CEDH · CASELAW;JUDGMENTS;CHAMBER;ENG — 14 mai 2020

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GEORGIA   (Application no. 12391/06)     JUDGMENT   Art 3 (material) • Degrading treatment • Poor conditions of detention • Overcrowding Art 3 (material) • Inhuman and degrading treatment • Inadequate medical supervision and treatment while in prison Art 6 §§   1 and 3 (criminal) • Fair hearing • Adversarial trial • Witness • Conviction based on witness statements including people not part of the plea-bargaining process and various other evidence • Domestic courts’ fair treatment of the applicants’ application regarding admissibility of evidence and questioning of witnesses • No consequences on the fairness of the expulsion from the courtroom and the inability to make closing statements in person Art 6 §   1 (criminal) • Access to court • Refusal of the Supreme Court to consider the case on its merits not disproportionate to the legitimate aim pursued • Very limited reasoning of the refusal satisfying the requirements of Art 6 in absence of legal grounds for accepting the case Art 7 • Absence of retroactive application of a penalty • No far-reaching detriment with the application of a law inexistent at the time of committal of the crimes Art 34 • Hinder the exercise of the right of application • State failure to comply with interim measure indicated by the Court under Rule 39   STRASBOURG   14 May 2020   FINAL   14/08/2020     This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Kadagishvili v. Georgia, The European Court of Human Rights (Fifth Section), sitting as a Chamber composed of:   Síofra O’Leary, President,   Gabriele Kucsko-Stadlmayer,   Ganna Yudkivska,   André Potocki,   Mārtiņš Mits,   Lado Chanturia,   Anja Seibert-Fohr, judges, and Victor Soloveytchik, Deputy Section Registrar, Having deliberated in private on 23 April 2020, Delivers the following judgment, which was adopted on that date: PROCEDURE 1.     The case originated in an application (no. 12391/06) against Georgia lodged with the Court under Article   34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by three Georgian nationals, Mr Amiran Kadagishvili (“the first applicant”), Ms   Nana Kadagishvili (“the second applicant”), and Mr Archil Kadagishvili (“the third applicant”), on 3   April 2006. 2.     The applicants were represented by Ms L.   Mukhashavria, Mr   V.   Vakhtangidze, and Mr V. Imnaishvili, lawyers practising in Tbilisi. The Georgian Government (“the Government”) were represented by their Agent, Mr L. Meskhoradze of the Ministry of Justice. 3.     The applicants alleged, in particular, that the criminal proceedings against them had been unfair and that they had been deprived of access to the Supreme Court, in breach of Article   6 of the Convention. The applicants also submitted that their property had been confiscated by means of a retroactive application of a criminal sanction, contrary to Article   1 of Protocol No.   1 to the Convention. Relying on Article   3 of the Convention, the first and the third applicants also complained of the inadequate conditions of detention, and the inadequacy of medical care in prison. They further complained under Article   34 that the Government had failed to comply with the interim measure indicated to them by the Court under Rule   39 of the Rules of Court. 4.     On 22   August 2007 the Court, acting pursuant to a request by the applicants, advised the Government, under   Rule   39 of the Rules of Court, in the interests of the parties and the proper conduct of the proceedings before the Court, to transfer the first and the third applicants to a medical establishment capable of dispensing adequate medical treatment for each of their diseases. 5.     On 6   December 2010 notice of the application was given to the Government. The Court, of its own motion, categorised the applicants’ complaint relating to Article   1 of Protocol No.   1 under Article   7 of the Convention, and also notified the Government thereof. On the same day the Court discontinued the indication made to the Government under   Rule 39. THE FACTS I.     THE CIRCUMSTANCES OF THE CASE 6.     The applicants were born in 1949, 1947, and 1978 respectively, and live in Tbilisi. The first and the second applicants are husband and wife. The third applicant is one of their two sons. A.     Criminal proceedings against the applicants 1.     Investigation stage 7.     On 20 July 2004 the first applicant and the third applicant were arrested on suspicion of having committed various financial crimes, including money laundering, during the period between October 2000 and July 2004. The suspicion was based on the preliminary findings of the head of the Financial Monitoring Service (“the FMS”), an agency in charge of tracking money laundering, and related to the activities of Gammabank, a Tbilisi-based joint-stock company established by the first applicant. According to the charges brought against the two applicants, on an unspecified date the first applicant resigned from his position as deputy chairman of the bank’s supervisory board and appointed his son, the third applicant, as chairman of that board. The first applicant also appointed his second son, G.K., to various positions in the bank, and ultimately as its director general. In practice, the first applicant continued to be the primary manager of the bank and its operations, together with his family. The suspicion of the commission of financial crimes also related to the activities of three companies which were alleged to have been fictitiously created in order to cover up acts of fraud and money laundering committed through Gammabank (“the three shell companies”) as well as the bank’s cooperation and transactions made in respect of various offshore companies. The Prosecutor General’s Office (“the PGO”) conducted, as an urgent measure, a search of the offices of Gammabank, seizing numerous financial records and other types of documents, seals and letterheads of various companies, and electronic files. The company’s assets and the two applicants’ personal bank accounts were frozen. On 21   September 2004 the second applicant was arrested, also as a suspect in the case in relation to her role as a consultant to the bank in 2000-03, and her subsequent involvement in its activities, and aiding the first applicant. 8 .     On an unspecified date at the end of July 2004, the daily news programme of Rustavi 2, a private television channel, reported about the investigation into the case. The anchor of that programme made the following statement: “[The first applicant] is one of those people who were involved in financial scheming [in the nineties] owing to which he had to flee his homeland. But as it appears, he has settled the problems with the previous Government and returned to Georgia with a new scheme. This time [it’s] Gammabank – the place where 10   billion euros [EUR] were laundered in one day. ... The Gammabank case may enter the history of Georgian law as “the Kadagishvili case”. [The first applicant] and [the third applicant] who were arrested ... for money laundering [are] detained in Tbilisi prison no.   5 ...” 9 .     The anchor’s comments were followed by excerpts from interviews with the PGO’s investigator in charge of the applicants’ case, and with the head of the FMS. The investigator stated, without further elaboration, that the investigation had established the act of transferring 10 billion euros (EUR) through Gammabank accounts. As to the head of the FMS, he spoke briefly about difficulties associated with investigating the activities of offshore companies in general, without relating his comments to the applicants’ case. 10 .     Between 2 August and 7   December 2004 an audit report was prepared by financial, economic, and tax experts appointed by the PGO to carry out an examination in respect of Gammabank’s activities. The audit was carried out by six experts from the National Bank of Georgia, the Revenue Service, the Ministry of the Interior, and the State Audit Office of Georgia, and concerned the period from 1 January 2000 to 1 July 2004. The experts assessed various documents seized from Gammabank’s offices. The examination was attended and assisted by Gammabank’s Deputy Director General M.Kh., Deputy Accounts Director M.K., and Director of the Correspondent Accounts Department N.P. The experts concluded that Gammabank owed the State 11,717,378.3 Georgian laris (GEL –approximately EUR   5,326,115) in damages for various unpaid financial dues. It further noted that the case-file material, including the links between various companies (subsequently found to have been the applicants’ shell companies) and the bank and its personnel, required further investigation. They further noted that the administrative procedures at the bank were in violation of various regulations on processing and storing relevant documents and correspondence. It also noted that an investigation needed to determine the real scope of the legal relationship between Gammabank and General Charter Bank (registered in Montenegro), the latter apparently benefiting from free services from the former without a clear explanation. The report also noted that General Charter Bank had purchased a building from Gammabank on 26 February 2001. Furthermore, a number of loans had been apparently issued without complying with relevant regulations on documenting all the details of the transactions. The report further noted the need to investigate the reasons behind the transfer of several large amounts across various accounts via Gammabank, currency conversions of those amounts, and their subsequent return to the original source. Various large transactions were made without indicating their purpose. 11 .     As it transpires from the case-file material, on 19   November and 24   December 2004 a judge allowed the prosecutor’s applications for a preliminary injunction to freeze the applicants’ personal bank accounts as well as the accounts and property belonging to various allegedly fictitious companies listed in the charges. The respective judicial orders relied on Article   190 of the Code of Criminal Procedure, and stated that a reasonable suspicion existed that the property in question had been obtained through criminal means (“CCP”, see paragraph   90 below). 12 .     On 18 December 2004 and 12   October 2005 G.T., an internal auditor of Gammabank and the deputy chairperson of the bank’s supervisory board, stated that he had known the first applicant since 1989 and had started working at Gammabank at the latter’s suggestion. Subsequently, he had been appointed director of the Georgian branch of General Charter Bank, a bank registered in Montenegro, at the first applicant’s suggestion. Subsequently, General Charter Group had also been created which in turn had been a parent company of other smaller companies. G.T.’s duties had included supervising all these organisations. G.T. stated that he had never had any direct contact with the headquarters of General Charter Bank, and in practice he had reported to the first applicant. G.T. signed a sales contract between Gammabank and General Charter Bank concerning an office building in February 2001 at the first applicant’s request. The contract had been aimed at shielding Gammabank from its financial obligations and the potential seizing of that building in order to cover its debts. He noted that he had had some doubts about the activities of General Charter Bank, and he had ultimately quit that position while retaining his post at Gammabank. He also noted that he had signed various documents following requests by the first applicant. 13 .     In January 2005 the following ten employees of Gammabank were charged with money laundering, business fraud and other financial offences, and were remanded in custody: (i).             Mr   Z.G., Director, member of the supervisory board, and Director of the Internal Audit Service; (ii).            Ms   I.K., First Deputy Director General of Gammabank in 2000 ‑ 02, acting Director General between February 2002 and March 2004; (iii).          Ms   M.G., Accounts Director; (iv).         Ms   M.K., Deputy Accounts Director; (v).           Ms   Ts.M., accounts specialist, (vi).         Ms   M.Kh., Director of the Loans Department (vii).        Mr   N.B., specialist at the Correspondent Accounts Department; (viii).      Ms   M.M., Gammabank’s registrar in charge of keeping the registry of securities, Director of one of the shell companies allegedly owned by the applicants; (ix).         Mr   S.J., Director of the Credit Card and Securities Department; and (x).           Ms   N.P., Director of the Correspondent Accounts Department. 14 .     The PGO proposed plea-bargaining agreements, which the above ‑ mentioned ten accused employees of Gammabank accepted. In January   2005 the ten individuals thus confessed in the presence of their lawyers, as part of separate proceedings in respect of each, to money laundering and other financial crimes in exchange for a prosecutorial recommendation of a lighter penalty. The individuals concerned also incriminated the applicants, and explained, amongst other things, that the profits from several financial dealings had mostly accumulated in the applicants’ personal bank accounts. All the accused stated that they fully understood the nature of the charges to which they were confessing, and their legal implications. The respective agreements were confirmed by the Didube-Chughureti District Court in Tbilisi during the hearing held on 21   February 2005 as the basis for their convictions. The ten individuals in question testified to the absence of any pressure to enter into those agreements. They were all given non-custodial sentences (fines varying from GEL 1,000 to 2,000 (approximately EUR 450 to 900). 15.     On 15 February 2005 the second applicant was released on bail of GEL   85,000 (approximately EUR 38,600). 16 .     On 14 March 2005 the PGO transferred the bill of indictment against the applicants, together with the list of evidence gathered in what appears to have been 118 volumes to a court for their trial. According to the case file, the first applicant had familiarised himself with the first twelve volumes between 18   February and 7   March 2005. The respective report signed by the applicant contained a note made by the latter that the material he had seen had included documents in Russian and English, which he spoke. 2.     Judicial proceedings at first instance (a)     Trial 17.     The trial of the applicants initially commenced before the Tbilisi Regional Court, sitting as a court of first instance, but sometime in 2005 it was taken over by the newly established Tbilisi City Court, apparently as a result of a reform of the judicial system. 18 .     On 9   June 2005 the first applicant applied to be allowed to have a small table in the barred dock or to be seated beyond the metal bars, next to his lawyer, at the latter’s table. The court granted the request and allowed him to be seated outside the dock, next to his lawyer. 19 .     On 9 June 2005 Ms I.K., First Deputy Director General of Gammabank in 2000-02 and Acting Director General between February 2002 and March 2004 (see paragraph   13 above), was examined by the court. She stated that her appointment had been a formality, and the first applicant had acted as a de facto manager of the bank. She noted having acted on the first applicant’s instructions on several occasions, and described the processes related to the currency trading operations and transfers of money to General Charter Bank in order to conceal certain funds. She further confirmed having issued loans to fifteen non-resident legal entities at the first applicant’s instructions, the latter guaranteeing to her that the companies would repay. I.K. explained that on several occasions she had been assisted in her tasks by M.Kh. She also stated that as she was not a lawyer, she could not give a legal assessment of the described actions. When examined by the trial court again on 6 and 10   January 2006, I.K. stated that she had not known that she had been contributing to money laundering by her activities at Gammabank and that she had agreed to plead guilty because the commission of the offences had been established by the investigation. She noted that she had never been subjected to any form of undue pressure by the prosecution. 20 .     On 9 June 2005 Ms M.G., Gammabank’s Accounts Director (see paragraph   13 above), was examined. She noted that in practice it had been the first applicant who had owned and managed the bank, and confirmed having made several transfers to General Charter Bank instead of the State budget at the first applicant’s instruction. The sums transferred to that bank would sometimes end up in the accounts of some of the bank personnel who never withdrew it despite signing documents of having done so. M.G. noted that it had not been her duty to check the provenance of sums of money incoming to a client’s account. She did not know who had laundered money. She also stated that she agreed with the results of the audit report (see paragraph 10 above). M.G. also confirmed having issued a false certificate of a deposit in favour of an insurance company owned by the applicants following the first applicant’s order so that the company would obtain a state license; having determined, at the third applicant’s instruction, special tariffs in respect of two of the three alleged shell companies mentioned in the charges; and having discovered various errors in currency trading operations carried out by the bank, which had been detrimental to the bank’s financial interests. M.G. stated that the bank’s office was sold in 2001. M.G. repeated her statement before the trial court on an unspecified date in 2006. 21 .     As the case-file material suggests, some of the witnesses who were to be examined as part of the proceedings on 9   June 2005 were not isolated from each other in the courtroom. However, the exact number and identities of such witnesses are unclear. The applicants and their lawyer apparently protested against that manner of witness examination, arguing that, in such conditions, the witnesses could easily be influenced by the events occurring and information disclosed during the trial and that their statements could thus lack reliability. It does not appear that their objection was addressed by the trial court, or that the applicants pursued the matter before the appellate and cassation courts. 22 .     On 15 June 2005 Ms M.K., Gammabank’s Deputy Accounts Director (see paragraph   13 above), was examined. She gave information regarding the fact that currency conversion operations had resulted in financial losses for the bank. She noted that she had carried out M.G.’s orders in respect of various financial operations, and noted that tariffs for various organisations, including those connected to the applicants, had been determined by the first and the third applicants. In response to the second applicant’s question, M.K. noted that the second applicant had not been involved in those transactions but had been in contact with lawyers. M.K. confirmed her statement on 18   January 2006. 23 .     On 29 August 2005 Mr N.B., a specialist at the Correspondent Accounts Department of Gammabank (see paragraph   13 above), stated that he had been on friendly terms with G.K, the first and the second applicants’ second son. N.B. noted that he had never suspected that his activities, including currency trading at Gammabank, as well as subsequent transfers to various companies, including the three shell companies connected to the applicants, could have constituted a criminal offence. His explanation as to the reasons for agreeing to conclude a plea-bargaining agreement was that he had wanted to avoid “a further protraction of the proceedings”. N.B. also stated that the prosecution had never used any coercion against him but that his right not to incriminate himself had not been explained to him. On 12   September 2005 the PGO opened a criminal case against Mr N.B. for “impeding the administration of justice” by giving inconsistent witness statements (the obstruction-of-justice proceedings). The final outcome of the proceedings against N.B. is unclear. On the following day, 13   September 2005, the applicants challenged before the trial court the initiation of criminal proceedings against Mr N.B., seeing those measures as an attempt at intimidation of all the witnesses in their case. On 18   January 2006 N.B. was heard by the Tbilisi City Court. He confirmed his earlier statements and stated that at Gammabank he had been tasked with managing the accounts of three shell companies established by the applicants, and he had made various currency-exchange operations. 24 .     On 29   August 2005 Ms M.Kh., the Director of the Loans Department (see paragraph   13 above), was examined. She noted the absence of any undue pressure to testify and gave her description of the processes related to the issuance of loan contracts to fifteen non-resident companies, together with I.K., and her own role in creating false letterheads, and preparing the relevant documentation. She noted that the credit committee had not met but the loans had been issued anyway, and she had signed the relevant documentation because it had been so decided. She did not know whether those loans had actually been transferred to those companies. M.Kh. confirmed never having met representatives of any of those companies, as well as having witnessed the seizure from the bank’s offices of various seals belonging to those companies. M.Kh. averred that she had not known whose money had been laundered, nor about the applicants’ “pre-existing conspiracy” to commit crimes. M.Kh. repeated her statement before the trial court on an unspecified date in 2006. 25 .     On 29 August 2005 Ms M.M. (see paragraph   13 above) stated that she was the second applicant’s cousin. According to her, she had worked as Gammabank’s securities registrar, and at the second applicant’s initiative had been appointed Director of one of the shell companies which, according to M.M., was owned by the applicants. She had not been aware of any activities of that company, had had no seal, and had signed some documents drafted in English, out of trust towards the Kadagishvili family, even though she did not speak the language. She had put signatures to various documents, including those brought to her on the second applicant’s orders, out of trust towards the applicants. M.M. confirmed the contents of the plea-bargaining agreement but noted that she was not exactly sure of the charges, and that she had not had a prior agreement with the applicants to commit crimes. Ms M.M. also mentioned that while in pre-trial detention she had written a letter to the applicants from prison to apologise for having incriminated them. That letter was admitted into evidence by the trial court, at the applicants’ request. In the letter the witness had apologised to the applicants and had written that the deposition had been drafted by the investigator while she was giving information regarding the documents presented before her and bearing her signature, and that in her weakened condition she had felt psychological pressure to sign the deposition. During the trial M.M. explained that she had written that letter because she had felt remorseful for testifying against her cousin and the Kadagishvili family. She also told the trial court that the second applicant had told her to implicate a dead employee instead of her, but that she had not felt able to do so. On an unspecified date in 2006 M.M. confirmed the content of her statement of 29   August 2005 before the trial court. 26 .     On 29 August 2005 and 18 January 2006 another employee of Gammabank, Mr S.J., the director of the bank’s credit card and securities department (see paragraph   13 above) was examined. Noting that he could have been involved in certain financial irregularities, the witness stated that his actions had not been deliberate. He confirmed having been designated as director of one of the shell companies registered by the applicants, without having had anything to do with it in practice. In particular, he noted that he had even forgotten about the existence of that company, which had been managed by the first applicant, whom he trusted, and that he had not had the seal of that company; all financial transactions to and from the shell company had apparently been made by the first applicant. He noted that there had been no contract underlying those financial transactions. He did not know whose money had been laundered. 27 .     On 13 September 2005, Ms N.P., Director of the Correspondent Accounts Department (see paragraph   13 above), was examined by the trial court. She described, among other things, her functions at the bank, testified to the fact that it had been the first applicant who had managed the bank, and described transfers made to General Charter Bank and subsequent transactions that had been made to the accounts owned by the applicants, as well as certain irregularities in granting loans to various clients without adequate documentation. As to pleading guilty as part of the plea-bargaining procedure, she stated “I [had] pleaded so because the investigation had established that I had committed an unlawful act”. The presiding judge enquired into whether the witness had come under any undue pressure to testify, and whether she had been warned that the conclusion of a plea-bargaining agreement would not exempt her from civil liability. N.P. confirmed the absence of pressure, and that she had been given the relevant warning regarding the civil liability, as well as having given her statements in the presence of her lawyers. N.P. confirmed her statement before the trial court on an unspecified date in 2006. 28 .     On 13 September 2005 Mr   A.J., the second applicant’s cousin and the Director of General Charter Group – one of Gammabank’s shareholders allegedly owned by the applicants and used for various illegal transactions mentioned in the charges – was examined by the first-instance court. He noted that the company in question had not carried out any actual activities, had not had an office, and its seal had been stored in the office of the first applicant’s second son (G.K.). A.J. confirmed that he had signed various documents and financial transactions at the first applicant’s request. He noted in respect of another company allegedly owned by the applicants and mentioned in respect of the various episodes that he had also been designated as its director, at the request of the first applicant, but that in practice he had not acted as one. 29 .     On 27   September 2005 Mr D.M., a former accountant and credit officer at Gammabank, was examined as a witness. He confirmed having had a personal account at the bank, but noted that he had never utilised it, and had not had any money in it. When confronted with records of various incoming and outgoing sums of money in respect of that account, he partly modified his pre-trial statement in which he had incriminated the second applicant. D.M. confirmed having signed blank cashier’s checks in respect of withdrawals of various amounts of money from his personal account in the bank which he had not himself used, but unlike the statement given at the investigation stage, noted that he did not remember at whose instructions he had signed the orders. When confronted with his pre-trial statement implicating the second applicant as the one who had given him the orders, he explained that those had been different documents. During his subsequent examination in court on 6   October 2005, D.M. noted having been charged with obstruction of justice on account of giving inconsistent witness statements, but he had not considered that to be a form of undue pressure by the prosecution. On 13   December 2005 D.M. gave his statement to a prosecutor as part of the obstruction-of-justice proceedings. He noted having met the second applicant after implicating her, and that the second applicant had rebuked him for naming her, and causing her to be placed in pre-trial detention. That, according to D.M., had been the reason for altering his statement as he had felt sorry for the second applicant. The case-file material contains no information regarding the final outcome of the obstruction-of-justice proceedings. Subsequently, on 6   February 2006 D.M. was examined anew before the Tbilisi City Court. He responded to the parties’ and the judge’s questions and maintained his initial statement implicating the second applicant in ordering him to sign blank cashier’s orders, noting that no undue pressure had been exerted upon him by the prosecution. Noting that he had changed the emphasis in his earlier statement in which he had not explicitly pointed at the second applicant, D.M. stated that his latest statement implicating her was to be considered as the authentic and sincere one. In that connection, the applicants applied to the trial court to have a secret recording of a conversation between D.M. and the second applicant admitted into evidence. D.M. stated that he had not been aware of the conversation having been filmed. The application was dismissed on the grounds that the second applicant had not been a victim of a crime, and her version as to the recording having been made by accident had not been convincing to the court. 30 .     On 6 October 2005 R.S., a former lawyer of the bank noted that signatures in respect of several documents issuing loans had not belonged to her, and she had never seen those documents before. Another former employee of the bank, G.K., Head of the Audit Service, confirmed having had a personal account at the bank, but noted that he had not utilised it for himself, but had signed a withdrawal order in respect of 12,000 United States dollars (USD) at the first applicant’s request, without withdrawing any money. He also confirmed that he had had several seals made at the first applicant’s request. On the same day S.K., the former Director General of the bank, was also examined. He stated that in reality it had been the first applicant who had managed the bank. S.K. explained that he had quit the bank over discovering that certain sums of money to be paid to the State had been relayed to another destination, and generally after developing certain doubts about the legality of various transactions, including those involving General Charter Bank, which had been a foreign bank. 31 .     On 6 October 2005 Mr   Z.G., Gammabank’s former director, member of the supervisory board, and director of the internal audit service (see paragraph   13 above) was examined. He noted that certain sums had been diverted to General Charter Bank’s account instead of the state budget. The witness confirmed having issued various guarantees on behalf of the bank following the first applicant’s instructions. 32 .     On 18   January 2006 Ms   Ts.M., an accounting specialist of Gammabank (see paragraph   13 above) was examined. She confirmed having made transfers to the General Charter Bank’s account and from the latter to the applicants’ accounts in a converted form. 33 .     On 14   February 2006 the first-instance court dismissed an application by the applicants that a certain financial expert be questioned in respect of the validity of the financial obligations imposed upon the applicants (see paragraph   10 above). The judge reasoned that the defence had only presented a certificate that the named individual had been a qualified auditor. However, the expert in question had no connection to the criminal case, and had not participated in any procedures related to it either as a specialist or an expert, as required by the domestic legislation. 34 .     On 6 March 2006 the applicants applied to have the trial court include in the case file a number of different documents which, they believed, could support their arguments. The court allowed that application in part, only accepting copies of documents that had been duly certified and were relevant to the applicants’ charges, and rejecting the remainder for failure to comply with those two criteria of certification and relevance. The court also allowed the applicants’ request to have certain documentation retrieved from the bank. 35 .     On 6 March 2006 the applicants applied to have D.M.’s statements declared as inadmissible evidence on account of being contradictory. The application was dismissed on the grounds that the witness statements had not, in the court’s opinion, been “diametrically opposed” and therefore substantially inconsistent. (b)     Conviction of 18 April 2006 36 .     On 18 April 2006 the Tbilisi City Court convicted the applicants of the commission, as an organised criminal group, of various crimes imputed to them. 37 .     The trial court found that the first applicant had created an organised criminal group with the aim of laundering money and carrying out other illegal actions. The group had comprised the first applicant’s wife and two sons (the third applicant and the second son who was at large), and had subsequently involved the employees of Gammabank. Among other things, the first-instance court found that the criminal group had acted in the following manner: various sums of money had flowed from foreign accounts into Gammabank or its correspondent accounts in various banks in Georgia and Russia, allegedly for the purpose of “contributing to the authorised share capital” ( საწესდებო კაპიტალის შევსება) or with the source’s alleged intentions to carry out investment activities . Following one of such wire transfers (in the amount of USD 1,230,244)   allegedly for the purpose of “contributing to the authorised share capital”, various transfers were made across accounts in January 2004 and subsequently fictitious loan contracts were drawn up in respect of false entities, without those loans actually having been issued, while the money was split into fifteen different amounts, and was eventually returned to the original source in “laundered” form. The documentation seized from the bank pointed to various procedural irregularities in issuing those fictitious loans. The criminal group also used various schemes of money laundering through the shell companies created by it, as well as by means of another bank – General Charter Bank – registered in Montenegro, which had had its licence revoked on 1   August 2002, but the first applicant had illegally used its name, as the criminal group had possessed falsified seals and letterheads in respect of that institution. Some of the laundered money would be accumulated in personal accounts of the employees of the bank which would then be withdrawn by the applicants. In one of the episodes concerning the period between 1   January and 13   July 2004, three companies registered in Russia transferred, through Gammabank’s correspondent account in a Russian bank, 2,095,679,603 Russian rubles (RUB, approximately EUR 58,618,500) to an account in Gammabank in respect of a company registered in the United States of America. The criminal group had owned a false seal of the mentioned American company which was retrieved as a result of the search of the bank’s office. The criminal group made foreign-exchange trades in respect of the sum received in respect of that American company – which were otherwise detrimental to the bank’s interests – with the purpose of laundering and returning money to its original source after various transactions. The thus converted sum was wired to the shell companies owned by the applicants, including the one mentioned in M.M.’s statement (see paragraph   25 above), and was further relayed by means of 2659 wire transfers. Furthermore, certain amounts due to be paid to the State budget were first relayed to the General Charter Bank, converted into foreign currency, wired to another account, finally to be transferred to the applicants’ personal accounts and the shell companies connected to their activities. Certain sums of money were also accumulated in some of the bank employees’ personal accounts, later retrieved by the applicants. The first applicant had also committed insurance fraud in favour of one of the shell companies. As confirmed by the results of the search and seizure of Gammabank’s offices, the group used various falsified letterheads, electronic signatures, and seals of various companies in order to achieve their aims. The court relied on witness statements of former managers of the shell companies, who had been friends or relatives of the applicants, to conclude that it had been the applicants who had set up and managed those companies in order to commit various illegal transactions. The first-instance court, having applied an Amnesty Act in respect of a part of the charges relating to the period before 1   January 2004, found that out of the total of GEL   11,717,378.03 (approximately EUR   5,326,115) dues and damage to the State only GEL   2,919,882.58 (approximately EUR   1,327,228) was to be considered as having been inflicted and payable. 38.     The first applicant was found guilty of all charges related to money laundering, business fraud, embezzlement, forgery of various financial documents and abuse of power. He was also convicted, together with the third applicant, of unlawful possession of a gun, which had been discovered by the police during a search of the applicants’ home, and breach of public order. The latter two charges were based on the statements of several witnesses, including two former security guards at the office of the Gammabank. The second and the third applicants were convicted of money-laundering, embezzlement, forgery of various financial documents, and abuse of power in respect of episodes concerning the issuance of the false loans; currency trading and the use of shell companies to conceal the true source, location, movement, and owner of the converted sums; appropriation and laundering of money owed to the State; manufacturing and using of forged seals, signatures, letterheads. The second and the third applicants were acquitted of all charges related to the episodes of insurance fraud, reduction of dues payable to the National Bank, and avoidance of payment in respect of a certain amount to the state budget. The third applicant was also acquitted of the charges concerning the acquisition and storage of firearms. 39 .     The first applicant was sentenced to eleven years in prison. The second applicant was given a five-year prison sentence suspended on probation. The third applicant was sentenced to nine years in prison. 40 .     The conviction was primarily based on the statements of sixteen employees of Gammabank, including those of the ten employees who had been convicted of the same financial crimes on the basis of their plea ‑ bargaining agreements with the prosecution. The Tbilisi City Court additionally noted that the convictions of those ten people had the force of binding precedent, in so far as those final judicial decisions had already established the existence of money laundering and other financial offences committed in direct complicity with the applicants. The court also based its findings on other material, such as the financial and other documents retrieved from the first applicant’s second son’s (G.K.’s) personal computer and those seized from Gammabank, an expert examination apparently carried out in respect of the relevant documents, and a report obtained from the United States Department of the Treasury (“contained in volume   12 of the case file”). The content of the latter and its relevance to the determination of the applicants’ charges was not explained. 41 .     The conviction of 18 April 2006 also contained a confiscation order in respect of various properties. The Tbilisi City Court ordered, under Article 52 § 3 of the Criminal Code (“CC”, see paragraph   88 below), confiscation of those assets, together with any accrued interest, “which [had been] obtained as a result of the criminal activities”. The list of confiscated property comprised the following items: all property belonging to the shell companies and other companies indicated in the charges that had been contributed to Gammabank’s share capital, sums of money in the applicants’ accounts in Gammabank, as well as in the accounts of the impugned companies, and all those companies’ movable and immovable assets. The confiscation order also concerned the building where Gammabank’s offices had been located, but which, according to the court, “[had been] fictitiously sold to General Charter Bank”. 42.     Lastly, the City Court also allowed a civil action of the Ministry of Finance, which had joined the criminal proceedings as an injured party, ordering the applicants to compensate the State for pecuniary damage amounting to GEL 2,919,882.58 (approximately EUR   1,327,228). 3.     Appellate proceedings 43.     On an unspecified date the applicants appealed against their conviction of 18 April 2006. 44.     In their submissions, the applicants called into question various findings of fact and law of the Tbilisi City Court, the court’s assessment of witness evidence, and reliance on the statements of witnesses who had concluded plea-bargaining agreements with the prosecution, as well as the trial court’s statement that the plea-bargaining agreements had had the force of binding precedent. The applicants applied to the Tbilisi Court of Appeal to have some documents concerning Gammabank’s activities seized from the National Bank of Georgia. The applicants also claimed that the statements of Mr D.M., Ms M.M., Mr   Z.G., and Ms N.P., should be excluded from the case file on account of their incoherence. In addition, they complained that Mr D.M. had been forced to testify against the second applicant on account of the obstruction ‑ of ‑ justice proceedings against him. The applicants also brought the appellate court’s attention to Ms M.M.’s letter in which she had, in the applicants’ opinion, acknowledged that she had been induced to testify against them. The applicants further complained that the confiscation order had been a penalty applied to their case retroactively, in so far as its legal basis – Article 52 § 3 of the CC – had been enacted on 28   December 2005, that is to say after the impugned offences had taken place. The applicants also complained that the lower court had failed to establish a link between their activities at Gammabank and the origin of the confiscated property. 45 .     As disclosed by the case-file material, the appellate court responded to the applicants’ arguments regarding the admissibility of evidence that while D.M. had altered his statement on one occasion, he had subsequently explicitly confirmed his pre-trial statement before the trial court. Similarly, M.M., had given a pre-trial statement, and then an identical statement to the trial court in which she adequately explained why she had written a letter to the applicants, and confirmed the correctness of her statements. Two other witness statements challenged by the applicants (Z.G. and N.P.) had also been sufficiently consistent. Therefore, no grounds existed for exclusion of those items of evidence. Regarding the retrieval of certain documents, the appellate court responded that the defence had failed to explain the reason behind lodging such a belated application in respect of facts which had been known at the trial stage, and the relevance of the requested documents had been insufficiently explained. 46 .     In the course of the appellate proceedings, the first hearing being held on 21 July 2006, the applicants requested that a number of agents from the GPO, who had been involved in th