Legal summary
October 2025
M.S.L., TOV v. Ukraine - 18049/18
Judgment 16.10.2025 [Section V]
Article 13
Effective remedy
Absence of effective remedy to challenge freezing of applicant company’s assets under Sanctions Act: violation
Article 1 of Protocol No. 1
Article 1 para. 2 of Protocol No. 1
Control of the use of property
Freezing of assets imposed on applicant company under Sanctions Act and absence of sufficient procedural guarantees against arbitrariness: violation
Facts – In 2014 the Sanctions Act was adopted in response to the unprecedented threats to Ukraine’s statehood and territorial integrity. In September 2015 the National Security and Defence Council of Ukraine (“the NSDCU”) issued a decision applying economic restrictions to different individuals and legal entities, including the applicant company, a multi-tiered corporate structure operating State lotteries and involving shareholders from Ukraine, the United Kingdom and Cyprus. The grounds for the imposition of sanctions, including the freezing of assets, were similar for all the individuals and legal entities concerned and were limited to a citation of section 3(1)(1) of the Sanctions Act. This decision was put into effect by presidential decree.
In October 2015 the applicant company asked the Security Service of Ukraine (“the SBU”) to launch a criminal investigation into the alleged offences, as implied in the NSDCU’s decision. In March 2017 the SBU discontinued the investigation, concluding that no criminal offence had been committed.
In March 2016 the applicant instituted administrative proceedings seeking the invalidation of the presidential decree. In November 2022 its claim was dismissed by the Cassation Administrative Court (a formation within the Supreme Court) which referred to information provided by the SBU as an intervening party and according to which the company was controlled by citizens of the Russian Federation and engaged in illegal gambling, money laundering and tax evasion. The decision also referred to the Supreme Court’s (Grand Chamber) ruling of January 2021 finding that the existence of threats under the Sanctions Act was an evaluative concept implying a certain level of discretion and requiring only a limited judicial review. In August 2024 the Supreme Court (Grand Chamber) dismissed the applicant company’s appeal, referring to its 2021 ruling, reiterating the limited judicial review of presidential decrees imposing sanctions and finding that the impugned decision contained no signs of arbitrariness.
In September 2016 the applicant company applied to SBU for a lifting of the sanctions, following which SBU suggested that the NSDCU should consider removing the company’s name from the list of legal entities subject to sanctions.
Under the Articles 1 of Protocol no. 1 and 13 of the Convention the applicant company complained that the sanctions imposed on it had been unlawful and disproportionate and that it had not had an effective remedy in this respect.
Law – Article 1 of Protocol No. 1:
The Court confined its examination to the freezing of the applicant company’s assets and analysed the interference with regard to the “quality of law” requirement.
The grounds for the application of sanctions laid down in section 3(1)(1) of the Sections Act had been expressed in broad terms and had covered a wide range of alleged actions. This had included not only activities whose scope had been more or less clearly defined, but also abstract and even ambiguous formulas.
The unprecedented threats to Ukraine’s national security and territorial integrity had required a swift response from the authorities, which traditional criminal proceedings alone could not provide. The Sanctions Act had been specifically designed to address those urgent security needs. It had served merely as a general legal framework for the imposition of restrictions; its terms had been subject to practical interpretation and application by the individual decisions of the NSDCU and the President. None of those decisions had contained any individualised justifications, mechanically reproducing all the grounds for applying the various restrictions provided for in the Sanctions Act without explaining how they had applied specifically to the applicant company, whereas it had been essential for the applicant company to be able to ascertain the essence of the reasons for them and to prepare its legal argumentation.
Concerning the procedural guarantees, there had been no meaningful judicial assessment of the decisions to impose sanctions on the applicant company. The Supreme Court, in both its formations, had limited its analysis to the sole issue of whether the NSDCU’s decision and the presidential decree had complied with the formal requirements of the Sanctions Act, without addressing the substance of the SBU’s allegations against the applicant company. Noting that it could only exercise limited judicial review in such cases, the Supreme Court had declined to examine whether the SBU’s factual findings concerning the applicant company had provided genuine and sufficient grounds for its activities to be considered a threat to national security. The key legal issue had remained unaddressed – namely whether, despite not having Russian owners in its corporate structure, the applicant company had in fact been controlled by entities of the Russian Federation and whether it had committed any acts that posed a threat to Ukraine’s national security.
The domestic courts had never seriously attempted to verify why, in parallel with defending the imposition of restrictions on the applicant company in the course of the judicial proceedings, the SBU had sought to lift those restrictions after agreeing with the company’s arguments as presented in its letter of September 2016.
Nothing in the Ukrainian Constitution or in any other domestic provision had explicitly prevented the domestic courts from examining the basis of the allegations against the applicant company or assessing the credibility of the information provided by the SBU. Moreover, the Supreme Court had not explained how such limited judicial review should be understood in the light of Article 124 of the Constitution, which provided that the domestic courts’ jurisdiction extended to all legal disputes without limitation. This also appeared to contradict the Supreme Court’s earlier case-law in similar cases where it had examined the substance of the allegations against claimants subject to sanctions.
Despite the discretion afforded to the NSDCU and the President in matters of national security and defence, the judicial review conducted by the Supreme Court could not be regarded as a sufficient procedural guarantee against arbitrariness as it had not involved any verification as to whether the presidential decree had been based on a sufficiently solid factual foundation or as to whether the factual allegations against the applicant company had been substantiated.
Accordingly, the applicant company had been denied a reasonable opportunity to effectively challenge the measures in question.
The Court concluded that the interference with the applicant company’s possessions had not been accompanied by sufficient procedural guarantees against arbitrariness and had thus not been lawful within the meaning of Article 1 of Protocol No. 1.
Conclusion: violation (unanimously).
Article 13 in conjunction with Article 1 of Protocol No. 1:
The interference with the applicant company’s possessions had not been accompanied by sufficient procedural guarantees. Although the applicant company had initiated the administrative proceedings in March 2016, no court assessment appeared to have been made until November 2022 – more than six years later.
The applicant company had also requested an SBU investigation into the allegations against it, had cooperated with law enforcement authorities and eventually had obtained a decision discontinuing the SBU investigation. Additionally, following the applicant company’s further request, the SBU had recommended that the NSDCU lift the sanctions against it, but these efforts appeared to have had no effect.
The foregoing considerations were sufficient to conclude that, in the particular circumstances of the present case, the applicant company had not, in practice, had an opportunity to obtain effective remedies for its complaints.
The scope of judicial review exercised by the Supreme Court under the Sanctions Act in similar cases indicated that, provided it was available without excessive delay, such a remedy might, in principle, satisfy the requirements of Article 13. Accordingly, the above conclusion related solely to the present case and did not call into question the effectiveness of Supreme Court proceedings in similar cases.
Conclusion: violation (unanimously).
Article 41: claim for pecuniary damage dismissed and finding of a violation sufficient in respect of non-pecuniary damage.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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