CASE OF GRATION TREYD, TOV v. UKRAINE

FIFTH SECTION

CASE OF GRATION TREYD, TOV v. UKRAINE

(Application no. 9166/14)

JUDGMENT
 

STRASBOURG

22 February 2024

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

In the case of Gration Treyd, Tov v. Ukraine,

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

 Carlo Ranzoni, President,
 Mattias Guyomar,
 Mykola Gnatovskyy, judges,
and Martina Keller, Deputy Section Registrar,

Having regard to:

the application (no. 9166/14) against Ukraine lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 18 January 2014 by Gration Treyd, TOV, a limited liability company registered in Ukraine (“the applicant company”), which was represented by Mr K.V. Bondar, a lawyer practising in Kyiv;

the decision to give notice of the application to the Ukrainian Government (“the Government”), represented by their Agent, most recently Ms Marharyta Sokorenko;

the parties’ observations;

Having deliberated in private on 1 February 2024,

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

SUBJECT MATTER OF THE CASE

1.  The case concerns the retention of the applicant company’s property by prosecution authorities for about eight months, allegedly in breach of Article 1 of Protocol No. 1.

2.  The applicant company is a limited liability company specialising in CD‑ROM manufacturing.

3.  On 7 June 2013 an investigating judge of the Boryspil Town Court authorised a search of the applicant company’s premises in the context of a criminal investigation into suspected production and sale of counterfeit CD-ROMs, having accepted an argument made by a prosecutor that the search might uncover evidence of criminal activity. The ruling authorised “items of relevance for the investigation” to be withheld.

4.  Following the search, which was carried out on 14 June 2013, various pieces of equipment and other materials related to CD-ROM production were withheld[1].

5.  On the same date, an investigator issued a ruling declaring almost all of the withheld items[2] to be material evidence in the ongoing investigation. Those items were to be stored at the Boryspil police department.

6.  On 2 July 2013 the applicant company applied to the Boryspil Town Court for the return of those of the withheld items, which it considered essential for CD-ROMs’ production[3]. It submitted that, in accordance with Article 236 § 7 of the Code of Criminal Procedure (“the CCP”), withheld property which was not specified explicitly in a search warrant, was to be considered “temporarily withheld”. The applicant company further referred to Article 171 § 5 of the CCP, which provided that, if an investigator did not apply for such property to be seized within a day of its being temporarily withheld, it was to be immediately returned to its owner. In the absence of such an application in the applicant company’s case, it argued that there were no legal grounds for the continued retention of its property.

7.  On 9 July 2013 the investigating judge, by a final ruling, allowed the applicant company’s claim and ordered the investigator to return the property in question. In so far as the investigator referred to his ruling of 14 June 2013 (see paragraph 5 above) as providing the legal grounds for the retention of the property, the judge noted that the delivery of such a ruling was not provided for by the CCP.

8.  On 10 July 2013 the same judge allowed an application by the prosecutor (lodged earlier that day) for the seizure of all the property withheld on 14 June 2013[4], stating that such a measure was necessary to ensure an effective investigation, without commenting on the earlier ruling (see paragraph 7 above). The judge held that the matter was to be examined without the applicant company being notified, given that the property in question was “not temporarily withheld”.

9.  On 10 and 11 July 2013 the applicant company, which was not aware of the aforementioned seizure order, applied to the investigator for the return of its property.

10.  On 11 July 2013 the investigator sent two letters to the applicant company: the first letter informed the company that its representative could retrieve the property in question from the Boryspil police department, whereas the second stated that the applicant company’s request could not be granted, given that the property had been seized on 10 July 2013.

11.  The applicant company’s attempts to challenge the seizure order or to have it lifted were unsuccessful. On 17 July 2013 the investigating judge[5] rejected an application by the applicant company for the seizure order to be lifted, and on 18 July 2013 the Kyiv Regional Court of Appeal, by a final ruling, rejected the applicant company’s appeal against the seizure order of 10 July 2013 (see paragraph 8 above). The applicant company’s arguments, notably that there was an unexplained contradiction between the rulings of 9 and 10 July 2013, were not addressed.

12.  On 20 February 2014 the investigation was discontinued for lack of evidence that a criminal offence had been committed, the seizure order was lifted, and the applicant company received its property back.

THE COURT’S ASSESSMENT

13.  The applicant company complained that the retention of its property by the prosecution authorities had been in breach of Article 1 of Protocol No. 1. It also complained, relying on Article 6 § 1 of the Convention, that the seizure-related judicial rulings had been in breach of the rule-of-law principle and had not been accompanied by any procedural safeguards.

14.  The Court considers that the application falls to be examined under Article 1 of Protocol No. 1 only (see Piras v. San Marino (dec.), no. 27803/16, § 47, 27 June 2017, and, mutatis mutandis, G.I.E.M. S.R.L. and Others v. Italy [GC], nos. 1828/06 and 2 others, § 302, 28 June 2018, with further case-law references).

15.  In its submissions of 19 April 2023 made in reply to the Government’s observations, the applicant company informed the Court, for the first time, that further searches of its premises had been conducted in November 2013, and that property had been seized[6]. It raised a complaint under Article 1 of Protocol No. 1 in that regard.

16.  The Court notes that this new complaint does not constitute an elaboration or elucidation of the applicant company’s original complaint, on which the parties have commented. The Court considers, therefore, that it is not appropriate now to take up this matter in the context of the present case (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, §§ 122 and 129, 20 March 2018).

17.  The Government submitted, with reference to domestic case-law from between 2019 and 2022, that the applicant company had failed to exhaust domestic remedies, given that it had not lodged a civil claim for damages under Article 1176 of the Civil Code. They further contended that the application had been lodged outside the six-month time-limit. The applicant company disagreed with both objections.

18.  The Court notes that the Government have not submitted any evidence proving the effectiveness of the remedy in question at the material time: the domestic case-law cited by them dated from more than five years after the events of the present case (see Ruslan Yakovenko v. Ukraine, no. 5425/11, § 37, ECHR 2015). Nor does the Court find any compelling reason justifying an exception to the rule that the question of whether domestic remedies have been exhausted is normally determined by reference to the date when the application was lodged with the Court (see Nechay v. Ukraine, no. 15360/10, § 42, 1 July 2021, and the case-law references therein). That being so, even assuming that the applicant company could have lodged a claim for damages after the discontinuation on 20 February 2014 of the criminal investigation within which its property had been seized, that is not relevant for the assessment of its compliance with the exhaustion requirement on the date it lodged the application (18 January 2014). The Court further notes that the application was lodged within the six-month time-limit, contrary to the Government’s objection. It follows that both objections should be dismissed.

19.  Being neither manifestly ill-founded nor inadmissible on any other grounds listed in Article 35 of the Convention, the application must be declared admissible.

20.  The applicant company submitted that the retention of its property had been unlawful and arbitrary.

21.  The Government accepted that there had been an interference with the applicant company’s right to the peaceful enjoyment of its possessions. They argued, however, that that interference had been in compliance with the requirements of Article 1 of Protocol No. 1. According to the Government, the retention of the applicant company’s property had consistently had a legal basis: initially the property had been temporarily withheld following the search and shortly thereafter it had been attached as material evidence in the ongoing criminal investigation. The Government further observed that the applicant company had successfully requested the return of part of its withheld property, whereas another part had been seized in compliance with the applicable legal provisions.

22.  The Court notes that Article 1 of Protocol No. 1 does not prohibit the retention of physical evidence in the context of an ongoing criminal investigation. Nevertheless, such a measure, which relates to the control of use of property, must comply with the requirements of Article 1 of Protocol No. 1. It must thus be provided for by law and pursue a legitimate aim. The authorities’ actions must also strike a fair balance between the general interest and the individual right to property (see, for example, Pendov v. Bulgaria, no. 44229/11, § 42, 26 March 2020, with further case-law references).

23.  Furthermore, although Article 1 of Protocol No. 1 contains no explicit procedural requirements, judicial proceedings concerning the right to the peaceful enjoyment of one’s possessions must also afford the individual a reasonable opportunity of putting his or her case to the competent authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision (see G.I.E.M. S.r.l. and Others, cited above, § 302, and the references therein).

24.  Turning to the present case, the Court notes that, although they admitted that the applicant company’s property had been “temporarily withheld” following the search on 14 June 2013, the Government did not comment on the failure of the prosecution authorities to comply with the applicable safeguards under Article 171 § 5 of the CCP (either by seeking a judicial order for the seizure of the applicant company’s property within a day of its being withheld or by immediately returning it to the applicant company), even though the applicant company’s related arguments were accepted on 9 July 2013 by the investigating judge, who ordered that the property be returned to it (see paragraph 7 above). While the judge also stated in that same ruling that the attachment of the property by the investigator as material evidence following the temporary withholding had not been provided for by law, the Government went on to state, without further explanation, that such attachment had been lawful (see paragraphs 7 and 21 above).

25.  The Court also takes note of the unexplained change by the investigating judge of his position from one day to the next. Without commenting on his earlier ruling ordering the return of part of the applicant company’s property, that judge ordered the seizure of all the property withheld following the search on 14 June 2013 (see paragraph 8 above). Furthermore, on that occasion the investigating judge held, without any reasoning, that there had been no “temporary withholding” of the applicant company’s property and that, as such, it did not need to be notified of the seizure.

26.  In the Court’s view, the aforementioned circumstances disclose serious indications of arbitrariness in relation to the impugned interference with the applicant company’s right to the peaceful enjoyment of its possessions and provide sufficient grounds for the Court to find a violation of Article 1 of Protocol No. 1.

APPLICATION OF ARTICLE 41 OF THE CONVENTION

27.  The applicant company claimed just satisfaction without specifying an amount or whether its claim concerned pecuniary damage, non-pecuniary damage and/or costs and expenses. It submitted that, owing to the allegedly arbitrary retention of its property by the prosecution authorities, it was no longer able to pursue its business activities, which had previously been successful. The applicant company also indicated the total amount, for which it had signed contracts with its clients, and submitted the value of its property which had been retained for about eight months.

28.  The Government contested the above claim as unsubstantiated.

29.  The Court reiterates that an applicant who wishes to obtain an award of just satisfaction must make a specific claim to that effect (Rule 60 § 1 of the Rules of Court). While the Court is, even in the absence of a properly submitted claim, empowered to afford just satisfaction, this applies only in respect of non-pecuniary damage and in exceptional circumstances (see Nagmetov v. Russia [GC], no. 35589/08, §§ 74-82, 30 March 2017). It finds that such circumstances are not present in the present case, and it therefore rejects the applicant company’s claim for just satisfaction (compare Split Ferry Port JSC v. Croatia [Committee], no. 23472/15, §§ 34-36, 28 April 2022).

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

Done in English, and notified in writing on 22 February 2024, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Martina Keller Carlo Ranzoni
 Deputy Registrar President

[1] As stated in the search report, the following items were withheld: 14 system units without serial numbers, a computer monitor, 9 flash drives, 3 servers, 530 CD-ROMs without identification signs and 62 CD-ROMs with holographic signs, 5 die moulds and 5 metal matrices, as well as 15 cargo bags containing granulated polycarbonate. It was also noted in the report that, given the technical impossibility of transporting the withheld equipment to a different location, it was to be stored by the premises’ owner.

[2] With the exception of the cargo bags containing granulated polycarbonate, which were not mentioned in the list.

[3] The list submitted by the applicant company did not mention the seized flash drives, CD-ROMs or metal matrices.

[4] On this occasion the list of items did not mention the cargo bags containing granulated polycarbonate.

[5] The same judge who delivered the rulings of 9 and 10 July 2013.

[6] The applicant company referred to those events as “the second episode”, distinct from the episode described in its initial application.