PETROL v. UKRAINE

FIFTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 62605/00
by MPP PETROL
against Ukraine

The European Court of Human Rights (Fifth Section), sitting on 25 March 2008 as a Chamber composed of:

Peer Lorenzen, President,
Karel Jungwiert,
Volodymyr Butkevych,
Renate Jaeger,
Mark Villiger,
Isabelle Berro-Lefèvre,
Mirjana Lazarova Trajkovska, judges,
and Claudia Westerdiek, Section Registrar,

Having regard to the above application lodged on 23 May 2000,

Having regard to the decision to apply Article 29 § 3 of the Convention and examine the admissibility and merits of the case together,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

1. The applicant company, MPP Petrol (Мале приватне підприємство “Петрол”), was a Ukrainian privately owned enterprise that was registered in Mukacheve. On 8 May 2003 its registration was annulled and it was struck off the State register of enterprises as it had been declared insolvent. It is represented before the Court by Mr Tsytsey and Ms Sokolova, respectively, the applicant company’s former director and sole owner (“the Director”) and the applicant company’s former deputy director (“the Deputy Director”; hereinafter together – “the Directors”).

2. The Ukrainian Government (“the Government”) are represented by their Agent, Mr Zaytsev.

A. The circumstances of the case

3. The facts of the case, as submitted by the parties, may be summarised as follows.

1. Background to the case

4. On 13 January 1998 the Mukacheve State Tax Inspectorate (the “Inspectorate”) ordered that the applicant company’s accounting records for the period of 1997 be inspected for compliance with tax regulations. As a result of the inspection, held from 13 to 19 January 1998, the Inspectorate issued two decisions: nos. 26-87/2 of 19 January 1998 and 26-87/11 of 12 March 1998. On 26 January 1998 the Inspectorate found violations of the procedure for keeping incoming cash records and ordered the applicant company to pay a fiscal penalty in the amount of 505,060 Ukrainian hryvnyas (UAH). On 21 March 1998 it ordered the applicant company to pay in fiscal penalty of UAH 2,332,850 and UAH 79,150.

5. On 17 March and 27 August 1998 the Regional Tax Administration upheld the decisions taken in the context of the tax inspection. On 22 and 25 May and 28 July 1998 the State Tax Administration of Ukraine rejected similar complaints as unsubstantiated.

6. On 20 March 1998 the Zakarpatsky Regional State Control and Revision Service (Державне Контрольно-Ревізійне Управління; the “Revision Service”) ordered the applicant company to pay UAH 9,596 as a penalty for infringement of financial regulations.

7. On 21 December 1998, 21 December 1999 and 14 April 2000 the Zakarpatsky Regional Court of Arbitration (“the Arbitration Court”) declared null and void, respectively:

- the orders of the Inspectorate of 26 January and 21 March 1998 (decision upheld on 18 March 1999 by the President of the Arbitration Court);

- the order of the tax authorities for the payment of UAH 79,150;

- the order of 20 March 1998 of the Revision Service.

2. Criminal proceedings instituted against the management of the applicant company

(a) Summary of criminal proceedings against the company’s managers

8. On 20 January 1998 the Mukacheve Prosecutor’s Office (“the Prosecutor’s Office”) initiated criminal proceedings against the Directors, suspecting them of being involved in tax evasion. Subsequently, criminal proceedings were initiated on other charges against them - fraud committed by an official of the company, tax evasion, financial fraud, corruption and misappropriation of company property.

9. On 7 October 1998 the Mukacheve City Court remitted the indictment against the Director to the Mukacheve Prosecutor’s Office for additional investigation, having noted that the investigation was incomplete and did not comply with procedural regulations. The remittal was upheld by the Zakarpatsky Regional Court on 11 November 1998. It also partly revised it, in relation to the alleged absence of unlawful intention on the part of the accused to evade tax, and confirmed that the charges had not been duly corroborated. The Directors signed an undertaking not to abscond.

10. From December 1998 to May 2000 the Mukacheve Prosecutor’s Office and the Zakarpatsky Regional Prosecutor’s Office (“Regional Prosecutor’s Office”) reopened and suspended investigations for various procedural reasons. The charges against the Directors were amended on several occasions.

11. On 14 August 2000 the criminal investigation against the Directors in relation to tax evasion episodes was terminated as the fiscal sanctions imposed by the Inspectorate had been declared null and void by the Arbitration Court (see paragraph 7 above). New criminal proceedings were instituted in respect of forgery committed by an official of the company, which were joined to the original proceedings.

12. On 23 September 2000 the prosecutor in charge of the case filed a new bill of indictment against the Deputy Director on charges including abuse of power, forgery committed by an official, tax evasion and embezzlement. On 30 November 2000 the bill of indictment was lodged with the Mukacheve City Court. The Director was indicted for forgery committed by an official, theft and financial fraud.

13. On 18 June 2001 the Mukacheve City Court remitted the case to the Regional Prosecutor’s Office for additional investigation as it held, inter alia, that the investigation had failed to comply with the Code of Criminal Procedure and the court’s resolution of 7 October 1998. On 20 August 2001 the remittal was upheld on appeal.

14. On 24 October and 14 December 2001 the Regional Prosecutor’s Office filed new bills of indictment concerning the Directors and lodged them with the Mukacheve City Court. In particular, the Deputy Director was charged with forgery committed by an official and abuse of power. The Director was charged with forgery committed by an official, abuse of power and financial fraud.

15. On 5 January 2002 the case file, with the indictment against the Deputy Director on charges of financial fraud, abuse of power and forgery committed by an official, and the indictment against the Director on charges of financial fraud, abuse of power and forgery committed by an official, was referred to the Mukacheve City Court for preliminary examination.

16. On 16 July 2004 the Mukacheve City Court, in the presence of the accused, their two representatives and the prosecutor, found the Directors guilty of document forgery and financial fraud. The Court decided not to convict them as the limitation period had expired, acquitted them of the remainder of the charges and ordered “the return of the material evidence as relevant”. No appeal was lodged against this judgment and it became final.

(b) Summary of the procedural decisions on seizure of property and documentation

17. On 13 and 22 January 1998 the Inspectorate and Assistant Prosecutor, respectively ordered the seizure of the banking documents, main record book, cash registers, invoices, receipts, agreements and other accounting documents of the applicant company for the period from 1 January 1997 to 1 January 1998 and the accounting records of the applicant company for 1996. These documents were added to the case file.

18. On 14 January 1998 the Inspectorate requested the JSC Zakarpatnaftoprodukt-Mukachevo (“Z.M.”) to store 993,938 kg of diesel bought by the applicant company from a private company, JSC Galychyna-Kyiv (“G.K.”). On 16 January 1998 the Inspectorate informed the applicant company of the transfer of these products to G.K. as they had not been paid for.

19. On 21 January 1998 the Assistant Prosecutor of Mukacheve (the “Assistant Prosecutor”) ordered the attachment of all of the applicant company’s and the Director’s property, in order to secure compensation for damage allegedly caused by their unlawful activities, which amounted to UAH 25,278. On 26 and 27 January 1998 the Inspectorate seized petroleum products belonging to the applicant company from three different locations:

- petrol station AZS MPP Petrol, the village of Chmonin;

- petrol station no. 2, Mukacheve (AZS MPP Petrol);

- petrol store of the MP “Erko” (a private enterprise).

20. On 27 January 1998 the Inspectorate attached diesel, petroleum and motor oil stored with Z.M. (The applicant company alleged that the petrol stations in Chmonin and Mukacheve, where the products were stored, were in a “natural disaster zone” and had been destroyed by natural disaster, as allegedly stated in the notice issued by the Zakarpatsky Regional Chamber of Trade and Commerce of 29 December 1999. The applicant company mentioned that products stored at MP Erko had also disappeared).

21. On 13 February 1998 the Assistant Prosecutor ordered a search of the private joint household of the Directors. The search resulted in the seizure of documents relating to the activities of the applicant company.

22. On 24 February 1998 G.K. and the private company OJSC “APPEK” were declared “civil plaintiffs” in the criminal proceedings. On the same date the Assistant Prosecutor made a report on the transfer of diesel, petroleum and oil to storage by G.K. (G.K. had previously requested the Mukacheve Prosecutor’s Office to declare it a “civil plaintiff” and to order a transfer of petroleum products stored at Z.M.’s premises to it, allegedly for recovery of the applicant company’s debts for petroleum supplied in 1997.) The applicant company and G.K. signed the decisions on transfer of these products to G.K. They were transferred to this company under bills of transfer, with the application of Incoterms provisions traditionally used in commercial activities for contracts on sale of goods (see paragraph 105 below). (Later, on 17 September 1999, at G.K.’s request, the applicant company signed a verification of debt record, which confirmed the applicant company’s debts to G.K. of UAH 560,385.33.)

23. On 14 May and 31 May 1998 the JSC Ukrbudresoursy (a private company) and the Revision Service were also declared civil plaintiffs.

24. On 24 and 25 May 1998 the Assistant Prosecutor allowed the Deputy Director’s requests for access to the accounting documents seized and for an additional forensic economic examination in the case. He also ruled that the documents seized, including accounting documents for 1997, were material evidence and a part of the criminal case file.

25. On a number of occasions throughout the criminal investigation, and in particular from 9 January 1999 to November 2001, the Mukacheve Prosecutor’s Office and the Zakarpatsky Regional Prosecutor’s Office informed the applicant company that:

- the documents seized could not be returned as they were part of the case file, but that the Directors were not prohibited from copying them;

- the petroleum products seized had been transferred to G.K. for storage;

- it was not possible to terminate the criminal proceedings;

- it was not possible to lift the attachment on property and documents, including accounting records, and return them, as they were material evidence.

26. On 16 April and 8 December 1999 and 11, 14 and 25 January 2000 the applicant company lodged several complaints with the President’s Administration, the Ministry of Justice, the Prosecutor General’s Office and the Regional Prosecutor’s Office, of unlawful seizure of accountancy documents and requesting their return. In particular, it made unsuccessful requests to:

- have the documents returned for completion as some formal information was missing from them, such as signatures, seals and so on;

- be recognised as a “civil plaintiff” in the criminal investigation and to have the prosecutor’s office which had seized documents designated a “respondent”.

27. On 17 and 27 January 2000 the Regional Prosecutor’s Office stated that the Directors’ access to the accounting records was not limited as they had been able to familiarise themselves with the case file from 11 to 17 January 2000.

28. On 27 December 2000 and 29 October 2002 the applicant company unsuccessfully requested the Mukacheve City Court to annul the attachment of its property and the Directors’ private property.

29. On 16 July 2004 the Mukacheve City Court ordered the return of material evidence “as relevant” (see paragraph 16 above).

3. Judicial proceedings relating to seizure of documents and property

(a) First set of proceedings (compensation proceedings against the Tax Inspectorate)

30. On 3 April 2000 the Arbitration Court returned the applicant company’s claim of 29 March 2000, in which it had sought damages and loss of profit from the Inspectorate as “not lodged” because of its failure to pay the court fee (amount claimed UAH 26,618,690.60). It also ruled that the company had failed to pursue a pre-arbitration settlement procedure.

31. On 15 April 2000 the applicant company lodged a request for pre-arbitration settlement with the Inspectorate, demanding damages and compensation for loss of profit in the amount mentioned in paragraph 30 above. On 5 September 2000 the Inspectorate disagreed with the request for settlement, finding it unsubstantiated, both as to form and content.

32. On 8 May 2000 the applicant company lodged its claims with the Arbitration Court again and requested it to declare unlawful the verbatim reports on the seizure of documents and attachment of property by the Inspectorate on 13 and 27 January 1998 (see paragraphs 17 and 20 above).

33. On 15 May 2000 the Arbitration Court refused to examine the applicant company’s claims as it had failed to pay the court fee for bringing the claims and thus had not complied with Article 63 of the Code of Arbitration Procedure (see paragraph 87 below). It also stated, referring to the recommendation of the Presidium of the Higher Arbitration Court of 26 January 2000, that these claims should be resolved in accordance with the Code of Criminal Procedure (see paragraph 99 below).

(b) Second set of proceedings (proceedings concerning unlawfulness of actions by the tax authorities)

34. On 22 May 2000 the applicant company complained to the Mukacheve City Court that the tax authorities’ acts were unlawful and requested the court to annul the Inspectorate’s reports of 13 and 27 January 1998 (see paragraphs 17 and 20 above). On 30 May 2000 the court dismissed the applicant company’s complaint without examining it on the merits, finding that it had no jurisdiction to deal with it. The court indicated that complaints concerning criminal proceedings were to be examined by the courts of general jurisdiction, pursuant to Articles 24 and 248-1 of the Code of Criminal Procedure (see paragraph 76 below).

35. The applicant company appealed in cassation to the Zakarpatsky Regional Court. The first-instance court informed the applicant company that a hearing was scheduled on 15 June 2000 and ruled that the presence of its representative was not obligatory.

36. On 27 June 2000 the regional court, with no parties present and in a preliminary hearing, returned the appeal in cassation to the first-instance court without examining it. The court ruled that the Deputy Director had failed to provide a letter of authority and the case file was returned to the first instance court.

37. In August 2000 the applicant company lodged a complaint with the Mukacheve City Court, contending that the appeal in cassation had been properly lodged. In a letter of 11 August 2000 the Acting President of the Mukacheve City Court stated that the letter of authority had been sent to the Regional Court in order to be appended to the case file. He stated that the returned case file had had no letter of authority attached to it and requested a new letter of authority.

38. The parties have provided no information as to the outcome of these proceedings.

(c) Third set of proceedings (proceedings against G.K.)

39. On 22 August and 11 September 2000 the Arbitration Court refused to examine three claims against G.K. lodged by the applicant company for annulment of the decision on the transfer of petroleum products from it to G.K. as they were beyond the jurisdiction of the arbitration courts (Article 12 of the Code of Arbitration Procedure). In particular, the “transfer decisions” were not “normative acts” within the meaning of this provision (see paragraph 85 below).

(d) Fourth set of proceedings (new claims against G.K.)

40. On 17 November 2000 the Kyiv Court of Arbitration refused to examine three new claims by the applicant company against G.K. by which it sought annulment of the transfer decisions mentioned above as the company had no legal capacity after having been declared insolvent: only the company’s liquidator could act on its behalf.

41. On 19 December 2000 the Kyiv Court of Arbitration, in a different composition, left the applicant company’s claims unexamined as they were unsubstantiated, meaning that the copy of the “transfer decision” did not provide evidence of a legal act, nor could it lead to a finding of the existence of a legal act.

(e) Fifth set of proceedings (new compensation proceedings against the Inspectorate)

42. On 18 September 2000 the applicant lodged a claim with the Arbitration Court against the Inspectorate seeking damages of UAH 35,095,760 for the Inspectorate’s unlawful actions.

43. On 25 September 2000 the Arbitration Court returned this claim without having examined it, under Article 63 § 3 of the Code of Arbitration Procedure (see paragraph 87 below), as the applicant company had failed to provide corroborating evidence in support of its claims for loss of income and to prove a causal link between the fiscal sanction and the damage alleged.

44. In October 2000 the applicant company lodged its claims again and on 2 October 2000 the Arbitration Court returned this claim for the same reasons as on 25 September 2000 (see paragraph 43 above).

(f) Sixth set of proceedings (December 1999 – May 2000)

45. On 22 and 29 December 1999 Z.M. informed the applicant company that it had been instructed by G.K. to sell the petroleum products and that the seized petroleum products had been transferred to that company.

46. On 12 May 2000 the applicant instituted proceedings in the Arbitration Court against G.K., seeking the return of the petroleum products or reimbursement of their cost. On 18 May 2000 the Arbitration Court returned these claims as not having been lodged, without having examined them on the merits, as the applicant company had failed to substantiate the sum claimed and had not paid the court fee.

(g) Seventh set of proceedings

47. On 24 August 2001 the Directors complained to the Mukacheve City Court against the Mukacheve Prosecutor’s Office, seeking a declaration that the actions of the Prosecutors’ Office were unlawful and requesting compensation for pecuniary damage. The outcome of these proceedings, which apparently were not pursued, is unknown.

4. Liquidation proceedings against the applicant company

48. On 10 November 1999 the Inspectorate lodged an application with the Arbitration Court seeking to declare the applicant company insolvent.

49. On 15 November 1999 the Arbitration Court assumed jurisdiction over the case and instituted liquidation proceedings against the company, prohibiting the sale of its assets.

50. On 3 April 2000 the Arbitration Court requested the parties to provide it with additional information on the case and ordered that the applicant company should be managed by an insolvency officer, D.M.A., (арбітражний керуючий) who should analyse the company’s finances, and attach its property and prohibit its sale. The court also prohibited enforcement of any claims of creditors against the company, except those allowed by section 12(4) of the Insolvency Act (salary- and social-related payments).

51. On 7 April 2000 D.M.A. issued an order prohibiting any actions with regard to the company or its assets.

52. On 16 June 2000 the Arbitration Court, in the presence of the Deputy Director, representatives of the applicant company’s creditors and D.M.A., ordered the Inspectorate to publish information on the initiation of the liquidation proceedings. D.M.A. was ordered to draw up a list of creditors. The next hearing was scheduled for 5 September 2000.

53. On 25 September 2000 the Arbitration Court, in the presence of the Deputy Director, approved the list of the company’s creditors, consisting of the Inspectorate, G.K. and the Uzhgorod Branch of Ukrsotsbank. It approved the list of their financial claims and ordered the creditors to meet on 12 October 2000. D.M.A. had to inform the court of the results of the meeting and to provide the court with a final register of creditors’ claims. In particular, the court noted that the claims of G.K. amounted to UAH 450,843.30 and had not been challenged by the Deputy Director in the course of the hearing.

54. On 6 November 2000 the Arbitration Court declared the applicant company insolvent and initiated its liquidation, which had to be completed within twelve months. D.M.A. was appointed as the company’s liquidator and was ordered to publish information about the applicant company’s insolvency, to form a liquidation commission and to finalise the liquidation procedure. The applicant company had to provide the liquidator with all the documents, official seals and other property belonging to it by 17 November 2000. The liquidator had to provide a liquidation balance to the court by 5 November 2000.

55. On 21 November 2000 the Directors unsuccessfully requested the Arbitration Court to review and quash its own ruling of 6 November 2000.

56. On 17 September 2001 the Directors unsuccessfully requested the Regional Prosecutor’s Office to return the accounting records, which from their point of view were necessary for finalising the liquidation, and to lift the attachment of the petroleum products so as to have them included in the register of the liquidated company’s property. (According to the applicant this request remained unanswered.)

57. On 18 September 2001 the Directors instituted proceedings against the liquidator in the Zakarpatsky Regional Commercial Court (formerly the Arbitration Court; hereafter “Commercial Court”) seeking to declare unlawful his failure to include the seized petroleum products in the register.

58. By a ruling of 28 September 2000, which apparently was adopted on 28 September 2001, the Commercial Court approved the liquidation balance and the liquidator’s report. The court ruled that the company should be liquidated, that the relevant State authorities and the company’s management should be informed of the court’s ruling and the termination of the proceedings.

59. On 17 October 2001 the Directors appealed against the ruling of 28 September 2001 to the L’viv Commercial Court of Appeal. They also requested that the ruling of 6 November 2000 be quashed and the time-limit for lodging an appeal be extended, alleging that they had received that ruling late.

60. On 29 October 2001 the L’viv Commercial Court of Appeal, composed of three judges, dismissed the applicant company’s request for the extension of the time-limit as it had been lodged outside the statutory time-limit of three months under Article 91 of the Code of Commercial Procedure. It also returned the appeal of 17 October 2001 to the applicant company, without examining it on the merits.

61. On 24 November 2001 the applicant company appealed in cassation to the Higher Commercial Court, seeking to have declared null and void the rulings of 28 September 2001 and 6 November 2000. In particular, it alleged that the liquidator had failed to include the property seized by the prosecutor’s office in the liquidation report. The company noted a technical mistake in the year of the ruling dated 28 September 2000, which in fact had been adopted on 28 September 2001. It alleged that a request for extension of the time-limit had been lodged with the Higher Commercial Court.

62. On 9 January 2002 the Higher Commercial Court informed the applicant company that the appeal in cassation had been wrongly lodged, as it should have been sent through the first instance commercial court.

63. On 6 March 2002 the Higher Commercial Court refused to examine the applicant company’s appeal in cassation as it had failed to comply with the requirements of Chapter XII of the Code of Commercial Procedure in that the company had failed to pay the court fee for lodging the appeal (see paragraphs 91 – 94 below).

64. On 14 May 2002 the Higher Commercial Court dismissed the applicant company’s appeal in cassation as it had not complied with the one-month time-limit envisaged by Article 110 of the Code of Commercial Procedure (see paragraph 95 below). The Court also informed the applicant company that no request for extension of this time-limit had been lodged.

65. On 20 June 2002 the Supreme Court remitted the applicant company’s appeal, without having examined it, to the Higher Commercial Court and eventually it was sent to the first-instance commercial court.

66. On 9 July 2002 the Higher Commercial Court again dismissed the applicant’s appeal in cassation as having been lodged out of time, finding that no request for extension had been lodged.

67. The applicant company alleged that it had lodged a request for extension of the time-limit, together with its appeal in cassation, with the Higher Commercial Court after the ruling of 9 July 2002.

5. Compensation proceedings initiated in 2006 brought by Directors

68. On 27 October 2006 the Directors lodged compensation claims against the prosecution authorities with the Mukacheve City Court. They sought UAH 24,537,664 in pecuniary and non-pecuniary damage caused by the allegedly unlawful actions during the criminal investigation against them.

69. On 6 November 2006 the Mukacheve City Court left the aforementioned claims unexamined and returned them to the Directors, finding that they had not complied with the requirements of Article 119 of the Code of Civil Procedure. The claimants were asked to rectify these shortcomings before 15 November 2006. On 16 November 2006 the court returned these claims unexamined, for failure to comply with the court’s previous ruling.

B. Relevant domestic law and practice

1. Provisions with regard to compensation

(a) The Constitution, 28 June 1996

70. The relevant provisions of the Constitution read as follows:

Article 56

“Everyone shall have a right to compensation ... for losses sustained as a result of unlawful decisions, acts or omissions by public or municipal bodies or civil servants in the performance of their official duties.”

(b) Civil Code, 1963 (in force at the material time)

By virtue of Article 442 of the Code everyone has the right to compensation for damage caused by unlawful actions by State authorities.

2. Provisions with regard to the status of the applicant company (Enterprises Act 1991 and Property Act)

71. Section 2 of the Enterprises Act envisages that private enterprises are commercial companies founded by private persons. The private enterprise has no distinct shareholding and particularised ownership of property, except if specified in the articles of its association, statute or other internal corporate regulations.

72. The private enterprise, in accordance with the Section 4 of the Property Act, is an object of a free exercise of property rights envisaged for any kind of privately owned property. The ownership rights and the rights and legal obligations of a founder of a private enterprise can also be transferred to other private persons on the basis of an agreement (this is confirmed in other normative acts and recommendations, such as the letter no. 4-422-329/7239 of 10 December 2001 of the State Committee on Entrepreneurship; Resolution no. 740 of the Cabinet of Ministers of 25 May 1998).

73. In accordance with Section 7 of the Property Act the owner of a private enterprise was not responsible for its legal obligations (letter no. 2‑222/1068 of 22 February 2002 of the State Committee on Entrepreneurship). The liability of an owner for debts of a private enterprise could only be established on the basis of its statute or articles of association or specific normative acts.

74. Section 13 of the Enterprises Act provides that the State must guarantee protection of enterprises’ property rights. Seizure of funds and property belonging to enterprises is only allowed in situations provided for by the law. Also, a decision to pay compensation for damage caused to an enterprise by the infringement of its property rights by citizens, legal entities or State bodies must be based on a judgment of a court or court of arbitration.

75. Sections 24 and 31 of the Enterprises Act stated that the private enterprise must, as all other legal entities, comply with the credit agreements and State tax and other payment obligations. A private enterprise that fails to comply with its financial obligations could be declared bankrupt in the course of ordinary insolvency proceedings and could be liquidated, as any other legal entity.

3. Provisions with regard to the seizure and attachment of property and material evidence

(a) Code of Criminal Procedure, 28 December 1960 (as amended on 21 June 2001)

76. The relevant extracts from the Code can be found in Merit v. Ukraine, no. 66561/01, 30 March 2004 (Relevant domestic law and practice).

77. Pursuant to Article 80 of the Code of Criminal Procedure (the conditions for storage of material evidence), material evidence must be stored until the judgment or decision terminating proceedings in the criminal case becomes final. Documents that are material evidence must be stored together with the case file and interested persons or organisations can receive copies of these documents on request. If there is a dispute as to the right of ownership of the material evidence, this evidence must be stored until the final judgment is given in civil proceedings. Material evidence which could be damaged by storage and which cannot be returned to its owner must be transferred to State or “cooperative organisations” to be sold on. These organisations must, if necessary, return property similar to the material evidence sold or pay compensation for it in accordance with prices established by the State as pertaining at the time of return of that evidence.

78. Pursuant to Article 81 of the Code decisions relating to material evidence are to be taken by means of a judgment of the court in the criminal case or a ruling or a resolution of the court, body of inquiry, investigator or prosecutor (concerning termination of the proceedings in the case). Any dispute with regard to the return of material evidence must be decided in civil proceedings.

79. Pursuant to Article 126 of the Code, the seizure (attachment) of property belonging to a suspect or accused is intended to secure a possible civil claim and a ruling as to confiscation of property in the course of criminal proceedings. Attached property must be inventoried and can be transferred for storage to the representatives of enterprises, institutions, organisations or members of the accused’s family or other members. Persons who are responsible for storage of property must be informed about criminal liability for failure to comply with storage obligations which have been undertaken by them. Seizure of property and its transfer for storage are to be carried out on the basis of a substantiated resolution (постанова) that must be signed by the person who inventoried this property, witnesses to the seizure of the property and the person responsible for storage. An inventory must be appended to the resolution. A specialist should be invited to estimate the value of seized property in case such a valuation is required. If there is no further need for seizure of property, the investigator must pass a separate resolution.

(b) Instruction no. 34/15 of 18 October 1989 as to seizure, registration, storage and transfer of material evidence (approved by the USSR General Prosecutor’s Office, Ministry of the Interior, Supreme Court, Ministry of Justice and the KGB)

80. Under paragraph 3 of the Instruction material evidence denotes objects which have been used to commit a crime or which bear traces linked to criminal activity or were objects of a criminal act; these can include monies and other valuables obtained by unlawful means and all other objects that can assist in investigating a crime and establishing the facts of the case.

81. Under paragraph 43 of the Instruction, attached property can be transferred to an entity which has suffered damage from an alleged criminal act. If necessary property can also be seized.

82. Pursuant to pаrаgraph 49 of the Instruction, material evidence which is part of the criminal case file, after termination of the preliminary investigation and the case file’s transfer to the court or another investigating body, must always be appended to it.

83. Pursuant to paragraph 63 of the Instruction, material evidence owned by enterprises, institutions or organisations must be transferred to their authorised representatives.

84. Pursuant to paragraph 64 of the Instruction, the body of inquiry, preliminary investigation or investigative body must return any confiscated objects before adoption of the final judgment in the case, if it is decided that the return of these objects will not impede the investigation in the case.

4. Time-limits, jurisdiction and regulations as to lodging cassation appeals as applied in the examination of commercial cases (the Code of Commercial (former Arbitration) Procedure of 6 November 1991 (as renamed and amended on 21 June 2001))

(a) Procedural time-limits and formal requirements for lodging claims

85. Under Article 12 of the Code of Arbitration Procedure (the “CAP”) the arbitration courts have jurisdiction over: cases concerning the conclusion, amendment, suspension and execution of agreements; disputes concerning technical standards or prices of products and services and others. The arbitration courts (currently “commercial courts”) also have jurisdiction over insolvency cases.

86. Article 53 provides that arbitration courts may grant extensions or renewals of the time-limits enshrined in the CAP on an application by a party or a public prosecutor or on their own initiative. A ruling shall be given in the event of a refusal to grant an extension of a procedural time-limit which has not been complied with. This ruling may be appealed against.

87. In accordance with Article 63 paragraph 3 of the CAP, the judge must return a claim that was lodged and the documents appended to it, if it does not refer to any circumstances on which the claim was based, has no relevant corroborating evidence or does not include an estimate of the sum claimed. A judge has to issue a ruling on return of a claim within five days of receipt. Return of the claim does not prevent it from being lodged again, in accordance with general procedure, after any shortcomings have been rectified.

(b) Review of judicial decisions before the changes introduced on 21 June 2001

88. In accordance with Article 91, Chapter XII of the Code of Arbitration Procedure (“CAP”), a party could request a supervisory review of the lawfulness and reasoning of a judgment, ruling or resolution. Such a review was conducted by the presidents or vice-presidents of the regional arbitration courts and the arbitration courts of the Crimea, Kyiv and Sevastopol and the specialised judicial division for review of the rulings, resolution and judgments of the Higher Arbitration Court.

89. Under Article 92 of the CAP, the first-instance arbitration court could review its judgments, rulings or resolutions on its own initiative. In accordance with Articles 93 and 94 of the CAP the judicial decisions of the regional arbitration courts and the arbitration courts of Kyiv, Sevastopol and the Crimea could be reviewed by the presidents of these courts or their deputies. The parties could request to be present at the review.

90. Under Article 100 of the CAP, the request for review had to be lodged with the first-instance arbitration court together with the proof of payment of State tax for lodging it and documents confirming the dispatch of a copy of a request to another party. Review proceedings did not suspend enforcement of an initial judicial decision; however a separate procedural decision in this case might be taken by a review body. A request for review had to be substantiated and based on law and the relevant facts of the case (Article 101 of the CAP). It had to be lodged within two months of the adoption of a judgment, ruling or resolution (Article 102 of the CAP). A reply to a request for review was dealt with in Article 103 of the CAP and parties should be informed of the date and time of the hearing in the case.

91. Under Article 105 of the CAP the arbitration court had to decide on the admissibility of a request for supervisory review of a judgment, ruling or resolution if the request had not been signed or had been signed without relevant authority, or if a copy of the request had not been sent to another party, the State tax had not been paid or the time-limit for lodging a request for review had expired.

92. In accordance with Article 106 of the CAP, the arbitration court had the power to: uphold the judgment, ruling or resolution, leaving it unchanged; amend the judgment, ruling or resolution; quash the judgment, ruling or resolution and adopt a new one; or quash the previous decisions and refer the case back for a fresh examination. It could also leave claims unexamined and terminate the proceedings in the case. The arbitration court which reviewed the case had all the powers of the first-instance court in examining a commercial dispute on its merits. The finding of the review of the case by the Division on Review of Judgments, Rulings or Resolutions of the Higher Arbitration Court was final, except when one of the parties was outside the territory of Ukraine or a different procedure was envisaged by international treaties.

93. The grounds for changing or quashing the judgment, ruling or resolution indicated in Article 107 of the CAP were: incomplete examination of the circumstances of the case; lack of relevant proof as to the circumstances of the case; lack of conformity of the facts with the conclusions of the court and infringement or incorrect application of the substantive or procedural law.

94. The arbitration court, acting in the course of supervisory review proceedings, had to issue a resolution, which had to be substantiated, based on law and include relevant legal reasoning (Article 108 of the CAP). The instructions given in the resolution of the supervisory court were binding in the course of the fresh examination of the case. The resolution of the court could not contain an assessment of evidence or instructions as to how the case should be decided in the future (Article 109 of the CAP). The resolution of the arbitration court had to be sent to the parties within five days (Article 110 of the CAP).

(c) Code of Commercial Procedure (as from 5 July 2001)

95. The relevant provisions of the amended Code of Commercial Procedure of 5 July 2001 (CCP) read as follows:

Transitional Provisions

“1. This law shall become effective from the date of its publication, save for Article 81-1 [of the Code], which shall become effective on 28 June 2002.

... 9. Decisions of the judicial divisions of the Higher Arbitration Court of Ukraine or of the Presidium of the Higher Arbitration Court of Ukraine that were not challenged by way of supervisory review proceedings before this Law entered into force, as well as resolutions of the Plenary Higher Arbitration Court of Ukraine, shall be final but may be appealed against to the Supreme Court of Ukraine on the basis of and pursuant to the procedure prescribed by the Code of Commercial Procedure of Ukraine.”

Chapter XII

Review of judicial decisions in the course of cassation proceedings

Article 109

The procedure for lodging an appeal in cassation (petition for appeal in cassation)

“An appeal in cassation (petition for appeal in cassation) shall be lodged with the Higher Commercial Court through the court of first instance or the commercial court of appeal which gave the contested judgment or resolution.

A first-instance or commercial court of appeal which has adopted a contested judgment or resolution shall transfer the appeal in cassation (petition for appeal in cassation) together with the case file to the Higher Commercial Court of Ukraine within five days of its receipt.”

Article 110

Time-limits for lodging appeals in cassation

“Appeals in cassation (petitions for appeal in cassation) shall be lodged within one month from the date the judgment of the first-instance court or the resolution of the court of appeal becomes effective.”

Chapter XII-2

Review of judicial decisions of the Higher Commercial Court of Ukraine by the Supreme Court of Ukraine (as amended on 22 May 2003)

Article 111-14

The right to appeal in cassation against the judicial decisions of the Higher Commercial Court of Ukraine

“The parties to a case as well and the Prosecutor General of Ukraine have the right to lodge with the Supreme Court of Ukraine a cassation appeal against the resolution [or ruling] of the Higher Commercial Court of Ukraine adopted following the review of a decision of a first-instance commercial court that has entered into force or a resolution of the Commercial Court of Appeal [adopted as a result of its review].”

Article 111-15

The grounds for lodging a cassation appeal with the Supreme Court of Ukraine against a resolution [or ruling] of the Higher Commercial Court of Ukraine

“The Supreme Court of Ukraine reviews cassation appeals lodged against the resolutions [or rulings] of the Higher Commercial Court of Ukraine if they are lodged:

1) on the ground that the Higher Commercial Court of Ukraine has applied a law or normative act which contravenes the Constitution of Ukraine;

2) if the resolution (or ruling) contravenes a decision of the Supreme Court of Ukraine or of a higher court of a different specialisation on the issue of the application of the norms of substantive law;

3) if the Higher Commercial Court of Ukraine has applied the same provision of the law or any other normative act differently in a similar case;

3-1) if the resolutions [or rulings] are inconsistent with the international treaties of Ukraine approved by the Verkhovna Rada of Ukraine;

4) if an international judicial body whose jurisdiction is recognised by Ukraine finds that a resolution has violated the international obligations of Ukraine.”

Article 111-16

Procedure for lodging an appeal in cassation and the cassation petition against a resolution (ruling) of the Higher Commercial Court

“The cassation appeal, petition of the Prosecutor General of Ukraine against the resolution of the Higher Commercial Court shall be lodged within one month from the moment of [the resolution’s] adoption.

In the event that the existence of the grounds for appeal in cassation after this period has ended, the Supreme Court shall be obliged to assume jurisdiction over the cassation appeal (petition).

The cassation appeal (petition) of the Prosecutor General of Ukraine against the resolution of the Higher Commercial Court of Ukraine shall be lodged with the Supreme Court through the Higher Commercial Court.

The Higher Commercial Court shall transfer the cassation appeal (petition) together with the case file to the Supreme Court within ten days of receipt.”

Article 111-17

The procedure for review in cassation of the resolutions [and rulings] of the Higher Commercial Court of Ukraine

“Proceedings for a review in cassation of a resolution [or ruling][* of the Higher Commercial Court of Ukraine by the Supreme Court of Ukraine shall be initiated on the basis of a decision taken by at least one judge in the course of the hearing of the chamber in commercial cases composed of three judges and shall be considered within one month of receipt of the cassation appeal or petition.]

The resolution or a ruling of the Higher Commercial Court shall be reviewed by the judges of the commercial cases chamber of the Supreme Court in the course of a hearing.

The resolution or a ruling of the Higher Commercial Court of Ukraine shall be reviewed in cassation on the basis of the rules for consideration of the case in the first-instance commercial court, save for procedural actions to establish and prove the actual circumstances of the case.”

Article 111-18

Jurisdiction of the Supreme Court of Ukraine in the course of the cassation review of the resolutions of the Higher Commercial Court of Ukraine

“The Supreme Court of Ukraine, following consideration of the appeal in cassation by the Prosecutor General of Ukraine against a resolution [or ruling] of the Higher Commercial Court of Ukraine, shall be entitled to:

1) leave the resolution [or ruling] unchanged and dismiss the appeal;

2) quash the resolution [or ruling] and remit the case to the first-instance court for further consideration or quash the ruling and remit the case for further consideration to the Higher Commercial Court;

3) quash the resolution [or ruling]* and terminate the proceedings in the case.”

Article 111-19

Grounds for quashing a resolution [or ruling] of the Higher Commercial Court

“Resolutions [or rulings] of the Higher Commercial Court of Ukraine shall be quashed if they contravene the Constitution of Ukraine, international treaties agreed as binding by the Verkhovna Rada of Ukraine, or if the substantive law has otherwise been misapplied.”

Article 111-20

Resolutions of the Supreme Court

“... A resolution of the Supreme Court of Ukraine shall be final and shall not be subject to appeal.”

Article 111-21

Binding nature of directions issued in the resolution of the Supreme Court

“... Resolutions of the Supreme Court of Ukraine, following a re-examination of the case on the basis of an appeal in cassation against a resolution [or ruling] of the Higher Commercial Court of Ukraine shall not include directions as to the admissibility or inadmissibility of evidence, the superiority of one type of evidence over another, the norms of substantive law that are applicable or the kind of decision that shall be adopted as a result of the further consideration of the case.”

96. In accordance with Article 111 of the CCP appeals on points of law must be accompanied, inter alia, by proof of payment of the court fee.

97. Under Article 111-3 paragraph 4 of the CCP the courts should return appeals on points of law examining them on the merits if the appellant fails to provide evidence of payment of the court fee.

98. In accordance with Article 111-3 paragraph 5 of the CCP courts and tribunals should return notices of appeal on points of law to the appellant without examining the appeal on the merits if it has been lodged out of time and the appellant has not applied for an extension of time.

(d) Instruction of the Presidium of the Higher Arbitration Court of 26 January 2000 no. 02-5/35

99. Under paragraph 6.2 of the Instruction, requests for annulment of investigative measures by courts and prosecution bodies were outside the jurisdiction of the arbitration courts as a different procedure was envisaged for examination of these requests.

5. Relevant provisions of the Code of Civil Procedure before the changes introduced in June 2001

100. The relevant provisions of Chapter 40 of the Code provided for appeals in cassation against court judgments and for the lodging of cassation appeals by the prosecutor.

101. In particular, under Article 289 of the Code, parties and others participating in the proceedings had the right to lodge appeals in cassation against the judgments in whole or in part. Appeals in cassation against judgments of the first-instance courts were to be lodged with the Supreme Court of the Autonomous Republic of Crimea, regional, Kyiv and Sevastopol city courts. Appeals in cassation against judgments given by the regional courts and equivalent courts were to be lodged with the Supreme Court.

102. In accordance with Article 311 of the Code the court of cassation was entitled to: uphold the judgment; quash it in full or in part and remit the case to the first-instance court in a different composition for a fresh examination; quash the judgment in full or in part and terminate proceedings in the case, leaving the claims unexamined; or amend the judgment, adopting a new one, without referring the case back for a fresh examination if, inter alia, there had been an error in application of substantive or procedural law.

6. Liquidation proceedings (Restoration of Solvency and Declaration of Bankruptcy Act of 14 May 1992)

103. Section 16 of the Act provides that a trustee (insolvency officer) must call a meeting of creditors, to be held within ten days of the institution of liquidation proceedings. At the meeting, each creditor has a vote proportionate to his or her claim.

104. Under section Article 17 of the Act, the Commercial Court may approve the proposal of the meeting of creditors, and order economic rehabilitation proceedings for a period of no more than one year. The court by the same ruling should appoint a licensed trustee (insolvency officer) to manage these rehabilitation proceedings.

7. Incoterms 2000 (EXW - EX WORKS (... named place))

105. “Ex works” means that the seller places the goods at the disposal of the buyer at the seller’s premises or another named place not cleared for export and not loaded on any collecting vehicle. The term represents the minimal obligation for the seller, and the buyer has to bear all costs and risks involved in taking the goods from the seller’s premises. However, if the parties wish the seller to be responsible for the loading of the goods on departure and to bear the risks and costs of such loading, this should be made clear by adding explicit wording to this effect in the contract of sale.

COMPLAINTS

A. Complaints in relation to criminal proceedings instituted against the applicant company’s Directors and the procedural decisions on seizure of property and documentation

106. In so far as the application concerns the criminal proceedings against the Directors of the applicant company (see paragraphs 8 – 16 above) and the seizure of property and documentation of the applicant company, including the documentation stored at the private household of the Directors (see paragraphs 17 – 29 above), the Directors of the applicant company complained, referring to Article 1 of Protocol No. 1 to the Convention that the domestic criminal and liquidation proceedings had in fact been aimed at expropriation of the applicant company’s property and cessation of its activities. It had thus violated the right to peaceful enjoyment of its possessions. They also mentioned that the seizure of property and documentation from the company led to an infringement of their property rights.

107. The applicant company complained, referring to Article 1 of Protocol No. 1 to the Convention, about the State authorities’ failure to examine its complaints, which had eventually led to the seizure of its assets and its insolvency. The Directors of the applicant company also complained that the failure of the domestic courts to act upon their various complaints infringed their rights under Article 6 § 1 of the Convention and 1 of Protocol No. 1 to the Convention.

108. The applicant company further complained of the absence in Ukrainian law of effective remedies permitting it to challenge within a reasonable time the decisions to seize accounting records and to issue attachment orders on its property (paragraphs 24–28 and 34–38 above). It relied on Article 13 of the Convention and Article 1 of Protocol No. 1 to the Convention.

B. Complaints in relation to various judicial proceedings concerning compensation and unlawfulness of the actions of Tax Inspectorate

109. The applicant company alleged, making reference to the compensation proceedings against the Tax Inspectorate (first set of proceedings), proceedings concerning unlawfulness of actions by the State tax authorities (second set of proceedings) and new compensation proceedings brought against the Inspectorate (fifth set of proceedings), that Article 6 § 1 of the Convention had been violated. In particular, the company stated that the domestic courts had unfairly refused to examine its claims of 29 March, 8 and 22 May, 18 September and October 2000 (first, second and fifth sets of proceedings) against the Mukacheve State Tax Inspectorate for damages (see paragraphs 30, 32, 34-37, 42 and 44 above).

110. The applicant company also stated, again referring to Article 6 § 1 of the Convention, that it was unfairly denied access to a court in the third, fourth and sixth sets of the proceedings (see paragraphs 39, 40-41 and 45-46 above), which concerned, respectively, proceedings against G.K., proceedings on new claims against G.K. and proceedings brought by the company in December 1999 – May 2000.

111. Moreover, the Directors of the applicant company complained about an infringement of Article 6 § 1 of the Convention in the course of seventh set of the proceedings, stating that the Mukacheve City Court had unlawfully refused to examine their claim of 24 August 2001 against the prosecutor’s office, which had seized its property (see paragraph 47 above).

C. Complaints in relation to the liquidation proceedings against the applicant company

112. The applicant company further stated, referring to Article 6 § 1 of the Convention, that its right of access to a court had been infringed. It contended that it had been unlawfully denied access to a court of appeal and then to the court of cassation in the liquidation proceedings instituted against it (see paragraphs 48-67 above) as, in particular, it alleged that it had been unable to challenge the ruling of 28 September 2001 (see paragraph 58 above).

D. Complaints in relation to compensation proceedings initiated in 2006, which were brought by the Directors

113. The Directors of the applicant company complained, referring to Article 6 § 1 of the Convention, about the domestic courts’ failure to examine their compensation claims.

THE LAW

A. The scope of the case

114. The Court notes that the present application has been brought by and in the name of the applicant company, which was declared insolvent in November 2000 and was finally liquidated by July 2002. The question therefore arises whether the Directors, who are no longer officers of the company, are entitled to bring the application on behalf of the applicant company. The Court recalls that in certain circumstances, the owner of a company will be permitted to bring a Convention application on behalf of the company, notwithstanding the separate legal personality of the company (see Agrotexim and Others v. Greece, judgment of 24 October 1995, Series A no. 330‑A, pp. 25-26, §§ 68-71, and Capital Bank AD v. Bulgaria (dec.), no. 49429/99, ECHR 2005‑... (extracts)). In the present case, the Director was the sole owner of the company, and for the purposes of the present application, the Court accepts that he is entitled to bring the application on behalf of the company.

115. However, to the extent that the application is directed against acts which affected the Directors, that is, the Directors’ complaints about the criminal proceedings against them (see paragraphs 8 – 16 above), the seizure of property and documentation (see paragraphs 17 – 29 above), proceedings concerning allegedly unlawful acts of the Prosecutor’s Office (see paragraph 47 above) and the domestic courts’ failure to examine their compensation claims brought in 2006 (see paragraphs 68 – 69 above), the Court observes that this particular application had been brought on behalf of the applicant company, a legal entity, but not on behalf of the applicant company’s Directors (see paragraph 1 above). The Court has not been seized by the Directors of any applications in their respect, as required by the Rule 47 of the Rules of Court, Practice Direction “on Institution of Proceedings” and Article 34 of the Convention.

116. It follows that the complaints (see paragraphs 106 – 107, 111 and 113 above), relating to the various proceedings brought by the Directors and events related to these proceedings (see paragraphs 8-16, 17 – 29, 47 and 68-69 above) must be rejected as being incompatible ratione personae, pursuant to Article 35 §§ 3 and 4 of the Convention.

B. Complaints under Article 6 § 1 of the Convention

1. Complaints raised by the applicant company in relation to Article 6 § 1 of the Convention

117. Firstly, the applicant company maintained, referring to Article 6 § 1 of the Convention, that this provision had been infringed with reference to the compensation proceedings against the Tax Inspectorate (first set of proceedings), the proceedings concerning unlawfulness of actions by the State tax authorities (second set of proceedings) and the new compensation proceedings brought against the Inspectorate (fifth set of proceedings). In particular, the company maintained that the domestic courts erred in the assessment of the facts and application of the law.

118. Secondly, the applicant company stated, again referring to Article 6 § 1 of the Convention, that it was unfairly denied access to a court in the proceedings against G.K. (third set of proceedings), in the proceedings on new claims against G.K. (fourth set of proceedings) and in the proceedings brought by the company in December 1999 – May 2000 (sixth set of the proceedings).

119. Thirdly, the applicant company further complained under Article 6 § 1 of the Convention that it had been unlawfully denied access to a court of appeal and then to the court of cassation in the course of the liquidation proceedings instituted against it, as it had been unable to challenge the ruling of the Zakarpatsky Regional Commercial Court of 28 September 2001 (see paragraph 58 above). It referred to Article 6 § 1 of the Convention, which provides, in so far as relevant:

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

2. The Government’s objection as to the exhaustion of domestic remedies

120. The Government stated that the applicant company had failed to exhaust the various remedies available to it at the domestic level under Ukrainian law before lodging an application with the Court.

121. The applicant company disagreed and stated that all the available remedies had been pursued. However, the applicant company’s claims had not been examined on their merits, as the domestic courts had deprived it of access to these remedies. Moreover, the available remedies had not been accessible or effective and thus it had not been obliged to use them. Furthermore, as a legal entity, it alleged that it had had no access to certain remedies available only to physical persons.

3. The Court’s assessment

a. Court’s case-law

122. The Court reiterates that, under Article 35 § 1 of the Convention, it may only deal with a matter after all domestic remedies have been exhausted, according to the generally recognised rules of international law, which only requires normal recourse by an applicant to remedies which are effective, sufficient and available (see, mutatis mutandis, MPP Golub v. Ukraine (dec.), no. 6778/05, ECHR 2005‑..., and Karuna v. Ukraine (dec.), no. 43788/05, 3 April 2007).

123. The Court, taking into account the principles enshrined in its case-law as to the matters of exhaustion and the submissions of the parties, considers it necessary to deal with each of the Government’s objections as to exhaustion of domestic remedies separately, taking into account the facts of the case and the complaints raised by the applicant company. It further considers that the applicant company’s complaints as to the lack of access to the domestic courts must be examined jointly with the Government’s objection as to the exhaustion of domestic remedies.

b. Exhaustion of domestic remedies and access to a court

(i) First and fifth sets of the proceedings

124. In so far as the applicant company complained that the Arbitration Court and the Mukacheve City Court had unlawfully refused to examine its claims of 29 March, 8 May, 18 September and October 2000 against the Mukacheve State Tax Inspectorate (first and fifth sets of proceedings – paragraphs 30, 32, 42 and 44 above), the Court notes that, in relation to the first set of the proceedings the applicant company failed to appeal against the rulings of the Zakarpatsky Regional Arbitration Court of 3 April and 15 May 2000 (see paragraphs 30-33 above).

125. Moreover, the Court notes, in relation to the fifth set of proceedings, that the applicant company did not appeal against the rulings of 17 November and 19 December 2000 of the Kyiv Court of Arbitration (see paragraphs 42-44 above).

126. It follows that these complaints must be rejected under Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies.

(ii) Second, third, fourth and sixth sets of the proceedings

127. As to the applicant company’s complaints in relation to the second, third, fourth and sixth sets of proceedings, the Court notes that the applicant company failed to use various procedural opportunities existing in domestic law to appeal against the rulings by the domestic courts on its complaints (see paragraphs 39, 34-38, 40-41 and 45-46 above). It notes that the claims mentioned above were dismissed because of various failures on the part of the applicant company to comply with the clear and foreseeable procedural requirements mentioned in domestic law, namely the form and content of appeals, payment of a court fee and submission of relevant evidence required by law. The Court also notes that the domestic courts’ rulings contained detailed references to relevant provisions of Ukrainian law and were sufficiently substantiated. Given the close link between the issues of exhaustion of domestic remedies and those of access to a court, the Court considers it appropriate to examine the complaints in relation to the aforementioned sets of proceedings from the point of view of the State’s compliance with the applicant company’s right of access to a court, guaranteed by Article 6 § 1 of the Convention (see MPP Golub v. Ukraine (dec.), no. 6778/05, ECHR 2005‑...).

128. In this connection, the Court reiterates that the “right to a court” is not absolute, but is subject to limitations permitted by implication, in particular where the conditions of admissibility of appeals are concerned (see Golder v. the United Kingdom, judgment of 21 February 1975, Series A no. 18, pp. 13-18, §§ 28-36). Furthermore, it reiterates that this requirement means that an applicant must be able to present the case to a court which is competent to examine and decide on the dispute at hand, but must at the same time observe the applicable rules and procedures of domestic law, failing which the application is likely to fall foul of the exhaustion rule (see Umayeva v. Russia (dec.), no. 1200/03, 11 December 2007). Thus, the Court must consider whether the applicant company complied with the applicable rules and procedures of domestic law and establish whether there has been any interference with its right to have any claim relating to civil rights and obligations brought before a court.

129. The Court notes in this connection that in accordance with Chapter XII of the Code of Arbitration Procedure and Chapter 40 of the Code of Civil Procedure (see paragraphs 88–94 and 100-102 above), as in force at the material time, the rulings mentioned above could have been appealed against either in supervisory review proceedings to the President of the same arbitration court that was obliged to review an appeal and deliver a resolution on the basis of its review (rulings given in the course of arbitration proceedings) and by means of an appeal in cassation to the regional court of general jurisdiction (rulings given in the course of civil proceedings). It notes that before 5 July 2001 the judicial division for review of the judgments, rulings and resolutions of the Higher Arbitration Court was considered to be the court of final instance for the purposes of exhaustion of ordinary domestic remedies in arbitration proceedings (see Sovtransavto v. Ukraine (dec.), no. 48553/99, 27 September 2001). The court of final instance in ordinary civil proceedings before 29 June 2001 was the Regional Court, which dealt with cases in the course of cassation proceedings (see Prystavska v. Ukraine (dec.), no. 21287/02, ECHR 2002‑X, and Kucherenko v. Ukraine (dec.), no. 41974/98, 4 May 1999). In these circumstances, the Court considers that the applicant company had access to a court in respect of its complaints.

130. It follows that this part of the application must be rejected as being manifestly ill-founded as a whole, under Article 35 §§ 3 and 4 of the Convention.

c. Alleged lack of access to a court in the course of the liquidation proceedings instituted against the applicant company

131. The Court reiterates that an appeal to the regional commercial court of appeal and a subsequent appeal in cassation to the Higher Commercial Court may be considered effective remedies against first-instance commercial courts’ decisions taken after 5 July 2001 and before the changes introduced to the Code of Commercial Procedure from 15 May 2003 onwards (see MPP Golub, cited above). It also notes that before 15 May 2003 the rulings of the Higher Commercial Court were outside the jurisdiction of the Supreme Court in the context of a cassation appeal (see paragraph 95 above), as it is only after that date that the Supreme Court could review procedural rulings of the Higher Commercial Court upon a further appeal in cassation (see MPP Golub, cited above).

132. The Court observes that the applicant company lodged an appeal with the L’viv Regional Commercial Court of Appeal, complaining of the unlawfulness of the ruling of 28 September 2001 (see paragraph 59 above), stating that the court had unlawfully refused to include confiscated property in the liquidation balance of the enterprise and the approved register of its property. These matters fell within the appeal jurisdiction of the L’viv Regional Commercial Court of Appeal and could subsequently have constituted grounds for seeking leave to appeal in cassation to the Higher Commercial Court. However, the applicant company appealed not only against the ruling of 28 September 2001, but also against the ruling given on 6 November 2000. Thus, the applicant company’s appeal constituted a hidden request for the reopening of the liquidation proceedings, which were terminated by a final ruling of 6 November 2000 and against which the applicant company did not complain by ordinary means (see paragraph 63 above). Eventually, this appeal was rejected, without being examined on its merits, on 29 October 2001 by the L’viv Regional Commercial Court of Appeal, on account of the applicant company’s failure to comply with the statutory time-limit (see paragraph 60 above).

133. As to the applicant company’s cassation appeal against the ruling of 17 October 2001 lodged with the Higher Commercial Court, the Court notes that this court had dismissed the applicant company’s appeals on four successive occasions, giving different reasons: on 9 January 2002 as not having been lodged through the first-instance court, on 6 March 2002 for failure to pay the court fee and on 14 May and 9 July 2002 for the applicant company’s failure to comply with the time-limit (see paragraphs 61-66 above).

134. The Court notes that under Article 109 of the Code of Commercial Procedure, an appeal in cassation should be lodged with the first-instance court or the court of appeal (see paragraph 95 above). As to the applicant company’s failure to comply with the time-limits for lodging a cassation appeal, the Court notes that the applicant company’s lodging an appeal, not in compliance with the procedural law, directly with the Higher Commercial and without payment of the court fee, did not interrupt the running of the procedural time-limits established by law (see MPP Golub, cited above).

135. It considers therefore that the refusal of the Higher Commercial Court to consider the cassation appeals was not arbitrary or unjustified in the circumstances of the case. Furthermore, it notes that the requirements concerning the lodging of cassation appeals, as envisaged by Articles 109‑111 of the Code of Commercial Procedure (see paragraphs 95-98 above) undoubtedly serve the purpose of assuring proper administration of justice in commercial proceedings. The parties concerned may reasonably expect those rules to be complied with (see Melnychuk v. Ukraine (dec.), no. 28743/03, § 23, ECHR 2005‑..., and Kamenivska v. Ukraine (dec.), no. 18941/04, 30 August 2006).

136. It follows that this complaint must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention as manifestly ill-founded.

C. Complaints under Article 1 of Protocol No. 1 to the Convention and Article 13

1. Complaints under Article 1 of Protocol No. 1

137. The applicant company complained of the State authorities’ failure to examine its complaints and to protect its property which had been expropriated, leading to the applicant company’s liquidation. It also complained that the domestic liquidation proceedings had been in fact aimed at expropriation of its property; thus its rights under Article 1 of Protocol No. 1 had been infringed (see paragraph 107-108 above). This provision reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

138. The Government disagreed.

139. The Court notes at the outset that, as mentioned above, the applicant company has not exhausted all the domestic remedies available to it under the Ukrainian law (see paragraph 129 above). Moreover, during the liquidation proceedings and in particular during the hearing of 25 September 2000 before the Zakarpatsky Regional Arbitration Court (see paragraph 53 above), the applicant company did not challenge the amount of its debt to G.K., which apparently took into account the value of the petroleum products. Indeed, the applicant company agreed with it. Finally, the ruling of 25 September 2000 was never challenged by the applicant company or its representatives.

140. As to the other petroleum products seized by the Prosecutor’s Office and allegedly not released from attachment, the Court reiterates that it is primarily for the national authorities, notably the courts, to interpret and apply domestic law and to establish the facts of the case (see Bosphorus Hava Yolları Turizm ve Ticaret Anonim Şirketi (Bosphorus Airways) v. Ireland [GC], no. 45036/98, § 143, ECHR 2005‑...). In each such instance, the Court’s role is confined to ascertaining whether the effects of such adjudication are compatible with the Convention (see, mutatis mutandis, Waite and Kennedy, cited above, § 54, and Streletz, Kessler and Krenz v. Germany [GC], nos. 34044/96, 35532/97 and 44801/98, § 49, ECHR 2001-II). The Court further notes that the applicant company had a full opportunity to resolve these complaints in the course of the pending domestic civil, commercial and criminal proceedings, by furnishing to the domestic courts all necessary evidence and arguments, which it failed to do. Finally, in a situation where domestic remedies were available but not employed by the applicant company, it is not for the Court, which is not a court of appeal against the decisions of the domestic courts, to establish the facts of a particular case, acting as a first-instance domestic court and thus replacing it in the exercise of its regular judicial function.

141. Nevertheless, to the extent that the Court is required to consider factual allegations of the applicant company, the Court observes that the applicant company’s contentions are unsubstantiated in a number of respects. First, the company failed to provide sufficient corroborating evidence to prove that property seized on 26-27 January 1998 by the tax authorities (see paragraph 19 above) had indeed disappeared from the Chmonin and Mukacheve petrol stations and from MPP Erko respectively. Further, it is unclear whether the property was still subject to formal attachment, or whether it had been transferred to third parties with the applicant company’s consent (see paragraph 22 above). The Court notes in this connection that the petroleum products concerned were transferred to G.K. by way of Incoterms, that is, standard terms which are conventionally used in commercial activities between companies (see paragraph 22 above), rather than where a company is holding property pursuant to an attachment order.

142. Taking all the circumstances together, the Court concludes that the applicant company’s complaints under Article 1 of Protocol No. 1 to the Convention are unsubstantiated and must be rejected as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.

2. Complaints under Article 13 and Article 1 of Protocol No. 1

143. The applicant company further complained of the absence in Ukrainian law of effective remedies permitting it to challenge, within a reasonable time, the decisions to seize accounting records and its property (see paragraph 108 above). It relied on Article 13 of the Convention and Article 1 of Protocol No. 1 (cited above). Article 13 read as follows:

“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”

144. The Court, having regard to its above-mentioned considerations as to the domestic remedies available to the applicant company in Ukrainian law, considers that the applicant had no “arguable complaint” under this heading (Pozharskyy v. Ukraine (dec.), no. 6692/02, 29 May 2007). It follows that this part of the application should be rejected as being manifestly ill-founded, pursuant to Article 35 §§ 3 and 4 of the Convention.

D. Application of Article 29 § 3 of the Convention

145. Taking into account all of the above, the Court, accordingly, decides to discontinue the application of Article 29 § 3 of the Convention.

For these reasons, the Court unanimously

Decides to discontinue the application of Article 29 § 3 of the Convention and

Declares the application inadmissible.

Claudia WesterdiekPeer Lorenzen
RegistrarPresident

[* of the Higher Commercial Court of Ukraine by the Supreme Court of Ukraine shall be initiated on the basis of a decision taken by at least one judge in the course of the hearing of the chamber in commercial cases composed of three judges and shall be considered within one month of receipt of the cassation appeal or petition.]* Amended on 15 May 2003.

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