CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 27 mai 2010

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He was represented before the Court by Ms Y. Liptser and Mr Y. Baru, lawyers practising in Moscow. The present case is his second application concerning his pre-trial detention and conviction for tax fraud. The respondent Government were initially represented by Mr P. Laptev, and subsequently by Mrs V. Milinchuk, both former Representatives of the Russian Federation at the European Court of Human Rights. A.     The circumstances of the case 2.     The facts of the case, as submitted by the parties, may be summarised as follows. 1.     Background 3.     From 1992 until December 1995 the applicant was the President of the Menatep bank. In 1995-1996 the applicant was a member of the Executive Board and the Board of Directors of that bank. In 1996-1998 the applicant worked in the Rosprom (an industrial holding company affiliated to Menatep): first, as an adviser to the Executive Board and then as Deputy Chairman of the Executive Board. From 1998 onwards the applicant was Deputy Chairman of the Executive Board of Yukos-Moskva Ltd., a major Russian oil company belonging to the Yukos group and affiliated to Menatep and Rosprom. He was a business partner and a close friend of Mr   Khodorkovskiy, the former head and a major shareholder of Yukos. Both Mr Khodorkovskiy and the applicant were major shareholders of an international investment holding company GML (Group Menatep Limited) that controlled the Yukos oil company. 4.     On 20 June 2003 a public prosecutor opened an investigation on suspicion of fraud committed in the course of privatisation of a State-owned company in 1994 by a group of leading executives of Menatep and its affiliated companies. In the following months some of them were arrested and charged, including Mr Khodorkovskiy. Others, in fear of prosecution, left Russia. 5.     On 14 April 2004 the Tax Office lodged its first demand for tax arrears allegedly owed by Yukos, which led to proceedings before the Moscow Commercial Court. Those proceedings concerned the operation of a “tax optimisation” scheme using trading companies registered in the Lesnoy Town and other “tax havens”. In the following months more claims concerning the tax situation of Yukos and its affiliates were lodged. The commercial courts granted most of the Tax Service's claims. As a result Yukos had to declare itself insolvent and bankruptcy proceedings were started. (For further details see the statement of facts in the case of OAO Neftyanaya kompaniya YUKOS v. Russia , no. 14902/04, admissibility decision of 29 January 2009). 2.     Statements by public officials 6 .     On 12 November 2003 Mr Kolesnikov, the Deputy Prosecutor General, at a press-conference in the State Duma publicly stated that the applicant and Mr Khodorkovskiy faced a ten-year prison sentence. He added: “Unfortunately, we cannot give them [a harsher sentence]”. 7 .     On 24 March 2004 Mr Biryukov, the Deputy Prosecutor General, published an article in the Komsomolskaya Pravda newspaper in which he wrote as follows: “The defendants [Mr Khodorkovskiy and Mr Lebedev] are taking their time before the trial; they know that after conviction they would not have an opportunity to appeal to the public and complain about injustice, but they would have to serve a well-deserved punishment. ... They knew it long before we charged them. They knew it when they were committing those crimes! Yukos is like a virus infection quickly spreading through the country and covering it with the pockets of contamination. Here is the map of the epidemic: Samara, Volgograd, Mordoviya. ... They left dirty marks everywhere in the country. Take, for example, Vladimir Dubov, an MP representing Yukos in the State Duma; he, so to say, appropriated   70 billion Russian roubles of budget funds via a bank under his control and using a fraudulent scheme; that money was allocated for the housing of retired military personnel and for building a new bridge over the Volga. Do you see the scale? Smooth guys! Dubov is now abroad, hiding ... Leonid Nevzlin is also charged with fraud and tax evasion.” 8 .     On 6 July 2004 Mr Ustinov, the Prosecutor General, said in a radio interview to the radiostation Ekho Moskvy : “This case has a beginning, but it is hard to see where it ends. ... The scale of fraud, abuse, tax evasion, is so big that it is impossible to fit them into one case. This is why other branches of this case were severed into separate proceedings, and they are now pending.” 9 .     On 11 April 2005 Mr Shokhin, who represented the State prosecution at the applicant's trial, made the following statement to the news agency Interfax : “We believe that the evidence collected in the course of the trial was enough for a fair judgment, for a conviction. I am absolutely convinced that [the applicant] committed serious crimes and that the court has unquestionable evidence of that ... All fine words and loud statements of innocence and care about the good of Russia that have been made today are nothing but words ... During the year of the trial we saw that there was a cynical and insolent embezzlement behind all that, amounting to tens of billions of roubles. Therefore, in our view, the State, society and the population suffered great damage ... In the course of the trial enough evidence was obtained to prove the applicants' guilt.” 10 .     On 1 June 2005 the spokesperson of the General Prosecutor's Office, Ms   Veshnyakova, said in an interview to the Noviye Izvestia newspaper: “We consider that judgment just and in line with the factual circumstances and the gravity of the crimes committed by Khodorkovskiy, Lebedev and Kraynov. We flatly dismiss any political rationale behind that case. Specific grave crimes were committed, and have been proven. The question was about common fraud, theft and tax evasion. The fact that those crimes were committed by the management of a big company does not change the substance of the case. These are grave crimes which ended with a just punishment. Now Khodorkovskiy and Lebedev are facing new charges, primarily concerning the legalisation of criminal profits, which amounted to billions of roubles.” 3.     The applicant's detention (a)     From 3 July 2003 until 10 September 2004 11.     On 2 July 2003 the applicant was admitted to a hospital in connection with his chronic diseases. On the same day, while in hospital, the applicant was arrested by the prosecuting authorities as a suspect in the above-mentioned criminal case. He was placed to the Lefortovo remand prison. In the following months the applicant's detention on remand was extended by the court (for further details, as regards the period until November 2004, see the decision on admissibility in the case of Lebedev v. Russia , no. 4493/04, 18   May 2006). At the end of October 2003 the applicant was transferred to remand prison IZ-77/1 in Moscow, commonly known as “Matrosskaya Tishina”. On 6   April 2004 the Meshchanskiy Court decided that the applicant should remain in detention pending trial. No reasons were given for that decision. On 15   April 2004 the Meshchanskiy District Court dismissed the application for release lodged by the defence. The court held as follows: “[The court] takes into account that [the applicant] is accused of a number of offences, including serious ones, punishable with more than two years' imprisonment. The combination of the seriousness of the charge and the information about the applicant's personality gives reason to suspect that, if released, the applicant may abscond from trial, interfere with the proceedings and influence witnesses. [In particular], the persons suspected of having committed the offences in concert with [the applicant] have gone into hiding. [The applicant] maintains international connections. [He] is accused of offences committed in his capacity as a manager of commercial companies. The persons with whose assistance, according to the investigating authorities, [the applicant] committed the offences, still work in the companies and depend on [him] financially and otherwise. [The applicant] may therefore influence them ...” The District Court concluded that the applicant should be kept in custody pending trial. (b)     From 10 September 2004 until 16 May 2005 12.     At the hearing of 10 September 2004 the prosecutor requested the court to extend the applicant's detention on remand until 26 December 2004, since the previous detention order would expire on 26 September 2004. The defence objected but the court granted the request and extended the applicant's detention on remand as requested. The reasons given by the District Court in its decision of 10 September repeated the reasons stated in the decision of 15 April 2004. 13.     The defence appealed. On 13 October 2004 the Moscow City Court upheld the decision of the lower court. The City Court noted that “the circumstances in which the imputed acts had been committed” suggested that, if released, the applicant might pervert the course of justice by putting pressure on witnesses or otherwise influencing them, or might abscond. 14.     At the hearing of 14 December 2004 the prosecutor again requested the extension of the applicant's detention until 26 March 2005. That request was made orally. The court granted the request and extended the detention until 26 March 2005, giving the same arguments as in the detention orders of 15 April and 10 September 2004. On 19 January 2005 the detention order of 14 December 2004 was upheld by the Moscow City Court. 15.     At the hearing of 2 March 2005 the State prosecutor requested a new extension of the applicant's detention pending trial. The prosecutor referred to the applicant's oral statement of 1 March 2005, when he had said that he “would haunt the prosecutor until his last day”. The court granted the request extending the applicant's detention until 26 June 2005. That detention order repeated the reasons given in the previous detention orders. 4.     Investigation 16.     On 3 July 2003 the prosecution charged the applicant and two other persons (Mr Khodorkovskiy and Mr Kraynov) with fraud, non-compliance with a court order and tax evasion. The prosecution asserted that in 1994 the applicant, together with the co-defendants, had deceived the State: he had bought a stake in a large mining company through a privatisation tender, but had not made a return investment in the company even though it was the winning bidder's obligation to do so. Furthermore, the applicant had subsequently disregarded a judgment ordering him to return his stake in the company to the State. In the following month other accusations were added, in particular that of tax evasion (corporate and personal). 17.     On 14 August 2003 the investigator commissioned an audit of the business activities of Apatit Plc. – one of the companies belonging to the group connected with the applicant. The audit was completed on 16   August 2003. The defence received a copy of the investigator's request for the audit report only on 19   August 2003. 18.     On 20 August 2003 the investigation ended. On 22 August 2003 the applicant and his lawyers began to study the case file, consisting of 162   volumes (over 250 pages each), and the bill of indictment. 19.     On two occasions, after having a meeting with the applicant in the remand centre where he was being detained, his defence lawyer, Mr Baru, was subjected to a search by officers of the SIZO led by its director. The reason given by them was that the applicant had allegedly handed over some notes to the lawyer. During the search, documents that Mr Baru was carrying and which were related to the cases of Mr Khodorkovskiy and the applicant, were seized from him. 20.     In September 2003 one of the applicant's lawyers, Mr Drel, was summoned to the General Prosecutor's Office for questioning in respect of the applicant's case. Mr Drel refused to appear, referring to his status as advocate. On 9 October 2004 the prosecution carried out a search in the office of Mr Drel and seized certain documents which were later included in the case file. The prosecution also carried out searches in a number of other places, including the applicant's house, the office of Menatep bank, the law firm of ALM Feldmans, and the office of Mr Dubov (a Member of Parliament). A large number of documents on paper and in electronic form were seized. On 22 March 2004, during a visit to the applicant by one of his lawyers, Mr Baru, the prison guards seized from Mr Baru certain documents and his notebook. These documents were returned to him two days later. 21.     In the meantime, the cases of several other leading Yukos executives were set down for trial. On 5 February 2004 the Meshchanskiy District Court, presided over by Judge   Kolesnikova, rendered a judgment in a criminal case concerning Mr Shakhnovskiy, the former president of Rosprom and Yukos-Moskva (companies belonging to the Yukos group). In that case the District Court found, inter alia , that during the period under consideration the de facto “captains” ( фактические руководители ) of Yukos, acting in concert with Mr   Shakhnovskiy, had transferred the funds of a number of Russian companies controlled by Yukos to the accounts, in foreign banks, of foreign companies controlled by Mr Shakhnovskiy and the said persons. Further, these unnamed “captains” of the company, in order to reduce tax payments, had paid him his salary through Status Service Limited, an offshore company, under the guise of consultancy fees. In support of its findings the court referred to various documents. Among them the court indicated “analogous” consultancy agreements, concerning the same period of time, that had been entered into with other leading Yukos executives, including the applicant. Further, the court referred to the American Express credit cards found in the applicant's house during the search. As can be seen from the text of the judgment, the applicant received these cards in his capacity as head of Status Service Limited. 22.     On 5 March 2004 the Basmanny District Court of Moscow, upon the request of the prosecution, set a time-limit for the examination of the case file by the defence. In support of their request the prosecution indicated that the defence was maliciously delaying the beginning of trial. Thus, by 9   February 2004 the applicant had read only 41 out of 162 volumes given to him; his lawyers had read from 4 to 85 volumes. It set a deadline of 25   March 2004. 23.     An entry made by the applicant in the record shows that on 24   March   2004 he requested that volumes 150 and 152 be provided to him for inspection. However, on 25 March 2005 this was not done. 24.     On 25 March 2004 the investigator decided to withdraw the case file from the defence and submit it to the court. 25.     On 26 March 2004 the case was transmitted to the Meshchanskiy District Court for examination on the merits. 26.     On 20 April 2004, during the preliminary hearing, the defence filed a request for additional time to enable new lawyers, who had entered the proceedings recently, to become properly acquainted with the materials of the case. The defence also pointed out that the applicant himself was not familiar with all the materials of the criminal case because the time frame for examining the case materials was so constrained. They sought to obtain five months for the proper preparation of their position. The court adjourned the preliminary hearing until 28 April 2004 and set a one-month deadline for the defence to become acquainted with the case materials. 27.     On 13 May 2004 the applicant signed a statement in which he confirmed that he had read all the materials in the case file. However, on 17   May 2004 he withdrew that statement. 5.     Bill of indictment 28.     The prosecution presented a number of charges against the applicant, Mr   Khodorkovskiy and Mr Kraynov. In particular, the applicant was accused of misappropriation of assets and profits of private companies and tax evasion. The charges may be summarised as follows: (a)     Misappropriation of shares in Apatit 29.     In 1994 the State privatisation authority decided to sell 20% of the stock of Apatit Plc., a large mining company producing the apatite concentrate. Under the conditions of the privatisation tender the buyer would be under an obligation to invest money in the business activities of Apatit. 30.     In order to participate in the privatisation tender, the applicant, together with Mr Khodorkovskiy and their subordinates and friends, created several “paper companies”: Volna, Malakhit, Flora and Intermedinvest. Further, the applicant, as a head of the Menatep bank, issued indemnity bonds on behalf of Menatep, guaranteeing the capacity of the first three companies to pay. The fourth company produced a fake indemnity bond from the European Union Bank. As a result, the four companies were admitted by the State privatisation authority for participation in the tender procedure. 31.     In its tender of 1 July 1994 Intermedinvest made the best offer, but then withdrew it. Other companies participating in the tender procedure did the same. As a result, Volna obtained the privatisation contract. Under the contract Volna had to invest 394,219,000 Russian roubles in Apatit by 1   July 1995. However, that condition was not met. (b)     Misappropriation of profits and assets of Apatit 32.     In 1995 the applicant and Mr Khodorkovskiy, who together (through affiliated companies) held a controlling interest in Apatit (including 20% purchased through the privatisation tender), appointed a group of managers in order to control the sales of Apatit. As a result, all sales went through a number of paper companies controlled by the applicant and located in tax havens. Thus, the apatite concentrate was bought by those companies for 30-40 United States dollars (USD) per metric ton and then sold to foreign companies for USD 40-78. These companies, controlled by the applicant, thus accumulated the profits of Apatit; as a result, the minority shareholders suffered pecuniary losses. (c)     Failure to comply with the court decision concerning Apatit 33.     On 16 November 1994 the State privatisation authority brought proceedings before the Commercial Court against Volna seeking the nullification of the privatisation contract and return of the shares of Apatit. In 1995 Volna transferred the amount stipulated in the privatisation contract to the bank account of Apatit. On 16 August 1995 the case against Volna was dismissed on the ground that the money stipulated in the privatisation contract had been duly paid. Some time later that amount was transferred back to the bank accounts of Volna by the director of Apatit. 34.     In 1998 the judgment of 1995 was quashed. The Commercial Court of Moscow, sitting as a court of appeal, declared the privatisation contract null and void and ordered the restitution of the shares of Apatit to the State. However, by that time Volna had already sold the shares of Apatit to a number of sham legal entities, controlled by the applicant and Mr   Khodorkovskiy. As a result, the decision of the Commercial Court of Moscow of 1998 remained unenforced and the enforcement proceedings were discontinued. 35.     In March 2002 the applicant proposed a friendly settlement of the dispute and the State privatisation authority accepted the offer. Under the friendly settlement Volna paid the State USD 15,130,000 and the State withdrew its claim to the shares of Apatit. The above amount was calculated by an audit firm, BC-Otsenka, and was accepted by the Commercial Court of Moscow as representing the market value of the shares. On 22 November 2002 the Commercial Court of Moscow endorsed the friendly settlement agreement and closed the case. However, according to the Meshchanskiy District Court, the real market value of the shares at the relevant time was USD   62,000,000. It referred to the audit report of 19 August 2003, commissioned by the investigator, and the report of the consultancy firm Rusaudit, Dorhoff, Yevseyev and Partners of December 2002, commissioned by the Government of the Russian Federation. Therefore, the decision of the Commercial Court was based on false evidence. (d)     Misappropriation of shares in NIUIF 36.     In 1995 the State privatisation authority decided to sell through a tender procedure 44% of NIUIF Plc., a Moscow-based research institute. To that end the authority issued an invitation to tender. One of the conditions of the privatisation tender was that the winner would have to invest a certain amount of money to support the on-going activities of NIUIF. 37.     In order to take part in the tender procedure the applicant (acting through his subordinates in the Menatep bank) created two “paper companies”: Polinep Ltd. and Wallton Ltd. Further, he issued two indemnity bonds on behalf of Menatep, guaranteeing the payment capacity of those companies. As a result, they were admitted by the State privatisation authority for participation in the tender procedure. 38.     In its offer Polinep proposed to invest USD 50,000,000 in NIUIF; it was the highest bid so Polinep was declared the winner. However, immediately afterwards Polinep withdrew its bid. Wallton made a bid of USD 25,000,000; as it was then the highest investment, Wallton obtained the privatisation contract. 39.     On 28 December 1995 Wallton transferred the investment money to the account of NIUIF in the Menatep bank. Mr Klassen, the then managing director of NIUIF, reported to the State privatisation authority that Wallton had fulfilled its obligations under the privatisation contract. On the next day he transferred the money back to the account of Wallton in Menatep. As a result, 44% of the shares of NIUIF were transferred to Wallton, although de facto the conditions of the privatisation contract had not been met. 40.     In February 1996 Wallton sold the shares of NIUIF to another three “paper companies” created by the applicant: Khiminvest, Metaksa, and Alton. Under the contract of sale those companies received the shares but were free from any investment obligations vis-à-vis NIUIF. 41.     Further, in order to control the activities of NIUIF the applicant delegated several employees of the Menatep bank to the Board of Directors of NIUIF. As a result, the board of directors approved the sale of the main asset of NIUIF – its office buildings in Moscow – to Pender Limited, an off-shore company controlled by the applicant and registered in the Isle of Man. That company acted through the persons who worked in the Menatep bank or the Rosprom holding company. The applicant also delegated his men to the management of NIUIF in order to oversee the day-to-day activities of the company. (e)     Failure to comply with the court decision concerning NIUIF 42.     In 1997 the State privatisation authority learned that Wallton Ltd. had failed to perform the main obligation under the privatisation contract, namely, to invest a certain sum of money in NIUIF. The privatisation authority brought proceedings against Wallton seeking the return of the shares. As a result, on 24 November 1997 the Commercial Court of Moscow annulled the privatisation contract of 1995 and ordered the seizure of the shares from Wallton. 43.     However, by this time the shares in NIUIF had already been sold by Wallton, so that decision could not be executed. In January 1998 the shares were re-sold to several “paper companies”, which had also been created and were controlled by the applicant: Danaya, Galmet, Fermet, Status, Elbrus, Triumph, Leasing, Renons, Izumrud, Topaz. As a result, the decision of the Commercial Court of Moscow remained unenforced. (f)     Personal income tax evasion 44.     In 1998-2000 the applicant registered himself as a private entrepreneur. That status allowed him to pay an “imputed” income tax of a fixed amount, defined by the legislation, instead of paying the personal income tax and making social security contributions. He then made fake agreements for consultancy services with the company Status Service Limited registered in the Isle of Man. The court found that the applicant was the head of that company. That company was controlled by Mr Moisseyev, a close friend of Mr Khodorkovskiy and the applicant. Under that agreement he received money purportedly in payment for consultancy services; however, in reality that money was the wage for his work in the Menatep bank, the holding company Rosprom and other large companies affiliated to Yukos. As a result, he paid much lower taxes than if he had received that money as his salary. In support of these allegations the prosecution referred, amongst other documents and witness statements, to the American Express cards seized during the search of the applicant's country house and to copies of the consultancy agreements between the applicant and Status Service Limited. (g)     Company income tax evasion; misappropriation of budget funds 45.     In the 1990s there were a number of tax havens in Russia; one of them was Lesnoy Town in the Sverdlovsk Region. The applicant, together with Mr Khodorkovskiy, registered a number of “paper companies” there. Those companies purported to operate in Lesnoy Town and, on that ground, obtained tax relief. However, de facto those companies did not have any business activities in Lesnoy Town but were controlled and administered from Moscow. Those “paper companies” became the profit centre for Yukos Plc. (the major oil pumping company of the industrial group, controlled by the applicant and Mr Khodorkovskiy). As a result, the overall tax payments of the industrial group were significantly reduced. 46.     Secondly, the “paper companies” registered in Lesnoy Town did not pay taxes in monetary form. Instead, they obtained promissory notes from Yukos Plc. and then transferred them to the tax authority of Lesnoy Town. The value of the promissory notes was later offset from the tax debt. In the following years the promissory notes were paid off, but only in part. 47.     Thirdly, since the value of promissory notes was higher than the tax debt, the “paper companies” obtained a tax refund from the State. In other words, in 2000-2001 the Federal Treasury paid the “paper companies” the difference between the tax debt and the value of the promissory notes. 48.     In 2001, when the regional tax authority started a tax audit of the “paper companies” registered in Lesnoy Town, those companies formally discontinued their activities in Lesnoy Town and merged with another “paper company” registered in Aginskiy Town, another tax haven. Later these companies were again re-registered in the Chita Region. 5.     Trial 49.     On 20 May 2004 the Meshchanskiy District Court held a preparatory hearing. On   16   July 2004 the trial was opened. The court was composed of three judges: Ms   Kolesnikova (presiding judge), Ms Klinkova and Ms   Maksimova. The court was assisted by seven secretaries who kept the summary record of the hearing (no verbatim record was made). The prosecution was represented by Mr Shokhin. The defence was represented by Mr Baru, Mr Drel, Ms Liptser, Mr Ryvkin, Mr Grydnev and Mr   Kransov. 50.     On 8 June 2004 the applicant's case was joined with those of Mr   Khodorkovskiy and Mr Kraynov (director of Volna, a firm which participated on behalf of Menatep in the privatisation of Apatit). The applicant was given access to a mass of further documents. 51.     The hearings were public. They took place in a courtroom which held, according to the defence, up to thirty people. No audio or video recording or broadcasting of the hearings was allowed. However, journalists were present in the courtroom. The applicant and his co-defendants were held in a metal cage under the supervision of armed guards. Any contact between the applicant and his lawyers during the hearing was prohibited, unless authorised by the judge. 52.     On 23 June 2004 the defence sought a one-month adjournment in the proceedings in order to allow the applicant to finish reading the case file. The court adjourned the case until 12 July 2004. 53.     The judge decided to start with the examination of prosecution evidence. The judge also ordered that the applicant's meetings with the defence team should take place on Wednesdays. (a)     Examination of prosecution evidence 54.     Between August and October 2004 the court examined a large number of witnesses called by the prosecution. In respect of 37 of the witnesses examined by the court the prosecution requested the reading-out of the written statements that they had previously given to the investigator. The defence objected, arguing that it would intimidate the witnesses. The court granted all requests and the written statements of those witnesses were read out. It appears that some of those witnesses had been summoned to the General Prosecutor's Office and questioned again only a few months, weeks or even days before they appeared in court. 55.     Between September and December 2004 the defence lodged a number of applications on the exclusion of evidence produced by the prosecution. Thus, on 30   September 2004, the defence drew the court's attention to the fact that certain items of evidence relied on by the prosecution were missing from the case file. For instance, the case file did not contain an American Express credit card or a copy of the contracts between the applicant and Status Service Limited (these documents were later referred to in the judgment, on page 479) that were relied on by the prosecution in their submissions. 56.     On 11 October 2004 the defence asked the court for access to the case file in the case of Mr Shakhnovskiy. They claimed that the prosecution, in their submissions, had referred to American Express credit cards allegedly seized during the search in the applicant's house, but that these cards were missing from the case file in the applicant's case. The applicant had expected that these credit cards would be found in the materials of Mr   Shakhnovskiy's case, since in the judgment of 5   February 2004 in that case the Meshchanskiy District Court had listed those cards among other evidence. However, the District Court rejected this request. 57 .     On 28 October 2004 the defence requested the court not to include in the case file documents which had not been part of the original file, as it had stood at the time when the applicant had been given access to it, on the completion of the investigation. 58.     On 19 November 2004 the defence complained to the court that the case file contained a large numbers of documents which either were not duly certified or were barely readable. 59.     On 30 December 2004, 21 January and 25 February 2005 the defence asked the court to exclude from the body of evidence documents which were not duly certified. The defence also asked the court to exclude the documents obtained by the prosecution in several searches carried out in the applicant's house, in the office of Mr   Drel (one of the applicant's lawyers), and in the offices of Menatep-SPB and the law firm ALM-Feldmans, among others. The defence sought to exclude other items of prosecution evidence (see pages 629 et seq. of the judgment), but the court rejected their requests. 60.     Despite the objections of the defence, the court also admitted several documents produced by the prosecution which were not final: a draft agreement between two companies (later referred to on page 269 of the judgment), draft minutes of board of directors meetings, a draft contract between the applicant and a foreign company Status Services Limited (later referred to on page 476 of the judgment). 61.     The defence further sought the exclusion of the audit report of 16   August 2003. They claimed, among other things, that they had been unable to challenge the experts, to put additional questions to them, or to have independent experts added to the team. However, the court rejected the request. The court noted that at that time the applicant had not yet been charged with the misappropriation of assets of Apatit. (b)     Examination of evidence produced by the defence 62 .     From November 2004 onwards the defence started to produce their evidence in the case, including a large number of documents, some of which were included in the case file. However, the court refused to admit the reports prepared by tax experts and auditors, in particular Mr Shchekin, Ms   Petrova, Mr Semenov, Mr Lubenchenko, and Mr Grechishkin. The court decided that those reports were inadmissible evidence and therefore could not be admitted to the case file. The court, however, later agreed to question those persons as witnesses. After examining them, the court decided that the witness statements of Mr Shchekin, Mr Semenov, Ms Petrova and Mr   Lubenchenko were inadmissible evidence. The court accepted the testimonies of Mr Grechishkin, but only to the extent that they did not relate to the subject-matter of his report. 63.     On 27 December 2004 and 17 January 2005 the court refused to admit in evidence certain documents produced by the defence on the ground that those documents had not been duly certified (did not contain an official seal or signatures on each page). On 28 December 2004 the court refused to admit in evidence a draft of a Government regulation on privatisation produced by the defence, on the basis that it had been just a draft and not a final document. Further, the court refused to admit the charter of Status Service Limited because that document had been obtained by the defence lawyer in breach of Article 59 of the Code of Criminal Procedure. The court also refused to admit documents confirming that the promissory notes transmitted to the tax authority of Lesnoy Town had been duly paid. 64.     On 31 December 2004, before the start of the Orthodox Christmas holidays, the defence sought the adjournment of the case for a day. However, the court adjourned it only for a few hours. As a result, the applicant had only one hour for a meeting with his lawyers. 65.     From January 2005 onwards the hearings were held every day. As a result the applicant had little time to meet his lawyers in private. On 25   January 2005 the defence lawyers requested the court to allocate every Wednesday for meetings with the applicant. However, this request was refused. Some time later the defence repeated that request, but it was again refused. 66 .     According to the applicant, the defence could not properly examine the expert witnesses called on their initiative, since the presiding judge often artificially dismissed the questions put to them by the defence. The presiding judge overruled and rejected questions on the pretext that the questions “were not related to the competence of that specialist”, or because of the fact that “they assumed interpretation and explanation of the legislation in force”, or upon other grounds not envisaged by Russian law. 67.     On 17 January 2005 and 23 March 2005 the defence lawyers complained to the court that the prosecution had put pressure on certain witnesses by threatening them with criminal prosecution or actually prosecuting them. The defence declared that, for the sake of the safety of those witnesses, they would not call them to testify at the trial. 68.     On 8 February 2005 the defence sought an adjournment for two days, but it was refused. On 14 February 2005 the defence sought another adjournment for two days. The court decided to adjourn the case but only until noon the next day. On the next day the defence repeated its request for adjournment for two days, but the request was dismissed. 69.     On an unspecified date the defence challenged the prosecutor Mr   Shokhin alleging his personal enmity towards the applicant. However, the judge refused to exclude Mr   Shokhin from the proceedings. 70.     On 9 March 2005 the defence sought the judge's replacement. They referred to various irregularities in the proceedings and the judge's alleged lack of impartiality in matters of detention. In particular, they referred to the participation of Judge Kolesnikova in the trial of Mr Shakhnovskiy, alleging that this showed her predisposition against the applicant. However, the judge refused to stand down. The judges decided that the applicant's allegations were unfounded. 71.     On Thursday 24 March 2005 the defence requested adjournment until the following Monday, 28 March 2005. The court ordered the adjournment only until 2 p.m. on Friday 25 March 2005. 72.     On 25 March 2005 the defence sought adjournment for five days in order to prepare their pleadings in reply to those of the prosecution. That request was repeated on 30 March 2005, when the prosecution concluded. However, the court scheduled the next hearing for 1 April 2005. (c)     Position of the defence 73.     The applicant pleaded not guilty. His substantive defence in respect of the charges, as shown by the text of the judgment, can be summarised as follows. 74.     As regards his position in the companies involved in the transactions which the prosecution regarded as criminal, the applicant gave the following testimony. He confirmed that he had been the President of the Menatep bank until 1995. He was also one of its major shareholders. However, in December 1995 he had left that post. Later he had become a chief executive of Rosprom (1996-1997) and of Yukos-Moskva. Rosprom was the management company of the Yukos oil company. At the same time, in 1999-2002, the applicant had represented a group of major shareholders of Menatep in the negotiations concerning the restructuring of that bank. In 2001-2002 Menatep created the Menatep-St. Petersburg bank and the applicant had become the Chairman of its Board of Directors. From 1999 onwards the applicant had been the head and one of the major shareholders (together with Mr   Khodorkovskiy) of Group Menatep Limited. That company owned 100% of shares in GML Management Services. In 2001-2002 the applicant had also provided consultancy services to Fos-Agro AG (the management company of Apatit). 75.     As to the transactions referred to by the prosecution, the applicant did not deny that some of them might indeed have taken place. However, those transactions had been public and lawful. He also denied any personal involvement in those transactions or any relations with the parties thereto. 76.     Thus, as regards the alleged misappropriation of shares in Apatit, the applicant claimed that he had not had any relations with the companies involved in the re-sale of the shares in Apatit, and had not controlled them. 77.     Concerning the alleged misappropriation of the profits of Apatit, the applicant testified that he had never participated in any discussion concerning schemes in respect of the apatite concentrate (the main produce of Apatit). 78.     Concerning the alleged non-compliance with the court judgments, the applicant denied having heard about proceedings initiated by the Murmansk Prosecutor for the return to the State of shares in Apatit, or the ensuing proceedings before the commercial courts. The applicant admitted that he had learned about the situation later, and had been ordered to help Volna to pay off its debts to the Treasury in 2002, in order to secure a friendly settlement between the State and Volna. 79.     Concerning the privatisation of NIUIF the applicant did not deny that Menatep had issued a security bond for the acquisition of shares in NIUIF. However, he did not remember the details of that operation and, in any event, he was unaware about the further implementation of the investment programme since he had left Menatep in 1995. The applicant testified that in 1993 the Menatep bank had created an investment department which was supposed to find business projects to fund. The applicant was not aware of its on-going activities, especially when the amounts of investment involved were relatively small. The activities of the investment department were controlled by the Deputy Chairman of the bank's Management Board. The applicant only set the general policies of the Menatep bank and of other companies he had headed. As to the larger business projects, they were approved by the Board of Directors or other collective bodies of those companies. 80.     In respect of the charges related to the personal income tax evasion, the applicant confirmed that he had concluded consultancy agreements with Status Service Limited. However, he was unable to indicate specifically when he had rendered services to that company or to any of its clients, and what these services consisted of. He denied that he had ever been the head of that company. 81.     In respect of the charges related to the company tax evasion, the applicant testified that he had no information about the companies that were buyers of Yukos oil. He had not given any instructions to the oil-pumping entities belonging to the Yukos group to sell oil to those companies. 82.     As regards the alleged misappropriation of budget funds, the applicant denied any links to the companies registered in Lesnoy Town or other tax havens. Until the beginning of the investigation, he had not heard the names of their directors, shareholders or managers. He denied having designed, together with Mr Khodorkovskiy, the scheme of payment of taxes by promissory notes from Yukos Plc. 6.     The judgment 83.     On 16 May 2005 the Meshchanskiy District Court delivered two separate judgments. The first concerned the misappropriation of shares in Apatit (see above, point (a) of the “Bill of indictment” part). The court found the applicant guilty as charged; however, because the offence had been committed more than ten years before, namely in July 1994, the court applied the statute of limitations and waived the applicant's criminal liability. 84.     As regards other charges against the applicant, the District Court found the applicant guilty (with minor changes in the legal characterisation of the offences) and sentenced him to nine years' imprisonment in an “ordinary regime” correctional colony. The relevant judgment was 660   pages long; it may be summarised as follows. 85.     The District Court found that the “paper companies” involved in the transactions had been controlled by the applicant and Mr Khodorkovskiy. Most of the persons who had created those companies, acting on their behalf, worked at Menatep, Rosprom, Yukos, etc., and, in that capacity those persons were subordinate to the applicant and Mr Khodorkovskiy. Further, the “paper companies” never had any financial resources of their own, but operated with the financial support of Menatep, Rosprom, Yukos and other companies officially affiliated to the applicant. The “paper companies” did not have premises or personnel; they did not make profits and some of them had been finally liquidated or abandoned. Therefore, the companies had been created solely for participation in the sham transactions; they were controlled by the applicant and Mr Khodorkovskiy through their personal friends or subordinates in Menatep, Rosprom and Yukos. 86.     As regards the charges concerning personal income-tax evasion, the court dismissed the applicant's arguments. The court found that the applicant was unable to substantiate with any documentary evidence the claim that he had provided services to the company Status Service Limited, although, as a tax payer and an entrepreneur, he had been obliged to keep records of his transactions with his business counterparts. The judgment did not contain any reference to the case of Mr Shakhnovskiy. However, the judge referred to the same evidence as in the case of Mr Shakhnovskiy, in particular, the consultancy agreements between the applicant and Status Service Limited, the American Express credit cards seized in his house during the search and his tax reports for the relevant periods. The court also referred to the reports of Yukos lawyers which described this method of payment of salaries as a tax minimisation scheme. 87.     The judge orally informed the applicant that he could file objections to the summary record of the trial until 25 August 2005 at the latest. However, by that date only 15 volumes of the original record were available. The rest was not given to the defence on the grounds that they had already received a copy of it. 7.     The appeal 88.     The defence appealed. They claimed, in particular, that the Meshchanskiy District Court had no territorial jurisdiction to hear the applicant's case. Further, the court had been biased because of the participation of Judge Kolesnikova in the proceedings concerning Mr   Shakhnovskiy. The applicant's right to the presumption of innocence had been breached by the statements of senior prosecution officials. Further, the applicant had been seriously ill and had therefore been unable to prepare his defence. He had not had enough time to consult with his lawyers. The prosecution had put pressure on the lawyers for the defence, on witnesses and on judges. The applicant had not had enough time to read the record of the trial. The District Court had refused to admit evidence produced by the defence, in particular the expert reports. At the same time