in the interpretation of provisions of substantive law in various decisions of the HCC. In particular, he argued that there was a discrepancy between the HSC’s final decision of 25 June 2011 in the civil case (see paragraph 14 above) and the HCC’s decision in the instant case.

24.  On 20 April 2016 the Supreme Court found that the decisions in the first set of proceedings had been based on different factual circumstances.[9]

25.  The Government provided the Court with a letter of the PGO dated 22 June 2023, which contained the following information.

(i)  Proceedings were pending before the High Anti-Corruption Court against a former member of parliament, O.Sh., for misappropriation of the bank’s funds in conspiracy with bank officials and third parties. One of the charges was misappropriation of the bank’s funds disguised as legal fees paid to the applicant’s law firm. The former temporary administrator S.Sh., the applicant and O.Sh.’s wife were suspected co-conspirators. According to the PGO, the applicant and his partner O.L. had, after receiving funds from their law firm, transferred them to O.Sh., who had in turn transferred them to his wife. Then, in order to protect the funds from seizure within criminal proceedings, in June 2012 they had been transferred to O.Sh.’s son, then to foreign companies and eventually placed in Swiss bank accounts, where they had been frozen by the Swiss authorities.

(ii)  On 6 April 2017 the Kyiv Podilskyy District Court had convicted the former temporary administrator S.Sh. of misappropriation of the bank’s funds, including in connection with the payment under the services contract with the applicant’s law firm. According to the PGO, in convicting S.Sh. the court had established that the contract had been fictitious and that “the transactions pursuant to it [had] not [been] executed”.

(iii)  Proceedings against other alleged co-conspirators, including the applicant, had been severed from the proceedings against O.Sh. and the pre-trial investigation was pending.

(iv)  The applicant had the status of an accused person in criminal proceedings for suspected tax evasion and had been on a wanted list since 2012.

THE COURT’S ASSESSMENT

26.  The Government maintained that the applicant had failed to inform the Court of the criminal proceedings concerning him and the verdict against the bank’s former temporary administrator, which, in their view, established that the contract had been fictitious (see paragraph 25 above). They argued that the purpose of his application to the Court was not to protect his right to a fair trial, and that his conduct should be regarded as an abuse of the right of individual application.

27.  The applicant contested those arguments and in particular submitted that he had not been involved in the above-mentioned criminal proceedings and did not know about them.

28.  Alternatively, the Government invited the Court to reject the applicant’s complaints as manifestly ill-founded. They submitted that the courts had considered two different sets of proceedings between different parties on a different subject matter and had relied on different grounds in their judgments. Moreover, the Supreme Court, in its decision in the first case, had stated that no claim had been filed in that case for invalidation of the contract as ultra vires (see paragraph 16 above). It had found that the decisions in the first case had been based on different factual circumstances (see paragraph 24 above). It had also established that the claim in the first case had been based on the alleged non-compliance of the provisions of the legal services contract setting success fees with lawyers’ rules of professional conduct, while in the second case, it had been the temporary administrator acting ultra vires.

29.  Pointing to the Supreme Court’s case-law on the issue of res judicata effects[10], the Government stated that domestic law allowed claimants to obtain the resolution of a dispute on the same subject, if they specified a different basis for the claim and provided evidence to justify it.

30.  The applicant disputed the Government’s arguments.

31.  In respect of the Government’s objection concerning the abuse of the right of individual application, the Court considers that the facts relied on by the Government do not constitute sufficient grounds to conclude that the applicant intended to withhold the information from the Court or that there has been an abuse of the right of application. Their objection must be therefore rejected.

32.  Furthermore, the Court considers that the arguments presented by the Government in support of the alleged manifestly ill-founded nature of the applicant’s complaint under Article 6 § 1 of the Convention raises issues requiring an examination of the merits, rather than an examination of its admissibility.

33.  The Court concludes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

34.  The Court reiterates that the right to a fair hearing under Article 6 § 1 of the Convention, interpreted in the light of the principles of the rule of law and legal certainty, encompasses the requirement that where the courts have finally determined a dispute between given parties, their ruling should not be called into question (see Brumărescu v. Romania [GC], no. 28342/95, § 61, ECHR 1999-VII, and Gražulevičiūtė v. Lithuania, no. 53176/17, § 72, 14 December 2021).

35.  The Court considers that a situation where the facts already determined by a final decision in one case are later overruled by the courts in a new case between the same parties, is similar to the one where, following a reopening of the proceedings, a binding and enforceable decision is quashed in its entirety. Consequently, such a situation may also amount to a breach of the principle of legal certainty, in violation of Article 6 § 1 of the Convention (see, for instance, Esertas v. Lithuania, no. 50208/06, § 25, 31 May 2012).

36.  The Court observes that in all legal systems the res judicata effects of judgments have limitations ad personam and as to material scope (see Kehaya and Others v. Bulgaria, nos. 47797/99 and 68698/01, § 66, 12 January 2006; see also Esertas, § 22; and Gražulevičiūtė, § 74, both cited above).

37.  As to the ad personam effect in the present case, the Court observes that the Commercial Court of Appeal, in refusing to recognise the res judicata effect of the findings of the Court of Appeal in the first set of proceedings, stated, without further elaboration, that the first set of proceedings had “involved different parties” (see paragraph 20 above).

38.  However, the Court observes that both cases involved essentially the same parties. The fact that in the first set of proceedings the applicant and one of his partners were formally named as defendants, while in the second the bank refrained from naming them as such, cannot of itself lead to exclusion of the res judicata effect of the relevant decisions (see, for example, Decheva and Others v. Bulgaria, no. 43071/06, §§ 41-43, 26 June 2012, where the Court found a violation of Article 6 § 1 of the Convention where the parties opposing the applicants had been two different emanations of local public authorities, and Siegle v. Romania, no. 23456/04, § 36-39, 16 April 2013, where a violation of Article 6 § 1 was found even though the relevant proceedings had involved two different individuals).

39.  The courts in the second set of proceedings recognised the applicant’s standing to lodge appeals and found that those proceedings directly affected his rights, noting in particular that his law firm had acted as his mere representative, with him being the recipient of fees under the disputed contract (see paragraphs 20 and 22 above).

40.  As to the material scope, the Government made detailed submissions regarding that issue, referring to the Supreme Court’s case-law to the effect that domestic law allowed claimants to obtain the resolution of a dispute on the same subject, if they specified a different basis (different grounds) for the claim (see paragraph 29 above). They also stated that the grounds for the bank’s claim, as presented before the first-instance court in the first set of proceedings, did not include the temporary administrator acting ultra vires (see paragraph 28 above).

41.  The Government appeared to argue, in essence, that the matter of the temporary administrator’s authority to enter into the legal services contract with the applicant’s firm had not been examined in the first case. However, neither they nor the domestic courts in the second case explained the legal status of statements in the Court of Appeal’s decision of 16 March 2011 to the effect that the temporary administrator had had sufficient authority to enter into the contract (see paragraph 12 above). The domestic courts provided no reasons for their decision to disregard those statements and not consider them definitive findings. They appeared to interpret the decisions in the first set of proceedings as being limited to the arguments presented by the bank at first instance (see paragraph 20 above).

42.  In the absence of the domestic courts’ observations on this point, the Court notes that the relevant provision of the Code of Civil Procedure allowed appellate courts to examine additional arguments as long as they remained within the limits of “demands” presented before the first-instance court (see paragraph 11 above). The bank presented such additional arguments concerning the temporary administrator’s authority, and the Court of Appeal accepted them. This acceptance was not questioned by the higher courts in their review of the first case.

43.  In summary, the Court sees no motivation, in the domestic courts’ reasoning, not to accept the Court of Appeal’s findings concerning the temporary administrator’s authority as definitive and binding.

44.  Nevertheless, in the second set of proceedings the bank presented the same arguments concerning the same matter, which the domestic courts re-examined and accepted.

45.  There is no indication that there was any fundamental flaw in the first set of proceedings: all parties, including the PGO, were fully involved in them and were able to make submissions. The matter was examined by courts at four levels of jurisdiction. The Court also takes due note of the matters raised in the relevant criminal proceedings (see paragraph 25 above). However, they were not reflected in the domestic courts’ decisions.

46.  In the view of the foregoing, the domestic courts, in the second set of proceedings, did not provide any reasons which would have demonstrated that there were circumstances of a substantial and compelling character which justified a re-examination of a matter which had been determined in a final judicial decision. The Court therefore finds that by re-examining the matter already decided by the Kyiv Court of Appeal’s decision of 16 March 2011, the domestic courts acted in breach of the principle of legal certainty inherent in Article 6 § 1 of the Convention and did not give the applicant’s case a fair hearing.

47.  There has accordingly been a violation of Article 6 § 1 of the Convention.

48.  The Court reiterates that the above findings are without prejudice to any other domestic proceedings.

49.  The applicant considered that the finding of a violation would be sufficient just satisfaction for the non-pecuniary damage he had suffered.

50.  The Court sees no reason to disagree and, accordingly, makes no award for non-pecuniary damage.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

Done in English, and notified in writing on 25 September 2025, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Martina Keller Georgios A. Serghides
 Deputy Registrar President

[1] The equivalent of about 307,264,048 euros (EUR) at the time.

[2] The equivalent of about EUR 24,581,124 at the time.

[3] At the relevant time, Article 303 § 1 of the Code of Civil Procedure of 2004 provided that, during the examination of a case on appeal, the appellate court reviewed the lawfulness and well-founded nature of the first-instance court’s decision within the limits of arguments presented in the appeal and within the limits of demands (вимог) presented before the first-instance court. Article 303 § 2 authorised the appellate court to examine evidence which the first-instance court had unjustifiably refused to examine or examined in breach of established procedure, as well as new evidence not produced to the first-instance court for valid reasons.

[4] Article 355, as worded at the time.

[5] «У справі, яка переглядається…. позовні вимоги про визнання угоди недійсною у звязку з укладення її неуповноваженою особою не заявлялися.»

[6] The Court of Appeal cited a rule applicable to the procedure for liquidating banks after the NBU revoked their banking licence. At the relevant time, the bank’s licence had not been revoked and it was not in liquidation.

[7] У вищезазначеному рішенні розглянуто позов між іншими сторонами та з інших підстав.

[8] Prior to the enactment of Law no. 1226-VII, which entered into force on 8 May 2014, Article 35 § 2 of the Code of Commercial Procedure of 1991 provided as follows: “facts established by a decision of a commercial court (or other authority examining commercial disputes), except for those established in an arbitration court award, during the examination of one case, shall not be proven again during the resolution of other disputes involving the same parties.” Article 35 § 4 provided as follows: “a court decision in a civil case (which has acquired legal force) is binding on the commercial court with respect to the facts established by that court which are relevant to the resolution of the dispute.” Law no. 1226-VII removed Article 35 § 4 and slightly reformulated Article 35 § 2 (which became Article 35 § 3), as follows: “Circumstances established by a court decision in a commercial, civil or administrative case (which has acquired legal force), except for those established in an arbitration court award, shall not be proven during the examination of other cases involving the same parties or a party in respect of whom those circumstances have been established.”

[9] Рішення ухвалено з урахуванням інших фактичних обставин, встановлених судами попередніх інстанцій.

[10] The Government referred to two resolutions of the Supreme Court: case no. 910/15598/19(910/8017/20) of 24 February 2021 and case no. 909/783/20 of 18 March 2021. The Supreme Court applied and interpreted Articles 175 and 231 of the Code of Commercial Procedure, which require the courts to refuse to open proceedings or discontinue proceedings if there is already a court decision in a case between the same parties on the same subject and on the same basis (grounds) of claim. The Supreme Court explained that, to discontinue proceedings on those grounds, a combination of three circumstances had to be present simultaneously, with the judicial decision concerning: (i) the same parties; (ii) the same subject matter of the claim (предмет позову); and (iii) the same basis (grounds) of the claim (підстави позову). A lawsuit (claim) (позов) consists of two elements that characterise the essence of a specific claim: the subject and the basis of the claim. The subject of the claim is the object of the disputed legal relations, regarding which a dispute has arisen, that is, a certain material and legal demand of the claimant against the defendant, in respect of which the claimant has requested a court decision. It is the manner in which the protection of the right or interest is sought (спосіб захисту права чи інтересу). The basis of the claim is constituted by the circumstances by which the claimant substantiates his or her claims. Such circumstances constitute legal facts that entail certain legal consequences. The factual basis of the claim is constituted by the legal facts on which the claimants’ claims are based. The legal basis of the claim is a reference, in the statement of claim, to the laws and other legal norms on which the claim is based. The Code of Commercial Procedure allows claimants to obtain the resolution of a dispute on the same subject, if they specify a different basis for the claim and provide evidence to justify it. However, simply supplementing the claim with additional circumstances (if the initial circumstances are preserved) and changing references to provisions of substantive or procedural law does not mean that the basis of the claim has changed.