Communicated on 23 August 2016
FIFTH SECTION
Application no. 41939/14
ZAKARPATTURYST, PAT against Ukraine
and 4 other applications
(see list appended)
STATEMENT OF FACTS
A list of the applicant companies is set out in the appendix. The applicant companies are Ukrainian joint-stock companies with limits on the circulation of their shares (приватні акціонерні товариства, hereinafter “PAT”). They are represented by Mr R. Oryekhov and Mr Y. Voltarnist, lawyers practising in Zhytomyr.
The facts of the cases, as submitted by the applicant companies, may be summarised as follows.
On 17 April 1936 the government of the Union of the Soviet Socialist Republics (“the USSR”) entrusted the management of the network of recreational facilities for workers in the USSR to the All-Union Central Council of Trade Unions, the central authority of the USSR’s official State-controlled trade unions (“the All-Union Council”).
On 27 November 1959 the All-Union Council entrusted the management of trade union-run recreational facilities in the then Ukrainian Soviet Socialist Republic (“the Ukrainian SSR”) to the Ukrainian Republican Tourism and Excursions Board (“the Republican Board”).
The Republican Board and various organisations created under its authority built and ran a large number of hotels, sanatoriums and other tourism facilities. The properties at issue in the present case were built under that system at various times prior to 1990.
On 29 November 1990 the Verkhovna Rada (“the Parliament”) of the Ukrainian SSR suspended the privatisation of all State property.
On 23 August 1991 the Federation of Independent Trade Unions of Ukraine (“the Federation”) decided to reorganise the Republican Board into Ukrproftur, the company which is the applicant in case no. 43041/14 (“UPT”).
On 24 August 1991 Ukraine declared its independence from the Soviet Union.
On 10 September 1991 Parliament adopted Law no. 1540-XII dealing with the status of “all-Union” (USSR-wide) companies and organisations located on the territory of Ukraine. Among other things, the Act declared the assets of all such companies and organisations to be the property of the Ukrainian State. It also declared invalid any acts of privatisation of State property carried out after Parliament’s resolution of 29 November 1990.
On 4 October 1991 the Federation and the Social Insurance Fund of Ukraine, acting as the founders of UPT, ratified its articles of association, under which the Republican Board’s assets were transferred to the company.
On 10 April 1992 Parliament ordered the State Property Fund, the State agency in charge of the administration and privatisation of State property, to temporarily take over the administration of the assets of USSR-wide non‑governmental bodies, until such time as legal successors could be found. On 4 February 1994 Parliament declared that as no successors had been found, such assets were to be deemed State property (resolutions nos. 2268‑XII and 3943-XII respectively).
At an unspecified date the State Property Fund brought a claim against UPT, the Federation, and the Social Insurance Fund, seeking to declare UPT’s articles of association invalid on the grounds that the assets the Federation had transferred to the company were in fact State property.
On 20 January 1997 the Higher Arbitration Court (“the HAC”) rejected the State Property Fund’s claim. It held that under Soviet and Ukrainian law as it stood at the time of the proclamation of Ukraine’s independence the trade unions, rather than the State, were the owners of the recreational facilities they administered. It found that at the relevant time there had been and still was no rule which would limit the Federation’s right to transfer assets to UPT. The HAC further found no substantiation for the State Property Fund’s allegation that the assets which the Federation had transferred to UPT had in fact been State property.
In May 2007 the Odessa regional prosecutor’s office brought a claim in the commercial courts, seeking to declare as invalid the articles of association of Ukrprofozdorovnytsya, another company which had been founded by the Federation and endowed with certain properties in 1991. The prosecutor sought to prove that the Federation had transferred State property rather than its own. In a final decision, on 19 March 2009 the Higher Commercial Court upheld the lower courts’ decisions rejecting that argument, essentially for the same reasons as in the HAC’s ruling of 20 January 1997.
On various dates UPT created the other applicant companies as its subsidiaries and transferred some of the properties at issue to them.
On the dates set out in the Appendix various local authorities issued decisions recognising the applicant companies’ title to the properties.
On 21 May 2011 the Prosecutor General instructed regional prosecutors to verify the legality of the title to former trade union properties located in their respective regions, taking into account the Prosecutor General’s position that the 1991 transfers of those properties were null and void because the assets in question had been State property and the Federation had had no power to transfer them.
Starting from 30 June 2011, on the dates set out in the Appendix, various prosecutors brought claims in commercial courts on behalf of the State Property Fund against the applicant companies. They sought, in particular, to declare the local authorities’ decisions invalid and to have the properties transferred to the State. The commercial courts granted the claims.
The applicant companies appealed, relying, in particular, on the HAC’s judgment of 20 January 1997, which in their opinion had definitively resolved the matter of the status of former trade union property. They also argued that the prosecutors’ claims had been brought outside the three-year statute of limitations set by the Civil Code of the Ukrainian SSR at the material time. However, the judgments were ultimately upheld by the Higher Commercial Court (“the HCC”), the HAC’s successor.
In ruling against the applicant companies the domestic courts held, in particular, that the properties built under the Republican Tourism Council system had been State property. In particular, in accordance with the resolution of 29 November 1990 and the law of 10 September 1991 they could not be validly transferred from the State to the trade unions and then to UPT and the other applicant companies. They further held that no statute of limitations applied to the prosecutors’ claims.
COMPLAINTS
The applicant companies complain under Article 6 of the Convention that they did not have a fair hearing before an impartial tribunal. In particular, they argue that the prosecutors’ intervention in their cases constituted pressure on the courts and was contrary to the principle of equality of arms. They also argue that the domestic courts’ decisions in their cases were contrary to the principle of legal certainty.
They further complain that they were deprived of their property, in breach of Article 1 of the Protocol No. 1 to the Convention.
QUESTIONS TO THE PARTIES
1. Did the applicant companies have a fair hearing before an impartial tribunal in the determination of their civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular:
1.1. Did the prosecutor’s intervention in the applicant companies’ case undermine the appearance of a fair trial and the principle of equality of arms (see Menchinskaya v. Russia, no. 42454/02, §§ 35-40, 15 January 2009)?
1.2. Was the principle of legal certainty breached (see, mutatis mutandis, Baroul Partner-A v. Moldova, no. 39815/07, §§ 39-42, 16 July 2009; Kehaya and Others v. Bulgaria, nos. 47797/99 and 68698/01, §§ 66-70, 12 January 2006)?
2. Has there been an interference with the applicant companies’ peaceful enjoyment of their possessions, within the meaning of Article 1 of Protocol No. 1 to the Convention? If so, has that interference been in compliance with the requirements of Article 1 of Protocol No. 1?
Appendix
No
Application No, date it was lodged on
Applicant company’s name and the city of its registration
Description of the property in dispute and its location
Date the applicant company’s title was formalised
Date the prosecutor’s claim was lodged
Region of the first- instance commercial court and the date of its judgment
Date of the HCC’s final ruling
41939/14
26/05/2014
ZAKARPATTURYST, PAT
Uzhgorod
Forel complex, Zhdeniyevo
21/08/2001
April 2012
Zakarpattya, 18/06/2013
18/12/2013
42038/14
27/05/2014
ZAPORIZHTURYST, PAT
Zaporizhzhya
Prymorsky complex, Prymorsk
17/11/2000
09/09/2011
Zaporizhzhya, 09/11/2011
16/12/2013
49481/14
27/05/2014
A compound in Naukove mistechko, Zaporizhzhya
27/03/2001
September 2011
Zaporizhzhya, 26/09/2011
23/12/2013
43041/14
26/05/2014
UKRPROFTUR, PAT (UPT)
Kyiv
Tarasova Gora Hotel, Kaniv
31/10/2002
30/06/2011
Cherkasy, 15/07/2011
09/12/2013
43049/14
26/05/2014
VOLYNTURYST, PAT
Lutsk
Svityaz Hotel, Lutsk
31/08/2000
05/10/2011
Volyn, 30/11/2011
18/12/2013
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