Communicated on 3 November 2017
FOURTH SECTION
Application no. 67122/09
MAXBET ENTERTAINMENT GROUP PLC and TOV MAKSBET against Ukraine
and 4 other applications
(see list appended)
STATEMENT OF FACTS
A list of the applicants is set out in the Appendix.
A. The circumstances of the cases
The facts of the case, as submitted by the applicants, may be summarised as follows.
1. All applications
The applicants purchased licences for gambling operations for the periods indicated in the Appendix. They (except the applicant company in application no. 49432/16) operated gambling businesses. The licences were prepaid for the entire period for which they were issued. In addition, they acquired year-long permits for each gambling point (slot machine, table, etc.).
On 7 May 2009 a fire occurred at a gambling establishment in the city of Dnipro, leaving nine people dead and eleven injured. The incident attracted considerable public attention. On the same day the Prime Minister issued decree of the Cabinet of Ministers no. 494-p entitled “On Measures to Increase the Safety of Citizens”, which ordered the Ministry of Finance to suspend all gambling licences.
On 8 May 2009 the Ministry of Finance suspended the applicants’ licences until 7 June 2009.
On 15 May 2009 the Parliament passed a law prohibiting all gambling operations in Ukraine (hereinafter “the Law of 15 May 2009”), with some limited exceptions – notably in respect of lotteries. The law did not contain any provisions regarding any possible compensation for licence holders.
The President vetoed the law, arguing in particular that it was contrary to the constitutional provisions protecting property as it did not provide for any compensation to be paid to licence and permit holders.
On 11 June 2009 Parliament overrode the veto.
On 25 June 2009 the law entered into force and as of that date the applicants’ licences were deemed to have been revoked by operation of law.
The applicants (other than those in application no. 67122/09) lodged claims for compensation with domestic courts, but those claims were dismissed.
2. Particular applications
(a) Application no. 13290/11
Upon the coming into force of the Law of 15 May 2009 the applicant company lodged a claim for damages against the Ministry of Finance and the Administration of the State Treasury of Ukraine. It relied on various provisions of domestic law.
On 10 December 2009 the Kyiv City Commercial Court dismissed the claim on the grounds, essentially, that the Law of 15 May 2009 did not provide for the payment of compensation and that it was had not been declared unconstitutional. There was thus no basis in domestic law for the claim for damages.
The applicant company appealed to the Kyiv Commercial Court of Appeal and appealed on points of law to the High Commercial Court, invoking (i) Article 1 of Protocol No. 1 to the Convention and (ii) the Court’s judgment in the case of Tre Traktörer AB v. Sweden (7 July 1989, § 53, Series A no. 159).
The above-mentioned appellate courts dismissed the appeals, upholding the findings of the first-instance court. They did not comment on the applicant company’s references to Protocol No. 1 to the Convention or the Court’s case-law.
(b) Application no. 62600/12
The applicant lodged claims seeking (i) the invalidation of the decisions of the Cabinet of Ministers and of the Ministry of Finance of 7 and 8 May 2009, respectively, concerning the suspension of her licence and (ii) damages. In final decisions delivered on 28 May 2013 and 20 January 2016, the High Administrative Court dismissed those claims; on 3 December 2012 the High Commercial Court dismissed those claims.
B. Relevant domestic law
1. Licensing and permit regime in place at the time of the prohibition of gambling
Section 15 of the Licensing Law of 1 June 2000, as worded at the material time, provided that payment for a licence had to be made at the time that that licence was issued. The fee for the issuance of a licence for gambling operations was EUR 30,000 per year, and licences were issued for a five-year term. Section 21 of the Licensing Law contained an exhaustive list of situations in which a licence could be annulled (such as in the event of a repeated breach of licence conditions or a misrepresentation in the licence application). The list did not provide for the annulment of licences in the event of the prohibition, by law, of a previously lawful licensed activity.
Section 5 of the Permits Law of 23 March 1996 required that an operator of a gaming business purchase a permit in respect of each slot machine, roulette table and other gambling point. It provided that such permits would be valid for a year and set the relevant fees.
2. Law of 15 May 2009 prohibiting gambling
Section 2 of the Law on the Prohibition of Gambling in Ukraine of 15 May 2009 contains a general prohibition on gambling in Ukraine. Section 4 of the Law contains transitional provisions.
Pursuant to section 4 § 1 thereof, the Law came into effect on the date of its official publication, which occurred on 25 June 2009; it was to remain in effect until a law was adopted authorising gambling in specially designated areas (no such law has been adopted so far). Section 4 § 2 provided that gambling licences issued prior to the date of the Law coming into force would be deemed to have been revoked.
An explanatory memorandum in respect of bill no. 4268 (which became the Law of 15 May 2009) stated that the Law would not entail fresh expenditure of funds from the State budget.
3. The Court’s case-law as a source of law to be relied upon by the domestic courts
Section 17 of the Law on the Execution of Judgments of the European Court of Human Rights of 23 February 2006 provides that the courts shall, when deciding cases, apply the Convention and Protocols and the case-law of the European Court of Human Rights as a source of law.
COMPLAINTS
The applicants complain that the prohibition of gambling operations by the Law of 15 May 2009 – in particular the revocation of their licences – amounted to an interference with their right to the peaceful enjoyment of their possessions, contrary to Article 1 of Protocol No. 1 to the Convention.
In application no. 62600/12 the applicant also complains that Article 1 of Protocol No. 1 to the Convention was breached on account of the suspension of her licence by the order of the Ministry of Finance of 8 May 2009.
In applications nos. 13290/11 and 62600/12 the applicants complain, under Article 6 § 1 of the Convention, that domestic courts failed to give sufficient reasons for their decisions, and in particular failed to comment on the applicants’ references, in support of their claims, to Article 1 of Protocol No. 1 and to the Court’s case-law.
In applications nos. 62600/12, 35517/13 and 49432/16 the applicants complain under Article 13 that they do not have an effective remedy with respect to the possible infringement of their rights under Article 1 of Protocol No. 1.
QUESTIONS TO THE PARTIES
Admissibility
1. Application no. 67122/09
1. Are both applicant companies legal entities in good standing? Are their complaints compatible with the Convention ratione personae?
2. Have the applicant companies exhausted all effective domestic remedies, as required by Article 35 § 1 of the Convention?
2. All other applications
3. Have the applicants complied with the six-month time-limit laid down in Article 35 § 1 of the Convention in respect of their complaints?
Merits
1. All applications
4. Has there been an interference with the applicants’ peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1? If so, was that interference in accordance with that provision (see, for example and mutatis mutandis, Vékony v. Hungary, no. 65681/13, 13 January 2015, and S.C. Antares Transport S.A. and S.C. Transroby S.R.L. v. Romania, no. 27227/08, 15 December 2015)?
2. Applications nos. 13290/11 and 62600/12 (application forms dated 4 November 2013 and 19 July 2016)
5. Did the applicants have a fair hearing in the determination of their civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular, did the domestic courts comply with the obligation to give reasons for their decisions?
3. Applications nos. 62600/12, 35517/13 and 49432/16
6. Did the applicants have at their disposal an effective domestic remedy for their complaints under Article 1 of Protocol No. 1, as required by Article 13 of the Convention?
Appendix
No.
Application no.
Lodged on
Licence paid until
Final decision of domestic courts, if any
Applicant
Date of birth (for individuals only)
Place of residence and nationality for individuals or place of registration for companies
Represented by
67122/09
06/12/2009
04/05/2011
N/A
MAXBET ENTERTAINMENT GROUP PLC
Limassol, Cyprus
MAXBET TOV
Kyiv, Ukraine
Jacob KATZ
13290/11
15/02/2011
25/04/2011
22/09/2010, High Commercial Court
SVIT ROZVAG
Kharkiv, Ukraine
Arkadiy Petrovich BUSHCHENKO
62600/12
26/09/2012
16/05/2011
21/05/2012 and 03/12/2012, High Commercial Court
28/05/2013 and 20/01/2016,
High Administrative Court
Nataliya Ivanivna STANKO
05/07/1975
Loza, Ukraine
Ukrainian
Igor Mykhaylovych SHKORKA
35517/13
21/05/2013
23/09/2012
27/11/2012, High Administrative Court
LS, TOV
Kharkiv, Ukraine
Oksana Mykhaylivna KOBZAR
49432/16
08/08/2016
27/10/2013
15/03/2016, High Administrative Court
IGRO-BET, PP
Lviv, Ukraine
Oksana Igorivna YAKYMETS
Full & Egal Universal Law Academy